European banks have 20 TRILLION in toxic assets and loans??? Is the USA in better shape than Europe?

Here are some links that I found interesting, I hear that the US is being blamed for this crisis but I have doubts. Americans are not blameless by any means but its not all our fault. I would wager that the US is by taking the pain now, will recover first (if ever). These numbers below kind of put the (~4-7 trillion) that the Obamaites are spending into perspective doesnt it?

Is it far worse in the EU than the USA?


Eu ropean bank bail-out could push EU into crisis...

The Commission figure is significant because of the role EU officials will play in devising rules to evaluate “toxic” bank assets later this month. New moves to bail out banks will be discussed at an emergency EU summit at the end of February. The EU is deeply worried at widening spreads on bonds sold by different European countries

Here is another

European banks may need 25 trillion dollar bail-out, EC document warns

European Commission officials have estimated that impaired assets may amount to 44pc of EU bank balance sheets. The Commission estimates that so-called financial instruments in the trading book total £12.3 trillion (13.7 trillion euros), equivalent to about 33pc of EU bank balance sheets.

Converted into dollars, £16.3 trillion are the equivalent of $25 trillion.

So the US with a GDP of 14 trillion and shrinking......with a debt as of yesterday of 11 trillion....growing....but lets look at something:

Debt as a % of GDP, the US ranks 22nd @~61% whilst, Germany is 20th at ~ 63%, France is 17th @~ 67%, and Japan is 2nd at ~170%. These numbers will change but by how much?

source
Is the United States actually better fiscally than these others??

besides who owns the US debt? Well lets look at some numbers (~2007ish) so they will change..






China is not my worry, they only own 800 billion of it, MOST is owned by the United States!!!

2007 version





So maybe things are not as bad as the press leads you to believe. They are not good and I KNOW....but its not a Depression. I remember the late 70's and early 80's, it was far worse then.

We need a NEW REAGAN!

I don't know if US are better than Europe according their own national debt.


But your sources points out US debt for the year 2007.
But for other states its 2008.

And about who owns the US debt, sources pointed the year 2006. Since, china and japan increased their ''participation'' it is a more than what is presented.

Anyways,

A strong country like Germany may sustain 67 % debt ratio, and maybe UK can't nor US . It depends on many factors. Such as: Exportation, productivity, Commercial balance, government spending, taxation level, etc..

The problem with US economy, is not only the actual debt, but long term liabilities, wich are about 54 Trillions now. And the fact that nothing seems to stop the over spending, unbalance budgets, Creation of money out of the blue, costly no-end-in sight wars, millitary expense beyond imagination, low productivity, High trade deficit, low saving rates, people endebtment.

What is saving the US from a brutal decline is the US dollar as THE TRADE currency worlwide, But it could also be fatal if everybody dumps it, because they print them ''ad Nauseam''.

The bottom line is:

Economies are so much tied, one of G7 collapse, and the domino effect starts.

From now, maybe it is not worse than the 70's and 80's, It needs to be verified, afterall they called it the worse crisis since the great Depression, no ?

And does someone think it is over yet ?

Well the 50 trillion was NOT part of the actual debt numbers. I am sure the EU's numbers would be much higher as their entitlements are far greater I would presume. I would like to see some data but the EU is not exactly forthcoming with it, which in itself is a problem.

As for the 2006 numbers, it is the same percentages per se, just now is 11 trillion. The important thing to remember is that the US owns most its debt. Japan and China together are at about 1.5 trillion between them.


Things are bad BUT unemployment is not over 10% yet. Inflation is NOT rampant (deflation is the biggest risk now).

Actually, when you think about it, hyperinflation would be a good thing for the average homeowner holding a mortgage.

Let's say we go into hyperinflation. By the end of 2010, it takes $50 to buy a loaf of bread, a gallon of gas, etc. That's 25x more money.

Take a mortgage of $250,000. Divide that by 25. Now your mortgage is costing you $10,000 in 2008 dollars. I like it. Good plan by the central government. Mortgages are fixed amounts, regardless of inflation/deflation. If I were hoping, it would be for hyperinflation for a few years.

I think they should print the hell out of money. Print up $100 trillion. Get that stuff out in the market now.

See any downside to this? Your wages/commissions would have to keep pace, but your mortgage would be frozen.

After the smoke clears, your house is paid off, and the government solves the monetary issue.

Nice plan. Good thinking.

Of course, that only works for people with big mortgages. Everyone else bites it, such as savings.

Obviously, there is a tremendous money shortage now. That's why you are seeing deflation. Low interest rates don't solve the problem like the Fed assumed under Greenspan. With the confusing numbers the economists get, they don't seem to realize that it is just a shortage of money. Heck, there are a lot more people in the world now than there were in 1990. They need money: money for jobs, purchasing, bills, etc. If you make it unavailable because it is not being produced by the government, you have exactly what you see today: economic slowdown, deflation, desperate sellers, stock in decline due to the shortage of credit (money). It's all about shortage of the money supply. They'd better get with it and produce more money asap.

[edit on 20-3-2009 by Jim Scott]

Once we're into trillions and trillions of dollars, i'm pretty sure that almost everyone involved is screwed.

I can't even fathom that amount of money, it's ludicrous really!

True - your mortgage would be paid but the savings would be gone, people would get their wealth into tangible items, but your 401k would be toast.

reply to post by edsinger


Is not over 10% nationally but go and check the numbers state by state and city by city, is well over those numbers.

Still most of the toxic debt that US generated with the corrupted banking AIG dirty deals no even the billions been funneled to EU to avoid collapse is going to help.

Bernanke is about to throw the towel because not even the Treasury printing presses can deal anymore with all the toxic debt still circulating.

Now that also the credit card bubble is bursting due to the raise in unemployment and the commercial real states numbers kept hidden until the mortgage one get settle the true is that nothing is going to stop the tsunami heading our way.

China so far is the country with most liquidity that will come out as the power house after everything just go down south.

Reagan what in the heck we need another Reagan, under him is where the whole actual mess we are seen today started.

Get your history fact fix my friend.

reply to post by Jim Scott


Your assuming that wages "have" to keep up with inflation and in the past 30 years it has not. Wages when you consider inflation has actually gone DOWN. This is part of the reason we are in this situation we are now. We are a debt based society and pretty much have to be because of the wage gap. 90% of all the wealth is controlled at the top 1%. This does not make for a good foundation.

[edit on 20-3-2009 by mybigunit]

Originally posted by marg6043
reply to post by edsinger

 

Reagan what in the heck we need another Reagan, under him is where the whole actual mess we are seen today started.

Get your history fact fix my friend.

Thats horsepucky, in Reagan 8 years our economy grew by 25%! It started over 27 years of continued growth. As has been quoted before whenever we paid off our debt the economy soon suffered shortly thereafter. the secret is growth, as long as you grow faster than your debt, you build wealth.

Under Clinton it took 10-15% of Government revenue to pay the interest on the national debt (Owned mostly by AMERICANS making money on the loan). Under 'W', it fell to 7-10%. You folks throw out numbers that 'W' had the largest debt of any administration, yet as a percentage of GNP that was not the case even AFTER 911.

Get your facts straight my dear...

so long as we have world reserve currency we are in better shape than europe .....especially with the conditions their banks are in.....but that could change.......watch out for competive one time devaluations against gold......and gold sale suspensions.....radical but effective...and then new dollars would be needed.....Amero??

Originally posted by Nimrod

Anyways,

A strong country like Germany may sustain 67 % debt ratio, and maybe UK can't nor US . It depends on many factors. Such as: Exportation, productivity, Commercial balance, government spending, taxation level, etc..

The problem with US economy, is not only the actual debt, but long term liabilities, wich are about 54 Trillions now. And the fact that nothing seems to stop the over spending, unbalance budgets, Creation of money out of the blue, costly no-end-in sight wars, millitary expense beyond imagination, low productivity, High trade deficit, low saving rates, people endebtment.

What is saving the US from a brutal decline is the US dollar as THE TRADE currency worlwide, But it could also be fatal if everybody dumps it, because they print them ''ad Nauseam''.

Exactly, Unless we start bringing in Money to this economy to start fighting our overexpenses that seem to compound daily now ... We are not pulling out of it.

Hence Most are not waiting around for these after effects of the past few months. if they dont have to.

Your assuming that wages "have" to keep up with inflation and in the past 30 years it has not. Wages when you consider inflation has actually gone DOWN. This is part of the reason we are in this situation we are now. We are a debt based society and pretty much have to be because of the wage gap. 90% of all the wealth is controlled at the top 1%. This does not make for a good foundation.

But everybody loves walmart /sarcasm

Coincidentally, the latest GEAB (March 16) attempts, in part, to address the question posed in the OP. Includes direct commentary on your linked UK Telegraph article edsinger (later amended - see GEAB Notes > LewRockwell.com).

Apparently the LEAP/E2020 team interprets the recent, negative Euro Zone spin, as political subterfuge leading into the April G-20 negotiations.

Growing Transatlantic tensions on the eve of the G20 summit: An illustration of Wall Street’s and the City’s attempt to destabilize the EU banking system and the Euro

In line with their concern for reliable information, the LEAP/E2020 team (which warned about housing risks in Central and eastern Europe as early as December 2007 in GEAB N°20 decided to study carefully in the present public announcement the reality of this so-called “Eastern European banking bomb” which has invaded the media in the last month.

If we found this a relevant theme, it is because it represents in our opinion a deliberate attempt on the part of Wall Street and the City (2) to make the world believe in some rupture within the EU and to instil the idea that some « deadly » risk is weighing on the Eurozone, by endlessly conveying phony news on a “banking risk coming from Eastern Europe” and by stigmatizing a “cold-feeted” Eurozone as opposed to the “voluntarist” actions initiated by the Americans and the British. One aim is also to divert the attention from the increasing financial problems encountered in New York and London, and to weaken the Europe position on the eve of the G20 summit.

Full Text

We hear similar negative comparisons with respect to the other major powers - China et al....

If Davos was any indication, I'm sure there will be sufficient finger-pointing in London on April 2. Should the US find itself on the defensive - imo, it's justified.

The problem is systemic - corruption knows no boundaries - and there's plenty of pain to go around. Why not get on with it - define long-term solutions - demand transparency - assign accountability - and let history conduct the body-count.

GL

reply to post by Jim Scott


This is not how it works, if a loaf of bread starts costing 50 dollars people begin to believe the dollar is garbage and trade it for other currencies / goods. Once there is a loss of confidence in a currency by the population it is over, just look at zimbabwe.

Now your second point - I have been fisically responsible, I have zero debt a decent amount in savings, and have been waiting to buy a house. How is it fair that with inflation my savings are basically stolen from me and all the irresponsible people that helped get us in this mess are rewarded.

Think about that for a moment - even if this worked this time - think about the message that sends - be irresponsible and the responsible citizens will bail you out - well if people are punnished for acting responsiblly what do you think they will do next time, and where do you think that ultimately leads our nation?

Like it or not if people and companies are irresponsible with their finances they need to be punished or the system will implode. That is what is happening and what NEEDS to happen for us to ever have a strong economy again.

reply to post by edsinger


According to Warren Buffet we were at about 500+ Trillion in derivatives
about a year ago, and they guesstimated that about half of it is smoke
and mirrors like Bernie Madoff's and Stafford's scam.

The good detailed info on that is found here:

Warren Buffet talks about coming derivatives disaster to the tune of 100's of trillions

More recently this guy says it is now closer to 1,000 Trillion.

Quadrillion dollar powder keg waiting to blow

Yes, the numbers are nuts, I do not think that much money even truly
exists in this world. It was all made thru great fiction of very corrupt
ppl running "the game" as they like to call it.

What it will do to us as a country will be quite real though.

Derivatives is the true crisis here, and I imagine Europe will find itself
saddled with some similar fake massive number that is just a true
road marker to the level of theft that has taken place via the
ultra corrupt central banks.

Good Luck to you all !

We also need to keep in mind that the US Federal Reserve has sent billions of dollars to the EU in the past month......it's obvious that we are all screwed basically as equally.

reply to post by Jim Scott


I think you need to read about the Weimar Republic, and the
US during the Great Depression.

When you can fully wrap your head around it, you will see what
is coming down the pike.

This is not a new thing, its just new to this generation.

Just as inflationary expectations are intregal to inflationary cycles - abject loss of confidence in the currency, independent of business activity, is the distinguishing component in an hyperinflationary death-spiral. Imagine the impact of a global loss of confidence in the world's reserve currency.

The benefits of destroying your savings - and sacrificing your purchasing power - is explained in this little gubmn't propaganda film. Inflation was released in June 1933, in preparation for Roosevelt' official devaluation of the dollar against Gold.

Similar to the gradual - unofficial - devaluation against Gold today.

10:32min


Deflation - Inflation - cost push Stagflation - or - Hyperinflation

?


[edit on 21-3-2009 by OBE1]

Originally posted by edsinger
Here are some links that I found interesting,

This was $34trillion a couple of months ago.. people were worried because this figure was close to half the worlds GDP.

Now its $20trillion..

Soon it will be $8 trillion and then $1trillion..

Also...

impaired assets may amount to 44pc of EU bank balance sheets

... means that Possible toxic assets may amount to $20 trillion..

Which is sensationalist and means absolutely nothing ..... yet.

Any loans given on property, to any struggling industry or to any struggling nation would be marked as 'a possible toxic asset'.

It still doesnt answer why the EU is NOT being forth coming about its 'banking' sector now does it?

It has been one year or so since I posted this, and now some of these cracks have been exposed.

Is the European economy growing? Why is the Euro dropping in value? Why is the dollar strengthening?


Interesting times.