My View:
George Soros, member of the wealthy elite, seems to relish interviews with the media so he can espouse his Fabian Socialist notions. In this interview, he states that the best solution to the European crisis is to do what the US did in 2008 - guarantee the banks.
That worked out well for the US didn't it!
In Soros plan, the European Central Bank would "instruct" private banks so they would maintain lending.
The ECB would lower interest rates to accommodate the high debt levels of Italy and Spain.
Greek debt would be rolled into zero coupon bonds with 10 year maturities and Greek public assets would be sold to the private sector (most likely at deep discounts) to reduce the debt load.
So the basic idea Soros has is to create a command economy, similar to China's, and manipulate interest rates in an attempt to avoid a meltdown.
Unfortunately, all this does is kick the can down the road further.
The fundamentals are undeniable.
Greece is bankrupt and so is Italy.
Their debt to GDP ratios at over 100% of GDP are far too high.
Austerity with debt at these levels will be ineffective and simply enrage a disaffected populace.
Greek default and return to the drachma remains the only viable option in my view.
This equates to debt haircuts in the range of 73%, if my earlier calculations are correct, to restore viability to the Greek state.
But the impact on European banks, and French and German banks in particular, would be severe.
At this point, a second credit crisis appears unavoidable, in my view.
Therefore, anticipate a significant decline in asset values that are leveraged.
Real estate, commodities, stocks, and bonds all look vulnerable. Cash and gold appears to be the best safe havens as John Exter's pyramid predicted.
1 Listen therefore, O kings, and understand; learn, O judges of the ends of the earth.
2 Give ear, you that rule over multitudes, and boast of many nations.
3 For your dominion was given you from the Lord, and your sovereignty from the Most High, who will search out your works and inquire into your plans.
4 Because as servants of his kingdom you did not rule rightly, nor keep the law, nor walk according to the purpose of God,
5 he will come upon you terribly and swiftly, because severe judgment falls on those in high places.
6 For the lowliest man may be pardoned in mercy, but mighty men will be mightily tested.Wisdom 6:1-6 RSV
From everyone who has been given much, much will be required
Luke 12:48 NASB
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