Breakup of the Euro?

Here is another take on the possibility of the breakup of the Eurozone.  The linked video is from The Economist, the British newsmagazine that is the last, best hope of substantive journalism about contemporary world events.

Video: Controlled Breakup of the Euro?

Compare this video to our own recently-published TGS White Paper: They Came for the Greeks…

Something I find interesting is that The Economist has finally begun to seriously consider a possibility (a Eurozone breakup) that we’ve been predicting for months, if not years.  Does this suggest that the Investment Committee at little ol’ TGS Financial Advisors in suburban Philadelphia is smarter than the most respected news organ in the Western world?

That question answers itself, and not in the affirmative.  We here at TGS are not, individually or in aggregate, smarter than the very smart folks at The Economist.  But we are, I think, mostly free of a deeply-held but not reality-supported belief in a central tenet of the conventional wisdom of Western elites — that the highly-educated and nobly-intentioned have a presumptive ability to subdue reality by the force of their intellects and the pureness of their motives.

2 thoughts on “Breakup of the Euro?

  1. Jim,
    Well done as ususal. But could you add something about what to expect when the Fed has to unwine all the twists? The bond market is going to exploed in my opion.
    What is your take?


    • My gut instinct says that the huge expansion in the money supply will ultimately have inflationary consequences. I certainly agree that, at these yields, longer-term bonds are as unattractive an investment as I’ve contemplated in thirty years of my career.

      What I’m not certain about is the ultimate consequence of the Fed’s expansion of its balance sheet and increase of the money supply. We’re hunting up some charts to illustrate just how utterly unprecedented the Fed’s actions have been, in terms of the amount of money sloshing around the system. We really are in uncharted territory.

      BTW, unlike many of my fellow Republicans, I’m not a Bernanke-hater. I think he’s doing what he thinks he can in the absence of any sensible policy from the Congress or the White House. Still scares me.



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