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The failure of the euro and the bailout of Germany

Dear reader, You are warned, this post is going to be a long one. But by the end of it I promise that you will come to understand how the eurozone found itself one step before a financial implosion. You will understand how the common currency lead to a humongous misallocation of capital and how … Continue reading

Collective ignorance (part II)

Free markets never allow for exchange rates to be constant. It is impossible for the millions of agents in different economies to agree every day on exchanging goods and assets of the exact same value. Fixed exchange rates can only exist because of central intervention in the foreign exchange market. Central authorities intervene in the … Continue reading