Wednesday, February 24, 2010

Shilling: Euro Poised to Plunge 27 Percent

Economist and money manager Gary Shilling says the euro is likely to drop about 27 percent from current levels.

“I think the currency could go back to 1-to-1 versus the dollar,” he says.

“The problem is that Europe has a one-size-fits-all monetary policy but very different fiscal statuses in individual countries. Greece is the poster boy, but you have the rest of the PIIGS (Portugal, Ireland, Italy, Greece and Spain) right behind it,” he told Bloomberg.

Greece, for example, has a budget deficit totaling 12.7 percent of GDP.

“It’s really an insoluble problem because these economies are very different,” Shilling said. “They’re much weaker; they need to issue all these sovereign debts. And ratings agencies are downgrading them.” (more)

No comments:

Post a Comment