Bond Guru Gundlach to FBN: 'The Euro-Zone Dies Within 5 Years'

By Business Leaders FOXBusiness

Gundlach: Bond market 'ridiculously' oversold

Doubleline Capital founder & CEO Jeffrey Gundlach explains why it's a good time to tweak bond investments.

In his first business network interview of the new year, DoubleLine Founder and CEO Jeffrey Gundlach said the Euro and its multi-nation zone could face grave danger as early as this year.

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Speaking to FOX Business after an exclusive taped interview, Gundlach, who boasts $101 billion in assets, said the common currency that 19 member states of the European Union use won't survive.

"It was a bull market idea. A group hug of sorts but when push comes to shove, I knew Paris wouldn't take orders from Brussels, Italy is a disaster, there are countries that will never pay their debts. I'd put a 35 to 40 percent bet that something could even happen this year.  (In the upcoming French elections) Marie Le-Pen could win. She's said she'd put France's membership up to a referendum and if that happens... I'd be surprised if it survive another 5 years," he said.

Gundlach, who called Donald Trump as the victor in the U.S. presidential election even before the primaries, also spoke to FOX Business exclusively on a multitude of other major potentially market-moving issues:

Future trade war with China:  

"I don't see it. The possible happy scenario is that Donald Trump's just a deal guy. He strikes deals. China doesn't want a trade war so Trump dangles it out there and then softens his position on China in exchange for something. China has some control over North Korea. Maybe he strikes a deal to back off a trade war in exchange for China keeping a lid on North Korea (and its nuclear ambitions). But to start a trade war only makes things like apparel more expensive for consumers. Why would you want to do that?"

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Trump's effect on business sentiment and his attacks on U.S. companies doing business overseas:

"It's incredible. We've seen a complete 180 degree change in sentiment since he was elected. Trump is  symbolic guy. He picks symbols like Carrier and Ford. They're very small issues but he makes them seem very big. His pushing them leads to incredible optimism. Did you see uptick in Small Business sentiment?     

On forcing businesses to keep plants in America:

"(Trump) can impose tariffs, he can promise that America will get a bigger share of the pie. But that's about it. Companies might stay here but they'll use more robots. The robots won't go away. Dark factories? It's already happening. There's a massive technology shift and you can't stop it." 

On President Obama's relationship with business owners:  

"That was the most frustrating thing. People don't want to be lectured to for being entrepreneurs. When Obama said in 2012, 'If you've got a business, you didn't build that, you didn't create those jobs,' I can tell you I've created 200 jobs. So I didn't appreciate that."

On Trump's plan to cut taxes and spend on infrastructure:

"It's a very bad time to launch a deficit explosion.  It's like drinking a ton of coffee in the morning. You'll feel pretty good for awhile but in the afternoon, you're gonna crash hard."

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