[lbo-talk] Prepare for riots in euro collapse, Foreign Office warns

Wojtek S wsoko52 at gmail.com
Tue Nov 29 13:17:22 PST 2011


Joanna: "How would it be a bad thing for the 99%?"

[WS:] It is not that difficult to envision this. If countries have problems borrowing now, with the fall of the euro they will have no other option but to print money in large quantities. Maybe not Germany of France, but Greece, Portugal, Ireland, Spain or Italy. That would likely trigger serious inflation (if not hyperinflation) that will wipe out savings and pensions. It will further suppress credit and demand - which is bound to trigger a recession and unemployment. The 1 percent will probably speculate its way out of this mess, and maybe even make money, but the 99 percent will bear all the costs.

To respond to Jordan - economically speaking you may be right that this is not too big to fall, but the political and social cost will be enormous and have a potential for massive social unrest. I am not sure if the managers of the eurozone states are prepared for it. But then I am a strong believer in path dependency (as Kurgman once was ;)) and more sympathetic to the view that once an institution is getting established, it is easier to keep it going than to abolish it.

Will see.

Wojtek



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