It’s Only A Matter Of Time Before Greece Exits The Euro

Wednesday, February 11, 2015
By Paul Martin

Chris Puplava
February 11th, 2015

Greece is beginning to dominate global news once again as the newly elected party, Syriza, is trying to renegotiate the country’s debt with its creditors, mainly the ECB. Both sides appear to be playing chicken which is creating uncertainty in financial markets with both Europe and U.S. markets recently stalling.

We’ve seen this movie before in which markets make little progress until the Greek uncertainty is removed. Back in 2011 and 2012 we saw several double-digit corrections with little to no net advancement in the S&P 500 while Greece dominated the news. News references for Greece skyrocketed and it was only until late 2012 when Greece began to withdraw from headlines that the S&P 500 broke out and began to rally strongly (see figure below).

Also of note is that while Greece remained absent from the news throughout 2013 and 2014 the S&P 500 powered higher by a massive tailwind in the form of quantitative easing (QE) by the U.S. Fed. Even after QE in the U.S. ended in October 2014 the stock market powered higher but stalled as we entered 2015. Then Greece began to make the rounds again by dominating global headlines with news references to Greece rising to their highest levels since the middle of 2012.

The Rest…HERE

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