Peter Schiff recently stated that the worst choice that could be made by the EU would be for them to put more stimulus into play.
After former French President Sarkozy was voted out of office, German Chancellor Angela Merkel lost her most important ally in implementing austerity measures, and so has been under increasing pressure to cave on going the stimulus route rather than cutting back on spending.
Schiff doesn't think Germany will cave in. He said, "Either Greece is going to leave the euro zone, or it's going to have to accept austerity as a price of remaining a member. There's no way that Germany is just going to cave and support the Greek welfare state."
Of course the real issue isn't the largely irrelevant Greece, but the obvious consequences of other nations lining up soon afterwards to demand they be bailed out as well.
Germany will find itself footing the bill for much of that, draining valuable resources that could be used for productive means and redistributing it to governments who refuse to cut spending to sustainable levels. In other words, the German people will get screwed.
Schiff doesn't believe it will happen, but I'm not so sure. Never underestimate the stupidity in regard to failing Keynesianism, which supports the anemic idea that governments can endlessly spend themselves into prosperity.
The failure in Europe and the growing, unsustainable debt levels in the United States show that Keynesianism is dying and a complete failure, and leaders need to accept that as the reality of the future.
Austerity will be forced on nations around the world whether they like it or not, but it won't come without a lot of pain, as the promises made by politicians who are supported by elites pursuing a New World Order, have never been realistic, and the day of reckoning will be soon at hand for those who have refused to take action and continue to kick the can down the road in hopes the default won't happen on their watch.
Peter Schiff is right in saying the worst action by Europe would be to throw more money into the economy via another stimulus, but it would be surprising to me if Merkel holds out and refuses to engage in more money printing, as most leaders and everyday people don't understand the precipice they're all heading for.
If Merkel has any courage, she would resist stimulus and remain firm on austerity as the economic answer for the region. There is no other way.
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