Is the Euro zone doomed?

My friend sent me this article the other day.

Basically it states that the countries outside the eurozone are better off than the countries inside it. That makes me laugh irronically. I remember when they were building the euro zone. The countries that most wanted it were adressing the other countries around, with a bit of scorn, that if they missed the boat, the countries outside would starve to develop, denied the access of this vast market they were about to form. Who's laughing to whom now?

I believe that the euro is doomed and it is only a question of time. This idea, good in principle, was flawed from the beginning. Among other things, they introduced the possibility for a country to make bankrupcy which is a major flaw in design. Let me explain. Take the United-States for example. Right now it is heavily under debt. But can it crash? The answer is no. Because by definition a country is immortal, sooner or later the USA will pay their debt. What ever the time it takes. And if Uncle Sam wanted (wouldn't be wise to do so but...) he could print more money and pay the debt with it. The US government has the hability to do so. Therefore it can never make bankrupcy. This is not so for a country in the euro zone. In the euro zone the members gave that right away. So the only thing they can do to stimulate their economy is borrow some money and spend on the economy. Therefore creating debt that the country is not yet sure it can repay.

Look at Greece. I don't know for you but if it were my money I wouldn't grant a penny of loan to them. Seriously. Someone comes to you and ask for money because he is crumbling under debt. And he says to you: "My monthly expenses are way more than my monthly revenues. But don't you worry. I will repay you... in time... I... I promess. And if you don't finance me, I'm getting out of the game anyway." Would you lend some money to him? I doubt that.

Europe lend Greece the money needed because it was the thing to do to put the problem under the carpet since they didn't know what to do with the problem. Can we blame them not knowing? These events are unprecedented in history. Their main motive at the time was to save the eurozone... and fast! So in simple terms, the idea of the unknown of the world after a euro colapse is more painful than lending the money now to a country that will not be able to repay. That's very short term strategy to me. And from what I've seen throu out history, you always finish worst off if you adopt a short term strategy instead of seeing farther than your nose.

But who I'm I to tell? Poor little mosquito in the big game of the world.

History will tell anyway.

Do you remeber the dominos theory? It was stating that once a country adopt communism, the neighbouring countries should follow. All falling one after another like dominos. Well that's exactly what I think will happen for the euro zone. First there was Greece, now its Ireland's turn. Next should be Spain. Then which one? Portugal, Italy... who's next?

Just take your bet.