German bonds are beginning to sink. A national strike has been called in Portugal to shut down the economic life of the country to protest the government's austerity measures. Bond yields in Spain and Italy have resumed their upward march. There is a growing awareness that Greek reforms will never take place.
No surprises here, unless your name is Merkel, Sarcozy, Bernanke or Geithner.
The European debt explosion marches on to its inevitable conclusion. The forces that drive sovereign debt expansion in Europe, in Japan, in the US, are alive and well. Politicians can huff and puff all they want, but it won't matter. The unraveling process is well under way. Check out the trend in US bond yields. We're going the same route.
In case you didn't see it, Ben Bernanke and Tim Geithner weighed in yesterday on how things are going in Europe.
Bernanke (to a House Oversight Committee): "In the past few months, financial stresses in Europe have lessened, which has contributed to an improved tone of financial markets around the world, including in the United States."
Geither (to that same House Oversight Committee): "The European economies at the center of the crisis have made very significant progress."
You wonder what these guys are looking at to make these kinds of statements. The American public is not well served by misleading statements from it's chief economic politicos.