Why Greece is finished sooner than you think

Greece may well revolt and leave the euro this April, says Bengt Saelensminde. So act now to position yourself against the coming turmoil in Europe.

The results of a survey published this week amazed me. According to currency broker Travelex, two-thirds of Britons reckon the euro will collapse. And half of the respondents reckon it's going to happen by this summer!

"Ah, what does the public know?" you may say.

But I think it's a mistake to shrug off public opinion. There's a common sense at work here. I think this survey is ahead of the game; it's certainly ahead of the markets. The fact is the markets are being too complacent and I'm convinced something serious is going to happen come April...

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Two months away from catastrophe?

Politicians can ignore public sentiment for a while. They can get away with taking a nation to war, implementing unpopular taxes and, dare I say it, taking a nation into an ill-fitting economic union.

But the problem comes when dissatisfaction reaches a certain level think the poll tax riots, the war in Vietnam that sort of thing. Then the politicos have to change tack. I think public sentiment has reached that tipping point once more. And this time its cause is economic slavery in Greece.

The public isn't as dumb as many politicians think. I don't think the Greek man in the street is going to fall for the line, "We need to stay in the eurozone or we'll lose everything!"

I suspect the public knows that leaving the euro would be a case of short-term pain for long-term gain. Of course, the politicians think they know best. They're not going to change tack yet, they're going down fighting.

That means bail-outs. Yet the latest bail-out' is deeply unpopular with the public. They know that this is a bail-out for foreign banks. It's akin to a loan-shark demanding that you borrow more money so you can pay him his interest back. On top of that he cuts off one finger each week making it even more difficult for you to earn your way out of the mess.

This is what's happening with the austerity measures. Austerity is in effect driving the economy into a depression, making it almost impossible for the taxman to generate enough income.

What's the solution? Well, for European politicians it seems to be to send in a team from the Troika - that is, officials from the European Union, the European Central Bank and the International Monetary Fund (IMF). They want to extract Greek cash at source. But this is not going to fly

The tide turns against the bureaucrats

Much of the Greek public see this as economic enslavement. They're out on the streets fighting for their freedom.

Meanwhile the Greek police union released a statement saying its members refused to "stand against our parents, our brothers, our children or any citizen who protests". The police union knows that more and more austerity is self-defeating. They agree with the protesters, not the politicians!

The union threatened to arrest members of the troika - for "blackmail, covertly abolishing or eroding democracy and national sovereignty".

This is as serious as it gets. I was listening to the UK Independence Party's Nigel Farage the other day. He said a Greek friend of his (a former ambassador) had just bought a Kalashnikov rifle on the black market. He thinks he's going to have defend himself and his property some time soon. Now, did you know that things have gotten that bad?

The politicians are hated. An election is set for April. Already opposition parties are saying they'll rip up the latest bail-out deal if they're voted in. If they do that, it's likely to mean ejection from the euro. And this is in April!

I'm convinced Greece has to leave the euro project. And I think the day when it may happen is looming closer.

I've told you about how I think you could profit if Greece leaves the union (in fact it doesn't have to be Greece, it could be any member). It's a spread bet, so you should heed the risk warnings I mention.

And in the coming weeks, I'll bring you more ideas on how to best position yourself for European turmoil.

This article is taken from the free investment email The Right side. Sign up to The Right Side here.

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Bengt graduated from Reading University in 1994 and followed up with a master's degree in business economics.


He started stock market investing at the age of 13, and this eventually led to a job in the City of London in 1995. He started on a bond desk at Cantor Fitzgerald and ended up running a desk at stockbroker's Cazenove.


Bengt left the City in 2000 to start up his own import and beauty products business which he still runs today.