Down Goes Europe!

Europe is and has been in political turmoil for years following their Euro Zone experiment where they combined currency though they still had different ways and means to make money.  Some States rely on tourism, others production; whereas these different systems worked in times of surplus, now that money is stagnant problems have risen.  Led by housing bubbles and unemployment in a socialist system, the Euro Zone appears to be collapsing.

When I think of Europe my first thought is that the US Government is in a similar situation, and the only difference is that Europe is managing multiple societies, whereas America is managing different cultures.  This is a big difference, and it is ill thought that the States of Europe could find harmony in monetary and fiscal policy, but EUrope does have some great advantages to its Western Power counterpart.  First, it is connected by land to the greatest oil producers in the world:  the Mid East and Russia.  This is a great advantage.  Second, it's popluation does not have the reliance on oil that America does due to its infrastructure.  Also it has not the complacency of having the reserve currency; America has been spoiled with such.

Yet their situation is dire:  the banks are undercapitalized, unemployment is high, and they have many promises to pay that are unsustainable; but isn't this just like America?  This conjures up the Sun Tzu quote, "When you are weak appear strong, and when strong appear weak."  Is it that Europe is taking the heat off of America, because when America collapses under its debt burden it will be the end of the Fiat Ponzi, and the Euro Fiasco can prolong the inevitable?  As Europe and America are joined at the hip, I do believe that the reason Europe's problems have been stretched out is to keep the eye off of America.

This is why the problem, reaction, solution has gone into overdrive, with Germany bluffing and bluffing again that they will not pay the next bailout, though they always do.  Same with Greece accepting the bailouts.  There will reach a point of no return; in fact we are past that point, but the result will be just as bad for America as for Europe, and the collapses will be simultanious, as FX swaps will have little meaning when one country collapses.  Will the DXY go up as the Euro goes down?  Will Bernanke cut the value of the dollar by fractionally reserving it to stem the tide, only to increase the price of all assets?  Are there any real solutions?  Considering the debt burden of all Nation-States, and considering they are using fiat to denominate said debt, there is no real solution.  So down goes EUrope, and with it, the Keynesian Experiment.