But a more immediate problem is the increasing likelihood that the ECB will lose control over financial asset prices, particularly those of government bonds.

In the short-term, it seems likely the euro will rise against the dollar as currency and financial distortions, principally in the fx swap market, are unwound. However, the eurozone faces a developing financial crisis comprised of the following elements: a collapse in economic activity, escalating payment failures, a drastic contraction of bank credit and a collapse in bond prices, as well as the medium used to buy them (the euro).

Eventually, Germany will go it alone by introducing a gold-backed mark, which will only happen after the European Project is finally abandoned.