European Vacation

As most of our subscribers know we have been predicting further turmoil in Europe and an outright collapse of the euro currency since our publication began.

After each bailout we receive email from some people saying that the problems are now over in Europe.  After each announcement of austerity measures we hear the same thing.

But, in our estimation all of these problems can only be resolved once the euro currency is relegated to the dustbin of history, barely even lasting more than a decade.

The problems are too intractable.  The debt and deficits too large.  The demographics too poor.

In fact, the concept of having one fiat currency amongst dozens of socialist countries in Europe is so utterly unworkable that we still are surprised they even tried it in the first place.

As we watched the riots ensue across Europe this week we found ourselves humming the tune from National Lampoon's European Vacation.

And so, we thought we'd leave it up to Clark Griswald and family to help make light of the entire situation.  The following video is the result:

Comments

[Tom]

You have a respected website and quite interesting newsletter. Being a TDV subscriber, I read every article you post but when I read the material about the demise of the Euro and the collapse of the European Union it appears that you are copying the Anglo-Saxon media machine that keeps harping on the same issue.

It would be nice to see some originality in thought and material especially about Europe.

PS: Euroland debt requirements going into 2011 and 2012 = $3Tril
USA debt requirements for same period = $4.5 Tril

Best regards

[Jeff Berwick]

Hi Tom,

Thanks for your input! You are absolutely right... to date we haven't really "made our case", in the letter, for why the euro will collapse. This is something which we may do in the next issue. However, it should be noted, all we are stating is that this 11 year old fiat-currency experiment, called the euro, will not survive. This, as you noted, isn't even big news as many people have stated the same.

We aren't stating that Europe, as a whole, will disappear... it's not like Italians will cease to exist and no one will eat amazing Italian food anymore after the dust settles. However, the euro has a 0% chance of surviving in its current form, in my opinion... and I will try to show evidence of this more-so in future issues. But, to be brief, the main reasons it cannot exist in its current form are a) no fiat currency ever lasts - politicians always destroy it and b) tying 20 odd very socialist countries together into a currency union is 20 times worse than just one socialist nation having one currency.

There are plenty of other problems as well. Demographics and debt being some of them.

We are fairly bullish on Switzerland, mainly thanks to the fact its not in the Euro and on Germany because the German people, in general, are amazing productive. Club Med, however, is headed back to the banana republic it almost always has been.

Cheers!

Jeff Berwick

ps. please join our subscriber's only Facebook group if you'd like to talk in more detail. It is located here: http://www.facebook.com/home.php?sk=group_165061220180155

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