Quote Originally Posted by Papewaio View Post
Germany post WW I, South America twenty years ago, Zimbabwee now.

If you don't have something to back up the printed money i.e. loans or taxpayer money you will have to devalue the EU... and the confidence hit in the markets tends to be far worse if they don't think you can repay it. No such thing as a free lunch, and printing off more money for some without taking it out in other places will lead to devaluing the EU, rapidly.

Investors will flee in general, contrarians will find bargins here and there but even they may be scared off by the potential economic landslide and wait until they think it bottoms out.

End of the day the EU as a whole has to pull its finger out and be more productive be it smarter, longer hours or over a longer life time with more of the people contributing to allow for welfare states (people and corporate welfare). Something has to give, not all can take.
Where is the hyperinflation in the US? It's not a short term risk there or in Europe.

And I totally agree with everything you say about reform and restructuring but that can only be achieved once a degree of stability can be found.

There is genuinely no reason why there should be a risk of Italy defaulting. It has a positive primary surplus, plenty of assets it can sell to raise funds like it did in the early 90s and it's debt load is not even that historically high. It's only the absurd handcuffs placed on the ECB that is causing this market turbulence and vicious circle of higher financing costs.

If the ECB committed to stand behind euro zone debt these problems would immediately cease and we could get on with paying down debt, growing the economies and restructuring the euro zone so this never happens again.

And by the way I actually think devaluing the Euro would be a good thing for Europe - exporters would benefit greatly and increased tax receipts would help the fiscal position.