Is the financial collapse of Italy going to be the final blow that breaks the back of Europe financially? Most people don’t realize this, but Italy is actually the third largest debtor in the entire world after the United States and Japan. Italy currently has a debt to GDP ratio of more than 120 percent, and Italy has a bigger national debt than anyone else in Europe does. That is why [...]
Biderman’s Daily Edge – Japan Will Lead the Coming Government Bond Ponzi Scheme Collapse
Public Debt – Japan is the Worst
So many people only look at the US debt and yell and scream while jumping up and down in their yellow rain coats preaching the end is near. True, the US has the largest public debt, but it is far from the worst for it has the largest economy. That distinction [...]
armstrongeconomics.com / By Martin Armstrong / December 20, 2012
So many people only look at the US debt and yell and scream while jumping up and down in their yellow rain coats preaching the end is near. True, the US has the largest public debt, but it is far from the worst for it has the largest economy. That distinction being the worst debtor belongs to Japan and if Japan had to [...]
Debt Crisis Solutions are Leaving Investors Behind
by Ben Traynor
Wednesday 21 November 2012
How the losses are being paid for…
IT USED TO BE taken for granted that you could put aside some money and earn enough interest to be better off than when you started.
As the world continues to struggle with the aftermath of an enormous credit boom and its subsequent bust, though, this kind of objective seems hopelessly naïve. Events in [...]
To most of us, “debtors’ prison” sounds like an archaic institution, something straight out of a Dickens novel. But the idea of jailing people who can’t pay what they owe is alive and well in 21st-century America.
According to a report inThe Wall Street Journal,debt collectors in Missouri, Illinois, Alabama and other states are using a legal loophole to justify jailing poor citizens who legitimately cannot pay their debts.
Here’s how clever payday lenders [...]
Compound Interest and the Debt Bubble
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” Albert Einstein
Without a comprehensive understanding in this axiom of the financial universe, much of public policy and finance is incomprehensible. The different positions of the borrower and the lender is obvious, but the notion that one can earn enough interest on savings [...]
The Germans are making “a tragic, historical mistake,” says George Soros of the country’s refusal to offer something like a Marshall Plan to its troubled neighbors. In an outstanding interview, Soros stands much of the conventional wisdom regarding the crisis on its head. “(Merkel) is trapped (realizing) the euro is not working, but she cannot change the narrative she has created.”
With the EU summit set to start on Thursday, [...]
Economist David McWilliams describes what led to the crisis, who is being bailed out, the terrible policy decisions being made, and the negotiating position of peripheral countries in the Eurozone. McWilliams’ whiteboard animations are embedded following these select notes:
The bill for individual and institutional debt that led to the crisis has been passed on to people who had nothing to do with creating that debt.
Europe has been turned from a democracy to a [...]
In his latest column, Cumberland Advisors’ founder David Kotok advises his audience that the peripheral Eurozone countries are already a lost cause; it is now Italy that has begun to teeter.
Greece, he writes, is doomed. Portugal and Spain are already getting killed in credit markets.
“Italy is the one to watch,” he says. “It is the 800-pound gorilla and it is sick.”
Growth, deficits, demographics and a 120% debt-to-GDP ratio are causing it to [...]
January 25, 2012
As historical memory diminishes and the lessons of past centuries are forgotten, the practice of systematically destroying economic independence grows. Forget about real prosperity, the concept of interdependence, coined in popular parlances by the Trilateral Commission, has made the United States economy a post industrial dependency and a bankrupt debtor. The global corporatists despise protective tariffs because these excise taxes must be paid by foreign manufacturing enterprises. [...]
Remember, back in the day, when a bankruptcy was simply called a bankruptcy? Naturally, this was well before ISDA came on the scene and footnoted the living feces out of everything by claiming that a bankruptcy is never a bankruptcy, as long as the creditors agree to 99.999% losses at gunpoint, with electrodes strapped to their testicles, submerged in a tank full of rabid piranhas, it they just sign [...]
Image: Iduke, Wikimedia Commons
If you’re interested in balance-sheet recessions and the effect of the debt overhang on the state of the US economy, you should read Mike Konczal’s interview with economist Amir Sufi.
Sufi has co-authored a couple of very interesting papers (here and here) on the connection between household debt, the housing bust, and persistently low employment. We presented one of his arguments here.
While it may seem intuitive that the huge debt overhang is responsible [...]
Last month, the capital city of Pennsylvania filed for Chapter 9 bankruptcy protection. Harrisburg had taken out a $317 million loan to fund a municipal incinerator, but it didn’t have the money to pay even interest on the loan, much less the principal.
So the Harrisburg City Council did what any debtor, backed into a corner and seeing no way out, would do. Itfiled for bankruptcy protection.
Court Calls “Backsies”
That was a [...]
The global debt crisis, of course, is nothing new.
Since the dawn of time, men have been lending other men money (or other things of value) and not getting them back.
But it’s only recently that the solution to this state of affairs has gotten so complicated that even PhD economists can’t figure it out.
In most situations in which people or companies can’t pay their debts, a simple thing happens.
It’s called “bankruptcy.”
The con myth of Reagan
Cons love to say it took a Carter to get a Reagan. Well, let’s examine that myth with unemployment numbers creeping upward under Reagan.
January 1981 – 7.5%
February 1981 – 7.4%
March 1981 – 7.4%
April 1981 – 7.2%
May 1981 – 7.5%
June 1981 – 7.5%
July 1981 – 7.2%
August 1981 – 7.4%
September 1981 – 7.6%
October 1981 – 7.9%
November 1981 – 8.3%
December 1981 – 8.5%
January 1982 – 8.6%
February 1982 – [...]
There are two ways of interpreting the decision by Angela Merkel, German chancellor, and Nicolas Sarkozy, France’s president, to give themselves a tight deadline for finalising a “comprehensive package” to tackle the eurozone crisis.
The official line, as Mr Sarkozy insisted on Sunday night in Berlin, is that they agree on the plan, but still need time to work out the details – behind closed doors. [...]
The US may be the biggest debtor to countries around the world – with net foreign debt almost three times the size of the Indian economy, and total foreign debt about 18 times the size of India’s – but this is one of the key reasons why it is also managing to stay afloat. This, and the fact that it is also the largest creditor to [...]
While it is not exactly clear what has caused the substantial sell off in the EURUSD over the past several hours, even with the explicit support of China of all insolvent European states, the news that the German constitutional court in Karlsruhe is about to commence hearing a lawsuit contesting the legality of the Greek bailout is certainly not helping the euro. As Athens [...]
By: Julian D. W. Phillips, Gold/Silver Forecaster – Global Watch -GoldForecaster.com
This weekend, the E.U. Ministers promised the next tranche of money to Greece and a second bailout packageif Greece enforces another bout of austerity on itself. Does this clear the E.U. of its obligations? They have not yet finalized these terms and await the next episode in Greece of its acceptance of this principle.
A default by [...]
(NaturalNews.com) To most Americans it’s unthinkable that the U.S. dollar could someday be relegated to second-class status as a currency, but what they may not realize is that the transition is already underway.
Reports this week marked the dollar’s continued slide – it reached a 16-month low against the euro and slid to a historic low against the Swiss franc on Tuesday – while at the same time [...]
Bloomberg Article: U.S. Is Bankrupt and We Don’t Even Know It: Laurence Kotlikoff
202 Trillion Dollars in the Red, Bitchez. Even if he’s wrong by 50%, or 75% for that matter, it’s all the same.Europe is just as broken, and Japan is well on its way. Say hello to the looming Chinese implosion, also. Bitchez.
What’s that, Jean-Claude?
04-18 15:56: ECB’s Trichet says all [...]
New York Times article “Placing the Blame as Students Are Buried in Debt“, featuring $100k debtor, Cortney Munna and her mother:
Follow-up interviews with Cortney Munna:
Follow-up response by Cortney Munna (trying to defend herself, I guess):
These kids are yoking themselves to the equivalent of home mortgage payments – but unlike a home where you can live, there’s no guarantee of a job…
A Look At This Week’s Show:
-Treating the value of the dollar as a constant is a rookie mistake.
-Will QE2 end early only to be replaced later with “emergency” QE3?
-How inflation affects the four players of the economy: The Debtor, The Saver, The Creditor and The Consumer.
Who wins, who loses and why.
Listen the audio here
The worldâ€™s banking system (which is the western banking system) has the same problems that existed before the collapse in 2008, with two exceptions: 1) The problems are much larger; and 2) They have been shifted to the public. Since 2008, the Fed has loaded up on all sorts of â€œtoxic debtâ€, including Fannie & Freddie (MBS), FHA, US Treasuries ($900B) and many more. Newly [...]
You know very well that I can prove the following fourteen points all day long.
And they own it All, including us….
1. You are legally a debtor and chattel (property) owned by a hidden creditor.
2. There is a hidden lien on everything transacted for by or with a Federal Reserve Note.
3. Your entire alleged wealth is/has been liened, you donâ€™t own anything! You merely have possession by privilege. This privilege [...]
by Cliff Wachtel
This is based on the assumption that one or more of the time bombs I mention does indeed detonate and it takes some time before leaders can respond.
The HUGE caveat to that prediction is that given the active role of governments in ‘managing’ confidence, it is quite possible that markets can avoid that. As I note in the article above, the biggest question [...]
—US Treasuries last week suffered their biggest two-day sell-off since the collapse of Lehman Brothers in September 2008. The borrowing costs of the government of the worldâ€™s largest economy have now risen by a quarter over the past four weeks.—
By Liam Halligan, Economic Agenda 4:49PM GMT 11 Dec 2010
Such a sharp rise in US benchmark market interest rates matters a lot â€“ and it [...]
“Linda DeMartini, a supervisor and operational team leader in B of A’s litigation management department, testified that “the original note never left the possession of Countrywide”… DeMartini “testified further that it was customary for Countrywide to maintain possession of the original note and related loan documents”…”
“Incidentally, if you think this is all a big nothing because Countrywide was the document custodian, you better read the rest of the case record [...]
From Buckler’s as always must read The Privateer (number 666).
The Successful Rescue – 1979-1982:
When the US Fed under Paul Volcker stopped â€œtargeting interest ratesâ€ in late 1979, they stopped trying to hold US interest rates below levels set by the markets. The result, of course, was that US interest rates SOARED. They soared because there was now no impediment which prevented them from reflecting [...]
Roosevelt once said that Nothing in Politics Happens by Accident. Was he right or was he wrong? Six months ago, we debated a 100 point up or down Market ticker. Today, the wisest amongst us, ignore the Weekly “Roller Coaster”….just as we ignore Geraldo Rivera in the path of a natural Hurricane!! A joke is a joke, whether it is obvious, or if it is displayed on the Main Stream [...]