It seems that we are living during the age of the \u00e2\u20ac\u0153bailout.\u00e2\u20ac\u009d\u00c2\u00a0 Late Sunday in Europe a rescue package deal was sealed to lend Ireland up to 85 billion Euros (112.3 billion US Dollars) at an interest rate of almost 6%.\u00c2\u00a0 Ireland can draw upon the funds as necessary and the funds are being provided by other European nations, the IMF and Ireland’s National Pension Reserve Fund.\u00c2\u00a0 The money will be used to recapitalize their banks as well as provide three years of budgetary assistance.<\/p>\n
This is the latest bailout of a European nation with Greece being bailed out earlier this year.\u00c2\u00a0 The bailout is being dubbed the blueprint for future bailouts as investors are looking at Portugal and Spain next as they will probably need funds as well.<\/p>\n
As a result treasuries had their steepest monthly loss this year; gold and silver are both up on the news.\u00c2\u00a0 It looks as though the world is going crazy with debt, using debt to pay for debt and more spending.\u00c2\u00a0 It seems crazy to me that governments worldwide feel as though they don\u00e2\u20ac\u2122t need to make as much as they spend.\u00c2\u00a0 This never ending cycle of borrowing at some point has to stop.\u00c2\u00a0 Ben Bernanke himself said \u00e2\u20ac\u0153unsustainable trajectories of deficits and debts will never actually transpire, because creditors would never be willing to lend to a country in which the fiscal debt relative to the national income is rising without limit.\u00c2\u00a0 One way or the other, fiscal adjustments sufficient to stabilize the federal budget will certainly occur at some point.\u00c2\u00a0 The only real question is whether these adjustments will take place through a careful and deliberative process \u00e2\u20ac\u00a6 or whether the needed fiscal adjustments will be a rapid and painful response.\u00e2\u20ac\u009d<\/p>\n
Eventually the game will be up and fiat currencies will fail, whether that will be through inflation into hyperinflation into collapse, or an overnight phenomenon that creates panic and extreme loss in savings and investment will only be known in hindsight.\u00c2\u00a0 With all of the bailing out we are doing here in the United States it will be only a mater of time before our currency fails.\u00c2\u00a0 The US Dollar has already been in question, especially since the first round of quantitative easing<\/a>.\u00c2\u00a0 China, our biggest lender, has been cutting back on its lending to us, which further confirms what Bernanke had to say.<\/p>\n