Friedman’s Prophecy

I don’t believe in prophets. I’m very skeptical when it comes to economists of all flavors, too.

But when looking around at what’s going on here in Europe these days and considering how even the Spiegel itself now warns us about investors preparing for the euro collapse, I can’t help but wonder if Milton Friedman didn’t have a functioning crystal ball after all.

“There is no historical precedent for such an arrangement (the euro). It involves each country’s giving up power over its internal monetary policy to an entity not under its political control. Such a system has economic advantages and disadvantages, but I believe that its real Achilles heel will prove to be political; that a system under which the political and currency boundaries do not match is bound to prove unstable.”

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