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The Rats Begin to Chew the Sheets

The euphoria over the second hundred billion euro bailout of Greece is already beginning to fade as analysts pore over the numbers.  It looks as if the implied write down of Greek debt is about half the size needed to restore the country to solvency.  A third bailout looks inevitable.

Meanwhile, Cyprus is suddenly on the eurozone crisis list.  New crises continue to pop up faster than Europe can resolve the old ones.

A dollar short and a day late has been Europe’s motto since this crisis began; forecast. more of the same.

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  • Everyman

    The EU is looking more and more like a teenager fighting desperately to deal with blooming acne on his face. Squeeze one and two more pop up. Where, or if, it stops, nobody knows.

  • Gabriel

    Cute “Nixon” reference

    • Walter Russell Mead

      One of the best operas of the last fifty years.

  • Gabriel

    did you catch Kathleen Kim’s performance as Madame Mao at the Met? if not you can see it on YouTube or the “Met Player” service.

  • Luke Lea

    Milton Friedman predicted this:

    “The exchange rates between different currencies provided a mechanism for adjusting to shocks and economic events which affected different countries differently. In establishing the common currency area, the Euro, the separate countries are essentially throwing away this adjustment mechanism. What will substitute for it?

    Perhaps they will be lucky. It may be that events, as they turn out in the next 10 or 20 years, will be common to all the countries; there will be no shocks, no economic developments that affect the different parts of the Euro area asymmetrically. In that case, they’ll get along fine and perhaps the separate countries will gradually loosen up their arrangements, get rid of some of their restrictions and open up so that they’re more adaptable, more flexible.

    On the other hand, the more likely possibility is that there will be asymmetric shocks hitting the different countries. That will mean that the only adjustment mechanism they have to meet that with is fiscal and unemployment: pressure on wages, pressure on prices. They have no way out.”

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