If you haven’t heard about the financial crisis in Greece, you’re probably just getting back from a month-long vacation to Antarctica.
Otherwise, you likely know at least a little about the struggles being faced by the Greeks and what any fallout from that situation could be.
Hope for the best and prepare for the worst, right?
Here’s the worst-case scenario and how you should handle it…
Just this past weekend, Greece’s people voted “no” to an austerity plan proposed by European leaders.
The newly proposed aid program included some significant measures, including tax hikes, pension restrictions, and more.
But now Greece is pressed to come up with its own counter proposal before it runs out of money- a deadline that seems to be picking up speed every day.
Banks in Greece have been closed for a week and people are currently limited to being able to withdrawal a maximum of 60 euros a day from ATMs. According to reports, Greek banks are now down to their final $555 million.
All of that is real right now. But what if things get worse?
We’ve already seen the U.S. market take a hit from the fears reverberating from Europe. Could that just be the start of it all?
Let’s say that no agreement is found between European leaders and Greece, Greece defaults on its debt, and then leaves the euro. One of the biggest fears for analysts looking down the road is Spain.
Spain has an unemployment rate nearly as bad as Greece’s current unemployment rate, which is over 25%.
If Spain witnesses Greece leaving the euro for their own benefit, would it follow suit and do the same?
If that happens, would Italy be next in line to drop out of the Euro zone?
As of right now, those are some very far off dominoes that are still very unlikely to fall, but they are possibilities nonetheless.
What should Americans be prepared for if they do fall?
Well, Greece is a very small part (relatively speaking) of about 2% of Europe’s economy. Right now, that’s causing a pullback in the stock market as investors’ fear drives selling volume.
If more and bigger nations follow the same path as Greece, we can expect investors to become even more fearful. In turn, that fear would be the cause of further drops, but would it be enough to start a bear market with this bull market being due for a long rest?
What we do know is that true crisis in the States is more likely from a crash in the Chinese stock market.
But while the world economy takes a few punches from the turmoil in Europe, expect the market to see regular dips as the bull market continues. When it’s ready, we’ll see the market turn over into a bear thanks to its cyclical nature. But that’s OK, we can make money in a bear just as easily as in a bull.
Just follow The Midas Legacy’s lead…
