Tag: debt

  • THREE STRATEGIES FOR REDUCING THE DEBT, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell

    Whenever monetary creation, or the famous concept of printing money, is alluded to, the idea of hyperinflation is never far away. Subsequently, reference is made to history to predict a return to these episodes that left such an indelible mark in people’s memories. The conclusion immediately drawn is that the same cause will have the same effect.

    However, the crisis we are living through might well lead us to a more nuanced picture. The first thing that needs to be considered is that we are seeing an inflation of financial assets, … Read the rest

  • SPAIN : THE MARKETS ARE EXPECTING NEW DEVELOPMENTS SOON

    Translated from the French by Tim Gupwell

    Exceeding 6% on 10 year debt is already dangerous. According to the terms of the balanced budget rule, this signifies that a nation will require growth of around the same amount, whereas in fact Spain has registered a negative growth since the beginning of the year! So, 7.567% at 10.15  this morning! As the German 10 year Bund stands at 1.255%, this means that for Spain over 10 years there is a risk premium (for the possibility of the debt not being repaid) which can be reckoned at 6.312%.

    © Bloomberg… Read the rest

  • THE RESULT OF UNRAVELLING A BALL OF WOOL… FROM THE WRONG END, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell

    François Hollande has confirmed that the Government is going to propose for adoption an organic law (which a simple law cannot undo) in order to have the balanced budget rule adopted, on the advantageous pretext that it is provisional. There have been many occasions in recent French history when special measures have been adopted for their presumed importance, without ever leaving good memories behind.

    At the same time, the debate in Europe continues to move on, focusing once again on the reduction of the banks’ debts. Thanks to the Wall Street … Read the rest

  • WELL SPOTTED, BRAVO!, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell

    As already highlighted the Spanish government is already benefitting from a de facto rescue plan under another name. To save appearances, the new austerity measures put forward for vote in parliament have not been the object of a memorandum jointly signed with those providing the funds, as had previously been the case for other countries. In fact, the announcement of these measures came the day before that of the banking bail-out!

    One major difference with the preceding rescue plans can be observed: the entirety of the 100 billion Euros loans provided … Read the rest

  • WHEN THE WISE MAN POINTS AT THE MOON… (I), by François Leclerc

    Guest post. Translated from the French by Tim Gupwell.

    The chaotic ups and downs of the deleveraging process continue inexorably, affecting not only the debt of the member states but also a European banking system which is now in the same mess. What it had been concealing has now been revealed: it is in a very sick and feeble state.

    In order to subdue and contain this gradual process, new bail-out instruments have had to be put in place – which are the subject of much debate; their effectiveness is limited since they are part of a debt-reduction strategy which … Read the rest

  • THE TOWERING MOUNTAIN, SWAYING FROM SIDE TO SIDE, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell.

    “There is a first assessment, then a second, a third, a fourth…..It’s the worst possible way of doing things because everybody ends up doing the right thing but at the highest possible cost and price”. Who was it speaking so harshly yesterday of banking losses and of the policies of the European leaders? Answer: The ECB president, Mario Draghi, in the course of a hearing before the European parliament.

    With his colleagues from the governing council, he drove home this same point, supporting the creation of the “European banking union” proposed … Read the rest

  • SPAIN: A WEAK LINK, OR A VICTIM OF DEBT TRANSFER AND OUTRAGEOUS CONDUCT ON THE MARKETS?, by Sébastien Bano

    Guest post

    A few days ago, I was contacted by a friend of mine, in New Zealand, who was concerned about the bad news affecting the economy and, particularly, Spain, where I currently work. In answering the two questions he asked me, I have tried to describe what seems to be the main problem of this country (and many others, but Spain is indeed a glaring example), and in doing so, hope to provide an alternative insight to counter the facile accounts of idle Mediterranean workers and “Club Med resorts lifestyle”, frequently advanced as the logic for Spain’s demise. As … Read the rest

  • Healthy / destructive system of capitalism (2d version), by Lambert de Haas

    Guest post. Taking advantage of my interview with Caroline de Gruyter in NRC Handelsblad, Lambert de Haas has put this all together. He’s expecting your remarks to make further improvements.

    Read the rest