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Spanish fiscal reform plans exceed the recommendations of the EU, says economy minister de...
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Thursday, September 27, 2012, 12:11 PM ETSpanish fiscal reform plans exceed the recommendations of the EU, says economy minister de Guindos. If true, the boast is an important one as it means Spain can submit to a bailout without having to go through the politically difficult route of accepting EU conditions. This would then trigger the ECB bond purchase program. Stocks rally to a session high, the S&P 500 +0.8%.
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In any event I highly doubt it will be sterilised. Something which also never gets mentioned is the automatic monetary expansion through the near exponential growth of the Target2 balance sheet.
Announced Spanish budgetary reforms and progress are ludicrous. Their expenditures have grown significantly of late - which is no surprise as it is in the nature of social transfer payments to rise in times of distress. Spain promising success in overcoming the principle laws of budgetary finance is not believable in the least, unless they are prepared to let 50% of their youth starve in the streets. Any bold move in that direction would lead to revolution.
Gives the impression that this is just the beginning of something that could end up very much in tears.
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Now there is an impartial, credible source.
warfare-based QE: that's the ticket!