It’s been many months since I looked at the 10 year bond yields of Australia, the UK, the US and the PIGS. These can be seen in today’s charts. When I last posted in August of 2010 Greek 10 year debt was yielding 10.31%, as of the end of May 2011 that is now 16.29%. Mish’s post yesterday raised some great points and gave plenty of food for thought prompting this post.
What is clear when it comes to Greece is that the can continues to be simply kicked down the road with no real solution being found. This cannot happen indefinitely. At some point the reset button has to be pressed, haircuts taken and a lot of pain felt. The sooner it happens the less the haircuts and pain will be. I just don’t understand why they don’t do it. Do they honestly believe the current solutions are working and sustainable?
I believe (along with the market) that Greece will now have to default. It’s now not a matter of if but when. You can’t keep the patient on life support forever. The question for me now is how long until Portugal follows suit.
As always do your own research.
Assumptions:- All yields are month end