Second, get ready to pounce.
And you don’t want to walk by the bargain basement bin when it happens this time around any more than you did in March 2009…right before the markets “melted up.”
As for how this situation may play out, Hollywood couldn’t come up with a more subtle story of international intrigue.
Both Russia and China have long angled for ports and energy rights in the region. Even if the IMF and ECB do come forward with some sort of liquidity arrangement, expect one or both nations to wind up with enhanced interests in the region. I think some mix of deep water ports, more extended lending arrangements, and newly acquired rights to energy reserves and drilling in the region are distinct possibilities.
The EU’s political leaders and Washington’s strategists will go apoplectic, because a Russian or Chinese presence in the middle of the EU is not something they want to see.
But there’s nothing they can do about it. Fresh lending in exchange for prize assets is the ultimate discipline in capitalism.
If you’re out of money, creditors take prize assets. That’s just the way it works. It’s a reflection of the ultimate Golden Rule – you know the one – he who has the gold makes the rules.
Right now, it looks like the European Union is coming up empty.