Portugal Debt Insurance Soars

The PIIGS are a mess.

The cost of insuring Portuguese debt against default hit a record high on Wednesday and yields on Portuguese bonds spiked after Moody's cut the country's credit rating to junk and warned it may need another bailout.

Five-year credit default swaps (CDS) on Portuguese government debt rose 82 basis points to 850 bps, according to data monitor Markit, Reuters said. This means it costs 850,000 euros to protect 10 million euros of exposure to Portuguese bonds.

This didn't help out the other PIIGS.

Five-year Irish CDS rose 42 basis points to 780 bps and the cost of insuring, according to Reuters.

Spanish debt against default gained 21 basis points to 297 basis points. The Italian equivalent also firmed 24 basis points on the day to 220 bps.

There is no way all the PIIGS will be bailed out without money printing from th European Central Bank. Thus, its either accelerating inflation in the Eurozone, or the eurozone breaks up---and the drachma, Irish pound, lira, escudo and peseta return.