Cross-posted from Credit Writedowns
Marshall Auerback was on Fox Business last week talking about the European sovereign debt crisis. He said he is very concerned not just about the national solvency problem in the euro zone but also about the debt deflationary policy remedies now being implemented across the whole of the euro zone. He notes grimly, “the more you deflate these economies, the bigger the public debt problem is going to become.”
The deflationary impact of fiscal tightening after the deficit ‘Supercommittee’ failure will only begin to hit the United States in a major way beginning in 2012.