Monday, October 24, 2011

She's a Eurozona Dime, But It's Time...

Tyler Cowen explains how to quit the Euro zone in six steps.

Step one:

1. Issue a surprise announcement that all euro deposits in Ruritania will be converted into pesos (or whatever) at a new and lower yet defensible rate. If I try to withdraw my ten euros from my bank, I receive an IOU for ten pesos which is worth say six euros. Over time the government will replace these IOUs with a new paper currency.

Meanwhile, Paul Krugman says that if the Euro is going to collapse, it's better to have it happen sooner.