Sovereign Strangulation by "The Euro Standard"

Bernanke discussed how The Gold Standard (pegging the currency exchange rate to the price of Gold) exacerbated the Great Depression, because countries were not able to devalue their currency to inflate away debt and become more competitive in the Global Marketplace.

http://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm

The same thing is now happening with the Euro. Many countries in the Euro Zone are now being suffocated by this common currency. Ireland, Spain, Italy and Greece have been hardest hit by the popping of Housing and Banking Bubbles. They now lack the ability to devalue their currency, because the currency they use is now controlled outside of Dublin, Madrid, Rome and Athens.

Britain has also been devastated by the popping of these bubbles, but retained the British Pound as currency. Britain will now print as many Pounds as it takes to devalue the currency and inflate away their debt. In Britain, the Government has taken on so much bad debt from banks, in the form of bailouts, that they have bankrupted the country. My fear with the US is that the Government is doing the same thing and putting the US at risk of defaulting on our sovereign debt.

There are only a few potential results of this in Euro Land –
1. Ireland, Italy, Spain and Greece default on their National Debt and abandon the Euro as their currency
2. The countries that are not allowing the devaluation of the Euro will put up a lot of money to save Ireland, Italy, Spain and Greece from defaulting on their sovereign debt.
3. Devaluation of the Euro

I am now watching Currencies, Bond Prices, Precious Metals and the Stock Markets of these Countries very closely. I will have a separate post on them later today.