Tuesday, 20 December 2011

Spain borrowing costs dive, ECB loans seen at work

Thus reads Reuters head line today  reporting a 'successful' Spanish bill auction with 6 month paper going at 2.435% compared with 5.227% last month and 3 month bills going at 1.735% compared with 5.11% last month. This is all new ECB money at work. Draghi cannot admit to it publicly for fear of the Gestapo but the ECB is buying up Eurozone dodgy debt in size with newly minted money. 

Their strategy seems to be to buy just enough toilet paper to keep the PIGS in the market but keep the pressure on the dodgy politicians to push through the much needed tax and spending reforms. Its a nice trick if you can manage it but the markets view is more clear in the Italian 10 year rate of 6.62%, down about 0.5% from its recent high but still in bail out territory. Once the IMF etc have seen the books the truth and the worms will out.

I was going to write about the nauseating letter of self interest supporting the EU in today's DT but this has been adequately dealt with by Richard North in his EU referendum blog. One of the signatories Leon Brittan is still on the EU payroll via his  Commissioner's pension. These signatories  are all people who worship globalisation and have no concern for the ordinary working people of the UK. But as Richard writes, we are going to see a lot more of this in the next 6 months. 

Where is Farage's EUKIP rebuttal?

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