Tags: Rogers | US | Threats | Europe

Jim Rogers: US Facing Bigger Threats Than Just Europe

Wednesday, 28 Sep 2011 08:16 AM

Financial woes in Europe may be hammering U.S. stock markets these days but the economy is facing scarier homegrown threats, says international investor Jim Rogers.

Debt burdens in the U.S. are heavier than many in Europe.

"Europe has a few bad, bankrupt states, so does America. We've got Illinois which is bigger than Greece, we've got California, we've got New York, you know those are pretty big states that have serious economic problems. We have pension plans in America that are terribly under water," Rogers tells CNBC.

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Jim Rogers
(Getty Images photo)
"Europe's got some bad problems but the entity as a whole is not nearly as deep in debt as the U.S. They don't have a huge balance of trade deficit, like we do," Rogers adds.

Concerns persist that a Greek default could bruise banks across Europe and eventually those in the U.S.

European authorities have been working with Greece to prevent such a scenario, although Rogers says Greece should default and allow Europe to forgo the side effects that bailouts will have on the European economy.

"I wouldn't want to bail out the Greeks either if I were the Germans or the Dutch or the Finns or the Austrians. I wouldn't either and that brings more discipline to bear than what happens in the U.S. where just everybody runs amok."

Europe is working to tweak a $590 billion European Financial Stability Facility, originally designed to buy bonds from Ireland and Portugal, and empower it to buy government debt wherever needed to ease pressure from the crisis.

Many oppose such a move, arguing it bails out countries that spend too much, while others point out that it's too small to help others.

"Given the need to create a buffer to potentially support Spain and Italy if they lose market access, the capacity of the EFSF will likely need to be tripled or even quadrupled," economists at JPMorgan Securities write in a report, according to CNNMoney.

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Financial woes in Europe may be hammering U.S. stock markets these days but the economy is facing scarier homegrown threats, says international investor Jim Rogers. Debt burdens in the U.S. are heavier than many in Europe. Europe has a few bad, bankrupt states, so does...
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2011-16-28
Wednesday, 28 Sep 2011 08:16 AM
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