12 sovereign debt defaults in the EU

[vbo man]

 WOW !Shta mislite ko ce ostati na nogama u EU?

Rogoff Foresees A Wave of Sovereign Debt Defaults

    Kenneth Rogoff, former IMF chief economist warned that a series of sovereign debt defaults is likely to be in the offing. From Bloomberg:

           Following banking crises, "we usually see a bunch of sovereign defaults, say in a few years. I predict we will again," Rogoff,...said at a forum in Tokyo today.

            He said financial markets will eventually drive interest rates higher, and European countries such as Greece and Portugal will "have a lot of troubles....

            "It's very, very hard to call the timing, but it will happen," Rogoff, 56, said in the speech. "In rich countries - - Germany, the United States and maybe Japan -- we are going to see slow growth. They will tighten their belts when the problem hits with interest rates. They will deal with it."...

        Rogoff said Japanese fiscal policy is "out of control." Japan has the world's largest public debt, with gross liabilities that are approaching twice the size of the economy.

    Rogoff is far from alone in seeing sovereign defaults as likely, but so far, the chorus of concern comes mainly from analysts and investors rather than well-known economists (Willem Buiter was notable exception in that regard). One correspondent said that one of his sources, with impeccable contacts, anticipates 12 sovereign debt defaults in the EU. And while Rogoff puts Greece and Portugal as top of his hit list, a recent Bridgewater report (no online source) took a hard look at Spain, and did not like what it saw:

           On net, Spain owes the world about 80% of GDP more than it has external assets. As a frame of reference, the degree of net external debt Spain has piled up in a currency it cannot print has few historical precedents among significant countries and is akin to the level of reparations imposed on Germany after World War I. We don't know of precedents for these types of external imbalances being paid back in real terms.

    In the Great Depression, the debtor countries, who both defaulted and devalued their currencies by leaving the gold standard fairly early, did better than creditor countries (as in they suffered smaller drops in GDP and recovered faster). But it is not clear how this will play out in the EU, where the debtors cannot depreciate their currencies (and as we also noted, the recent example of Sweden v. Norway also suggests that currency devaluations are not always the tonic they are assumed to be).

[zagor te nej]

Tip kenja kvake.
Tako se prave karijere - outlandish scenario, pa ako se nesto slicno desi, krenu da ti prave hramove, a ko se nista slicno ne desi...pa, zaborave ljudi i vece gluposti.

[vbo man]

Nadam se da si u pravu.
No chovek je bio IMF chief economist pa ko velim da chujemo shta ima da kaze...

[vbo man]

Evo ga josh jedan doom-ster i to "bank's KING"...a i ime mu je King :mrgreen:

Bank's King warns of bigger crisis | Reuters

    LONDON (Reuters) - Failure to act now on sweeping banking reform could pave the way for an "even bigger" financial crisis in the future, Bank of England Governor Mervyn King said on Thursday.

    Giving evidence to a cross-political party commission on the future of banking, King also stressed his opposition to having firms that are deemed "too big to fail" because of the potential cost to the taxpayer if they need to be bailed out.

    "My fear would be, we have had this debate and we will set out possible alternative models for the structure of banking, but not very much will happen," King said. "It won't actually prevent the next crisis -- the next crisis will be even bigger."