And even this modest goal presumes that economies are able to grow faster than their debt – in real terms. When you get debt equal to 100% of GDP, you’re over a barrel. If interest rates were to return to the double digit levels of the ’70s, it could cost more than 10% of GDP just to pay the interest.
June 30th, 2010 | Bill Bonner | 0 comments | ContinuedAll Posts Tagged With: "Greece"
Even Taxes are Pretty in Pink
Forcing the more productive, intelligent and resourceful people in the economy to bear the weight of those who should be going out of business is just stupid. That hasn’t stopped countries from trying it. But the IMF points out that most countries abandon it. And what would happen to government revenue when the economy slows?
June 26th, 2010 | Nickolai Hubble | 11 comments | Continued
Taming the Vigilant
Free markets! It’s a government institution – the U.S. Federal Reserve – that is providing the liquidity, via low interest rates and outright buying of government securities, to keep bond yields low. That’s the opposite of free markets.
June 21st, 2010 | Nickolai Hubble | 1 comment | Continued
Europe, Greece and a French Blonde
We see it coming too. We’ve already seen what happens when a small country runs up too much debt. Investors get worried. Interest rates rise. The country can no longer borrow to cover its deficits…or to pay its past loans. Disaster.
May 14th, 2010 | Bill Bonner | 0 comments | Continued
Bailout Shmailout
One day the world is convinced that the central bankers and financial meddlers of Europe have the secret to success. The next day, they change their minds. Turns out, the euro feds don’t seem to have the problem solved after all. The euro is going down again.
May 13th, 2010 | Bill Bonner | 0 comments | Continued
Money for Nothing
The question begging itself here, of course, is how Europe intends to come up with roughly a trillion in bailout money. Sell Portugal to China? Cut Greece up into bait and catch whatever fish are left in the Mediterranean Sea? Frankly, I’m stumped. Talk about robbing Peter to pay Paul…
May 12th, 2010 | James Howard Kunstler | 16 comments | Continued
Say You Want a Revolution?
Greek communists are usually a reliable bastion of error and darkness. Their ideas are appalling. Their proposals are absurd. The only thing they are not wrong about is their opinion of the ruling classes – whom they regard as morons
May 10th, 2010 | Bill Bonner | 0 comments | Continued
Default Threat Rises
Let’s pause for a moment to reconsider what may have happened last week with Wall Street’s “trading glitch.” Is it possible that traders saw the cops beating protestors in the Streets and surmised this: No matter what deal European leaders come up with to bailout Greece, that deal isn’t going to fly on the streets of Athens.
May 10th, 2010 | Dan Denning | 13 comments | Continued
Chaos No Longer a Theory
A German reporter with a very poor, or very excellent, sense of humour has been handing out the old Greek currency (Drachma) to Greeks on the streets of Athens, just to record their reaction. He obviously didn’t expect to get the worthless paper torn from his hands – literally.
May 8th, 2010 | Nickolai Hubble | 0 comments | Continued
The Achillies Heal of Financial Markets
It looks to us as though the stock market is finally rolling over…it’s finally putting in a big top after a long, long bounce. But it could be just another temporary setback. We won’t know for a while. In the meantime, readers are advised to floss their teeth and stay out of stocks. The bounce may or may not be over. It hardly matters.
May 7th, 2010 | Bill Bonner | 0 comments | Continued
The Lies That Bind…
This is supposed to be a recovery. Everyone thinks it’s a recovery. All the papers say so. Investors are betting on it. Politicians and economists are congratulating themselves for it. The only trouble is, the things that need to recover so that there can be a genuine recovery are not recovering.
May 5th, 2010 | Bill Bonner | 5 comments | Continued
To Trade the Resources Rent Tax or Not?
Let’s leave off with the underlying economic debate about the resource rent tax and talk about the market. It’s getting shellacked. Our colleagues Kris Sayce and Alex Cowie are finding many of the positions they’ve recommend in their publications since the March lows are declining and hitting suggested trailing stop levels.
May 5th, 2010 | Dan Denning | 5 comments | Continued
Surprises of the Crisis
On cue, all hell broke loose in Europe. Markets fell, bonds plummeted, and the cost of insuring debt went through the roof. But the Daily Reckoning has been telling you about all this for a while now. It shouldn’t be a surprise. That’s not to say there weren’t plenty of surprises anyway.
May 1st, 2010 | Nickolai Hubble | 9 comments | Continued
Learning From A Communist
The communists learned their lessons. They proved that government spending does not make people rich. But now…what’s this…? The US and other countries are greatly increasing the percentage of GDP spent by the government.
April 29th, 2010 | Bill Bonner | 2 comments | Continued
More Extend and Pretend
And now you get the feeling that policy makers only have a couple of bullets left in their gun to prevent a bigger panic in the market. Of course, maybe it just feels that way because of the drumbeat of coverage in the media.
April 29th, 2010 | Dan Denning | 2 comments | Continued
