InvestorMind

After hours of negotiating, European policymakers agreed on Friday morning that the bloc’s bailout fund, better known as the European Stability Mechanism (ESM), would be able to lend directly to recapitalize struggling banks. Following the news, the markets reacted happily in agreement. But one person doesn’t see it as joyfully… Ever-skeptical investor Jim Rogers told CNBC that the move does absolutely nothing to help solve the region’s biggest problem of high debt levels. “Just because now you have a way to get [the banks] to borrow even more money, this is not solving the problem, this is making the problem worse,” Rogers said. Negotiations lasted throughout the night into Friday morning and finalized the agreement that these banks would be able to have money lent to them to recapitalize without increasing a country’s budget deficit and without preferential seniority status. The market euphoria brought on by the news of the agreement by European officials surged the Asian stoc...

With tremendous volatility in global markets, today King World News interviewed James Turk out of Europe. Turk told KWN that we are headed into an extraordinarily dangerous time for both the markets and the financial system, that will end in a massive panic. Here is what Turk had to say about what is taking place: “Today was a very important day, Eric, because gold was strong while the stock markets were weak. This is a trend I expect to continue, and one that will baffle many financial analysts, going forward, that don’t understand this type of cycle.” James Turk continues: “I was hoping to see more strength in the precious metals at the end of last week, Eric, given the pummeling gold and silver were given. But I guess that was too much to ask for with July option expiry this week. Having driven the price of gold and silver down to this low level, I assume the paper-shorts will try to keep prices as low as possible, in order to maximize their profit by having calls they sol...

Today 40 year veteran, Don Coxe, told King World News “...the amounts involved are at mind-boggling levels,” in terms of what is needed for Europe’s governments and banks. Coxe, who is Global Strategy Advisor to BMO ($538 billion in assets), also said that European banks, “...have borrowed huge amounts of money, in dollars, under currency swap arrangements,” and “if banks start to go down, we know from 2008, when banks start to crumble, then the whole system falls.” Here is what Coxe had to say about the ongoing crisis: “Well, first of all we’ve got to stop using ‘billions’ because if there is going to be a fund that works, it’s going to have a ‘T’ (for trillions) on it. We are dealing with some very big numbers in the sense that Italy, although it’s not that big of an economy, it’s got the third largest amount of bond debt outstanding.” Don Coxe continues: “So Italy’s situation is truly serious because they also have a short duration on their debt. If you were holding a three...

This chart, better than any we have seen so far, summarizes just how much has been injected already to preserve the Eurozone from collapse. This is what is known as a sunk cost, because last time we checked (and just as we explained back in March at the market highs when everyone was euphoric that Europe is now fixed) nothing has been fixed, and Europe is one 'rogue' democratic vote away from an EMU exit, and thus oblivion (or so they said last year, now everyone is prepared for a Greek departure, or so they say now, expect for the Greeks of course - they go straight to the 10th circle of hell and do not pass go). The truth is that by the time the status quo finishes its extend and pretend game, which incidentally has only one real outcome, the €2 trillion spent to date, will be orders of magnitude higher... Original source

At the latest Casey Research conference, Recovery Reality Check, James Rickards, senior managing director of Tanget Capital Partners and author of Currency Wars: The Making of the Next Global Crisis, debates Harry Dent, founder and president of HS Dent Foundation, on the subject of which is more likely in the near-term economic future, inflation or deflation.

As I’ve assessed in earlier pieces, neither the Fed, nor the IMF, nor the EFSF, nor the ECB has the firepower or the political backing to prop up Spain or the EU. This ultimately leaves the ESM, the permanent European Stability Mechanism… which technically doesn’t even exist yet (it’s supposed to be ratified by July 2012). That’s right… the bailout fund which is meant to SAVE Europe doesn’t even exist yet. And it’s not clear that it will anytime soon either… Indeed, in order for the ESM to be ratified it needs the individual EU member states that will contribute 90% of its capitalization to first ratify it on an individual basis. Here’s the list of countries that represent that 90% of capital as well as the status of their individual ratifications and the percentage of funding they are to provide. Read the full article at Zero Hedge