"Do you hear that sound? It is the sound of Europe being hit with a cold dose of
financial reality. The air has been let out of the balloon, and investors all
over the world are realizing that absolutely nothing has been solved in Europe.
The solutions being proposed by the politicians in Europe are just going to make
things worse. You don't solve a sovereign debt crisis by shredding confidence
in sovereign debt. But that is exactly what the "voluntary 50% haircut" has
done. You don't solve a sovereign debt crisis by pumping up your "bailout fund"
with borrowed money from China, Russia and Brazil. More debt is just going to
make things even worse down the road. You don't solve a sovereign debt crisis
by causing a massive credit crunch. By giving European banks only until June
2012 to dramatically improve their credit ratios, it is going to force many of
them to seriously cut back on lending. A massive credit crunch would
significantly slow down economic activity in Europe and that is about the last
thing that the Europeans need right now. If the deal that was reached last week
was the "best shot" that Europe has got, then we are all in for a world of hurt..."
at http://theeconomiccollapseblog.com/archives/the-air-has-been-let-out-of-the-balloon
at http://theeconomiccollapseblog.com/archives/the-air-has-been-let-out-of-the-balloon
