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A confidence crisis is deepening. Normura's Jens Nordvig said "disorderly" moves in Spanish bonds suggest Madrid is "about to lose market access." Like Greece, it's collapsing. Analysts expect Italy to be next.
At the same time, the euro hit a two-year against the dollar. Signs show it going lower. Severe structural weakness defines Europe. At some point, policy makers will exhaust rabbits. They buy time, nothing else.
Greece stumbles along one bailout at a time. The end of the road approaches. On July 26, Greek Finance Minister Yannis Stournaras faces a deadline to give Troika leaders details on his latest austerity package.
If rejected, civil servants don't get paid. What remains of pensions won't be funded. Other budget priorities will be left hanging. On July 20, the ECB said Greek government debt no longer is acceptable collateral for low-cost loans.
Conditions in Spain keep worsening. Valencia and other troubled regions say they need bailout help. At issue, of course, is who'll provide it. The European Financial Stability Facility (EFSF) is exhausting resources and maneuvering room.
Debt holders may have to take haircuts. Default whispers are heard. An IMF report suggested the unthinkable. It's losing confidence in the Eurozone experiment. It was an idea doomed to fail. Breaking up is hard but inevitable.
Months ago, the late Bob Chapman said Germany was printing Deutsche Marks and France francs in preparation. Perhaps other Eurozone countries are doing the same thing.
Economic reports are grim. GDP forecasts creep lower. US retail sales show negative reads. The Philadelphia Fed survey had nearly half the region's manufacturers saying they'll cut production.
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