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Euro era may end

Business Materials 29 July 2011 16:15 (UTC +04:00)

Azerbaijan, Baku, July 29 / Trend A.Badalova /

The euro may end as the single currency and Germany may contribute to this process starting, World Marketing Company analyst Gene Aldridge said.

"Germany can extract more profit from the European default, if it decides to refuse from the euro and begin to pay the debts in another currency. This could be the beginning of the end for the euro, and it is possible," Aldridge wrote Trend in an e-mail.

Concerns about the deepening crisis in the eurozone have led to increasing beliefs among experts about the possible disintegration of the eurozone due to the Greek default.

The European currency has seen a huge decline against the dollar on the backdrop of concerns about the financial problems in the eurozone.

The increased apprehension is caused by German Finance Minister Wolfgang Schauble's statement about the unacceptability of the redemption of government bonds on the secondary market by the eurozone reserve fund.

Analysts predict a further decline of the euro rate, particularly against the dollar, which in their view, despite current fears of a U.S. default , could regain its position.

Aldridge thinks Ireland, Portugal and Italy are also facing a default risk.

Regarding the U.S., he said the whole world will suffer from a default in this country.

He said hyperinflation, which would help the country get rid of its debt, could be a way out of this situation.

"A hyperinflation can destroy the debt, because the U.S. can pay them over a low dollar rate. This can be achieved at the expense of countries, which are constantly trading in national currencies," Aldridge said.

Aldridge said a high inflation in the U.S. maybe caused by the continuation of the quantitative easing policy (QE3), which will reduce the value of the dollar to 50 cents or even lower, and the
country's internal debt may be shortened, for example, from 72 percent to 36 percent.

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