Phase III (or is it IV?): Europe on the brink of currency crisis meltdown

Ambrose Evans-Pritchard makes Nouriel Roubini look like a Chamber of Commerce booster. Here are some of our previous links to his writings. With the U.S. markets looking to trade up 4%, a lot of folks may be tempted to start a chorus of "Happy Days are Here Again". Not our A. E-P. From the Telegraph:

The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump.

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon.

Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits....MORE