[quote=briansd1][quote=Allan from Fallbrook]
Brian: So Greece is fixed? Thank God! That’s a relief. [/quote]
Greece is not fixed but the situation is better than without intervention.
If nothing had been done, Greece would have gone bankrupt and left the Euro. The civil unrest would have been a multitude worse.
Had the Europeans moved faster as Krugman had suggested, the situation would have been contained. The speculators would have taken big looses as they could not stand a chance against the ECB. The markets would have turned.
Krugman was right all along. Krugman realized long ago that there are only 2 posible ways forward:
1) Internal deflation for the countries affected, probably until they can take it no more and leave the Euro.
2) A Euro wide approach and Germany accepting inflation risks for the sake of the greater good. That means allowing the ECB to act more forcefully like our Federal Reserve has.
Allan, you’re doing the same thing as the Spanish guy who “destroyed” Krugman. You rail against the Euro as a bad idea. You rail against Germany for dictating auteristy. You talk about past mistakes but fail to see the solutions forward.[/quote]
Brian: The problem is this: NEITHER SOLUTION WORKS. Inherently missing from the Krugman “solution” is this overlooked but oh so salient fact: The Eurozone is built on a false premise and that premise has been exposed.
You’re right in saying Greece is not fixed. It sure isn’t. Nor is Spain. Nor is Italy, Portugal, etc. Moreover, the German economy is beginning to stagger and various other countries, including Finland, are disavowing the Euro and seeking to go it alone.
It’s easy to propose solutions, when the solution is nothing more than the output from a model, but things are a mite messier in the real world. Just like all those “shovel-ready” jobs not being so shovel-ready.
“Everybody has a plan. Then they get hit.” George Foreman.
