LIR – Doom, Gloom, Default.

Baltic Dry Index. 807 -34 

LIR Gold Target by 2019: $30,000.  Revised due to QE programs

This sucker could go down.

George W. Bush.

Is Greece being set up to forced default? It seems that way to me at least. The banksters can run thorugh the numbers as well as anyone, and it’s obvious that Greece has to default at some point. But a default is best done early and suddenly. Right after Greece has received whatever new currency it’s going to impose and right after a deal is struck with the ECB over Greek issued euros. More and more it seems to me, this is all about stalling to get to the coming Friday night default option. Will it be the 27th or Friday February 3rd?

Below, the latest on Greece, but keep watching the collapse of the Baltic Dry Index, shipping is a large part of the Greek economy. With last night’s close the BDI is now just 144 points above the post Lehman crash low of December 5th 2008. Stay long precious metals, something isn’t right.

"The pillars of the nation state are the sword and the currency, and we changed that."

Romano Prodi. EU Commission President 1999.

EU ratchets up pressure with Greek default threat
European Union officials have stepped up pressure on Greece and its creditor banks in a complex game of three-way brinkmanship, signalling that they will allow a Greek default to run its course unless both sides accept more pain.
By Ambrose Evans-Pritchard, International Business Editor 9:39PM GMT 24 Jan 2012
Austria's finance minister Maria Fekter said patience with Athens is exhausted. "Greece has failed its austerity targets by a wide margin. The Greeks have made decisions, but they weren't implemented. They have agreed to austerity measures, but costs haven't come down. This situation has caused great consternation," she said at a meeting of EU finance minister in Brussels.

"We're sending a direct message to Greece that the community expects more. We're not pleased and only when there's a written message on the table in front of us, can further assistance be discussed," she said.

The head of the European Commission's economics team Mario Buti said Brussels is prepared to allow credit default swaps (CDS) on Greek bonds to come into play if talks fail to reach a deal that gives Greece enough debt relief to claw its way back to viability. "Triggering CDS may have to be considered," he said.

The comment is a clear warning to private creditors holding €206bn (£172bn) of Greek debt that the EU will not step in with fresh money to prevent a default on March 20, when Greece must make a €14.5bn debt payment.

The EU authorities are demanding that banks, insurers, and pension funds accept a cut in the interest rate on new bonds to 3.5pc – on top of the 50pc haircut agreed – to reflect the drastic deterioration in Greece. The creditors are holding out for 4pc. EU officials would leave Greece's debt at 125pc of GDP by 2020, above the 120pc level deemed the maximum tolerable burden.

Charlesa Dallara, the head of the International Institute for Finance (IIF) representing creditor banks, said EU officials were playing with fire by talking about default and demanded that the EU stick to the agreement reached last October.
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Greek Economy on Track to Implode: Hanke
By Austen Sherman and Sara Eisen - Jan 24, 2012 9:53 PM GM
Whether or not Greece is able to reach an agreement on the restructuring of its debt, the country is set to “implode” as the economy contracts, according to Johns Hopkins University’s Steve Hanke.

“The game is completely over,” Hanke, professor of applied economics, said at the Bloomberg Sovereign Debt Crisis Conference in New York hosted by Bloomberg Link. “All the calculations are nonsense and have been since day one. Since the crisis began the money supply has been shrinking and the economy is going to implode, no matter what they do in the short run.”

Money supply is shrinking at an annual rate of about 16 percent in Greece, meaning there won’t be growth needed to support debt payments, Hanke said. Greece is pursuing talks on a debt swap with private creditors that would lower Greece’s debt to 120 percent of gross domestic product by 2020. European governments have sought to fill a deeper-than-expected gap in Greece’s finances by having investors accept a lower interest rate on exchanged bonds.
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In other news, the EU’s Iran embargo could cost European jobs and force the closing of up to 70 European oil refineries, including one in Greece. Does Europe have a death wish or what? Not to worry, the EU can get even more oil and gas from Russia!

Iran Embargo May Speed Refinery Closures
By Alessandra Migliaccio - Jan 25, 2012 12:01 AM GMT
The European Union’s embargo on Iranian oil threatens to accelerate refinery closures in Europe, the head of Italy’s refiners’ lobby said.

“Asian countries not applying the embargo could buy the Iranian oil at a discount and sell cheap refined products back to us,” Piero De Simone, general manager of Unione Petrolifera, said in an interview in Rome yesterday. “Italy already risks the closure of five refineries and at a European level we’re talking about 70 possible shut downs.”
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