As I reported late last night, the massive bailout of the European Union seems to have pleased markets, first in Asia, and now the rest of the world. A $1 Trillion dollar super-fund engineered by central banks will add liquidity where needed to the Euro Zone. Greece also got more good news this morning as the European Central Bank, ECB, announced that it would take any and all of Greek’s junk government-issued bonds to be used as collateral for as fat line of credit. Talk about turning straw into gold! This financial nuclear option is viewed by some as a remedy for the Debt Contagion and will prevent a double-dip recession.

One wonders now why Greece is even bothering with it’s austerity measures? Not only are they causing civil unrest but may also prove to worsen their GDP slide downward. Other EU nations, like France and Germany, are pressuring Greece not to trim budget items like new frigates, jet fighters and other arms deals Greece made with them. One has to wonder why the Greeks need a navy, an air force or an army right now? Who’d want to invade them and inherit a population already mad as hell?

Spain and other Euro Zone countries are also facing serious budget shortfalls. The nuclear option will help bail them out and keep those nations spending away like there is no tomorrow. The ECB, IMF and other central banks will undoubtedly turn their junk bonds into gold and cash as well. All of this is also playing well for U.S. Treasuries, as savvy buyers move their cash to America, thinking that the nuclear option might just accelerate Europe’s Debt Contagion. Why they think we’re a safer haven is a mystery, given that Obama’s spending spree is far from over. Last week, stories appeared to confirm the worst fears about the Obama-care health package will indeed raise rates and cause companies to drop private insurance benefits. I can see the cost doubling sooner than later.

But the band plays on while the economy continues to sink. Even Goldman Sachs is looking to get away with it’s gaming of the rigged markets. So the mindless herd gets bullish over bull-$#!% and the fantasy continues. Inflation is ignored as the trillions of dollars of debt pile up. This new round of bailouts will undoubtedly be followed by more. The ECB has thrown caution to the wind, just as Obama and Ben Bernanke have. A year from now, if not a month, we’ll be back in the same leaky boat, hearing that same tune.