Brexit is all over the press these days… But it’s the collapse of the EU you need to worry about… In the mailbag: “Nothing Doug Casey says will shock me”…
Sharp-eyed readers will have spotted from the dateline at the end of these dispatches that I (Chris) am based in Europe part of the year.
I spend much of my time between Lisbon, Portugal, and my hometown of Dublin, Ireland.
Over this side of the Atlantic, the story on everybody’s lips is Britain’s exit from the European Union (EU) – aka Brexit – which is due to happen on April 12.
And Brexit headlines are even starting to appear in the North American press.
As trade deals lapse… there are warnings of food vanishing from supermarket shelves… of life-saving medicines getting held up at hastily erected border posts… and of Brits being forced to survive on stockpiled baked beans.
But it’s our goal at The Daily Cut to show you what’s really going on in the world… not the version of events you read in the mainstream press.
And as we’ll show you in a moment, it’s the EU that’s headed for collapse, not Britain. And it’s a threat to your wealth… even if you don’t live on this side of the Atlantic.
Before we get to why, though, it’s important to understand the big picture of what’s going on in Europe.
Every day, there’s a new twist or turn to report on. And there’s the extra drama of a fast-approaching deadline. That’s why it’s even making headline news in the U.S.
But Brexit is just part of a much bigger problem for the EU. It’s a symptom of a much deeper disease.
Here’s Legacy Research cofounder and legendary crisis investor Doug Casey with more…
It’s not just the UK seceding from the EU, but Scotland from the UK. The Basques and Catalans may eventually secede from Spain. Belgium, a totally artificial country, may eventually break up into Flemish-speaking Flanders and French-speaking Wallonia.
France has half a dozen secession movements. Italy was only unified into its present form from scores of principalities, duchies, and baronies in 1871 by Garibaldi. It was the same with Germany until Bismarck in 1871.
There are communities and whole countries who still remember being forcefully integrated into bigger nation states. Then those bigger states were made part of the EU. Now we’re seeing the backlash.
And this shouldn’t come as a surprise. Doug says the EU project was doomed from the start…
The EU is a completely artificial union. The Swedes are very different from the Sicilians, and the Portuguese very different from the Austrians. These people have little in common besides a history of fighting with each other. Force them together into a phony union, and they’ll become mutually resentful, the way the Germans and the Greeks now are.
The EU was put together partly to avoid future wars, but it may turn out to be a war incubator. It makes no sense for there to be a European Union at all.
All the UK is doing is leaving the sinking ship of the EU before it’s too late.
What we’re talking about… if Doug’s prediction is right… is the biggest geopolitical crisis since World War II.
Britain is the world’s sixth largest economy, with an annual GDP of $2.8 trillion.
But it’s a minnow compared to the EU economy.
The EU is the world’s second-largest economy, with a GDP of $17.3 trillion. And it also issues the world’s second most widely used currency, the euro.
If the euro project collapses, it would lead to an even bigger economic shock than the one the Lehman Brothers bankruptcy triggered in 2008.
When Lehman Brothers hit the wall in September 2008… and triggered the 2008 global financial crisis… it had $619 billion in debt on its books.
Eurozone governments have issued €10.1 trillion ($11.3 trillion) in debt – more than 16 times that amount.
And eurozone corporations have issued another roughly €9.5 trillion ($10.7 trillion) in corporate debt.
If the euro system breaks apart… that entire debt pile is at risk.
Nobody is going to want to hold onto all that debt with the EU in full-on crisis mode. And if everyone rushes for the exits at once… like they did with subprime debt in 2007 and 2008… we could see the mother of all meltdowns in euro-denominated debt.
But for folks who are ahead of the curve, it could actually prove profitable.
Nick heads up our Crisis Investing advisory. And he started warning about the collapse of the EU more than two years ago, when it was still far off most people’s radars.
Although his timing was premature, what we’re seeing play out now tells us he wasn’t wrong. As he put it…
The trends pulling apart the EU are only getting stronger. One Italian politician summed it up well: “The euro is melting away like a gelato left out in the August sun.”
Today, even the folks on Wall Street – and in the mainstream press – are starting to wake up to the EU’s crisis. The inevitable outcome is growing closer by the day.
Like the Soviet Union, I think the European Union will unravel rather quickly once people realize the jig is up. And that moment may be a lot closer than most people realize.
And make no mistake, if Nick and Doug are right… and the EU is headed for a collapse… the consequence will be felt worldwide.
There’s simply no way that the world’s No. 2 economic bloc and the world’s No. 2 currency could hit the skids without triggering a global panic.
Gold – as we’ve shown you before – is the ultimate disaster insurance. It tends to rise in value when investors are in panic mode.
Just look at what happened to gold when the last financial crisis struck, in 2008…
As you can see, gold soared after the Lehman Brothers collapse on September 15, 2018. It went from $787 an ounce to its all-time high of $1,900 an ounce in 2011 – a 142% increase.
Here’s how he explained it to his readers (paid-up Crisis Investing subscribers can catch up in full here)…
Leading up to the Brexit referendum, gold was range-bound. After the results came in, it soared.
That’s because gold is the original “crisis currency.” It’s what you want to own during a panic in financial assets.
In a crisis, people want the assurance of gold. There’s zero default risk when you own gold bars or gold coins.
On April 12, I’ll be in London to experience the climax to the Brexit saga firsthand.
I’ll also be talking to some of the analysts in our London office about the opportunities and risks they see ahead.
So make sure to keep an eye out for those reports in your inbox.
But with the pressure valves already whistling in Europe… and its €19.6 trillion ($22 trillion) debt pile hanging in the balance… the best way to seek safety is in gold.
If you’ve never bought gold before, you can find out how to get started with The Gold Book.
It’s 48 pages filled with everything you need to know – including a four-step checklist for buying the right coins… flexible storage options… and what to look for in a gold stock.
As a Daily Cut reader, you can access it for free here.
Did you catch Doug’s new documentary-style film, Totally Incorrect: LIVE, last week?
In it, Doug shared five predictions for 2019 and beyond that many would consider “politically incorrect.” (That’s why we warned you it wasn’t for those who are easily offended…)
Here’s what some of your fellow readers are saying about it…
We are with you. Many people have sacred cows. I’ve slaughtered mine. Tell it like it is and let the chips fall where they may. Until people are willing to recognize the realities of the human condition, they’re going to avoid or defend against anything that makes them uncomfortable. It’s a natural response.
Because they’re not teaching logic in school, you can expect a lot of this. Those who grew up in the ‘60s and ‘70s and became parents in that time weren’t any more knowledgeable than the millennials who are coming behind us. Now that they are seeing the fruits of their poor decisions and that their children and grandchildren have to pay for it all, they are opting for a blind eye and escapism.
I hope they live long enough to see their hippy utopia crumble into dust. Reason and science can save us, if we have the courage to make well-reasoned, long-view decisions now. Time to tend the garden.
– Stephanie E.
Nothing he says will shock me, as I think life as we have known for so long is just about over. So who is to carry the torch in the future as we submit to China?
It was my pleasure to meet Doug in New Orleans many years ago at Blanchard’s conference. I remember well some advice he gave that proved very true. On a small scale, I have been a globetrotter. He recommended at that time it was too late to invest in Hong Kong properties, but Manila was ripe for it. Well, over the past few decades I have seen Manila build and grow.
I am ready to retire – hang ‘em up and live permanently outside of the USA and, hopefully, avoid the forthcoming crisis in this country. So thank you for sharing and revealing what is destined for this nation.
– William H.
No, he did not offend me. Matter of fact, people have no backbone. They have gotten too soft and can’t handle the truth. The truth hurts; that’s another old-school thing.
– Eric M.
I’m not easily offended. I just have a totally different worldview. We live in a country where we have a wide range of views, based on a melting pot of different cultures. Differing views on major issues clash with some political viewpoints.
It is not a question of being easily offended. It is just people standing up for what they believe.
– Dayna A.
If you missed the world premiere of Totally Incorrect: LIVE last Wednesday, you’ve still got until midnight tomorrow to watch the replay.
And as always, let us know what you think. Did Doug cross the line? Or are you taking steps to prepare for the crisis he sees ahead for America? Weigh in at [email protected].
April 1, 2019