European Union, Currency Are Headed for Collapse: Gartman
By: The current European debt crisis likely will not end until the euro collapses as a currency and takes the entire European Union with it, said Dennis Gartman, hedge fund manager and author of "The Gartman Letter."
"I think the whole thing will go down to defeat, the whole thing will eventually unravel," Gartman said in an interview with CNBC.com.
Gartman said he doesn't have a specific timetable for how long it will take for the collapse of the 17-year-old EU, but said, "it doesn't look good."
The debt problems continued to escalate Wednesday as Greek citizens rioted in the streetsover proposed austerity measures that would be required for any rescue plan to gain approval.
At the same time, Moody's warned that it might downgrade the debt for Portugal, accelerating worries that Greece's unremitting debt worries could spread across the continent.
Gartman holds the following long positions: 15 percent gold; 10 percent silver, and 15 percent each to Canadian and Australian dollars; he is short 15 percent each in euros, pounds and yen.
The chaos was enough for Gartman to advise US investors to get out of the stock market.
"It means confusion, it means a stronger dollar, it probably means weak commodity prices," Gartman said. "I think they should be out. People should be on the sidelines and out."
A correction of as much as 15 percent in the US market "would be normal," he said. "There's always a chance we could get worse than that."
In his daily letter to investors, Gartman said there is little chance of a peaceful, successful resolution of Greek's troubles.
"The modern Greek culture is so dependent upon government largesse, and is so used to the fact that Greek fiscal irresponsibility will be bailed out by the taxes paid by responsible German workers and businessmen, that we cannot see this being resolved short of Greece being summarily tossed out of the EMU, or removing itself voluntarily," he wrote.
He added that "we are not naive. Rather we are realists, and realists know that little other than chaos and the eventual breaking up of the EUR is the way of the future."