Monday, September 10, 2012

Europe Leveraging Debt

The European Central Bank is going to buy Euro Bonds thereby monetizing what otherwise would (and should) be worthless paper. The United States is engaged in a similar folly, buying our own Treasury instruments, effectively buying debt with more debt. This practice is of course an act of last resort which will only worsen recovery prospects for America and which can not ultimately prevent Greece from being forced out of the Euro and may not save Spain either.

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