Eurozone endgame very close warns Professor Niall Ferguson [ArabianMoney]


The eurozone sovereign debt crisis is very close to going critical and could blow up before the end of this year with a Greek exit from the euro creating a Lehman-style contagion in the global banking system.

That was the blunt assessment of Professor Niall Ferguson addressing the Agora Financial conference in Vancouver. He was there to promote his latest book ‘Civilization’ that charts the rise of the East and fall of the West.

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Of course any book is written many months in advance of publication and so the story moves on in the interim, especially during an ongoing financial crisis or ‘Slight Depression’ as Professor Ferguson characterizes our era, and the one-time company biographer of the Rothschild dynasty has an amazing historical perspective on this.

He pointed to there only being three real depressions in history: the 1870s, 1930s and today. And why was it that today we only have a ‘Slight Depression’ and not something like the Great Depression of the 30s?

Professor Ferguson answered this very succinctly noting that the Fed and other central banks had read the history of the 1930s and responded to the recent crisis with exactly the opposite policy response.

‘The trouble now is that we don’t know exactly what effect doubling or tripling the money supply will have,’ he added. “It could be inflation but the transmission mechanisms are not fully understood and we cannot be sure.’

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