Economist and fund manager John Hussman says investors are foolish to take hope from the promise of coordinated central bank "liquidity" operations in the event of further economic deterioration in Europe.

"The problem here, in my view, is that whatever amount of liquidity central banks create, it cannot address the structural problem, which is insolvency and the need to restructure debt of peripheral European governments and the European banking system," Hussman writes in a note to investors.

Even if liquidity operations help to stabilize the markets, we will quickly return to a pattern of recurring strains, says Hussman.

"Make no mistake," he says. "Europe is in a solvency crisis. Central bank liquidity, coordinated or not, will not solve this problem."

In the aftermath of a long period of excessive debt expansion and credit growth, the global economy remains in a deleveraging phase, the difficult portion of what is known as the "financial cycle" — in the aftermath of a long period of excessive debt expansion and credit growth, Hussman notes.

“Meanwhile, by our analysis, the U.S. has also now entered a recession in the business cycle,” he says, adding that he does expect more further monetary interventions, but doubt that further intervention will substantially stabilize, much less reverse, the “goat rodeo” challenges the economy faces.

Meanwhile, Spain's ability to manage its debt without an international bailout was thrown into doubt Monday after investors pushed its borrowing rates up to the level at which Greece, Portugal and Ireland had sought help, the Associated Press reported.

Investor sentiment improved briefly in the morning as electoral results in Greece suggested the country would not drop out of the euro currency union, a scenario that would have put severe stress on Spain's markets.

But that market relief quickly faded in Madrid as it became clear that Spain's fundamental economic and fiscal problems remain huge.

The interest rate on Spain's 10-year bonds — an indicator of market confidence in how well a country can pay down its debt —hit a fresh eurozone era high of 7.18 percent, and stocks fell 2.6 percent in Madrid.

The bond yield's alarming 0.31 percentage-point rise put it firmly in the 7 percent range that prompted the other three eurozone countries ask for a bailout, the AP reported.