I guess we have to get used to living in a “what have you done for me
lately world”, huh? With high frequency trading, the 140 character Twitter
world and attention spans about as long as a gnat’s, it looks like
policy makers are increasingly being impacted by this societal change in
the way we think. And I think there’s a bit of this going on in Europe
as we speak and it’s having a massively negative impact on millions of
people’s lives. Let me elaborate.
Every fix implemented in Europe thus far has been a band-aid on a gushing wound. And after brief periods of relief the negative long-term trends become acknowledged once again, the structural flaws reassert themselves and markets relapse. This has been the trend in Europe for years now and I don’t think it’s over yet.
As regulars know, I think the problems in Europe require long-term thinking. We need to fix the currency crisis that is causing the solvency crisis at the sovereign level. So we need one of two things to occur – a complete break-up of the Euro (very unlikely in my opinion) or a move towards some form of fiscal union (the likely direction). We have to return Europe’s nations to a state of sovereignty. Ie, we need to eliminate the solvency crisis by creating some form of supranational entity that can always procure funds like we have in the USA (see here for more on how the US states are like Europe’s countries and why US states are experiencing a funding crisis).
Every fix implemented in Europe thus far has been a band-aid on a gushing wound. And after brief periods of relief the negative long-term trends become acknowledged once again, the structural flaws reassert themselves and markets relapse. This has been the trend in Europe for years now and I don’t think it’s over yet.
As regulars know, I think the problems in Europe require long-term thinking. We need to fix the currency crisis that is causing the solvency crisis at the sovereign level. So we need one of two things to occur – a complete break-up of the Euro (very unlikely in my opinion) or a move towards some form of fiscal union (the likely direction). We have to return Europe’s nations to a state of sovereignty. Ie, we need to eliminate the solvency crisis by creating some form of supranational entity that can always procure funds like we have in the USA (see here for more on how the US states are like Europe’s countries and why US states are experiencing a funding crisis).
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