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The world is big, and the Eurozone is not a negligible fraction of the world. So the world is not big enough to dilute capital flows on the order of the Eurozone trade imbalances.

But you're from Sweden, and Sweden is outside the Eurozone and small enough to have its surpluses diluted in the Eurozone, let alone the whole big world.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Dec 14th, 2011 at 10:23:34 AM EST
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The world is big, and the Eurozone is not a negligible fraction of the world. So the world is not big enough to dilute capital flows on the order of the Eurozone trade imbalances.

I'm not sure about that. It seems to be able to swallow US CA deficits without much trouble, and the US economy is of the same magnitude as that of the EZ.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Dec 14th, 2011 at 10:28:03 AM EST
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Hmmm... just because the US CA deficit issue with China hasn't blown up yet isn't a good guide to "without much trouble."

The trouble is out there - and it's incoming. It can be solved, but it's going to take a huge political negotiation to do so - and may be a rough ride even with that level of leadership. With Merkozy levels of leadership, the prognosis isn't good.

by Metatone (metatone [a|t] gmail (dot) com) on Wed Dec 14th, 2011 at 12:46:28 PM EST
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