Intel Corp (INTC)

[mas]

we already saw this process play out with Europe. While Germany is still the engine, most of the other countries are basket cases. With labor participation rates lower than ours.

Those basket cases are mostly caused by being locked in a currency union with Germany at too high an initial exchange rate which was tolerable before the 2008 financial crisis but it proved lethal for them afterwards when everybody started devaluing with QE and the EU did not. These countries did not all suddenly get lazy in the last 5-10 years as their employment all used to be much better.

I really don't know what the answer for them is apart from coming out of the Euro and re-establishing their national currencies and devaluing as their debt deflation is getting steadily worse because the interest they are paying on their debt far exceeds their inflation which is negative in many cases which means their budget surplus rate has to match their debt interest rate just for their debt to stay still. The Euro was a badly implemented idea and I suspect Italy will be the first to break away followed by Spain and Greece and maybe others. The second major party in Italy is advocating a referendum on leaving the Euro and re-establishing the Lira.