About this episode
* Over the weekend the Greeks voted no to the Eurozone bailout terms * The Greeks ars still hoping for a better deal, hoping to avoid austerity * The irony is that the consequences of their vote will bring on even more austerity, as a return to the drachma will result in a lower-valued currency * For example, pensioners will be paid not in fewer euros but drachmas that buy less * This will mean a huge collapse in the standard of living in Greece - far worse than the "austerity" called for under the Eurozone bailout terms * There is no way out without substantive reforms, particularly in smaller government * The markets are reacting adversely because they want to extend and pretend * The euro will be stronger without Greece, despite comments in the press to the contrary * Fears of "contagion" - other countries leaving - are unfounded * Greece is headed for hardship, but they will have to impose austerity from within they could rebound * Greece has a lot of potential, they have natural resources and a thriving shipping industries * The secret of the success of the shipping industry is that it is not taxed * The answer will be fewer taxes and less government spending * Short term, leaving the Eurozone will be negative for Greece * The Greek vote will be positive for the euro * There is still a flight to the dollar for safety over gold * The reason gold has not benefited from Greek instability is that the dollar is still viewed as a safe haven * More and more economic data reveals how weak the U.S. Eeconomy is * This week the Service Sector PMI for June contracted from 56.8 in May to 54.8 * More and more people are looking for a rate hike in December rather than September, but they are still buying the narrative that interest rate hikes are feasible * This belief supports the dollar over gold * Our economy is weaker than other countries whose interest rates are higher * When are the dollar buyers going to realize that they have jumped out of the frying pan into the fire? * The dollar is the grandaddy of the fiat currencies * In light of continued weak economic data and further deterioration in the job market, the Fed will have to come out with another round of QE * That will be a game changer * All the economic news around the world is fundamentally good for gold * At some point the speculative forces that are restraining gold will not hold up * All that stands behind the U.S. dollar is faith * At one point people had faith in Greece, they had faith in Puerto Rican government bonds and in sub-prime mortgages - and then they didn't * When we were on the gold standard, we had real value backing up our money * All that stands between us and economic collapse is the faith we have in a worthless piece of paper Our Sponsors: * Check out FRE and use my code LISTEN20 for a great deal: https://frepouch.com * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy