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Dennis Gartman: European Union Barely Holding Together

You could almost hear the collective sigh of relief on Wall Street as new signs emerged that the EU would do whatever necessary to prevent a Greece default.

Largely investors expect that Athens will agree to stricter austerity measures in return for another 12 billion euros in emergency loans.

But whether it’s next week or next year, strategic investor Dennis Gartman thinks a default is all but in the cards.

”It’s only a matter of time,” he says in a live interview. “The German public isn’t going to put up with this a lot longer.”

In fact, he thinks the only reason Europe has propped up Greece as long as it has is because of politics and leaders trying to save face. But Gartman thinks the public’s growing disdain for the bailouts will ultimately prevail.

“Throwing $100 billion euro at a failing economy – one that can not pay back what they already owe – to lend them more is nonsense,” he says. “It’s only a matter of time until Greece fails.”

And it’s not just Greece – ultimately he thinks the European Union fails. In a case of 'sometimes the best medicine is hardest to swallow' -Gartman thinks an EU that unravels may in fact be the best thing for ailing nations.

"Have back the drachma, have back the paseta and lira,” he says

In other words, once Greece, Italy and even Spain are free from the constraints of the common currency, they can get back on their feet. “By devaluing their currencies, they will make themselves more competitive and more attractive to tourism.”

And on a related note – because financial woes are making the euro weaker and the dollar stronger, Gartman is cautious of commodities. “A stronger dollar puts weight upon commodities prices,” he reminds.

He thinks the only commodity whose moves are bullish is gold, which is making new highs in non-dollar terms.

And he says the commodity that needs to be watched is copper . “Copper continuously make lower lows and it doesn't make new highs. It looks like it's tipping over.”

As you might imagine, if you’re looking for a trade Gartman suggests long gold and short copper.






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Trader disclosure: On June 20, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Seymour Owns (AAPL); Seymour Owns (F); Nathan Owns (JPM) Put Spreads; Nathan Owns (LNKD) Put Spreads; Terranova Owns (VRTS); Terranova Owns (IBM); Terranova Owns (FCX); Terranova Owns (CVI); Terranova Owns (F); Terranova Owns (AAPL); Terranova Owns (CAT); Terranova Owns (BX); Terranova Owns (HPQ); Terranova Owns (MA); Terranova Owns (PEP); Terranova Owns (MCD); Terranova Owns (JWN); Terranova Owns (TM); Terranova Owns (LULU); Terranova Owns (WFM); Terranova Owns (DAR); Terranova Owns (BJ); Terranova Owns (XOM); Terranova Is Short (DELL); Weiss Owns (TWM); Weiss Owns (SDS); Weiss Owns (COP); Weiss Owns (JPM); Weiss Owns (UUP); Weiss Owns (DVN); Weiss Owns (HK); Weiss Owns (CMA); Weiss Owns (MRK); Weiss Owns (AKAM); Weiss Owns (ETP); Weiss Owns (MS); Weiss Owns (QCOM); Weiss Owns (VZ); Weiss Owns (MRK); Weiss is Short (X); Weiss is Short (FWLT); Weiss is Short (FLR); Weiss is Short (SHAW)

For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
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For Dennis Gartman
Funds Managed By Dennis Gartman Are Long Gold
Funds Managed By Dennis Gartman Are Short Euro
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