In a world where a group of Nation-States combine bailouts and only come up with $430 billion, there is a risk that the can kicking is nearing an endpoint. From a $800b TARP, a $800b STIMULUS, massive QE's and LTRO's (especially considering asset prices have nearly doubled since the Fall of '08), a $430b package is quite unimpressive, so what is the motive for even acting like this amount will mitagate the flow of funds and flow of credit risk?
It is either that the Central Banks think that the crisis is over, and they are merely shoring up their ship, or that the boat has hit an iceberg, and the $430b will give them enough time to make it to a life raft while the rest of the ship's crew listen to the band play. I think it is the latter, because with days like today, where Europe equity is down 3% across the board, and where Asia and the US markets fell, there is no way people can believe all is well. Afterall, Bernanke and Hu have both said the recovery is weak at best.
What will the $430b do? Well, judging from recent history, it can give the system pause for a month, maybe two. What then? More bailouts will be needed, likely from the Fed, since most other CBs have done their fair share of late. This will lead to more inflation of the asset prices for necessary goods like foodstuffs, oil and metals (especially PMs, because the CBs will continue to leverage them).The housing market will provide a cushion for hyperinflation, as houses continue to deflate. But after this $430b the system will need a large cannon if the can should continue to be kicked, an amount of $1T due to Europe's coming massive July debtroll; this should be in late June, early July, and do not be surprised if it sets fiat on fire.