Is the Euro Doomed?

So times are looking pretty bleak for Europe and the whole world in general.  Judging by the markets last week you can see how quickly the markets have reacted to a series of developments during the last week that has affected the markets extremely negatively.

Looking at the last week’s chart I agree it looks very bad but need I remind you how quickly markets can change. I don’t think it will but all that is needed is some good news for a change as opposed to the catalogue of negative news that has been released recently. The newest news to come out is that the International Monetary Fund is preparing to give Italy a €600 billion ‘loan’. This would give super Mario, I mean, Mario Monti some breathing space in order to sort out some policy so he doesn’t need to focus so much about the debt right now. However in my view if Italy gets this it will not take long before Spain comes pleading to ‘get a piece of that action’.

 I think the problem is, where will the IMF get this money? Unfortunately I think I know the answer, which isn’t pretty! Lets just print more! If America can then why cant we Europeans? The sad truth is that this is just a short term solution. With printing comes inflation which is ok to an extent but once that threshold of 10-20% is crossed things tend to go wrong pretty quickly. Need I remind you of the scenes during the war where Germans would print money three times a day in order to pay people. Obviously this is a worst case scenario, but I could see us Europeans heading towards inflation. The question is just how high will it be? I hope this is just my pessimist feeling and the reality is brighter than this.