This is How the Spanish Bailout Will Impact Key Markets
June 10, 2012
With investors around the world wondering how the $125 billion Spanish bailout will affect trading, today Michael Pento, of Pento Portfolio Strategies, writes exclusively for King World News to let readers know exactly how this bailout will impact key markets. Here is what Pento had to say about the situation: “It was announced this weekend that Spain has requested and will most likely receive $125 billion (100 billion Euros) to recapitalize their banking system. The money for the bailout will be channeled through the Fund for Orderly Bank Restructuring (FROB), whose funds count towards public debt.”
Michael Pento continues:
“However, nobody really knows where this money will come from or what the consequence will be from bailing out banks by increasing European sovereign debt levels. The current view among global financial markets is that Europe can solve its problems by applying the same elixir as the U.S. did during our credit crisis back in 2008.
Namely, the European Union now claims that by ring-fencing their banking system, starting with Spain, the European debt crisis will simply disappear. By adopting this philosophy, politicians have illustrated their complete lack of understanding regarding the true structure of the problem….