, I began to write a report on what was foreseen as a monumental clash.  I believe one would have to agree with me now that this clash between the evolution of a grand system of faceless, technocratic government and the people trying to live and find small corners of enjoyment within that ice-cold and elite system, has shoved its way front and center!  Of course, the monumental clash, and now front page news I am referring to is the evolution of the European Union and the rise of the modern-day Comprachicos.

According to research by John Boynton Kaiser in the Journal of the American Institute of Criminal Law and Criminology, "Victor Hugo has given us a pretty faithful picture of many characteristic details of social England of the 17th century; but the word Comprachicos is used to describe a people whose characteristics are an unhistorical conglomeration of much that was once actual but then obsolete in the history of human society." Much that seems unimaginable today may have authentic roots in common practices of the seventeenth century. One might argue that the goals and aspirations of those guiding the  European Union is a modern-day extension of the evil Comprachicos. Except today the unelected EU Cheylas lurking in Brussels are all about disfiguring the spirit of the European peoples.

While the asset managers, investment banks and private equity firms have taken steps to protect collateral and assets in anticipation of the dissolution of the EU, faceless technocrats who maintain the structure of the union are fast tracking initiatives that will both consolidate and increase their power over the member states.  Note: It is the purpose and goal of the European Council to strengthen the foundation of the EU. It remains the task of  leaders of the member states to convince the people that this is a noble goal, while at the same time downplaying the steep loss of independence and sovereignty if the abominably perverse technocratic gnomes prevail.

There is nothing like having the evidence to cinch an argument. For years the pro-union collectivists have been repeated their hectoring rant, “The European Union must not be derailed by lies and disinformation.” I can certainly agree with that!

So rather than lies and disinformation, how about we examine truth and information through the written word coming right out of two of Europe’s most high-profile players own pens? Namely, Nicolas Sarkozy and Angela Merkel, as they brazenly hawk for the evil clowns in Brussels!


Never Write Anything Down
…Reflect upon the possible consequences

Prior to the latest in a long string of ‘emergency summit meetings’, this one held in Brussels, Angela Merkel and Nicolas Sarkozy penned a joint letter to the European Council.  In it, they shared their almost casual violation of free market principles to put forth a strategy for a new budgetary discipline to be adopted by the EU member states. They also offered a plan to harmonize economic and fiscal policy. To achieve their objectives, they are calling for a renewed contract between all member states. I am sure they kept a straight face as they also stressed the need to strengthen growth (?) by regaining competitiveness and by converging economic direction within the union. The two Euro schills, blithely feigning a cloistered virtue, also suggested there is a real need for a revamped legislative construct. I try not to laugh at this point in writing this, for it is truly no laughing matter. Their suggested legislative construct would further represent a more progressive direction in the areas of financial market regulation, aligning the labor force, along with convergence and harmonization of the tax base….and almost as an afterthought – the creation of a financial transaction tax!

From my side of the keyboard this sounds an awful lot like moving all of the economic power out of the hands of the member states directly into the gloved paws of those pesky techno-gnomes in Brussels, with nary a furtive glance. Lost in the shuffle, what about the individual citizens of Europe? Furthermore, who or what gaunt specter will be calling the shots? In addition, just who will be paying for all of this converging, harmonizing and revamped economic direction? As to who or what, I would imagine the greedy and grasping gnomes would grudgingly volunteer one their own, out to suffer exposure to daylight so the collective can put a human face on the unsavory process. As to who will pay; I am guessing in the end it will be Dmitry the plumber and Bruno the baker who will be once again have to feed the gaping maw of grinding despotism, as all of this converging and harmonizing will translate directly into yet more taxes and an increase in service fees. 


And Lest Anyone Should Marvel
….the money and the people are fighting back!

Although it appears the pro-union crowd still enjoys the upper hand as it consolidates power under the smoke screen of the never-ending European Financial Crisis, the common folk are not all standing idly by. More importantly, this is to be welcomed and expected. Europeans have a long history of wanting to live their lives in harmony and peace, and if they are assured of at least a shot at the illusion of prosperity, so much the better.  But for anyone who thinks that it was only the likes of Marie Antoinette who had to suffer the unforgivable tragedy of an overtaxed and disrespected populace, think again. Europe has enjoyed an entire Age of Revolutions and much of it had to do with living standards, taxes and a loss of perceived sovereign and individual rights. Other than the odd broken window and the display of ungracious temper exhibited by mobs in the streets, the true revolution has already started, and it has commenced at the ATM machines!

For months I have waited in vain for the unwelcome alliance that is the mainstream media to give these important stories some exposure, but as usual I waited in vain…until now. One such previously untold calamity “Anxious Greeks Emptying Their Bank Accounts” can be found here.   In addition, is panic hitting even the more sound of the European governments?  I turn once again to Der Spiegel for “Berlin May Have to Nationalize Giant Commerzbank”. The story can be found here. There has already been a run on the banks in Ireland and Portugal, but the stories are almost criminally underreported. I remain grateful to the unwearied diligence of my European readers who first brought me anecdotal evidence of the run on banks as early as June of this year.

In my opinion, running the banks is an honorable and intelligent way to fight back against a governing system that would undoubtedly turn into a “1984” model of existence for Europe, if the technocrats prevail.  What is of less value would be the increased balkanization of the European people. It only plays into the seedy tricks and stratagems of euro-gnomes for Germans to be castigating the Greeks and vice versa. It serves no cause when you have politicians like Geert Wilders saying that providing aid to Greece serves less purpose than throwing money over the dykes. But it goes even further with the more inflammatory comment that Europe’s beggar states should fly their EU flags at half-mast to show the world that they are fiscally incompetent. What all freedom loving and intelligent Europeans have to remember; the enemy is not the citizens of the member states, it is the invisible gnomes lurking in their midst.


The Consolidation of Power
….or a pyrrhic victory? 

It would be justice well served if the technocrats, victorious in their desire to wield power, slithered out of their bunkers, and while looking around… discover a diminished civilization reduced to shreds and tatters!

As I have already stated, the asset managers, investment banks and private equity firms have taken steps to protect collateral and assets in anticipation of the break-up of the heinous European Union. This is not simply an exhibition of rash behavior; it is all about the numbers! 


The Numbers Dictate a Full Retreat

Spring 2010, and I wrote a piece warning of the massive iceberg heading towards the shores of Europe. ETA: January 2012. Shrugging off the intemperate scorn of the fiat dollar defenders, along with the pandering peddlers of dodgy debt instruments, I remained content to make my case. Sitting and waiting… all the while choosing to ignore the stories of a much larger European debt load, that not unlike your typical iceberg, was lurking heavy in the chill waters below.

Fast-forward to now…the last month of 2011 and the European chapter of the non-recovering fiat addicts are suddenly in a dither. Bloomberg recently reported that European governments will have to satisfy over $1.5 trillion of long and short debt in 2012, with over one third of that amount maturing within the first six months. At exactly the same time, European banks have to repay nearly $700 billion of debt, and all within the first quarter!  For what it’s worth, the banks will need a further $370 billion by the end of 2012. Where will all of this money come from? Makes no difference to the end game if the money is printed in Europe or America, or if there are enough emerging country treasuries daft enough to join this doomed bail-out effort. Even if they are ready to jump into the breach and pour good money after bad, the monstrous and insupportable system that is the European Union is too unwieldy to succeed without infinite and eternal cash injections.


From The Pen of a Progressive
….an opposing point of view

My readership has exploded over the last two years and contrary to what most think, not all of my subscribers are “small government, gold is king, socialism is evil”, etc. I enjoy the views of a growing number of proud (?) liberals, with more than a few who actually believe in the Progressive Movement. My most ‘progressive’ reader has shared with me that he views me as a big and dumb, but lovable dog. I am always doing or saying something ridiculous, but he simply cannot stay mad at me. I would like to share his thoughts on the European Union:

One must argue that you cannot enjoy the benefits of a monetary union without a fiscal union. As Herculean the task may turn out to be, control of the European money should rest in the hands of a central body. This is not unlike the government of the United States of America passing a national budget. I strongly believe in the European Union and their penchant for an orderly and organized Europe. As such, the citizens of Europe should relish ceding their sovereign rights, as would it not make sense with each member state being responsible for its own fiscal direction, without working in tandem with other member states. Would the best outcome one could hope for be uneven growth and one or more member states always being in crisis? Granted there is room for improvement in the structure of the EU and I am confident that once regionalism is replaced by a centralist system, the European Union will be a blueprint for the rest of the world to follow.

• With everyone fixated on the problems of overwhelming and unsolvable paper debt, the central banks are quietly continuing to acquire physical gold. In 2011 alone, the net purchases of gold by the central banks soared to nearly 150 tonnes. This is the highest single year purchase since 2009.  Compare this to the final quarter of 2010 when the central banks acquired less than 23 tonnes of gold. “Statistics this year have been remarkable,” explained Marcus Grubb, managing director of investment at the Gold Council. The Russian central bank purchased 15 tonnes in the third quarter, while Thailand increased its gold reserves by 25 tonnes. The report states, “A number of central banks continued their well-publicized programmes of buying, while a slew of new entrants emerged wishing to bolster their gold holdings in order to diversify their reserves. We see the trend continuing into 2012.”
• Although 2011 saw the price of gold experience its usual volatility, it is safe to say the formidable and profound decade-long run in the gold price is not going to end anytime soon. With everything said and done, we are still looking at a 20% gain in the price of gold since last year this time.
• During the hyperinflationary period of the Weimar Republic, when in the end the mark became worthless (1923) the stock market became extremely active, albeit volatile. Absolutely gorgeous gains were realized in a very short time period. The trick of course was timing, as for many, a percentage of the gains were spent on food!  But something that has been overlooked by many historians is the investor who did not have to sell their shares for a potato and a piece of bratwurst. These investors enjoyed windfall profits after the market pullback. And it was not just the pre-war rich that were able to profit by holding shares, as many of them got wiped out as well. Instead it was the investors who had wisely accumulated physical gold as the system was imploding. With the solid backstop of physical gold, they then turned to the market and bought stocks while the mark still retained reasonable value. When the mark was finally replaced, they were able to cash out into the new currency. I want you to remember the Weimar Market the next time you read about the sheer number of faded and withering dollars sloshing around the world and the depressed share price of junior gold companies!

I wanted to devote more time and ink to junior gold and silver explorers who were in my opinion doing it right! These effective and competent juniors are shunning the glare of heavy handed and expensive promotion, instead are plowing all of their shareholders money into exploration and development. We will have to save that report for early 2012. I have identified three such companies and look forward to sharing my research with you. 
 

Larry Myles
Larry Myles Reports
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Larry Myles is neither a geologist nor a financial analyst. I do not purport to offer personal investment advice nor recommendations. While all statements of fact are derived from reliable sources, and are believed to be accurate, I make no warrant that they are so. You must do your own research and check statements of fact for yourself. My opinions are precisely that, my opinions. I do not accept any responsibility for any gains or losses you may experience resulting from actions taken based on my opinions. If not otherwise qualified, you should consult with your own personal financial advisor before engaging in any investment activities. Larry Myles Reports does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Larry Myles may actively trade in the investments discussed in this publication. Larry Myles may have a substantial position in the securities recommended and may increase or decrease such positions without notice. I do not know your personal financial circumstances. I am not your personal financial advisor. You must do your own due diligence. By entering this web site, or reading LMR reports, you acknowledge and accept the foregoing.