Weekend Edition: Why Greece Matters

The world is ending’again! The resource sector has been beaten so badly one wonders if buying a bike for transportation, guns, ammo and lots of canned food is the only way to survive the coming apocalypse. The worst part is it’s been a few years since I biked, so I have to brush up on my skills in a short period of time as Greek elections are scheduled in less than a month (more like a??referendum??on EU membership).

The end is nigh and yes, it’s because of Greece, again. Are you wondering how an insignificant country in the grand scheme of things can be on the verge of triggering the apocalypse in the financial markets? The answer is easy; in 2 words it’s because of the ‘known unknowns‘. There’s 1 certainty in all of this fiasco, the uncertainty of what could happen if Greece exits or is kicked out of the Euro club.

The divorce between Greece and the EU may well trigger a major financial crisis. There’s no such thing as an amicable divorce with no consequences. Most importantly, it opens the door to questions such as why not Portugal and why not Spain? As you can see, we just multiplied the ‘known unknowns‘ by an unknown factor!

Anyone who claims to know where the markets are heading in the short term is simply lying. This is a wait and see crisis that might go either way. On one hand human ingenuity might find a way to fix this issue and on the other you can bet on human stupidity (remember 2008?) so all the possibilities are on the table.

Finally, I believe financial markets won’t disappear??any time??soon, at least not on my watch. It will only be a matter of time before the dust settles and markets recover just like theyve been doing for the past 100 years. I would even venture to say current oil stock prices??may well be excellent entry points since we cannot afford to live without oil. Stepping back from the edge of the abyss is ‘easy ‘as it takes 2 words: ‘Euro Bonds’. Will the Germans give in to jointly guaranteed Euro bonds or will a Greek collapse be used as a lesson for others? Will a Greek exit trigger the disintegration of the EU? Time will tell.

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