Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
The money quote from Varoufakas' correspondent ---
Unlike other credit crunches (e.g. that in Italy now), this particular credit crunch was effected by the Chinese government for the purpose of pricking the gigantic speculative bubble in China before it inflates further with devastating potential. This same bubble is intimately linked to the US economy: both US finance and the midwest mining areas of the US are fully involved. Shortly afterwards Chairman Bernanke started talking about relaxing QE3. If the Chinese government no longer wants to provide unlimited liquidity then the whole burden of sustaining the bubble would fall on the Fed. Mr Bernanke considers this to be far too dangerous and for this reason he may have brought forward the Fed's exit from QE. In this reading, the Fed's signal that it is exiting QE has nothingto do with the actual health  of the US economy and everything to do with China's economic situation and government intentions. Bernanke seems determined to reduce QE for reasons that have to do with China.

--- is the first analysis I have seen that makes real sense of Bernanke's recent actions.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jun 23rd, 2013 at 01:08:44 AM EST
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