Douglas Carswell's Blog

The writing on the wall*

Policy makers still cling to their clichés, but economic reality has a habit of cutting through political muddle headedness.  

Since £billions of our money was promised this week to try to shore up the Euro (and yet more tanked banks), what has happened? 

Graphs for Irish (left), Portuguese (middle) and Spanish (right) ten year bond yields have spiked sharply. See the right hand of the graphs below.

But what do these financial geek graphs mean?

The people who do the lending now have less confidence in the ability of the Irish, Portuguese and Spain states to pay back their IOUs. Less than before the so-called bailout at the start of this week.

If policy makers are on top of things, they’d now be focusing on the key issue;  does the European Central Bank keep extending liquidity to Ireland and the others, or not? If the ECB does, the Euro is in trouble. If the ECB does not, the periphery states membership of the Euro is in trouble.

* - Jonathan Swift's The Run apon the Bankers:

A baited banker thus desponds,
From his own hand foresees his fall,
They have his soul, who have his bonds;
'Tis like the writing on the wall.

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