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Greece: It’s Time to Go
Greece: It's Time to Go
Justin Burkhardt | FXFocus.com
The lost decade. You never realize you're lost until hours into a trip when you find out you have no clue where you are. In Greece's case, that took years. The good times were rolling and the markets were booming.
Then came the burst of the bubble. What looked like endless prosperity turned quickly into a nightmarish hell of austerity, tax increases, and rampant-unemployment. With the moral hazard already breached by Lehman, the EU tried to prop the country up with bailout after bailout. Restrictions and targets were imposed then promptly ignored.
Investors soon realized the free market has no place when politics run amok. The bond vigilantes came out in force to make Greek debt unsustainable without a constant ECB backstop.
Now, after years of trying, the end of a Greek era should be close at hand. The constant bailouts, the barrage of opposition, the missed targets; failure has thwarted the country’s every effort to pull themselves out of the hole they are so deeply in.
Today German Chancellor Angela Merkel met with Greek Prime minister Antonis Samaras to discuss the Greek crisis. It is obvious that the harsh austerity measures are not yielding the results that Merkel believed they would, but her visit to Athens confirms one thing; that regardless of the countries inadequacies, she does see a Greek future in the EU.
Merkel made sure to add tension to her “relief” statement by stressing that Greece still needs to push through key cost-cutting reforms in order to be compliant with previous German terms.
From the outside, this looks like the Greek story has entered syndication. Greece still can’t get their act together; Germany comes in slaps them on the hand like a child and offers a threat to make them think about what they did. Does anything REALLY change though? No…
Greece is already requesting a two-year extension on their fiscal targets. Is this evidence that the country is likely to continue within the same cyclical trend they have been in for the last decade?
If we were following “Free market” principals, which we are not, it would dictate that Greece is not viable and that the EU should cut their losses quickly and begin focusing on the other looming threats within the EU.
Much of Southern Europe is in a deep recession, and Greece is an unnecessary distraction.
FOREX Insights
The market has already started to react to the news flowing out of Europe. The EUR.USD is 0.70 percent off of the days high and short-term the outlook is that we will see a continued decline.
The pair just completed its “B” wave move retracing 76.4 percent of the previous downtrend and is zipping through wave “C” now. The Expectation for a “C” wave is that it will extend 61.8 percent past the end of wave “A” at a minimum. But most frequently we see equality between waves “A” and “C”, thus our expectation is that wave “C” will find its bottom at or around $1.2705.
Indicators On Watch
- EUR German Consumer Price Index (Thursday)
- EUR ECB Publishes Oct. Monthly Report (Thursday)
Your currency analyst,
Justin Burkhardt
Disclaimer: I have no positions in any stocks mentioned, but may initiate a (long or short) position in the EUR.USD over the next 72 hours.
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For Greece to kicked out of the EU is an egregious crime, not to mention just plain stupid. Greece has been criminally abused at the hands of common loan sharking thugs. Yes, I know the Greeks were lying through their teeth, and trying to pull a fast one on the EU, but loan sharking is ILLEGAL everywhere, and the sharks should be punished, not the poor dupes even if they thought they were the sharks.
The EU is perfect for Greece, and all the other wastrels of southern Europe. The odd man out is Germany, they don't belong in that club: they should get out. They should issue nice pretty world respected deutsch marks, and let the Euro devalue to ... say.. $0.65. It's just what the PIIGS ordered: a currency that is worthless.
Oh for Gorrum's sake - Greece should have been out of the EZ at least a year ago, instead of that painful re-structuring that was BS from start to end, and back on the Drachma, which would have been sort of an automatic restructuring/write-down of their non-Brit debt. Zombie banks are nothing: Greece is a zombie country, and ALL THOSE EUROCRAT ASSHOLES KNOW IT! So let it go already and take your lumps, asshole Euro banks.
There is one truth. The Europeans need to get out of the Euro. The Americans out of the dollar. The British out of the pound. The Chinese out of the Yuan and the Japanese out of the Yen.
The world's financial system is not working and the use of fiat at cheap rates without lending standards and huge leverage has led to inordinate asset value increases which are now reversing, huge trade imbalances, too much excess capacity and too much malinvestment.
On top of all that the huge promises of politicians have led to a stratospheric increase in unfunded liabilities.
Unless these excesses are quickly allowed to reverse we will hit another brick wall which is well into the making. That brick wall is the plight of the young who cannot get jobs and therefore cannot buy homes or have families. This demographic nightmare will become self fulfilling and unstoppable no matter how much printing takes place.
FX dude says get out of the Euro.
Talk ... meet book
They need to go back to Drahma asap - for their own good.
Euro: It's time to go!
Greece, the lamprey eel of the EU.
Actually, the lamprey is another country which also has a name starting with G (D in it's native dialect).
Why do you say that?
Probably because Germany was happy to run huge trade surpluses with countries like Greece and even happier to provide vendor finance through their banks so that Greece would buy German military and telecommunications hardware even though the European Commission had from the outset pointed out to the politicians that Greece did not qualify for entry into the Euro.
To top it all off, it is well known that Getman companies have scoured both the business sector as well as the gography of Greece identifying choice opportunities should the Europeans successfully push Greece into auctioning itself off.
And now, the end is near, go tell the world I did it my WAAAAAAA...
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