Since the start of the financial crisis, industrial country public debt levels have increased dramatically. And they are set to continue rising for the foreseeable future.
A number of countries face the prospect of large and rising future costs related to the ageing of their populations. In this paper, we examine what current fiscal policy and expected future age-related spending imply for the path of debt/GDP ratios over the next several decades.
So says the Central Bankers bank, the[FONT=Arial, Helvetica, sans-serif] Bank of International Settlements.
Our projections of public debt ratios lead us to conclude that the path pursued by fiscal authorities in a number of industrial countries is unsustainable. Drastic measures are necessary to check the rapid growth of current and future liabilities of governments and reduce their adverse consequences for long-term growth and monetary stability.
Another finger in the dike to try and plug the leak ?It casts aside long-held notions that each EU nation should manage its own finances, opening an era in which members of the common currency take on unprecedented responsibilities for each others' fiscal troubles.
Crikey Moses!
The S&P500 futures likes it. Up 3.6%.
Guesses for where the index will end today's session and what it will mean ?
Crikey Moses!
The S&P500 futures likes it. Up 3.6%.
Guesses for where the index will end today's session and what it will mean ?
TOKYO (MarketWatch) - Japan's central bank joined five major global counterparts Monday in reopening temporary U.S. dollar-liquidity swap facilities as part of coordinated global central-bank efforts to maintain normal money-market function.
Just don't really want to think what that sort of bust could look like.
* "A common feature of all these earlier troubles [panics such as 1907 and 1914] was that having happened they were over. The worst was reasonably recognizable as such.
The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning.
Nothing could have been more ingeniously designed to maximize the suffering, and also to insure that as few as possible escaped the common misfortune. The fortunate speculator who had funds to answer the first margin call presently got another and equally urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost.
The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. (Not only were a recorded 12,894,650 shares sold on 24 October; precisely the same number were bought.) The bargains then suffered a ruinous fall.
Even the man who waited out all of October and all of November, who saw the volume of trading return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next twenty-four months.
The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable."
-- From The Great Crash of 1929 by John Kenneth Galbraith
I've just spent some time on the World of Possible Futures website that Festivus used as a reference for his recent post. Quite fascinating. In considering where the current financial crisis might take us it's worth looking at what happened during the 1930's depression as debt was unwound around the world.
http://www.nowandfutures.com/great_depression.html
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