Germany pushed Greece “a little too far” during negotiations over rescue aid, said James Rickards, chief global strategist at West Shore Funds.
“This looks like a German miscalculation to me,” Rickards said in an interview with Bloomberg TV’s Stephanie Ruhle and Olivia Sterns. “The Germans are going to have to blink and back away.”
Rickards said Greece and its creditors weren’t far apart in terms of reaching a deal, and that there were several scenarios in which the Mediterranean nation can step away from the brink, including voting to accept the latest aid package in the upcoming referendum.
Rickards also warned about the dangers of contagion if Greece’s situation deteriorates, including possible social unrest, which he called the “real wild card.”
“These things can take a year or more to play out,” Rickards said, citing the 1997 Asian financial crisis that began in Thailand before spreading throughout the world and the global financial crisis that he said started in 2007. “I wouldn’t underestimate contagion.”