A Gold and Silver Paper Default in the Wake of an EU Collapse The EU has failed to recapitalize its banking sector, which still remains massively over-‐ leveraged. They have not yet had their "Lehman moment" of truth. Furthermore, governments of the Eurozone adopted the Euro as a common currency in part because by doing so, they could collectively borrow at much lower interest rates than they were used to when they printed their own money. Now they cannot continue to do this because the beleaguered Eurozone has lost the confidence of the markets and cannot seem to regain it no matter what financial band aids are applied to the situation of excessive sovereign debt. Instead, confidence is largely confined to the currencies of those nations which still maintain a legal monopoly on its creation. Printing Money Does Not Create Wealth Everybody knows that money printing will not make a nation wealthy in the long run. Nevertheless, powerful constituencies benefit from money creation in the short term so politicians understand that their re-‐election depends on not thinking about the absurdity. It is also often assumed that a wholesale Euro collapse would be U.S. Dollar positive since an overall EU default would cause financial panic, so money would flood back into US Treasuries as a safe haven. This sentiment tends to weigh against using precious metals as an alternative safe haven — at least in Dollar terms. Nevertheless, the United States is also overleveraged in terms of its debt. Precious Metals Likely to Spike on Euro Collapse Read more here.