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[quote="Tom Acre"]I'm gobsmacked!

If they jump that hurdle, who is the EU going to borrow from to bailout the PIIGS? We're in hock to the tune of $12,000 billions or more.

Who is the IMF going to borrow from to bailout the PIIGS? They're awash in red ink already. How can they just pledged their entire budget to the PIIGS?

If they get past that, how will the PIIGS ever pay it back, much less in three years?[/quote]


I heard on Yahoo news a few days ago, that the fed issued a line of credit to the IMF. If this is true, there is your answer. It will never be paid back. It will be paid by devaluing our currency or shipping our $ overseas. How long can the balance of printing money and the dissappearance of money (foreclosers) keep in sync? Or how long will it be before everyone stops working and just lives off the government's printed money?

Just so everyone knows where Obama's Supreme Court nominee Kagan stands on Federal Reserve Transparency - well she doesn't stand really, it's more of a sit with an option to rollover. And she's about to get her treat:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSab0xkcV8jc

[i] Sept. 30 (Bloomberg) -- The Federal Reserve filed a notice it will appeal a judge’s order requiring the central bank to identify the companies that benefited from its emergency loans.

The filing with the U.S. Court of Appeals in New York today was authorized by Solicitor General Elena Kagan, the Obama administration’s top courtroom lawyer, according to Charles Miller, a spokesman for Kagan.

“Public disclosure is likely to cause substantial competitive injury to these financial institutions including the loss of public confidence in the institution, runs on banks and possible failure of some institutions,” the Fed said in its notice, which asks to put the lower court’s order on hold until the appeal is prepared. [/i]

This news is no surprise. That the global markets had dropped so precipitously on the fear of no baillout, the bailout is and was inevitable. From a government point of view, the loss in market values of the equity market more than offset the price to buy the loans in the short term. All governments think in short term only these days.
This goes through and they simply kick the can further down the road. I do agree with John though in that at some point they will not have the ability to kick the can any further down the road. Seems like this will be another year or two away. Seems like we will get one more bull market before that occurs.

I'm gobsmacked! Just from my casual understanding of this plan, I don't see how it can work.

How do they propose to get around the "No bailouts" clause in the EU Constitution?

If they jump that hurdle, who is the EU going to borrow from to bailout the PIIGS? We're in hock to the tune of $12,000 billions or more.

Who is the IMF going to borrow from to bailout the PIIGS? They're awash in red ink already. How can they just pledged their entire budget to the PIIGS?

If they get past that, how will the PIIGS ever pay it back, much less in three years?

10-May-10 News -- Europeans approve trillion dollar aid package


[i][url=http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e100510#e100510]** 10-May-10 News -- Europeans approve trillion dollar aid package[/url]
** [url]http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e100510#e100510[/url][/i]

Contents:
"Europeans approve 720 billion euro aid package - in principle"
"Angela Merkel suffers major defeat in regional election"
"Additional links"