Yields on Spanish and Italian bonds dropped sharply as the European Central Bank bought them heavily today. That means we won’t get a total financial meltdown today. This is good news for all of us, and not just for the many hedge fund managers and Swiss bankers working night and day to keep the vast Mead network of trusts and investment vehicles at their customary 20 percent annual growth.But this isn’t progress. It’s more like Pharaoh’s dream in which the seven lean cows ate up the seven fat ones but stayed as skinny as before. The bad credits in the world system are inexorably contaminating the good; as the ECB buys weak Spanish and Italian paper at above market rates, the creditworthiness of the ECB and its backers (at this point primarily Germany and France) inexorably weakens. The effect is trivial when dealing with small economies like Cyprus and Greece, but Italy runs in a different league. The Royal Bank of Scotland estimates that the ECB could end up buying $1.2 trillion in bonds, more than ten times the amount spent so far.A sign of future trouble: investors are starting to demand higher interest rates for German government bonds. Germany is either going to get stuck holding the bag for Italian debt or its economy will take a big hit as the euro breaks up, Germany’s new currency soars, and German exports are priced out of world markets. Quite possibly the Germans will get the worst of all worlds: a big debt from supporting Italy followed by a euro crash as the rescue package fails.