US to Bail Out EU? The Death Engine Plows Forward

That sucking noise you hear is the sound of the tide withdrawing with your paycheck. Gee what's with that wall of wat...

The United States would be ready to support the extension of the European Financial Stability Facility via an extra commitment of money from the International Monetary Fund, a U.S. official told Reuters on Wednesday.

"There are a lot of people talking about that. I think the European Commission has talked about that," said the U.S. official, commenting on enlarging the 750 billion euro ($980 billion) EU/IMF European stability fund. "It is up to the Europeans. We will certainly support using the IMF in these circumstances."

"There are obviously some severe market problems," said the official, speaking on condition of anonymity. "In May, it was Greece. This is Ireland and Portugal. If there is contagion that's a huge problem for the global economy."

The remarks foreshadow a visit to Europe this week by a U.S. Treasury envoy who is expected to visit Berlin, Madrid and Paris to hold talks on the ramifications of the debt crisis.

The developments have echoes of the pressure applied by Washington on European capitals last May to create the near $1 trillion EFSF safety net that was last week used to rescue Ireland after its banking crisis spiraled out of control.

The IMF, whose biggest single shareholder is the United States, has committed 250 billion euros to the EFSF.

While reluctant to dictate to Europe how it should address the unfolding debt crisis, the U.S. government is growing concerned about the global fallout of Europe's predicament.

U.S. Treasurys' prices fell and the euro strengthened against the dollar on Wednesday after the news that the United States would be prepared to support an enlarged EFSF.

Germany, whose leaders have expressed frustration at the market backlash against their plans to solve the euro zone's debt problems, does not want to make the stability fund larger.

Or is it?

The Real Effect
Earth to sheep, earth to sheep? Are we angry yet? As Denninger is fond of pointing out, this will not stop until we stop it. We must not permit another bailout, no matter the consequences. We must prosecute the fraud and throw the criminal bankers in jail, not reward them with bonuses. The EU must stand on their own two feet, if it's an insolvent system, let it fail!

This is going to gain steam now, Portugal and Germany are blowing out, China is finally starting to slow and Yahoo is laying off 10 - 20% of its employees.

The music has stopped, now where are the chairs? If I were you, I would get cash, on hand. Buy silver, buy gold, and items to protect yourself because we're going in for a crash landing.