His remarks offer a stark and welcome contrast to the Disneyland fantasies of those running things in Brussels and Frankfurt. On the degree of real risks in the PIIGS countries, for example, he observes:

‘Market measures of risk for peripheral European countries (PIIGS) are at or near danger levels… despite exceptional support from the ECB, EU and IMF, and despite the implementation of adjustment measures on the part of some…’

The measures he mentions are having little or no effect, he contends….for reasons outlined many times both here and elsewhere:

‘The failure to reduce risk spreads means that the public sector bailout is not working…..ECB/EU/IMF support funding is being used by existing investors to exit their exposures to the most vulnerable peripheral European countries.’

We have seen this every day for weeks now: the people who least need the help are getting out of their self-created mess with the help of taxpayers’ money. But, he concludes, this is merely putting off a day of reckoning. His summary of the risks that go with the Trichet strategy are especially damning:

‘This situation cannot be sustained….It undermines any chance that the most vulnerable countries have of limiting the collapse in their GDP, contaminates the balance sheet of the ECB, exposes the revolving nature of IMF resources to considerable risk, and raises the risk of renewed contagion.’

Pimco was the first major lender to exit the eurozone bonds market and focus its efforts elsewhere. Mohammed El-Arian was the guiding light in this and many other policies which have turned Pimco into a world leader in its field. For him to be this frank in a major opinion-leading financial newspaper highlights the degree to which both investors and EU citizens are once again being conned by the banker/government spin axis.

Related: Brussels’ sleazy deal with Norway over Greek bond investments.