U.S., Europe Nowhere Close to Ending Crisis, Krugman Says – Bloomberg 10-03-12

Salient to Investors:

Paul Krugman of Princeton University said:

  • The US and EU are nowhere close to ending the financial crisis and German-led austerity efforts may lead to a 1930s-style economic depression.
  • The US needs maximum help from the Fed and another round of stimulus -which should be directed to distressed individuals rather than companies.
  • Europe needs a fiscal union to save the euro. Europe must accept there are limits to austerity and that additional austerity will bring societies on the verge of collapse. It’s not difficult to see the decades ahead looking like the 1930s.
  • Europe needs to contain immediately the financial threat to troubled countries and stabilize yields on their borrowing, which requires the ECB to be the lender of last resort and buy sovereign bonds – 60 percent odds that they’ll save the euro.

Read the full article at http://www.bloomberg.com/news/2012-10-03/u-s-europe-nowhere-close-to-ending-crisis-krugman-says.html