Although Madrid sources told The Slog this morning that next week’s formal Spain bailout will include “unlimited bond buying by the ECB”, market sources are suggesting this evening (5.00pm BST) that the Spanish government drove a coach and six through eurozone bond rules to artificially depress bond prices earlier today.

“The explanation is that Spanish banks have significantly increased their borrowing from the ECB, not LTRO funds, and are using the proceeds to buy Spanish debt at the auction, thereby causing yields to drop,” asserted one UK opinion leader, “Then the newly purchased bonds are used as collateral for additional ECB borrowing by the Spanish banks.  You can see that the drop in yields is far greater than the adjustment to the new OMT program.  This is a stealth Eurobond mechanism, and Germany is on the hook for 22% of the ECB liability.”

It’s not the first time the Peter-to-Pay-Paul-Ponzi scheme nonsense has reared its head in Clubmed, and it won’t be the last. But the scale and brazen nature of it makes Draghi’s subordination of the Greek bondholders look like philanthropy.

“All bets are off now,” agreed The Slog’s trusted Madrid informant and explicator, “they’re making it up as they go along, and the rules left the building long ago. A year ago it was a case of knowing smiles about the horsesh*t. Now it’s a case of watching every move like a hawk. They’ll kill the market before they’ve finished…it was bad enough destroying the credibility so much over Greece, but now the crooks have moved in, well….it can’t work, and it won’t work”.

The issue he describes is far from being restricted to Spain. An EU-IMF report into whether Greece’s debt is manageable looks set to be delayed until mid November because policymakers ‘want to avoid any more shocks to the eurozone economy’ . Bollocks: O’Drama wants a quiet life until he’s safely back in the Oval Office chair. I doubted the reality of this until last week, but despite the Mittgaffes that follow the GOP candidate wherever he goes, the Black Dude is clearly paranoid about rapid contagion screwing up his triumphal re-election. All of which might suggest that he either thinks (or more likely, is being advised) that when it comes, the Big Wave will be moving faster than a Hydron molecule.

Spain is, many of my friends out there believe, on the verge of break-up. Greece is showing signs of splintering as Left and Right battle to replace the ancien régime. Portuguese Prime Minister Pedro Passos Coelho told the Lisbon parliament that his government “was not deaf” to the fury unleashed after it announced plans to hike social security payments levied on workers.

Mario Monti was not playing host to three other leaders today as Prime Minister of Italy: he was doing so as fellow Goldman Sachs eminence grise behind Mario Draghi in the game of Rollerball now getting into its stride between the control freaks in Berlin and the sociopaths in ClubMed. Trying to work out the Venn diagram of their respective and individual motives in all this is rapidly becoming a mugs’ game. Gold is cruising upwards again, and glitz-bricks continue to sky-rocket. It really is batten down the hatches time.

Earlier today at The Slog: Why the OfCom James Murdoch verdict is about as independent as the Warren Commission