Thursday, May 17, 2012

If Greece Goes Back to the Drachma, Short It

From Forbes:

How And When Greece Will Leave The Euro; New Drachma To Slide 50%
With the tide turning against a Greek unity government that will respect prior agreements with the troika, the possibility of a Eurozone breakup is no longer just an academic possibility.  The consensus is gradually accepting a Greek exit as a likely scenario: external funding could dry up, severely constraining the supply of euros and leading to the adoption of a new currency.  According to Nomura, these neo-drachmas would face a 50% to 60% depreciation, while the euro would tank, falling to 1.15 to 1.20 against the U.S. dollar.  This is why it could happen, and how it would go down....MORE