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Felix Zulauf - Watch Out for These Events in 2012

With people having concerns about the viability of the financial system, continued turmoil in Europe and serious concerns about the United States, today King World News interviewed one of the greats, Felix Zulauf, of Zulauf Asset Management. Because of mounting worries around the world, KWN wanted to ask Zulauf what investors should expect in 2012. This is what Zulauf had to say about the coming year, “I think the periphery goes into depression. When you look at a country like Greece, it’s now been in recession for three years. GDP is probably down 15% from the top. The stock market is down 90%, which is the equivalent of 1929 to 1932 in the US. This is depression-like.”

Felix Zulauf continues:

“More and more economies will fall into that situation. That creates the problem of people revolting. Right now we have new governments not elected by the voters, the citizens of those countries, but implanted as technocrats by the EU center, by Brussels. So they will be very disliked and I think you will see some revolutions starting or intensifying next year.

Then I expect next year one country, probably three, will exit the euro. That will make 2012 very interesting because there are no rules on how to exit the euro. A country exiting the euro means the next day, when they exit, their banking system is bust. That means the banking system has to be immediately nationalized in a new currency.

They introduce a new currency, they nationalize the banking system, and then, of course, the government is also bust. Then the government will default. That’s what you have to expect next year. I think Greece will do so and Portugal and Ireland are candidates also.

Then it will depend on how that crisis is managed as to whether the crisis can be turned around and terminated or whether it will intensify and drag on into 2013 and force Italy and Spain out of the Eurozone as well. (This will have the effect of) creating turmoil in the financial markets and weakening the European and most likely the world economy (even) further....

Continue reading the Felix Zulauf interview below...

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“...Let’s go back to what I said, one country exiting (the euro) and then you have chaos. Obviously that country will default. Not only the government, but also the private sector will default to a large extent. That means the banks in the remaining European countries will have to take huge losses, much more losses than the recent stress tests used.

That would mean you have to expect more nationalization of banks in several of the European countries to stabilize the system. This means the governments that have to nationalize banks, they don’t have the money. They have to go into debt and that means the debt levels go even higher.

So you can expect the bond markets will not be very quiet in their trading next year. It will be a very wild situation that I see coming for next year.”

When asked if that will lead to a healthy cleansing of the system or a collapse, Zulauf stated, “Well, I hope for the first and I fear for the latter.”

In this interview, Felix Zulauf goes into great detail about what people should expect in 2012. The legendary money manager and two decade Barron’s Roundtable panelist also discusses systemic collapse, as well as what investors should be doing with their money right now and much more. The extraordinary KWN audio interview with Felix Zulauf will be released this weekend and you can listen to it by CLICKING HERE.

Eric King

KingWorldNews.com

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