Tuesday, September 27, 2011

Eurozone should allow Greece to default: Jim Rogers - Economic Times

FRANKFURT: Jim Rogers, Chairman, Rogers Holdings is of the opinion that a viable solution to the Europe sovereign debt crisis would be if Eurozone allows Greece to default. According to him the default, would be a magnificant signal to buy euros.

"I would buy all the Euros I could at that point. We would know we are going to have a sound currency, strong Euro," he said in an interview. He believes that euro would then be a very serious competitor to the US dollar.


Asked about his top pick in the commodities space, Rogers said that the current scenario would warrent a buy in the agriculture space.


Meanwhile, world's major economic powers are pledging to launch a bold effort to deal with a chronic slowdown in growth and a European debt crisis that are threatening to push the global economy into another recession.


But it was unclear whether their strong words would be backed up by equally strong actions.


The statement by the Group of 20 major economies late on Thursday pledged that the countries, which represent 85 per cent of the global economy, would do what was necessary to restore financial stability and calm financial markets.


IMF Managing Director Christine Lagarde said the world was entering a 'dangerous phase' and World Bank President Robert Zoellick said he still believed the globe could avoid a double-dip recession 'but my confidence in that belief is being eroded daily.'


The president of the Dutch central bank says in a newspaper interview that he no longer rules out the possibility that Greece may not be able to pay back its crippling government debt.


A Greek default "is one of the scenarios," Klaas Knot says in an interview published in Friday's edition of the respected Dutch newspaper Het Financieel Dagblad.


Greece could default on its debt next month unless it receives a (euro) 8 billion ($10.9 billion) installment from a bailout fund managed by the European Central Bank, the European Commission and the IMF.


A default could destabilize other financially troubled European countries, such as Portugal, Ireland, Spain and Italy. It would also deal a blow to many European banks, which are large holders of Greek government bonds.

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Jim Rogers

Warren Buffett

Nouriel Roubini