I thought it could be helpful to investors who might have their doubts about where the dollar will go, at least in the medium term, to take note of what ECB Vice President Vítor Constâncio said Tuesday evening in Paris in a “written” speech to the Gulbenkian Foundation.

“I do not see a major reform of the international monetary system on the horizon, as there is no real substitute for the US dollar in the medium term,” he wrote “The special drawing right (SDR) is not a promising option, and the insufficiently deep and liquid financial markets of emerging market economies will limit the role that their currencies can play in the foreseeable future. A more cooperative system of exchange-rate regimes is essential but does not depend on unachievable radical reforms.”

Remember that French President Nicolas Sarkozy has made driving a reform of the international monetary system a key theme of his actual (one-year) presidency of the Group of 20 industrialized and developing nations, which began last month in Seoul.

It now seems clear that the idea of using the International Monetary Fund’s theoretical currency, the special drawing right (SDR), as well as using some of the “emerging economies” currencies as substitutes to the dollar is more wishful thinking than anything else.

 Constâncio also remarked: “The impossibility of continuing down the same route, now that all economic agents are deleveraging, generates enormous difficulties to improve growth prospects for all advanced economies. They may face the threat of a protracted period of low growth.”

He said that only two things could prevent this: the resolution of the global imbalances conundrum with increased demand by emerging countries or a wave of technological innovations which create new needs and new markets.

“The possibility of a long period of mediocre economic growth raises the prospect of momentous social problems that will test our institutions. In the present post-modern culture where ‘higher values’ tend to be depreciated, legitimacy comes primarily from performance in terms of offering permanent hope of higher living standards,” he said.

“Our democracies depend as much on economic growth as on the level of prosperity already attained.”

In the meantime, my suspicions that the first half of 2011 may be as troubling in the eurozone as it has been in 2010 have certainly not diminished, on the contrary.

International Financing Review (IFR) newswires cited Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), as saying “for the very first time” that “there is a possibility that the eurozone could split into two parts.”

He discounted any possibility that Germany will leave the euro arrangement. He also added “The eurozone has to provide a comprehensive solution to this problem, the ‘piecemeal’ approach, one country after another, is not a good one.”

Strauss-Kahn is not alone when he speaks about a possible split of the eurozone.

Former (from 1974 to 1982) German Chancellor Helmut Schmidt (who also served as German finance minister, economics minister, and defense minister) said in a recent interview when talking about today’s complex problems of the euro (that in fact started a little bit less than 20 years ago when Europe created its monetary union without establishing political union, and that is still without the perspective of a political union) that the mistake was made around the time of Maastricht, in 1991-92.

“At this time we were 12 member countries in Europe. They not only invited everybody to become a member of European Union but they also invented the euro and invited everybody to become a member of the euro area. And this was done without changing the rules or clarifying the rules beforehand. This was when the great mistakes were made. What we are suffering now is the consequence of that failure,” he said.

“Over the next 20 years, I think it is rather likely, at least 51 percent likely, that a hard core of the European Union will emerge. And it would comprise the French, the Germans, the Dutch — I’m not so sure about the Italians. I’m rather sure that the British would not be part of it … It would not be a hard core in written paragraphs of paper but it would be a hard core de facto and not de jure.”

In this context, this year we’ve already noted comments from the two most important politicians within the eurozone that have really served to call into question the idea that their euro membership is “irrevocable.”

The Guardian (U.K. newspaper) in May reported that French President Nicolas Sarkozy had threatened to abandon the euro at a crisis meeting earlier that same month unless German Chancellor Angela Merkel dropped her hostility to the EU's 750 billion euro (US$1 trillion) safety net

This event might have been easy enough to forget if it had not been for a second incident that occurred at a second summit. where the German chancellor became “embroiled in a row” over the proposed amendments to the Lisbon Treaty with the Greek prime minister, George Papandreou, during a dinner at the EU summit in late October.

Witnesses said that Papandreou accused the German Chancellor of tabling proposals that were “undemocratic.”

In response she reportedly stated: “If this is the sort of club the euro is becoming, perhaps Germany should leave.”

Unsurprisingly, Merkel's spokesman Steffen Seibert resolutely denied the story.

So, I don’t think it’s unrealistic to say the euro can’t survive as it was and still is “fabricated” today. Of course, I could be wrong.

In Europe, we now are waiting for the next crisis to emerge. In the U.S., we now see interest rates moving up and last but not least China soon will further raise its key interest rates and certainly well into 2011.

Because of all that and a lot of other things, yes, I expect, a much stronger (10 percent gain) dollar (dollar index over 90 where it’s actually around 80) within six months, which should imply a downward correction of most anything else.

I have no doubts that the first half of 2011 could become very troubling indeed for those that are positioned on the opposite side of the U.S. dollar. And here I don’t take into account the impacts of lurking geopolitical threats, if these should “evolve,” but hopefully not.