The Spain Relief Rally is About to End

Phoenix Capital Research's picture


As I noted previous articles, Spain has essentially three options:


  1. Spain goes the “Greek route” of agreeing to austerity measures in exchange for bailouts (which will implode the economy).
  2. Prime Minister Rajoy refuses to impose austerity measures and is removed/ replaced by an EU technocrat who is pro-austerity measures (like Italy experienced last year)
  3. Spain defaults/ leaves the EU.


Thus far Spanish Prime Minister Rajoy has opted to go for #1. The end result has been riots, protests, and now the threat of Spain as a country breaking up. I’ve long averred that Spain will bring about the break up of the Euro. By the look of things, we’re not far from this.


To whit, as the above article notes, Germany, Holland, and Finland have decided to pull back on the promise of a €100 billion Spanish bank bailout first established in June. These countries are now stating that this bailout should be included as part of the ESM mega-bailout fund’s banking program that could take years to implement.


Spain doesn’t have time for this. As I’ve noted before, Spain is facing a full-scale bank run (Spaniards pulled another €17 billion from Spanish banks in August, bringing the year to date bank run to over 18% of total Spanish bank deposits).


Now add multiple regional bailout requests, as well as 25% total unemployment to the mix and Spain is an absolute disaster. The Spanish Ibex knows it too:



Congratulations Mario Draghi, you promised unlimited bond buying and you bought less than one month’s worth of gains for Spain. If you want proof positive that Central Banks are losing their grip on things, the above chart is it. The moment we take out that trendline again, it’s GAME OVER (what more can the ECB promise?)


Remember, Spain is currently drawing over €400 billion from the ECB.


Let’s put this number in perspective… in June before Spain requested a €100 billion bailout, the country was drawing only €300 billion from the ECB.


Since that time and now, the ECB has promised to provide unlimited bond buying… and even Germany has indicated it would be open to some sort of a Spanish bailout…


And yet, Spain is now borrowing even MORE than it was in June.


This is not progress in any way… if anything it indicates that things are worsening in the EU’s financial system at a staggering pace. The powers that be are keeping things calm until after the election… at which time there will be absolute hell to pay.


On that note, if you’ve yet to prepare for Europe’s BIG collapse…we’ve recently published a report showing investors how to prepare for this. It’s called What Europe’s Collapse Means For You and it explains exactly how the coming Crisis will unfold as well as which investment (both direct and backdoor) you can make to profit from it.


This report is 100% FREE. You can pick up a copy today at:



Best Regards,


We also offer a FREE Special Report detailing the threat of inflation as well as two investments that will explode higher as it seeps throughout the financial system. You can pick up a copy of this report at:



Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
skydrake's picture

Perahps, three months, not one month (the promise of Draghi is of Jul 26), and even without lending money.

In addition, Rajoy still didn' ask for money to UE. Until he don't formally ask for help to UE, the European "troika" (the group of financial experts) is not allowed to go to Madrid "to see and suggest" (= take the power). Maybe Spain isn't completely run out of liquid money like Greece and they can take such "luxury". 

max2205's picture

GS never mentions that Ben will do swaps till eternity or economic conditions improve. Like he's done for 4 yes 4 years.

Cynthia11640's picture

Someone tell me why the "powers that be are holding it together until after our election"
How does our election affect European banks?
Sorry, I need the correlation stated please

mkhs's picture

Simple.  If no problems, the current office holder will be re-elected and can fulfill his quid pro quo.

Why would you think it has anything to do with economics?

Grand Supercycle's picture

APPLE parabolic...

As mentioned Oct 15 - days before the premature earnings sell off - GOOGLE daily / weekly / monthly charts are overextended & significant correction expected.

Also previously noted:
APPLE parabolic weekly & monthly charts are at EXTREME levels. Unfortunately longs will be badly burnt.

hourglass86's picture

The biggest lie of all is called Dutch Economy. Watch out when this Massive Ponzi Scheme explodes

skydrake's picture

The data don't mach. For Istance, actual US debt is 16 Trillion not 10.3 Trillion.

In comparison , the US situation is worse.

Popo's picture

And exactly what is that debt to equity ratio?  They do not have a lot of money at all.

20-20 Hindsight's picture

While I do not disagree with Graham Summers' views, I do find it supremely irritating that he always needs to insert his crass plug for his "free" report on how to prepare for an imminent financial armageddon.  The report, of course, is only "free" once it's paid for.  Sorry, I'm not buying...   

Peter Pan's picture

I agree. He should put that offer at the beginning of his articles just for a change. That way you can finish the article without being irritated at the end.

GCT's picture

What wrong with a person who is writing a blog for us to plug his or her reports?  Come on all is Graham's time worth nothing to all you capitalists!  LOL / Sarc

Seriously, I appreciate all the bloggers here and it is you or I who decide if we want to click on the free report!

Peter Pan's picture

Doctors warn their patients about the dangers of drinking and smoking but just because they don't provide an exact date of death, it doesn't mean their advice is useless.

The point of Graham's article is that you need to prepare.

If it's a date you want then how about November 17 or pssibly January 24th.

Happy now?

BigDuke6's picture

Shaddup pussy.

Patients are warned to stop S+D if they aren't HARD enough.

Some will fall by the wayside....

Zero Govt's picture

"..if you’ve yet to prepare for Europe’s BIG collapse..."

Well you've prep'd us Graham, for what seems like decades of articles!

Go on, put your balls on the line (again), when?