May 10, 2012 By gpc1981
http://albertpeia.com/spainnotsolvedsoplanb.htm
‘We
have entered an extremely dangerous environment: one in which the primary prop
for asset prices (Central Banks) are running out of ammunition. This will have
profound consequences for all asset classes as well as the financial system at
large.
This
was the real problem with Central Bank responses to 2008 all along: by
attempting to prolong a peaked economic/ credit cycle, they have set the stage
for an even larger Crisis, one that will see the Central Banks themselves
collapse along with numerous sovereign defaults.
These
are the key take home points ALL investors must come to grips with:
1)
Going forward the Easy Money props are going to
be removed from beneath the market.
2)
Sovereign defaults are coming. Whether it’s through hyperinflation, reneging on
promised future social welfare / pension/ healthcare spending, or outright
messy defaults (or various combinations of these) we will see most of the
Western world defaulting on its debts in the coming years.
How
soon all of this unfolds remains to be seen. The Multi-‐Trillion Dollar Question is whether the
markets realize that Central Banks are virtually powerless sooner rather than
later.
By
the look of things, it’s coming relatively soon. Spain, which is now at the
forefront of the Great Western Debt Default Collapse, has opted to seek funding
from the mega-bailout fund, the European Stability Mechanism (ESM) rather than
going directly to the ECB or the IMF.
The
reasons for this are clear: the IMF doesn’t have the funds (nor will it as the
However,
as
Spain’s
rating downgrade at Standard & Poor’s doesn’t alter Germany’s stance that
banks can’t have direct access to Europe’s financial backstops, a senior
lawmaker from Chancellor Angela Merkel’s party said.
“The
German position is absolutely strict,” Michael Meister, the deputy caucus
chairman of Merkel’s Christian Democrats, said in a phone interview in
The
ESM funding idea is really just
Indeed,
Moreover,
German tempers boil over back-door
euro rescues
Professor
Hans-Werner Sinn, head of Germany’s IFO Institute, said German taxpayers are
facing a dangerous rise in credit risk from a plethora of bail-out schemes. “The
euro-system is near explosion,” he told
Dr
Sinn said
“It
is a horror scenario,” he said, warning that the euro system is splitting
friendly countries into blocs of mutually hostile creditors and debtors,
exactly the opposite of what was hoped.
Earlier
this week, the Foundation for Family Business in
This
is the last thing Angela Merkel needs right now. Between this and inflation
arising in
Which means that the European mega-bailout funds (the
ESM and EFSF) will be much less likely to put out money for
Spanish lenders in talks over ‘bad
bank’ plan
As
their losses from mortgages grow, Spanish banks have begun discussions about
creating a separate entity -a “bad bank” – to take on these assets and relieve
pressure on the country’s financial sector.
The
goal of the new organization would be to reduce the financial strain on banks
and prevent the need for either a more costly government bailout or an
international rescue along the lines of
The
official for
This
is similar to
The SoFFin is essentially
Once
things improved, SoFFin was essentially put on hold
in December 2010. But in the last three months,
The SoFFin will give up to €400 billion ($524.24 billion) in
guarantees for banks and provide up to €80 billion for recapitalization. The
fund, which for the first time will accept euro-zone government bonds, will be
operational until Dec. 31 2012.
http://online.wsj.com/article/SB10001424052970204573704577184362262410868.html
The SoFFin and
This
is the equivalent of just sweeping bad debts “under the rug.” The debts still
do in fact exist and still pose a threat to the financial system. The markets
know this, which is why Spanish banks continue to be nationalized/ under major
duress.
With
that in mind, I’m already positioning subscribers of Private Wealth Advisory for the upcoming EU
collapse. Already we’ve seen gains of 6%, 9%, 10%, even 12% in less than two weeks by
placing well-targeted shorts on a number of European financials.
And
we’re just getting started. Indeed, we just closed our 50th straight winner
today: a 10% gain in one week’s time.
So if
you’re looking for the means of profiting from what’s coming, I highly suggest
you consider a subscription to Private Wealth Advisory. We’ve locked in 50 straight
winning trades since late July (thanks to the timing of our trades), and haven’t
closed a single losing trade since that time.To find
out more about Private Wealth Advisory and how it can help you make money in any market…Click Here Now!!! Best Regards, Graham
Summers, Chief Market Strategist,