On the heels of the recent turmoil in global markets, today King World News interviewed MEP (Member European Parliament) Nigel Farage, to get his take on the ongoing crisis. Farage told KWN that “What you may see is a very desperate European Union begin to put in place capital controls and things like this ... In a sense the proposal that is on the table next week, which is coming from Van Rompuy and Barroso, would be the first step toward that repression.” Farage also discussed the action in the gold market, but first, here is what Farage had to say about the crucial meeting in Europe next week: “I would be very, very surprised at that big summit next week, which incidentally I have a ticket to, not that I’ll be the most popular person in the building, but I just don’t think there is going to be an agreement of any great significance next week. I just don’t see it happening.”
Nigel Farage continues:
“I hold to the theory that at some point in time, the markets are just going to overwhelm all of this, and then we will face the IMF global bailout situation. It would be better to admit we’ve made a terrible mistake and take losses on the money we’ve already foolishly thrown in and say, ‘Let’s start again boys.’
Bearing in mind that overhanging all of this is the threat of something even worse in the banking system, which of course is very much beyond our control now....
“The total amount of money that is needed to shore up the Spanish banking system is more like 400 billion (euros), some people even think 500 billion (euros). The trouble is that if Europe was to do that they would be penniless. Because in theory they’ve got that money in their stability mechanism, although in practice all they’ve got are commitments from countries to put money in. The cash isn’t actually there.
But even if they were able to rally around and get the cash, that would be it. The money would have run out. Then the market run would move to Italy. So the scale of the Spanish banking problem is such that I don’t think Europe on its own is able to get Spain out of it.