PIMCO's El-Erian: You Fools Don't Realize That The Sovereign Debt Crisis Goes WAY Beyond Greece

Business Insider ^ | 03/11/10 | Joe Weisenthal

[TigerLikesRooster]

PIMCO's El-Erian: You Fools Don't Realize That The Sovereign Debt Crisis Goes WAY Beyond Greece

Today, we should all be paying attention to a new theme: the simultaneous and significant deterioration in the public finances of many advanced economies. At present this is being viewed primarily – and excessively – through the narrow prism of Greece. Down the road, it will be recognised for what it is: a significant regime shift in advanced economies with consequential and long-lasting effects. To stay ahead of the process, we should keep the following six points in mind.

/snip

Many metrics speak to the generalised nature of the disruption to public finances. My favourite comes from Willem Buiter, Citi’s chief economist. More than 40 per cent of global GDP now resides in jurisdictions (overwhelmingly in the advanced economies) running fiscal deficits of 10 per cent of GDP or more. For much of the past 30 years, this fluctuated in the 0-5 per cent range and was dominated by emerging economies.

[TigerLikesRooster]

P!

[Kimberly GG]

Glenn Beck has been doing an EXCELLENT job covering how this is going to go down.

[Old Teufel Hunden]

I can put it a little more succinctly than this guy did. Europe and our problem is that GDP to debt ratios are going out of balance because there are too many people riding the gravy train and the bill is coming due.

[ckilmer]

for the USA this problem could be greatly relieved if the USA switched to natural gas for the trucking & bus industry—thereby killing the oil import bill.

Reports are that modern technology has made significant reserves of natural gas available in Europe too.

The elites have a death wish. They need to be pushed aside.

[NeoCaveman]

OK, more debt is out there than can ever be paid.

Is it time for a jubilee yet?

[GonzoGOP]

OK, more debt is out there than can ever be paid.

For years we have been asking for leaders who can make the taught decisions. They have not appeared. Now those decisions will be made for them. You have a choice, complete withdrawal of government services, or Zimbabwe like inflation. In either case your nation will be destroyed, the latter just takes a bit longer.

In this case you are better off with the quick collapse, after the riots are over you can start the rebuilding. If you go the Zimbabwe route the nation is so thoroughly destroyed that it will likely never rise again. I will be divided up among those nations brave enough for the former option, that will have recovered much sooner.

[Track9]

Good post. International socialism and its policies are destroying economies everywhere. It is incredibly important not to allow them to advance technical schemes as legitimate solutions for the problems they alone caused.

[DuncanWaring]

You ready to say “Goodbye” to any investments you have?

Any money you have “invested” somebody else has “borrowed”.

[DuncanWaring]

Market Ticker commentary on this editorial:

http://market-ticker.org/archives/2066-Oh-Mr.-President-and-Congress-El-Erian.html

[NeoCaveman]

Yes.

It’s already over anyways.

It’s been clear to me since October 2008 that it is all vapor anyways.

[dennisw]

I can put it a little more succinctly than this guy did. Europe and our problem is that GDP to debt ratios are going out of balance because there are too many people riding the gravy train and the bill is coming due.

What happened is that mountains of debt, mortgages, of pension commitments, of promises, of obligations have been built up over the last 30-40 years. They would still be building up except that now you have everyone eyeballing everybody else and saying, “Do I trust this party to service his debt (pay interest) and pay back his debt (pay back principal)”. Suspicious lenders are asking for proof that you can at least service the debt. Suspicions are growing that Greece cannot unless it adopts austerity measures, collect more taxes and chops away at the size of government meaning firing Gov’t workers and reneging on the plush pensions they were promised

[mo]

“..the simultaneous and significant deterioration in the public finances of many advanced economies.”

these economies are in no ways “advanced” ....other than in their moneyed classes ability to sell sh%^ to the rest of the world and make ‘em ask for more.

They are economies reflecting the last dregs of 20th century fascism/socialism. The deficits associated with these economies are the true measure of their irrelevance and worthlessness at a practical level, to the world.

They are “retarded” economies...and are a liability to every free man , free thinker, and truly free country; and anybody desiring of any measure of independent thought and action.

[Kokotele]

Physical gold, held in your hot little hands, is the ONLY investment that is no one else’s liability....

[Del Rapier]

I agree with this article.

We’re seeing the end of the socialist dream across the world.But it will have been Greece that broke the camel’s back.

If only FDR was alive to see this.