Regarding to the EURO crises, the following is the list of possibilities:

1. ECB will be acted as a “circuit breaker” by printing extra 2 or 3 Trillions of Euro to do open market purchase which may destroy the Euro. And it will only delay the crises.

2. The crises is getting worse and some of the PIIGS countries went default and Italy will be in troubles.

3. All PIIGS countries (Include France) adopt a very strict austerity direction but it will destroy the consumption/demand in the world. The euro will also in a great recession.

4. Eveyone do nothing and the PIIGS can issue the debt at a low yield and continue their life by raising bond.

For 1, 2, 3, 4 above, personally, I think the possibilities are 60%, 30% ,10% and 0.0001%, respectively.

Also, the outcome may be a combination of the three above possibilities. But it doesn’t matter, either 1, 2, 3 will lead the Euro currency depreciation. The only possibility for Euro to appreciate is the US debt crises suddenly get extremely worse (As we found that USD will get much stronger if US is in normal level crisies). But it seems not likely to happen before the president election in Nov 2012.

I think it is good to short EURO, what do you think?