Saturday, September 03, 2011
The end is nigh?
The bigger the fudge, the bigger the eventual crash. But there is no clarity, no clear direction and no obvious end game. But, when the Bundesbank is growling, we must be close to the finish. Zerohedge seems to believe that the failure of the euro is imminent.
The EMU, it says, started on the idea that it would bind the EU closer. In essence it was a political decision rather than an economic decision. They passed a stern rule that said no state could run of deficits of more than 3 percent of their GDP. Except for Estonia, Finland, and Luxembourg, all countries, including Germany, now exceed the limit. Thus their politicians sacrificed fiscal probity for political gains.
They have hit the wall: Greece will soon default on their sovereign debt. On Tuesday, yields on one year Greek bills reached 60 percent. It is a sign that investors have no faith in the Greek government's ability to repay their debt.
And that is only a taster – but you will struggle to find any good economic news elsewhere. So what do we do now? Well, Raedwald has some ideas - and yes, it is that bad. The fools whom we call our leaders will be the death of us all.