Greece

Warren Mosler argues that it is the realization that the ECB is the issuer of the currency, and is therefore not revenue constrained, that leads to the conclusion that not allowing Greece to default best serves public purpose.

Former ECB chief economist Otmar Issing recently spoke to German weekly Stern in an interview now published online. His view is that the appropriate strategy for dealing with Greece is to force a hard restructuring and a large writedown of…

Most of the writers whose work appear on this blog have long warned that the extend and pretend strategy in Europe would fail. Now, it seems that Europe is moving to a hard restructuring for Greece and recapitalisation for bank creditors.…

Germany’s ability and willingness to pay will decrease as the economy falters. Remember, Germany is more indebted than Spain and has also long been in violation the Maastricht Treaty’s stability and growth pact provision on government debt…

The future of Euro is going to be determined by the Greek street in the next few weeks and how they react to the new austerity measures. G-Pap has his work cut out convincing the population the pain is worth it. Stay tuned.

"The larger the haircut that bondholders accept, the better the outlook for the Greek sovereign from a credit quality perspective after the default," said Tony Stringer, a country debt analyst with Fitch.

Here’s a great chart just released by the International Monetary Fund for Greece, Portugal, and Ireland as well as Japan, the US and the UK. Note that almost half of the US federal government debt is held by the Federal Reserve and the…

I want to highlight three things here from Wolfgang Munchau on the euro zone because he reaches conclusions I have reached. Below are excerpts of what Munchau writes about a Greek default, Italian solvency and euro zone dissolution.

10% ‘internal devaluation’ in Germany took eight years. We are talking now about 20-30% wage and price cuts in Greece and Ireland. How realistic is that?

Here’s what I am hearing. At the end, I will tell you how far-fetched I think these things are.