Monetary Policy In America Is A Mess. Things Are Even Worse In Europe.

The dynamics of the inflation path would depend crucially on the behavior of the euro. If the US is by then reining back monetary radicalism in the context of accelerating inflation, then Europe’s currency fall could indeed be breathtaking. Even if political forces in Germany against high inflation gather power under such circumstances, that would not slow the fall of the euro. In any breakup scenario for the EMU, including the opening of a path to a new hard euro, the ECB faces liquidation first.

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