The Western world keeps spending its way to disaster

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investorzzo's picture
investorzzo
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The Western world keeps spending its way to disaster

The Swiss-based Bank of International Settlements (BIS), the oldest international financial institution in the world, has functioned as the central bank of central bankers for 80 years. In a working paper written by three senior staff economists (“The future of public debt: prospects and implications”), released in March, BIS warns that Greece isn’t the only Western economy with hazard lights flashing.

Indeed, it names 11 more: Austria, France, Germany, Ireland, Italy, Japan, the Netherlands, Portugal, Spain, Britain – and the United States. Without “drastic measures,” BIS says, all of these countries will hit a wall of debt.

When the senior economists at BIS warn 12 of the richest countries on Earth that they must take drastic action to reduce debt, you know that it’s time to check the air bags. The only thing you don’t know, that you need to know, is the precise time of the crash. The lesson is already obvious: Governments can’t drive recklessly, use only the accelerator for braking and not eventually crash.

http://www.theglobeandmail.com/report-on-business/commentary/the-western...

redpill's picture
redpill
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Re: The Western world keeps spending its way to disaster

I always thought Britain would go before the U.S., but I'm not so sure now.  The British stiff upper lip may enable them to tolerate austerity measures in a way that the various unions and interest groups in America would never stand for.

mesaboogieman's picture
mesaboogieman
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Re: The Western world keeps spending its way to disaster
redpill wrote:

I always thought Britain would go before the U.S., but I'm not so sure now.  The British stiff upper lip may enable them to tolerate austerity measures in a way that the various unions and interest groups in America would never stand for.

Cameron and Merv have seem to have co ordinated their efforts to reassure the bond market that we are going to get our fiscal house in order. I'm hoping that should buy us a couple of years before interest rates go sky high and TSHTF, but who knows, like Chris says, time gets short at the sharp end of an exponential curve!

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