Riots in the US?
“Yes, yes, yes. It will be an excuse for cracking down and using strong arm tactics to maintain law and order which, carried to an extreme, could bring about a repressive political system, a society where individual liberty is much more constrained.“
– George Soros
George Soros, a graduate of the London School of Economics way before I attended, is making Dr. Doom seem like an apologist for Europe’s crisis. While Roubini gives a break up of the EU a 50-50 possibility sometime later than 2012, Soros says that it’s likely that Greece will default in 2012 and that the euro could collapse with devastating consequences.
This is a preview of the speech that Soros plans to give at the famous annual World Economic Forum in Davos. Soros has been sharing his grim outlook throughout Europe in the past couple of months. Coming from anybody else his warning would sound more like panic than a dispassionate plea to come to grips with a crisis about to spin out of control. But Soros understands how the world of money works as well as anybody else on the planet. The man has gravitas to spare. From Britain’s Telegraph…
In an interview ahead of a speech at the World Economic Forum in Davos, the 81-year-old said that for the first time in his career he was baffled by the current state of the market, and saw no way to avoid a violent crisis which at its worst could result in the total collapse of the financial system.
Known as the “man who broke the Bank of England” after betting against the pound on Black Wednesday in 1994, Mr Soros plans to use his Davos address to issue a stern warning that he now considers it “more likely than not” that Greece will default in 2012. And unless Europe’s leaders do more to stop it, the euro is likely to collapse with a devastating impact on the rest of the world, he will add.
The financier compared the crisis to the collapse of the Soviet empire and the Great Depression, adding that the old belief in the power of the market to prevent turmoil could no longer be relied upon.
He told Newsweek: “The euro must survive because the alternative – a break-up – would cause a meltdown that Europe, the world, can’t afford. I’m not here to cheer you up. The situation is about as serious and difficult as I’ve known in my career. We are facing now a general retrenchment in the developed world.
“The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system. We need to move from the Age of Reason to the Age of Fallibility in order to have a proper understanding of the problems.”
Soros is hoping that Europe’s leaders develop a stronger sense of urgency with his clarion call to action. That would be nice but unlikely. Europe’s leaders have heard various versions of these warnings before. They may even think that they’re possible. It really doesn’t matter. If Germany doesn’t want to take greater responsibility in bankrolling future emergency funding, then there’s not much the rest of Europe can do.
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