Death of the Euro???

Almost every day you read an article or hear a story about the fall of the dollar. We believe there is a greater story occurring across the pond: the possibility of the euro collapsing. We believe for this reason we are starting to see the US dollar strengthen as money starts to flee Europe for the safety of the US.

What would cause the euro to collapse? In the current scenario, weakness from countries that have poor financials is causing great stress on the system. Specifically, you have Greece and Ireland that are, in essence, bankrupt. Italy and Spain are not far behind. During past financial crises, countries such as Italy could devalue their own currency and thus increase exports and spark a recovery. Being part of the European Union prevents individual countries from taking such isolated steps. The biggest question at this time is: will the stronger countries (Germany, France) come to the rescue of the weaker countries? Time will tell. But, just imagine if America was asked to bail out the poor fiscal practices of Mexico. Would the American people want to? Probably not. Nor do we think that the French or Germans will be excited about doling out the necessary fiscal medicine to cure their neighbors’ problems. This is a true test of this grand experiment. Stay tuned.

Sincerely,

Your THOR Team