Friday, April 2, 2010
UK default: better first than last?
I just had lunch with Carmen Reinhart, author of `This Time is Different: Eight Centuries of Financial Follyâ€ and a world authority on sovereign defaults. Suitably, she was wearing a medallion of a Spanish silver coin dating from 1580, celebrating Philip IIâ€™s third default in eighteen years. These magnificent defaults did not stop Spain launching the Armada against Elizabethan England a little later, or attempting to roll back the Protestant Reformation in a last maniacal attempt to impose Habsburg-Papal absolutism on free thinkers, but it did cripple some great European banking dynasties â€” about 20 in all.