07-25-2012, 09:55 AM
'admin' pid='7201' datel Wrote:Well, in my little corner here I have put up that funny little graph daily of the Spanish 10-year yield (although arguably, the 2-year yield is even more important), and that ain't been painting a pretty picture (and I'm putting it very mildly). However, I do expect major coordinated central bank action to soften the blow. As far as I'm concerned, Germany and a few satellite countries should introduce a parallel currency and then let it rise. The present strategy has been counterproductive, even the IMF now admits that. The euro has been an unmitigated disaster, first pumping bubbles in the periphery and now reversing that, creating a Fisherian self-reinforcing debt-deflationary 1930s style depression, but don't get me started..
The Germans don't want to jeopardize their exports, either internal to the Eurozone and/or outside. They are currently in the sweet spot, with the Euro falling apart.
Why would they follow what you think they "should" do?
The Euro has lasted longer than I thought it would. Hope springs eternal that some kind of fiscal integration will take place. FAT CHANCE. The political bozos will continue to have summits ad nauseum -- number 20 coming right up -- with worthless breathless communiques announcing the accomplishments -- OF NOTHING.
Unfortunately, the US will eventually have to participate in a massive Euro area bailout.
Will the Chinese bail us out when the time inevitably comes?
VS