We don't know exactly what is to come, but we can all join the very few dots from where weare now, to the collapse of the first major bank.

With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves. There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation.


The problem is not government debt per se. The real problem is that the $70 trillion in G10 debt is collateral for $700 trillion in derivatives.


From a timing perspective, I think 2012 and 2013 will usher in an end.


The markets are at the frankly terrifying point of realizing that LTRO, EFSF, QE etc are not going to prevent this collapse.

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