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 The end of Europe The end of EuropeHow the European time bomb will explode… and what that means for your money, Brexit and the stockmarketIn this report:How a closed-door meeting with Alan Greenspan lead me to a shocking conclusionWhy Europe is doomed – politically and nanciallyWhat to do with your money to survive, whether you’re a novice investor or a seasoned veteranA special report by Nick O’Connor, Publisher, Southbank Investment ResearchIt’s the most fragile point in the worldwide nancial system…And this year, that fragility could be brutally exposed – with serious consequences for your money, your retirement and for Britain as a whole.I’m talking about Europe.As you’ll see in this report, the current problems in the eurozone that you’ve likely read about in the papers have been growing… morphing… and intensifying for nearly a decade. This year I believe they will strike at the heart of the entire European project.I’m not the only one. Today I also want to show you what I learned in a closed-door meeting with the world’s most powerful former central banker, Alan Greenspan. Pay close attention. Greenspan revealed why he’s so worried about Europe. In private conversation with our analysts he explained exactly what could happen. That’s what this report is all about.In particular I want to show you how the nancial problems building in the European banking system will morph into a political crisis. And that could strike amortal blow to the entire European project. If these problems continue to escalate… there won’t be a Europe for Britain to negotiate Brexit with!Greenspan predicts the euro’s demiseOur meeting with Greenspan was private. There were no representatives of the mainstream press there. Most of them were down the road from us in Washington, preparing for Donald Trump’s inauguration. With that in mind, it’s worth us looking at precisely what he said concerning Europe since you won’t nd it anywhere else but here.Here’s what he said, with added emphasis from me.1 | Page
 
 The end of Europe There’s one thing that bothers me considerably, which nobody makes any mention of. There is in the European Central Bank [ECB] a mechanism as it existsof necessity where the European Central Bank is made up of the central banks of the European, euro area and there’s a thing called TARGET2, do you know what  TARGET2 is? TARGET2 at this particular stage is turning out to be an extraordinary large transfer from Bundesbank to essentially Italy and Spain, and most recently the European Central Bank. That means the Bundesbank is lending money to the European Central Bank and the question is – it’s big numbers. We’re talking 7,800 billion euro. This can’t go on indenitely because at some point somebody’s going to have the courage to move Greece out. Greece is in the ECB by accident. They came in under false pretences and the government, immediately following the government that got Greece fraudulently into the ECB, said the numbers were allwrong and if they were actually the numbers used they would not have been in, but nonetheless they let them stay. That was a terrible mistake. The Greek personal savings rate right now is -20%. You cannot run an economy at -20% savings rate.Something is going to happen there. My view is it’s either going to be Greece – it conceivably could be Italy. The funny part of it is that the second largest contributor to the net ow in lending to Spain and Italy is Luxembourg. They’ve got some steel and they’ve got a few other things and they’ve got some banks, but it is extraordinary what is going on in this system while the total assets of [the] European Central Bank continue to go straight up. What would happen if there was a default of the euro?In the United States, if there were a default on the dollar the US Treasury could always [step in]. For example, if the federal reserve went into default the US  Treasury would bail it out but what do [European banks do?] There is no comparable vehicle to help the system.I’m very worried. Mario Draghi, whom I know and he’s a very good guy, is just talking like we’ll do whatever is required. Well at some point somebody’s going tosay, “I don’t want to accept euros.”I didn’t expect Greenspan to make any major predictions about the US monetary system. He’s biased: the dollar is part of his legacy.Like a parent incapable of seeing the aws in their children, I doubt he’ll ever truly acknowledge the nancial problems he helped create in the US. That’s not true of the euro, though.When it came to the eurozone he was surprisingly direct. From where I was sitting, it sounded like he believes the next major nancial crisis will be triggered by either Greece or Italy and will result in the total destruction of the euro as a major currency.Greenspan pointed out that Mario Draghi’s promise to “do whatever it takes” – otherwise known as his promise to ood the market with freshly printed euros 2 | Page
 
 The end of Europeuntil everyone just leaves him alone – has a aw. It only works if people are willing to accept euros.Someone in Greenspan’s position at the Federal Reserve doesn’t quite have this problem. The dollar is still the world’s reserve currency. For as long as that lasts, people are going to need dollars. You can print with abandon because there’s no real alternative. That’s not true in Europe. There are two reasons why. Two ways the euro can disappear The rst possibility is internal demand. By that I mean the demand for euros within eurozone nations. There’s a high level of demand there because people need euros to pay their taxes.But those nations didn’t always use the euro. People have long memories. They remember when the euro didn’t exist and each nation had its own currency. Perhaps they even yearn for the good old days.It sounds like Marine Le Pen does, anyway. In January she proposed the creation of a new basket of currencies to be used in Europe – a kind of shadow euro. France could then reinstate the franc and peg its currency to that basket. That’s one way in which internal demand for euros could drop – a move back towards national currencies. Once you pay your taxes in francs… there’s not much incentive to hold euros. The other mechanism would be external demand falling. That means the rest of the world looking at Europe, seeing its huge structural problems will never be resolved, and ditching the euro.Again that would lead to a situation where “nobody wants euros” any longer. Draghi may as well be printing monopoly money at that point. He’d be out of ammo.Of course, either one of those scenarios would likely trigger the other. External demand drying up would push more nations towards reinstating national currencies. Or vice versa. It doesn’t really matter. Europe is doomed either way.A sordid history of central banking in EuropeLet’s dig into what else Greenspan said. There’s a whole sordid history of central and commercial banking subterfuge hidden between the lines. Take, for instance,the fact that Greenspan is direct about the fact Greece should never have been allowed into the euro to begin with. He even uses the word “fraudulent” to describe its admission.But then, it’s ironic that he outlines what a good guy ECB chief Mario Draghi is in the very next breath. Why?Because it was Goldman Sachs that helped Greece cook its books in such a way that it could enter the euro to begin with. The head of the GS International division for large parts of that process was… who? You guessed it! Mario Draghi!3 | Page

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