Monday, May 21, 2012

Euro shorts in panic mood

During an appearance on Meet The Press on Sunday, Jim Cramer of CNBC boldly predicted that "financial anarchy" is coming to Europe and that there will be "bank runs" in Spain and Italy in the next few weeks. This is very strong language for the most famous personality on the most watched financial news channel in the United States to be using. In fact, if Cramer is not careful, people will start accusing him of sounding just like The Economic Collapse Blog. It may not happen in "the next few weeks", but the truth is that the European banking system is in a massive amount of trouble and if Greece does leave the euro it is going to cause a tremendous loss of confidence in banks in countries such as Spain, Italy and Portugal. There are already rumors that the "smart money" is pulling out of Spanish and Italian banks. So could we see some of these banks collapse? Would they get bailed out if they do collapse? It is so hard to predict exactly how "financial anarchy" will play out, but it is becoming increasingly clear that the European financial system is heading for a massive amount of pain.
Comment: Nothing of that will happen. After a slight dip, the euro is already moving back to over $ 1.30 again.

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