On Jun 27, 2009, at 1:27 PM, Michael Pollak wrote:
> Lessons from the Jazz Age for creditor nations
> By James Macdonald
>
> snip
> In 1928, the music stopped. The American stock market boom sucked
> money away from Europe and into securities loans at juicy interest
> rates. Deprived of credit, Germany lost its ability to service its
> debt. The pretence that international debts were worth the paper
> that they were written on limped on for a while. But in 1931,
> Germany stopped paying reparations, and Britain and France stopped
> paying their war debts. The imbalances that the world had been
> unwilling to resolve through trade flows were resolved instead
> through default and protectionism.
>
> Now, as then, the laws of economic gravity will eventually bring
> about a resolution to our current global imbalances. Let us hope
> that historical short-sightedness does not lead to a repeat of the
> 1930s outcome.
Supposing that there is a balance. Supposing that the role of 'global police' has value equal to US debt. Is that the trade? A nation of cops?
martin