Daily: Why Bill Gross and others are now buying Spanish and Italian sovereign debt

Bill Gross has admitted that he has started buying Spanish and Italian debt. That's quite a turnaround given he had been saying earlier that he wouldn't touch their sovereign debt with a ten-foot barge pole. So the question is why. And the answer is pretty simple. I told you why about a year ago when I wrote why Investors will buy Italian bonds after ECB monetization:

To sum up, the euro zone is in an existential crisis, brought on by fiscal, private sector and current account, imbalances in a fixed exchange rate environment lacking a lender of last resort. The morality of the economics of this situation are only relevant in regard to the economic nationalism to which these kinds of morality plays give rise. On the other hand, this arrangement necessarily means that some countries withi...


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