Euro Area

[gaelic cowboy]

gaelic cowboy is (as quite often in this thread) entirely correct - this will do nothing to solve the actual problem, but what it will do is provide a figleaf which will finally allow the ECB to step in.

gaelic cowboy is often right, but if he said that in the post just above i have failed to see it, and that fig-leaf is limited to bank support.

lol, that is not what i am hearing from Draghi and Merkel!

Regardless if they had a whole Fig tree forest to hide behind I do not see the ECB acting as lender of last resort.

I get the sense that were probably past the whole lender of last resort arguement the ECB could buy all the bonds it wants now all that will happen is people will sell to it then refuse to buy new ones. This is like announcing to the whole village you will buy all there cattle at the mart in the back end and that you will be back to sell the same ones in the spring, your price per kilo next Janurary baring a massive move in beef prices globaly would tank.


So in a strange way Germany has a point but for the wrong reason inflation will not be the problem, the problem will be the price offered next spring if the taps are opened now.

The problem as we can all see is that with Britains veto they cant change the Lisbon Treaty but they also couldnt finish the meeting without having something to show the Bankster for todays bond auction, hence the intergovernmental agreement there flashing around like a voodoo doll at the bond markets.

We know the European banks are exposed to private losses so they have bought sovereign bonds (encouraged to do so by there governments and the ECB) as a way to offsset potential future losses by having supposed secure government assets on there books.

Now it looks like governments and banks all over the place may get downgraded which leads to more capital requirements for banks which could mean more government bailouts.

Except the governments may get downgraded leading to the banks supposedly secure government assets being worth less meaning more bailouts.

Basically we are a hairsbreath away from a systemic debt/death spiral and they are they are still talking up the Austerity Confidence Fairy it's like the bulldozer is outside and were arguing over what colour paint should be in the sitting room.

Keep this in your mind at all time about this crazy situation if Italy goes the Euro is over therefore if we keep on the present course expect to see Greece, Ireland and Portugal peeled off to appease the Banksters.
It has it's appeal as a solution and it might just work IF the countries stayed on the path to reform of there respective economies at there own pace. (it also might just save Italy)