Allowing Greece to go bankrupt may cause a lot of pain, but it will be better for the euro in the long run, investor Jim Rogers said in an interview with CNBC on Friday.
"If Greece went bankrupt, it will clean up the system, (the) euro will go down for a while but then in my view, the euro will be a very strong currency," Rogers, chairman of Rogers Holdings, said.
The move would also demonstrate that Europe does not tolerate fiscally irresponsible countries, which will allow confidence to return to the euro , Rogers said.
"The way to solve this debt problem is not with more debt. The idea that you would solve a problem with too much debt and too much consumption with more debt and more consumption, that defies comprehension," Rogers said.
'Competent Regulators, Not More Regulations'
On U.S. President Barack Obama's push for more financial regulation, Rogers slammed it as "ludicrous", noting that it was precisely the problems at regulated industries like insurance, banking and mortgages, that led to the financial crisis in the first place.
"If it was regulated industries which caused the problems, we don't need more regulations, you need competent regulators," he said.
Rogers warned that the key systemic risk remains in sovereign debt.
"Sitting around here saying all these bankers are causing all our problems? No, Greece is bigger than nearly all the banks in the world. Spain, Portugal, United States…that's where the risk is."
Stock Up on Agriculture Commodities, Precious Metals
When asked about his key financial concerns, Rogers said Iceland's volcanoes remain a worry, particularly when the second, bigger Icelandic volcano – Katla - will erupt.
"If that happens, you're going to see a lot of disruption in the world economy … you better buy all the agriculture (commodities) you can if that happens," advised Rogers.
Rogers also likes real assets like precious metals, which he said is the only way for investors to protect their wealth.
"Precious metals are very depressed on a historic basis. While gold is making all time highs in euros and in some currencies, I'll much rather buy silver
than gold these days," he revealed as silver is 70 percent below its all-time high. "But I'm not selling my gold."
Click on the links below for more on Rogers' comments:
- Rogers on More Financial Regulation
- Rogers on the Next Systemic Risk
- Top Issue on Rogers' Mind