Ian Bremmer of the Eurasia Gropu was a recent guest on Charlie Rose. He has a view in sharp contrast to mine.
"Eurozone breakup -- probably the single most overrated risk of 2012, The political will to maintain the eurozone remains strong among all the major political parties in the core eurozone states, almost across the board in the European periphery and, just as importantly, among eurocrats in the ever-growing European bureaucracy. Further, there is no effective political mechanism for a
eurozone breakup."
Once again, political will does not generate long term economic growth or employment unless it results in structural changes. Where are they? The core problem in the Euro zone (and the US) is structural unemployment and the inability of these economies to replace lost middle class jobs for their low(er) skilled workers
Also, they think no hard landing for China this year. I agree, but I believe the hard (or not soft) landing (growth 3% or lower for half a decade or more) is coming in the back half of 2013. China adjustments are lagging adjustments in Europe, the US and Japan. Once global trade imbalances start to get adjusted then we will see the flow through impact of investment and exports being hit in China. My view on China and the BRICS is similar to Pettis.
I believe he/it is a respected group, so for the benefit of my readers, I present the link as a counterbalance. I watched his CR interview and was not persuaded by anything he said to change my opinions. Admittedly, my principal analytical weaknness is that I am often too early on issues, sometimes way too early (as measured in years).
Finally, Ian gave Charlie a version of the "We have nothing to fear but fear itself speech". That left me "alone in the house, late at night, after watching the 'Excorsist/Silence of the Lambs' double feature" type of afraid.
"Eurozone breakup -- probably the single most overrated risk of 2012, The political will to maintain the eurozone remains strong among all the major political parties in the core eurozone states, almost across the board in the European periphery and, just as importantly, among eurocrats in the ever-growing European bureaucracy. Further, there is no effective political mechanism for a
eurozone breakup."
Once again, political will does not generate long term economic growth or employment unless it results in structural changes. Where are they? The core problem in the Euro zone (and the US) is structural unemployment and the inability of these economies to replace lost middle class jobs for their low(er) skilled workers
Also, they think no hard landing for China this year. I agree, but I believe the hard (or not soft) landing (growth 3% or lower for half a decade or more) is coming in the back half of 2013. China adjustments are lagging adjustments in Europe, the US and Japan. Once global trade imbalances start to get adjusted then we will see the flow through impact of investment and exports being hit in China. My view on China and the BRICS is similar to Pettis.
I believe he/it is a respected group, so for the benefit of my readers, I present the link as a counterbalance. I watched his CR interview and was not persuaded by anything he said to change my opinions. Admittedly, my principal analytical weaknness is that I am often too early on issues, sometimes way too early (as measured in years).
Finally, Ian gave Charlie a version of the "We have nothing to fear but fear itself speech". That left me "alone in the house, late at night, after watching the 'Excorsist/Silence of the Lambs' double feature" type of afraid.
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