Monday, March 08, 2010
Jim Rogers: Greece bankruptcy good for Euro
Jim Rogers tells Bloomberg TV that Greece should go bankrupt, and that this would be good for the euro and for Europe in the longer term.
As Jim points out, a Greek bankruptcy would show everyone that the euro is a serious and sound currency based on the strength of its financial commitments. Of course, he does not expect this level of discipline to prevail.
He also has some sharp words for those in the political sphere who have tried (as always) to blame speculators for "attacking" the currency and Greece's debt. Some much needed common sense and basic education on the nature of markets and economic fundamentals here (that you might want to share with others).
Check out the full interview and stop in tomorrow for more on the state of Greek and European finances. We've got a lot to talk about on this subject this week, so stay tuned.
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March 04, 2010 - Press Dispensary - The markets are behaving as if a European bailout deal for Greece could come as early as tomorrow but such a deal could be extremely damaging for the Euro, warns controversial trader and investment coach Vince Stanzione.
“People are trading on the notion that tomorrow’s meeting between Germany’s Angela Merkel and Greece's Prime Minister George Papandreou will lead to a deal,” says Stanzione, “but I don’t see it. To bail Greece out now will be very damaging for the Euro long-term and should not happen. My advice to Mrs Merkel is that the Eurozone should kick Greece out.”
There is a lot of evidence that Merkel in fact may be of the same mind. So far, she has refused to make any commitment to a bailout and knows that her electorate is very much against a deal, with a poll on Monday in the online version of Germany's mass-circulation BILD showing an 80% opposition<1>.
“The Eurozone needs to send the right signals,” continues Stanzione, “and it is not right to tell the rest of the PIIGS – Portugal, Italy, Ireland and Spain – that rescues are there for the taking. What would the markets make of a currency that cannot say ‘No’?
“I urge the Eurozone not to provide any financial assistance to Greece and not to become a US style bailout nation, even if it means that Greece withdraws from the Eurozone.”
“It will weaken the Euro short term, certainly, but then the current support for the Euro is only short-term. The Euro may drop to $/Euro 1.20 on a Greek departure but it’ll be a very strong signal that reckless fiscal management will not be tolerated and will gain the Euro far more long-term respect and improve its chances of survival.”
Stanzione’s stance is not just pundit talk. It is also the basis for his own investment strategy.
“If Greece is ejected, I shall start buying Euros in strength. I’ll let that initial sell-off pass but then I’ll be on a Euro shopping spree. That, I believe, is where the smart money should go. If, on the other hand, France and Germany decide this weekend to save Greece, I shall only sell.”
It’s a strategy that runs counter to common thinking, not least that of George Soros<2>, former partner of Jim Rogers with whom Stanzione will be sharing a speaking platform later this month.
“In theory,” says Stanzione, “rescuing Greece would be an act of confidence which strengthens the Euro: that’s how the market’s treating it at the moment. But I believe that would only be short-term: a quick buy and then a long fall. And I’d want to be selling at the top of that very long downhill.”
Obviously, the success of such a strategy is in the detail – and the timing – and this is what has seen Stanzione not only ride previous recessions but make his millions from them. It is also what he has in common with financier Jim Rogers (who famously founded the Quantum Fund with George Soros in 1970 and then presided over a decade of spectacular gains) and investment adviser and author Dr “Gloom” Marc Faber, who himself predicted a short term rise but long term fall for the Euro on Bloomberg this week<3>. Stanzione, Rogers and Faber will be co-presenting the Global Trading Day seminar on March 19 in central London for investors who are looking for the inside track on trading successfully through a downturn.
Stanzione summarises the day: “Canny investors can make gains from any kind of market, with the right approach. The Global Trading Day seminar is for investors who are sensibly planning for difficult times ahead and want to know what that approach should be from those who’ve already made it work.”
For more information about the Global Trading Day seminar, visit http://www.traders2010.com
Greece and Spain won't pay back. This was a calculated Risk, and a Lesson for the Banking System. The only thing Germans can do is:
REPOSSESS 170 Leopard 2AEX Battle Tanks from Greece, and 190 Leopard 2A6E Battle Tanks from Spain.
U.S.A must REPOSSESS 170 F-16 Jet Fighters from Greece, … the rest is gone with the wind …forever …
Greece must stop paying lucrative pensions with borrowed money, reform the free health care system, and cut down, 4 times the military budged.
Greece’s problem is too much debt. Greece has a budget deficit of 12.7% of GDP – meaning that the country is spending 12.7% more than the value of one year’s economic output.
Greece is no different to a serial credit card borrower who can’t pay back his loans. But just like a serial credit card borrower, as long as Greece keeps relying on borrowed money to fund itself, the problem won’t go away. It will just get worse.
http://www.defenseindustrydaily.com/Greece-in-Default-on-U-214-Submarine-Order-05801/
Don't worry; the ECB, the Fed or both will print the money.
And all of us will share the pain, with our hard-earned money.
Bad is never good until worse happens.
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