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Reading the diary on the wreck list at the moment "The Euro Crisis by the numbers" it didn't really deal with the consequences of such a collapse.

Europe happens to be the largest export market for the US, it accounts for around 1/3 of the worlds total GDP. European countries not in the Euro-zone depend heavily on trade with member countries. The European Union is also China's second largest export market after the US. The globalization of today's economy will leave few at the borders of the fallout.

I have often listened to cheering both in the US and the UK at the thought of the collapse of the European model, the consequences of such a catastrophe are hardly mentioned.

In both the US and Europe dangerous games are being played that benefit but a few, the near collapse of the Euro is all part of the global financial crisis it is merely phase two. The willingness to expect continual growth to finance explosive public and personal debt was a poorly concealed myth designed to funnel unheard of wealth into the hands of a very few. The solution proposed was austerity which has already exacerbated an already over stressed situation.

The collapse of the Euro will wipe out all the gains since WWII and will replicate many conditions present in the Great depression, political and social instability will become a fact of life.

The US economy made deliberately fragile by an obstructionist party is not in good condition to absorb such a financial implosion. The economies of China and India still depend on the industrialized countries their internal markets cannot sustain the growth upon which they have come to depend.

In my opinion it is too late for a controlled exit from the Euro any such disintegration will be like an avalanche, the thought of a core of strong Euro countries coming together is a pipe dream the fallout on the fringes will prevent that being successful.

One option is a federal Europe and that might work, however, since they cannot agree on which way is up, that is about as easy as herding cats and could not be completed in the time frame required.

Its been a particularly depressing week with the climate talks in Durban promising total failure. China and India want Kyoto to continue unchanged since this called on them to do nothing at all, the US has already abandoned the process, Canada probably the per capita worst offender wants who knows what, as long it doesn't effect them. Europe once at the heart of the process has other problems on its mind.

Such lack of clarity and unwillingness to act on both sides of the pond has had the effect on my partner and I on how we are best going to come out of this potential meltdown, and what can we do for the future. One thing we agree on is that the current incarnation of globalized capitalism cant last much longer, what we cannot predict is what is on the other side of such a systematic failure.

I wish I could be optimistic, but all I see are the same memes being repeated, if austerity doesn't work try some more until you are sure it is broken.

Perhaps some good will come of this in the long term but the immediate future does not look good.

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