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In his usual entertaining oblique approach to subjects, Grant gives a historical summary of the Maginot line and German dam defenses in WWII. Both were designed to be as impregnable as possible. The first was circumvented by an end run around it. The second by an ingenious new frontal assault weapon, the British development of a dam-busting bomb. This leads up to the current Franco-German attempts to build firewalls around the weak economies of Southern Europe. Key points are:
- Quantitative Easing … printing money out of thin air, CANNOT fix this [the massive credit produced by 2 decades of easy money].
- I’ve got news for you, folks; there will be PLENTY more QE to come. In fact, QE will be used and used again until it is finally proven not to work and, when that day finally arrives, the world’s Central Bankers will be out of ideas – and time.
- The combined might of the EFSF/ESM is, to all intents and purposes a monetary Maginot Line that the market will simply find a way around.
- He reviews events in Spain and the Netherlands that suggest the defenses constructed by the EU and the IMF are threatened.