Wednesday, November 23, 2011


The big news today, for you economic wonks is that the Germans attempted to sell national bonds, and no one stepped up to buy them. This is a big-time no-confidence vote in the notion that the Mediterranean countries will be allowed to run up debt and the Northerners will pay it off for them.

“We must re-establish the primacy of politics over the market.”
A. Merkel
FWIW, Frau Merkel, political bodies have always been able to destroy markets. Think of a political entity (country) as a body, and the market as the blood circulating within it. It's easy for the body to control the blood, simply place a tourniquet around the neck and tighten. Of course this results in a shrinking market, falling GDP, higher unemployment and a pressing need for the government to raise taxes to cover the cost of tightening the tourniquet.

Good thing we're not that dumb here, right?

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