Gary Shilling Predicts Major Problems for Europe in 2012

By on December 22, 2011

Gary Shilling - A. Gary Shilling & Co.Sara Eisen on Bloomberg’s Inside Track interviewed Gary Shilling regarding his insight into what will occur next year.

Shilling commented first on the political risks in North Korea and Iraq. He also mentioned the stability of the large economies including China and Japan. Shilling also doesn’t expect any major-scale “Occupy” movements in the coming year.

However, Shilling believes Europe is already in a recession, which will become severe, and that there will be a global recession.

Shilling thinks the Euro will fall to 120 in the intermediate term and could eventually reach parity with the U. S. dollar. He expects we’ll see a major bank failure in Europe.

Shilling further commented on the percentage of exports (14%) from the U. S. to the Euro zone, the risks to the financial area since U. S. banks are exposed 27% to the Euro zone, and his view versus the consensus.

Shilling has been prescient for his past predictions of strength in long-term Treasury bonds (link).

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