Douglas Carswell's Blog

Why we should keep an eye on Belgian bond yields

Two weeks ago economic reality started to catch up with years of political wishful thinking in Europe. 

Remember those official communiques telling us how Brussels was going to make Europe "the most competitive and dynamic knowledge-based economy in the world"?  Today they have all the credibility of Soviet pronouncements about tractor production.  

Commentators who since 2007 recycled unthinking clichés about how the bailout-and-borrow approach was the answer to everything, have quite suddenly begun to lecture us about rising yields on 10 year Italian and Spanish bonds. 

Suddenly the smug politico-media elite have clocked the fact that pretty much everything the West has done since 2007 has made things worse; More debt.  Higher public spending.  Higher taxes.  Interest rates that have fed more overconsumption.

The herd no longer seem quite so sure who to follow.

Here's a clue:  Watch Belgian bond yields (see graph) - our cliché-mongers can even check the Bloomberg site, add in the German data, and watch widening spreads by the hour.  To me this suggests this crisis is no longer about a bit a fiscal mismanagement on the Euro periphery, but perhaps something more profound.

This Euro crisis is ultimately about the size of public spending in relation to private wealth creation.  It is not only Europe's monetary system that has failed.  It is European welfare corporate-capitalism that is looking busted.

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