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Sunday, June 10, 2012

Spain Gets $125 Billion Bailout from Euro Zone

The question about Spain's economic future has been answered in the short term, as finance ministers in the euro zone came to an agreement to lend the country up to $125 billion to shore up its weakened banks.

While it wasn't a total surprise Spain would get aid, the amount did raise some eyebrows, as it was a lot more than expected.

Even though there is up to $125 billion on the table, the exact amount to be lent is still being hashed out, and won't be decided for about a week.

This of course will be hailed as a great moment, but in fact it is a disaster, and will exasperate the financial health of the region over time.

Until there are significant austerity measures taken over time, there will be no solutions to Europe's economic woes, as Keynesianism has proven to be a failed economic theory and practice.

The amount announced to be on the table for Spain was for media consumption and dissemination, as it will help to calm extremely jittery markets, as fear of contagion was reaching a fever pitch, almost as bad as the very real contagion itself, that has only had the can kicked down the road once again, only delaying the inevitable day of reckoning.

The upcoming Greek elections on June 17 could rain a lot on the euro zone parade if the people of the country vote for the country to leave the zone.

Greece isn't too important, as its economy is rather small and insignificant in contrast to Spain's, but it could be the first domino to fall in what will eventually become a string of dominoes.

That's not really a bad thing, as Europe would be much stronger without the deadbeat nations attempting to extract more money from the productive European nations.

It'll be fun to see the pathetic dream of those wanting a one-world order blasted apart by the inevitable, upcoming events. Hang onto your seat, it's going to be a fascinating ride as it unfolds.

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