Boom.
We have not only fixed nothing the so-called "coordinated actions" of so-called "world leaders" have set up a potential catastrophe originating in Europe.Hat tip to Dad29. One of his commenters points out an additional, serious problem: the tool of devaluation of currency is off the table in the Eurozone. As with the U.S. during the 1920s, tied to the gold standard, it's not an option.
More than two years ago I predicted that Europe was the most likely place where the second leg - the real "Oh.... My...... God" moment - would originate in this economic mess. These ratios were the reason for my prediction, and all that has happened over the last two years is that they've gotten worse.
Neither Germany or the rest of the EU can fix this without massive reform - read that as restructuring and/or default - of the external debt in these nations, including Germany itself....
The United States, ironically, is one of the better-positioned nations to survive what is coming. No, it won't be easy for us, but of the developed world there are few who have the internal capacity to pull in the horns and make it - not comfortably, but to survive.
So what does that leave? Admission of failure, combined with the cuts that are necessary to restore long-term solvency; or actual failure. Social unrest in the first case, war in the second.
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