Inflation

The Eurozone is stuck in a dumbbell trap where economies are socially, economically & politically diverging clustering on either side of a dumbbell. The longer this divergence continues, the more likely that the European construction, the bar that holds them together may collapse under the weight of contrasting and conflicting needs & perspectives.

The spreads between Spanish and Italian bonds and German bonds are once again on their way up. Even as the borrowing costs for Spain and Italy come dangerously close to Euro area records, the German government is able to fund itself at all-time record low interest rates with significantly negative yields.