The part-economic, part-philosophic foundation of his argument is that there exists no clear-cut 'reality'. Rather, there are trend developments and perceptions of these trends that mutually affect each other. In asset markets, positive trends may lead to overly optimistic "misinterpretations" (existence determining consciousness), which in turn reinforce the price rally and thus add to the 'reality' of rising asset values (consciousness determining existence). Once the "gap between the trend and its biased interpretation grows so wide that it becomes unsustainable", the bubble bursts---and it does so suddenly. Now his application to the Euro as the turning point in the European unification bubble:
"['far sighted statesmen'] recognized that perfection is unattainable; so they set limited objectives and firm timelines and then mobilized the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step. The process fed on its own success, very much like a financial bubble. That is how the Coal and Steel Community was gradually transformed into the European Union, step by step.
(...)
The process culminated with the Maastricht Treaty and the introduction of the euro. It was followed by a period of stagnation which, after the crash of 2008, turned into a process of disintegration."Why? Because the next step of the political rally, movement towards a fiscal union, 'suddenly' seemed pretty far off when Angela Merkel declared protection of the banking sector a national instead of a common European concern after the Lehman insolvency in 2008.
He then asserts that there are roughly three months left, especially for Germany, to turn this around. If you're interested in
- how he derives the three-months window (Greek crisis climax in fall),
- what is to be done ("convincing commitment" concerning the banking system and peripheral refinancing costs),
- why the German public possibly prevents it (mistaking own past successes for eligible solutions),
- and what could be the possible outcomes (German empire?!),
