Krugman:

Decline and Fall:

Ed Harrison has a good essay on how the world euro ends if the ECB doesn’t step in on a massive scale. I don’t agree with everything — I think he’s wrong to attribute the commodity spike of 2010-2011 to monetary policy — but he’s basically right about how the thing unravels. I might place greater emphasis on the immediate channel through which falling sovereign bond prices force bank deleveraging, but we’re picking nits here.
And this is totally right:

If the ECB writes the check, the economic and market outcomes are vastly different than if they do not. Your personal outlook as an investor, business person or worker will change dramatically for decades to come based upon this one policy choice and how well-prepared for it you are.

Crunch time. If prejudice and false notions of prudence prevail, the world is about to take a major change for the worse.

Larry and Paul and Dave and Ian

Oh, one thing about Felix’s commentary: he describes me as always pessimistic. But my pessimism has been selective; I’ve been pessimistic about unemployment and growth, but optimistic about interest rates and inflation. So it’s not just about crying doom, doom. I think that counts for something — especially since I’ve been right …