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The ECB's insistence on Euro stability the source of the Euro's instability?

I've been thinking about why it seems the ECB keeps going out of its way to re-assure everyone they will not intervene in the sovereign debt markets no matter what. It seems too simple an explanation that they are simply responding to articles suggesting they should act as a lended of last resort.

It seems to me that the ECB believes the markets are trying to force them to become lender of last resort rather than just the "inflation fighter" role they defined for themselves. They think that if only the markets truly believed there was no ECB intervention coming then they would settle down and see the restructuring and austerity as acceptable solutions. They truly believe the Euro and the Euro area are just under a misguided attack by bond vigilantes and they see this as a temporary situation that will reverse itself if they just wait long enough. Therefore they keep repeating their mantra that waiting for anything else from them is futile and that they will not bend to the markets. They think their plan is working.

The unfortunate thing for the ECB is that they are dead wrong. What we are seeing is no "bond vigilantes" but a capitulation by the markets. Each time the ECB repeats they will not act as a back-stop more market participants believe them. The response however is not to settle down, but rather the more rational response, which is to sell any and all Euro denominated debt. Not to force the ECB to do anything, but rather quite to the contrary, from the reinforced belief the ECB will not do what it's supposed to, and with the realization that this will mean the end of the Euro. 

Therefore each time the ECB repeats its mantra in order to stop the imaginary "bond vigilantes" it is just causing the crisis to accelerate as regular bond holders run for the hills. 


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.