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Europe Has Two Potential “Hail Mary” Passes … Would Either of Them Work?

by Graham Summers
Gains Pains Capital

Mario Draghi claims he can save the Euro.

I don’t buy it… even for one second. As far as I can see the ECB has one of two “Bail Mary” options. They are:

1) Massive money printing and buying of sovereign debt

2) The issuance of Euro-bonds along with across the board banking backstops.

As I noted in a recent article, #1 is impossible. If the ECB does this it will implode the bond market, which means GAME OVER for all intervention. Look at the impact QE had on Treasuries and you’ll see what I mean. And that’s Treasuries we’re talking about… not PIIGS debt.

Now let’s consider the ECB’s second “Hail Mary” option: the issuance of Euro-bonds and across the board backstopping of EU banking deposits.

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