Watchman Reporters

Angela Merkel consigns Ireland, Portugal and Spain to their fate
         

<blockquote><cite>Quote:</cite>Germany has had enough. Any euro zone state that spends its way into a debt crisis or cannot adapt to a monetary union set for Northern rhythms will face “orderly” bankruptcy. </blockquote>
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<a href="http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8100412/Angela-Merkel-consigns-Ireland-Portugal-and-Spain-to-their-fate.html#disqus_thread" target="_blank">http://www.telegraph.co.uk/finance/comme...qus_thread</a><br />
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Germany has pushed the EU into saying next time there is a bailout, they will put these countries into some form of bankruptcy and will hair cut the bond holders. Whether they will actually hair cut the bond holders or not is a different matter, but this alters the entire picture of Euro land as we know it Jim.<br />
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<blockquote><cite>Quote:</cite>Foreign ownership of certain peripheral European government bonds has been dropping like a Blarney stone, in a reversal of a decade-long trend.</blockquote>
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Bias in bonds<br />
<a href="http://ftalphaville.ft.com/blog/2010/11/01/389461/bias-in-bonds/" target="_blank">http://ftalphaville.ft.com/blog/2010/11/...-in-bonds/</a><br />
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This is clearly a reversal of a decade long trend, before you could have brought Irish debt, Spanish debt, and so on over the last 10years at a very small amount compared to German debt, because everyone knew that they would get bailed out. Now Merkel has changed all this, and bond holders might not get bailed out next time, and they might have to take a haircut, or more likely something similar to the end of kill bill and get their heads chopped off.<br />
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The above link shows us a chart, by the CITI group, and note from it that those countries are no longer selling bonds to people outside, but are in fact buying their own debt...<br />
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The dragon is beginning to eat its own tail, "Uroborus" but it is not the Governments debt it is the people’s debt, and what seems to be happening is that Governments are forcing that debt onto its people. But what we have here is the complete change in Euro land, that Spain, Ireland, Portugal, and Italy will come into it and no doubt other peripheral countries, will all see that they have much less reason to stay in the Euro, before they used to have cheaper debt, and many other advantages but these are slowly flying away. <br />
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We will see all through the rest of this year and into next year when they have to hit the debt markets again; these peripheral countries will be paying a lot more for their debt... They will never return to the good old days of cheap debt of the last decade, that is all now gone, they are being forced to cut back on their spending and are going to have to pay a lot more on their borrowing. <br />
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It’s getting very close to being an impossible position for those peripheral countries of Europe, and Germany has known what it has been doing all along, ever since this Euro land thing was first floated, it has known exactly that this was going to happen and presumably the other countries didn’t, they should have done..........<br />
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http://forums.ukcolumn.org/showthread.php?tid=2589