Near the end of the episode, Posen responds to a co-host's worry that the global rise in long-term bond yields ends with a major economy needing a bailout. He adds that he would not want to gamble on a French crisis scaring other governments into better behaviour.
Exactly. And so I think what I worry about is this actually makes things worse that it drags it out because you got no place to put your money because you're not going to put it wholesale into China. And so there is no other place to absorb this stuff. And so these all these economies, including the U.S., get a longer leash than they otherwise would have if they were deviating from the others. And then you could say, oh, Europe's messing up. I'll move into Japan or vice versa.
Right.
So finally, your point, scary about a bailout. 50 years, I hadn't thought of that, but you're right. I mean, there are serious people in official places talking contingency plans for what it would take for an IMF or IMF, European Central Bank, Troika kind of thing to bail out France. I mean, people are doing contingency planning on that now. This is for real. And again, if you want to be sort of bloodless about this, and I am not confident enough as AI to make this call from induction, but you could make a case. Well, in a sense, it's good if France blows up because they're big enough to scare everybody and it might keep the nut jobs from getting out of government. But it could happen before the other ones blow up and that might induce a better outcome. I don't want to gamble on that.
That is a sobering note on which to wrap. I think we should wrap. Adam, Kaleidoscopic in your range. Thank you so much for being here. Thank
you for having me.
That was a tour to force.
