Spanish Bank Bailout - The Plan - And The Arrogance

[Reality Check]

The European Union elites have leaked the plans of how they are going to "Bail Out" Spanish Banks.

The arrogance and the laziness of the plan is astounding.

The governments of the Economic Union have set up a bail out corporation known as the European Financial Stability Facility (EFSF)
The bail out corporation is not, repeat not, backed by the full faith and credit of the EU Governments. It is a paper shell corporation.

The bail out corporation was funded by "limited promises of money" from the governments of those countries that use the Euro as there only currency.

The amount of the promises were in proportion to the size of the economies of the various countries. I am not aware if countries like Greece, Ireland and Spain were included as part of those making promises or not. It would not surprise me if the total "funding" of the bail out corporation included promises from countries like Greece to pay their fair share.

The total amount of the limited promises was estimated to be in the range of 400 to 600 Billion Euros but some of that may have already been promised to other countries like Greece for partial bail outs.

It has not, as far as I am aware, been announced if any country actually funded the bail out corporation with actual money, or just their promise to pay into the bail out corporation a limited amount of funds when, and if actual funds were required.

At one point in time the bail out corporation was also "hoped" to be funded by loans, unsecured loans, from countries like China. But when countries like China were actually approached to see if they wanted to make these tempting investments, they declined.

In any event, this bail out corporation is going to be a key player in bailing out the Spanish Banks.

The Bail Out Corporation will issue bonds ( paper, promises by the Bail Out Corporation only, to pay at a future date if needed ).

These bonds ( paper promises of the bail out corporation ) will be given, or loaned, as "assets" to the Spanish Government.

The Spanish government will then give these "assets" to the Spanish Banks to re-capitalize the Spanish Banks.

The total amount of these bail out corporation bonds is estimated to be in the range of 40 Billion to 125 Billion Euros.

Each Spanish bank will then take these valuable assets, these bonds, and borrow money against them from the European Central Bank at near zero interest rate. These loans are allowed under the EU Treaty because they are fully secured by "top rated assets" of the bank, in this case the "top rated assets" will be the bonds of the Bail Out Corporation given to the bank by the Spanish government.

The European Central Bank will almost certainly do what it always does when it needs more money - print it - before loaning it to the Spanish Banks.

Somehow the public depositors; and the investors who own the bank's stock; and investors who own the banks bonds will feel better about the Spanish banks because the banks now have more capital ( money from the European Central Bank ), and more Debt ( a new Debt to the European Central Bank offsetting this new money ) and best of all new assets ( paper promises from the Bail Out Corporation that it will come up with a limited amount of real money if needed ).

[Reality Check]

This thread lost all posts - after the first post - apparently after a restore of the Generational Dynamics Forum database by Network Solutions.

[Trevor]

Yes, I've been having a similar problem.