Many banks in the Eurozone are stuffed with US Bonds/TBills as a hedge, this will not work for them for the following reasons:
2- They cannot dump them, the main reason is that the Fed is THE # 1 buyer of American Debt. Yes that is correct #1 not #2 we have surpassed the Chinese, since the ChiComs did not show for many of the last bond auctions and are stealth dumping US Debt Obligations. This has caused the balancing act to begin...Fed is Printing, at the same time buying what it prints, thus the banks can't lend causing a solvency crisis the likes of which we have not seen and killing all credit markets like a ELE (Extinction Level Event) This will create a hyper Velocity Parabolic crash.
There is no stopping this...We are still on track as I have been predicting for a while now for a fall/winter collapse of the Eurozone and naked exposure of all derivative markets the world over. Europeans will go through a major reset, after time they will recover as Europeans do not carry the type of personal debt that Americans do. It is for America that I worry. Look for these signs next:
1- JPM will be bailed out again but it will not stop the coming market crash. More details will emerge about their derivative swap failure $150 billion and counting.
2-BOA (BAC Bank of America) will fold and be absorbed into JPM as a way to prop up the bleeding Giant. JPM will get the best picking of this deal just like they got with Bear Stearns.
3- Massive layoffs at Citigroup and Wells Fargo
4- Goldman Sachs finally pays the piper, look for massive cuts there as well as BIG Losses
5- Bond market bust which leads to freeze of all bond sales
6- Derivative bust the next one will be BOA followed by Citigroup
7- All CDS shorts and swaps will freeze.
8- Total Meltdown
Those who are ready begin to implement GOOD (Get Out Of Dodge) Plan. Keep what you need in paper and what you can afford to lose in banks in order to pay day to day expenses/bills. The rest of your investments/retirements should NOW be pulled from the market and moved to safe haven assets like Precious metals, farmland, fire arms and food. Prepare to ride out what we are calling the coming RESET BUTTON.