St. James International · Further Readings


In my article published  in June 2010, I highlighted the plight of the Euro and the fragility of the Eurozone.
We now know that the weakest link is Greece, a country that has always relied on its invisible exports – tourism and shipping.  Unfortunately these invisible exports are now truly invisible because recession in Europe means that the beaches of Greece are devoid of holidaymakers and the dockyards are full of unchartered vessels.

The great Ship of State that is the Eurozone is now becalmed in the Mediterranean surrounded by other member states whose invisible exports have also become truly invisible.  It has always been the case that a common currency requires a common fiscal policy to succeed.  This basic truth has escaped the transitory politicians in European governments and the permanent civil servants in the European Commission. UNTIL NOW.  Frau Merkel has wakened up to this basic fact and has realised that she has discovered a way to realise the ambition of Herr Hitler.

Domination of Europe can be achieved through a common fiscal policy – Germany´s fiscal policy, and the benefits to Germany include the enormous savings of not having to produce armaments.  Fortunately Frau Merkel, like Herr Hitler, will be resisted by Great Britain.  We may also find that this time around the resistance from France may be much more in evidence.  It is unlikely that French farmers, lorry drivers and innkeepers will accept a fiscal burden to rescue any of their European partners.  After all, the aversion to income tax is a Gallic characteristic.

If the Euro survives as a common currency it is likely to be common only to the original 6 members of the European Economic Community.  The Greeks will have to return to their Drachma and, once the precedent has been established of a reversal in national currency, the door will be open for other lame ducks to take to the water or be pushed into it.

Opportunities exist for investors to take advantage of the currency funds managed by seasoned and experienced foreign exchange traders.  

ERIC DIXON   December 2011

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