The End Of The Euro? Market Outlook

As the European Governments, primarily Germany and France, contemplate what to do to save the Euro, the Union stands on the precipice of collapse.  This is having a detrimental effect on the global economy and the US Markets.  The recent sale of German Bunds that failed so sell the full allotment shows that there is a serious worry about the health of Europe.  Make no mistake, a collapse of the Euro Zone will trigger a collapse in the global economy which may take at least 5 years to recover from.

We need bold action from the European leaders.

Since my last post on November 10th suggesting that now is a very bad time to be bullish, the market has plummeted 8%.  This is nothing compared to the volatility and decline we will see if European leaders and the ECB are not bold and aggressive.

Monetary loosening and devaluation of the Euro due to quantitative easing to fund the bond purchases required to support the debt of Italy and the other PIGS (Portugal, Ireland, Greece, Spain) is the only option.

Now is still a very bad time to be bullish.

Understanding the direction of the market is critical to success.  Whether the market moves up or down there are way to profit.  Looking at inverse ETF’s in a down market can be a good source of profit.

5 Day Return on US Inverse ETF’s

FAZ – Direxion Financial Bear 3X Shares – 17.44%

SPXU – ProShares UltraPRO Short S&P500 – 14.9%

TZA – Direxion Small Cap Bear 3X – 12.55%

QID – ProShares UltraShort QQQ – 11.46%

DXD – ProShares UltraShort Dow 30 – 8.88%

Take care of your money and your portfolio.


1 COMMENT

  1. I agree with what your are saying but i believe that the recovery would take longer with multiple possibilities of civil unrest and or also a possibility of either civil or trade war, i think it might be that we seem to have 2 or more schools of thought about Europe some want Europe to become a global power and stand as a Federal country not unlike the USA, others just think it should be union just based on trade and others are too proud of the national heritage and want no part of it and some even see Europe as a threat in the making, if Europe did lets say become what some people think is inevitable, a federal country like the USA, it would command a huge gold reserve and manufacturing industry which no one country on its own could really match also it would have massive armed force which would rival that of even China with a population to match, I don’t think that Russia or even the USA or China would feel comfortable with this and would act against it for reasons such as their own political and even economic prowess.
    I feel that we do not just live in turbulent times we have a very dangerous situation which we have created with Europe we have only really 2 choices one is, If we let it collapse it will be catastrophic in economic terms which like you say will be felt for sometime around the world I also feel that some of Europe if not all will be plunged into a state of civil unrest or worse war, If we fight to keep it and make it work inevitably not unlike any other country which has been forged in history it will at some point have a Civil war to determine how it will be ruled and in which direction it should all go, Also because of the threat it will give to other great countries such as Russia it will eventually lead to war as well at some point in its future so the prospect of it all seems somewhat bleak I know, but as a historian this is the way i see it for the moment and please remember this is only an opinion and opinions change but it seems it could be a real possibility which i do hope will not happen.

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