Ray Dalio Reads Europe's 'Tea Leaves'

Ray Dalio shares his predictions on the future of Europe and why he believes the euro zone is likely to stay together.

I think in the next couple of years I think that we're going to have a depression in southern europe and it's going to be a managed depression. there will be a combination of monetary policy, printing a certain amount of money to relieve it and at the same time a de-leveraging and restructuring of debt. de-leveragings, restructuring of debt and austerity are deflationary, and they are negative for growth. printing of money is inflationary and positive for growth. you have to have enough stimulation that you raise growth, you have to have a higher level of growth than you have of interest rates and so that process will continue and it will be a 10 to 15-year managed depression. the euro in that thesis stays together in. I think the euro stays -- eurozone. -- likely to stay together, although in later years, it's more risky.

 I think the euro is controlled by southern Europeans for the most part, it's a vote of the members, and it will be run that way. And that will help to achieve the balance ... if there is a breakup, I think it's more likely that the northern europeans would leave.