not impacted??how risky people think the overall US economic system is. Confidence, that all important economic currency, is still something we trade in. That’s good.But here’s what else is going on. In the background you have this growing fear that the federal deficits run up in the wake of the financial crisis will cause interest rates to spike, making it very expensive for the government and US companies in general to borrow. The idea is that the government bailout of banks and home owners has loaded too much debt on the US government. So we took all that private debt and made it public. So we didn’t solve anything just kicked the bucket down the road. Here’s NYU prof. and Dr. Doom Nouriel Roubini:So, there is a massive buildup of public debt. And the lesson of history is that unless this buildup of
jimmy choo uk sovereign debt is tackled eventually by raising taxes and controlling spending, then there are only two outcomes: default or high inflation.Historically, we have seen a series of defaults and sovereign debt crises in both advanced and emerging market economies. If you are a country
christian louboutin outlet like the US, the UK, or Japan that can monetize its fiscal deficits, then you won?€?t have a sovereign debt event but high inflation that erodes the value of public debt. Inflation is therefore
true religion sale basically a capital transfer from creditors and savers to borrowers and dissavers, essentially from the private sector to the government.While the markets these days are worrying about Greece, it is only the tip of the iceberg, or the canary in the coal mine of a much broader range of fiscal crises. Today it is Greece. Tomorrow it will be Spain, Portugal, Ireland, and Iceland. Sooner or later
jimmy choo uk Japan and the US will be at the core of the problem, shaking the global economy.If we were, as Roubini fears, to see interest rates soar before the economy pulls out of the recession, then we would be in big trouble. Running up deficits, either by cutting taxes or public spending, is how the government stimulates the economy. And it is
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