Posted on 04/08/2010 4:50:14 AM PDT by TigerLikesRooster
Sovereign debt crisis at 'boiling point', warns Bank for International Settlements
The Bank for International Settlements does not mince words. Sovereign debt is already starting to cross the danger threshold in the United States, Japan, Britain, and most of Western Europe, threatening to set off a bond crisis at the heart of the global economy.
By Ambrose Evans-Pritchard, International Business Editor
Published: 6:31AM BST 08 Apr 2010
Bond investors are waiting for Governments to lay out clear plans for deficit reduction
"The aftermath of the financial crisis is poised to bring a simmering fiscal problem in industrial economies to the boiling point", said the Swiss-based bank for central bankers -- the oldest and most venerable of the world's financial watchdogs. Drastic austerity measures will be needed to head off a compound interest spiral, if it is not already too late for some.
The risk is an "abrupt rise in government bond yields" as investors choke on a surfeit of public debt. "Bond traders are notoriously short-sighted, assuming they can get out before the storm hits: their time horizons are days or weeks, not years or decade. We take a longer and less benign view of current developments," said the study, entitled "The Future of Public Debt", by the bank's chief economist Stephen Cecchetti.
"The question is when markets will start putting pressure on governments, not if. When will investors start demanding a much higher compensation for holding increasingly large amounts of public debt? In some countries, unstable debt dynamics -- in which higher debt levels lead to higher interest rates, which then lead to even higher debt levels -- are already clearly on the horizon."
(Excerpt) Read more at telegraph.co.uk ...
P!
So let’s just declare sovereign bankruptcy and start over! Sure we’ll have do live on our income for 10 years, but that will fly by!
You are full of bright news today.
I don’t post when I have a bad day. You may expect me to have a bad day often.:-)
The BIS skips nimbly over this dilemma. Nobody has yet mastered our horrible Hobson’s Choice.
Joe Weisenthal
Apr. 8, 2010, 5:41 AM
Amazingly, the story right now is in Greece.
According to ForexLive, Greek-German 10-year bond spreads are at 453, which is a brand new record.
The euro is also getting clubbed again. This is the overnight action.
Futures across the board are down.
What the Federal government - and some States, counties and city governments have done to this nation is nothing short of a treasonous crime.
Bankers’ Fascism
The pivotal role of Schacht in the Hitler coup and in the Pan European Union, highlights a critical dimension of the universal fascist scheme: the top-down role of the financial “overworld” and its banking technocrats. By all historical accounts, Schacht was the architect, in 1930, of the Bank for International Settlements (BIS), along with the Bank of England’s Montagu Norman. Historian Carroll Quigley, in his epic book, “Tragedy and Hope: A History of the World in Our Time” (New York: MacMillan Company, 1966), described the BIS scheme to establish a dictatorship over world finance:
“The powers of financial capital had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.
The apex of the system was to be the Bank for International Settlements) in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank, in the hands of men like Montagu Norman of the Bank of England), Benjamin Strong of the New York Federal Reserve Bank), Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank, sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.”
http://www.modernhistoryproject.org/mhp/ArticleDisplay.php?Article=Synarchism&Entity=BankIntSet
Treasury Sec. Tim Geithner served as chairman of the G-10’s Committee on Payment and Settlement Systems of the Bank for International Settlements.
The solution is inflate the GDP. If the GDP is doubled by inflation, the debt as a percentage is halved.
The only question is when?
My guess is that the war with Iran will provide the backdrop and excuse
Everything can be inflated away except the not quite explicit Medicare obligations which are more or less open-ended promises to treat us than hard-number dollar amounts.
I figure that before they can start the hyperinflation route, they will need to change that situation from “whatever care you need, subject to death panel approval” to a certain lifetime dollar amount — which then can also be hyperinflated away.
Of course, the wild card of the new healthcare bill which limits end of life care more than the present architecture does might very well already be the cornerstone for that ultimate explicit change to Medicare.
I’m certainly thinking that this is what all the dire predictions are about. Control, control, control (and global taxes).
Good post, TLR. It will be interesting to see some of the more detailed news from the U.S. Treasury auction and sale this week.
Sorry, Consumer Spending Is Just Not Going To Go Gangbusters
bump
What the Federal government - and some States, counties and city governments have done to this nation is nothing short of a treasonous crime.
BUMP! 535 rotating criminals in the legislature, the rotating executive branch of criminals, many lifetime judicial criminals, their propagandists & sycophants have really done a number on this nation. The states, counties and cities are the stomping grounds for socialists.
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