Ask not what the EFSF can do for you…

Ask not what the EFSF can do for you, ask what you can do for yourselves. I say this to Italy and Spain who are both suffering another day of market discipline as their bond yields are moving to at and above recent multi year highs and CDS in both are rising to record levels. They must do for themselves because both are to big to bail. While debt is the noose around the troubled countries in Europe and also in the US, it is the welfare state that this debt financed that can no longer be sustained with the now lackluster economic growth rates that both regions are experiencing. The US debt deal did nothing to face this reality. In Japan, another country that fits the above description, is seeing very little of a decline in the yen after yesterday’s newspaper planted threat of another intervention and verbal jawbone by their Finance Minister overnight in order to weaken it from its record high vs the US$. The RB of Australia kept rates unchanged as expected “in view of the acute sense of uncertainty in global financial markets.”

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