A very cogent look at the options analysis for 2012 sparked by the Eurozon crisis is to be found here written by Prabhat Sakya. It outlines two options:
Things muddle on, the crisis always managing to avoid complete meltdown, with continued deleveraging and plunging shares as a rebalancing occurs.
Things meltdown, with the Euro as we know it today disappearing, to be replaced by something different, even if it is still a Euro, it won’t be this Euro. This will spread and plunge most economies into serious drops.
The third option is that they fix it, but as Prabhat points out, if that were the case, surely they would have pulled the bunny out of the hat by now. And with the problem spreading to larger countries at the core, it is unlikely to get any easier moving forward.
Euro is heading down to the dollar, and that should help exports and tourism, but it is going to cause further panic amongst the populations tied into that currency, so it is really a mixed bag (as all things always are). As this chart shows, if this were to continue for overlong, there would be serious loss of wealth and there would be some serious outcry from the populations affected. I would like to see what is happening with assets being moved from outwith the zone, and what these people feel is a safe haven.
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