No doubt emergency meets are underway in numerous countries right now following a failed German bond auction. Bond auctions have failed before, but not in Germany (at least by this much), and never at a worse time.

Link if above video does not play: German Bond Auction Disaster

Key Ideas Expressed in Video

“What people are saying is Germany is going to have to pay the bill. … Just possibly, today is the day people may have decided German bonds are not the safe haven they thought they were. … It’s all about confidence isn’t it?”

It’s actually about solvency, not liquidity, not confidence. Solvency issues in Greece, Spain, and Portugal have now affected the core.

Mike “Mish” Shedlock
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