Central Planning Failing In Europe

Banks push Europe stocks lower, yields surge

The Stoxx Europe 600 index rose 0.1% to close at 259.07 after trading as low as 256.52.
For the week, the index fell 1.6%.

European equities pushed back into positive territory in late trade as Wall Street erased initial losses.

Most European and U.S. markets are closed Friday.

Major European markets will also be closed Monday for the Easter Monday holiday.

European stocks slumped Wednesday after a lackluster Spanish government-debt auction reignited fears over the euro zone’s sovereign-debt crisis, while Italian and Spanish government bond yields spiked.

Yields rise as bond prices fall.

The bond auction yesterday failed to generate lower yields and obviously markets are suspicious. The spread to the German bund is now over 400 basis points, which is the highest since December. This means that investors are shunning...Spanish bonds,” said Marc Pussard, head of trading at Tradenext.

My View:

Once again, policies promoting bond purchases and repricing by central authorities in an attempt to put a band-aid on the wounded European Union are failing.

The LRTO, like the QE 1 and 2 policies by the Federal Reserve, temporarily prop up stock and commodity prices, but fail to positively impact the real economy.

As the bond market becomes more suspicious, and eventually nervous, we can expect yields in Europe to skyrocket.

While yields in the US are still very low, and a crisis in Europe may drive yields perhaps a little lower in the medium term, the long term view remains grave.

Due to the much larger size of the bond market compared to the stock market, the default on sovereign debt will cause a destruction of wealth unprecedented in recent history.

And when the bond market collapse does show up in all its dark glory, central planning, fiat currencies, and big government will be the prime suspects.

The question for each reader is this:

Are you ready for your life to change?


  1. throw some ads on your site, might take 30 to 45 minutes, easier than you think. Cant hurt, $1 per click, at least I could buy you a coffee now and then.....

  2. I think I'll do that Steveo.
    Might need the extra income the way things are developing in my neck of the woods.


Post a Comment