More on Europe

Briefly, here are two views on the crisis. The first is from the ubiquitous Soros:

George Soros, who knows a thing or two about finances, likens the threats to Europe and the United States to that of the dying days of the Soviet regime. 

“Something similar is happening in the West,” Mr. Soros told Bloomberg Television. “You had a financial crisis where the market did actually collapse, but it was kept alive by the authorities. People don’t realize that the system has actually collapsed.” 

The Hungarian-born financier said he himself is confused by Europe’s woes.

The second is from Citi's Willem Buiter:

The temporary pause in the European debt crisis is as deceptive as the frenzy before the New Year, says economist Willem Buiter. 

The countries of the eurozone will eventually emerge from the sovereign debt crisis — with pain and difficulty. That is what Citigroup chief economist Willem Buiter, on a visit to Amsterdam on Friday during a roadshow, expects. Spain and Italy will get their finances in order and the ECB will jump in when necessary. Deep integration of fiscal policy, according to him, is not necessarily required. 

Before all that happens, Europe will have another panic phase Buiter says. This was a really good must-read thought-provoking interview with a lot more on Europe integration, fiscal integration, demographics, the political economy of change, the whole nine yards. The interview also gave me some food for thought. I have the full story including a full translation of Buiter’s comments from Dutch for Credit Writedowns Gold members in the usual place. The first part is already up; more to follow as well as commentary on the S&P downgrades and what they mean for investors.

I think that the realisation is slowly dawning that we are now in the grips of a postmodern catastrophe, that a state of functioning collapse can exist without breadlines and blood on the streets.