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Thursday, September 15, 2011

America: Global policemen & piggy banks

Yesterday in a posting, we compared the pathetic game Germany and France are playing by propping up an economically dead Greece, to the 1980's film "Weekend At Bernie's".  We also stated that Americans should be caring what goes on in Europe because we are the ultimate economic backstop; the world piggy bank.   We bail out Everyone...  Everyone except our own middle class and poor.

Seems 'Business Insider' agrees..  here's what they wrote:

Merkel Will Press Obama And The Fed To Help Bail Out The Eurozone

"In the days leading up to the collapse of Lehman Brothers, then French Finance Minister (now IMF Managing Director) Chistine Lagarde told then-Treasury Secretary Hank Paulson that he could not allow Lehman to fail. The ramifications would be catastrophic, she said.  She was mostly right.

Three years later, it will be Angela Merkel talking to President Obama,Treasury Secretary Geithner and Federal Reserve Bank Chairman Ben Bernanke with exactly the same message.  The United States government and the Federal Reserve must come to the rescue of the Eurozone or the ramifications will be catastrophic. And she will say that she needs roughly $1 trillion in financial guarantees and liquidity support.  That's the number that will calm the markets.

She will do this publicly (it will be leaked to the FT or the NYT) because (a) she wants to maximize the pressure on the US to ride to the rescue and (b) she wants the blame to fall elsewhere in the event that the "situation" goes haywire. And there will follow perhaps the defining moment of the Obama Presidency.

If Obama goes forward and provides all or part of the $1 trillion guarantee, he will likely cut his own political throat in so doing. 

If Obama declines to go forward and provide all or part of the $1 trillion guarantee, he will likely preside over the second massively destabilizing financial panic in four years, thus insuring a second Great Recession, thus cutting his own political throat."

~ Things are going to get Very bad in the coming weeks.. and you Better start paying attention and caring about things going on economically outside of yourselves and the political left-right games this nation plays to distraction.  Its going to be a rough winter figuratively and literally and if you want to be ahead of the game, you will focus on understanding Europe's financial problems.

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