Daily: On Spain’s death spiral and the exogenous threat of drought

Daily commentary

Two topics today: The first is Spain and the second is record high oil prices.

On Spain, I think what we are witnessing is a debt deflation death spiral that will see Spain in Greece's corner soon. Spanish spreads are at a record high and still rising despite the existing bank bailout package. The ECB is not riding to the rescue here. So there are no catalysts which will put the Spain default genie back into a box. That means spreads will continue to widen until Spain collapses in a heap and gets rescued or defaults. Angela Merkel's u-turn on the Spanish bank bailout is the direct cause of this crisis. As I wrote last Wednesday, Rajoy’s humiliating defeat to Merkel narrows options to sovereign bailout, monetisation or default for Spain. A sovereign bailout w...


As this site is now reader-supported via Patreon, the remainder of this article is only available to subscribers at a specific patronage level. Articles at patronage levels BRONZE, SILVER, and GOLD are denoted by the categories in blue capital letters above the post. Posts categorized DAILY are available to both SILVER and GOLD patrons.

Click here to join. Your readership is greatly appreciated!

Registered users can log in by entering details here or below.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More