Gyroscopic Investing

BERLIN — Just weeks ago, the idea that Greece would leave the euro zone was almost unthinkable. Now, with Greece’s newly empowered political parties refusing to abide by the terms of the country’s international loan agreement and Europe’s leaders talking tough, that outcome is looking increasingly likely.

Germany’s devotion to the euro and the European Union runs extremely deep and cuts across the political spectrum. But the frustration with Greece here is undeniable. There is a growing conviction that it is up to Greece to follow through on its commitments, that Europe is done negotiating.

“Germans are now predominantly of the opinion that they would be better off if Greece left the euro zone,”? said Carsten Hefeker, a professor of economics and an expert on the euro at the University of Siegen. “If the country really is continuing on the path they are taking now, it would be hard to justify keeping them in. How do you deal with a country that says we don’t want to keep any of the commitments we have made?”?

Mr. Wolff said that even with Greece’s departure, the structural problems of the euro zone, which ropes together economies of vastly different levels of competitiveness, are going to remain. European policy makers are “still in a state of denial,”? he said.

Tyler wrote: So assuming there's a decent chance the euro will break up at some point and there will be resulting financial chaos in Europe for a time, is there anything we need to be worrying about (that we can control) from a PP perspective?  I'm specifically thinking about the gold ETFs with vaults/financial ties in London or Zurich. 

Maybe I'm just being paranoid, and I know the worst thing to do is to overthink things and start making trades based on fear.  But I figured I'd ask.

The New York Times’ coverage of the euro zone crisis continues to exhibit two related flaws. First, it is overwhelmingly written from the German perspective – the Berlin Consensus that is driving the crisis. Second, it continues to ignore economics. Paul Krugman, the NYT’s Nobel Laureate in economics, has been explaining the economics of the crisis for years in his weekly NYT column. We know that Berlin either doesn’t read or comprehend what Krugman has been trying to explain, but it is remarkable that so many of the NYT reporters covering the euro zone crisis share their failure to read or comprehend.

Ad Orientem wrote: The Euro may or it may not survive. But if it is going to survive it will only be if the EU becomes a great deal more centralized than it is now. I remain highly skeptical that Greece will remain in any event. But the long term survival of the Euro requires some form of centralized government that can monitor, and where needed, interfere with the budgets of member states.

Ad Orientem wrote: The Euro may or it may not survive. But if it is going to survive it will only be if the EU becomes a great deal more centralized than it is now. I remain highly skeptical that Greece will remain in any event. But the long term survival of the Euro requires some form of centralized government that can monitor, and where needed, interfere with the budgets of member states.