Greek Bonds are two steps from Default

The folks in Greece will be paying through their Drachmas, for the next thirty years, as their Bonds crashed today.

Consider:

Bank of Montreal's Sherry Cooper wondered aloud last week whether we'll all look back at this some day and "see this as a period of global economic mismanagement of historical proportions." Only time will tell of course, but I'm sure BMO's chief economist is right

Austria and Italy cancelled a bond auction.

Bond Vigilantes are mounted up and are heading to Washington.

What the heck is going on with the US? (* Impeach Obama?)

Will the World Reserve Currency, the US Dollar, lose that role?

So many questions, and so many answers about to come to the fore.

What a day! Gold and Silver could go to the moon.

Rick Rule (* a genius) - expects good Jr Companies in gold and silver might be takeover targets.

We shall see.

John Rubino: After Greece, Portugal

Now that Greece has been kicked down the road, it’s time for the other PIIGS countries to start lining up for similar deals. Portugal looks to be next, after its most recent deficit report:

Portugal’s 1Q Budget Deficit Higher Than Expected

LISBON (Dow Jones)–Portugal’s budget deficit for the first quarter of the year came in higher than suggested by the previous government, forcing the new one to step up efforts to control the country’s accounts.

Portugal’s statistics agency said the deficit for the first quarter was at 8.7% of gross domestic product. Although it was an improvement from 9.2% of GDP in the fourth quarter, it is still much higher than the 5.9% Portugal must reach by the end of the year under a EUR78 billion bailout program.

“This needs to be corrected fast,” a government official familiar with the matter said.

Two government officials told Dow Jones Newswires Tuesday that the new administration will accelerate some measures to address the budget gap, including on tax increases. Prime Minister Pedro Passos Coelho is expected to announce the measures in parliament Thursday.

Under terms of the bailout agreed with the European Union, the International Monetary Fund and the European Central Bank last month, Portugal must cut its budget deficit to 3% of GDP by 2013.

The goal is challenging, particularly because the country faces a recession over the next two years.

Nonetheless, Passos Coelho, who took over the post of prime minister last week, has been quick to show how willing his government is to fulfill all the requirements imposed by the troika under deadline.

Portugal’s bailout success will be key to the euro zone, which is currently struggling to shake off problems in bailed-out Greece.

Like Portugal, Greece was told to cuts its budget deficit sharply in exchange for financial aid. So far it hasn’t been able to meet the targets.

Portugal, a country of nearly 11 million, is Western Europe’s poorest, with growth that has trailed its neighbors over the past decade, something economists blame on an uncompetitive and rigid labor market. The unemployment rate has risen above 12% this year.

Ahead of new debt talks, Boehner nixes grand plan

President Barack Obama and congressional leaders were regrouping after House Republicans abandoned efforts for a deficit reduction package of $4 trillion over 10 years. The potential deal had unnerved lawmakers in both parties.

House Speaker John Boehner announced late Saturday that he was now looking for a deal about half that size and said that chances for a bigger agreement succumbed to the White House's insistence on substantial new tax revenue.

Administration officials said Obama would press for a bigger bargain one last time at a White House negotiating session Sunday evening.

CHINA ETF a stiff?

The biggest Chinese exchange-traded fund in the U.S. is losing money faster than any other country- focused ETF, even as the lowest valuations since 2008 convince brokerages in the Asian nation that it’s time to buy.

Investors pulled a net $961.2 million from the iShares FTSE China 25 Index Fund (FXI) this year, the most among 140 single-country ETFs that trade on U.S. markets, according to data compiled by New York-based research firm XTF Inc. The outflows coincided with a decline in the Shanghai Composite Index’s price-earnings ratio using estimates for the next year to 11.6, a valuation last seen during the financial crisis in November 2008.

Valuations in the Shanghai Composite slumped after the country’s central bank raised lender reserve requirements 12 times since the start of 2010 and increased benchmark interest ratesfor the fourth time. The People’s Bank of China is tightening monetary policy to curb inflation, which climbed to the highest level since July 2008 in May.

Little known line in Constitution to prevent Default?

The White House could resort to an little-known line in the USconstitution to prevent a ruinous default if Democrats and Republicans do not agree to raise the debt ceiling by August 2, experts say.

The 143-year-old clause, written to address still-potent divisions after the bloody Civil War, has been dredged up by legal scholars as well as the US Treasury secretary to suggest how a debt debacle might be avoided.

But resorting to it could spark a constitutional crisis over just who -- the Congress or the White House -- controls the power of the federal purse, analysts say.

The US government reached its debt limit of $14.29 trillion in May and since then the Treasury has used special measures to allow the government to keep paying its bills.

But unless the limit is raised by August 2, the Treasury says, growing spending and debt service commitments will force a default, which would have disastrous ripple effects throughout the global financial system.

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Of Course - there is always 1907!

Think about this;


The lineup at the cash machine is long - not just long - it's around the block.


No one can get a cent.


The Banks are closed.


The Debit card?


Doesn't work.


There have been many Countries that have been kicking 'the can' down the road, for far too long.


The chickens are have come home to roost.


Watch the next few weeks.


Look at the record gold shorts.


Insiders have stopped buying.


Housing is DOA.


Stay tuned.