[once_inc]

Europe is doubly-screwed, because the central bank can't raise interest rates without causing instant defaults for most southern European countries, because their bonds become junk at any rate above 0%.

They've painted themselves in a corner in 2008-2010 and are now presented with the bill.

[simonebrunozzi]

Instant defaults? Not necessarily.

As long as you find enough buyers for govt bonds, these governments can keep going for several years. But yes, I agree that long term it's going to be a serious issue. Defaults wouldn't be "instant", though, as you say.

[heurisko]

Southern European states, such as Greece are already bankrupt--they are just in the European Union's debtor's prison.

There is a fundamental schism in the EU, and that is they share a currency, without a common fiscal policy. It's a problem that will never go away, until member states cede power to set budgets, pensions, etc. to the EU, which I can't see happening.

https://www.theguardian.com/commentisfree/2018/aug/26/greece...

[tmaly]

the only other corner to paint would be direct loans from central bank to consumer. But if that happened, the prices would climb even higher.