France Losing Its Head... Europe Soon To Follow?

According to the European Central Bank, the Italian banking industry now holds more government debt than the banks of any of the major European economies: nearly €324 billions worth of shaky bonds. The Spanish banking sector is also heavily overweight in government paper, at a new record high of €263 billion.

 

This bond-buying spree was caused by the "Sarkozy Trade," or the wild printing of euros by the ECB, which French President Nicolas Sarkozy hoped would relieve France's own public debt problem. As a result of his campaigning, any European bank can get all the euros it wants at...