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My gut says something is looming on the horizon but what would it actually mean for the Euro to "collapse?" Money would no longer buy anything? Prices would go astronomical?" Governments would no longer pay employees, pensions, etc?

I really don't know but wonder what the day to day effect on the average citizen would be, and most of all, why. Any insights anyone?

Any bailout these countries will just go to financing the status quo—nothing will change. Which, in turn, means that they’ll fritter it away and be back for another one within the year.

Modern politicians seem incapable of solving problems because to REALLY solve these problems means that they’ll pi$$ people off and won’t get re-elected. Frankly, I expect the charade until the foolishness is wrung out of the electorte. Unfortunately, that won’t happen until the social order starts to break down.

And that especially goes for the US too.

“My gut says something is looming on the horizon but what would it actually mean for the Euro to “collapse?” Money would no longer buy anything? Prices would go astronomical?” Governments would no longer pay employees, pensions, etc?

I really don’t know but wonder what the day to day effect on the average citizen would be, and most of all, why. Any insights anyone? “

I suspect that they will have to immediately devalue the currency by some ratio. So, in effect, prices for everything will go up by some factor, maybe double or triple...that’s what they’ll see. At the same time, their wages will not budge much, and their savings will not change at all - so they’ll have a good chunk of their wealth wiped out. That’s the end-result.

The part that Britain is worried about is the transition to that new-normal. If done in a collapse, there will be some period of time where the currency may be worthless and that people will have to barter, use dollars, or use gold. For people without resources, they will get desperate.

By the way, I expect the same here, given our debt level. In our case, the key is to be prepped up, to get through those very difficult transition weeks.

Any insights anyone?

These are just guesses, but ...

Much of the welfare net would crumble (due to a rush out of the euro). While in some sense this is good, there is far too much dependency on that net for it to be peaceful. Banks will fail, and there will be some level of long-term credit crisis. The depth of that crisis will go a long way towards dictating how bad it actually gets there. If it turns into a credit collapse, where banks aren't lending to each other, and companies can't get short term credit, then look out. The economy will for the most part come to a complete stop.

The euro will collapse in value, making imports prohibitively expensive. But, at the same time, there will be a shortage of that same currency, due to the collapse in credit. This combination may very well mean that the Euro won't be widely accepted, even within Europe. Obviously, countries would have to issue new currencies, but given the widespread chaos, this will be a significant challenge.

To the average person this translates into: a loss of employment, a loss of savings (either through weakening of the Euro, or simply because the banks can't give them their money), a slashing of asset prices (probably with foreigners picking over the carcass), a lack of availability of non-essentials -- basically, real poverty (as opposed to the American style cell phone/cable/brand new vehicle, kind of poverty).

The only good news for them is that they will still be able to watch Japan crumble, and, because misery loves company, they won't feel all alone.

I really don't know but wonder what the day to day effect on the average citizen would be, and most of all, why. Any insights anyone?

Seriously, I think there will be a rush to the dollar that will ease things here. That being said, the derivatives thingy is a sword over the "too big to fail" banks - unless the Euros says the collapse is "voluntary" (cough), which would negate paying off the defaults, as they did with Greece.

My gut says something is looming on the horizon but what would it actually mean for the Euro to “collapse?” Money would no longer buy anything? Prices would go astronomical?” Governments would no longer pay employees, pensions, etc?

My guess is to look at the most selfish thing a nation could do. ie. The Euro is dead! Long live the ‘Drachma, Deutschmark, Franc,’ etc.

Another way of looking at it is all debts made under the Euro are null and void. Only new debt will be acknowledged and as for you holders of Euro debt, So sorry but stuff happens. Just ask the Shareholders and Bond Holders of a Bankrupt company a la General Motors.

"Some economists believe that at worst, the outright collapse of the euro could reduce GDP in its member-states by up to half and trigger mass unemployment."

A 50% Debt Deflation combined with Sovereign Default.

That makes for very, very hard times.

For currencies that survive, they will increase in "value" enormously.

Very hard times.