This Is The Biggest Problem Facing The World Today: 9 Countries Have Debt-To-GDP Over 300%

Submitted by Tyler Durden  –  ZeroHedge

If anyone has stopped to ask just why global central banks are in such a rush to create inflation (but only controlled inflation, not runaway hyperinflation… of course when they fail with the “controlled” part the money paradrop is only a matter of time) over the past 5 years, and have printed over $12 trillion in credit-money since Lehman, the bulk of which has ended up in the stock market, and which for the first time ever are about to monetize all global sovereign debt issuance in 2015, the answer is simple, and can be seen on the chart below.

It also shows the biggest problem facing the world today, namely that at least 9 countries have debt/GDP above 300%, and that a whopping 39% countries have debt-to-GDP of over 100%!

We have written on this topic on countless occasions in the past, so we will be brief: either the Fed inflates this debt away, or one can kiss any hope of economic growth goodbye, even if that means even more central bank rate cuts, more QEs everywhere, and stock markets trading at +? while the middle class around the globe disappears and only the 0.001% is left standing. Continue reading

How Goes the War?

Submitted by James Howard Kunstler  –  www.kunstler.com

Oh, you didn’t notice that World War Three is underway, actually has been for more than year? Well, that’s because most of it has been taking place in the banking sector, which for most people is just an alternative universe of math. The catch, which many people either miss or don’t care about, is that the math doesn’t add up.

For instance, the runaway choo-choo train of linked European sovereign bond obligations with its overloaded caboose of interest rate swaps and other janky derivatives of mass destruction. That train left the station in Athens a few weeks ago bound for Frankfurt. Ever since, the German government and its cohorts in the EU, the ECB, and the IMF have been issuing reassurances that the choo choo train will not blow up when it reaches its destination.

Few people grok that Greece is an entity with an economy not much bigger than North Carolina’s, yet it is burdened with roughly $350 billion of old debt that will never be paid back. The only thing at issue is how it will not be paid back, that is, what mode of pretense will be employed to disguise the inability to pay back this debt. The mode du jour has been the crude one of lending Greece more money to pay back the interest on the old debt. A seven-year-old ought to be able to understand where that leads.

It’s kind of up to the Greeks this week to possibly opt out of that farcical deal. They have at least two other present options: return to being a sunwashed semi-medieval backwater of olive farmers, shepherds, and inn-keepers, or perhaps lease out some cozy corner of their vast Mediterranean coastline to the Russian navy for enough annual walking-around money to keep the lights on for the aforementioned farmers, shepherds, and inn-keepers. Of course, that would drive the US and its NATO quislings batshit crazy. Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

1 In 3 Americans On Verge Of Financial Ruin (MarketWatch)
BofA Leads Charge Into Bonds as Banks Hoard $2 Trillion (Bloomberg)
Can A Bitcoin-Style Virtual Currency Solve The Greek Financial Crisis? (Guardian)
Greece Debt Deal: Reforms Will ‘Combat Tax Evasion’ (BBC)
Greece Draws Up €7.3 Billion Tax Hit List Aimed At Oligarchs And Criminals (AFP)
Greece Scrambles To Finalise Fiscal Reform List (Guardian)
Who Made Germany Europe’s Boss? (Bloomberg)
Why Germany Might Not Be Bluffing in Greece (Bloomberg)
The Greek Debt Deal: Victory Or Defeat? (Guardian ed.)
Greece’s Tsipras Is on a High Wire (Bloomberg)
Spain Said to Lead EU Push to Force Terms on Greece (Bloomberg)
Why Greece Will Never Repay Its Debt (CNBC)
Rebuilding Crumbling America Shouldn’t Wait (Bloomberg)
Global Central Bank Easing Quadruples In 2015 (Zero Hedge)
French Analyst Calls For France-Germany-Russia Alliance (TASS)
Homeless Britons Are Turning To The Sikh Community For Food (BBC)

Much more here: Debt Rattle February 23 2015 – TheAutomaticEarth.com

Greek Non-Drama – Has Syriza Really Given Up?

Submitted by Pater Tenebrarum  –  The Acting Man Blog

Greek Government Seemingly Blinks

Alexis Tsipras has tried his best to sell the outcome of Greece’s negotiations with the EU to his voters over the weekend. As far as we can tell, the Greek government hasn’t achieved even a single one of its aims so far. The bailout was extended by four months, but in spite of a few cosmetic changes to the wording accompanying it (e.g. the “troika” has been renamed “the institutions”), it is still precisely the same bailout agreement as before.

8-tsipras

Yanis Varoufakis and Alexis Tsipras. What’s the plan?

Photo credit: Alkis Konstantinidis / Reuters

Not so, avers Tsipras. Here are a few quotes from a televised speech he delivered on Saturday, as reported by Reuters:

“Yesterday we took a decisive step, leaving austerity, the bailouts and the troika,” Tsipras said in a televised statement. “We won a battle, not the war. The difficulties, the real difficulties …are ahead of us.”

Tsipras and his Syriza party won power last month on promises to end Greece’s EU/IMF bailout program and end cooperation with the hated “troika” — inspectors from the European Commission, European Central Bank and IMF who have monitored Greece’s compliance with its austerity and reform commitments. Instead Athens was forced to accept the conditional extension of the bailout and still deal with the troika, renamed in the deal as “the three institutions”.

Nevertheless, he said: “Yesterday’s agreement with the Eurogroup … cancels the commitments of the previous government for cuts to wages and pensions, for firings in the public sector, for VAT rises on food, medicine.”

Tsipras, a radical left-winger, had been under heavy pressure to secure a deal as Greeks have been pulling huge sums out of the country’s banks, fearing the talks with euro zonefinance ministers would fail and Greece would be cast adrift as the bailout had been due to expire on Feb. 28. Without naming names, he attacked conservatives at home and in the euro zone. “Yesterday we averted plans by blind conservative powers, within and outside the country, to asphyxiate Greece on Feb. 28,” he said.

About 1 billion euros fled Greek bank accounts on Friday, a senior banker told Reuters, due to savers’ fears that Athens might have to halt such withdrawals or prepare to reintroduce a national currency. Greece says Friday’s extension should calm such fears.

“Greece achieved an important negotiating success in Europe. We showed determination and flexibility and in the end, we achieved our basic goal,” said Tsipras.

(emphasis added)

Continue reading

Whatever Became of Economists and the American Economy

Submitted by Dr. Paul Craig Roberts – Institute for Public Economy

According to the official economic fairy tale, the US economy has been in recovery since June 2009.

This fairy tale supports America’s image as the safe haven, an image that keeps the dollar up, the stock market up, and interest rates down. It is an image that causes the massive numbers of unemployed Americans to blame themselves and not the mishandled economy.

This fairy tale survives despite the fact that there is no economic information whatsoever that supports it.

Real median household income has not grown for years and is below the levels of the early 1970s.

There has been no growth in real retail sales for six years.

How does an economy dependent on consumer demand grow when real consumer incomes and real retail sales do not grow?

Not from business investment. Why invest when there is no sales growth? Industrial production, properly deflated, remains well below the pre-recession level.

Not from construction. The real value of total construction put in place declined sharply from 2006 through 2011 and has bounced around the 2011 bottom for the past three years.

How does an economy grow when the labor force is shrinking? The labor force participation rate has declined since 2007 as has the civilian employment to population ratio.

How can there be a recovery when nothing has recovered?

Do economists believe that the entire corpus of macroeconomics taught since the 1940s is simply incorrect? If not, how can economists possibly support the recovery fairy tale?

Continue reading

“Global System Catastrophe” Is Key Threat To Human Civilization

Submitted by Mark O’Byrne  –  GoldCore

 – Oxford Scientists Cite “Global System Catastrophe” Among 12 Plausible Threats To Civilization

– “Global System Catastrophe” More Of A Possibility Than Most Western People Suspect

– Study Described As A “Scientific Assessment About The Possibility Of Oblivion”

– Other Threats Include Nuclear War, Environmental Degradation, Geological Events and Out of Control Technology

Recent research undertaken by scientists in Oxford University to identify possible threats to human civilisation has identified “system-wide failures caused by the structure of the network” as one of twelve major threats.

goldcore_bloomberg_chart1_23-02-15

Global economic collapse, artificial intelligence and nanotechnology have been named alongside nuclear war, ecological catastrophe and super-volcano eruptions as “risks that threaten human civilization” in a report by the Global Challenges Foundation.

The world’s economic and political systems face systematic risks because of their intricate and interconnected natures. The researchers say more work needs to be done to clarify what parts of the system could collapse and destroy western civilization.

The authors of the study say it is about “how better understanding of the magnitude of the challenges can help the world to address the risks it faces, and can help to create a path towards more sustainable development.”

The foundation was set up in 2011 with the aim of funding research into risks that threaten humanity, and encouraging more collaboration between governments, scientists and companies to combat them.

Apart from failure of the systems of civilization the report also looks at the threats posed by the following:

– extreme climate change

– nuclear war

– global pandemic

– major asteroid impact

– super volcano

– ecological catastrophe

– synthetic biology

– nanotechnology

– artificial intelligence

– future bad global governance

– unknown unknowns

The impact of human activities on our environment is the most pressing problem according to the study.

The report warns that ‘extreme climate change’ could lead to a nightmare scenario of famines, mass deaths, social collapse and mass migration igniting global conflict as civilization crumbles.

Cheery stuff !

Continue reading

50 Shades of Greece

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth


John M. Fox Window display of imported and domestic cheeses, New York 1948

When it comes to the ongoing Greek question, I see a lot of people eagerly jump to conclusions, after the ‘debt deal’, that I don’t think are justified; certainly not yet. The overall conviction in the press seems to be that Syriza has given in on just about all fronts, and Germany and Dijsselbloem are the big winners.

But since that may well be the exact position Syriza wants ‘the other side’ to be in, where they think they have prevailed, one will have to try and think a few steps ahead before judging the situation. There’s far more grey area here than many pundits seem to assume, easily 50 shades of it.

If Greece wouldn’t have given Germany the idea that it was winning, Athens would have already come very close to an exit from the eurozone. The problem with that is that it is not part of the mandate Syriza has been given by Greek voters. Who have spoken out for an end to austerity, but within the existing euro framework.

Varoufakis et al. may long have concluded that such a set-up is simply not realistic, but they would still have to work up to a situation where, at some point, they can present this to the people. And that can only be done after they can convincingly show that Germany and Holland refuse to honor the democratically decided mandate Syriza brings to the table.

They would have to make absolutely sure that the other side gets the blame for the failed negotiations. They have to do that anyway, even if a Grexit is not their preferred outcome. They need to be able to prove that they bent over backwards and Germany still wouldn’t play ball.

The 4-month extension debt deal agreed on this week is still contingent on a set of measures Varoufakis is due to hand to his various European ‘partners’ on Monday. If the ‘partners’ throw out the package, or too much of it, then Tsipras can go to the Greek people and say:

“Look, they’re not acting in good faith, they refuse to honor your democratic vote, and the mandate you handed us with that vote. So what are we going to do now? Do you want to stay in the eurozone and the austerity programs it forces upon you, or are we going to try to find out what would happen if we leave the euro?” Continue reading