If you’ve been following the European debt saga over the last six years or so, you’ve seen that the continent has struggled to find a way to solve the sovereign debt problem and the associated anemic economic growth. For years, the European Central Bank has targeted inflation as the number one enemy to fight and kept interest rates fairly high in the face of this threat for probably too long. As the consequences of Russian sanctions take effect and unemployment remains high with growth contracting or growing at very slow rates, it seems the ECB may have gotten the QE religion. ECB President Mario Draghi said last week at a meeting of central bankers in Jackson Hole, Wyoming, that the ECB will do whatever it takes to halt the fall in inflation expectations. That is, they will print money like a failed banana republic, just like the U.S. has done. They will make Argentina proud.

Whether or not this will work is a moot point. Most likely, over the long term, certain large countries in Europe will have to default as their spending and debt are unsustainable. France comes to mind. The ECB has to keep rates very low in order to prevent an interest rate spike that will in turn cause all of the European sovereign budgets to be eaten up by debt service costs. The only real solution is to stop spending like a drunken sailor, restructure the debt, and make needed structural reforms to the labor markets, etc. However, this won’t happen. Europe will continue to muddle through until the proverbial brown stuff hits the fan.

That being said, the question is–what is an investor to do? Where should you keep your assets? Is Europe a safe place to keep your money? In the short to medium term, the answer is probably yes. However, investors should be aware that interest rates in Europe most likely will be kept as low as possible for as long as possible to help governments kick the restructuring can down the road for their grandchildren to deal with. Nice, isn’t it? I believe the geopolitical effects of a financially weak West and the resulting military weakness and changing balance of power are only starting to be felt. But, that’s an issue for another column. Rates will stay low on the continent and that means a weakening currency and a very low return or negative real return on your money invested in Euros.

Where should one invest for yield? Look for currencies where the government is going to have to raise rates and keep them high in the out years to attract capital to overcome perceived risk in their economies. Russia seems like one of those places right now. I wouldn’t put my eggs all in that basket but I would probably take a bite. Russia has her own problems but with $500 trillion in foreign currency reserves and no debt to speak of, the risk/reward ratio seems favorable in the medium term. Emerging markets are going to continue to emerge as the West fails to deal with its overwhelming sovereign debt and failed monetary and fiscal policy decisions. The one place where there could be a bright spot in the not too distant future is the United States where growth is recovering in spite of an incompetent administration. The American economy is just too deep and wide for any one president to destroy it, no matter how hard he tries. The tipping points will be the congressional elections in November and the presidential election two years later. If a leader emerges that can right the fiscal ship in America, then you could see a spike in rates as the economy recovers and a reemergence of the dollar. But, that is a big if. The U.S. could reelect another orator with no experience and with that result, you could kiss the U.S. goodbye. At that point, all bets are off in the currency world. Stay tuned, for updates down the road on the currency wars.

L. Todd Wood is a former emerging market debt trader with 18 years of Wall Street and international experience. He is also an author of historical fiction thriller novels. His first of several books, Currency, deals with the consequences of overwhelming sovereign debt. He is a contributor to many media outlets and is a foreign correspondent for Newsmax TV. LToddWood.com