Spain received up to $125 billion in aid over the weekend…
It’s like spraying a campfire with kerosene…what was the goal when the central banks of Europe need upwards of over two trillion to get through this mess….
Seems like it was a way to keep the fire hot and to get through this Greek election. Depending on who takes power this weekend, will determine whether Greece stays with the Euro or not.
With a new word beginning to hit the airwaves, re denomination is something that may be discussed more and more as the election overseas gets closer.
Something else to note is the FOMC, or Federal Open Market Committee meeting being held just after the election takes place in Europe. As we noted the Feds revised meeting schedule here, in a post mentioning QE3 in September. With the Greek decision to come on the 17th of June 2012, the Fed meeting is just days after that on the 19th and 20th. If you take these facts in to consideration, it seems the $125 billion for Spain was nothing more than a interim band-aid, just as Bernanke’s lack of QE3 talk over this past week. Chess moves by the powers that be, each moving pawns to see how aggressive the other will be when their feet are held to the fire.
Central banks have never made any moves on a large scale until an emergency arises…could it be that no one really knows how bad it may actually get…and that is the real reason there has not been any more easing up to this point.
Everyone knows there is a huge problem, we’re on pace to lose more than 1$trillion this year already as we near a national debt of $16trillion, take a look for yourself here.
Are they holding back the most powerful tool they have to get a better overall picture of everything, so they don’t add an insignificant amount of liquid capital to the system, cause they don’t know how much will really be needed?
If Europe does not implode over the weekend, which is not likely, an extension of “operation twist” would make sense. This would keep the banks just as tight on lending while remaining heavy in cash, without the need to add even more liquidity just yet.
This will allow time for the problems in Italy to start rearing their ugly heads, and QE3 to come in the Feds July/Aug or Sept. meeting, just in time for implementation to take effect for the US Presidential election.
Just some things to think about as everything unfolds…It’s been said that a spike in gold and silver will signify the beginning of the end, if you have not gotten involved in precious metals as of yet, what seems to be the final window for opportunity may be closing soon.