Billionaire investor Wilbur Ross says if Britain votes to leave the European Union in its June 23 referendum, a global “madhouse” will erupt because of the “financial suicide” the move will mean for older investors.
“I think there’s a lot of things to worry about. To me the biggest worry coming up near-term is the Brexit, the potential for the U.K. pulling out. That would really be a madhouse if it happened,” Ross told the Fox Business Network’s Maria Bartiromo.
“And what’s strange about it, in Scotland it was the young people that wanted to break away from the U.K., young people idealist and patriotic and all that. In U.K., it’s the reverse, it’s the old people who want to pull out and the young people know there will be a half a million or so unemployed people if they break out,” said Ross.
In his opinion, older people in the U.K. are committing “financial suicide” by supporting a British exit, also known as a “Brexit,” warned Ross, chairman and chief strategy officer of WL Ross investment company.
“More than 70% of the people over 45 years of age in U.K. own their own home. If you have half a million people laid off in the recession that would follow a British exit, those house prices will collapse and a house is usually the main asset that any family has” Ross said.
If the U.K. does vote to leave, Ross says there would be major complications in other regions of the world.
“There would be a domino effect, for sure the Scottish exit would come back up again, you know the Spaniards will have the problem with Catalonia, Germany, you’ll have all these extreme parties, Euro-skeptic parties, get together,” Ross said.
Global investment firm Pimco sees a significant chance of Britain voting to leave the European Union in its June 23 referendum but this would not deal a big blow to the global economy, executives with the firm said.
Pimco managing director Mike Amey put the likelihood of Britain voting to stay in the EU at about 60 percent. Bookmakers price the chance of a "Remain" vote higher, at about 80 percent, while opinion polls suggest the two sides are evenly split, Reuters
"There's a pretty significant chance that we leave," Amey told reporters. "It would be a significant event for the UK, but it wouldn't be a globally systemic event. It wouldn't derail the global economy."
The International Monetary Fund has previously said a Brexit could hurt the fragile global economy.
An investor and businessman who made his billions advising bankruptcies and restructuring flailing companies, Ross was No. 20 in Newsmax's 100 Most Influential Business Leaders in America.
Ross is a force in the steel, coal, telecommunications, foreign investments, and textiles industries. He spent 25 years with Rothschild Inc.'s bankruptcy practice and then founded investment firm WL Ross in 2000. It was acquired by Invesco in 2006. He has spent the recent years turning around troubled banks, first the Bank of Ireland and then the Bank of Cyprus.
Ross successfully bet on the Irish banking system when it was on the ropes. Ross is known for restructuring failed companies in industries such as steel, coal, telecommunications, foreign investment and textiles. As of June 2015, Forbes
listed Ross’ net worth at $3 billion.
Ross, who specializes in leveraged buyouts and distressed businesses, leads a group of investors who last year poured 1.3 billion euros ($1.47 billion), into Eurobank Ergasias, the third-largest bank in Greece, the New York Times said.
(Newsmax wire services contributed to this report).
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