As I was saying...

From one of yesterday's posts...

So what are we left with? Another massive bailout of banks by tax payers in an effort to prop up a zombie country that was broke yesterday, is still broke today and I am willing to bet more money than I have will still be broke three years from now. When and where does this end? How much money can the EU (or the Congress here in the USA) shell out to prop up bankrupt institutions whether countries, states, or private corporations?

Today major financial markets across Europe and in the United States dove as nervous investors began to take a hard look at Europe's problems. The DOW was down over 2% and the Euro was slammed down to its lowest exchange level versus the dollar in a year. I wonder how long before people notice that the United States has a massive sovereign debt problem of its own? Once they do the dollar and Treasuries (now sporting record low yields) will become very unattractive in a hurry.

A rather insightful comment from a discussion board over at yahoo...

Debt to GDP ratios and all that math are good. But pretty much, when people decide it is over,...It is over. It is a human thing. Sovereign debt and currency is not like the stock market. It is never backed by anything. Not these days anyway. The money and debt cannot be converted into assets during a bankruptcy. Once faith is gone, it is gone. And the truth of fiat currency is slowly coming to forefront of global consciousness.

Central bankers may struggle to hold the system together. But we are looking at a global currency episode. Most Americans still think the dollar is backed by gold, just like Europeans thought the Euro was partially backed by gold. The learning curve sharpens fast when questions start being asked.

Trust requires ignorance.

Source.