You’re sick of reading headlines about the Euro, and you’re probably sick of reading what I have to say about Euro as well.
The same exact stories run nearly every week. Something along the lines of: "Greece to Come to Agreement With Germany about Bailout Terms."
And we’ll see these headlines and stories for weeks and months to come.
That is, we’ll see these stories UNTIL a catalyst causes extremely massive changes to arise quickly.
The folks in the Eurozone can extend, pretend and so forth forever in the world they think they live in.
The world they think they live in is one where monetary and fiscal policy don’t have real world consequences. They think that their policies operate within the strict confines of an economist’s model. They think the lines of Keynes’ charts are more important and indicative than bread lines. They think that a formula in a textbook will ultimately trump social unease and unrest.
They think they’ve conquered the laws of supply and demand.
But they forget that economies run not on theories, but on energy, work, goods, commodities, trade and innovation.
Scarcity exists – no matter how much they want to deny it.
For the simple reason that the world’s readily available supply of oil is not accelerating nearly as fast as the world’s supply of Euros.
There will be a breaking point for creditors who no longer are willing to deal with the likelihood that the Euros they receive repayment will simply not buy anywhere near the same amount of goods and services.
Or, there will be a breaking point for the Euro-zone to be completely unable to afford both oil and its massive debt repayments.
Why oil though?
Oil is just the biggest and most important example of a good that will continue to rise in price as the European Central Bank treats the Euro like it’s tissue paper.
It’s not a question of if at this point, but when.