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EU CATCH 22

Moodys has put Germany on negative credit rating outlook on the basis of its debt levels. This is an incredible strategic issue for Germany and the EU. Presently the German Constitutional Court is endeavoring to determine the capacity and efficacy to fund further EU stability and bail-out accounts.

It would therefore appear that on Moodys current stance the German Credit Rating is headed south. If it funds further EU bail-out and increases its own debt levels, what does Moodys do. Similarly if Germany does not fund further EU bail-out and the PIGS et al bubble and hiss, and the EU struggles even more economically, what does Moodys do?

It would appear the EU and Germany could be in a real Catch 22 - Damned if you Do, Damned if you don't.

This is probably the price they are all paying for the PIGS deflationary effect on the EURO.......................................................

.......................... And more importantly the effect of Germany Inflating the EURO and therefore deflating the PIGS.

...................... Enjoy the Catch ....................CATCH 22

Andrew D Turner (adt)

Andrew@andrewdturner.info (occasionally)