.... and so the wheel turns ..

News. Spain will implement its economic austerity plan to cut its budget deficit “whatever the cost”, and will introduce even harsher measures if necessary, according to José Luis Rodríguez Zapatero, the Socialist prime minister.

My view. First Greece. Now Spain. Then.... And we keep seeing the same nonsense over and over again.

People ask. The politicians give beyond the means of the country. Deficits soar. The markets eventually make it impossible to borrow by raising yields (risk premiums) to incredible levels. The populace does not understand what is going on and protests. Violence.

The politicians finally realize they have to pay the bond holders for their spending largess and borrowing craziness.

The same politicians who gave the country away say that the markets are irrational. Then they announce "austerity measures" with a sober tone.

Taxes are raised across the board in the name of stability.

The moral of the story is that people (you and I) have to pay the markets for the goods and services they did not afford.

And so the wheel turns. The same nonsense over and over again in space and time. The same war to gain power and wealth. And we pay with a painful loss of purchasing power.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

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