Monday, May 14, 2012

If the Euro Cracks: Comment

Considering a Common Currency's Collapse

The EU was a good idea; the euro, a bad idea.

Be that as it may, if the euro cracks it could lead to the breakup of the European Union, which could be catastrophic for the global financial system. Nobody seems to have a clear view of the relationship between a potential breakup of the euro and the massive derivatives exposure of the big banks and hedge funds. So-called too-big-to-fail financial institutions are secretive and resistant to regulation; regulators are overwhelmed; and the prestige press, which is supposed to clarify complex issues, has done an awful job of reporting economic news. Business journalism is mainly an oxymoron, and the big TV networks are prisoners of pictures, practically incapable of telling stories that lack attention-getting video images.

Small consolation: if economic conditions dramatically worsen, the networks will get the pictures they need … of mass poverty and unemployment and terrifying social unrest.

Related: Reuters Reports Contingency Plans Being Drawn Up for Forcing Greece's EU Exit

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