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Dennis Gartman: The Entire European Experiment Coming Apart

Monday, 11 Jul 2011 | 6:42 PM ET

Again, the financial woes of Europe have emerged as the Achilles heel of global markets with troubles growing ever worse.

This time stock investors ran for the exits after word surfaced that Italy could be careening into a banking crisis - Italy is the 3rd largest economy of the Eurozone.

And some of the Street's most widely followed strategists are sounding concerns.

Jim O’Neill, chairman of Goldman Sachs Asset Management and father of the BRIC acronym tells us, “I have found it reasonably easy to not get too worried about the debt dynamics of Ireland, Portugal or Greece but Italy is a different topic.”

Europe's Woes to Boost Gold: Gartman
Dennis Gartman, of the Gartman Letter, explains why investors should boost their holdings in gold as Europe's debt crisis worsens.

That’s because a debt crisis in Italy could spook already jittery investors. “We can’t afford many days of this – it will bring back fears of contagion – everywhere,” says O’Neill.

In other words, Italy's debt woes could trigger an aversion to higher risk assets – at least until the market better understands who has exposure to the woes – and who doesn’t.

As if that’s not worrisome enough strategic investors Dennis Gartman thinks were still early in the game.

He tells us “the entire European experiment is coming apart at the seams. People used to laugh at me for saying it. They’re not laughing any longer.”

As you may know, since November of last year Gartman has been telling us that the European Union couldn’t survive as one unit. At a minimum he thinks they break into two parts – southern and northern Europe.

And he thinks the EU falls apart in as little as 18 months. “Sometimes over the next year and a half all the PIIGS will go bankrupt,” he says.

If you're looking for a trade Gartman still thinks the trade is long gold in terms of euro. 6 months from now gold will probably be trading at 1300 euro," he says.

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But, if you're not already long he suggets waiting to establish a new position. "Investors will probably get a chance to buy 30 euro lower," he says. "Gold in euro terms has gone from 1020 all the way up to 1100 in 6 trading sessions. That's too far too fast!"

What do you think? We want to know!









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Trader disclosure: On July 11, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karabell owns (GOOG); Karabell owns (GS); Karabell owns (GE); Karabell owns (AAPL); Adami owns (AGU); Adami owns (C); Adami owns (GS); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU); Adami owns (INTC); Pete Najarian owns (AAPL); Pete Najarian owns (ACI); Pete Najarian owns (C) ; Pete Najarian owns (F) bonds; Pete Najarian owns (MS); Pete Najarian owns (MOS); Pete Najarian owns (MRVL); Pete Najarian owns (PFE); Pete Najarian owns (GE); Finerman's Firm And Finerman Own (AAPL); Finerman's Firm Owns (BAC) Leap, Finerman owns (BAC); Finerman's Firm Owns (JPM) Leap, Finerman owns (JPM); Finerman's Firm owns (CMI), Finnerman is short (CMI); Finerman's firm owns (CAT) calls; Finerman's Firm Is Short (SPY); Finerman's Firm Is Long S&P 500 Puts; Finerman's Firm Is Long Russell 2000 Puts

Brian Kelly
Accounts Managed By Brian Kelly Capital Own (KRE)
Accounts Managed By Brian Kelly Capital Own (WFC)
Accounts Managed By Brian Kelly Capital Own (ANDE)
Accounts Managed By Brian Kelly Capital Own (TCK)
Accounts Managed By Brian Kelly Capital Own (FCX)
Accounts Managed By Brian Kelly Capital Own (TCK)
Accounts Managed By Brian Kelly Capital Own (UGA)
Accounts Managed By Brian Kelly Capital Own (RTH)
Accounts Managed By Brian Kelly Capital Own (SLV)
Accounts Managed By Brian Kelly Capital Own (TBT)
Accounts Managed By Brian Kelly Capital Are Short the British Pound
Accounts Managed By Brian Kelly Capital Are Short the Yen

For Zachary Karabell
River Twice Capital is short (XLF)
River Twice Capital and Karabell own (BIDU)
River Twice Capital and Karabell own (POT)
River Twice Capital owns (MON)

For Dennis Gartman
Funds Managed By Dennis Gartman Are Long Gold
Funds Managed By Dennis Gartman Are Long the Australian Dollar
Funds Managed By Dennis Gartman Are Long WTI CRUDE
Funds Managed By Dennis Gartman Are Long the Canadian Dollar
Funds Managed By Dennis Gartman Are Long the Swiss Franc
Funds Managed By Dennis Gartman Are Long Corn
Funds Managed By Dennis Gartman Are Long Soybeans
Funds Managed By Dennis Gartman Are Short Brent
Funds Managed By Dennis Gartman Are Short the Yen
Funds Managed By Dennis Gartman Are Short the Euro
Funds Managed By Dennis Gartman Are Short the BRITISH POUND SILVER
Funds Managed By Dennis Gartman Are Short COPPER
Funds Managed By Dennis Gartman Are Short the S&P 500 INDEX
Funds Managed By Dennis Gartman Are Short the DOW JONES

For Mary Ann Bartels
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