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According to CNBC, the G20 is now considering a $2Tn rescue fund for EU bailouts, double the $1Tn they put in during the crisis in 2008. Of course the markets plunged in 2009 as it occurred to people that, if the banks needed $2Tn to be rescued, then we were in what leading economists refer to as "deep shit."
The plan is to combine the EFSF and the ESM to create a 1 Trillion Euro fund ($1.34Tn) and to augment that with the other $700Bn coming through the IMF (on top of the $350Bn already pledged). While $2,000,000,000,000 is a staggering amount of money – enough money to more than double the net worth of the bottom 40% of the planet – but, is it enough?
It's enough to kick the can down the road but Greece alone is $500Bn in debt and Ireland alone owes well over $2Tn externally (mostly to England), Italy owes $2.6Tn externally and $400Bn just to France and Spain is also at $2.6Tn of debt owed to other nations but they spread the pain around pretty evenly by comparison. That's the damages in the PIIGS before we even get to France ($5.6Tn), Germany ($5.5Tn), the UK ($9.8Tn) and, of course, the United States, which owes over $1Tn to Japan and the UK and another $2.5Tn to China within their $15Tn external debt load. How's that $2Tn looking now?
So let's not confuse can kicking with "fixing" as there is NOTHING about this $2Tn that fixes anything but the ability to roll over that $40Tn for another year. Unfortunately, in another 12 months, some portion of the $120Tn of unfunded liabilities that no one likes to discuss will also drop to the bottom line. The US alone will add over $2Tn of additional debt in 2012 and about $5Tn is expected of the others – but that was before they all pledged this new $2Tn that they will be lending themselves to pay themselves for the old debt while the add on new debt.
Let's keep in mind that the source of this "news" about $2Tn in aid is CNBC and, as of 8pm on Sunday, it's still not confirmed by legitimate news sources. Of course, CNBC is nothing more than the propaganda station for the top 1% and their agenda, differentiated from Fox only by the fact…