- Feb 12, 2007
- 59,384
- 24,018
- 2,290
This is a pretty ugly warning about where we are headed if we don't reduce our debt.
Greece is now paying nearly 20% (that is credit card rate interest). By comparison, the U.S. net interest outlays in 2010 were about $200B. If the interest rate double, triples, quadruples, quintuples, do the math.
That is where we are headed - an ever increasing share of our GDP to just pay off the debt for past spending excesses.
Todays Telegraph informs us that the yields on Greek, Spanish, Irish, and Portuguese debt climbed to record levels today, and that Irish bank debt has been cut to junk status. In the meantime, Finlands political tilt rightwards in yesterdays elections portend a possible veto of any plans by the European Central Bank to bail out these economies on terms unfavorable to the EC member countries paying the bills.
Greece is now paying 19.7% on 2 year bonds and there is a real fear of government default. This will put even more pressure on the other PIIGS, who are either on or already over the edge. The question then becomes which economies are triaged. Greece, Iceland, and Ireland are all moribund. Portugal is in the middle of a political crisis, and Spain is teetering on the edge. We are seeing the slow motion destruction of the economic and social programs that helped these economies enter the 21st century. It is hard to believe where these countries ranked economically and demographically even 25 years ago.
The Standard & Poors downgrade of U.S. debt is, in my opinion, similar to their downgrade of subprime debt in 2007. Too late and out of touch.
Economic Storm Warning « Matt's Meditations
Greece is now paying nearly 20% (that is credit card rate interest). By comparison, the U.S. net interest outlays in 2010 were about $200B. If the interest rate double, triples, quadruples, quintuples, do the math.
That is where we are headed - an ever increasing share of our GDP to just pay off the debt for past spending excesses.
Todays Telegraph informs us that the yields on Greek, Spanish, Irish, and Portuguese debt climbed to record levels today, and that Irish bank debt has been cut to junk status. In the meantime, Finlands political tilt rightwards in yesterdays elections portend a possible veto of any plans by the European Central Bank to bail out these economies on terms unfavorable to the EC member countries paying the bills.
Greece is now paying 19.7% on 2 year bonds and there is a real fear of government default. This will put even more pressure on the other PIIGS, who are either on or already over the edge. The question then becomes which economies are triaged. Greece, Iceland, and Ireland are all moribund. Portugal is in the middle of a political crisis, and Spain is teetering on the edge. We are seeing the slow motion destruction of the economic and social programs that helped these economies enter the 21st century. It is hard to believe where these countries ranked economically and demographically even 25 years ago.
The Standard & Poors downgrade of U.S. debt is, in my opinion, similar to their downgrade of subprime debt in 2007. Too late and out of touch.
Economic Storm Warning « Matt's Meditations
...Oh, you mean the game "Empire"? 
