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Often wonder if Euro collapse, will USD gain advantage in long run?
Once EU falls into deeper crisis, it will be forced to borrow from IMF, with many strings attached. that will greatly benefit the core members of IMF.
then Euro will not be in the basket of reserve currency, thus making USD in higher demand. Furthermore, no worries for petrodollar to be swapped to Euro...
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19-11-2011, 04:13 PM
(This post was last modified: 19-11-2011, 04:15 PM by corydorus.)
If EU itself in crisis so deep such that they need to borrow at ECB level, i doubt IMF have enough to lend.
Printing is the easy and obvious Option else Euro will be force to breakup.
I bet other nations currency among themselve maybe around the same assuming no other indirect related matter.
Euro will definitely be weaken. Gold will go up long term.
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US dollar definitely will benefit as the only reserve currency left in the world.
if printing is the only way left, either Germany and northern European countries will leave the EURO or the southern European countries will leave EURO. In any case, EURO is not the original currency any more.
I doubt Gold will go up. With USD becoming stronger as the only reserve currency and a better US economy after 2012, Gold probably would plunge to pre-2000 level that there was no EURO to challenge the reserve currency status of USD.
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The euro is actually deutsche mark in disguise. There are a few ways how this euro scenario may be played out. 1 - eu kicks out the weak countries , this means the euro gets stronger. 2 - austerity measures kick in , bondholders get a haircut, financial turmoil for awhile, euro dips then rebounds as it is more trustworthy than usd .
A bit simplistic, but let's see how things roll out.
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