Rumor Has It DEXIA BANK RESCUE IS FALLIN APART

The market is rife with rumors about the previous agreement to bail out the bank and insurance firm DEXIA is coming apart as the Belgians are balking at the cost. Something that needs to be considered is that the French are probably putting pressure on the deal to force the Germans to agree an EBC-sponsored bailout so as to get a major infusion of capital. Dexia is already a problem for Europe so by getting the Belgians to pull the plug on the deal the French can force the Germans to immediately step up and agree to a large role for the ECB.

If French banks become insolvent, the Germans will be right behind. What better way to initiate German cooperation–and this can be done–by using a bank that is already the subject of a bailout. This would fit with today’s rumor about the IMF enhancing its SDR pool by utilizing its pool of funds to aid the European financial system. In tonight’s Financial Times there is also a story about the possibility of European central banks utilizing their GOLD HOLDINGS TO SECURE A EUROPEAN BOND.

There is definitely a major plan in the works for some CONCERTED ACTION USING ALL THE ELEMENTS AVAILABLE: GOLD, ECB, EFSF, IMF FUNDS and whatever else can be found. Something is definitely in the works. More tomorrow as rumors begin to surface.

IMHO...

This is why I think the most conservative Cain and / or Michele Bachmann will be pulled up and take the primary.

Europe is heading for a bigtime disaster and it looks like it’s going to be starting to kick in bigtime well before the 2012 election.

I don’t know the exact timing of the big collapse, but the world is going to really be searching for answers.

And a “back to work” conservative will be swept into office like Churchill was if we have any brains at all.

People will not want to hear anything about government being the solution. Big banks will fail. People are not going to want to hear about bailing them out with printed dollars for which Treasury debt is issued and therefore the bailout has to be paid for with future taxes. The size of what’s needed for bailing out is going to get too big to fly in that manner.

Major banks will have to fail around the world and smaller banks will be there to pick up the pieces and carry on - but only if the normal bankruptcy process happens. Doing things this way will add zero to taxes, providing an enormous benefit for citizens. The big bank employees will just have to change jobs and go work for smaller banks. Investors will take some big hits. The big bank executives will just have to be embarassed for 15 minutes and then everyone goes on with their life.

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