30-Dec-10 News -- A precarious Estonia joins troubled euro

[John]

30-Dec-10 News -- A precarious Estonia joins the troubled euro zone

U.S. revokes visa of Venezuelan ambassadador to Washington

** 30-Dec-10 News -- A precarious Estonia joins the troubled euro zone
** http://www.generationaldynamics.com/cgi ... 30#e101230

Contents:
"A precarious Estonia joins the troubled euro zone"
"Will the euro survive 2011?"
"Additional links"
U.S. revokes visa of Venezuelan ambassadador to Washington
UAE slaps big visa fines on Canadian visitors
Five arrested potting to attack Danish paper that published cartoons
Palestinians will ask U.N. to condemn settlements
Israel rabbi's wives to Jewish girls: Don't date Arabs
40,000 homes without water in Northern Ireland after thaw
Jerry Brown to raise taxes and cut services in California

[mannfm11]

What is left to pay with John? I was just adding up the US, which has total debt over 300% of GDP. At 5%, that is 15% of GDP for interest. Bernanke is playing with a loaded pistol, as he is playing with the dollar in an attempt to generate inflation. Inflation means higher interest rates such that 3% means 6% on the US debt and a 10% discount for stocks and somewhere in between for AAA debt. The 15% goes rapidly to 20% or 25%. Throw in taxes and the private sector is loaded with a total cost in the 55% or higher range before they borrow for expansion.

People like Koo point to Japan, but Japan wasn't able to inflate to the point its interest rates moved up and it still had the inflating US and China to keep it afloat. The world still dances to the Fed, not the yen or the Euro. The intermediaries in the US that are liable for their debts or deposits are broke. They can't become unbroke, as it isn't mathematically possible. The paradox is that if they take their losses, meaning the banks, the depositors, etc. they are going to find themselves out of business or short on savings, but prices will be lower. The current ploy will force savers to liquidate their savings without interest or lose it in speculation in stock, as the prices in the market can't be supported with the credit structure at this juncture. Nor are the prices relative to reality.

I believe the proper way to do this was to take the haircuts then inflate. The government has done it backwards and they have left paper criminals in charge of this mess as well. The current situation is nothing more than these same criminals gaming the markets for one more dose of ill-gotten gains. Lending has to exceed net accumulated interest and capital gains and I don't think we get there.