THE NEXT SHOE TO FALL

REF:"The Coming Pan-european Sovereign Debt Crises" by Reggie Middleton, www.SafeHaven.com

"Banks are the epicenter of the economic crises that face the developed and emerging nations over the last few years. Many appear to have allowed the media to carry the conversation away from the banks and into sovereign debt issues, social unrest etc., but the main issue still resides in the banks."

"The fact that governments worldwide have made the (generally unwise) attempt to bailout their big banks by transferring bad debts and liabilities from the private sector and bank investors to the public sector and taxpayers doesn't mean that the problem has been solved or even ameliorated. As a matter of fact, I believe the problem has now been amplified, for now we have effective increased the implicit leverage in the already excessively leveraged banking problems as well as removed the natural firewalls that may have been in place by having the problems in individual financial institution versus sitting on government balance sheets, able to affect all without the need of the "domino effect" that was feared from the Lehman collapse."

"This leverage stems from the fact that most European sovereign nations are considerably "overbanked". The levered assets of the banks in many Euro-sovereign nations easily outstrip those nations' GDP's. So when the nations' banks get in trouble from bad banking practices (and a very large swath have), the nations themselves not only are helpless in attempting to truly save the banks."

Following the example of the UK and U. S. of "uploading" the toxic assets of the banks[securitized weak mortgages, and other bad bet derivatives] the nations have put themselves in financial jeopardy.

Before we exhale "whew, I'm glad it's them not us", look again. our turn is at hand. Our central bank is way over bloated with worthless assets,bought with created dollars. This crises started with undisciplined banks and will be perpetuated in an attempt to conceal the rot within.

Our government's cosiness with banks and the undisciplined secret Federal Reserve has brought financial destruction to this nation as well as to the world. They may continue to pretend and extend , create and borrow funds for bailouts, but the end is certain.

With Love and Kindness,

THE HATMAN