...bringing out the big rhetorical guns. Readers here will note the same issues with a more pragmatic outlook, but whatever.
The self-correction mechanism is jammed. China holds down the yuan
against the dollar through a dirty peg. Germany and its satellites
hold down the D-mark against Club Med covertly through the mechanism
This outcome in Europe is not deliberate (I hope); it is not a German
plot; it is the unintended effect of a currency union created by
ideologues against Bundesbank advice, and which has calamitous
implications for German foreign policy and for Latin social stability.
My sympathies go to the hard-working citizens of Germany, Spain,
Italy, Portugal, and Ireland for being led into this impasse by
A global system biased towards export dumping has had unhappy effects
on the US, UK, and Club Med. These countries have faced a Morton’s
Folk over recent years: an implicit choice between job losses at home,
or accepting credit bubbles to mask the pain.
They chose bubbles. That was a mistake. This strategy of buying time
cannot safely be repeated because fiscal woes are already near
"boiling point", in the words of the BIS. “Drastic improvements will
be necessary to prevent debt ratios from exploding," it said.