Financial panics subside and the authorities realize a profit on their intervention. But not this time because the financial problems were reinforced by a process of political disintegration. While the European Union was being created, the leadership was in the forefront of further integration; but after the outbreak of the financial crisis the authorities became wedded to preserving the status quo. This has forced all those who consider the status quo unsustainable or intolerable into an anti-European posture. That is the political dynamic that makes the disintegration of the European Union just as self-reinforcing as its creation has been. That is the political bubble I was talking about.
Monday, June 4, 2012
The Noose Tightens around Europe.
Stories here and here. Of course the latter story, which reports a massive sell-off of euros by central banks, could have an upside: the fall of the euro should at some point begin to stimulate exports. And then there's George Soros: