Heading for the European breakup

(Der Spiegel) - Not even a week after the most recent European Union summit aimed at ending the debt crisis, panic is mounting once again. But not in Berlin. Chancellor Merkel calmly told parliament on Wednesday that a solution would take years and German central bank head Jens Weidmann compared demands for ECB intervention to an alcoholic grabbing for the bottle..... With virtually the entire world convinced that the euro zone has not done enough to save the common currency, Merkel remains stoic in the face of demands to erect a gigantic firewall. On Thursday, she ruled out increasing the size of the permanent euro backstop fund, the European Stability Mechanism, beyond the currently planned €500 billion ($648.5 billion).

The Germans are set to bring some sanity into the European political system. The problems is the patients are incurable.

What is interesting is that the European approach to solving their financial problems is the opposite of what has been done in the US. They want the private sector/banks to pay the price.

The tire will hit the road during the 2012 European recession.

More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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