Paul was wrong, the risk premium is right

As you can see in the chart, Spainistan has surpassed today the threshold that before triggered the EU’s intervention in Greece (here obviously known as Greecistan). Indeed, for Greecistan the risk premium was in 500 when this took place, whereas for Portugalistan and Irelandistan was 517 and 544, respectively. The barrier has been crossed and, from this Blog, we do urgently call for a formal intervention of this country. Actually, this intervention will just formalize what is already de facto happening so no worries!. This actually takes place in a critical moment for Spainistan; please do refer to the Spainistan Nonsense Indicators’ list here.

As you may know, just a couple of days ago, Paul Krugman suggested the end of the game as follows: 1. Greek euro exit, very possibly next month. 2. Huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany. 3a. Maybe, just possibly, de facto controls, with banks forbidden to transfer deposits out of country and limits on cash withdrawals. 3b. Alternatively, or maybe in tandem, huge draws on ECB credit to keep the banks from collapsing. 4a. Germany has a choice. Accept huge indirect public claims on Italy and Spain, plus a drastic revision of strategy — basically, to give Spain in particular any hope you need both guarantees on its debt to hold borrowing costs down and a higher eurozone inflation target to make relative price adjustment possible; or: 4b. End of the euro.

I think Paul was wrong and the risk premium is right; being honest and coherent, Spainistan should have had to be intervened today, the exit of Greecistan has already been decided and normal people, like me, are already transferring funds to other countries, such as Germany and Switzerland.

Let’s be all honest: we are in front not only of the end of the Euro, but of the end of the European project. It was never considered, it was actually never considered worth to try to tackle it and to build it up as a social-political one; now it won’t even be economical. And one of the main responsible for this to happen is Spainistan.

A Hurt Former Spaniard   

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