Ready for Credit Crunch 2? Dollar to Strengthen, Euro to Fall

The dollar is about to get strong. It is still weak at the moment and the credit crisis is starting up again in Europe which will cause the Euro to fall majorly against the Dollar. Greece and Portugal and Ireland are already in major trouble as their interest rates are increasing. I am just waiting for Spain and Italy to join them.

As the countries get closer to default the rate of interest they are getting charged goes up.

These are the interest rates that the countries now have to pay on their national debt.

Greece 12.50% (up from 10.35% in July 2010)
Ireland 9.72% (up from 5.41% in July 2010)
Portugal 7.90% (up from 5.44% in July 2010)


Soon Europe will not wish to carry on bailing these countries out, when that happens the Euro is going to lose a lot of value so have any currency but Euro. Even UK sterling is good but the dollar will grow the strongest as it has the most money in circulation and thus has the most money that will disappear from the system during defaults.

I have put all my money into Dollars now and wish for anyone holding Euro to do the same to save them from the loss.

Usually when the interest rate is low in a country that is when it is good to buy that currency. People that go for higher interest rates usually get killed in the devaluation. Look at what happened with Drachmes all those years ago because people thought they were getting good interest and when they came to change their money back to Sterling. They realised it was pretty much worthless. This will likely happen to the Euro as there are many weak countries pulling it down and the strong countries cannot carry the weak forever.

Remember how much the Euro fell during the first credit crunch? Well get ready for credit crunch 2. The big one.


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