The Whole Eurozone Could Be Ablaze by New Year

by | Nov 29, 2010 | Headline News | 19 comments

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    Late Sunday night the EU announced that they have agreed upon an 85 Billion Euro ($113 Billion) bailout for Ireland. Early media reports sought to calm global stock markets by suggesting that crisis talks were over and the deal was just about inked.

    The problem is, however, that even though the EU wants to give Ireland a bailout, the Irish people may have none of it. Ireland’s debt crisis, though a drop in the bucket compared to that of Spain (and the USA), may be the catalyst for a complete bond meltdown in Europe if the Irish Parliament refuses to accept assistance from the IMF et. al. :

    Therefore, the next week will be crucial, in Ireland. The next week could likely decide the fate of the Eurozone.

    If the popular perception grows over the coming week that the Cowen government sold out the country to the IMF and the EU, then it is possible—very possible—that the austerity budget will not pass on December 7.

    This would be a disaster to the European Union.

    Is such an outcome likely? Will the Irish reject the austerity budget on December 7? Will they instead force the Irish banks to default on their debt?

    But if the Irish reject the austerity budget on December 7, it is obvious that the Spanish problems will come to a head a lot faster.

    An Irish rejection of the bailout would send the bond markets into a frenzy—Spanish debt would immediately come under pressure, likely crashing before Christmas. Italy would come immediately next. The whole Eurozone could be ablaze by the New Year’s.

    Therefore, the EU needs to make the December 7 budget vote go smooth—they need to pull out all the stops and make the Irish understand the situation. They need to make them see the wisdom of making sacrifices for the well being of British and German banks.

    Source: Gonzalo Lira

    We realize that the goings on in Europe are not the concern of the majority of Americans – we’ve got plenty of problems right here at home – but, consider what may happen to US stocks, bonds and our economy in general if Europe collapses.

    Correction: Not if, but when.

    We’ve maintained, that like the US, the coming European collapse is inevitable. Even if the Irish accept the bailout, the EU still has Italy to deal with, as well as Spain, which would require a bailout five to ten times times larger than Greece, Ireland and Portugal combined.

    In early November we asked Is a Monster Reversal In Stocks, Commodities, and the US Dollar in the Works?

    We will soon find out, either by the end of this year if Ireland doesn’t take the bailout, or by next Summer, at which time Spain’s problems will be the talk of mainstream financial pundits the world over.

    Whatever the case, whenever Spain and Italy finally do have a meltdown in their debt markets, we can see massive capital flows shifting from Europe to the US.

    This means that the Euro may be annihilated, while the US dollar benefits.

    The result?

    If we had to guess, further continuation of the European debt crisis will lead to falling equities, commodities and perhaps even precious metals (for a time). Depending on the severity of how the EU crisis is perceived, we may even see a sharp correction or crash in US financial markets.

    This, of course, may lead to further erosion of the American consumer, as many will fear that a double dip recession has occurred (those paying attention realize that we’re way past recession and in the throes of another great depression), leading to further reinforcement of the negative feedback loop of rising unemployment, falling wages, and increased government assistance.

    Keep an eye on Europe, it is a good indicator of things to come here in the US.


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      1. Thanks for the kind words Schaef.

        Anytime the IMF comes in to “bail out” a country, really bad things end up happening to the wealth of the populace. It’s not going to be pretty in Europe any which way you slice it.

        Here is a bit of insight I came across today:

        This sums up the current global debt crisis. The amount of money in existence in the world today is not enough to pay back all that is owed when you include the interest. Therefore default is an inevitability rather than something that can be avoided by creating more debt – because, of course, creating more debt just means that you are causing a greater disparity between the money that exists and the money which is owed. The question then remains: “At what point does the entire system collapse?”

        Picked up that little tidbit right here, on your web site in your analysis of the IMF, Europe and Debt in general. Great stuff, as always Schaef! (Highly recommended read for basic understanding of how debt [doesn’t] work and how the IMF destroys the monetary system of nations)

      2. They are already going after the Italian bonds.  If gold goes down in dollars it will “see/saw” on the other’s fiat.  Good thing governments keep their gold holdings secret!


      4. Therefore, the EU needs to make the December 7 budget vote go smooth—they need to pull out all the stops and make the Irish understand the situation. They need to make them see the wisdom of making sacrifices for the well being of British and German banks.

        Are YOU JOKING??  This is a bailout for the Rothschilds and Bankers.  One more step towards ONE World Currency.  WAKE UP!
        watch-Damon Vrabel  Watch- MONEY AS DEBT  READ READ READ!

      5. Mac,

        In relation to the debt, i can tell you what we live here in Greece.
        Before the IMF the Greek debt was 330 billion euros. There are many reasons which lead to that and we dicsuss them some other time. But the important issue is that after the IMF, the debt will reach 440 billion euros.
        How is a country going to survive having to pay interest of 5,9% of 440 b?
        My opinion is that every country which faces trouble must rely on its own resources. Close the borders, throw out all the aliens, cut the public sector in half, and start production.
        To give you a clue of what happened here, Greece was mainly an agriculture based society. Today we import beans, we import cucumbers, we import peanuts, pears, grapes etc. If we manage to start producing again, at least we will be able to support ourselves for some time. Slowly we could enter the global markets again.
        But the main problem is Germany which doesn’t want strong allies, but wealthy consumers for its BMWs and Mercedes.


      6. I enjoyed visiting Rhodes, pebble beach, Greece.  Olives imported yet Manos?

      7. Tom,

        I also love Rhodes. My wife graduated from the tourism college of Rhodes, and while she was studying i visited the island. It’s a real beauty.
        As for the olives, this has already happened Tom.
        A couple of years ago, olive oil from Crete (where i live) was sold to Italy, the Italians refined it, bottled it, and the sold it back to Greece.
        We are beyond the limit of laughters; we must start crying.

      8. This is why I do not go back to the old country anymore.
        Amerika is bad.
        Greece is worse……


      9. Have been to Crete twice.  Nice leather products.  I always recognize it in Zorba the Greek.  How’s the fishing industry doing?

      10. Germany is the only economy that works in EU.   The question is, how long will the German people, put up with bailing out the rest of Europe?
        I know how proud Europe is of their common money,  but the time is coming when Germans will demand the D-mark  back.    That is when everyone holding euros, will suddenly realize they are holding  doo-doo!

        What am I talking about…..the euro is as solid as the dollar!
        Gold, anyone?

      11. I understand that the U.S. funds the IMF with 20% TP?

      12. – this article is straight up bullshit! ;0P

        All euro countries need to REFUSE BAILOUTS!



        open your EYE’S!


        “OH WAIT THE GAME IS ON!” gotta go watch the tube…

      13. Which game?  I don’t think anybody is raping me, no…… rape here.  My eyes are shut but I can type with them open also.  Are you yelling? 

        I do understand your frustration.  I think many of us here have already in different ways, if we want to admit it here or not.  If we don’t have an outlet, most of us would pop.  Have seen it on this site already.  I’ve made a good friend of mine upset with me because he didn’t understand.  Still doesn’t fully, thinks he can beat it & not prep.  I would rather have one good friend than 2 or more that are less.  Would be neat to be in the same room with ALL of you and guess which ones you are.  Would any of you be wearing tin foil hats?  I do.  HD Renolds.  I’ll bet I can pick out more than my share.  Just wish I could do that with the public.  I meet 20-30 strangers every day.  Ask 2-3 every day where the economy is going………every one of them thinks it’s getting better.  Most have degrees.  The people that I get to know that I care about, I give them a silver dollar or round.  They will get it before most have to see it but think it will still be too late.  Aren’t we the lucky ones!!!!!!!! 

      14. @ Anonymous 7:41…..Back in December, 2006, I had a conversation with my VERY successful cousin. I said the economy was on shaky ground because of housing and that I gave it 2 years at the most. He basically said, “you don’t know what you’re talking about; the economy is in GREAT shape.” All through 2007 and 2008, I kept telling people things were going to get really bad. Many looked at me as if I had grown a second head. Then came September, 2008, and comments such as “Wow, I guess you were right”.  I’m trying these days to get people to prepare, and yup, I guess I grew that second head again. They just chuckle and shake their heads…all forgetting that I called right just 2 years ago. How’s that saying go? “You can lead a horse to water, but you can’t make him drink.” Well, I will keep leading as best I can, because I care for these people, and I will keep preparing as best I can, because to my mind, the writing is on the wall, and it will not be pretty.

      15. In 1933 great, great grandpa Brown was a highly paid craftsman. He got paid $2 per day. One day he decided to take one day’s salary and dedicated it to his two oldest great, great grandsons. The first grandson to be born after New Years Day, 2010. But, grandpa wasn’t too smart. He got paid on friday and went to cash his check for $10. Out of that check he kept two dollars. One silver dollar coin and one paper dollar. To the first grandson born after News Years Day 2010 he would give the silver dollar and to the second grandson born after New Years Day 2010, he willed the paper dollar.

        The first grandson would inherit a coin worth a certain amount. At todays prices it would buy, say, 27 loaves of bread. The second grandson would inherit a bill that would buy 1 loaf of bread. Isn’t this strange? Grandad Brown worked just as hard for the value of the first dollar, the silver dollar, as he did for the paper dollar, yet the paper dollar is missing 26 loaves of bread.

        Think to yourself: What happened to the value that would buy the 26 other loaves of bread? Did it just evaporate? It did not. Where did it go?

        I’ll tell you where it went! The Government and the Federal Reserve *FUCKING*STOLE*IT*!!! 99.99% of the sheople of the USA do not understand and do not relate to this story. They do not understand the the US Government in collusion with the Federal Reserve is stealing their wealth. Until we make people understand this and until they realize that the Federal Reserve is nothing but a sub-corp of the IMF and that the US Goverment is nothing but a sub-corp of the Federal Reserve, NOTHING will change until it all goes belly up.

        I pray every day that God will push this over the edge. When we have a federal reserve who believes that they have the power of a god to create wealth from nothing and then the government can then regulate what “sin” is, we need to work as hard as we can to make it suffer a painful, grueling, gruesome, agonizing death. A death befitting the evil that it is.

        There is nothing in this world that has caused more horror, more evil, more suffering than the IMF/Federal Reserve/US Government. Nothing. It is the cause of all famines, all wars, all plagues and all corruption, every depression, recession and economic collapse. Over and over and over they do the same thing but, the sheople, take them back each and every time.

      16. I give the grandkid silver every Christmas & birthday.  She has her own lock box that must stay at my house.  The rule is if she wants more she must leave it here. If she wants to take any or all home she doesn’t get any more in future, it’s her choice.  She has learned well and learned what real money is.  She has some silver certificates also & understands the difference between rounds, bullion, proofs & junk silver. 

      17. You go Net Ranger!  Shut’em down. We’ve got your back.

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