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Spain Just Issued a Warning: the System is Blowing Up Again

Phoenix Capital Research's picture




 

 

At this point it is clear that Europe is totally finished. The house is burning. It’s just a matter of time before it collapses.

 

Indeed, we get a clear signal of this from Spanish Prime Minister Mariano Rajoy, who just announced the following: “It is not enough, there are no green shoots, there is no spring.”

 

To understand the significance of this statement, you need to know a bit more about Rajoy and European politics in general.

 

Rajoy is the same political leader who, throughout 2012, stated time and again that the Spanish banking system was in great shape. Indeed, he was still claiming, "there will be no rescue of the Spanish banking sector," a mere week before Spain’s entire banking system collapsed.

 

Rajoy then demanded a €100 billion bailout from the EU (Spain’s entire banking market cap is just a little over this). It was only then that he admitted that 2012 would be a “bad year.” Of course, he also claimed that the bailout was a “triumph” and celebrated by hopping a plane to watch Spain’s soccer team play Poland, but that’s a story for another time.

 

Given that Rajoy has only admitted Spain is screwed at times when the entire system is going under, we have to ask ourselves… How BAD are things that he just admitted, “there are no green shoots, there is no spring”?

 

The short answer: HORRIFIC.

 

Spain only just squeaked through 2012 by using 90% of its social security fund to buy Spanish debt. The country now has over €200 billion in new debt to issue in 2013.

 

Where on earth Spain will get this money from remains to be seen, given that even Spanish banks became net sellers of Spanish debt last year as they sold assets to return money to fleeing depositors.

 

Indeed, the country now is attempting to find idiots, I mean investors, in the US, by offering a Dollar-denominated bond. After all, who wouldn’t want to invest in a country where the formal bailout fund is tapped dry, social security is tapped dry, and banks still have negative value?

 

At the end of the day, we all know how this mess will end: Spain will default which will suck several hundred billion Euros worth of collateral out of the system at which point we’ll experience a Lehman-type event times ten.

 

What happens between then and now is anyone’s guess. But the fact that Rajoy is admitting “there are no green shoots, there is no spring” indicates that things are likely about to get very ugly once again.

 

You can choose to ignore this and believe that Europe’s Crisis is fixed just as EU political leaders claim. But Europe in general is out of options in terms of solving its debt crisis. The only thing that held things together in 2012 was the promise of unlimited bond buying by ECB President Mario Draghi… but then again this “buying” would only come with a formal request for a bailout, rampant austerity measures, and a look at the books for any country requesting it.

 

Trust me, Spain doesn’t want ANYONE taking a closer look at its books.

 

We have produced a FREE Special Report available to all investors titled What Europe’s Collapse Means For You and Your Savings.

This report features ten pages of material outlining our independent analysis real debt situation in Europe (numbers far worse than is publicly admitted), the true nature of the EU banking system, and the systemic risks Europe poses to investors around the world.

It also outlines a number of investments to profit from this; investments that anyone can use to take advantage of the European Debt Crisis.

Best of all, this report is 100% FREE. You can pick up a copy today at:

http://gainspainscapital.com/eu-report/

Best

Phoenix Capital Research

 

 

 

 

 

 

 

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Wed, 02/20/2013 - 21:01 | 3261798 orangegeek
orangegeek's picture

PIIGS

Wed, 02/20/2013 - 20:54 | 3261782 Rustysilver
Rustysilver's picture

I am for Spanish Inquisition 2.0 .

Wed, 02/20/2013 - 20:26 | 3261702 mt paul
mt paul's picture

Ahabs

economic white whale

their she blows...

Wed, 02/20/2013 - 19:31 | 3261548 Super Broccoli
Super Broccoli's picture

when is the next time spain has to issue debt ? i mean this is the spark lot's of us have been warning of ! Massive and sudden increase in their debt yield, greece is already said to be out by june, rest of europe's bad shape, not talking about the US nor Japan ...

The market manipulation on gold and silver tend to prepare this, it's going down till it blows, THE END IS NEAR (LOL, never thought i'll say this ;-)

Wed, 02/20/2013 - 22:23 | 3261977 Notarocketscientist
Notarocketscientist's picture

Bond yields won't spike so long as the market believes the ECB's promise to print in unlimited amounts.

Now if someone calls the bluff - if it is indeed a bluff (Germany as always said there is no way they will do that) - then the whole thing unravels very quickly.

Maybe another 'Soros' type will step in and call that bluff ...

That's a very risky proposition though because the EU is like a cornered animal right now - the ECB (and Germany) might just lash out with massive QE knowing it will eventually be suicidal... because they know that if they just stay in the corner they will be crushed immediately

Wed, 02/20/2013 - 18:34 | 3261397 youngman
youngman's picture

They are selling bonds tomorrow..should be interesting who buys them and at what price.....I bet they are all bought up...probably by the FED....the US Fed....we always help a banker in need...

Wed, 02/20/2013 - 19:33 | 3261549 Super Broccoli
Super Broccoli's picture

Tomorrow ? Oh it's even closer than expected. If they're that broke, i'll expect their yield up to 6.5%, this is going to be ugly !

Wed, 02/20/2013 - 17:34 | 3261197 shovelhead
Wed, 02/20/2013 - 21:49 | 3261893 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

It worked for the Nat'l Lampoon...

Wed, 02/20/2013 - 17:31 | 3261103 homonohumanus
homonohumanus's picture

Well I would assert that this guy have no idea about what the Euro is and by extension the nature of NATO.

 

One potent German technocrate (* EU technocrate)  stated a month ago (or so) that we would need a common market with US by ~2015.

That happens to match exactely the CFR "forecasts" (lol ... really) about North America and European UNion (/ NATO) sharing the same currency by.... 2015... I heard about that "forecast" years ago and was postitively frightened when I read the statement of that person in the news papers... a "Am I dreaming awake?" kind of moment, really...

 

So no, Euro won't collapse or not at all in the way that person thinks. The main deeds of economy oriented persons is that they believe their own BS too much. Economy doesn't rule the world... sorry guys we are not there, we are not that advanced in our evolution.

Geopolitics and firing power still rules, clever people like him (not an inronic statement I think he is clever most likely significantly more than me) should really spend a week wraping their minds about the implications of a word like "thallassocracy" then they will make interesting predictions about economy and/orin the broarder field of human affairs.

Wed, 02/20/2013 - 16:50 | 3261036 fancyfree
fancyfree's picture

The sky is falling!  The sky is falling!   Did you ever notice how the Euro's sky is falling whenever someone points out corruption? http://www.zerohedge.com/news/2013-01-14/it-begins-bundesbank-commence-repatriating-gold-new-york-fed

Wed, 02/20/2013 - 16:30 | 3260944 monad
monad's picture

"I am a fan of the social policies that you find in Europe" - Black Hilary, Red Willie

Wed, 02/20/2013 - 15:43 | 3260748 tony bonn
tony bonn's picture

spain is completely fucked, not because it is bankrupt - and indeed it is, but because it is led by pathological liars in government, business, and society, just as the usa is......these totalitarian freaks despise free markets - or i should say that they despise free markets for the plutocrats and oligarchs - but it is economic freedom and morality which enables general prosperity....but the bildeberger rabble do not want general prosperity.....spain and greece are targets for neocolonialism to forcce fiscal union on europe so that the rockefeller axis of evil can have its way and sway...

the only - and i mean ONLY - hope for the spanish people is burn rajoy and other corrupt government leaders at the stake and to repudiate debt to a manageable level, and start anew on their arrogant socialistic, money for nothing ponzi scams.....

Wed, 02/20/2013 - 14:29 | 3260353 strannick
strannick's picture

LIke Phoenix Capital says. There will no new QE. Repeat, no new QE...

Wed, 02/20/2013 - 14:50 | 3260467 Ahmeexnal
Ahmeexnal's picture

And yet the king of Spain goes on hunting trips to murder endangered species.

Spanish sheeple deserve what they will get.

Wed, 02/20/2013 - 16:20 | 3260896 falak pema
falak pema's picture

'cos american sheeple won't?

Wed, 02/20/2013 - 14:12 | 3260264 icm63
icm63's picture

EURO BOND

EURO BOND

EURO BOND

EURO BOND

EURO BOND

EURO BOND

EURO BOND

Will the Euro bond save the day for the folks in Brussls and the great EURO expirement?

This is will be a GERMAN election decider.

SAY NO GERMANY !

Wed, 02/20/2013 - 17:20 | 3261147 marathonman
marathonman's picture

What does it matter if they say no?  There is a whole host of EU countries that voted no to the treaty and yet there they are stuck in EU hell.  If we haven't figured this out yet, the fix is in.  The banksters will fulfill the prophecy soon enough.

Wed, 02/20/2013 - 15:49 | 3260778 LawsofPhysics
LawsofPhysics's picture

Am I the only one who sees more real value in those recently stolen diamonds than another paper promise from the E.Z.?

Wed, 02/20/2013 - 21:10 | 3261815 Debeachesand Je...
Debeachesand Jerseyshores's picture

Well,that is one way to get hard assets.

Wed, 02/20/2013 - 18:53 | 3261447 neidermeyer
neidermeyer's picture

I'm royally po'd that I wasn't in on the diamond gig .... not as good as gold (diamonds can be manufactured) but far easier to transport.

Wed, 02/20/2013 - 21:09 | 3261810 disabledvet
disabledvet's picture

i find it interesting that no one has said what those diamonds were actually to be used for. clearly we're talking payment...no one moves that much ice without a reason...but payment for what exactly? "not for taxes" clearly.

Wed, 02/20/2013 - 16:21 | 3260900 falak pema
falak pema's picture

lol, pink panther forever! 

Wed, 02/20/2013 - 13:58 | 3260190 poldark
poldark's picture

The ECB will print a few more hundred billion euros and buy Spanish, Italian and French debt.

As Gordon Brown said, "You can get away with printing money as long as everyone else is doing it".

Wed, 02/20/2013 - 22:35 | 3261999 Notarocketscientist
Notarocketscientist's picture

I think more likely we will see another LTRO with Bernanke doing the printing and handing it over.

Afterall the ECB has the US by the balls - because Ben knows that if the EU collapses - the US collapses....

Wed, 02/20/2013 - 17:39 | 3261212 homonohumanus
homonohumanus's picture

You should not believe or quote what obvious profesionnal liars are crapping out of their mouth...

 

You can get away with money printing as long as you can enforce the use of your currency onto foreign entities.

The requirement for that is to have the control of the "commercial" roads... which since Antiquity and till nowadays are actually seas and oceans with a strong concern for 'straights'.

 

This have a name which MSM, never, under any circumstancies, use or will explanify to the masses...

Wed, 02/20/2013 - 15:22 | 3260661 Fish Gone Bad
Fish Gone Bad's picture

In secret, Bernanke will bail out Spain.  They have been doing this for everyone else.

Wed, 02/20/2013 - 15:30 | 3260684 Winston Churchill
Winston Churchill's picture

If it stopped at Spain maybe.

Italy up next,closely followed by France.

Ben will need MOAR printers.

Wed, 02/20/2013 - 13:55 | 3260175 Temporalist
Temporalist's picture
Spanish woman set herself on fire in bank

"Upon being rescued the woman reportedly cried “Look what you’ve done, you’ve ripped me of everything,”"

http://english.ruvr.ru/2013_02_19/Spanish-woman-set-herself-on-fire-in-b...

Wed, 02/20/2013 - 16:27 | 3260930 Mi Naem
Mi Naem's picture

Thankfully, here in the US, you are not allowed to smoke in the bank. 

You are only allowed to get smoked by the bank. 

Wed, 02/20/2013 - 15:54 | 3260795 FeralSerf
FeralSerf's picture

The bank prefers that she take her immolation outside.   They don't like to clean up messes.

Wed, 02/20/2013 - 13:49 | 3260144 donsluck
donsluck's picture

The EU economy may fall (not disappear) but the Euro will survive, and because they are not sacraficing their currency as much as everyone else, the Euro will become the world reserve currency due to it's non-national status.

Wed, 02/20/2013 - 22:37 | 3262005 Notarocketscientist
Notarocketscientist's picture

The Euro coins that don't get melted down for scrap metal will be collectors items in a few years

Wed, 02/20/2013 - 14:21 | 3260317 Non Passaran
Non Passaran's picture

> because they are not sacraficing their currency as much as everyone else

they=Germany, Finland, Holland, Lux, Austria?
Eurozone has more than 5 members.

When it becomes serious, you have to devaluate!

Wed, 02/20/2013 - 13:40 | 3260083 GCT
GCT's picture

The circle jerk will continue on the sheeple's backs.  This games has a long time to play out.  At my age I will be dead before all of this shit hits the fan.  Still I am prepared for most problems.

Wed, 02/20/2013 - 22:39 | 3262012 Notarocketscientist
Notarocketscientist's picture

Expect Bernanke to rush to the rescue again - recall LTRO - I think he pumped about 1.5 trillion USD across to shore things up last year?

Wed, 02/20/2013 - 13:31 | 3260025 Dareconomics
Dareconomics's picture

I took a closer look at Spain's books. Spain ran a budget deficit approaching 14% last year, despite Rajoy claiming 7%.

http://dareconomics.wordpress.com/2013/02/20/msm-neglects-fact-checking-...

Furthermore, the country will need to issue about €233bn in new debt for 2013 during a major political scandal and increased separatist tension. Who will buy all of this paper?

http://dareconomics.wordpress.com/2013/02/20/spain-prohibits-borrowing-b...

Wed, 02/20/2013 - 19:09 | 3261482 spinone
Wed, 02/20/2013 - 17:14 | 3261108 CheapBastard
CheapBastard's picture

Viva España !

Here is a dec, 2012 article that's still as relevant as yesterday:

 

Spain's house prices to fall another 30pc as glut keeps growing

 

Spain's property slump will deepen for much of the next decade, and tracts of buildings along the Mediterannean coast will have to be demolished, the country's top consultants have warned.

 

 

http://www.telegraph.co.uk/finance/financialcrisis/9768067/Spains-house-...

  

Wed, 02/20/2013 - 15:48 | 3260772 john39
john39's picture

who? surely you jest...  the CB's will  make sure the bonds are sold, one way or another...

Wed, 02/20/2013 - 21:13 | 3261822 disabledvet
disabledvet's picture

"best of times/worst of times." reread your Dickens. if prices at the retail level start to fall "the window get's slammed shut." and that LTRO is certainly "big enough to fail."

Wed, 02/20/2013 - 13:30 | 3260018 fourchan
fourchan's picture

sounds bullish!

Wed, 02/20/2013 - 13:28 | 3260004 Hulk
Hulk's picture

It's like deja vu all over again

Wed, 02/20/2013 - 17:34 | 3261187 Ying-Yang
Ying-Yang's picture

God Bless Yogi Berra

"It's deja vu all over again"

"It ain't over 'til it's over"

"Never answer an anonymous letter"

"I usually take a two hour nap from one to four"

"When you come to a fork in the road....Take it"

"I didn't really say everything I said"

"When asked what time it was...   you mean now?"
 
"You can observe a lot by watching"

"The future ain't what it used to be"

Wed, 02/20/2013 - 17:00 | 3261074 DoChenRollingBearing
DoChenRollingBearing's picture

Adios España...

Wed, 02/20/2013 - 17:49 | 3261251 thisandthat
thisandthat's picture

Nonsense! They were just about to overtake Germany as the greatest ever economy in Europe in just a couple more years - it CAN'T be true. SPAIN IS DIFFERENT!™

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