Euro is doomed, any "way"

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Greece will be either rescued by injecting money under a cover-up operation using a kind of "reform agenda", or it will be left behind and has to default on its Euro denoted debt. Both scenarios are bad for the Euro. A third possible scenario is not even on the table for discussions, but it is the only one which would not lead to the demise of the Euro as a result. Therefore from an investing point of view, the only thing which remains to anlayse, is to know when things will turn out badly for the Euro. The correct timing is the key question and the main difference between the both scenarios, currently discussed. Most likely a secret bail-out will take place. This is consistent with governmental activities in the last years. The IMF might be a great vehicle to inject liquidity into Greece. On the short run this will drive down CDS spreads and yields. But on the medium run this is setting up the Euro for disaster as investors come to realize that they can no longer trust into the paper on which the regulation for the Euro zone is been written on. At that moment of time, investors will get into Euro denoted debt and out of Euro investments. That will cause a tidal wave for the Euro currency. Countries in the Euro zone will suffer even more from the following liquidity squeeze and bankruptcy rates will go up. At the same time easy monetary policy will increase money growth, which in reality is debt growth, and therefore cause further inflation. If the central bank does continue to inject money, this inflation will be offset for quite a period of time by the deflation central banks generate by doing so. (Japan model) The outcome is therefore the potentially worst for the citizens. Hyperinflation will be the result at a certain point of time in the near future.. It does not matter how you turn the medal, things are set to get worse for the Euro. The hope that the Dollar collapses at faster rate and that investors seek security in the Euro was just a nice dream. The Euro will collapse along the US Dollar, the British pound and other currencies. European citizens should be aware of that and they should make clear that they have to veto their governments in bailing out the losers and distribute the wealth. Finally one has to recognize that the ones who benefit from the Greece bail-out will be mainly the banks, again. People make choices – especially if they don’t step up and articulate what they want or don’t.

tags:Dr. B., Dr. Doom, Greece, bail-out, rescue, Greece rescue, bond yields, bond markets, currency markets, Euro devaluation, Euro zone, ECB, IMF, debt markets, CDS spreads, crisis, Euro crisis, Dollar crisis, Dollar, EU, Spain, Greece default,