We had a major development here in Europe today folks. Yields on the
ten year Italian bond soared to over 7%. The 7% hurdle is considered
critical because once Greece and Ireland went over 7%, they turned to
the EU for a bail out. So the thinking now is that Italy needs a bail
out too, but hereâ€™s the problem. Italy has two trillion euros of debt.
Thatâ€™s greater than the total amount of debt owned by Greece, Ireland,
Portugal and Spain combined.
amount of debt in the world. Itâ€™s estimated that over half of this is
owned by banks around the world. Four hundred million euros of it is
owned by the French banks alone. As I mentioned in a previous interview
here, they can no longer kick the can down the road because itâ€™s become
a two ton boulder.
plus drop today by the euro against the US dollar is a warning sign that
a major crisis is brewing. I mentioned before that the Dexia and MF
Global collapses are not the Lehman event Iâ€™ve been expecting before
year end. But the markets are telling us that a major crisis is now
brewing. So be prepared for another Lehman type of collapse which will
bring the financial structure to its knees.
The media has been
portraying these problems as a crisis of capitalism, but they have it
completely wrong. What weâ€™re witnessing is a crisis of socialism.
Governments have been making far too many promises which have been based
on borrowed money coming mainly from the banks.