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Mervyn King, Governor of the Bank of England, fears that America shares many of the same fiscal problems currently haunting Europe. He also believes that European Union must become a federalised fiscal union (in other words with central power to tax and spend) if it is to survive. Just two of the nuggets from one of the most extraordinary press conferences I have been to at the Bank.
What with all the excitement yesterday over our new Government, I never had time to remark on the Inflation Report press conference. Most of our attention was on what King said about the Government’s fiscal p
Every country around the world is in a similar position, even the United States; the world’s largest economy has a very large fiscal deficit.
I do want to suggest that within the Euro Area it’s become very clear that there is a need for a fiscal union to make the Monetary Union work.
According to this pleasant little myth the US has a couple of decades before its debt might, possibly hit 140% of GDP. That doesn't sound too bad now does it? After all, we're as far away from that moment as we are from the collapse of the Soviet Union back in 1990. Seems like a long time.
And Greece, a country we can now all openly deride as clearly irresponsible, is already at 115% of GDP.
The problem with this little narrative is that it conveniently excludes all the off-balance sheet obligations that government's routinely exclude to hide the severity of the current predicament. The red bars in the chart below are the relatively tiny amounts with which we console ourselves like in the article snippet above. The gray bars include all official liabilities.
Originally posted by IntelRetard
What would you do if you were a Banker or politician and you knew the world was gonna end in say 2012 or sometime there about?
Originally posted by SassyCat
respectable members of the banking cartel will be enjoying remote tropic islands drinking pina colada
Originally posted by UnlawfullPriest
Most of the US debt is owed to either to The Bank of England, or to China. So the Bank of England would have a general idea of our financial situation. either way we owe more money then ANY other entity in the world. So ya we're gonna have HUGE financial trouble. Now whether our amazingly lazy population will actually get off the couch to protest is negligible. Don't take me for an American basher, but most of the time, Americans just complain, but never take action, to afraid to be outcast.
Originally posted by sligtlyskeptical
is that the US can create their own money, while the others have to rely on other countries to buy their debt. This is one reason why the US is the safe haven of the world and while we will continue to get stronger relative to EU.
Originally posted by SassyCat
For size comparison, US external debt amounts to 36 Russias. Also, Greece has a larger debt than Russia.... I think that comparison clearly shows that something is very wrong .
The UK is just bellow US, which only shows who really "controls" world monetary system.