A Eurozone bailout may be the only option available to keep the entire European union from defaulting on their overblown debt. Although the International Monetary Fund denies potentially lending an estimated $800 billion to Italy, in a last ditch effort to back increasing bond liquidation, many believe that it is only a matter of time before this happens. Spanish newspaper, “La Stampa” also reports that Spain has offered to lend a hand.

Whether or not cash is forthcoming from other European countries, Europe must follow in the footsteps of all other economies in similar situations. Sooner or later, currency printing presses will begin to roll. Although Europe continues to take its time in an attempt to bolster support from within its banking system, a 2012 recession, with all its attendant financial turmoil, is still probable.

Precious metals, like gold and silver could trend substantially higher, should a viable European rescue package emerge. In any case, unsustainable Italian and Spanish bond yields continue to exacerbate the need for cheap credit to those countries. Smaller states, like Ireland, Portugal and, Greece are likely to lead should default begin. Markets could react, even in the weeks leading up to December 17th, when large Greek debt installments come due.

The bailout waiting game continues, because throwing a lifeline to stressed European economies could mire its benefactors in the spreading fiscal contagion. The European stability fund may peddle bonds on an international scale or European countries may share in the bailout. Either way, savvy investors know that tangible assets, like precious metals are in and paper currency is out.

http://www.arabianmoney.net/gold-silver/2011/11/28/gold-and-silver-prices-jump-as-imf-prepares-800bn-rescue-for-italy-and-spain/