|Image from Spiegel based on calculations with ING bank|
Merkel's unequivocal comment on her nation's unwillingness to 'share' burdens and slap the proverbial cheek of Monsieur Hollande, Italy's banking union looking for more 'aid', Spain actually asking for their bailout, Greece 'avoiding' reality, and Cyprus pulling the 'China rescue plan' last ditch retort to market angst; ZeroHedge.comI have been reporting the impeccable analysis from the Gold Jackass, that Germany is planning on leaving the Euro to the socialist nations of the South and forging its own path with its Northern European neighbours and now others are picking up on this.
“I think Greece leaving the euro zone or being pushed out is now a real expectation and this is what is necessary to strengthen the rest of the euro zone because the way the financial markets work they can actually push a country like Italy into default - see this is what the weakness of the euro as it is currently structured because a developed country has no reason to default because it can always print money. By printing money it can devalue the currency and people can lose money by buying debt but there is no danger of default, but the fact that the individual members don't now control the right to print money - they have given that right over to the central bank you see, and that has created this situation with a European country that could actually default and that is the risk that the financial markets price into the market and that is why say ten-year bonds yield 6% whereas British 10-year bonds yield only 1.25%. That difference is due to the fact that these countries have abandoned the, surrendered their right to print their own money and they can be pushed into default by speculation in the financial markets.” George Soros in an interview with Bloomberg
This is what the Greek, Italian and Spanish government can no longer do. They, like every government everywhere is unwilling to cut spending (in absolute terms), its hard because the voters love 'free stuff' even but have not quite worked out yet that there is no such thing as 'free stuff', even if you can't see it you are paying for it somehow and most likely through the stealthiest tax of all, inflation.
|Courtesy of kitco.com|