Whatever Germany does, the euro as we know it is dead
For Angela Merkel, leader of the eurozone's richest country, a queue is forming of high-quality adversaries. As she tips German Geld und Gut into the furnace of a rescue package for the euro, while going it alone in a misguided ban on market "manipulators", the brass-neck Chancellor has infuriated domestic voters, angered her EU partners (in particular the French) and invited the so-called wolf pack of global traders to do its worst.
In one respect, Mrs Merkel is right: "The euro is in danger… if the euro fails, then Europe fails." What she has not yet admitted publicly is that the main cause of the single currency's peril appears beyond her control and therefore her impetuous response to its crisis of confidence is doomed to fail.
The euro has many flaws, but its weakest link is Greece, whose fundamental problem is that for years it spent too much, earned too little and plugged the gap by borrowing in order to enjoy a rich man's lifestyle. It flouted EU rules on the limits to budget deficits; its national accounts were a moussaka of minced statistics, topped with a cheesy sauce of jiggery-pokery.
By any legitimate measure, Greece was unworthy of eurozone membership. That it achieved card-carrying status was down to the sleight-of-hand skills of its Brussels fixers and the acquiescence of central bank bean-counters. Now we know the truth, jet-hosing it with yet more debt makes no sense. Another dose of funny money will delay but not extinguish the need for austerity.
What remains to be see IMO, is who or what will be the catalyst that sets all the dominoes to collapsing globally. Many have said that Greece is the lynch pin. Maybe so, but probably only because the Greeks have been singled out as the weakest in the herd. Certainly the Greeks are not alone in their spend thrift socialist ways.
The French are in far worse shape 'truth be known' IMO and the Brits are right up there with the, The bottom line, all of them have been pursuing the American model of tax and spend and borrow into oblivion. and now the tab has come due.
The problem is, these EU countries that depend upon the Euro as their sole currency? They have absolutely nothing to fall back on. They can't do like America has done and continues to do. they can't simply print more money. And in the end, once the collapse begins, it will be 'every man for himself.'
Wait until Wall Street figures out (admits) that the Chinese have been cooking their books and they are in worse shape that we are in reality. Wait until that reality settles in on world markets.
That's right, the Chinese? Our biggest bankers? They have been financing our hollow economy with their own. The Chinese topped out about ten years ago and they have been keeping their own version of the floating crap game afloat by nothing short of book keeping that would make Enron's best proud.
Yes, it's coming people and it may be here a lot sooner than even the best minds of finance have ever dreamed or imagined.
So who's the weakest link? Who will trigger it? I'd say simply watch who the herd offers up as sacrifice. then step back and watch as the rest of them slide into the same sink hole pf socialism that they have been trying to appease.