Greece is a corpse. It's waiting for its obituary to be written. Spain is on life support. Portugal and Ireland are wheezing. Italy is breathing hard. Britannia is sinking. America isn't far behind.

Progressive Radio News Hour regular Jack Rasmus said significant private sector job creation, housing recovery, and state and local government spending increases followed 11 post-war recessions.

In contrast, Obama's first term achieved nothing. "There have been no effective jobs program, housing-foreclosures solution program, or state-local government spending program. That tripartite failure is at the heart of (his) failed economic recovery."

Conditions in Europe are worse. Will they or won't they? At issue is Fed QE III and massive ECB monetary intervention. Rasmus says smart money isn't sure. It can go either way. It can be some but too little to matter. It can be substantial and accomplish nothing.

On August 2, we'll know. Or will we? The ECB's governing council meets. It may act, do nothing, or defer to a later date. ECB authority is limited.

The Fed may move now or post-election. Rasmus ups the odds for intervention then. At the same time, whatever it does leaves deep-seated problems unresolved.

Monetary intervention only buys time. Unresolved problems fester and increase. Paul Craig Roberts calls America's economy and financial system broken. In Europe things are worse.

On July 26, ECB President Mario Draghi said he'll do "whatever it takes" to protect the euro. "Believe me, it will be enough," he added.

Equities and bonds rallied. No matter. Euroskeptics abound. Is it talk? Will he act? Does his mandate limit him? Will Germany agree? Most important is does it matter?

LTRO I and II (Long-Term Recovery Organization) were Draghi's last grand schemes. They let banks borrow at 1%. The idea was to recapitalize them and use funds to buy sovereign bonds.

Breathing room was short-lived. It lasted three months. On July 26, ECB data showed Q II business and household borrowing contracted by 88 billion euros.

UK Telegraph international business editor Ambrose Evans-Pritchard said Mario's "bond bluff electrifie(d) global markets."

His "comments came as Spain claimed backing from France and Germany for activation of the eurozone's rescue fund (EFSF) to buy Spanish bonds, though this would require calling the Bundestag's finance committee back from holiday for a vote."

"Action by the EFSF (European Financial Stability Facility) would provide 'political cover' for the ECB to join the fray in a two-pronged attack."

Critics called Draghi's comments "cheerleading bluster" and a "bluff to get through summer." Market action was short-covering.

Germany's Finance Minister Wolfgang Schauble rejects ECB hyperbole. "Welt am Sonntag," he said. "No, this speculation is not true."

Bailing out Spain tops Draghi's agenda. A 100 billion euro package is agreed. No more, says Schauble. ECB backdoor Spanish bailouts violate Germany's constitution.

He nixed an additional 300 billion euro lifeline. Europe's ESM (European Stability Mechanism) won't be operational until fall. At the same time, Spain's funding needs way exceed 100 billion euros. They may be tenfold that amount.

At issue is who'll supply it. The Bundesbank and German ECB members oppose dramatic action. After Draghi spoke, they expressed opposition to more bond purchases.

The Bundesbank opposes letting the ECB have sovereign debt monetizing power. Its mandate prohibits it. Officially, Draghi hasn't said he wants it. Unofficially, his July 26 bluster may lack muscle enough to overcome opposition to his comments.

Moreover, if the ECB and Fed act, will it be enough? Enormous sums on both sides of the Atlantic are needed.

Most important is bailing out banks and sovereigns at the expense of letting deep-seated problems fester and grow assures levels no amounts can resolve.

Broken economies and financial systems need fixing. Giants banks created today's problems.

Recovery depends on nationalizing ones worth saving, breaking them up, separating commercial banks from investment ones and insurance companies, and letting the others die.

Evans-Pritchard cited Professor Tim Congdon saying "the chief cause of Europe's credit crunch is the EU policy of forcing banks to raise core Tier 1 capital ratios to 9pc too fast."

"Loans are shrinking because of a misguided regulatory assault. It is crazy to make banks shrink risk assets in a recession," he said.

Evans-Prichard added that LTRO problems abound. Draghi may have no way to resolve them. He cited Capital Spreads' Angus Campbell saying he needs radical ECB mandate change to deliver as promised.

"Until European politicians can agree to the necessary treaty changes, we could see this rally fizzle out as quickly as it materialized." Achieving it requires 17 Eurozone member countries agreeing. It won't happen quickly if at all.

Peter Schiff is a longtime skeptic. He thinks economic collapse could begin August 1. He posits a worse crisis than 2008. Others agree.

The late Bob Chapman predicted economic collapse any time from late 2012 to 2017. No one can predict timing. All sorts of stopgaps can delay trouble. Central banks used many. At issue is how much more can they do.

According to Schiff, QE III delays America's day of reckoning. At the same time, it'll weaken the dollar and won't lift the economy. He envisions an eventual Greek-style crisis.

"We have a much bigger collapse coming, not just the markets, but of the economy. It's like what you're seeing in Europe right now only worse," he said.

Chris Martenson says accelerating debt at first goes unnoticed. At the same time, it's accelerating to unsustainable levels. "That's when chaos breaks out," he believes.

According to Harry Dent, eventual debt bubble deleveraging will collapse markets. When air starts coming out of the balloon, watch out.

Phoenix Capital Research's chief market strategist Graham Summers says neither the Fed or ECB can stop what's coming. Monetary policy didn't resolve issues causing 2008 crisis conditions. They exacerbated them and created new ones.

Awakening comes slowly. Market professionals are "incentivized not to realize" dire issues. Now, they're "slowly realizing that 2008 was actually 'the warm up' " for worse things to come.

The Fed knows aggressive monetary intervention eventually causes trouble. As a result, it decelerated. It's only action since last year was Operation Twist and extending it.

Officially it's called the Maturity Extension Program. It exchanges short-term debt for longer maturities. In theory, it's to lower interest rates on 10-year Treasuries. It also represents QE without printing more money and thereby dampens inflationary pressures.

Since June last year, the Fed "rein(ed) in monetary stimulus." It "largely relies on verbal intervention....The general public and financial media are" just catching on.

"(I)n some ways, (the Fed) is at the end of its rope in terms of monetary intervention." It's been clear in FOMC (Federal Open Market Committee) statements.

Its latest one said it's "holding off on increasing monetary accommodation unless the US economic expansion falters or prices rise at a rate slower than its 2 percent target."

The Fed knows inflation way exceeds 2%. Shadowstats estimates around 9%. Eventually expect it to go higher, not lower. It also knows GDP figures overstate growth. Shadowstats estimates -2%.

The ECB's LTRO I and II expanded its balance sheet to nearly $4 trillion. Doing it exposed the fragility of Eurozone banks and severity of Europe's banking crisis.

It also made the ECB "politically toxic." Markets punish borrowers relying on it for help. Going forward, "the two biggest market props of the last two years: the Fed and the ECB have found their hands tied. What will follow will make 2008 look like a joke."

Summers correctly predicted the housing crisis, Fannie Mae and Freddie Mac collapse, recession beginning in fall 2007, and autumn crash a year later.

Currently he sees gold reaching $2,000 an ounce, sovereign debt defaults, eventual Eurozone breakup, and crisis conditions exceeding the worst of 2008. The late Bob Chapman made similar predictions.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

His new book is titled "How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War"

http://www.claritypress.com/Lendman.html

Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

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