Europe on Brink of ‘Major Financial Collapse

Posted: August 2, 2011 in World News

Gennine Kelly
CNBC
August 2, 2011

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.”

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