Update 2: In her own words - dispelling rumors of new instruments: "In view of the current difficulties, it’s important to emphasize that we have created the instruments of support in the euro zone, that Germany is ready to work with these instruments whenever that is necessary and that this is an expression of our firm desire to keep the euro area stable,”
Update: here is the counterrumor, just as expected courtesy of the summer and fall of 2011: Merkel willing to back use of EXISTING Euro-area instruments... Where Euro-Bonds just happen not to figure.
Just out from Bloomberg:
- MERKEL SAYS GERMANY READY TO BACK USE OF EURO-AREA INSTRUMENTS
Ignore that it is unclear what instrument is mentioned (not Euro Bonds as Merkel made very clear 48 hours ago), she probably just is referring to the Redemption Pact [4], which she would of course be in favor of, as noted before, and where Europe funds its loan-loss exposure with gold. We look forward to the PIIGS agreeing to hand over their gold to Das Deutsche Pawn Shop. Also ignore that in the same speech she said:
- MERKEL SAYS NO SINGLE RESPONSE WILL SOLVE THE CRISIS IN EURO
- MERKEL SAYS WILL TAKE `FEW YEARS' TO RESOLVE EURO CRISIS
- MERKEL SAYS PEOPLE `MUST BE PATIENT' ON EURO CRISIS
None of this matters: with an all time record number of EURUSD short, it is a one way panic out of the burning theater, just as we predicted on Sunday [5]: the EURUSD is now well over 200 pips higher from our entry point, and half way to the 400-500 bps upside target.