Tuesday, August 28, 2012

Rain in Spain

Things are getting gloomier in Spain.  There is no rain-making, just storm damage.  A Reuters report says that individuals and corporations are taking their deposits out of Spanish banks, as much as 5% of the total deposits so far.  This is similar to what happened in Greece.  Spain is not leaving the euro zone.  The euro zone is leaving Spain.

Europe is providing such good examples why multiple currencies are needed.  Germany and Sweden do not need the same monetary and fiscal policies that Spain and Greece need, yet the rigid nature of the single currency, the euro, mean that the ECB could not put the right policies in the right places even if its mandate allowed it to do so.  Because of the politics, the economic policies are "stuck on stupid."  There are no solutions so long as the thinking about the currencies is stuck inside the box.

TheOtherSideOfCapitalism (tosoc.org)

Copyright © 2012 TheOtherSideOfCapitalism

No comments:

Post a Comment