Tuesday, 16 March 2010

and here is why nothing...

...will change!

The New York Times: Corporate Debt Coming Due May Squeeze Credit
... 2012 also is the beginning of a three-year period in which more than $700 billion in risky, high-yield corporate debt begins to come due, an extraordinary surge that some analysts fear could overload the debt markets.

The United States government alone will need to borrow nearly $2 trillion in 2012, to bridge the projected budget deficit for that year and to refinance existing debt.

that's only 1,000,000,000,000 of many more needed...

Moody's said the United States and other major Western nations, particularly Britain, have moved “substantially” closer to losing their gilt-edged ratings. The ratings are “stable,” but “their ‘distance-to-downgrade’ has in all cases substantially diminished,” the credit ratings agency said.

A downgrade would affect more than American pride. The bigger risk would be to the country’s ability to keep borrowing money on extremely favorable terms, and therefore to keep spending more money than it takes in from tax revenue.

The above does not include the further deterioration of the global economy nor any other country but the US - so as small as Greece might feel there are many more countries in trouble from Japan to Russia and a huge number of smaller ones. Can you imagine anyone having the guts to restrict the banksters' power and influence facing those enormous volumes of debts that need to be refuelled? Or with other words how would you end that highly efficient and complex system of debts feeding debts with debts feeding d...

Even the slightest reduction of quantitative easing formerly called "printing money" in connection with ultra low interest rates in an effort to fight possible inflationary tendencies or any cut of public spending might be the very last thing you wanted to do just to avoid immediate collapse of this fragile needle point balance.

This really makes it irrelevant whether any country's rating drops from triple A to mono X; they/we all sit in the same boat and if one plug is pulled all passengers will get wet.

Carpe diem!


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