In this morning’s The Gartman Letter, Dennis Gartman analyses Greece.
His bogttom line: Greece will ultimately be bailed out by a consortium of European countries or the IMF.
But as Germany becomes more and more resistant to a Greek bailout, what exactly would the International Monetary Fund do to aide an ailing Athens? Here are a few key points:
- The IMF has a history of prescribing the same remedy to member states; raise taxes, cut spending, and devalue the currency.
- “Societal upheaval” will occur as residents become even more pissed off about their devalued currency and retooled pension plans.
- Trade imbalance will worsen, which is bad news considering how involved Greece is with the shipping industry.
Obviously these outcomes don’t sound good to anyone. Gartman hopes that the IMF will stay out of the matter for now.
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