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(email exchange)

>   On Mon, Jun 22, 2009 at 4:32 AM, wrote:
>   
>   ECB President Trichet has warned that governments have no more room
>   for taking on more debt, and should now look to start bringing down
>   budget deficits. “There is a moment where you can’t spend anymore and
>   you can’t accumulate any more debt. I think we are at that moment”.
>   

Similar to the Obama statement that the US has ‘run out of money.’

The difference is that under current institutional constraints Trichet is, unfortunately, probably right.

They are stuck waiting around for their own automatic stabilizers to function, and for exports to improve.

And hope the markets don’t test their banking system deposit guarantees and national government funding abilities.

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