Citigroup’s Michael Saunders has informed clients that Greece WILL leave the eurozone on January 1st, 2013, and that ‘Grexit will be followed by a series of policy responses aiming to prevent a domino-style collapse of the banking system and escalating economic disruption.‘ Saunders expects the new Greek currency to immediately devalue by 60%, and ‘unleash a massive wave of contagion across Europe’.
With the new Greek bonds now in a free-fall, if anything, Saunders’ note to clients seems optimistic on the timing of the Greek Euro exit/ contagion.
This is likely the last major gold and silver correction/ buying opportunity prior to the sovereign debt tsunami approaching land in the West. Have you already purchased your insurance?
QE Will continue to Infinity…AND BEYOND!!
Greece will leave the single currency eurozone on January 1, 2013, a senior economist at the world’s second-largest currency trading bank has claimed.
Citigroup’s Michael Saunders said Greece’s new currency would fall in value immediately by 60 per cent – and unleash a massive, yet manageable, wave of contagion across Europe.
In a note to clients, he said the likelihood of Greece leaving the euro in the next 12 to 24 months was now between 50 to 75 per cent – and assumed there would be a ‘Grexit’ at the start of next year.
The firm based its case on the belief that Greece would fail to form a government capable of implementing austerity measures after its next set of elections on June 17. This would ‘accentuate’ the stalemate between the nation and its creditors.
Mr Saunders said: ‘We assume Grexit occurs on January 1, 2013, with Greece staying in the EU and receiving external loan support [to mitigate risks of social unrest and collapse of civil society].
‘We expect that Grexit will be followed by a series of policy responses aiming to prevent a domino-style collapse of the banking system and escalating economic disruption.’