Chain Reaction Implosion of "European" Banking System Is Underway
May 17, 2012 • 9:01AM

With hysteria growing over Greece leaving the Euro, a run on Greek banks underway, and reports of a run on Italian banks beginning after Moody's downgrade of 26 Italian banks, Spain's Prime Minister Rajoy found himself haplessly warning on national television on Wednesday that Spain is in danger of being locked out of capital markets, on the eve of Thursday's bond auction.

"Right now there is a serious risk that [investors] will not lend us money, or they will do so at an astronomical rate," a rattled Rajoy declared, as his country's 10-year bonds traded at 6.5% at midday, heading up to the 7% rates at which Ireland, Greece, and Portugal pled for bail-outs. Rajoy demanded the European Union step in to shore up the Euro so that Greece doesn't leave it. "I think that would be a big mistake, very bad news, and I believe public debt sustainability must be guaranteed and all of us must fulfill our commitments."

By which he means, printing the "unimaginable amounts" of money London is demanding, to bail out its bankrupt global banking system. The same message, with their respective variations, was repeated by British Prime Minister David Cameron and the hatchetman of the private banking cartel, the IFF's Charles Dallara, on Wednesday. Cameron told his Parliament that the EU had "to take steps to secure the weakest members of the eurozone... or it's looking at a potential break up. That is the choice they have to make, and it is a choice they cannot long put off."

Dallara flapped about the coming Greek exit from the Euro being "somewhere between catastrophic and Armageddon... The pressures on Spain, Portugal, even Italy and conceivably Ireland could be immense and the need for Europe to step up with much greater support for the banking systems would be substantial," he wailed from Ireland.