Europe is imploding right now and the US Federal Reserve can only watch and wait. Investors are already pricing in a Greek default, with 10-year bonds hitting a yield of 33%! And while it’s easy to dismiss Greece as the black sheep of the European Union family, there’s also new trouble brewing in Portugal.
The country simply can not any longer compete in a single-currency monetary union. According to the Bank of International Settlements, Portuguese debt is now 479% of their entire country’s GDP!
The Federal Reserve can’t paper over these problems. America’s day of financial reckoning getting closer. Instead of providing a solution, the Fed’s easy money approach — one that continually gets extended out further and further into the future — is a sign of how bad things really are in the Western world.