Sunday, May 27, 2012

Tyler Cowen has Another Post Saying that Euro is in Danger

Tyler Cowen has another post saying that Euro is in danger and that if it falls it could badly hurt the European and world economies.

It looks to me like central banking is at the root of the problem.  Central banking seems to me to be prone to crisis.
1. Central banking appears to have feedback problems.
2. It is not easy for the central banks to get the money into the economy where it is needed.
3. People trust the central banks so much that they prefer money assets to real assets in times of crisis. It seems to me that it would be better if they mistrusted money and so bought real assents instead.
4. Central banks are subject to the whims of the median voter, who knows nothing about banking.

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