Jim Sinclair’s Commentary
This has the chance of functioning as well as a snowball in hell.
The word is swaps.
GOP Lawmakers Push to Keep U.S. Funds Out of Euro Bailouts
Published December 10, 2011
Republican lawmakers on Capitol Hill are moving to block the International Monetary Fund from using U.S. money for European bailouts, as talks intensify across the pond over how to stanch the debt crisis.
Some U.S. lawmakers want their concerns addressed as part of the feverish end-of-year budget talks. On the House and Senate side, lawmakers have introduced legislation to wall off U.S. taxpayer money from playing any role in averting a European meltdown.
"It’s time to stop the bailouts and start restoring fiscal discipline to our own economy," Sen. Jim DeMint, R-S.C., said in a statement, as he and 25 other senators introduced an IMF bill Friday.
A similar bill on the House side has been on the table since the summer, though it has not moved out of committee.
But lawmakers are sharpening focus on the issue as European leaders discuss what future role the IMF can play in stabilizing the region. They are talking about lending billions to the IMF to create a backup fund for future crises, in addition to pressing the European Central Bank to expand its role.
Jim Sinclair’s Commentary
Once the euro is resolved, be it as toast or not, the dollar takes center stages for the so called vigilantes. Within weeks the dollar will be below .7200. Then the Fed will be battling the mega rich vigilantes (international hedge funds) with QE to protect the US bond market. The Fed and the dollar will lose.
2012 is going to one hell of a year.
Eurozone banking system on the edge of collapse
The eurozone banking system is on the edge of collapse as major lenders begin to run out of the assets they need to keep vital funding lines open.
By Harry Wilson, Banking correspondent
10:01PM GMT 09 Dec 2011
Senior analysts and traders warned of impending bank failures as a summit intended to solve the European crisis failed to deliver a solution that eased concerns over bank funding.
The European Central Bank admitted it had held meetings about providing emergency funding to the region’s struggling banks, however City figures said a "collateral crunch" was looming.
"If anyone thinks things are getting better then they simply don’t understand how severe the problems are. I think a major bank could fail within weeks," said one London-based executive at a major global bank.
Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding.
"The system is creaking. There is a large amount of stress," said Anthony Peters, a strategist at Swissinvest, pointing to soaring interbank lending rates.
