European Union May Be in Final Stages

The European stock markets sank today while the US market was closed for holiday.  Why is it tanking?  Because their grand social experiment of a whole bunch of distant cousins sharing the same currency and the same interest rates is coming to an end...and it won't end with hand shakes and pats on the back.

On the Continent, August is usually reserved for long vacations in the sun. Instead, European leaders spent the month working on increasingly desperate attempts to save the euro in its current form. There's only one prospect more frightening than what would happen if they fail: what would happen if they succeed.

This is not hyperbole. The euro is an idea built on economic and political dishonesty, at the heart of which lies a flaw that the currency's architects never dared to address: Given that the euro zone's economies are so different, how could a single interest rate possibly apply to all of them? And how could these countries, having surrendered monetary policy, continue to control national public spending and therefore the size of their deficits and debts?

 Europe's politicians nevertheless thought they could have it both ways: a single currency among divergent economies, each with fiscal autonomy, allowing them all to borrow and spend to their hearts' content. No surprise then that the euro has turned into a bankruptcy machine. Once the markets had finished with Greece, Ireland and Portugal, they were bound to move on to Spain, Italy and—soon—France. The proximate causes for each of these crises may be different (excessive sovereign debt, over-leveraged banking sectors, property-market bubbles) but the root is exactly the same: the euro.

See it here; http://online.wsj.com/article/SB10001424053111904199404576538462312243874.html?mod=WSJ_markets_article_liveupdate

People ask me why this whole Euro thing won't last.  Think about it this way;  Would you share a checkbook and credit card with 12 of your first cousins?  What about if one of your cousins had a nasty habit of spending way more money than he should...but he seemed to not care because he knew you were responsible enough to pay for him.  How long would anyone stay in a system like that?  Of course the answer is that they will stay in that union until the money has to be paid back....and then the responsible party wants to be done.