Why Greece Should (and will) Leave The European Union (EUO, VGK, VWO, EEM, EPV)

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November 4, 2011 3:02pm NYSE:EEM NYSE:EPV

Kevin McElroy: What in the world is going on in Greece? I don’t know. I can’t tell. At first it looked like they were on the cusp of accepting the European Union – EU’s hammered-out proposal which included banks taking a 50% haircut on Greek bonds among other concessions.

Then, Greek Prime Minister George Papandreou announced he would put the proposal to a referendum vote in Greece.

I thought that was pretty neat, considering the anger, frustration and total lack of a voice the average Greek has in Euro-zone decisions.

There’s been a whole lot of big decisions made on behalf of Greek citizens over the past couple years, and many of them occurred without consent or consideration to how those citizens might feel about it.

So, putting the EU proposal up for a vote seemed almost quaintly and strangely democratic…

And then… Papandreou reversed course. The EU proposal will not be up for a referendum vote.

And now… the EU proposal has been pushed down the road another few weeks at least.

Papandreou seems like he might be getting the boot.

And who knows what the immediate result will be.

As I said, I can’t tell what’s going on in Greece, or even in the Eurozone as a whole.

What I can tell, and I can say this with about as much confidence as possible, is that Greece will exit the Euro-zone. Also, the Euro itself is on the way out as a currency.

I’m not saying it will happen soon. But it will happen. And it will happen because the entire idea of the Euro is unsustainable on the face of it.

To put the Euro experiment into perspective.

The Euro is the equivalent of having a checking account shared among a 19 different people.

Anyone of these 19 people can access the funds with their own personal debit card at any time. Some people make deposits. Some people make withdrawals. And while there are “rules” about how much can be taken out by any single person at any time, these rules are ultimately unenforceable – because there are zero repercussions for breaking them.

That’s pretty much how the Euro-zone operates. It’s basically one big prisoner’s dilemma, wherein the best possible outcome for any single operator is to completely defraud and abuse the other members by acting irresponsibly with the Euro-account.

Cooperation is not as profitable as fraud. In Greece’s case, cooperating is making it extremely unpleasant to be a Greek citizen. It’s in their best interests to leave the Euro-zone – even though many Greek’s might not realize it.

Eventually, Greece will leave and it will be followed by Portugal, Spain and Italy. These countries simply can’t act responsibly when they have the same debit card as Germany and Finland. These countries can’t prosper when a Spanish laborer has to compete with a German laborer for the same paycheck.

And when something can’t go on, it eventually stops.

I think we’ll see Greece out of the EU within the next 18 months. I think we’ll see the total failure of the euro within 6-10 years.

And when all of those people leave the euro, they’ll be fed up with fake money systems. Many of them will seek out gold and silver.

Related: ProShares UltraShort Euro (NYSEARCA:EUO), Vanguard MSCI Europe ETF (NYSEARCA:VGK), Vanguard MSCI Emerging Markets ETF (NYSEARCA:VWO), iShares MSCI Emerging Markets Index (NYSEARCA:EEM), ProShares UltraShort MSCI Europe (NYSEARCA:EPV).

Invest accordingly,

Written By Kevin McElroy From Wyatt Research

Kevin McElroy is a top rated commodity researcher and analyst  specialist at Wyatt Investment Research, with a targeted focus on short  and long term investment opportunities.  He has worked in the investment  publishing field for over three years alongside some of the world’s  leading commodity traders and analysts.  He takes the complex futures  and options trading strategies from the floors of the Nymex and the  CBOT, uniquely combines them with economic trends and positions his  recommendations in a way that any investor, from a straight long-term  buy and hold investor to a sophisticated day trader can easily  understand, implement, and profit.

Kevin constantly finds unique ways to profit from the “real stuff”  like oil, gold, iron, corn – the energy, money, goods and food that the  world constantly needs more of.  Kevin is the daily editor to Resource Prospector and a contributor to Energy World Profits and Global Commodity Investing.

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