As our friends know, Greece is just the sideshow to distract from the real entertainment: The great debt rollover occurring across Europe. As we have seen with Italian rates going through six percent, lenders are becoming less and less accommodating to refinancing debts.
In recent weeks several countries, including Germany and the UK have had debt auctions almost fail, and even the saviour of Europe, the EFSF, backed by Germany and the IMF pulled an auction of debt through lack of demand.
According to Bloomberg, banks in Europe need to refinance some $900 Billion during 2012, just a few billion less than we have seen in 2011, and look at the chaos that has caused.
Six percent, is not sustainable, and is not far away from when Greece and Ireland were forced to be rescued.
Pragmatic Capitalism has an updated chart of debt that needs rolling over in the next few months, and the total for 2012. Party that interest rates stay low, because any rise could have devastating effects on the economy and personal finances.
The good news is that by 2013, debt needing to be refinanced will haves halved from this year's level, but will the monetary system still exist.
UPDATE:Looking into the matter closer and it appears there have been dozens of debt auctions that have been close to failing, have failed, or were cancelled because they were sure to fail. Countries having trouble borrowing include: Italy, Spain, UK, Germany, even New Zealand.
And just two days ago, precisely when the French begging bowl was being passed around Asia, the saviour mechanism known as the EFSF also failed and cancelled a tiny auction of only E3 Billion- and that had been reduced from E5 billion.
So just as Regling was prostrating himself at the feet of President Hu Jin Tao, the EFSF could not even borrow E3 billion, and needs to raise around E700 billion to be effective.
It does not look good; see the post below why not.
