Mohamed El-Erian, chief executive of Newport Beach-based PIMCO, the worlds largest bond fund, says Greece will default.
"For the next three years, we're going to see different economies work out different problems. For European economies, especially Greece, it would be through default," El-Erian told reporters in Taipei on Wednesday via a video conference, according to Reuters. He also said that Europe risks wasting money for nothing by pumping billions of dollars into Greece.
In my view, Greece gets the next funding tranche of 12 billion euros. No government is going to sink the banksters when only a 12 billion payment needs to be made (Germany wants to make the payment only 7 billion), but things get interesting in September. That's when talks began over a second round of 120 billion euro bailout of Greece. At that point we are for sure talking money printing by the ECB, a Greek default or Greece leaves the eurozone and relaunches the drachma, which the Greeks can print until they destroy their own currency.
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