Remember when Paul Krugman called for Alan Greenspan to create a housing bubble to replace the collapsed NASDAQ bubble? While he has since backtracked from that and last year said that the U.S. Government effectively can fight this depression by preparing to fight off an invasion by imaginary “space aliens,” he has a new plan to save the euro: create a bubble in Germany. He writes in response to the current troubles of Europe: What could turn this dangerous situation around? The answer is fairly clear: policy makers would have to (a) do something to bring southern Europe’s borrowing costs … Continue reading Krugman: Germany Needs a Bubble To Save the Euro