George Soros said on CNBC last week that he thinks “we are in a [double dip] already” in the U.S.
And if we don’t create more jobs?
We will have even more of a slowdown and a double dip, he says.
Soros explained that the slow growth ahead in the U.S. is tied to the resolution of the Euro crisis, which he says is a dangerous liquidity issue.
He explained that what’s happening in Europe is a situation that’s “more dangerous” than Lehman. However the authorities will do whatever it takes to keep the system together. “Because the alternative is just too terrible to contemplate.”
What could happen: 2 or 3 of the smaller countries could default and leave the Euro, provided its preprared in an orderly way. However if it were disorderly un-preprared, it could disrupt the global financial system.
The next step people are looking for (after Soros’ and others’ warnings about the consequences of a surprise credit event in Europe) is a serious call for action. That’s the type of message that leaders need right now,
Soros doesn’t think this will happen soon. He says the climax won’t come in September, he says, because “they’re not prepared for it.”
“They have to create this EFSF,” says Soros, “whatever that stands for, it’s a potential for European Treasuries, but it’s not yet in existence yet. So they want to bring it in.”
The implications for Greece: “By December, if Greece hasn’t delivered by that time, they won’t get the next tranche,” predicts Soros.
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