Daily Gains Letter

Greece


Greece and Eurozone to Fall Into Economic Turmoil? How to Profit

By for Daily Gains Letter | Feb 11, 2015

Greece and Eurozone Fall In Economic TurmoilThere is yet another Greek tragedy playing out across the Atlantic, where legendary poets, mathematicians, scientists, and thinkers once roamed. Fast-forward several thousand years and the country once known for its proud history is cracking at its foundation, burdened by tens of billions in debt and fiscal chaos. (There is a way investors can profit from Greece’s potential demise, but more on that later…)

Syriza Party to Negatively Change Economic Outlook in Eurozone?

Making the situation even more uncertain for this poor cousin in the 19-country eurozone is the recent transformation in power with the left-wing Syriza party, under Prime Minister Alexis Tsipras, assuming control. The problem for the stability of the eurozone is that Tsipras’ party won on a platform to revise the country’s previous bailout requirements.

Greece wants to alter the austerity demands set by the previous government and lenders. Of course, the eurozone is refusing to do so and expects Greece to honor its original deal.

One of the revisions Greece wants is a cut in the country’s budget surplus to 1.5% of gross domestic product (GDP), rather than the set three percent. Simply put, Greece wants to spend more, which would impact the debt obligations to the eurozone.

Things like bringing back pensions, increasing wages, and other spending is clearly not what the eurozone wants Greece to do. The eurozone realizes that a steady return to lowering spending and debt in Greece is the way to reform and potentially strengthen the region.

Greece faces a big debt repayment this summer and all signs point to a refusal to play. This Greek drama could get messier, with … Read More