On Saturday, European officials stunned Cypriots (and many others) by announcing a rescue package for their country that involves a levy on all bank deposits. The news is spreading far and wide, causing quite a bit of controversy in the process.
The Great Compression will give way to the Great Reflation, not next month or next quarter but at some point over the next 12 to 24 months. How this is done will make all the difference -- via beggar-thy-neighbor policies or internal, pro-growth policy implementation?
It takes a blind eye for history and a deaf ear for economics not to understand that Europe's agonies could soon become our own. And let's not forget: as bad as things are in Europe, they can always get worse.
Predictably, the unemployment rate rises above 25 percent, riots and demonstrations ensue, and an extreme right-wing party rapidly gains adherents. What this will mean for Europe's political future is unclear.
Demonstrating is woven into European democracies. And, while protesting is generally just too much trouble for most Americans, Europeans are quick to hit the streets when they want to raise their collective voice.
The ECB doing 'whatever it takes' which means conditional funding to sustain solvency while keeping fiscal 'overly tight' is extremely euro friendly, which fulfills the ECB's single mandate. And very unfriendly to 99% of the people who live there.
Once again, the Eurozone debt crisis threatens to suck the oxygen out of the global economy. In the end, our election may well turn on events entirely beyond the influence or control of either President Obama or former Governor Romney.
Jamaica may seem worlds away from Eurozone countries, which are three or four times richer. But they face a common problem, and they could easily mimic the dismal economic performance that Jamaica has seen over the past 20 years.
Blaming a recession on the idea that an insolvent government was finally forced into reducing its debt is like blaming a morning hangover on the fact that you eventually had to stop drinking the night before.
What Europe's voters and its central bank are coming to recognize is that unremitting fiscal austerity measures are the wrong prescription for what ails the European economy -- they're actually exacerbating the continent's economic problems.