Spain is 100% Totally Beyond Saving
http://albertpeia.com/spainbeyondsaving.htm
‘My prediction regarding the breakup of
the EU was obviously way early.
However, the fact remains that the EU will
break up in time. And it will likely be Spain that brings this about.
The reasons? Among other things:
Spain’s
private Debt to GDP is above 300%.
A huge
portion of Spain’s banking system (representing over 50% of mortgage loans AND
deposits) was totally unregulated up until just a few years ago.
Spanish
banks are drawing over €400 billion from the ECB on a monthly basis (up from
€377 in June) to fund their liquidity needs.
Spanish
banks are now net sellers of Spanish sovereign bonds (leaving the ECB
as the only buyer in the market)
Spain’s
banking system has lost 18% of its deposits in the last 10 months due to a
staggering bank run.
The
economy of Spain is a disaster with total unemployment over 25% and youth
unemployment above 50%.
Spain is
now facing a constitutional crisis with various regions looking to secede if
they don’t receive bailouts from the Federal Government “without conditions.”
Spanish
banks need to roll over (meaning renew terms on) more than 20% of their bonds
this year.
So
Spain will suffer a collapse, most likely of its banking system resulting in a
sovereign default (barring a bailout). When this happens, some €1 trillion+
worth of collateral (still rated AAA by EU banks) will be sucked out
of the system.
This
in turn will spur margin and collateral calls on tens of trillions of Euros’
worth of derivative trades.
And
the EU Financial System collapses.
This
is reality, regardless of who wins the US election. It may take a few months
before it hits… but it will hit.
On
that note, if you are not preparing for a bloodbath in the markets, now is the
time to do so. The reality is that the Central Banks are fast losing their grip
on the markets. They’ll never admit this publicly, but I can assure you that
Bernanke and pals are scared stiff by what’s happening in the banking system
right now.
If
you’re looking for someone who can help you navigate and even profit from this
mess, I’m your man. My clients made money in 2008. And we’ve been playing the Euro Crisis to perfection, with
our portfolio returning 34% between July 31 2011 and July 31 2012 (compared to
a 2% return for the S&P 500).
Indeed,
during that entire time we saw 73 winning trades and only
one single loser. We’re now
positioning ourselves for the next round of the Crisis with several targeted
investments that will explode higher as the EU crumbles.
To
find out what they are, and take steps to protect your portfolio from the
inevitable collapse…
Graham
Summers