Dennis Gartman Talks To Benzinga Radio

Dennis Gartman, author of The Gartman Letter, spoke to

this week to discuss the possible dissolution of the European Union and the current disadvantages with buying gold among other things. Gartman reiterated his June statement that Germany would leave the Eurozone within two years. He claimed that the truth is that, “hard-working, fiscally responsible, saving-type Germans are not going to continue to pay for profligate, non-working, short-time, vacation-taking Greeks. The Germans are about up to here with what the European Union has cost them. It's only been 20 years since they brought the East Germans back in. Now they're being forced to pay for the Greeks.” In reply to the question, how long will it take for the EU to break apart, Gartman said, “Two years or more. There's an awful lot of political capital that's been expended that nobody really wants to write down to zero but that's essentially what has to be done.” On the subject of the moves of Italian bonds this week, Gartman said that he thinks that all of the spreads for all of the southern European nations are probably going to continue to widen relative to Germany. “I think any narrowing of those spreads relative to German interest rates will be an opportunity for somebody who owns Spanish, Italian, Greek or Portuguese debt to get rid of it. A year from now, the spreads will probably be wider than where they are now.” Gartman said that Greece is going to have to default, though he claims that they may call it something else. “The composition of the EU has made no sense since the beginning. They will do everything in their power to keep the union together because it is a political animal. The political forces have expended a lot of political capital to make this thing work and they're not going to give up on it easily.” He predicted that Greece, Portugal and Italy will return to their own currencies in order to devalue them and move forward. “Greece is a tourist country, and nobody can afford to go to go to Greece anymore. They need their Drachma that they can devalue by 50 percent, then suddenly you and I can go back to Greece.” Gartman also spoke about the success he had trading gold in Euro terms. “The problem because that I couldn't turn on CNBC or Bloomberg without somebody telling me how good the gold in Euro trade was. It's become awfully crowded. I'm not going to go there anymore.”