Nouriel Roubini is not buying the EU/IMF patch job as the solution
Europe's current bailout plan for Greece "is not going to work" because "Greece is nearly insolvent," Roubini told CNBC Wednesday.
"A restructuring of its debt [i.e. default] is going to be necessary," said Roubini.
A collapse of the Greek economy could have domino effect among other weak eurozone countries—including Portugal, Spain, Italy and Ireland, he said.
“Suppose you have a disorderly collapse of Greece, two things will happen," he added. "Financial institutions holding Greek debt—mostly European—will have massive losses. Secondly, a contagion from Greece to Portugal to Spain to Italy to Ireland will have a domino effect."
Eventually, debt increases and risk aversion is going to drive down the asset prices globally, as it happened yesterday and today.”
"Eventually, debt increases and risk aversion is going to drive down the asset prices globally, as it happened yesterday and today.”
ReplyDeleteAnd that is what scares the bejeebus out of me. It is only a matter of time before that debt domino hits the US. I'm not even convinced 'safe' investments like precious metals, etc are safe from this.