… in reality today’s situation is nothing like 2008 when one accounts for the EFSF [European Financial Stability Facility] which is essentially a Central Bank within a Central Bank: a pseudo pre-funded SPV [Special Purpose Vehicle] whose only job is to provide liquidity to those countries in the block who are insolvent (and in the process keeping peripheral inflation rampant), while at the same time tightening liquidity in the core. In essence the ECB [European Central Bank] has been split in two: a good central bank and a bad central bank. The problem is the funding for the bad central bank is contingent on Germany which is becoming increasingly disenchanted with the whole failed Euro experiment, yet which is unable to leave the EUR since the DEM [Deutsche Mark] would surge by orders of magnitude to account for the country’s strong economy, thereby burying the export sector. That in a nutshell is the summary of the tensions in Europe.
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