12/3/2010 Portland, Oregon – Pop in your mints…
Oh my, fellow taxpayer! All of the action is in the Bond markets lately! Specifically in Europe. Our current working hypothesis as to what will unfold in Europe is that the financial crisis is serving the purpose of generally weakening the governments of the Euro zone to the point where they will be compelled to turn over most of their authority to a central government which is currently located in Brussels. Whether it is premeditated or not is subject to a debate that we will not enter into at The Mint. We are simply observing the data and following it to a logical conclusion. And how entertaining the action is to watch!
The latest act in the drama of the emerging sovereign debt crisis is playing out with Italy and Belgium preparing to take center stage. From the New York Times:
Italy and Belgium have a lot in common: both are less dependent on foreign creditors than Greece or Ireland. But each is plagued by severe political dysfunction, which has raised questions about whether they can ever repay a mountain of debt, respectively the second- and third-heaviest loads in the European monetary union after Greece.