Billionaire Sees Stagflation Ahead

Billionaire Wilbur Ross of W.L.Ross&Company notes that the real problem Greece has is the extent of its debt,which has reached 13.7% of Gross Domestic Product.On the tax side,people in Greece don't pay tax.The government only gets 3-4% of what it is owed.There's not an easy way to pull out of the European Union.The frugal Germans are bearing the price for the sins of the people of the South.A whole lot of things could be reformed,but how do you get it through the legislature?
Estonia has cleaned itself up pretty well.At best,these countries will have stagflation without big government spending;the economy will weaken.They have to start cutting,even though it will be painful and slow.You have over-leveraged states in Europe trying to prop up the over-leveraged consumer.The thing that's dangerous for us is more the question of the Euro versus the dollar.We already had an imbalance of trade with Europe.
Mr.Ross doesn't see the U.S. going back to a recession,though the debt problem will probably cut basis points off its GDP and that of China and others. U.S. Treasury Secretary Timothy Geithner will be meeting European leaders on the way home from China to discuss the debt issue.