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What is MDEF™ Investing? Strategy before tactics. Strategic investments dictate tactical actions in the Metals, Defense, Energy & Food sectors.

- Jeffrey C. Borneman

Greece: There is a Plan, Joe - There's Always a Plan

Jeffrey C. Borneman | July 6, 2015

The title above is a line from the iconic movie "Heaven Can Wait" and should speak to frantic investors world-wide. Although this particular game is deep in late innings the rules will be followed, nonetheless. Let me explain:

In G. Edward Griffin's book The Creature from Jekyll Island there, in the second chapter titled "The Name of the Game is Bailout", we find the banking cartel's game plan detailed. While some view Jekyll Island as inconsequential due to its simplicity, Griffin does a masterful job exposing and explaining the goal of the banking cartel.

" ... that the primary objective of that cartel was to involve the federal government as an agent for shifting the inevitable losses from the owners of those banks to the taxpayers."

Some have erred in thinking that Griffin's work speaks only to our own federal reserve and domestic banking. What makes that too narrow a view is the history of how our own U.S. Federal Reserve (with the help of the IMF, World Bank and Bank of International Settlements) established the cartel on every continent and in almost every country, so it is safe to say the rules apply internationally.

According to Griffin, the Greek situation can be likened to a football game with nuanced rules that can morph depending on circumstances - and which only the most sophisticated viewers are meant to understand. I recommend you read Jekyll Island if only for its second chapter, but do so with the Greek banking situation in mind.

To date, we've witnessed threats, riots, cash, food and medicine shortages and a public referendum denouncing the debt owed the EU. But know that any final Greek collapse does the EU and world banking cartel no good. The EU does not want to absorb the Greek losses by allowing it to further default.

Might Greece still refuse a bailout? Might the people of Greece follow the Iceland example and jail the bankers who bankrupted its country? Yes, but the Greek game is different for many reasons. As the situation progresses into extra-inning, the referees will huddle again (tomorrow) to add time and "morph the rules" to placate the people of Greece into accepting some alternative to keep it in the Eurozone.

As of this writing the Greeks have floated the idea that a 30 percent "haircut" of the debt is required to further discuss further bailouts, and of course the EU (lead by Germany) has flatly rejected the idea. Perhaps a smaller haircut for banks combined with the "rescheduling" play or "guaranteed payment" play (see Jekyll Island). The sophisticated banker knows well the value of a non-preforming loan: All that is required to reinstate loan value is to increase the capital lent which allows interest payments to resume.

Aside from the balance-sheet issue we should remember that Greece is a NATO member and borders the entrance to the Black Sea. The Black Sea is home to half of the Russian naval fleet so it is no surprise that Russia (and China) have approached Greece to assist financially. It is doubtful that any disruption to the balance of power of this size would be allowed.

What may make this time different? On the scale of loans to countries, Central banks lend money against assets first - the borrower's ability to repay the loan is important but secondary. There is a chance the assets are running out ... I have referred to this as "running out of wheelbarrows to monetize". If the fear of this becomes widespread, the world will face another bout of very serious inflation, unrest and war.

While the financial stakes are enormous and contagion looms which may dissolve the EU, it should be remembered the original intent of the EU - unification was meant to so dilute a powerful German state to the point that it could never again instigate a European war. The bank's game has continued with only minor modification for some sixty years, so history suggests taxpayers with absorb bank loses through inflation - again. Yes, Greece may be the beginning of a new game; the EU may unravel and cause massive disruptions and war while the referees officiate an unrecognizable game ... but history favors FDR's almost-forgotten quote: "If it happens in politics, you can bet it was well planned in advance."

It was with this, and other, eventualities in mind that the MDEF™ Investing strategy was created. The banking cartel does not really think in terms of money (sound strange?) but only its movement and control of the ultimate assets of Metals, Defense, Energy and Food. A savvy investor will think likewise as "there's always a plan".

If you want to know more about how the MDEF™ Investing strategy is positioned in this, or other geopolitical possibilities, please contact us directly.

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