Legendary global investor and chairman of Singapore-based Rogers Holdings, Jim Rogers said some European countries are bankrupt or are having serious liquidity problems and should be allowed to restructure their debt.
Speaking today on CNBC Worldwide Exchange Rogers said: “You need to let Ireland go bankrupt. They are bankrupt, why let innocent Germans, Poles or innocent anybody pay for mistakes made by Irish politicians and Irish banks”.
"They are bankrupt. Let them go bankrupt, let the banks’ shareholders lose money, let banks’ bondholders lose money, let Ireland reorganize and start over, that’s the only thing that’s going to work. Zombie banks and zombie companies is not going to work," he added.
On Monday, ministers from the 16-country strong eurozone said that the existing safety net of €750 billion (US$1 trillion) was large enough, and praised both Portugal and Spain for the steps they were taking in getting their economies in order.
Some fear that the existing fund would be overstretched if countries such as Spain and Portugal followed Greece and the Irish Republic in asking for help.
On Monday, the head of the International Monetary Fund, Dominique Strauss-Kahn, had called for an increase in the size of funds available for support.
And on Tuesday, he criticized Europe’s response to the eurozone debt crisis.
Speaking from Athens, where he was attending a meeting with the Greek prime minister, Mr. Strauss-Kahn said: "The eurozone has to provide a comprehensive solution to this problem. The piecemeal approach is not a good one."
Greece is insolvent, Portugal has a liquidity problem, Spain has a liquidity problem…….the UK is totally insolvent, Rogers told CNBC.
“This is a serious problem we have in the West, somebody has to deal with it,” he added.
US President Barack Obama announced last night he’ll accept a deal to sustain all the Bush-era tax cuts for high- income taxpayers for two more years in exchange for extending federal unemployment insurance for the long-term jobless and cutting the payroll tax by US$120 billion for one year.
"Not raising taxes is always good for the world and for the economy, so we can presume that things will slowly continue to creep up for a while," said Rogers.
Jim Rogers has taught finance at Columbia University’s business school and is a media commentator worldwide. He is the author of Adventure Capitalist, Investment Biker, Hot Commodities, A Gift to My Children, and A Bull in China. See his website.