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    U.S. slides furr into depression. Housing defaults rise,

    America slides deeper into depression as Wall Street revels

    December was the worst month for US unemployment since the Great Recession began.



    By Ambrose Evans-Pritchard
    Published: 6:35PM GMT 10 Jan 2010
    Comments 418 | Comment on this article

    History repeating itself? President Obama has been accused by some economists of making the same mistakes policymakers in the US made in the Great Depression, which followed the Wall Street crash of 1929, pictured Photo: AP


    The labour force contracted by 661,000. This did not show up in the headline jobless rate because so many Americans dropped out of the system. The broad U6 category of unemployment rose to 17.3pc. That is the one that matters.
    Wall Street rallied. Bulls hope that weak jobs data will postpone monetary tightening: a silver lining in every catastrophe, or perhaps a further exhibit of market infantilism.

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    The home foreclosure guillotine usually drops a year or so after people lose their job, and exhaust their savings. The local sheriff will escort them out of the door, often with some sympathy –– just like the police in 1932, mostly Irish Catholics who tithed 1pc of their pay for soup kitchens.
    Realtytrac says defaults and repossessions have been running at over 300,000 a month since February. One million American families lost their homes in the fourth quarter. Moody's Economy.com expects another 2.4m homes to go this year. Taken together, this looks awfully like Steinbeck's Grapes of Wrath.
    Judges are finding ways to block evictions. One magistrate in Minnesota halted a case calling the creditor "harsh, repugnant, shocking and repulsive". We are not far from a de facto moratorium in some areas.
    This is how it ended between 1932 and 1934, when half the US states declared moratoria or "Farm Holidays". Such flexibility innoculated America's democracy against the appeal of Red Unions and Coughlin Fascists. The home siezures are occurring despite frantic efforts by the Obama administration to delay the process.
    This policy is entirely justified given the scale of the social crisis. But it also masks the continued rot in the housing market, allows lenders to hide losses, and stores up an ever larger overhang of unsold properties. It takes heroic naivety to think the US housing market has turned the corner (apologies to Goldman Sachs, as always). The fuse has yet to detonate on the next mortgage bomb, $134bn (£83bn) of "option ARM" contracts due to reset violently upwards this year and next.
    US house prices have eked out five months of gains on the Case-Shiller index, but momentum stalled in October in half the cities even before the latest surge of 40 basis points in mortgage rates. Karl Case (of the index) says prices may sink another 15pc. "If the 2008 and 2009 loans go bad, then we're back where we were before – in a nightmare."
    David Rosenberg from Gluskin Sheff said it is remarkable how little traction has been achieved by zero rates and the greatest fiscal blitz of all time. The US economy grew at a 2.2pc rate in the third quarter (entirely due to Obama stimulus). This compares to an average of 7.3pc in the first quarter of every recovery since the Second World War.
    Fed hawks are playing with fire by talking up about exit strategies, not for the first time. This is what they did in June 2008. We know what happened three months later. For the record, manufacturing capacity use at 67.2pc, and "auto-buying intentions" are the lowest ever.
    The Fed's own Monetary Multiplier crashed to an all-time low of 0.809 in mid-December. Commercial paper has shrunk by $280bn ($175bn) in since October. Bank credit has been racing down a hair-raising black run since June. It has dropped from $10.844 trillion to $9.013 trillion since November 25. The MZM money supply is contracting at a 3pc annual rate. Broad M3 money is contracting at over 5pc.
    Professor Tim Congdon from International Monetary Research said the Fed is baking deflation into the pie later this year, and perhaps a double-dip recession. Europe is even worse.
    This has not stopped an army of commentators is trying to bounce the Fed into early rate rises. They accuse Ben Bernanke of repeating the error of 2004 when the Fed waited too long. Sometimes you just want to scream. In 2004 there was no housing collapse, unemployment was 5.5pc, banks were in rude good health, and the Fed Multiplier was 1.73.
    How anybody can see imminent inflation in the dying embers of core PCE, just 0.1pc in November, is beyond me.
    Mr Rosenberg is asked by clients why Wall Street does not seem to agree with his grim analysis.
    His answer is that this is the same Mr Market that bought stocks in October 1987 when they were 25pc overvalued on Shiller "10-year normalized earnings basis" – exactly as they are today – and bought them at even more overvalued prices in 2007, long after the property crash had begun, Bear Stearns funds had imploded, and credit had its August heart attack. The stock market has become a lagging indicator. Tear up the textbooks.
    America slides deeper into depression as Wall Street revels - Telegraph

  2. #2
    watterinja
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    The fiat money system has fast become worth less than the paper it's written on.

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    Quote Originally Posted by watterinja View Post
    The fiat money system has fast become worth less than the paper it's written on.
    Ain't that the truth. And contrary to popular notions, it's not getting any better.

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    Quote Originally Posted by watterinja View Post
    The fiat money system has fast become worth less than the paper it's written on.
    The $US is still worth more than it should be if the playing field was level.
    Its because of the fiat money system and the $US hegemony as the worlds default trading currency that people all over the world are queuing up to buy $USs and therefore drive its value well above where it should be. In fact the worse things get the more people flock to $USs as a store of wealth as shown in the recent stock market crash. A phenomenon that simply compounds the economic problem for the whole world and of course USA. Wealth tied up in $US paper money instead of going to work making things that people need to live and prosper. Even despite the US governments spend, borrow and print policy the $US still remains strong. A country deep in debt and plunging deeper at an accelerating rate, yet faith in the $US is still strong because its the worlds default trading currency.

    There are many so called financial experts predicting another fall in the stock market this year as the general price to earnings ratio is too high. Or so they say. I dont know about these things as I am not a financial expert, so I just have to take their word for it. But I do know that if the bottom falls out of the stock market again, most of that money will go rushing back into $USs again as it did in the last crash. Thats going to put all of us right back where we were a year ago before borrowed stimulus money gave the economies a push along. However, the financial baseline for the average citizen is now a bit lower, (a lot lower if you are unemployed). One step forward and 2 steps backwards. Which means for the average person things are going to get a lot tougher.

    The sooner the world gets rid of the $US funny money hegemony and replaces it with a productivity based currency, the sooner the world trading economy can get back on an even keel. For every $ the USA prints, and for every $ the USA borrows, someone else in the world has to work to produce something of real value and use to trade for it. A excess of $USs on the world market and an over valued $US just means that people in other countries are working to support and subsidize the people of USA.

    No doubt the USA will use its unique position as the owner of the worlds money machine to inflate its way out of debt. Thats going to mean some even greater tough times for US citizens as imported goods become more expensive. And its going to take some time for US manufacturing infrastructure to get back on line producing for the domestic market at competitive prices once again. Its going to hurt a lot of people in other countries too as the US export market dries up and their jobs disappear. Many (most) countries governments are going to be hit hard too as their reserve wealth held in $USs loses a lot of its tradable value. Thats going to mean increased debt or reduced services for the working class citizens who can least afford it when their export driven jobs dry up.

    The whole world is going to have to pay for the excesses of USA over the past 39 years since Nixon totally abandoned the gold standard (because USA was essentially broke after the Vietnam war), and forced the $US fiat money hegemony system on the rest of the world. More fool the rest of the world too for swallowing it. It might have seemed like a good idea at the time because USA was up till then a gross exporter, but as it turned out in just a few short decades, the temptation of owning the worlds money machine was just too much for US governments. Now we all have to pay for 4 decades of financial mismanagement and excesses.

    But hey. The world will keep turning. Ditching the $US hegemony in favour of a more balanced trading medium is something that just has to happen sooner or later. Its going to hurt a lot of people in a lot of countries, especially the poor. But it is something that has to happen eventually. Perhaps an abrupt change would cause a catastrophic collapse of the world economy? On the other hand, prolonging an escape from a world trade and financial system that has run its course and been shown to not work simply prolongs the agony of change.

    Things are going to get a lot worse before they get better. Maybe the worlds political leaders are counting on the assumption that the masses will be less likely to revolt if things happen slowly?

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    Dug,

    Good OP.

    Yes, the next housing wave of foreclosures starts in 3 weeks and will last two years.

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    Quote Originally Posted by Panda View Post
    Quote Originally Posted by watterinja View Post
    The fiat money system has fast become worth less than the paper it's written on.
    The $US is still worth more than it should be if the playing field was level.
    Its because of the fiat money system and the $US hegemony as the worlds default trading currency that people all over the world are queuing up to buy $USs and therefore drive its value well above where it should be. In fact the worse things get the more people flock to $USs as a store of wealth as shown in the recent stock market crash. A phenomenon that simply compounds the economic problem for the whole world and of course USA. Wealth tied up in $US paper money instead of going to work making things that people need to live and prosper. Even despite the US governments spend, borrow and print policy the $US still remains strong. A country deep in debt and plunging deeper at an accelerating rate, yet faith in the $US is still strong because its the worlds default trading currency.

    There are many so called financial experts predicting another fall in the stock market this year as the general price to earnings ratio is too high. Or so they say. I dont know about these things as I am not a financial expert, so I just have to take their word for it. But I do know that if the bottom falls out of the stock market again, most of that money will go rushing back into $USs again as it did in the last crash. Thats going to put all of us right back where we were a year ago before borrowed stimulus money gave the economies a push along. However, the financial baseline for the average citizen is now a bit lower, (a lot lower if you are unemployed). One step forward and 2 steps backwards. Which means for the average person things are going to get a lot tougher.

    The sooner the world gets rid of the $US funny money hegemony and replaces it with a productivity based currency, the sooner the world trading economy can get back on an even keel. For every $ the USA prints, and for every $ the USA borrows, someone else in the world has to work to produce something of real value and use to trade for it. A excess of $USs on the world market and an over valued $US just means that people in other countries are working to support and subsidize the people of USA.

    No doubt the USA will use its unique position as the owner of the worlds money machine to inflate its way out of debt. Thats going to mean some even greater tough times for US citizens as imported goods become more expensive. And its going to take some time for US manufacturing infrastructure to get back on line producing for the domestic market at competitive prices once again. Its going to hurt a lot of people in other countries too as the US export market dries up and their jobs disappear. Many (most) countries governments are going to be hit hard too as their reserve wealth held in $USs loses a lot of its tradable value. Thats going to mean increased debt or reduced services for the working class citizens who can least afford it when their export driven jobs dry up.

    The whole world is going to have to pay for the excesses of USA over the past 39 years since Nixon totally abandoned the gold standard (because USA was essentially broke after the Vietnam war), and forced the $US fiat money hegemony system on the rest of the world. More fool the rest of the world too for swallowing it. It might have seemed like a good idea at the time because USA was up till then a gross exporter, but as it turned out in just a few short decades, the temptation of owning the worlds money machine was just too much for US governments. Now we all have to pay for 4 decades of financial mismanagement and excesses.

    But hey. The world will keep turning. Ditching the $US hegemony in favour of a more balanced trading medium is something that just has to happen sooner or later. Its going to hurt a lot of people in a lot of countries, especially the poor. But it is something that has to happen eventually. Perhaps an abrupt change would cause a catastrophic collapse of the world economy? On the other hand, prolonging an escape from a world trade and financial system that has run its course and been shown to not work simply prolongs the agony of change.

    Things are going to get a lot worse before they get better. Maybe the worlds political leaders are counting on the assumption that the masses will be less likely to revolt if things happen slowly?

    Yes, it's selfish and immoral but since I am retired on a pension denominated in US Dollars I hope the replacement of the dollar as the international currency does not happen in my lifetime. My very comfortable lifestyle in Thailand would disappear overnight. The thought of ever having to go back to living there and without any money is frightening. It's sad the way America has abused the privilege of Dollar hegemony.

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    Quote Originally Posted by Panda View Post
    Quote Originally Posted by watterinja View Post
    The fiat money system has fast become worth less than the paper it's written on.
    For every $ the USA prints, and for every $ the USA borrows, someone else in the world has to work to produce something of real value and use to trade for it.
    So...why don't these poor, helpless people around the world then buy something that American workers have produced? Too bad your countries tax the shite out of all the American products leaving you with little options than too buy American securities which are not taxed.

    Why doesn't whatever country you are from try building a bigger and better currency. Too bad the Euros were spending so much effort trying to build a bigger airplane which flopped.

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    Quote Originally Posted by Panda
    The sooner the world gets rid of the $US funny money hegemony and replaces it with a productivity based currency, the sooner the world trading economy can get back on an even keel.
    I don't think it would solve anything, and not sure what you mean by a productivity based currency, if there is a such a thing in the world. Maybe you could explain what you meant.

    Quote Originally Posted by Panda
    There are many so called financial experts predicting another fall in the stock market this year as the general price to earnings ratio is too high. Or so they say. I dont know about these things as I am not a financial expert, so I just have to take their word for it. But I do know that if the bottom falls out of the stock market again, most of that money will go rushing back into $USs again as it did in the last crash. Thats going to put all of us right back where we were a year ago before borrowed stimulus money gave the economies a push along. However, the financial baseline for the average citizen is now a bit lower, (a lot lower if you are unemployed). One step forward and 2 steps backwards. Which means for the average person things are going to get a lot tougher.
    The real issue is that there is too much money in this world, between corporate "treasure" coffers, large savings by rich individuals, too much money is chasing too few assets, which explains the current low interest rates, and the poor returns that most individuals have to take. That also explain why financial institutions are forced to take more risk for little extra returns, everything is already priced at the right level, there is not much more we can get.

    Solution would be more government interventions in the economy with massive international infrastructure projects to make it a real global economy. Maybe a technology discovery could help by using all that extra cash into real projects instead of fueling bubbles on existing assets.

    The problem is our limited choice of investment assets, what to do. To paraphrase Buffet, "when I have 1b to invest, for me it's a headache as my choices are limited, if you have 1m, you have much more freedom and can get better returns than I could"

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    The thing is how you define wealth. Is wealth defined by how many millions of $USs you have to invest or by how much goods and services produced that people can actually use. Right now wealth is defined in $USs simply because its the worlds default trading medium.

    A few months ago I made a post about a hypothetical situation where a beach tribe were trading sea shells for pigs and yams with the mountain tribe. It all worked well (especially for the beach tribe) until there were so many sea shells in circulation that they eventually lost their value. The thing is that the sea shells, although representing real wealth, actually had no practical use in society. You cant eat sea shells or build a house out of them. The trade in sea shells is not so different from the trade in $USs. The USA can produce any amount of the tradable medium ($US) when they want to purchase real things that other people in other countries have to work to create for trade. Somewhere down the line there will be so much $USs in circulation that the value will fall. Right now, people and world governments are holding on to their stores of $US paper money (or $US debt) as a facsimile of real tradable stuff. Such a system can only continue so long as everyone has faith in the value of the trading medium, which on its own has no intrinsic value to society when it can be produced at will and for profit.
    Just like the sea shells, the value of the $US is now based on the faith that it can be traded for real goods and services. Plus the fact that just about every country is so loaded up on $USs as part of their national financial reserves that NOBODY wants to see it lose tradable value.

    But the USA has not only been only exporting paper money and debt in exchange for real usable goods and services. USA does have a strong export business earning the country some income. Just that the export income has been dwindling since 1971 when the $US hegemony came into being, and instead of exporting real tradable goods and services the country has been exporting $s of which they have an endless supply. Its got to a point now where USA is holding its standard of living on selling $US debt rather than producing and selling real things that people need. Not that USA isn't a productive country that couldn't pay its way in the world of trade. Its just that the US governments have got greedy and exploited the $US hegemony to get more than their fair share than would have been able under a more normalized trading system;-- eg if the gold standard was still in process.

    Getting back to the primitive basics of the beach tribe trading with the mountain tribe. Which I think is a good analogy because the laws of nature and trade dont change no matter how educated and sophicated you get.
    Had the beach tribe traded things of real value like fish and shellfish instead of going for the fast profit of trading sea shells, the balance of trade could have continued forever to mutual benefit. But just pouring more sea shells, and read $USs here, into the system would end in an unsustainable system. Only when items of trade that are real are exchanged is trade sustainable.

    We shouldn't be too alarmed that a new medium of exchange in world trade is on the horizen. After all, the experiment of the $US as the world default trade currency has only been around for 4 decades, which is but the blink of an eye in historical terms. It seemed to be right at the time it was introduced, but it ran off the rails. OK. Time to move on. And be sure the world will. Just because you and I have grown up in a generation that has known nothing different doesn't mean there is no other alternative. It was/is an experiment in using the fiat currency of a dominating world power as a trading medium. Its been done before and failed. Nothing new there really. Time to move on and get a better system that suits the current state of world trade.

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    Quote Originally Posted by Panda
    the value of the $US is now based on the faith that it can be traded for real goods and services
    it has always been, all currency are based on faith, nothing else. Since the introduction of paper money in the 17th century, I don't think it has been based on anything else than faith. Don't introduce Gold in the matter, as it's still based on faith. Might as well be sea shells instead of Gold.

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    Quote Originally Posted by Panda
    Getting back to the primitive basics of the beach tribe trading with the mountain tribe. Which I think is a good analogy because the laws of nature and trade dont change no matter how educated and sophicated you get.
    Had the beach tribe traded things of real value like fish and shellfish instead of going for the fast profit of trading sea shells, the balance of trade could have continued forever to mutual benefit. But just pouring more sea shells, and read $USs here, into the system would end in an unsustainable system. Only when items of trade that are real are exchanged is trade sustainable.
    Your analogy is quite amusing, but still too simplistic to address or reflect any bits of reality. More like a myth. Quite creative though

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    Quote Originally Posted by Milkman View Post
    Yes, the next housing wave of foreclosures starts in 3 weeks and will last two years.
    The talking heads estimate that 8+ million more home foreclosures will take place in the coming years, unless adjustments are made to the terms / interest rate adjustments on these mortgages... This will drive the US economy back into recession and the banking institutions stick their hands out for another bailout... For reference, 2.5 million foreclosures have already taken place, the proverbial tip of the iceberg...

    Legislation has been passed that require banks / mortgage lenders to modify mortgage terms, but to date only 66,000 mortgages have been reviewed and adjusted... The banks / mortgage lenders don't want to write down their profits and most would prefer the paper goes into foreclosure as the chances for a bailout improve their bottom line...

    Too little mortgage help is on the way - MarketWatch

    [snip]

    Permanent modifications for more than 100,000 troubled mortgages have been approved under the government's Home Affordable Modification Program, the Treasury Department reported on Friday. Of those borrowers, 66,000 have accepted the modification offer and the remaining offers are awaiting borrower signatures.


    It's an improvement over data released last month, and Phyllis Caldwell, director of Treasury's Homeownership Preservation Office, added that the department is "committed to working with servicers and borrowers to sustain this improved pace."


    But despite the improvement in the HAMP numbers, John Taylor, president and CEO of the National Community Reinvestment Coalition, said more needs to be done.


    "The response to the foreclosure crisis has been like that Marx Brothers movie where in the heat of a battle they shout that 'help is on the way' over and over again, but the response is humorously small," he said. "Tough talk and action on bonuses and repayment of bailout funds should be accompanied by a stronger response on foreclosure prevention. This is an important pocketbook and a political issue for millions of Americans, and failure now means growing disillusionment."

    [/snip]
    Give a man a match, and he'll be warm for a minute, but set him on fire, and he'll be warm for the rest of his life.

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    Quote Originally Posted by Butterfly View Post
    Quote Originally Posted by Panda
    Getting back to the primitive basics of the beach tribe trading with the mountain tribe. Which I think is a good analogy because the laws of nature and trade dont change no matter how educated and sophicated you get.
    Had the beach tribe traded things of real value like fish and shellfish instead of going for the fast profit of trading sea shells, the balance of trade could have continued forever to mutual benefit. But just pouring more sea shells, and read $USs here, into the system would end in an unsustainable system. Only when items of trade that are real are exchanged is trade sustainable.
    Your analogy is quite amusing, but still too simplistic to address or reflect any bits of reality. More like a myth. Quite creative though
    The point is butterfly that the US have sold more bonds than they can honour, if I buy a paper from you on a promise that you will pay me it's value back if and when I need to, you need to have the reserves backed by real wealth to reimburse me, and all others if we all wanted to at the same time. but the fact is that the US is bankrupt, if all the holders of US bonds wants to get their money the US simply do not have it, they would have to print which would make my money much less worth because of the natural inflation that follows the printing of more US dollars.
    That risk is of-cause unacceptable for the sustained "faith" in the worlds trading currency.

    Since the crisis the world have become acutely aware of the risk in only holding US in their reserves, they have seen the vulnerability in the US economy, and no central banks or world leaders would be in their right minds if they in the future continued to play only on the lame horse in the race.

    Many central banks have already lost the "faith" and are buying a basket of currency's/gold and silver ect. instead of only US dollars as before, and are wisely spreading their risk, negotiations are ongoing openly and undoubtedly clandestine, on how to get out of being held hostage by an unsafe US dollar, it will happen sooner than later, it would amount to criminal mismanagement of a country's economy if the country's Government carried on like before the US mortage crisis sent the whole world's economy tumbling, especially knowing full well that there is more to come of the same, the only difference will be that next time there is nothing left for rescue plans it has all been used up this time around.

    In the meantime Bank of America is back to paying record bonuses, so the question arises, has anything been learnt and have the US Government established any meaningful control over the rouge big financial institutions?, and the answer is frightening.
    Last edited by larvidchr; 17-01-2010 at 02:52 AM.

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    Quote Originally Posted by larvidchr
    The point is butterfly that the US have sold more bonds than they can honour. . .Since the crisis the world have become acutely aware of the risk in only holding US in their reserves, they have seen the vulnerability in the US economy, and no central banks or world leaders would be in their right minds if they in the future continued to play only on the lame horse in the race.

    Many central banks have already lost the "faith" and are buying a basket of currency's/gold and silver ect. instead of only US dollars as before. . .

    In the meantime the Bank of America is back to paying record bonuses. . .
    The US is still able to price its bonds in such a way as to make them attractive to investors, for the most part central banks, and getting them to fund US debt. Other countries in deep debt, such as Japan, are unable to do so (not all of them for the same reasons). Japan is on the verge of gambling the farm on a, shall we say, innovative plan to fund its debt. It is uncertain what a country like Greece will do.

    My point is that the US still has this luxury. You suggest that it may soon not have that luxury. I read a number of interesting articles just this morning about China and other countries getting into gold, what it means and how it might work out, such as this China, gold, and the civilization shift – Telegraph Blogs The comments section is quite good, too.

    While it was probably just a slip on your part, larv, I find the use of the definite article- the "the"- in front of Bank of America interesting. As you surely know, it isn't our national bank, any more than American Airlines is our national carrier, and shouldn't get the "the." Still, I am afraid that BofA and its questionable practices are in the eyes of the world emblematic of what the US stands for, so in some sense it might as well be "the Bank of America."
    “You can lead a horticulture but you can’t make her think.” Dorothy Parker

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    Quote Originally Posted by robuzo View Post

    In the meantime the Bank of America is back to paying record bonuses. . .
    Quote robuzo-
    "While it was probably just a slip on your part, larv,
    I find the use of the definite article- the "the"- in front of Bank of America interesting. As you surely know, it isn't our national bank, any more than American Airlines is our national carrier, and shouldn't get the "the." Still, I am afraid that BofA and its questionable practices are in the eyes of the world emblematic of what the US stands for, so in some sense it might as well be "the Bank of America."[/quote]





    Thanks edited, yes it was just the language thingy I am aware that BoA is not your FED.

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    Why A Sovereign Debt Crisis Is Set To Begin

    New one from Roubini:
    Here's Why A Sovereign Debt Crisis Is Set To Begin
    In 2009, downgrades and debt auction failures in countries like the UK, Greece, Ireland and Spain were a stark reminder that unless advanced economies begin to put their fiscal houses in order, investors and rating agencies will likely turn from friends to foes.

    The severe recession, combined with a financial crisis during 2008-09, worsened the fiscal positions of developed countries due to stimulus spending, lower tax revenues and support to the financial sector. The impact was greater in countries that had a history of structural fiscal problems, maintained loose fiscal policies and ignored fiscal reforms during the boom years. Going forward, a weak economic recovery and an aging population is likely to increase the debt burden of many advanced economies, including the U.S., Britain, Japan and several eurozone countries.

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    Quote Originally Posted by larvidchr
    The point is butterfly that the US have sold more bonds than they can honour,
    sure, they did, with so much investor appetite for the USD, why wouldn't they ? you don't think it wouldn't have happened with any other currency? the issue is not the currency per se, but the excess of funds chasing too few assets and making mistakes over it

    Quote Originally Posted by larvidchr
    but the fact is that the US is bankrupt,
    I suggest you take a crash course on bankruptcy. The US is not bankrupt. Do you actually understand what the word means ?

    Bankrupt happens when you cease payments, and unless I missed something, I don't think the US government has ceased payments on the bonds interests or par value at maturity.

    I think you are confusing Net Liability with bankruptcy, larv

    Quote Originally Posted by larvidchr
    Many central banks have already lost the "faith" and are buying a basket of currency's/gold and silver ect. instead of only US dollars as before,
    they are simply diversifying their holdings, mostly because US bonds are paying very little interests (too much demand for them, a paradox), look at those that were issued 7 or 8 years ago when interest rates were higher, they are selling at a high premium. Other currency offer current higher interests, hence fuel demand for them. Unfortunately, international trades have little impact on the value of a currency. It wasn't always the case.

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