The thing is, Greece doesn’t make a lot of products. It makes feta cheese and olive oil, and it has tourism. If Greece became 50 per cent cheaper than Spain, Italy and Portugal, after a year or so, the economy would recover. After four years, Greece could come back to capital markets and after seven, eight or 10 years, it could re-enter the eurozone in a much-improved position. It’s a much healthier way of proceeding than what the European politicians are doing.
…Portugal is bust too. Their bond yields are in default territory, clearly. So after Greece comes Portugal.
…The very big picture is that markets in the United States and Europe are in a long, sideways value compression period, similar to what we saw from the mid 1960s to the early 1980s. This current one started in 2000, and will probably last into the second half of this decade. And it’s very similar to what you saw in Japan..
…In history, whenever we’ve seen a central bank finance more than 30 per cent of government expenditure, we’ve always had a highly inflationary period four to five years later.
[Emerging markets?] that’s where the money should flow.
Felix Zulauf’s market prognosis via @businessspectator $VWO $global $FXI #Greece $fxe $emu $TLT
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