Even as markets cheered the agreement by European leaders to
allow the direct use of the bloc’s bailout funds to recapitalize struggling
banks, well-known investor Jim Rogers told CNBC the move does nothing to help
solve the region’s biggest problem, which is its high debt levels.
“Just because now you have a way to get them (the banks) to
borrow even more money, this is not solving the problem, this is making the
problem worse,” Rogers said on Friday.
“People need to stop spending money they don’t have. The
solution to too much debt is not more debt. All this little agreement does is
give them (banks) a chance to have even more debt for a while longer,” he
added.
After negotiating late into the night, European policymakers
agreed on Friday morning that the bloc's bailout fund, the European Stability
Mechanism (ESM), would be able to lend directly to recapitalize banks without
increasing a country's budget deficit, and without preferential seniority
status.
Rogers argues that the deal does not improve the solvency of
indebted nations…
Read all about it at http://www.cnbc.com/id/48008281
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