MADRID – The Dow rose 217 points yesterday, even though Greece missed a $500-million loan payment to the IMF.

And the country needs to come up with another $8 billion by July 20, when it’s scheduled to pay back the principal it owes on bonds held by the ECB.

Greece reached an agreement with its creditors on Sunday night that would, in theory, allow it to tap further emergency loans. But in practice, there are two major stumbling blocks…

First, Greek prime minister Alexis Tsipras faces rebellion in Athens.

Many in his coalition government don’t like the terms of the latest deal. They’re already vowing to oppose it when it comes to a crucial vote in parliamenttomorrow.

Second, Greece’s creditors need to come up with a “bridge loan” to tide the country over until the details of its third emergency bailout can be worked out.

This is likely to be a bridge to nowhere…

A Learning Experience

We are writing this on the streets of the Pláka neighborhood in the heart of Athens, with the Parthenon at our back and the Agora down below.

The sun is shining. It is getting hot.

On the opposite sidewalk, there is a tall, lean, and handsome waiter. He is a cross between George Clooney and Omar Sharif, with salted hair swept back from a fine-featured face.

He has found his calling. He stops middle-aged women. He chats with them. He invites them into the restaurant. Smiling broadly and suavely, he escorts them through the door… and turns them over to a plump colleague.

Down the street, two gypsy women – in long, dirty skirts – are smoking a joint. They pass it back and forth. When a suitable tourist approaches, they quickly put it away. They jump to their feet and offer to read palms.

You have no particular reason to care about what goes on in Greece. It is a tiny economy by global standards, with little impact on the rest of the world. And for the U.S., Greece’s importance is vanishingly small. Exports to Greece account for about 0.004% of U.S. GDP.

But it is part of the Great Zombie War… If it doesn’t affect us directly, there are probably things we can learn from it.

Hero or Traitor?

Tsipras came back to town yesterday and was greeted either as a hero or a traitor, depending on how you looked at it.

He is certainly a hero to international bankers. He has agreed to play their game by their rules. The deal he struck in Brussels will continue to shuffle money from lenders to borrowers and back to lenders – and all the zombies along the way.

But many of the zombies – not to mention the honest, hard-working citizens of the Hellenic Republic – see him as a traitor.

Hadn’t they just exercised their right as democratic citizens a week ago? Hadn’t they clearly expressed themselves? Didn’t they say to the bankers loud and clear: Drop dead!

To fully understand the Greek front of the Great Zombie War you have to realize that this is mostly a battle between two zombie factions.

On the one side, there are the big, international zombies who want to continue to earn fees by lending money to bad credit risks. On the other side are the smaller local zombies, who hope to keep taking the money with no intention of ever giving it back.

“The Greeks peaked in the time of Aristotle,” said a companion at dinner. “It’s been downhill ever since.”

But you can’t accuse the Greeks of not being clever. They happily take the Northern Europeans’ money – whether from tourists or bankers. It’s all the same to them.

“They’ve got a special retirement system in Greece, like your Social Security system,” continued our friend.

“If you are in a career that is considered ‘hazardous’ you are allowed to retire with full benefits when you are only 53 years old.

“And guess what they consider hazardous? All kinds of things… including cutting hair. They get so much money that we’ve seen three generations, all living on one retirement pension.”

We gave the man another “thank you” and went off.

Greek Zombies Take to the Streets

Last night, the retired hairdressers, along with the overpaid hewers of wood and carriers of water – the little local zombies – gathered in Syntagma Square to demonstrate their dissatisfaction with Tsipras and his government.

They claimed he had sold them out in Brussels.

Tomorrow, the remonstrations will continue with a 24-hour strike by civil servants.

The banks were originally supposed to be closed for a maximum of a week. Already, their doors have been barred for double that time.

Originally, they were closed to slow the outflow of deposits. Now, they are closed because they are broke.

That’s the problem with not being in charge of your currency: You can’t print more when you need it.

And if the voters desert Tsipras… or the bridge loan collapses… the Greeks may become desperate.

What a pity we had to leave, just when it was getting interesting!

Regards,

Signature

Bill

Further Reading: As Bill has been advising, Greece is not a threat to your wealth. The real threat you should be watching is a fatal – but largely hidden – flaw in the U.S. economy. It’s something Bill has been personally tracking for over 30 years. Now it’s about to wreak havoc on the U.S. financial system.

You could find yourself suddenly locked out of your bank account… unable to withdraw cash or even use a credit card.


 

 

U.S. stock market investors are breathing a sigh of relief.

Today’s chart tracks Wall Street’s so-called “fear gauge,” the CBOE Volatility Index (VIX).

The VIX is based on the price of S&P 500 options contracts.

When investors fear a pullback in stocks, they buy options contracts that will rise in price as stocks fall.

When the cost of this “insurance” is high, it signals that investors see a bumpy ride for stocks over the next 30 days. When the cost is low, it signals that investors see a more placid market ahead.

071415 DRE VIX

At the end of June – with worries mounting over a Grexit – the VIX broke out of its five-month range of between 12 and 17 points.

And on July 9 – three days before the eleventh-hour deal was struck in Brussels – it hit a high of 20 points.

But following news of that deal, the VIX is back down to 14 points – well within its previous range.


 

Featured Reads

Greek Bailout Agreement: Key Points
After almost 17 hours of talks in Brussels, Alexis Tsipras conceded to a further swathe of austerity measures and economic reforms. Here is a summary of where he has had to compromise.

Why Some Form of Greek Debt Default Is Inevitable
The simple truth for Greece has always been the same: The math doesn’t work. It never has, and it never will until there is a default on at least some of the debt. Here’s why.

The Most Dangerous Secret of Corporate America
If you own stocks, chances are good you’re being scammed by one of corporate America’s biggest secrets. If you’re invested in U.S stocks, avoiding this scam could save you a fortune.


 

Mailbag

Today, a note from a card-carrying “prepper”… on how he’s getting ready for the financial collapse he sees coming.

I’m a debt-free, recently retired 65-year-old in good health living on a recently purchased (three years ago) modest working farm, with a modest retirement nest egg.

As a prepper (of everything – gold and silver included) and a homesteader (the two merge well), I have a little over a third of my nest egg in precious metals – the rest in cash, with some of that cash out of the bank for obvious reasons (I am quietly pulling more out all the time).

I come from a modest background and have been more of a saver than an investor, steadily stacking precious metals during dips since the late ‘90s… with an acceleration after 2008.

I passed on taking profit in 2011, with no regrets, as I feel as insured, hedged, and as protected as possible.

I think right now is the greatest opportunity to buy precious metals since the late ‘90s, and I may end up with half my next egg in metals, a third in stashed cash and the rest with the dubious banksters, if it holds together for another year. But that (in my opinion) is doubtful.

I spent a year as a grunt in the Marines in Vietnam in ‘69, and I know what it’s like to be an extra in a Mad Max movie… I don’t know what’s going to happen, but I believe there is a massive shaking coming, and I intend to be as prepared and self-sufficient and as disconnected from Wall Street and banks as possible.

– M.M

Today, a note from a card-carrying “prepper”… on how he’s getting ready for the financial collapse he sees coming.

I’m a debt-free, recently retired 65-year-old in good health living on a recently purchased (three years ago) modest working farm, with a modest retirement nest egg.

As a prepper (of everything – gold and silver included) and a homesteader (the two merge well), I have a little over a third of my nest egg in precious metals – the rest in cash, with some of that cash out of the bank for obvious reasons (I am quietly pulling more out all the time).

I come from a modest background and have been more of a saver than an investor, steadily stacking precious metals during dips since the late ‘90s… with an acceleration after 2008.

I passed on taking profit in 2011, with no regrets, as I feel as insured, hedged, and as protected as possible.

I think right now is the greatest opportunity to buy precious metals since the late ‘90s, and I may end up with half my next egg in metals, a third in stashed cash and the rest with the dubious banksters, if it holds together for another year. But that (in my opinion) is doubtful.

I spent a year as a grunt in the Marines in Vietnam in ‘69, and I know what it’s like to be an extra in a Mad Max movie… I don’t know what’s going to happen, but I believe there is a massive shaking coming, and I intend to be as prepared and self-sufficient and as disconnected from Wall Street and banks as possible.

– M.M

Does it make sense to buy a farm, and stash precious metals and cash to prepare for another financial meltdown?Bill and the team would love to hear your thoughts. Write to[email protected].