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At Risk Eurozone Sovereign Credit Ratings

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Besides what Eurozone countries have to refinance next year, banks have to roll $720 billion of their own at high rates. Moreover, troubled sovereigns need around $6 trillion to avoid default. Solvent countries can't provide it without going broke. Neither can the Fed, ECB or IMF.

Capital flight is also an issue. In 2011, Greek banks lost 20% of their deposits. Will Italian and Spanish ones be next? Smart money says so. World leaders grope for solutions. Good ones aren't being chosen "The situation is unsustainable," says Chapman.

If troubled Eurozone sovereigns default, or just Italy and/or Spain, "US banks cannot possibly stay solvent." Knock-on contagion will crush them. All 27 EU nations are at risk. So are others globally. "This as we predicted has no solution."

Weaker states will be cut loose. The euro will be phased out. Article 123 of the EU Treaty prohibiting ECB financing is illegal. Sticking with treaty provisions assures collapse. Germany won't abandon the system. Instead, they'll drop weaker states and hope others hold together.

Worsening conditions assure damned if you do or don't outcomes. Ordinary people will be hurt most, including in stronger nations like Germany. End game trouble's approaching at a faster clip.

Stephen Lendman lives in Chicago and can be reached at Email address removed

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

http://www.progressiveradionetwork.com/the-progressive-news-hour/ .                                 

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I was born in 1934, am a retired, progressive small businessman concerned about all the major national and world issues, committed to speak out and write about them.

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When Rome collapsed we went into the dark age. The... by Theresa Paulfranz on Wednesday, Nov 30, 2011 at 11:17:21 AM