Today one of the legends in the gold world told King World News what we are looking at right now is “financial Armaggedon.” Keith Barron is responsible for one of the largest gold discoveries in history and consults with major gold companies around the world as well as international brokerage houses. Barron described the current situation as “Lehman times 1,000.” Here is how Barron described the financial nightmare: “Once there is a resolution to this situation in Greece, we will see a resurgence in the gold price. We will see some major moves. The only way to get out of this Greek mess right now is to bail it out with money. We don’t know who’s going to do it. They were talking with the Chinese today about getting them involved in a rescue fund.”
Keith Barron continues:
“They call it an investment fund, but I don’t see how you are going to get any return on your investment or even get your money back. They can only do this temporarily, of course, and then another couple of months down the road, when more bonds are due, it’s going to come around again and bite everyone.
I think Greece will eventually default and that will be an end to it and then we move on. Then we will see what happens with the other countries that are in trouble. I saw yesterday there was something in the press about Italy selling its gold to help with their debt, but the gold they possess is only a tiny fraction of their total debt. So that wouldn’t even serve any purpose.
What we are going to have to see is a massive bailout by a consortium of countries with the Americans heading it up, with the possibility of China being involved. Essentially this will be designed to bail out Spain and Italy. If Spain and Italy were to go down, they would take the rest of Europe down as well as the whole international banking system. It’s very, very serious.
One thing that isn’t talked about much, although I did receive a note today from UBS regarding it, is derivatives related to bond insurance....