Tag: American fiscal and debt crisis

Eurozone sovereign debt – dancing in a room where the clocks have no hands

The strong rally in world stock markets in January 2013 appears to be based on three premises. Firstly, that the Chinese economy has successfully avoided a “hard landing”. Secondly, the threat of a fiscal cliff in the USA has been averted. And thirdly, that the Eurozone crisis is now behind us. With these three impediments …

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How long will Mr Market’s Euphoria Last?

Mr Market has started 2013 in euphoric mood. The FTSE 100 has soared above 6100 for the first time in almost five years. The Dow Jones Industrial Average is also close to a five-year high at 13,500. And elsewhere across the world stock markets are rising. So is Mr Market’s optimism justified? Only if you …

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The American fiscal deficit in simple terms

I am indebted to an old and wise colleague for the following, which puts the American fiscal crisis in easy-to-understand terms: “US Tax Revenue = $2,170,000,000,000 Federal Expenditure = $3,820,000,000,000 New debt (being the difference between the two) = $1,650,000,000,000 Total National Debt = $14,271,000,000,000 Recent budget cuts = $38,500,000,000. Now let’s remove 8 zeroes …

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Why averting the fiscal cliff isn’t such good news

Mr Market, the manic-depressive spirit of Wall Street, jumped for joy yesterday at the news that a last-minute deal had been cobbled together between the President and Congress to stop the United States falling off the fiscal cliff. But has anything fundamentally changed? No, it hasn’t. In fact, the last-minute deal, by simply putting off …

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The International Economic Outlook for 2013

As 2012 draws to a close, the financial press is dominated by the impending US “fiscal cliff”.  What seems remarkable in this age of 24/7 rolling news is that the crisis seems to have crept up on us without warning. Yet it was completely foreseeable. What is even more remarkable is that I have yet to read …

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City Book Fair November 13th 2012 – Preview of My Presentation on the International Financial Crisis

The international financial crisis is evolving very much as foreseen in The Golden Guinea.  The International Financial Crisis 2007-2014: Causes, Consequences and Cures, I am grateful to the organisers of next week’s City Book Fair at the Bishopsgate Institute, London EC2, for giving me the opportunity to present my analysis and proposed strategy for how it might be …

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The $16 Trillion Question: How much debt can the Federal Government sustain?

And an even more worrying question – what happens if the Federal Government cannot meet its debt servicing obligations? Federal debt has now risen well above 90% of American GDP – the tipping point at which Professors Reinhart and Rogoff found that sovereign governments starts struggling to service their debts in their book, This Time …

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Central Bankruptcy. Why Quantitative Easing could threaten the solvency of the central banks

The news this week that the US Federal Reserve is recommencing its quantitative easing programme on an open-ended basis, and that the European Central Bank is going to start buying the bonds of the peripheral Eurozone States to fulfil Mario Draghi’s commitment “to do whatever it takes” to save the Euro, call to mind an incident in my own investment career …

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