Stocks rose on the first Monday renewed hope for another solution to the crisis of sovereign debt in Europe.
Following the huge benefits to Europe’s most important stock exchanges, the Dow was recently up-more than 300 points while the S & P 500 rose by 3.2%. The euro rallied sharply against the dollar, putting upward pressure on raw materials such as gold and oil and other so-called risk assets, while Treasury prices fell.
In addition to a good start to the U.S. holiday shopping season, several factors have contributed to the initial euphoria, including:

Voices, which has since denied a bailout from the IMF for Italy.
New guidelines to be discussed at a meeting of finance ministers later this week, allowing the Fund to ensure financial stability by up to 30% of the struggling nations of debt offerings.

Comments weekends from German Finance Minister Wolfgang Schaeuble calling for quick changes of the Treaty to tighten budgetary discipline and unity among the members of the EU tax.

Growing expectations that the Fed will engage in another round of quantitative easing, has focused on the purchase of mortgage-backed securities as part of a global effort by central bankers to ease policy.
Henry and I have discussed these and related to John Mauldin, president of Millennium Wave Investments and author (most recently) Endgame: The End of the Debt Supercycle and how it changes everything.
Mauldin, who correctly predicted last May greek debt crisis would not be “content”, says the European crisis is nearing its peak, in one way or another.

“It’s getting to where it is an absolute crisis, shouting,” Mauldin says, citing debt offering nearly failed in Germany on Friday. Separately, Moody’s warned the “rapidly escalating” the crisis puts all the European sovereign debt rating downgrade risk, while the Organisation for Economic Cooperation and Development (OECD) cut its forecast for growth in Europe and in the world.

“We’re getting to the end,” says Mauldin. “What will they do, it is not clear [but] there must be a crisis to force it.
This is just the way we as human beings.’s Wait until we are forced to make a decision.”
The challenge in Europe, as always, is trying to get the EU 17-member nations to agree on the plan. Today, most notable is Schaeuble called for unity over budget and tax, which effectively means the Member States (including Germany) yielding sovereignty over economic issues to a central authority in Brussels. In other words, Europe would become more like the United States of America, but without the shared national identity and culture.

“What you’re dealing with here is this huge desire for unity in Europe and maintain the euro … and their desire to be Italian and Spanish and French historians,” says Mauldin. “And it is in conflict. It ’100% opposite.”
How all this plays out remains to be seen, to Business Insider, Henry outlines four ways the crisis should be resolved:

1. European leaders agree to more bailouts that can start on the road to a little ‘longer.
2. The euro zone will break.
3. Full integration with the creation of tax a real central bank and euro bonds.
4. Collapse.

For now, traders are betting on a happy ending, or at least they are betting against the worst scenarios and covering short positions that paid so well in the last two weeks. For the time being.