Euro at a cross road

I remember telling my sister and brother-in-law that Euro was in a slow-motion suicide. Not much of a future remains for the currency. That was Spring 2010, at the height of the Greece/Iceland debt crisis.

I still maintain my position on the Euro EXCEPT debt-ridden Euro countries like Ireland would default on their EURO debts.

My original position assumed that ECB/IMF would essentially "rescue" every troubled EURO country by issuing more of the EURO out of thin air and every debt-ridden EURO country would just accept the "help". Turns out that's quite an assumption to make.

If Ireland rejected the "bailout", EURO, as a currency, might be spared of a premature death. However, short to medium term, there would be tremendous turbulence for the EURO currency due to the soverign defaults. When the dust settles, the investment world would once again recognize the "soundness" of EURO as it's debts are not monetized into oblivion and adapt their investment decision making to focus on only sound EURO credit nations like Germany or France.

Gold and silver used to be the currencies of all nations in the world, the fact that certain nations went bankrupt didn't make Gold or silver less functional as currencies at all.

Moreover, unlike the USD from the United States, where there are tremendous foreign interests from all over the world "NOT" wanting USD to go kaput (due to their massive USD securities holdings, especially in US treasuries), which, thus, must NOT default, EURO has much smaller of the "reserve currency" role compared to the USD, so the default of even half of the EURO soverignties might not be as hazardous as the defaulting of US government debts (I just realized the coldness of this statement but less face it, defaulting means not paying the debt, it's a "good" thing for those defaulting countries in a sense).

Still pretty bad, of course, but not the worst.

Euro at a cross road