Just last week we featured the nations with the world’s highest unemployment rates. Of course it is only logical that Greece would have been in on that list. What was surprising was that the industrial production data for the month of June had shown a slight uptick, even while the broader economic news flow seemed to still be only headed the wrong way.

As we figured, this was merely a blip. Greece’s GDP was down 6% in the second quarter, but the June reading of industrial production actually was shown to be up 0.4%. We now have newer data showing that July industrial production was down by 5%. A later report from Dow Jones noted that this industrial production would have been down by fifty consecutive months with the exception of June.

The Hellenic Statistical Authority also said that consumer prices rose by about 1.7% annually in August, up from a 1.3% gain in July. The difference here is that on a month over month basis the drop in prices was 1%.

What is interesting is that the rally is continuing in National Bank of Greece SA (NYSE: NBG). This ADR is up by 8% at $2.14 and this was under $1.70 last week before Mario Draghi’s pledge to buy bonds.

Even the Global X FTSE Greece 20 ETF (NYSEMKT: GREK) is also up 4.7% at $14.41.

Our take is still that Greece will be the first nation to exit the Euro. Reports over the weekend signal a political rise in the anti-Euro camp, and in a nation where elections can be called routinely it will only be a matter of time before the nation capitulates and before the population bucks the Euro and accepts whatever consequences follow.

Our take is that the situation is still getting worse. Americans think that Greeks are pampered too much with very early retirement, but if you grow up under a set of guidelines then that is what you expect. Ultimately, the austerity measures may prove to be too much for a nation that is used to playing by different rules when it comes to taxes, benefits and retirement. With the ability for any new election to hinge on calls for a euro exit, the Drachma is likely to return and the printing presses will have to be turned on.

JON C. OGG

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