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Eurozone Collapse Not Happening
Pinnacle Digest writes: To say Puru Saxena’s latest article makes bold predictions would be an understatement.
Saxena states - as we all know - that Europe’s debt woes have been the main and virtually only true driver of the market this year. The problem has become too big to ignore and washed out most positive news in the US after Q1. However, Saxena explains that the Eurozone will not disband and that Greece will not leave. Plain and simple, it is far too costly and too risky for Greece to leave. The repercussions and losses of capital around the globe would be severe. He explains the situation uniquely by saying “Given the foreign debt exposure (Figure 2) we are concerned that if nothing is done promptly and a sovereign default occurs, the post-Lehman financial collapse of 2008 will feel like a picnic on a sunny day.”
Saxena also believes that the powers that be in Greece - the wealthy - are doing everything in their power to keep the debt-ridden country in the Eurozone. The wealthy Greeks are well aware that if the country goes back to the Drachma, asset values in the country will plunge and purchasing power diminished globally.
In backing up his belief that the Eurozone will not disband, due to many external influences, Saxena lays out the prestigous list of the debt holders for Eurozone countries - pretty much the who’s who of the financial world. On top of that, if Greece walks away from the Eurozone and its debt, it sets a precedent for other debt-ridden nations.
In the second half of Puru Saxena’s article, he makes a much bolder prediction. Saxena states that he believes the commodity bull-market is over and that US stocks will likely enter a bull-market phase within 2-3 years. He backs up his belief that the 12 year bull market for commodities is over based on slow growth globally and the fact that US stocks are receiving historically cheap valuations. When US stock markets enters a bull-era, commodities suffer. Towards the end of the article, Saxena explains how his group has “eliminated our holdings in the commodities sector.”
Click here to read Puru Saxena’s full article.