Everyone says the euro is falling apart…that Europe itself can’t survive as a political unit.

Europe seems to lack the things that make for a strong political system. It has no common language, for example (there are more than 200 different languages in Europe). And it has no common culture either…or even a common religion…or a common race.

The Greeks are rioting in the streets. They’re upset because their government is trying to cut back on ‘services.’ Actually, it’s not the services that anyone would miss. It’s the money. The rioters are mostly people who live, in one way or another, at the expense of others…thanks to the government. They work for the government…or get handouts from it.

The poor Greek government is stuck. As in almost all other democracies, politicians bought votes by giving out jobs and money. This leads to a bidding war…in which political parties vie for favor with the voters by offering more and more “services.” One gives away bread. The other prefers circuses. Whether it is food stamps or foreign wars…the price is high. And eventually, the bids go beyond the capacity of the economy to pay them.

Greece is at that point. So are half the US states. They’re out of money. It’s “doomsday” in Illinois, says one headline. It’s a “state of emergency,” in New Jersey.

Lenders don’t want to give them any more money. Wisely, they worry they won’t get paid back. So, lenders demand higher interest rates to cover their increased risks…which puts the Greek budget even further in the red.

The Greeks think the Germans should come to their aid. Why? Because, in a way, it was the Germans who got them into this mess. Nobody would have lent so much money to the Greeks had it not been for the strong teuton-backed euro…and the implicit promise that if the Greeks got into trouble…which everyone knew they would…the rest of Europe would come to their aid.

Well, what do you know? The Greeks are in trouble. And the Germans don’t want to come to their aid. The Germans saved. They ran their own economy better. They are one of the few countries in Europe that is living, almost, within the terms of the treaty they all signed, in which they agreed to keep deficits below 3% of GDP. The German deficit is just a little more than 3%. The Greeks don’t even come close – with a deficit of 12.7%.

In America, the situation is a little different. The economy and the population are more homogenous. And much more of the money is in the hands of the central government. The Germans don’t see why their savings should be used to bail out the Greeks. They’ve got their economy. The Greeks have theirs. In the US, while there are regional differences, there is basically one economy…with one government that messes it up for everyone.

Is the US better off? Does central planning on a larger scale make the US dollar or the US economy stronger?

In fact, the looseness of the European experiment is a strength, not a weakness. What damages a paper currency is not an act of omission; it’s an act of commission. Neglecting to provide more cash and credit is not what kills paper money; on the contrary, it’s the willingness to provide unlimited amounts of it. So far, the Americans are. The Europeans – or at least the Germans – are not.

So, we’ll bet on the euro over the long term…both the euro and the dollar are “elastic” currencies. They both get stretched out of shape. But there are more people pulling at the dollar than the euro.

In the short run, anything could happen. There are probably more reasons for the dollar to go up than for it to go down. But in the long run, our money is on the euro.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.