It’s Coming Folks (From Europe)

Italian 10-Year Bond Yield

It’s happening folks…

Italian bond yields continue up.

That’s not particularly news.

But now yields are going up in France, Spain and Belgium.

One downgrade to France and it all goes up in smoke for the EFSF.

Political movement no longer works.  You need fiscal resolution and you can’t get there from here.  Don’t believe for a minute that this isn’t going to blow up in people’s faces, because it both can and will.

“It’s a confidence crisis,” said Elwin de Groot, a senior market economist at Rabobank Nederland in Utrecht, Netherlands. “Investors have no confidence that the euro zone can solve its problems. They will look for the most safe place they can store their money, which is Germany. Everything else is suffering.”

This is not going to end well and so far there is nobody talking about what has to actually happen either here or there — that is, whatever services people want from government they must be willing to pay for them with current tax revenues.

That’s the beginning and end of it and the time to take this action is quickly coming to a close.  The market is going to enforce prudence whether the wonks in The Fed, in the ECB and in all of the governments involved like it or not.

Eurostat says that GDP in the Eurozone was 0.2% for the third quarter. This means that the Euro zone as a whole cannot run any fiscal deficit whatsoever without continuing an attempt to build the Ponzi.

I repeat: NOBODY is yet speaking to the truth of the matter.  Not central bankers, not governments, not politicians in either party here and nobody over in Europe.

The market is calling “BS!” on the games; the banksters and governments, having gotten away with bailing out the crooks in 2008 and then refusing to put a stop to the abuses, smugly thinking they could just go on their way and leave everything alone (including the asset-stripping and lying schemes of the banksters) are discovering that the market is refusing to play along and is going to force the truth into the open.

I have warned of this for four and a half years and have been ignored.  To date while there are people using a lot of “if” words, including Evans who is single-handedly destroying the credibility of The Fed right now on CNBC, and Liesman, rather than calling him on it, is (again) being an enabler.

Again folks, the bottom line is simple: You cannot continually borrow and spend more than you make, yet this is the game that governments have continually played for 30 years, and private businesses have attempted to “lever up” to “take advantage” of this without regard to the mathematical inevitability of this strategy’s failure.

Discussion (registration required to post)