Outside the Box

Was the Demise of the USSR a Negative Event?

John Mauldin

May 5, 2010

Let's have a thought game. What if the Eurozone breaks up? My friend and very serious philosophical thinker Charles Gave (of GaveKal) thinks that would be a positive event. To quote his conclusion:

"But we return to the most simple of questions, namely: Was the end of the USSR a negative event? When Americans stopped wasting capital building empty condos in Florida or Arizona, was that bad news? If, like us, our reader answers "no" to the above questions, then the Greek crisis should be seen as a reason for hope, rather than despair."

Now, that is a truly Outside the Box proposition and one which I found very compelling. His partner, Anatole Kaletsky, elsewhere argues that the ECB will enlarge their mandate to try and save the day by printing enormous sums of money, ultimately making things worse.

The team at GaveKal gave me permission to share this with you, as I think it deserves a wide audience. Warning: the first part is philosophical in nature. You will need to think through it. This is not one for speed reading. But if you grasp what he is saying, I think it will give you a major insight into the plight that is now engulfing Europe. Note. Even though Marc Faber calls the GaveKal team "euro perma-bears" GaveKal is mostly quite bullish on everything else. They always seem to find the bright side of the street to walk on, or at least a few spots in the sun in which to sit.

Read this and learn why the break-up of Europe might be a bullish event. As I said, Outside the Box is for ideas that challenge the status quo, and this, if anything, does just that.

John Mauldin, Editor
Outside the Box

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Was the Demise of the USSR a Negative Event?

By Charles Gave

Everything one reads on Europe these days varies from the seriously gloomy to the downright apocalyptic so let us immediately re-assure our reader: this is not yet another GaveKal paper explaining that the Euro is a doomed currency. GaveKal has done too many of those over the years to the point where our friend Marc Faber started to refer to us as…

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