The rain in Spain...

The propaganda we receive from the MSM says that the European financial crisis is solved. The Media even let out that the US (via IMF and even the FED) kicked in a big chunk of dough to rescue the Europeans. As usual, the truth is somewhat different.

True, Greece and Ireland were able to roll over their scheduled debt payments, but these governments continue to spend more than they take in. Their problems are not over, they just kicked the can down the road.

The next dominoes are Portugal and Spain.

Portugal's problems are similar to that of Greece and Ireland, too much govt spending and too little economic growth. Spain is another kettle of fish.

The MSM tells us that in spite of the erosion of Spanish credit rating, they have recently conducted a successful sale of govt bonds. That allowed Spain to roll over a portion of its debt. So, Spain, too, have kicked the can down the road. Of course, we do know why the sale of bonds was "successful." China bought them up.

Which brings us to the question: why is Spain in trouble and how come the Chinese are getting involved?

Spain is run by a Socialist govt and it has two types of banks. One set of banks is the kind of like a regular bank, either run by the govt, foreigners or is otherwise influenced by the govt. The other banking system (that has 41% of the Nation's deposits) is what is called 'cajetas.' Cajetas are local banks, controlled by boards made up of various political factions: Socialist unionists, priests or locally influential people. The govt wanted to control these institutions, so they forced the merger of cajetas: 45 of them were merged into 17. Some of the cajetas refused to hand over their deposits, giving rise to chaos as to who controls what. While this contributes to Spain's financial problem, it is NOT the main contributor. Spain has been living beyond its means and worse, it embarked on building solar power plants: these produce high-priced electricity and had financial problems from the beginning.

Why are the Chinese interested in rescuing Spain? Because the Spanish buy most of their solar panels from China.