Euro Sculpture at the ECB in FrankfurtImage via Wikipedia
With Standard & Poor's downgrading of the US debt, we got one step closer to global financial meltdown.
And of course, the weakest link in the system, i.e. the Euro-zone, got hit first.
With interests soaring last week on the Italian and Spanish bonds, the signals the markets were sending to our political leaders (if you can call them that) were crystal clear: After Greece, Portugal and Ireland, Spain and Italy are next!
Trouble is: no one can allow Italy (or even Spain for that matter) to go down the drain. That would make a $1.4 trillion hole, by some accounts. Whatever the size of the hole, it's obviously too big and makes the Lehman Brothers debacle look like a kiddy game, by comparison.
Let's be clear: it would mean the end of the world as we know it - and the Chinese, inter alia, are very, very worried. And so they should be. And so should we be all.
Sunday, the European Central Bank finally came out with a communiqué that left no doubt as to its intentions: it would buy Italian and Spanish bonds - in other words, it came out at last with a real, responsible position as central banker and defender of the Euro.
We'll see how the markets react this week. The proof is in the speculative pudding. But even speculators betting against the Euro are ultimately fools: they might (momentarily) make a lot of money, but they'll bring down the system and then where will they be?? Naked, of course.
The only problem in all this is that we shall be naked too!
Let's keep our fingers crossed!
Please let me know how you feel about this issue. This is something that has me very, very worried (like the Chinese!). But I'm hopeful that reason will somehow prevail in the end...
Once upon a time, there was a woman who discovered she had turned into the wrong person.Anne Tyler, Back When We Were Grownups~In our family, there was no clear line between religion and fly fishing. We lived at the junction of great trout rivers in Montana, and our father was a Presbyterian minister and a fly fisherman who tied his own flies and taught others. He told us about Christ’s disciples being fishermen, and we were left to assume, as my brother and I did, that all first-class fishermen on the Sea of Galilee were fly fishermen, and that John, the favorite, was a dry-fly fisherman.Norman McLean, A River Runs Through It~The sky above the port was the color of television, tuned to a dead channel.William Gibson, Neuromancer~The Miss Lonelyhearts of the New York Post-Dispatch (Are you in trouble?—Do-you-need-advice?—Write-to-Miss-Lonelyhearts-and-she-will-help-you) sat at his desk and stared at a piece of white cardboard.Nathanael West, Miss Lonelyhearts~Samuel Spade’s jaw was long and bony, his chin a jutting V under the more flexible V of his mouth. His nostrils curved back to make another, smaller V. His yellow-grey eyes were horizontal. The V motif was picked up again by thickish brows rising outward from twin creases above a hooked nose, and his pale brown hair grew down–from high flat temples–in a point on his forehead. He looked rather pleasantly like a blond satan.He said to Effie Perine: “Yes, sweetheart?”Dashiell Hammett, The Maltese Falcon