March 31, 2010

A German Eurozone would suffer the reserve currency curse.

Sir Martin Wolf (who seems to be as obsessed with lacking German demand as I confess to be with the lousy Basel regulations for banks) writes “If the Eurozone itself became Germany, I cannot see how it would work”, “Why Germany cannot be a model for the eurozone” March 31.

It would work, with the Euro at 3 dollars, making it much harder to export the Eurozone would suffer like the US from the reserve currency curse... the safe-haven curse. That it would seem impossible for this to occur, on that I agree though.

P.S. I invite you to read what I wrote in Daily Journal of Caracas in1998 a couple of weeks before the adoption of the Euro… it explains what is happening now.