Governments And Financial Media No Longer Pretending Everything Is Fine

By Patrick A. Heller
Commentary on Precious Metals Prepared for

I’ve been warning you for well over a year that the US was not experiencing an economic recovery and that Europe was a basket case waiting to implode.

Suddenly it seems like all the governments, central bankers, and the financial media are agreeing with me.

Switzerland is threatening to impose currency controls to stem the run on Eurozone banks.  In fact, Swiss two-year notes are now paying -0.32% interest (that’s right, you get back less money than you put in).

Denmark’s central bank announced that it is preparing for the dissolution of the European Monetary Union.

Germany’s former Vice Chancellor Joschka Fischer stated that European Union leaders have only two weeks to save the Euro.  He said, “Let’s not delude ourselves.  If the Euro falls apart, so will the European Union, triggering a global economic crisis on a scale that most people alive today have never experienced.”

The United States is already slipping back into recession or depression before the fiscal cliff looming at the end of December.

Brazil’s economy contracted in the first quarter of 2012.  India experienced the lowest quarterly growth in nine years.  China’s HSBC Manufacturing Index fell even further into contraction in May.

In the bond markets, German two-year interest rates are negative and British Gilts are at their lowest rate in 300 years.  US Treasury Notes are at a lower interest rate than at any time during the Great Depression.

In March, Spanish bank customers withdrew almost $90 billion worth of bank accounts to send the fund out of the country.  This occurred before the failure of the Greek elections proved that Europe has not solved any of its fiscal problems.

Unless Spain is bailed out by the European Central Bank (ECB) quickly, it likely will either collapse and fall out of the Eurozone, or both.  Unfortunately, Spanish Premier Mariano Rajoy vowed to not accept a bailout out and German Chancellor Angela Merkel stated that “under no circumstances” would the strongest nation in the Eurozone agree to supporting such a bailout.

Former Italian Premier Silvio Berlusconi (who still heads the largest voting bloc in that parliament) stated that for Italy, “We should use our own mint to print Euros.”  Such a step would probably destroy the European Monetary Union.

Unless the German central bank, the US Treasury, and the Federal Reserve crank up the printing presses to fund record levels of bailouts, the world economy is quickly facing a crisis of unprecedented proportions.  Even if a rescue package is cobbled together, it will not buy much time.  Look for a repeat of an even worse economic outlook within months.  About the only safe assets look to be gold, silver and other tangible assets.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at Other commentaries are available at Numismaster ( under “News & Articles). His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at

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  1. Reading this on Saturday morning (9 June) and I have to say I arrived at the same conclusions and as a result have taken to holding cash OUTSIDE the bank over the next few weekends as an immediated defense to Greek/Spanish collapse on a Friday afternoon at 5PM. Ensuing panic sweeping through Asia and Europe would likely result in a shutdown of the banking system in an attempt to avoid total collapse (worst case scenario).

    Of course, it MAY not be so bad, but better safe than sorry. If I’m wrong, I lose a few days of interest at a paltry .5%APR. If I’m right, I’m not caught empty handed on Monday! Even my sister, who’s an “I don’t want to hear about it, you’re crazy” type, didn’t bat an eyelash when I suggested the same to her and instead said, “OK. That makes sense.”

    CRAZY DAYS!!! As to that old Chinese saying, I think I’d actually prefer to live in DULL, UNINTERESTING times!!! Who’d have ever believed that the 1970s might be called “the good old days?”


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