Swan Song for the Euro

[Crewleader]

August 9, 2011

Junk It and Start Over Again

Swan Song for the Euro

By MIKE WHITNEY

We all know the drill. Bond yields start to spike in one of the smaller countries in the EU, and before you know it, the bigger countries are called in to bail them out. We've seen the same rerun over and over again.

This time, Italy and Spain are in the crosshairs. Jittery investors have fled their bond markets for the safety of German Bund, US Treasuries and precious metals. The selloff has sent Italian bond yields into the stratosphere making it more expensive for the government to fund its operations. So, the debts and deficits get bigger and the downward spiral begins. Same old, same old. That's why the ECB called an emergency meeting of the EU's Governing Council on Sunday to cobble together another 11th hour bailout before the markets opened on Monday. If they had ignored the problem, it would have been Lehman Brothers all over again; plunging stock markets, panicky bank runs, and a full-blown global financial crisis. Here's a summary from Bloomberg:

http://www.counterpunch.org/whitney08092011.html

[roamer65]

1. Or they enter fiscal and political union...

and truly become "Europe".