Jeremy Siegel: The Euro Could Be Worth $1 Within Six Months

jeremy siegel

Photo: Bloomberg TV

Despite the crisis in Europe and the approaching U.S. “fiscal cliff,” Wharton Professor Jeremy Siegel is sticking with his prediction that there’s a 70 per cent chance that the DOW could reach 15,000, and a 50 per cent chance it could reach 17,500 by the end of 2013.In an interview with Bloomberg TV, Siegel said Europe and the fear of a banking crisis in Europe was like a 1000 pound weight on the market right now.

But he explained that with European problems and the fiscal cliff gains will be pushed into next year.


With talks of a ‘Grexit’ Siegel said the big concern is of a bank run in Spain, Portugal and Italy and a tremendous rush into Germany which could be extremely destabilizing for the euro.

“Clearly what the ECB will have to do is back up all the banks… I believe that the ECB will actually lower the value of the euro in an attempt to improve the trade balance in the periphery and take some of the pressure off their recession.

I’m not sure that’s going to work, I’m not sure that’s going to be enough to prevent Greece from exiting but I do think we can expect a lower euro in the financial markets. I wouldn’t be surprised to see it go all the way down to parity with the USD …within the next six months depending on how the Greek crisis unfolds.”

Fiscal Cliff

Siegel said the fiscal cliff is being priced in now and that there’s fear that there will be a lot of selling at the end of the year:

“People are fearing that people are going to start selling, taking their capital gains at 15 per cent before they go up to 24 per cent, taking their dividends now at a low rate and there’s a lot of fear that there’s going to be a lot of selling at the end of the year.”

He does however think the Obama administration and the Republicans are going to extend tax cuts for at least six months through 2013 and that this would give a nice pop to the market.

Don’t Miss: The Truth About The Fiscal Cliff >

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