Dr. Doom Looks Through the Gloom

Nouriel Roubini thinks he sees a way to avoid the coming collapse of the Eurozone...

...but we may be past the point where Keynesian intervention can work. Deficit spending by sovereign governments can sometimes create a hothouse environment for economic growth, but not after future growth has already been pulled forward through over-borrowing. Fiscal stimulus now would just add to the debt overhang, further damaging long-term prosperity. Doug Casey proposes instead that government spending be drastically curtailed and sovereign debts repudiated. "Those debts," says Casey [interview here], "constitute an unethical mortgage without consent on the next two or three generations of people as yet unborn as a result of the excess consumption of their parents and grandparents."

Meanwhile, the European Central Bank's attempt at monetary stimulus is coming up dry. As Bloomberg reports, cash that might otherwise go for private-sector investment is being used instead to refinance sovereign debt, effectively starving the economy. When companies run out of cash, companies default. Companies default, workers are laid off. Workers are laid off....

You get the picture.