Jolted into action by last week’s slide in the currency and soaring bond yields in Portugal and Spain, the 16 euro nations agreed to offer financial assistance worth as much as 750 billion euros ($962 billion) to countries under attack from speculators. The European Central Bank will counter “severe tensions” in “certain” markets by purchasing government and private debt.
Silly us. It’s not the debt that’s the problem, it’s the “speculators” who are “attacking” the currency. It seems entirely more reasonable to me to conclude that investors are making rational decisions to hedge against a looming catastrophe.