A European Revolution by December?

Brian Hicks, the independent investment adviser and publisher of  Wealth Daily have been to Europe. More precise;  Greece. Brian Hicks has always seemed like a down-to-earth guy to me, and the things he obviously have picked up on, the psychology and forces at work in countries like Greece, are things I’ve been pointing out in several articles over the last two, three years. A big bubble may burst in several European countries, and I’m not talking about any financial  bubble.

“Between the closed shops and the graffiti that was, quite literally, providing the writing on the walls, clues about Europe’s economic future were impossible to ignore.”

Brian Hicks

"You Are Not Born A Fool - You Become One" (greek grafitti)

“The problem with revelations is that they always come when you least expect them.”

I was in Athens this past weekend — on vacation, against all odds, and not on business, Hicks writes:

I did the tourist thing: went to the Acropolis; checked out the national museum; found the most out-of-the-way restaurant I could and tried (in vain) to order in Greek.

It was the last leg of voyage that I’d been waiting for — that I’d needed — for quite some time.

But, as usual, the shadow of work was following me. Even when I intentionally isolated myself from my e-mail accounts and my Blackberry, my professional mind just couldn’t ignore the signs.

Between the closed shops and the graffiti that was, quite literally, providing the writing on the walls, clues about Europe’s economic future were impossible to ignore.

Of course, it wasn’t anything I didn’t know already… Anybody with a pulse has been hearing about Europe’s financial woes for much of the last year.

Between the trillion-dollar bailout, the multitude of bank failures, skyrocketing inflation, and the euro’s collapse, the world’s second biggest economy is a giant on life support.

And now, it seems its citizens themselves are getting ready to pull the plug.

This particular revelation happened in the final hours of my trip.

The Revelation

We were on the way to the airport, riding in a Skoda Taxi driven by Andreas, a mid-thirties native Greek who had once owned his own residential contracting company.

His English was a bit spotty, but he had no problem at all expressing himself when it came to his life, and where he saw it going if things didn’t change soon.

“Foreigners can come in and buy the land as much as they want. It has never been as popular,” he said after I reflexively mentioned the idea of vacation property in the Greek Isles. “But I cannot make my payments. My business is gone… My money is gone.”

With three times the average inflation rate of the Eurozone, and with an annual budget deficit of 13.4%, Andreas’s pains were easy to understand.

But at least he had a job, which is much more than 12% (a 10-year high for Greece) of the population can say.

I knew these numbers almost by heart, but it wasn’t until he delivered his next statement that I realized what this meant, on a personal level, to the Greek people.

“We are not the kind of people who talk; we are the kind of people who do. By December, when there is no money to pay end-of-year bonus, when there is no money to go on holiday, the people will force changes,” he said, smacking the steering wheel with the heel of his palm.

It was silent in the car for a moment when he said that. He didn’t need to elaborate.

And I knew what he meant: Greece’s imminent break with the European Union.

The Break-Up

It had been on everyone’s mind since the EU stripped Greece of voting rights on decisions regarding its own taxing and spending rights at a meeting in mid-March of this year.

But even this was just a sign of things to come.

Greece may have been the worst example of European economic calamity as of late, but it’s certainly not the only example.

Italy and Spain are not far behind, and with countries like Estonia joining the EU, the once elite club is starting to look more and more like Mickey Rourke in The Wrestler — well past its glory days and on the brink of sudden cardiac arrest.

So if you thought that things like credit collapses, inflation, higher taxes, and unemployment were problems that were inherently American in nature, you couldn’t have been more far from the truth.

The gradual erosion of currency value is a problem that spans the globe today — a predictable and natural side effect of advanced economies like the United States and the EU taking on record-setting amounts of debt to fuel unsustainable growth expectations.

The end result to this — as it is with all unnatural spurts of expansion — is recession.

For the last three years, fortunes built on this unrealized expansion have been dissolving, turning right back to the worthless paper on which they were founded in the first place.

Unfortunately, the citizens on the street — the people who work, pay their bills, and buy the things they need to live day to day — are the ones who pay the ultimate price.

Devalued savings accounts… soaring food and gas prices… unemployment…

It’s the sort of crisis that crosses boarders and socio-economic boundaries like a World War. And ultimately, everyone is affected.

However, World Wars and recessions, as damaging as they are, also have a funny way of benefiting a small percentage of those involved…

The U.S. economy was virtually built on the industrial appetites fueled by near destruction of Europe in the WWII. America’s infrastructure, fed by unprecedented government spending, was created in the years following the 1929 Stock Market collapse.

And this time will be no different.

This Time Will Be No Different

While much of the world writhes in a near universal currency devaluation, a select group of people will profit immensely.

These will be the people who store their wealth not in unstable currencies of government bonds; but in the one commodity that holds value better than anything else…

The one commodity that — even without profitable applications, or sudden, fad-like explosions in demand (such as lithium or rare earth metals of recent years) — will be as valuable tomorrow as it was today.

I’m talking, of course, about precious metals.  Specifically, gold.

For thousands of years, gold has been the world’s most famous and most sought-after precious metal. And today, its popularity is soaring on the back of deepening world-wide recession.

In fact according to most authorities on the subject, the recent jump in price is only the first step in gold’s historic rise.

By Brian Hicks


Wealth Daily

Read the full post at Wealth Daily here.

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