EUROPE PULLS OUT ANOTHER PELLET GUN

"The big news today is that the ECB will buy Spanish and Italian bonds. Italy is also announcing a balanced budget amendment. The comedy of errors continues. We’ve seen these movies before and we know exactly how they end. Italian austerity will not fix this problem. As we saw in Greece, austerity will only exacerbate their issues by shrinking the economy while ignoring the problem of aggregate debt levels. A balanced budget amendment is not what Italy needs right now. It’s in many ways, no different than the situation the USA is in. As a current account deficit nation, the balanced budget amendment will shrink the public sector while the private sector and foreign sector both act as drags on the economy. This means the Italian economy will shrink which will ultimately make their problems worse in the near-term..."

at http://pragcap.com/europe-pulls-out-another-pellet-gun