The Real Crisis in Europe Will Be Political With Spain as Ground Zero

Spain’s Mariano Rajoy is back with yet another display of why he should never have been allowed to take office in the first place.

For those who need a quick primer, here’s a quick highlight reel of Rajoy’s more notable accomplishments:

1) Helped facilitate biggest housing bubble in Spanish history, a bubble so large that the US’s looks like a molehill in comparison

2) Took bribes and kickbacks from developers in helping to create said bubble (more on this later).

3) Claimed Spain would never need a bailout, then demanded a €100 billion bailout one weekend before flying off to watch a soccer match.

4) Raided Spain’s social security fund, investing 90% of its assets in Spanish bonds… which were on the verge of default a mere six months before.

5) Got caught with dirty money he received from property developers and stated the following, “…everything that has been said about me and my colleagues in the party is untrue, except for some things that have been published by some media outlets,”

Now Rajoy is dealing with the problem of Catalonia (a region in Spain) wanting independence. Catalonians are proposing putting the matter to a vote, much as Scotland recently did regarding its own move to potentially break away from the UK.

Rajoy, never one to miss the opportunity to embarrass himself, has called the decision to vote for independence “profoundly anti-democratic.”

Bear in mind, this is the same “leader” who likes to proclaim that Spain is in a recovery… while Spain’s unemployment is roughly 24% and youth unemployment is above 50%.

At some point, the markets will call BS on Spain’s dreams of recovery and the bond markets will rebel. When this happens the whole fraud will come unraveled. However it might take a full-scale political crisis before this happens. And by the look of things we’re not far from one.

We’re back in trouble whenever Spain takes out the long-term trendline for its 10-year bond yields.

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Best Regards

Phoenix Capital Research