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July 4, 2011

Greek Tragedy or Farce

So let’s get on with it already. Greece is broke and playing charades with their debt and pretending that
they will pay it off. It isn’t fooling anyone. The only advantage is to defer the reckoning and possibly
dampen the impact until the European banks are in better financial shape. Otherwise, this appears to
be throwing more good money after bad. Imagine what could be accomplished if the Europeans faced
up to the realities of their overleveraged governments and directed additional funds towards productive
purposes.

In the meantime, while we’re all looking across the Atlantic, maybe we should pay attention to what’s
happening on the other side of the Pacific. If there is one thing that everyone is in agreement, it is that
China is the growth engine for the world. We occasionally debate the rate of growth, but very few doubt
the ability of the Chinese government to sustain its economic progress.