Nobody, in my book, slices and dices data more thoroughly or convincingly than Greg Weldon. In this week's Outside the Box, he first dispels the illusion that either of the two most-expected outcomes of the growing eurozone crisis is really any kind of a solution – neither expelling Greece nor keeping Greece in the club is going to work, he argues – and then, in a feat of legerdemain, he conjures up an alternative that just might work – and backs up his idea as only Greg can. But is this a rabbit he's pulled out of his hat, or is it ... a Black Eagle?
This letter will print a little longer but, as is usual with Greg, it's chock full of great charts. You can learn more about his work at www.weldononline.com. For institutions and hedge funds, it should be required reading. (It is a little more than your average service, but as you can see, he really gets into the data very deeply!)
I am in Philadelphia tonight to speak for Steve Blumenthal's Advisor Forum. We did an evening at the National Constitution Center museum, where they had a Bruce Springsteen exhibit on the first floor and rather fascinating historical display of the history of the US and the Constitution. At the end is a room where there are 39 bronze life-sized statues of the men who were at the Constitutional Convention, displayed as they might have been arrayed at the signing. It got me to thinking about the times. Indeed, there was a quote from Washington about how bad things had become in 1789, sounding much like so many who now see the US as a hopeless culture, careening down a path of socialism and entropy. And certainly, the US and much of the world face some very hard choices in the next year or so; but somehow I think we will do just fine, even if we make a few bad choices and have to correct our course more than we would like.
Of course, it helps to have a Washington, Hamilton, Franklin, Adams, Madison, and Jefferson to help guide the ship on its course, but we will have to make do with what we have. Every country needs leaders with a clear vision and a love of posterity. Maybe later generations will recognize leadership where we do not. Here's hoping.
On Wednesday I get to spend much of the day with David Rosenberg, and I am sure we will go over our own poor vision of what will happen. And Thursday I get to have lunch with George and Meredith Friedman of Stratfor, in Austin, where I will listen as he gives me his latest take on the world. I always come away from my time with them with a whole lot more insight. Then it's a few afternoon meetings and on to the University of Texas for a seminar with Rosie and Rich Yamarone (with whom I had lunch yesterday in New York). It will be fun.
Your trying to get a whole lot done in a short amount of time analyst,
John Mauldin, Editor
Outside the Box
Macro-EU: The Solution Illusion
Weldon's Money Monitor
May 23, 2012
Dating all the way back to the day the Greek Drachma was accepted into the EU's ERM (Exchange Rate Mechanism), thus retiring Greece's currency, and replacing it with the Eurocurrency ... we have always believed that a two-tier Eurocurrency 'regime' would ultimately 'reign', once the EUR experiment failed.
We envisioned that the northern 'core' countries such as Germany, France, the Netherlands, Belgium and Austria…