European Central Bank president Mario Draghi recently suggested (again) that quantitative easing would revitalize the Eurozone’s economies. Robert Blumen, physicist and Austrian economics advocate, thinks that Europe’s’ problems are systemic and that the system is unsustainable.
In the May issue of The Free Market, a monthly publication of the Mises Institute, Blumen said:
“The problems in Europe are a combination of the massive debts that can never be paid back, the unfunded entitlements, and the growth in the burden on producers. . . This burden consists of the totality of regulation, taxation, inflexible prices and labor markets, and the threat to the confiscation of wealthy. If you project these trends into the near future, I’m not sure where the lines cross, but the system is clearly unsustainable in its present form because it relies on sustaining current levels of consumption as fewer and fewer people produce.”
Europe’s problems are cultural. Yet central planners there see the solution being the creation of still more fiat money. The US is headed in the same direction, and eventually (but probably not too far out) price inflation will become a major problem here as well as in Europe.