June 17th, 2012
03:29 PM GMT
London (CNN) – For London’s investment community Sundays are more about talking pizzas than politics.
They’re the last chance to unwind before buckling up for the bumpy ride when the markets open on Monday morning.
But across Europe’s financial hub, traders are keeping an uneasy eye on events in Athens and preparing themselves for what many reckon will be a wild week at work.
The 43 year-old Dutchman shot to fame three years ago at the height of the credit crunch as the forthright financier on the BBC’s reality show "Million Dollar Traders."
Van Dam now spends his time running Hampstead Capital, a fund with 500 million euros ($630 million) under management, as well as his new initiative: The Lex van Dam Trading Academy, set up to teach would-be dealers how to manage money.
He took time away from his weekend lunch (and 26,000 followers on twitter) to answer five key questions on what the Greek elections mean for the markets.
1. Will Greece leave the euro?
Yes. They will leave very soon unless the Germans change their tune and throw more money at them. It is slightly unfair though as most of the help Europe gives them is to help the Europeans themselves as opposed to helping the Greek people.
2. Is austerity the right answer?
Austerity is not the answer. The Greek economy is absolutely collapsing and the tax base is going down with it. The American and British solution of printing money is not the answer because it will lead to a total lack of trust in the government because paper money will be worthless. The answer is accepting that people in the West need to work harder and longer.
3. Will the euro survive?
The biggest chance is for a two-speed Europe to emerge with Germany leading the euro pact and Italy in the second group. The German euro will be very strong, the Italian euro very weak though.
4. Eurobonds: The perfect cure or recipe for disaster?
The Germans have done a massive amount of austerity at home with a higher retirement age and lower wage inflation than in the southern European nations. They will not write a blank cheque to the south. Eurobonds mean that the Germans will become responsible for the Greek debt. It will not happen unless countries such as Spain and Italy give up part of their sovereignty.
5. Where are you putting your money now?
My money stays in cash and real assets such as property and gold. Shares are not expensive right now but if interest rates go up even a little they could drop a lot.
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