What is certain is that an implosion in Europe's debt crisis is reaching the point of inevitability in much the same manner that the housing bubble came to a head and burst in the United States, but though no one knows when the debt crisis will come to a head, events are happening in September that may push the eurozone over a fiscal cliff.
If there’s one thing Europe’s seemingly interminable debt crisis has taught discerning observers, it’s that, while we can always predict where the economic follies of politicians will lead, it’s impossible to predict the timing or the severity of such consequences. Ron Paul, Peter Schiff, and other savants accurately forecast the implosion of the housing bubble, but no one could have predicted precisely when the debacle would unfold. In a similar vein, we have been predicting financial collapse in Europe and the end of the eurozone for two years, yet the Europeans continue to postpone the evil day — guaranteeing in the process that, when the moment of reckoning eventually arrives, the consequences will be all the more severe.
The latest prospect for a European financial “zero-hour” is this coming September, when a confluence of several events may finally tear the eurozone apart and drive the global economy into a dizzying new downturn. So dark do Europe’s prospects now appear that one senior eurozone policymaker, Jan Strupczewski, speaking recently to Reuters, characterized September as “crunch time.” And an unnamed EU diplomat added, “In nearly 20 years of dealing with EU issues, I've never known a state of affairs like we are in now. It really is a very, very difficult fix and it's far from certain that we'll be able to find the right way out of it.”
So what has prompted this latest round of hand-wringing? Well, if Europe was staring into the abyss at this time last year, it’s now hanging by its nails from the proverbial stubby pine tree jutting from the cliff face.
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