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I am completely in your camp as far as Europe goes. No one seems to want to admit that the banks have a solvency problem, not a liquidity one.

European citizens are also going to have to face the harsh truth that the magical days of unlimited spending on someone else's credit card are over.

Germany (along with much of the "safe" Northern Europe) will have to realize that exports are there to pay for imports, not to build up massive foreign reserves (China is in the boat, too).

The banks need cash infusions, which means Germany is going to have to get over its fear of hyperinflation and let the ECB print.

These are major psychological hurdles and adjustments to national mentality that will only be made under the massive pressure of total collapse.

Sadly, the same can be said for the US and its issues (which haven't gone away - they're just hiding behind Europe's skirts right now).

Back to the issue of China's rising militancy, an interesting article out of India:
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