What's the "Closest Thing a U.S. Investor Will Get to a Crystal Ball"?

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What's the "Closest Thing a U.S. Investor Will Get to a Crystal Ball"?

By Nathaniel Williams
Mon, 25 Jun 2012 18:15:00 ET

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With the constant barrage of bad news coming from Europe, you might be tempted to gloss over it, thinking that Europe's problems don't really apply to the rest of the world. But what happens in Europe matters. European Financial Forecast editor Brian Whitmer explains why:

"Europe is the closest thing that a U.S. investor will get to a crystal ball right now. Not just with respect to the stock markets, but regarding economic trends, social and political trends."

To be prepared for what's next in the United States, you need perspective. That's where The European Financial Forecast comes in. Readers have been one step ahead of the European debt crisis since before it hit the mainstream media's radars.

Think back to early 2010. Greece's financial woes were just beginning to make headlines, though most of these mentions were tinged with hope. EU officials contended that no bailout would be necessary, nor were they contemplating having Greek exit the eurozone. And the dissolution of the euro was a far-fetched fantasy.

At the time, Monetary Affairs Commissioner Joaquin Almunia flat-out said, "No, Greece will not default. Please. In the euro area, the default does not exist." He added that there was "no chance" that Greek would leave the eurozone. (Reuters, Jan. 29, 2010)

But here at EWI, Whitmer's study of the charts led him to a different conclusion. In February 2010, he noticed that credit default swaps in southern Europe were surging to extreme levels, and that Greece's levels were higher than during the 2008 financial crisis. As Whitmer explains in a new subscriber video, "This seemed to suggest that another bigger crisis was beginning."

Plus, one month earlier in January 2010, his application of the Elliott Wave Principle's objective set of rules and guidelines to the region's stock markets led him to believe that peripheral Europe's stock indexes had topped. "Everything we saw at the time suggested this countertrend rally was over," Whitmer said.

Indeed, since Whitmer's forecasts in early 2010, Europe has further fallen apart. Greece has been bailed out twice. Ireland and Portugal have been bailed out once (but will likely need another). Spain and Italy are following close behind.

Moreover, credit default swaps have gone through the roof -- and then some, as you can see in the chart below. Greece, Portugal and Spain have breached their 2009 lows, just as Whitmer forecast years prior.

No one can change the past. But if Europe is a crystal ball for the U.S., you must prepare for what's next in the region. And there is no better time than now to put The European Financial Forecast's critical perspective on your screen. When you start a 30-day risk-free trial now, you'll get instant access to:

-- The 6 latest issues -- that's 50+ charts across 55 pages of the most independent, insightful European market analysis you'll find.

-- A NEW 35-minute, subscriber-exclusive video, "Is Europe as Bad as it Looks? Or is it Worse?" -- which brings you up to speed with EWI's analysis of the European debt crisis and then prepares you for what's next.

Get all of this on your screen in minutes, for less than a dollar per day.

Let me see the details about my 30-day risk-free trial now>>

Tags: europe, European debt crisis, european markets, European Union (EU), eurozone

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