German lawmakers have approved their portion of the $1 Trillion dollar bailout for Europe. Seen as a success for Chancellor Andrea Merkel, is it all ready too little, too late? Was a bailout of any size adequate to save the Euro Zone from the Debt Contagion?

The answer to this last question is, “NO”! I suppose that had somebody left an envelope at the foot of the Parthenon stuffed with $100 Billion dollars on some dark, quiet night last year, nobody would know anything about the Debt Contagion. We would have seen Iceland as an isolated event and moved on. But that’s not the way life works.

Greek’s debt crisis opened up a can of worms. People began taking a closer look at other nations. Spain, Ireland, Italy, Portugal all became suspect. Then the UK began to seem risky. Across ‘The Pond’ in the USA, America was looking shaky as it was. The National Debt had doubled since 2000, partly due to the War on Terror and the wars in Iraq and Afghanistan. California was mired in debt due to rising social expenses, energy prices and Liberal policies. Increases in taxes sparked a flight of businesses and productive taxpayers, causing lower revenues and real estate prices.

The collapse of the shady subprime mortgage market pushed California, and the rest of the United States, over the edge. The Crash of 2008 was a symptom of decades of bad monetary and government policies. Everything popped on the radar all at once. A sleepy public, sedated by entertainment and mundane life issues was rudely awaken.

Back in Europe, the framework of the Euro Zone was shaken. The stress of the interdependency of global markets exposed the cracks in their system as well. For several months, nations negotiated to develop a rescue plan for helping Greece. For a while, Germany and France were at odds with each other, primarily due to Germany’s reluctance to chip in. Who wants to tap their citizens, their taxpayers, so a bunch of Greek public employees can enjoy easy hours, great benefits and retire at the age of 50?

After much hand-ringing, Germany went along and a multi-nation fund was arranged, including the IMF to bailout Greece. Meanwhile, the cracks in other nations grew larger and deeper. Spain seems to be on the verge of defaulting. Ireland, which had instituted reforms and austerity measures, appears to be ‘double-dipping’ back into crisis. Greece is having schizophrenic moments with occasional rumblings of rejecting the bailout and just going ahead and default.

On May 6th, the wheels began to come off. Another day of strikes and unrest in Athens helped make markets nervous. Suddenly, just as a small mob appeared on world-wide TV to be ready to storm police and attack the Greek Parliament, something strange happened on Wall Street. A flurry of sell-offs suddenly hit the New York Stock Exchange computer systems, plunging the Dow Jones Index nearly 1,000 points in the space of 20 minutes! A ‘fat-fingered’ trading error? An act of financial terrorism? Some high-frequency exercise to scare the markets and prevent certain legislation from being passed?

Or, maybe, somebody decided to pull nearly $1 Trillion dollars out of the market and walk away? Kind of reminds me of that press conference that Donald Rumsfeld gave on September 10, 2001 at the Pentagon, where he said that $2 Trillion dollars seemed to be missing! Needless to say, events of the following day shoved that story completely off the radar screen and is generally forgotten by the Main Stream Media. Sort of like the trillions of dollars the Federal Reserve has been pumping out to people unknown, even before the market crash in 2008.

Suddenly, the financial framework of the Euro Zone, and the rest of the world, began looking like a house of cards again. After May 6th, rumors of France pulling out of the EU began floating about. Talk of Germany parachuting out the door and forming a new coalition with “good countries”, of which France was not one of. While much attention has been focused on the PIIGS and the UK the past few months, is there a reason to start watching France, too?

You Betcha! By the numbers, France is, in some respects, in worse financial shape than Spain is. While Spain’s total Debt%/GDP is higher, 342% to France’s 308%, France owes way more money and their Public Dent is higher than Spain’s, 18% to 14%. France also beats out Spain on having a more Private Debt, 155% to 142%. Spain has a higher unemployment rate, but France is now also in double digits. As for those strikes and riots in Greece, there’s been a steady stream of unrest in France for over 18 months now. Add to all of this the fact that French banks are holding a great deal of the notes on all the other troubled nations.

One of the topics of chatter about a possible Euro Zone break-up is, “Who will bolt first?” The thinking is that whoever does jump and gets out of the EU first will ultimately be in the better shape once all the dust settles after the Euro crashes. It would seem now that Germany and France are like two runners poised at the starting line. But in this case there’s no starting gun to fire. It boils down to raw nerve.

The Debt Contagion, or more properly put… the Sovereign Meltdown, is threatening to implode the Euro Zone, the USA and many of it’s individual states, and it won’t stop there. Japan is hanging on by a thread. China is gearing up for a trade war. India is mad about not being consulted on it’s IMF responsibilities to bailout Greece and the rest of Europe. South Korea and other survivors of the Asian Contagion are peeved that the IMF is giving the Europeans better terms than they had. The situation is getting uglier by the day and there is no soft landing in sight. Who’s going to default first? Keep an eye on France!