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The people who normally print currency are the banks.

We know roughly what would happen in the event of a Eurozone breakup - we've seen it all before (Iceland, Russia, Argentina, etc.).

We also know roughly what would have to happen to make the Eurozone not break up.

If I were a betting man, I'd give it around 50/50 odds.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jun 21st, 2011 at 04:40:00 AM EST
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The Richard Koo link from JakeS is well worth spending a bit of time on, by the way.

It explains how the Japanese avoided a full blown recession while their asset prices fell by 87% after their bubble burst.  And you've guessed it - the Japanese government spent and continued to spend while the private sector deleveraged and did not invest.  The national deficit grew rapidly, but they didn't cut themselves into a great depression.  In the process, various neo-classical articles of faith were shown not to hold in a time of asset-bubble hangover deflation.

Precisely the opposite of the ECB/IMF prescription.

by Pope Epopt on Tue Jun 21st, 2011 at 06:00:33 PM EST
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