Germany is under fire from the rating agencies. I had outlined this in a previous post, the dangers of the German sovereign debt and how it isn’t a safe haven anymore. Europe is going for self destruction, and it does not seem to acknowledge that fact.
It is sad to see the EU authorities not taking the right decisions. In 2010 they should have saved Greece with total effort in order to avoid other pseudo bail-outs, it would have been cheaper than have to save Spain and Italy. If they had shown full force since the beginning, the spread of the disease would have been contained, but they wanted to teach us all a lesson. Unfortunately for Germany they will also learn a lesson: their major commercial partner is the EU, if the EU countries are broken, Germany won’t be able to sustain the current industrial output, therefore the unemployment will grow, the budget deficit will grow, and their debt will not be AAA anymore. It is ironic that to maintain its triple A rating Germany should have helped the Greeks.
I still believe that there will be an EU after this nonsense, but I am starting to think that the cost for many countries is growing at a rapid pace. Spain is falling from a cliff at one region per day. If the Chinese economy ends up with a hard landing, that would be too much for the world economy. I starting to think that we might be heading for a Long depression (1873 – 1896).