Euro Debt Crisis: Dominoes Anyone?
Collapsing like a well stacked table of dominoes, the Euro Debt Crisis may be about to tear the European Union apart. The media was awash with news reports over the last many months about the Greek debt crisis. Then just recently the focus was on Italy. Both governments were replaced or are in the process of being replaced as the top leaders in each country, George Papandreou for Greece and Silvio Berlosconi for Italy, make their way out of leadership positions.
But just as picking up a domino that has already fallen on the table does not stop the rest of the dominoes from collapsing, the Euro Debt Crisis is not ceasing to spread either. The underlying cost of refinancing debt in France has jumped almost 10%, as the cost to refinance France's 10-year bond yield went from 3.42% to 3.68%. In Belgium, the same costs for their 10-year bond yield went up almost 10%, from 4.59% to 4.91%. And both of these increases took place in less than 24 hours.
Clearly, those who have money stored in European bonds are fleeing like rats from a ship. It won't be too long before, the news media is talking about bond yields of 6% in Belgium and possibly even France.
With a table stacked full of dominoes already set into motion, it is impossible for man to stop the rest from falling over. The ultimate solution is to wait until they've all collapsed, then start the game back over again, placing each domino carefully back on the table once more.