Letting Greece exit the euro “opens Pandora’s box,” says Jeffrey Gundlach.
The Greek debt crisis has proved that there is no easy answer, but allowing Greece to leave the euro could destroy membership in the eurozone, says the DoubleLine Capital founder. Other members will see participation in the euro as permeable, opening the door for others to leave, reports Bloomberg. “There’s never one cockroach,” says Gundlach.
Greece has until Sunday to come up with a new reform proposal, otherwise Europe is kicking it out. Such a move could be as devastating as it is unprecedented, as the membership in the euro is supposed to be irreversible, and the continent has struggled in the last few decades to unite politically and economically.
During the same webcast, Gundlach said that Chinese stocks won’t be have a strong bounce back any time soon. And the chances of the Fed raising interest rates in September are less than 25%.
Photo: DoubleLine Capital.