The Eurozone Bailout: Prepare for What's Next

[Editor's Note: Money Morning's Keith Fitz-Gerald is constantly fielding questions about the looming Eurozone bailout. We wanted to share with you this Q&A session with Keith on what you need to know about the debt crisis. You can also see more of Keith's analysis in the video below, filmed during a visit today to Fox Business' "Varney & Co." program.]

Q: What will happen in Europe?

Greece chickens out. The G20 has its hands out and wants to have Germany's standard of living. Germany should leave the EU and preserve its economy. There is no reason it should sacrifice itself to pay for the malfeasance and incompetence of everybody else.

Politicians will kick the can down the road while hoping rumors of future action will carry the day.

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Q: Will we get a bailout?

Will we get a bailout? - I think it's a foregone conclusion. The only question is whether or not we go through the front door or the back door.

I believe the Federal Reserve will get involved ultimately to bailout the European banking system, which will grind to a halt. This has significant ramifications at the very highest political levels in Europe and the United States, especially with the U.S. heading into elections and approaching a repeat of the debt debates.

Q: Would I own stocks going into this weekend when so much is on the line?

Yes. No question about it.

At this stage of the game, bailing out is the wrong thing to do. Many good companies will get put on sale and history shows that you want to buy into chaos rather than run the other way.

Q: Finally, what will this global chaos do to gold prices?

I expect gold prices to drop initially, perhaps even sharply, as trading houses raise cash. But the moment a bailout is announced, watch gold head the other way. The only question at this point is the order: drop first, bailout later or bailout first, correct, and rise later.

Ultimately gold will resume its place at the head of the class. I still expect $2,000 an ounce or higher within the next 12 months.

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About the Author

Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.

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