Matthew Boesler | Jul. 27, 2012, 2:35 PM
Taylor said the world has only seen the “second or third inning” of the euro crisis because Europe is still only dealing with liquidity problems – not to mention the solvency problems and the “structural issues that are even beyond solvency” that must be addressed in order to turn things around.
To illustrate just how twisted the economic dynamics in Europe are right now, Taylor used an interesting analogy:
Germany has to realize that every time they sell a Mercedes to somewhere in southern Europe, [southern Europe] is only borrowing German money in order to do it, and they’re never going to pay for that Mercedes. Either Germany is going to have to write off the Mercedes because [southern Europe is] never going to pay for it, or Germany shouldn’t sell that Mercedes, but they don’t want to admit that. It’s just the fact of life.
Read the rest of the article here: Business Insider