From Zero Hedge:
With Ireland now a lost cause, the next country which will see its bond yields surge to new records is Portugal. And just so vigilantes don’t miss the hint, the Portuguese opposition party has stated that the country’s budget deficit and public debt are “higher than those reported by the government.” The claim is that Portuguese debt is about 30% higher than claimed by official statistics: instead of 82% of GDP, it is actually 112%. With bankrupt Greece having lied about virtually every aspect of its comatose economy, it is not as easy to dismiss the announcement as merely political bickering, and is sure to leads to at least a modest double digit basis point jump in Portuguese spreads…
Which means that Portugal will find it increasingly hard to finance its debt, which will lead to even more financial stress and, of course, the EU/IMF working out some sort of fiscal papering over the cracks. Eventually, good people, this does stop working. With Greece, Ireland and Portugal, we’re talking about some of Europe’s smaller economies (none of these three nations has has even 12 million people, as compared to the 60, 64 and 82 million of Europe’s big boys, Britain, France and Germany) – but looming in the background are the highly stressed economies of Italy and Spain (60 and 45 million people). There simply isn’t enough money in the world to backstop all that debt.
They keep sticking fingers in the dike, and then another leak springs up…how long can they keep it up? Beats all heck out of me – but they can’t keep it up forever.
Blogs For Victory 