VIDEO: Long-Term Depression in Europe's Future
Ray Dalio, Bridgewater Associates founder and a recent addition to the annual Time magazine list of the 100 most influential people in the world, gave an exclusive interview with CNBC's Squawk Box on where Europe go from here. It doesn't look good:
“I think in the next couple of years, that we're going to have a depression in southern Europe and it's going to be a managed depression. There will be a combination of monetary policy, printing a certain amount of money to relieve it, and at the same time a de-leveraging and restructuring of debt. De-leveragings, restructuring of debt and austerity are deflationary, and they are negative for growth... it will be a 10 to 15-year managed depression”
As for the euro, Dalio thinks the 17 nation eurozone will manage to hold together. However, if anyone leaves, it won't be the struggling periphery countries:
“If there is a breakup, i think it's more likely that the northern Europeans would leave. i think the euro stays -- is likely to stay together. although in later years it's more risky.”
Here is the video:
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