"If we mark the assets of the European banks to market, the liabilities of the banks exceed the assets well beyond their capital cushion," said Minerd.

"The reality is every solution that's being offered by the policymakers is more and more liquidity, and the reality is this is not a liquidity problem, this is a structural problem," he added. "And the policy makers have done nothing to address the structural issues."

Take, for example "this Greek-Finland fiasco," said Minerd.

Earlier this week, Finnish Prime Minister Jyki Katainensaid the country could withdraw from Greece's bailout program if it is not granted collateral for its loans.

"This shows that the policymakers don't get it. Clearly both Greece and Finland didn't even understand the dynamics of the debtthat's in the marketplace."

"It's telling us that the degree of sophistication that we're working with here with the policymakers is pretty low," he added.

Ultimately though, Minerd said policymakers are going to have to "sit down at a table and come up with some formal plan to exchange all this debt."

In addition, Germany's DAX fell as much as 2.7 percent in European afternoon trading on Thursday due partially over rumors that a short-selling ban may be encated in Germany, that Germany is about to lose its triple-A credit rating, and that the collapse of the Greek bailout plan was imminent.