A Quick Update And A Few Thoughts On Greece

Posted by Nogger - a legend in his own mind at 11:50 | Categorized as

16/05/12 -- Blogging activity has been restricted this week by a combination of computer and mobile phone problems. The culmination to the latter difficulty being that I had to do a factory reset and have thus lost all of my contacts that were saved to the phone. Sadly that was most of them. Yes I know I should have done a back up. But then again we should only drink two halves of shandy a week, drive at 29mph in a 30mph zone and not eat a bacon & sausage growler for breakfast every day shouldn't we?

Meanwhile the market seems to be getting more erratic and unpredictable by the day. Greece: we all knew this was coming surely, so why is it such a big shock all of a sudden? Is it simply because it's been around in the market for so long that people have got complacent about it?

Greece will leave the Eurozone pretty soon in my humble opinion. The austerity pill is simply too bitter for them to swallow. The only thing we don't know is when. The immediate effect of that will almost certainly be a mass fund exodus from anything deemed risky. Like grains for example.

The almost immediate knock-on contagion-type ripple effect of that will probably be significantly lower prices than those you see on your screens today, regardless of how many soybeans China wants or what the weather is doing in Russia.

Once Greece go we will quickly move onto the "exactly what are the implications of this, and who's next?" question. Cue more money exiting the arena regardless of the fundamentals. One of the implications could easily be the ECB printing euros faster than a fast thing on its way to a fast thing's convention.

This is all starting to sound outrageously bearish isn't it? The bit I am struggling to get my head round is how long will these conditions prevail and what the more medium to longer term implications are.

The answer to the latter is probably easier to predict that the former, inflation.  Big time inflation. In a big time inflation scenario I'd want to be long all the grains, however there may be some downside pain (or pleasure depending on which way you swing) to endure first.