Saturday, 26 November 2011

A political tinderbox

As the eurozone lurches towards its demise, unless Germany makes a U-turn in its rejection of the ECB as a bank of last resort and the issue of stability bonds, concern is surfacing as to consequences of the currency's demise.

I have held the view for a long time that the political and social consequences of a disorderly break-up of the eurozone will be dramatic.  The imposition of new governments, controlled by EU stooges,  in Italy and Greece, the riots in Greece and massive demonstrations in a number of countries all point to impending social chaos.  The question is: how long will Germany continue its current policies on the eurozone?   The political elite in Europe has been behind the curve since the eurozone crisis started in 2009 (although the cause of the crisis really began with the admittance of nations to the eurozone which did not meet entry criteria, a reckless interest policy by the ECB, and failure to maintain adequate monitoring and corrective action of basket economies).

The accident waiting to happen was triggered by the consequences of the banking failures in 2008, but even without that, the disaster would have unfolded.

Will sovereign debt contagion be followed by social unrest contagion?  The likelihood is that it will. And then what?

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