If Italy Defaults, The Euro Dies

Gary North

Nov. 16, 2011

This is the best 6-minute video I have seen on the looming crisis for Europe. Italy has issued 25% of the bonds in Europe. If it defaults, the eurozone banks get hit with bank runs.

There is a bank run in progress in Italy. Italy is at a knife edge. Wealthy people are selling bonds. The interest rate is over 6% now. It was over 7% until the European Central Bank began buying Italian bonds today.

But where to go with your money? He says it: gold.

The interviewers are appalled. "No, no, it can't be true! Give us less bad news!"

There is no good news. The Keynesian model is broken, he says.

There is no European government solvent enough to bail out busted banks that have bought Italian bonds.

The eurozone's politicians have no say in the matter any more. Only the European Central Bank can bail out the system now. This may have begun today. If this continues, this will mean inflation and the demise of the euro. So, the central bankers must decide: death now or death later.