Preparing for the Euro collapse (1 Viewer)

[Ursa M]

Lowest yield of any bond and investors can't buy enough of them. Kinda makes you wonder why so much noise is being made about the debt, especially when overall debt is actually declining, once private debt is included.

Did you just pull this out of your ###?

No. It's from a MarketWatch article I read yesterday. It has a lot to do with the reasons the recovery is so slow. Here are a few quotes.

Little by little, our economy is reducing its debt burden, slowly repairing the damage caused by 10, 20 or 30 years of excess.

If you want to know why economic growth has been so tepid, here’s your answer. Four years after the storm hit, the economy is still deleveraging. And it’s very hard for any economy to grow when everyone is focused on increasing their savings.

Total domestic — public and private — debt as a share of the economy has declined for 12 quarters in a row after surging over the previous decade.

As a share of the economy, debt has plunged as a consequence of rapid deleveraging by families, banks, nonfinancial businesses, and state and local governments. The ratio of total debt to gross domestic product has fallen from 3.73 times GDP to 3.36 times.

In the 11 quarters since the recession officially ended, total domestic debt has risen by just $702 billion, or 1.4%. By contrast, in the 11 quarters before the recession began, in those bubble years of 2005, 2006 and 2007, total debt increased by $10.7 trillion, or 28%.

Cecchetti and his co-authors found that growth can be impaired once nonfinancial corporate debt hits about 90% of GDP, or when household debts hit 85% of GDP, or when public debts hit about 85%.

In the U.S., household debt has now fallen to 84% of GDP from a peak of 98%. Nonfinancial corporate debt has fallen to 77% from a peak of 83%. Financial sector debt has plunged from 123% of GDP to 89%. Public debt has risen to 89% from 56%.

The deleveraging process in the private sector still has a ways to run, not based on some economists’ rule of thumb, but based on what real people are actually doing. Banks and households are still slashing their debt, while nonfinancial companies are beginning to borrow again, but only a little, according to the latest data from the Federal Reserve’s flow of funds report. Take a look at the flow of funds.

According to a study by McKinsey published earlier this year, U.S. households may have two more years of deleveraging left before their debts are sustainable again.

If McKinsey is right, the U.S. economy may have to endure a couple more years of slow growth.

Those quotes really aren't backing up your nonsense.

My "nonsense" was about total debt, public and private added together, diminishing, which it is.

 

[humpback]

Lowest yield of any bond and investors can't buy enough of them. Kinda makes you wonder why so much noise is being made about the debt, especially when overall debt is actually declining, once private debt is included.

My "nonsense" was about total debt, public and private added together, diminishing, which it is.

Your nonsense was that we have the lowest yield of any bond, that we shouldn't be making noise over the debt, or that levels of private debt are relevant when talking about government debt. Other than that, you nailed it!

 

[Ursa M]

Lowest yield of any bond and investors can't buy enough of them. Kinda makes you wonder why so much noise is being made about the debt, especially when overall debt is actually declining, once private debt is included.

My "nonsense" was about total debt, public and private added together, diminishing, which it is.

Your nonsense was that we have the lowest yield of any bond, that we shouldn't be making noise over the debt, or that levels of private debt are relevant when talking about government debt. Other than that, you nailed it!

Levels of private debt ARE relevant when talking about the economy and, as a side note, explaining partially why the recovery is slow. I already admitted further up that I was looking at the wrong bond. I'm open to being corrected, unlike you.

 

[humpback]

Lowest yield of any bond and investors can't buy enough of them. Kinda makes you wonder why so much noise is being made about the debt, especially when overall debt is actually declining, once private debt is included.

My "nonsense" was about total debt, public and private added together, diminishing, which it is.

Your nonsense was that we have the lowest yield of any bond, that we shouldn't be making noise over the debt, or that levels of private debt are relevant when talking about government debt. Other than that, you nailed it!

Levels of private debt ARE relevant when talking about the economy and, as a side note, explaining partially why the recovery is slow. I already admitted further up that I was looking at the wrong bond. I'm open to being corrected, unlike you.

You're conflating the issues. In your initial post that I responded to, you said nothing about the economy, it was all about debt (and mostly incorrect).I read that article as well, and agree with much of it as it pertains to the economy. I've been saying for a while that I don't think we're going to have a quick recovery anytime soon, not without another bubble. As the article points out, we had several years of boom that were overdone due to excessive leverage. When you take that excessive leverage away (the article also points out that we aren't done deleveraging), the economy is going to be weaker. However, that's a separate point from our bond rates or national debt.

 

[Rohn Jambo]

Lowest yield of any bond and investors can't buy enough of them. Kinda makes you wonder why so much noise is being made about the debt, especially when overall debt is actually declining, once private debt is included.

My "nonsense" was about total debt, public and private added together, diminishing, which it is.

Your nonsense was that we have the lowest yield of any bond, that we shouldn't be making noise over the debt, or that levels of private debt are relevant when talking about government debt. Other than that, you nailed it!

Levels of private debt ARE relevant when talking about the economy and, as a side note, explaining partially why the recovery is slow. I already admitted further up that I was looking at the wrong bond. I'm open to being corrected, unlike you.

You're conflating the issues. In your initial post that I responded to, you said nothing about the economy, it was all about debt (and mostly incorrect).I read that article as well, and agree with much of it as it pertains to the economy. I've been saying for a while that I don't think we're going to have a quick recovery anytime soon, not without another bubble. As the article points out, we had several years of boom that were overdone due to excessive leverage. When you take that excessive leverage away (the article also points out that we aren't done deleveraging), the economy is going to be weaker. However, that's a separate point from our bond rates or national debt.

I think Ursa was saying that the economy would recover faster if people spend like there is no tomorrow but they are saving instead.

 

[Ursa M]

Lowest yield of any bond and investors can't buy enough of them. Kinda makes you wonder why so much noise is being made about the debt, especially when overall debt is actually declining, once private debt is included.

My "nonsense" was about total debt, public and private added together, diminishing, which it is.

Your nonsense was that we have the lowest yield of any bond, that we shouldn't be making noise over the debt, or that levels of private debt are relevant when talking about government debt. Other than that, you nailed it!

Levels of private debt ARE relevant when talking about the economy and, as a side note, explaining partially why the recovery is slow. I already admitted further up that I was looking at the wrong bond. I'm open to being corrected, unlike you.

You're conflating the issues. In your initial post that I responded to, you said nothing about the economy, it was all about debt (and mostly incorrect).I read that article as well, and agree with much of it as it pertains to the economy. I've been saying for a while that I don't think we're going to have a quick recovery anytime soon, not without another bubble. As the article points out, we had several years of boom that were overdone due to excessive leverage. When you take that excessive leverage away (the article also points out that we aren't done deleveraging), the economy is going to be weaker. However, that's a separate point from our bond rates or national debt.

So if you recognize that, why do you and the rest of the righties keep droning on about the slow recovery and how it's Obama's fault?

 

[humpback]

I think Ursa was saying that the economy would recover faster if people spend like there is no tomorrow but they are saving instead.

Not in his first post that I responded to, which had nothing to do with the economy.

So if you recognize that, why do you and the rest of the righties keep droning on about the slow recovery and how it's Obama's fault?

I'm not a righty, nor do I drone on about how the slow recovery is Obama's fault.

 

[Warrior]

Buy gold - sleep well.

My own personal take is everyone in the USA should be happy about Euro trouble because it makes the dollar the lepper with the most fingers. Once the Euro crisis gets resolved the dollar will be next.

the dollar is the safest currency in the world.... by far.

Lowest yield of any bond and investors can't buy enough of them. Kinda makes you wonder why so much noise is being made about the debt, especially when overall debt is actually declining, once private debt is included.

By investors do you mean the Fed?And as far as the safest currency in the world we will have to agree to disagree. It has lost 98% of it's value since inception and it settled with real debt of >$15T, accruing >$1T of debt a year, and has countless Trillions of future unfunded liabilities.

I guess your grandparents must have been 98% better off than you are today then, right?Good thing that's not how it works

 

[Ursa M]

So if you recognize that, why do you and the rest of the righties keep droning on about the slow recovery and how it's Obama's fault?

I'm not a righty, nor do I drone on about how the slow recovery is Obama's fault.

0 for 2.

 

[humpback]

So if you recognize that, why do you and the rest of the righties keep droning on about the slow recovery and how it's Obama's fault?

I'm not a righty, nor do I drone on about how the slow recovery is Obama's fault.

0 for 2.

Keep digging that pathetic hole you're in.

 

[tommyGunZ]

So if you recognize that, why do you and the rest of the righties keep droning on about the slow recovery and how it's Obama's fault?

I'm not a righty, nor do I drone on about how the slow recovery is Obama's fault.

0 for 2.

humpback's been spewing Rush talking points for months now. LOL at "i'm not a righty".

 

[humpback]

So if you recognize that, why do you and the rest of the righties keep droning on about the slow recovery and how it's Obama's fault?

I'm not a righty, nor do I drone on about how the slow recovery is Obama's fault.

0 for 2.

humpback's been spewing Rush talking points for months now. LOL at "i'm not a righty".

Another clueless clown- I guarantee you've listened to more Rush than I have.There's a neat little search feature on this site, so there should be all sorts of evidence of me droning on about how the slow economy is Obama's fault, right? Anytime you're ready, hack....

 

[humpback]

There's a neat little search feature on this site, so there should be all sorts of evidence of me droning on about how the slow economy is Obama's fault, right? Anytime you're ready, hack....

Still searching?

 

[Fennis]

the slow economy is Obama's fault

what do I win?

 

[humpback]

the slow economy is Obama's fault

what do I win?

You win the "tommygunz spinmeister award". And one of these .

 

[Slapdash]

Spain Slams Germany for Fostering Crisis in Plea for Assistance

By Ben Sills

June 14 (Bloomberg) -- Spain attacked Germany for what it

termed fostering the financial crisis, saying the biggest

European economy has benefited from the single currency as its

banks profiteered by lending to the fast-growing South.

“It’s true that some countries including Spain lived

beyond our means but that’s because banks from the core decided

to make lots of money investing here,” Spanish Foreign Minister

Jose Manuel Garcia-Margallo told Onda Cero radio radio. If

Germany “throws one country to the wolves that will affect

everyone, so they should take a more long-term view.”

Rifts are deepening with Greek elections on June 17 risking

the first exit from the single currency as voters buckle under

the continent’s most severe austerity program. Italy’s bond

yields soared at an auction today and German Chancellor Angela

Merkel rejected “seemingly easy” solutions to the financial

turmoil, pushing back against calls by France, Spain and Italy.

Garcia-Margallo said Germany’s export-led economic boom was

powered by the monetary union that depresses their currency. He

commented a day after Prime Minister Mariano Rajoy said he would

“battle” the European Central Bank for cheap loans to avoid a

sovereign bailout.

Rajoy yesterday called for the ECB to buy Spanish

government debt investors are dumping to ease the government’s

interest costs in a letter to European Commission President Jose

Manuel Barroso.

Rajoy’s Battle

“That is the battle we have to wage in Europe,” Rajoy

told Parliament in Madrid. “I am waging it.”

“What we’re seeing now says much about the deepening

cracks in Europe’s political financial and economic edifice,”

Nicholas Spiro, managing director at Spiro Sovereign Strategy in

London, said in a telephone interview.

The EU and the ECB have already lent or pledged the

equivalent of about 40 percent of Spain’s annual economic output

to the state and country’s financial institutions. Spanish

lenders took a record 287.8 billion euros from the central bank

in May, which many channeled into government debt to support the

sovereign.

The government agreed June 9 to borrow another 100 billion

euros from the EU to recapitalize the banks. The ECB likely

bought as much as 40 billion euros of Spanish securities in its

government-bond buying program, according to Marco Valli, chief

Euro zone economist at UniCredit SpA in Milan.

Surging Yields

The yield on Spain’s 10-year debt rose to a euro-era record

of 6.998 percent today while Italy’s benchmark bond yields

increased to 6.29 percent. The Spanish rate, which has jumped 78

basis points since the bailout request, rose for a fifth day

after Moody’s Investors Service cut Spain’s credit rating to one

step above junk late yesterday and said a further downgrade may

follow.

French President Francois Hollande, who is pushing back

against the austerity measures advocated by Germany, will meet

Italian Prime Minister Mario Monti in Rome today. Monti called

for a “credible package of growth measures” yesterday as he

said Europe faces a “particularly intense and crucial phase.”

The increasingly fractious tone of relations is adding to

doubts that European leaders will be able to plot a route out of

the crisis when they meet in Brussels on June 28. The bank

rescue will probably fail to avert a full sovereign bailout out

for Spain, and Monti may have to follow Rajoy in seeking aid

within months, James Nixon, chief European economist at Societe

Generale SA in London said.

Greek Vote

Any measures may come too late for Greeks who will vote

June 17 on whether to back Alexis Tsipras, who wants to scrap

the austerity plan dictated by the EU and the International

Monetary Fund as a condition of its bailout. New Democracy

leader Antonis Samaras, who supports the bailout conditions,

said backing Tsipras will see Greece thrown out of the euro.

“We have no sense that European partners will follow this

tactic of blackmail heard from some quarters and stop funding,”

Tsipras, whose Syriza party is vying for first place in pre-

election polls, said in an interview in Athens yesterday with

Bloomberg Television. “Something like that would be

catastrophic not only for Greece but for the entire euro area.”

The Spanish Foreign Minister is spot on here.

 

[RUSF18]

Sunday is a big, big day. I'm nowhere near retirement age, but I've moved my accounts into safer instruments just in case things go bad come Monday.

 

[Slapdash]

Sunday is a big, big day. I'm nowhere near retirement age, but I've moved my accounts into safer instruments just in case things go bad come Monday.

I've gone to a more defense position over the last couple of weeks but Spain is what scares me at the moment. Greece is just delaying the inevitable. If Germany is going to keep treating Spain like it is Greece things are going to get very ugly.

 

[RUSF18]

Sunday is a big, big day. I'm nowhere near retirement age, but I've moved my accounts into safer instruments just in case things go bad come Monday.

I've gone to a more defense position over the last couple of weeks but Spain is what scares me at the moment. Greece is just delaying the inevitable. If Germany is going to keep treating Spain like it is Greece things are going to get very ugly.

I agree. Italy is no better. Greece is already done, but the results of the election could be the proverbial straw that leads to a global meltdown.

 

[The Comedian]

bump.

 

[Topes]

What the ECB is doing, in essence, is setting itself up as the shadow government of Italy, Spain, Portugal, and perhaps Ireland.

 

[Politician Spock]

Buy gold - sleep well.

My own personal take is everyone in the USA should be happy about Euro trouble because it makes the dollar the lepper with the most fingers. Once the Euro crisis gets resolved the dollar will be next.

the dollar is the safest currency in the world.... by far.

Lowest yield of any bond and investors can't buy enough of them. Kinda makes you wonder why so much noise is being made about the debt, especially when overall debt is actually declining, once private debt is included.

By investors do you mean the Fed?And as far as the safest currency in the world we will have to agree to disagree. It has lost 98% of it's value since inception and it settled with real debt of >$15T, accruing >$1T of debt a year, and has countless Trillions of future unfunded liabilities.

Everything I read says "investors". Plural. And are you really complaining about it's value loss since 17whateveritwas?

Record Treasury Demand Keeps Yields Low As Supply Shrinks

Investors are plowing into Treasuries (USB2YBC) at a record pace as the supply of the world’s safest securities dwindles, ensuring yields will stay low regardless of whether the Federal Reserve undertakes more stimulus to fight unemployment.

Buyers bid $3.19 for each dollar of the $538 billion in notes and bonds sold this year, the most since the government began releasing the data in 1992 and on pace to beat the high of $3.04 in 2011. The net amount of Treasuries available will decline by 30 percent once proceeds from maturing securities are reinvested, according to data from CRT Capital Group LLC.

http://www.bloomberg.com/news/2012-04-09/record-treasury-demand-keeps-yields-low-as-supply-shrinks.html

61% of those "investors... plowing into Treasuries... at a record pace" was the Federal Reserve.From: http://www.moneynews.com/Headline/fed-debt-Treasury/2012/03/28/id/434106

The Federal Reserve is propping up the entire U.S. economy by buying 61 percent of the government debt issued by the Treasury Department, a trend that cannot last, Lawrence Goodman, a former Treasury official and current president of the Center for Financial Stability, writes in a Wall Street Journal opinion article published Wednesday.

"Last year the Fed purchased a stunning 61 percent of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis," Goodman writes.

Goodman also warns that U.S. economy and markets are “at risk for a sharp correction” if conditions aren’t “normalized.”

"This not only creates the false appearance of limitless demand for U.S. debt but also blunts any sense of urgency to reduce supersized budget deficits."

 

[Novice2]

It is a matter of time before the demise of the Euro.I need some advice on how to prepare for this event from the FBG financial experts.

Spend all your money and Obama will take care of you.

 

[cstu]

What the ECB is doing, in essence, is setting itself up as the shadow government of Italy, Spain, Portugal, and perhaps Ireland.

It is only a matter of time before the poor EU countries lose sovereignty since there's no other way to make the Euro work.

 

[Fennis]

the slow economy is Obama's fault

what do I win?

You win the "tommygunz spinmeister award". And one of these .

 

[Topes]

What the ECB is doing, in essence, is setting itself up as the shadow government of Italy, Spain, Portugal, and perhaps Ireland.

It is only a matter of time before the poor EU countries lose sovereignty since there's no other way to make the Euro work.

It is only a matter of time before the United Nations troops roll into Texas.

 

[Politician Spock]

What the ECB is doing, in essence, is setting itself up as the shadow government of Italy, Spain, Portugal, and perhaps Ireland.

It is only a matter of time before the poor EU countries lose sovereignty since there's no other way to make the Euro work.

It is only a matter of time before the United Nations troops roll into Texas.

The Texans have to be disarmed first.

 

[cstu]

Getting crushed...down to $1.13 - lowest since 2003.

 

[Chemical X]

good news is i get more for my money, but my property loses value For me.