The Euro is in trouble - no question. Relative to other major currencies, including the American dollar, it is sinking (losing value).There is now talk of a decline to parity with the dollar. In the event it even approaches that level, it is my opinion that it will cause the disintegration of the current
constituency of the European Monetary Unit into (probably) a Northern Euro and a Southern Euro.
If such a re-configuration comes to pass, the Northern Euro (think Germany
, Switzerland, etc.) will be, by far, the stronger. The countries of the Southern Euro (Italy, Spain
, etc.) will be the weaker. It is doubtful that there will be a complete break-up of the European Union.
While the American government
may not have directly instigated the current financial upheaval in Europe
, it is benefiting from it - for the simple reason that people have short memories, and attention is currently focused on Greece
and its financial problems. But make no mistake, the giant American banks were actively planting the seeds of the Euro's destruction through the use of Credit Default Swaps and other derivatives.
Just because the unease with the Euro has caused an apparent appreciation in the American dollar, it is merely a case of the dollar being seen, currently, as "less ugly" than the Euro. If the Euro should come apart entirely (the constituent countries will return to their national currencies), the ugly cousins - the US dollar and the British pound) will be left exposed for the truly repulsive creatures they, and all fiat currencies, actually are.
When that happens, you will see first the pound, then the dollar, go through what the Euro is currently enduring. It will take exceptional timing to take advantage of this event. That is, if you want to buy a vessel priced in Euros, It will be best to wait as the Euro continues to sink and the $US continues to rise against it. Just before the Euro comes apart, make your purchase
If you wait too long, and the exposed dollar resumes its decline (when people lose faith in fiat currencies, devaluation happens very quickly) the opportunity will quickly be lost
. It may
be possible that those holding $US will benefit from the fact that the disintegration of the British pound could very well presage the dollar's decline, but that is not assured, and they could go down together, or the dollar could lead.
What is happening is not the disintegration of the Euro so much as the disintegration of the fiat monetary system. The Euro is exposed due to the massive problems with Greek sovereign debt, but the "bail-out" of Greece should be seen for what it really is - a bail-out of Northern European banks. That is why the intended "shock and awe" of a trillion-dollar bail-out package was dismissed by the markets after only one day.
What is occurring is the dawning realization that fiat "money" is only paper and ink, computer digits, and hollow promises. More so than big financial institutions, it has always been countries that were regarded as "too big to fail." But with the onset of defaults on sovereign debt, as has already happened in Dubai and will probably happen in first Greece, then Portugal, Ireland
, Spain, Italy
, Great Bitiain and the United States, people begin to realize the fraudulent nature of fiat currencies. That will ultimately condemn every currency that is not tied-to / backed-by something of intrinsic value with no counter-party risk.