Category Archives: Europe

Not with a Whimper but a Bang

            Almost two months ago I posted an entry decrying the shift in American politics from a focus on unemployment to one on the debt and inflation.  Aside from a parenthetical reference to the troubles in Europe I focused upon the unfortunate changes in the United States.  Now with the possibility of a break-up of the Euro seeming ever more likely by the day lets look at the role of ideological inflation hawks in creating the present situation.  In April and July the European Central Bank (ECB) raised its benchmark interest rate 25 basis points (0.25%) due to its fears of increased inflation above its Euro zone target level of 2% (never mind the fact that others were arguing that the apparent rise in prices was simply a temporary commodity blip).  At the same time new governments in Europe (and in the United Kingdom) pushed for what they called “expansionary austerity.”  Continue reading

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Filed under Economics, Europe

Today’s Greece is 2001’s Argentina

In December 2001, Argentina’s economy collapsed and the streets of Buenos Aires erupted in riots. The government abandoned an experiment called “convertibility” (in which the value of the Argentine peso was made equivalent to that of the U.S. dollar), froze millions of bank accounts, and fell back on foreign debt. Tens of thousands flocked to European embassies to flee the country, groceries became bereft of food, and the government went through five presidents in only ten days. Today, this kind of chaos may ensue in another country: Greece. Continue reading

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Filed under Economics, Europe, Latin America