Global Cooling

Financial crises inevitably result in systemic pressures across a broad spectrum.  These pressures tend to lead to ideological clashes among both politicians and citizens, radical and otherwise.  Ideological clashes, under duress, can lead to factionism and extremism.  All these forces, and others, when working in conjunction, lend themselves to division much more often than unison.

Perhaps the saving grace for the American financial system might not be anything our sage elected officials and bureaucrats come up with but, rather, could hinge on the destruction of the European monetary union.  Consider for a moment that the EU consists of 27 different countries who all must conform to the monetary policies of a single, monolithic European Central Bank.  Is it too difficult to imagine that this global financial crisis might very well magnify the striking disparities between per capita GDP, standards of living, access to capital, consumerism, national debt, health care and overall quality of life and culture in such differing countries as Luxembourg and Latvia, Italy and Slovenia, France and Cyprus? 

Should nationalism replace unionism at some point, the US could be the big winner as the world’s second largest economy (EU-27) breaks into a series of much, much smaller economies with much less political and economic stability. One would think the greenback would regain some of its foregone luster as a true safe have; and one of only a very, very few left.

This may not happen and, if it does, it may not be good for anyone.  Just something to think about.

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