With each passing day, the banking crisis in Europe escalates. European banks are having their credit ratings downgraded in waves, bond yields are soaring and billions of euros are being pulled out of banks all across the eurozone. The situation in Europe is rapidly going from bad to worse. It is almost like watching air being let out of a balloon. The key to any financial system is confidence, and right now confidence in banks in Greece, Italy, Spain and Portugal is declining at an alarming rate. When things hit the fan in Europe, it is going to be much safer to have your money in Swiss banks or German banks than in Greek banks, Spanish banks or Italian banks. Millions of people in Europe are starting to realize that a "euro" is not necessarily always going to be a "euro" and they are starting to panic. The Greek banking system is already on the verge of total collapse, and at this rate it is only a matter of time before we see some major Spanish and Italian banks start to fail. In fact it has already been announced that the fourth largest bank in Spain, Bankia, will be getting bailed out by the Spanish government. It is only a matter of time before we hear more announcements like this. Right now, events are moving so quickly in Europe that it is hard to keep up with them all. But this is what usually happens in the financial world. When things go well, it tends to happen over an extended period of time. When things fall apart, it tends to happen very rapidly.READ MORE
And at the moment, things across the pond are moving at a pace that is absolutely breathtaking.
The following are 18 signs that the banking crisis in Europe has just gone from bad to worse. . .
Moritz Kraemer, the head of S&P's European sovereign ratings unit, made the following statement on Bloomberg Television on Monday: "Greece will default very shortly. . .That should chill you to your bones.READ MORE
If the EU allows Greece to default, that would be a signal to investors that the EU would allow Italy, Spain and Portugal to all default someday too.
Confidence in the bonds of those countries would disintegrate and bond yields would go through the roof.
Without a doubt, this is a German solution for a German-dominated Europe. Germany does not want to pay for the debt mistakes of other EU nations, and so they are shoving bitter austerity down the throats of those that have gotten into too much debt.READ MORE
But this solution is not going to be implemented without a massive amount of pain.
In fact, this solution is going to make a massive financial collapse much more likely...
Spain is toast. That's the solid opinion of a billionaire global investor I know with whom I met privately in Paris last weekend. The only European countries left standing financially when Spain and thus the EU-Euro enterprise goes under are Germany, Denmark, and Holland - plus non-eurozone countries like Norway and of course Switzerland. There's a chance Italy might barely squeak through, but likely not the UK, and France is broke.
We'll always have Paris, and Europe too - but the EU-Euro game is soon to be over.
Oh - and my billionaire friend (whose $20B private equity fund is averaging 68% returns, so he knows what he's doing) won't touch investing in China with a 20-foot pole...
But level of debt isn’t the only problem. Then there’s the fact that the US has a far shorter maturity of government debt than most other countries, meaning that even if it weren’t borrowing any extra cash it would have to issue a large chunk of new stuff each year...America is not Greece, but if it does not start making efforts to cut the deficit within a few years, it will head in that direction. The upshot wouldn’t be an IMF bail-out, but a collapse in the dollar and possible hyperinflation in the US, but it would be horrific all the same. America has time, but not forever.Read the whole thing
Tens of thousands of people took to the streets as part of nationwide strikes to protest new taxes and government spending cuts demanded by the International Monetary Fund and other European nations before heavily indebted Greece gets a euro110 billion ($141 billion) bailout package of loans to keep it from defaulting...Three people died after being trapped in a burning bank along the main demonstration route in central Athens.Read the whole thing
Alias Barack Obama: a lie is born: The greatest identity fraud in history Paperback – July 10, 2012
