Since the less dramatic European elections, which saw a slight movement towards the right-wing parties but did not change anything structurally, the euro has been in free fall. One can observe how the European Central Bank is buying up government bonds of euro states through massive interventions in order to keep interest rates low.

This of course further weakens the euro and is now putting pressure on the ECB to pursue a goal that is not economically possible: to have a stable currency and finance government deficits at the same time. The eurozone would need massive productivity growth to get out of this self-constructed trap of debt and over-regulation. This example shows how the United States is outpacing the Europeans.

Consider this: a country like France, a heavyweight in the eurozone, is currently running an annual deficit of over 5% in a relatively stable economic phase. What will happen if the eurozone slips into a deep recession? A monetary policy catastrophe is in the offing.