Contagion?

Do I smell contagion? First Greece, then Portugal, now Spain, every one of them is getting a deserved credit downgrade.  The market has rallied ignoring (discounting) all issues related to sovereign debts the last two months.  Now what?  One can safely bet our beloved Fed will come out with its now familiar soothing voice delivering near zero rates for "an extended period of time".  Do you still wonder why gold is going higher?

Will we get a stock market sell-off?  Certainly, the big one is overdue.  But with the Fed firmly maintaining its easy stance, who knows what to expect?  I used to hate the defense attorneys of rape cases blaming the victims alleged "promiscuous" behavior or background (remember Koby Bryant's knees?) to bring on the assult.  Now with the Fed "raping" the savers of world (retirees who rely on fixed income, prudent people that don't want to speculate etc.) with zero interest rate, forcing them to go further out on the risk spectrum, it is the perpetrator's "promiscuous" behavior that deserves the blame.

Whether or not we get a contagion-induced sell-off now, the stock market and all asset price is destined to go higher, but we will all be worse off in due course.