As reported today by Ambrose Evans Pritchard in the Telegraph, Asia investors and Central banks have begun to sell off German Bonds. This is the first sign of Asia pulling out of the Euro zone and losing fate in the Euro.

Andrew Roberts, rates chief at Royal Bank of Scotland, said Asia’s exodus marks a dangerous inflexion point in the unfolding drama. “Japanese and Asian investors are for the first time looking at the euro project and saying `I don’t like what I see at all’ and fleeing the whole region.

“The question on everybody’s mind in the debt markets is whether it is time to get out Germany. The European Central Bank has a €2 trillion balance sheet and if the eurozone slides into the abyss, Germany is going to be left holding the baby. We are very close to the point where markets take a close look at this, though we are there yet,” he said.

Jean-Claude Juncker, Eurogroup chief, fueled the fire by warning that Germany is no longer a sound credit with debt of 82pc of GDP. “I think the level of German debt is worrying. Germany has higher debts than Spain,” he said.

“It is comforting to pretend that southerners are lazy and Germans hardworking, but that is not the case,” he said, slamming France and Germany for their “disastrous” handling of the crisis.

German Bunds have already lost their status as Europe’s anchor debt. The yields of non-euro Sweden are now 20 basis lower for the first time in modern history. Danish and UK yields are higher but have closed most of the gap over recent months.

It was reported by Reuters on Wednesday of Junckers worries on Germany.

“I consider the level of German debts to be a cause for concern,” Juncker said.

Germany has higher debts than Spain,” he added. “The only thing is that here (in Germany) no one wants to know about that.”

So there you go Germany, you are well able to throw your weight around and point fingers but you are not so perfect yourselves. After all, the bailouts for Greece, Ireland, Portugal was to pay back your banks that were in trouble 😉

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