Posted on 04/04/2012 11:47:18 AM PDT by whitedog57
Apparently, Prime Minister Rajoy is watching the Greek Debt Tragedy carefully and learned that the “cure” can be worse than the illness. Spain’s debt auction was a massive failure. Each of the PIGS (Portugal, Italy, Greece and Spain) saw large spikes in their 10 year Sovereign bond yields.
The news for Spain is not good. Real GDP is falling, unemployment is at 23%.
And other Eurozone countries aren’t doing so well either.
I was on CNBC’s Squawkbox (Asia) last night discussing Spain and the ECB’s actions. I did say that Spain is a ticking bomb waiting to detonate. And you can see why.
Can the ECB (or IMF) ride to the rescue like the U.S. Cavalry in a John Wayne movie like “She Wore a Yellow Ribbon?” and have European banks buy more plunging Spanish debt? Or is this a repeat of the disastrous “Charge of the Light Brigade” where the ECB/IMP pour billions into entitlement and debt heavy economies with molasses-like economic growth?
As I pointed out in the Squawkbox interview, Europe is general went entitlement and debt crazy and simply providing liquidity is only a stall tactic. But do any on them have the courage to REALLY cut spending and balance their budgets? Especially in the face of austerity riots?
Only time will tell. But I think the ECB just launched the second “Charge of the Light Brigade” where thinly-armed liquidity strategies are trying to attack heavily armed entitlements, massive debt, and stagnant GDP.
The ECB announced that they are keeping their Main Refinancing Rate at 1.0%. Not surprising if you look at the charts above. Our Fed and the ECB are following similar low interest rate policies, although the ECB lags behind our Fed.
(Excerpt) Read more at confoundedinterest.wordpress.com ...
From from above ground bunker in a nondescript house in Chico California.
That was supposed to be “From MY ..” ala Mark Levin.
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