What Bothers Me About Europe

With Italy facing a constitutional crisis and likely fresh elections within months, attention is set to again focus on Europe’s single currency system. One effect of the euro is that it distorts self-correcting price adjustments, which regulate normal market-based economies. Understanding this dynamic is crucial, argues Charles Gave from Gavekal, if equity investors are not to be pulled into value-traps, of the type which are now presenting themselves.