Kicking Off the “Farewell Euro Tour”

10/20/11 Laguna Beach, California – Today’s issue of The Daily Reckoning features the first installment of the “Farewell Euro Tour” — a collection of on-the-street conversations with ordinary folks in Europe about the Greek crisis, and about what this crisis portends for the euro zone. The tour began in the Netherlands, then moved south to Switzerland and then to Italy.

Generally speaking, support for “saving Greece” was tepid at best. Although most folks expressed some vague notion that rescuing Greece was worth trying because it was probably in the public good, most folks also expressed a strong preference for their old national currencies. The Dutch, in particular, preferred their guilder. But the Germans preferred their marks and the French their francs too. Even the Italians preferred their liras.

In other words, as we pointed out a few days ago, “The EU’s bailout schemes seemed to have captured the minds of Europe (like a hostage), but very few hearts. Resignation is the dominant emotion, not resolve.” Take a look…

Watch the video here.

However bleak the prospects for the euro may be, it remains a viable currency for the moment. In fact, one euro will still buy one US dollar and 33 cents, which isn’t that much below its all-time high of $1.49. Furthermore, $1.33 is still very far above the euro’s all-time low of $0.82 — the point being that the euro crisis is not very crisis-like…yet.

But we think a genuine crisis is coming…and there will be no mistaking it when it arrives. The euro may not blow apart completely — although that outcome would not surprise us — but it will stumble noticeably…at least relative to gold.

The dollar may rally against the euro initially, but it, too, is facing a frightening future. The world’s faith-based monetary system is testing the faith of all participants. If that faith should fail, the consequences will not be pretty.

Eric Fry
for The Daily Reckoning

Eric Fry

Eric J. Fry, Agora Financial’s Editorial Director, has been a specialist in international equities for nearly two decades. He was a professional portfolio manager for more than 10 years, specializing in international investment strategies and short-selling.  Following his successes in professional money management, Mr. Fry joined the Wall Street-based publishing operations of James Grant, editor of the prestigious Grant's Interest Rate Observer. Working alongside Grant, Mr. Fry produced Grant's International and Apogee Research —  institutional research products dedicated to international investment opportunities and short selling. 

Mr. Fry subsequently joined Agora Inc., as Editorial Director. In this role, Mr. Fry  supervises the editorial and research processes of numerous investment letters and services. Mr. Fry also publishes investment insights and commentary under his own byline as Editor of The Daily Reckoning. Mr. Fry authored the first comprehensive guide to investing internationally with American Depository Receipts.  His views and investment insights have appeared in numerous publications including Time, Barron's, Wall Street Journal, International Herald Tribune, Business Week, USA Today, Los Angeles Times and Money.

View articles by Eric Fry

Related Articles:

• March 8, 2012 -- How Market Sentiment Moves With the Greek Debt Crisis
• February 17, 2012 -- Euro Is Yanked From the Slippery Slope!
• November 4, 2011 -- A Final Stop on the Farewell Euro Tour
• May 17, 2010 -- No Cure for Sovereign Default
• May 21, 2012 -- Greeks Run on Banks as Euro-Confidence Wanes

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