In a candid interview with CNBC, Soros gives his 2 cents on states finances and the muni implosion. It is very similar to what happened in Europe:
- The states cannot issue currency (they cannot print money)
- The states are too indebted
- They cannot tax their citizens any more.
What is interesting to note is that Soros does NOT think that the federal government will be there to rescue them. If this is the case, expect not only state budgets to face enormous austerity, expect state pension funds to implode.
On Europe, Germany and a few other places are in good shape; but others, noticeably those in the southern portion (mediterranean and baltic states), will fall further and further behind. Our thoughts exactly and we watch with great trepidation. This is what world wars are made of.