This is what is happening in three easy steps.
- Gamble number 1: Banks (European) invested in bonds sold by individual countries to finance these countries in effect loaning those countries money expecting it to be paid back with profit.
- Gamble number 2: They insured those bonds with other banks (American) in case the countries could not make good on the loans.
- Gamble number 3: All these banks multiplied their money based on the fractional banking model.
That is in short what they did and that whole house of carts is now coming down due to the fat that the underlying paper is rendered valueless. The house marked collapsed, the countries economies are collapsing and no matter how much zeroes and ones the banking system is generating in their computers there is no stopping the collapse of this financial system. The banks lost their gabling bets and now expect us to make good on them with hard physical slog.
I know there is much more to be said about the cause of the collapse but basically keep this in mind when following the coming collapse of Europe and America.