Europe To Launch Massive Two Trillion Euro Bailout Package

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/6/22_Saut_-_Europe_To_Launch_Two_Trillion_Euro_Bailout_Package.html

Hungary Folds, Ready To Change Its Laws To Get European Bailout Money

Goodbye, Hungarian sovereignty.  Hello, new world order.

http://www.zerohedge.com/news/hungary-folds-ready-change-its-laws-get-european-bailout-money

Former Fed VP Accuses Bernanke Of Bailing Out Europe Via Currency Swaps

http://www.zerohedge.com/news/former-fed-vp-accuses-bernanke-bailing-out-europe-currency-swaps

Bernanke’s Forgotten Footnote

http://www.nysun.com/editorials/bernankes-forgotten-footnote/87588/

Statement on the Fed's Continued Euro Bailout

http://paul.house.gov/index.php?option=com_content&view=article&id=1931:statement-on-the-feds-continued-euro-bailout&catid=16:speeches&Itemid=1

Euro bail-out in doubt as 'hysteria' sweeps Germany

http://www.telegraph.co.uk/finance/financialcrisis/8728628/Euro-bail-out-in-doubt-as-hysteria-sweeps-Germany.html

It Just Went From Bad To Far, Far Worse As Germany Says Italy Is Too Big For EFSF To Save, Refuses To Carry Euro Bailout Burden

Now that Germany and the Euro Central Bank are balking on further Euro bailouts, so does China.  "No, please, after you...really, you first--I insist..." 

http://www.zerohedge.com/news/it-just-went-bad-far-far-worse-germany-says-italy-too-big-efsf-save-refuses-carry-euro-bailout-

I've always thought the Euro was doomed, for many reasons.  But the writing is on the wall now.  While Germany hesitated initially in bailing out Greece and the "peripheral" countries, they eventually succumbed after preconditions of austerity were negotiated.  They're definitely saying "No!" to bailing out Italy and Spain, which have far bigger economies than Greece or Ireland.

Markets should be interesting on Monday to say the least.

Irish Rescue Accord Turns Investors' Focus to Spain, Portugal

Sovereign debt crises started in Iceland, Latvia, Hungary, Dubai, and reached the shores of Greece.  Ireland is the latest victim, with Portugal and Spain in the crosshairs of bond vigilantes.  For the forward-thinking, Italy and France will be next to catch the contagion.  Germany must be bewildered at the spreading collapse around them.  German taxpayers will force the break up of the Euro, in my opinion, because they are absorbing the brunt of the bailouts.  With IMF participating in bailouts, so are American taxpayers.

http://www.bloomberg.com/news/2010-11-23/irish-rescue-plan-turns-investors-focus-to-southern-europe-euro-credit.html

Even as EU leaders said Ireland’s bailout will stem contagion in the euro region, investors are turning their attention to Portugal, which hasn’t cut government spending and has barely grown for a decade. A rescue of Portugal may increase pressure on its high budget-deficit neighbor Spain, whose gross domestic product is almost twice the size of Portugal, Greece and Ireland combined.


After Portugal “the next question would be Spain and then Italy and then France and then the EU,” said Antonio Garcia Pascual, chief southern European economist at Barclays Capital in London. “Spain is a bit too big to be bailed out, the size of a rescue required would use up all the funds available and then you have Italy with contagion as well,” prompting “a situation where the euro itself is put into question,” he said.

Volcker believes Euro could disintegrate

http://www.bloomberg.com/apps/news?pid=20601087&sid=aG.VRgw_7PqA&pos=5

Former Federal Reserve Chairman Paul Volcker said he’s concerned that the euro area may break up after the Greek fiscal crisis that sparked an unprecedented bailout by the region’s members.

“You have the great problem of a potential disintegration of the euro,” Volcker, 82, said in a speech in London yesterday. “The essential element of discipline in economic policy and in fiscal policy that was hoped for” has “so far not been rewarded in some countries.”

Jim Rickards on the Euro bail out (part 2)

The Euro-bailout and guarantee fund will fail. There are several reasons for this. The initial problem is that governments have borrowed too much and the debt burdens are non-sustainable. How can you solve a debt problem with more debt? All that the program does is to substitute EU debt for the debt of Greece, Portugal, Spain and others. You are replacing national debt with multilateral debt but it's all still debt. And so-called money creation by the ECB is just another form of debt because Euros issued by the ECB are simply paper liabilities of the ECB itself, so-called "notes" so even the money is just debt. Any possible repayment of the debt involves deep austerity, spending cuts, layoffs, higher taxes, reduced benefits and other actions which will definitely cause a depression in Europe and perhaps 25% unemployment throughout the Euro-zone.

The alternative is to print money which will lead to hyperinflation and the collapse of the Euro. So there are no good outcomes. The G20 and the IMF will try to reliquify the system and create new money through the issuance of SDR's. At the same time, people will try to protect their wealth by buying gold. So as paper currencies collapse, the money system will become a foot race between SDR's and gold. Large hedge funds are completely unimpressed with the umbrella for the reasons noted above. They are shorting the Euro and buying gold.

There is one other flaw in the EU plan. In 1992, when George Soros attacked the Bank of England, he did so by selling Sterling and buying dollars. This forced the Bank of England to do the opposite which was to buy Sterling and sell dollars. Since the Bank of England had a finite amount of dollars to sell, Soros knew he could beat them by buying more than they had. However, he needed real money to do this and he was perhaps the only speculator in the world at that time with that much money. Today you do not need money to destroy national finances, you can do this by the creation of synthetic short positions in Euros through the use of credit default swaps (CDS) and other derivative instruments. Goldman Sachs are experts at this. And they can create CDS in potentially infinite amounts since there is no regulation and no margin requirements. In effect, Goldman could create a short position equal to ten times the amount of Euros in the guarantee fund. Goldman can create synthetic short positions faster than the ECB can print money. Therefore, the ECB's plan is doomed to fail because they cannot beat the speculators who can use CDS instead of real money.

- Jim Rickards