All Posts Tagged With: "debt"

Financial markets and institutions are mighty unstable no matter where you look these days. Europe, America, China, Australia. Where are you supposed to go to invest your money?

Markets – free markets – are meant to be unstable. They are meant to crack-up from time to time. And thank God they do. Otherwise, we’d be stuck forever with zombie industries and dead end investments.

“Adjusting for slippage” is the latest government fashion…and it is expensive. “Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year,” Bloomberg News reports, “with most facing a rise in borrowing costs.”

Even before debt became such a big problem, real growth had already begun to disappear from the developed world. There has been none in Japan for the last 20 years…and almost no real growth in the US private sector for the last 10 years. In Europe, grosso modo, the story is similar.

Before we say goodbye to 2011, let us pause to remember it…briefly. We spent 365 days with it – 365 days in a row. We can’t just move on to 2012 without a least a backward glance. What kind of a year was it? In what direction did it take the world, dear reader? Should we cheer that it is gone…or merely dry our eyes and hope for the best?

(Ed Note: Bill penned this note as 2011 was drawing to a close). The markets are fairly quiet. The politicians are keeping their mouths closed too. Here at The Daily Reckoning Christmas headquarters we’re drinking eggnog, eating fruitcake and wondering what 2012 will bring. We’ve given up trying to actually look into the future. We don’t seem to have the knack for it.

Yesterday in our article about gold’s price going down we discussed gold and the shadow banking system. Today we’ll explain how it all fits together and what it means for the markets and your investments.

Here’s our old friend Frank Giustra, writing in the Vancouver Sun about the savings destruction of US and Europe