The abyss scenario

Genevieve Signoret

This is Edward Hugh on what I call “The Abyss Scenario”, which has much in common with Edward Harrison’s Monetization Inevitability Hypothesis.

So we have the last “alternative” which is simply that markets push the issue to the limit, the centre does not hold (Germany, for example could be threatened with being stripped of its triple A), and the whole thing flies apart in the most disorderly and disagreeable of fashions. If you were to ask me at this point which of the three above alternatives I considered most probable, I would have to say the latter, although naturally in no way do I wish this to happen, it is simply the risk that Europe’s leaders are now taking.

I hope he’s wrong. I’m betting that he’s right.