Friday, 14 October 2011

Time For the Engorgio Charm Harry?

 Harry needs to return one more time to save the Eurozone...

The EFSF needs a 7x engorgement zap from Harry's magic twig. It was such a wee thing when it was born - EFSF Born 7th June 2010.

not only will the EFSF have to be expanded (that much was known), but that Germany, and specifically the outright economy, will be on the hook by an unprecedented amount of money. And expanded it will have to be: not by two, not by three, but by a cool four times, to a unbelievable €3.5 trillion which according to Daiwa's Head of Economic Research, Grant Lewis, is an act which will be necessary to convince financial markets of euro area resolve to save Italy and Spain." That was two months ago. Finally, the governments, which back then religiously denied such reporting as scaremongering, are getting on the bandwagon. It was none other than Le Figaro, mouthpiece of the country that has the most to lose from the inability to ringfence a Greek fallout, that said yesterday: "The euro area reflects one of several options to increase by up to five times, or more than 2500 billion euros, the firepower of its relief fund for countries in financial difficulty (EFSF), said on Wednesday AFP European sources." In other words, the target number is now known, and nobody is ashamed to put it out there: between €2.5 and €3.5 trillion.

Read the rest at Van Rompuy And Barroso Announce €440 Billion EFSF Fully Functional; Now, How Do They Expand It To €3 Trillion?

If thats what needs to be done, the big question is...

The only problem, yesterday, today and tomorrow, is the open answer to the question of who will pay for this €2.5-3 trillion rescue net? Because we now know that China, which is busy bailing out its own banking system is out of the picture, while the US has its own major problems - the last thing the Fed needs is for the general populace to realize the Fed is once again directly bailing out failing European banks, like it did with Dexia.

So, once again: who pays for this wacky, wonderful, rumor mill, which is the only thing that drives markets these days?

If you have any ideas or know where Harry is please write to:

European Central Bank
Eurotower (Main building)
Kaiserstrasse 29
60311 Frankfurt am Main, Germany

Meanwhile, back at the Ministry Of Magic Greek 1 year bond cracks 163% yield.... says?  <NO>

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