Although the euro could yet be saved, its chances of survival are ebbing by the day Photo: Bloomberg News
Euro Zone On The Brink -- Roger C. Altman, Washington Post
Roger C. Altman is chairman of Evercore Partners and former deputy Treasury secretary under President Clinton from 1993 to 1994.
Europe is on the verge of financial chaos. Global capital markets, now the most powerful force on earth, are rapidly losing confidence in the financial coherence of the 17-nation euro zone. A market implosion there, like that triggered by Lehman Brothers collapse in 2008, may not be far off. Not only would that dismantle the euro zone, but it could also usher in another global economic slump: in effect, a second leg of the Great Recession, analogous to that of 1937.
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My Comment: The Europe of today reminds me of the financial crisis that hit Russia in 1991-1992. When the Soviet Union broke apart the governments that took over had inherited unsustainable debt and financial obligations that resulted in the implosion of it's currency (through high inflation), and the inability to borrow money. The net result were drastic cutbacks in government services and obligations, high unemployment, decline in real GDP, inflation, and the destruction of the ruble.
Today .... Spain and Greece are in that situation .... soon to be followed by Italy and (to a lesser extent) the other countries that support the Euro. The resulting chaos that will come about will primarily be economic .... followed by social upheaval .... followed by political change. In short .... get ready for a few years of tough times and real austerity.
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