Italian bank purchases of its sovereign debt rose to record levels in June as fresh concerns of Italy needing another bailout seems to have discouraged foreign investors, well, the two that were left. Banks boosted Italian government bond holdings by about $17 billion in June to a grand total of about $390 billion, according to the Bank of Italy’s report today.

Since no one has stepped up to buy up Italian debt, Italian banks “have been holding the fort at government debt auctions in the absence of foreign investors,” said Nicholas Spiro managing director of Spiro Sovereign Strategy in London. “The run on the bond markets of Spain and Italy continues unabated and domestic banks have been left to pick up the slack. The question is how much longer they will be able to plug the gap if foreign investors continue to steer clear of Spanish and Italian debt.”

Story is HERE.

Mr. Spiro is absolutely correct – at some point there has to be foreign investment buying up the debt for Italy to even have a chance to keep breathing. Currently, and this is the trend and the inevitable result to countries like Italy, Greece and Spain, the banks of the country and the country’s central bank are the only parties buying up the sovereign nation’s debt, whose borrowing every euro under interest and who is further indebting their people.

Now, there are two essential paths to disaster under this scheme given the current strategies of the leadership: 1. the people will run out of cash, having their back’s broken and ready for change or 2. foreign investors come in, fueling debt for a little while longer, while the sovereigns ultimately run out of money, requiring more taxes and cuts, cutting more jobs, leading to more suffering and the same scenario as 1, except slower because foreign investors stepped in.

This is why we just wait while these sociopaths keep this going. It has to stop eventually. There is no more road to kick the can down from in Europe.