Quote Originally Posted by adam ali View Post
This article in Der Spiegel discusses the possibility that German economic policy has recently undergone a significant change in approach to the EU. While I'm hesitant to ascribe any wholesale transformation based on one article, I will say that if there has been a serious shift toward growth policies by Germany, it may prove to be the final nail in the coffin for the secular bull market in bonds.

I am surprised others are not focusing on this possibility. Perhaps it's because there have been so many starts and stops in Europe, that it's difficult to know what to believe. I'm also curious what Pascal, Billy and others who actually live in Europe think.

http://www.spiegel.de/international/...-a-901946.html
I believe that Germany cannot continue to say no to everybody else, but for election reasons has difficulties to openly say that it will fund more bailouts for the South. However, I am pretty sure that they will accept to fund a special package to help the younger generations. The package will however be small compared to the size of the problem and also compared to the size of past bailouts.

Hollande and Merkel will build a great communication campaign out of this special program for the younger generation.

This is however a distraction against the main issue, which is related to the potential disruption for bond holders and Governments when the interest rates will start rising.


Pascal