If the ECB and European authorities stick with their suicidal doctrine of austerity, then the Federal Reserve must intervene.
The problem is that the ECB, and other European authorities led by the German government, are still playing the same game of brinkmanship that they have been playing for the past two years. They are more concerned to press austerity policies on the weaker eurozone countries than they are about tanking the European and global economy. They continue to see the crisis as an opportunity to force through unpopular “reforms” – such as cutting jobs and pensions, raising the retirement age, privatisations and reducing the size and scope of the welfare state.
Some of us have called for the Federal Reserve to intervene before this happens and do the ECB’s job for it. The Fed has the capacity to do so, and like its prior quantitative easing in the US, this would be costless to the taxpayers.