I Don't Fully Buy Stiglitz's Argument That Our Macro Problems Have Deep Structural Roots. But I Do See Its Coherence
Letter from Margaret Thatcher to Friedrich Hayek

The Speed with which International Economic Imbalances Can Mount...

Karl Smith sends us to Kate Mackenzie quoting a chart from Bank of Canada Mark Carney:

Structure of a Recession Europe Edition  Modeled Behavior

Kate Mackenzie:

Structure of a Recession: Europe Edition: Carney points out that it doesn’t matter whether the debt is initially public or private, because private debts inevitably become public.

And of course, Europe is a microcosm (or, whatever a big microcosm is called) for the whole world. As Carney says, “Accumulating the mountain of debt now weighing on advanced economies has been the work of a generation.

And Karl Smith:

This in itself, however, is not enough.

Lets imagine that Portugal received massive inflows of foreign capital from 2002 to 2010. Then it used that capital to stockpile massive quantities of gold. Where would they be today? Chances are living the high life…. The point is… that there is something magical about the ability to send back whatever you borrowed. One of the things about Europe’s situation and that in America as well is that what was borrowed was structures…. Portugal can’t just ship Villas back to Germany or China to make good on its debts. What it could do is ship Germans or Chinese to Portugal to stay in the Villas. That would require, however, increased expenditures on vacations in Germany or a falling Euro to make it more affordable for the rising Chinese middle class to visit Portugal.