I’ve written about Europe a lot over the past couple of years and not out of just a Schadenfreude enjoyment of watching a slow motion disaster far from our shores but because it seems to me that really matters, both in terms of its impact on the global financial marketplace and the probable knock-on effect on domestic U.S. finance markets. It also deserves our attention because it contains lessons for all and sundry policymakers and opinion purveyors about policy choices that simply don’t work.
Of course, the first and most portentous mistake in Europe is don’t ever get into a land war in Southeast Asia, er, I mean never sever control of fiscal and monetary policy; in other words, their big mistake, the Euro-zone currency itself.
Until now, I have shied away from the conclusion that the center could not hold, and held firmly to the notion that somehow Europe would muddle through. Continue Reading