It has been announced that the European central bank will actively buy the debt of Italy and Spain.
The thinking behind this is exactly what I was saying will need to be done with the Euro nations, namely they will need to have their individual debts owned by the Central Bank of Europe.
Now the problem of doing this overtly would be hugely politically difficult and long winded.
However by having the Central Bank buying and owning the debt (as they are going to do) in exchange for the individual countries agreeing to meet spending targets the same is achieved by stealth and without most Europeans (read most importantly Germans) realising that they are bailing out Southern Europe.
I will keep you posted as the situation develops.
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