Greenspan's Dog

The Euro Has Significant Problems - And They're Likely to Worsen

Mister Straka, in your article you mention some facts about the Euro that, according to your opinion, are weakening the Euro.

I will use thesame facts as you do and show why these are in fact highly beneficial for the Euro.

First, you mention that no single gouverment is in control over the Eurozone's central bank, the ECB. You only have to look at the current US & UK situation to arrive to the conclusion that they messed up pretty good, didn't they!! The fact that 15 souvereign nations are in control over the ECB, is in fact the best possible guarantee that never incompetent lunatics will be in charge over the Euro's ECB.

Second, you mention that there are no treasuries backing the Euro. The Euro is backed by all 15 souvereign nations treasuries! Keep in mind what happend just a week ago, the European leaders ordered the ECB to go nuclear and launch a financial counterattack against the Anglo-Saxon credit default monster, spreading panic around the world. The panic immediatly dampened, the monster is not dead yet though, but at least it seems contained for the moment. This by the way, has massively increased the ECB's respect & prestige worldwide.

Third, you mention the inflation risk by the ECB's flooding of credit into the market. Trough! However, eventually the money will flow back to the ECB and since Trichet's only mandate is to maintain price stability, he will destroy Euro's just as easily as he created them. Over time, this means that there is no reason for fears of high inflation.

Regards