The greatest experiment in multi-national currency reform continues to unfold. I don't expect the Euro to dissolve in the complete sense, however I expect one or several member-states to remove themselves from the system and reissue an IMF-backed currency. That seems to be the way things are done in these types of situations, for instance Chile in 1982, Brazil in 1982, Argentina in 1982, Mexico in 1987, Russia in 1998, and Argentina again in 2001. Each result was an IMF-backed debt restructuring and a decrease in the value of the USD.
The difference between the current environment and those past is the unprecedented nature of the Euro Zone. With the inclusion of China and their questionable landing into this whole environment, and the US / Germany / UK with their own debt at record levels, we are watching one of the most spectacular credit unwinds in the history of the world. This era and Bernanke's policies will be some of the most meticulously studied for decades to come.
Here's the current yield curves for Spain, Portugal, Greece, and Italy as of this morning.
All that to say, go Chelsea.
The difference between the current environment and those past is the unprecedented nature of the Euro Zone. With the inclusion of China and their questionable landing into this whole environment, and the US / Germany / UK with their own debt at record levels, we are watching one of the most spectacular credit unwinds in the history of the world. This era and Bernanke's policies will be some of the most meticulously studied for decades to come.
Here's the current yield curves for Spain, Portugal, Greece, and Italy as of this morning.
All that to say, go Chelsea.
