A
chart to ponder as we wait for the monthly jobs report:
The above represents the latest available data for unemployment rates in
the PIIGS countries (data through March, except only through Feb for
Greece). Spain and Greece in particular continue to spin wildly out of
control.
As far as I can tell, there is still no coherent approach to managing
the situation, which will therefore continue to get worse. The latest twist
is that Spain is signaling that it cannot afford to rescue Bankia (a
hastily assembled consortium of regional banks that is now insolvent due
to bad real estate loans made during Spain's property boom).
Europe is rapidly approaching the point where deflation is the concern, instead of inflation. If the Germans are not ready to print money to replace that which is getting destroyed by default, they will soon find out that inflation isn't their biggest concern. Sometimes you have to print money.
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