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Dr. Doom: 'Kick Greece out and never take them in'

Swiss guru investor Marc Faber, known as 'Dr. Doom,' thinks Greece should go back to the drachma

03.07.2015 - Update : 03.07.2015
Dr. Doom: 'Kick Greece out and never take them in'

LONDON 

Swiss guru investor Marc Faber, in an interview with Anadolu Agency on Friday, said he wanted Greece to leave the euro.

"What I think should happen is to kick them out and never take them in. As we understand it, we are not talking about economic, but rather political issues. Greece is part of NATO. and the Americans have a naval base in Crete. Greece is part of the EU…Given the tension with Russia, American Neocons are afraid that if Greece turns its back to Europe, maybe Chinese or Russian influence will prevail in the country."

Faber is known as "Dr. Doom," because he predicts crises, while, at the same time, spotlighting investment opportunities. His newsletter is widely read and well-respected in the financial community.

And he takes a gloomy view of the Greek bailout.

"Greece is an irrelevant country in global economy. It’s less than 2 percent of  global GDP.  Economically it has no impact. However the impact, this is the problem for whole world, is that the global financial system is far too big for the real economy, and so when Greece defaults, it may threaten some institutions like the International Monetary Fund, the European Central Bank, and the banking system. This is the issue. If such a small country can have such a huge impact on the financial system, it means the financial system is very fragile. That’s the problem in my view," Dr. Doom commented.

"Greece was bailed out repeatedly. It was not the bailout of Greece; it was the bailout of the banks and the institutions of Europe. Now we clearly see that with this economy and GDP in Greece, they think they cannot pay the interest rate on their debt and repayment is out of the question. I think what Aleksis Tsipras is doing, he is basically doing the right thing, telling the truth; ‘we don’t have the money, we have to make a significant haircut on our debt.'"

Will Greece still be kept in the eurozone, even if Greeks vote ‘no’ on Sunday’s referendum? He replied "Yes, I think. I think eventually there will be some kind of a deal. But we have to face reality. The Greek economy is performing poorly and that is partly because of its huge debt burden that was enlarged by the European financial institutions including the IMF. We are living in a new world order, believe me. the influence of  Western imperialists is declining, and new countries are coming up: Brazil, China, India, Turkey and it is a new world order. I like Tsipras because he is challenging the IMF."

They 'strangled Greek economy'

Faber said that the bailout was a mistake. "If you are lending money to someone, basically you, as a lender pay for a certain amount of risk, because you are lending money. I think European financial institutions including the ECB were very imprudent to lend Greece that much money. I am not in favor of the Marxist socialist views that Tsipras espouse, but equally I am  against the Western financial institutions which essentially strangled the Greek economy and overburdened them with debt."

Faber urged Greece to leave the euro. "I think leaving the Eurozone and printing Drachma would be the best option, going back to the local currency. At that stage of course there will be meaningful devaluation. But a lot of money is waiting to go to Greece. A lot of hedge funds want to buy Greek assets. In my view that would be the best measure. They can still use the euro for some transactions like in Latin America. Under these conditions I think the Greek economy can perform well. This is the fear of ECB and the bureaucrats in Brussels, if Greece leaves suddenly their economy will do well and then other countries Italy, Portugal, Spain…they will also see ‘oh they left the zone and now they are performing well’…then they will do the same."

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