The Pain in Spain Flashes Financial Armageddon, Inflation Wars

Monday, June 4, 2012
By Paul Martin

By: Nadeem Walayat
Market Oracle
Jun 04, 2012

This article continues from – Euro-zone Galloping Towards Financial Armageddon

Spain is bankrupting, its central government is bankrupting, its local government is already bankrupt along with most of its banks that have been busy hiding most of their bad loan losses on crashed property developments. The credit markets despite ECB support are fast closing to Spain as it is being forced to pay credit crisis extreme financial armageddon rates of interest to borrow.

Spain’s economy is in meltdown, the adult unemployment rate of 25% is higher than that of bankrupt Greece and the youth unemployment rate of 50% is at critical social unrest inducing levels.

Money is flooding out of Spain at an estimated E33 billion per month! These bankrupt Spanish banks are being downgraded on a near weekly basis, and the most recent news is that Spain’s fourth largest bank, Bankia or Bankruptia is on the verge of toppling over, demanding the state bail it out to the tune of Euro 29 billion, money that Spain just does not have.

Spain in desperation has attempted to get the ECB to start footing the bill for bailing out Spain’s bankrupting banks, the ECB has said No to the Spanish governments attempts to get it to effectively monetize Spanish government debt through the back door for it knows it won’t stop at Euro 29 billion, but soon turn into a flood that will run into the hundreds of billions, when the EU only has a bailout fund left totaling Euro 200 billion.

Spain has flashed financial armageddon and is on the brink of demanding hundreds of billions of euro’s in bailout funds to delay bankruptcy, the question mark is Spain too big to bail, because the price exacted on primarily Germany will be several orders of magnitude greater than that expended on Greece, all without a positive outcome.

In my opinion, Spain will demand a bailout within the next couple of weeks, probably coinciding with the Greek elections, and it WILL leave the Euro-zone.

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