Jim Rogers Foresees Greece’s Economic Collapse, Thus Igniting a Stock Market Crash

Greece Economic CollapseWhile central bankers and media outlets try to prop up financial markets with upbeat rhetoric, investors should be worried about a Greek economic collapse and possible stock market crash as early as next week.

At least, that’s according to billionaire investor Jim Rogers. In an interview with Russia Today earlier this week, the former hedge fund manager predicated that a Greek debt default could shake the global economy and plunge the indebted nation into a depression. (Source: RT.com, last accessed July 2, 2015.)

As Rogers stated, “Greece will collapse this week and people will be terrified. […] If you ask me what they should do—its just go ahead and go bankrupt, get it over with and start it over. But all this calling names and blaming other people is not going to do any good.”

The Greek government and its creditors failed to reach a deal over the last week which forced the country to close all banks and impose capital controls. Consequently, Greece was the first developed nation to default on its financial obligations to the International Monetary Fund (IMF).

As Greek people set to vote on a referendum on Sunday on whether or not their government should accept the country’s bailout proposal, Rogers is certain Greeks will reject the terms for their European Union creditors.

What does Rogers recommend for the struggling country? In his view, Greece should default on its debt and begin the rebuilding process.

“The problem is this means that the citizens of Greece are going to be suffering and the bailout is for the banks and financiers. What they should do is to let the banks go bankrupt—they made their loans, you and I didn’t make the loans—let them go bankrupt and start it over.”

Analysts now have to fully contemplate the idea of the so-called “Grexit” scenario, whereby Greece completely abandons the euro and exits the continental union. In such a situation, it would be difficult for investors to anticipate the full contagion risks to the global financial system. Such uncertainty could well spark a global stock market sell-off, perhaps even the full economic collapse of the eurozone.