GREEK CRISIS: A serious debt crisis in Greece has rattled global financial marketplaces and raised worries about whether other countries can repay their money. LEHMAN REPLAY: Economists come to mind that the Greek turmoil, if not included, could become a do it again of the cascading financial stress that occurred in the fall of 2008 after Lehman Brothers collapsed. DEBT RESCUE: European countries and the International Monetary Fund are racing to assemble a package deal of loans for Greece which will be sufficient to encourage markets that the united states won’t default on its debt burden.

Concerns have previously surfaced in Congress that the wide demands of the sovereign debt crisis will quickly exhaust the I.M.F.’s reserves and leave America, the fund’s largest shareholder, with the expenses. The entire proven fact that the financial meltdown was over has been called into doubt. History shows us that the fantastic Depression bottom was the sovereign debt default phase.

And the EU’s erratic responses (hesitancy accompanied by “lip service” rather than decisive responses) is going to verify even more detrimental as this “Club Med” crisis grinds on. The Great Depression was composed of two independent panics. In 1930 people thought they’d seen the most severe of things. However, the economic conditions created by the first panic were already eating away at the foundations of finance institutions and governments. This is one of the nice reasons that people had another bank problems, which pressed America to the true bottom of the fantastic Depression, and brought FDR to power.

The euro is within problems, and already-weak European banks look like massively subjected to Greece’s huge debts fill. They’re even more exposed to the debt of the other Eurozone countries – Spain, Portugal et. The size of the rescue package that Greece needs is already going to have a significant chunk of the IMF’s war chest. As well as the IMF is, fundamentally, America.

It’s not clear that Greece has the political will for the austerity actions it will have to make even if its personal debt yields come back down–and the higher they stay, small the chance. This is the calculation, its creditors are making, which is why yields are now in the 20% range. And, perversely, this helps it be more likely that creditors are going to lose their money.

  • Prepare an income statement for the current year finished March 31
  • Generally involves high diversification (although Warren Buffett didn’t diversify very much)
  • Husband’s individual cost savings accounts, checking accounts and CDs $250,000
  • Total collateral on the balance sheet increases as dividends paid boosts
  • 2005 – Fiscal Expansion (Gov’t spending) = RIR increases = Investment decreases

A friend of mine from California, who is a successful investment supervisor and a multi-year disciple of Warren Buffet, feels the entire notion of the Euro is idiotic: a fiat currency held by all users of the golf club. Robert says, “In the “days of the past”, Greece could simply have devalued the drachma. Now, of course, they can’t devalue and so the reality of the “social democracy” like the European Union is currently exposed. The demographics are such that the concept of “Europe” by itself is completely moribund.

There is no future for Europe under the present circumstances. 1.Unplug the return and Euro to sovereign currencies. 3.Start procreating so that the population replacement ratio is reached (which may be impossible, as well as to past due). Robert continues, “Thus, the IMF (read, “USA”) will eventually bail out Greece since the Germans see the apparent injustice of increasing fees in Germany to pay for the profligate Greeks.

The same morbidity applies to us except that, for the moment we remain standing (albeit not so tall). I think my pal is right. We’ve got an extremely big problem on our hands, and we are headed for a real double-dip recession indeed. We’ve built a worldwide house of cards. If that house down comes, it’s going to be very painful for an extended, long time. Think about it, Keynesians? Don’t tell me you plan to print even more money to solve the world’s financial problems, because IT DOESN’T WORK.

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