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| Re: Boehner walks away, gives up on debt negotiations with Obama (814664) | |||
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Re: Boehner walks away, gives up on debt negotiations with Obama |
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Posted by SMAZ on Sat Jul 23 02:51:13 2011, in response to Re: Boehner walks away, gives up on debt negotiations with Obama, posted by AEM-7AC #901 on Sat Jul 23 02:27:50 2011. Ahh yes, the Japanese trick. :-)It's the Italian trick too. The problem with Italy is that they still suffer from their 80's reputation when they used to devalue their old lira all the time which led them to be put in the dubious "PIIGS" club.. This of course led to 20% interest rates during that time and they are still paying off those bonds even now. The good part is that they are getting rolled over into lower interest euro-denominated bonds. The bad news is that at 130% of GDP, debt payments are heavy and take away from otherwise spending on domestic investments and lower tax rates at home to make the economy grow more. The good news is that their deficit this year is only 4% of GDP and dropping and they should have a balanced budget in 2013 or '14. Massive tax evasion and corruption has always held Italy back but their finances are actually pretty good and like Japan, most of their debt is domestically owned and less subject to speculative attack. Their banks are also solid. I wanted to laugh at the attack on Italian bonds a couple of weeks ago. Whoever bought those 10 year notes at almost 6% made a good deal. |
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