Europe on Brink of 'Major Financial Collapse': Guggenheim CIO

Europe on Brink of 'Major Financial Collapse': Guggenheim CIO

Europe is a "train wreck" and on the "brink of a major financial crisis," Scott Minerd, CIO of the fixed-income firm Guggenheim Partners, told CNBC Tuesday.

"The way Europe is operating right now, it's what I called recently 'cognitive dissonance,'" Minerd said, or "basically doing the same thing thinking they're going to get a different outcome."

"They keep throwing more and more liquidity at it thinking it's going to get better and it's not," he added. Europe fails to recognize that it has a "structural problem, not a liquidity problem."

People will "flee the euro" unless they find a way to bifurcate the euro in some way where strong countries are in the euro only and the weak countries are out, Minerd explained, adding, "To be honest with you, I don't see the mechanism to do that."

"As the capital is flooding out of Europe, which we're starting to see now, the first place it's going to go is to the safe havens—[U.S.] Treasurys, which [the market] perceives to be safe, and it'll chase gold," he added.

Now with news of the debt ceiling debate receding, we have more ominous news coming out about the Eurozone and where lies one of the world's significant destabilizing timebombs. Noting the contagion factor, a major Eurozone crisis would almost certainly bring trouble to the rest of the world, particularly countries most heavily invested there, and I think China being one major investor. I agree with the latter part of the article (not cited) that the US is probably in a better state than the Eurozone, though we are seeing further deterioration of the US economy in GDP, manufacturing and unemployment. This together with reports that global growth is slowing and other troubling economic news elsewhere in the world points to some interesting times on the horizon.

Spain's Prime Minister Jose Luis Zapatero has been forced to postpone his holiday as investors continue to flee his country's debt.

Spanish PM debt fears

I heard something simular with Italy on the news today. They euro is as doomed as the dollar, when one collapses the other will follow at some point, hitting China hard. Only a matter of time.

Lord Stirlings News Blog is a good link for getting to the bottom of what's going on in Europe and else where in the world -

europebusines.blogspot.com...

So instead of directly taxing the very rich and corporations, we are borrowing money from them with interest. Much of the money we are borrowing from them was given to them via the bank bailouts; they were given free taxpayer money and lent the money back to the taxpayers, while demanding that programs that benefit working people be slashed! This extraordinary moment requires extraordinary action from working class organizations, including mass demonstrations as part of a sustained, independent campaign.

The deficit reduction plan worked out by the cooperation between Republicans and Democrats is not set in stone. Massive, ongoing protests have a tendency to make politicians re-think their policies.

globalresearch.ca...

You couldn't make it up could you!

Let these socialites collapse.

This is a good thing.

Proof socialism does not work....

Originally posted by hillynilly
Let these socialites collapse.

This is a good thing.

Proof socialism does not work....

proof you dont have any idea what you are talking about...

jog on bud!
where did you get the idea this was socialism...

These countries all wanted to be as affluent as Germany when they can't engineer $hit like the Germans can. They should have all stuck to their siestas.

This is like a monthly statement from this guy or that guy.

Next month somebody else will claim it again.

It is all about a "make believe" savior at this point!

Someone that can lead the masses out of the mess with Heaven in sight, but it is all just a painted brick wall with curtains hiding the rusty bars of oppression!

Maybe they will have air-conditioning! with cake!

FTSE finished low today, dont think it will regain this week, put call/ reverse invest in gold.

This is pure maddness.

Italy the next one

Bags of money in garages, frightened savers fleeing banks and even the country: these aren't the sort of stories you associate with a comparatively-prosperous European country, but with a developing one facing a life-or-death economic crash. The fact that they are now emerging from Greece not only indicates the scale of financial distress, it suggests something else: Greece today looks like parts of Latin America in the worst moments of its financial crisis.

Greece in panic as it faces change of Homeric proportions Guardian, August 1.

And Greece is just the thin end of the wedge.

Europe certainly has its problems, the inability to print, means large cuts in spending and the assistance of other members to fund the debt laden southern country's.
But i also think there is a little overreaction going on as Italy and Spain are quite capable of magaging their budget and have already reduced their deficit.
I think the news is somewhat biased on both sides of the ocean, because here in Europe it is said that America is in far worse shape then Europe.

Can't argue with anything in that article, it's all very factual information, but in the end, there is not a god damn thing we can do about it. Politicians have too much power and funding to be brought down, even with revolt, with revolution comes Military Rule. It's been shown many times in history, that when the general public wants to make a change, especially as drastic of a change as we are looking to make here, the military gets involved, and that my friends, is never good.

reply to post by bdimi


It's also been shown many times in history, that when the cause of the general public for change is just and undeniable, the military (which consists of our brothers and sisters) gets involved and joins us.

Please Update Thread title to Europe now falling to the brink