Could the euro be saved tonight?

Is this the full-blown, save-the-single-currency moment we have been waiting for?

Albert Einstein's definition of insanity is doing the same thing over and over again and expecting different results. In that case, stock markets are insane.

Because every time the European Central Bank (also insane) serves up another half-baked rescue package, markets greet it like a gourmet meal and crack open the champagne.

It has happened over and over again, with exactly the same result. The bailout tastes nourishing at the time, but quickly leads to yet more bellyache.

Have markets learned anything? Judging by the joyous reaction to ECB President Mario Draghi's pledge last Thursday to do "whatever it takes" to save the euro, they're still as crazy as a soup sandwich.

Euro saved!

Markets greeted Draghi's boast "believe me, it will be enough" as a cast-iron pledge that the ECB was finally going to unleash its big bazooka and blow the eurozone crisis (and German resistance) away.

By Friday, markets were acting as if he had ordered full-blown quantitative easing, interest rate cuts, long-term loans and unlimited purchases of Spanish and Italian bonds on the secondary market, all on German Chancellor Angela Merkel's tab.

As I said, insane. Because Draghi didn't promise any of these things.

Nobody asked the Germans

And how could he? By all reports, he hasn't agreed any of these things. Or rather, he hasn't agreed them with the Germans.

What sceptics read as yet another a bland catch-all assurance, markets saw as something different. In their crazy way, they reacted as if he had promised full-on fiscal union and free eurobonds for all.

Draghi's remarks were clearly designed to push the Germans in that direction, but that's a very different thing to persuading them.

Markets are even dappy enough to get excited by Chancellor Merkel's plea for all EU institutions to "fulfill their duties", whatever that means.

Are they desperate for good news, or plain loopy?

Black September

All eyes are now on the ECB policy makers meeting tonight. Could this be the full-blown, save-the-single-currency moment we have been waiting for?

If it is, the ASX could rocket. If it isn't, and Draghi is exposed to be full of bluff and bluster, the disappointment will be crushing. It could even force the single currency into a death spiral.

Some claim a funeral could be as early as September.

Don't get pally with that rally

Draghi has talked the talk, now he has to walk the walk. Which won't be easy, with the Germans trying to trip him up.

Judging by past events, he will give markets something to chew on, maybe a bit more bond buying, or cheap cash for banks, and trigger the world's shortest ever relief rally, followed by the mother of all disappointment dips.

Wise Fools will avoid getting sucked into that rally, and buying shares in their favourite companies at inflated prices.

You should only take any surge at face value if Chancellor Merkel and the Bundesbank happily agree to pay for everything, cheered on by grateful German voters.

Now that would be insane.

Tonight, tonight

Tonight's meeting is being billed as the last chance to save the euro. There will no doubt be other "last chances" over the next few months. Personally, I think the single currency is doomed. Only full-blown fiscal union can save it, and the Germans aren't daft enough to put that on their slate.

Whatever happens, my investment strategy will remain the same. Cash is poor. Bonds are overpriced. Gold is too speculative. Solid, cash-rich, blue-chips paying steady dividends are still the way to go.

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