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Posts Tagged ‘Debt’

Euro zone boosts powers of rescue fund to aid Greece, Ireland, Portugal

July 22, 2011 Comments off

theglobeandmail

Greek Prime Minister George Papandreou, left, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso speak after the EU summit Thursday in Brussels. - Greek Prime Minister George Papandreou, left, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso speak after the EU summit Thursday in Brussels. | AFP/Getty Images

Euro zone leaders agreed at an emergency summit on Thursday to give their financial rescue fund sweeping new powers to help Greece overcome its debt crisis and prevent market instability from spreading through the region.

French President Nicolas Sarkozy said leaders of the 17-nation currency area had agreed to ease lending terms to Greece, Ireland and Portugal, while private investors would voluntarily swap their Greek bonds for longer maturities at lower interest rates to help Athens.

Quantitative Easing Rounds 1 and 2 Hurt the Economy … Bernanke Proposes Round 3

July 14, 2011 Comments off

georgewashington2.blogspot.com

Federal Reserve chairman Ben Bernanke is hinting at a third round of quantitative easing.

But Dallas Federal Reserve Bank president Richard Fisher said today:

I firmly believe that the Federal Reserve has already pressed the limits of monetary policy. So-called QE2, to my way of thinking, was of doubtful efficacy, which is why I did not support it to begin with. But even if you believe the costs of QE2 were worth its purported benefits, you would be hard pressed to now say that still more liquidity, or more fuel, is called for given the more than $1.5 trillion in excess bank reserves and the Read more…

European Union growing more divided

June 26, 2011 1 comment

freep.com

IN GREECE: About 3,000 police officers, coast guard workers and firefighters protest salary and budget cuts on Thursday in Athens. Austerity measures in Greece have fueled disenchantment with the European Union.

 IN GREECE: About 3,000 police officers, coast guard workers and firefighters protest salary and budget cuts on Thursday in Athens. Austerity measures in Greece have fueled disenchantment with the European Union. / DIMITRI MESSINIS/Associated Press

FLENSBURG, Germany — Erik Holm Jensen slips between countries without a thought or a passport.

The 60-year-old business consultant drives from Denmark into northern Germany as smoothly as an American going from Delaware to New Jersey. There’s no hassle at the border, no guards to stop him. If he blinks, he misses the modest sign indicating he’s crossed from one country into another.

Such seamless travel is one of the European Union’s greatest achievements in its pursuit of a stable, prosperous continent built in the lingering aftermath of World War II. The other is the euro, like the wad in Jensen’s wallet that he can use in 17 nations.

But the twin pillars of Europe’s grand project are now Read more…

America’s Debt Could Soon Spark A European-Style Crisis

June 23, 2011 Comments off

economictimes

US debtWASHINGTON: America’s rapidly growing national debt could soon spark a European-style crisis unless Congress moves forcefully, the Congressional Budget Office warned Wednesday in a study that underscores the stakes for a bipartisan group working on a plan to reduce red ink.

Republicans seized on the nonpartisan report to renew their push to reduce costs in federal benefit programs such as Medicare, the federal government health care program that benefits the elderly.

At issue is the $9.7 trillion of US debt held by investors and foreign countries like China, the measure that economists deem most important. Government accounts like the Social Security trust funds account for the rest of the $14.3 trillion total debt.

Democrats and Republicans have been stepping up budget talks aimed at averting what could be the disastrous first-ever default on U.S. government debt. A bipartisan group led by Vice President Joe Biden tasked with reaching an agreement has not made the politically difficult compromises on the larger issues, such as Read more…

World’s wealthiest people now richer than before the credit crunch

June 23, 2011 Comments off

guardian

High net worth individuals

Click here to see a pdf of this graphic

We are not all in this together. The UK economy is flat, the US is weak and the Greek debt crisis, according to some commentators, is threatening another Lehman Brothers-style meltdown. But a new report shows the world’s wealthiest people are getting more prosperous – and more numerous – by the day.

The globe’s richest have now recouped the losses they suffered after the 2008 banking crisis. They are richer than ever, and there are more of them – nearly 11 million – than before the recession struck.

In the world of the well-heeled, the rich are referred to as “high net worth individuals” (HNWIs) and defined as people who have more than $1m (£620,000) of free cash.

According to the annual world wealth report by Merrill Lynch and Capgemini, the wealth of HNWIs around the world reached $42.7tn (£26.5tn) in Read more…

Categories: Wealth Tags: , , ,

Trades reveal China shift from dollar

June 21, 2011 Comments off

 ft.com

China began diversifying away from the US dollar in earnest in the first four months of this year, most likely by buying far more European government debt than US dollar assets, according to estimates from Standard Chartered Bank.

China’s foreign exchange reserves expanded by around $200bn in the first four months of the year, with three-quarters of the new inflow invested abroad in non-US dollar assets, the bank estimated.

“It certainly appears that China’s finally following through on its policy to diversify its foreign reserve holdings away from the US dollar,” said Stephen Green, the bank’s chief China economist.

For over six years, Beijing has continued to accumulate Read more…

Categories: China Tags: , , ,

Bailout plan roils Greece’s leaders

June 17, 2011 2 comments

boston

Greece was wracked by political turmoil yesterday as the embattled prime minister faced down a party revolt over new austerity measures — a bitter dispute that forced the EU to hint at new loans so Greece can fend off a summer default.

Prime Minister George Papandreou has struggled to garner support for a new package of $39.5 billion in spending cuts and tax hikes demanded by the European Union and the International Monetary Fund, which last year granted his debt-ridden nation $155 billion in bailout loans.

But the measures have sparked riots on the streets of Athens and open criticism from his own Socialist lawmakers. Papandreou’s desperate efforts to form a coalition government with the opposition conservatives collapsed Wednesday, and the Read more…

Greece Chaos: 20,000 protest in Athens, cops fight masked rioters

June 15, 2011 Comments off

Signals Spain may seek bailout spelling disaster for eurozone

May 16, 2011 Comments off

rt.com

Violent protests against austerity cuts have broken out in Spain, as the country struggles to deal with record-high unemployment signaling that Madrid could possibly be next in line for an EU bailout.

Across the border, Portugal’s crumbling economy is desperate for a €78 billion rescue package. Read more…

United States to hit debt ceiling on Monday

May 15, 2011 1 comment

rawstory

WASHINGTON — The debt-laden US government’s credit card will hit its limit Monday, creating a cash crunch that puts the country’s credit standing at risk as politicians battle over its long-term deficit.

Reaching the $14.29 trillion ceiling set by Congress will not have an immediate impact on government finances, because the Treasury has found about ten weeks of wiggle-room in short-term adjustments and an unexpected April jump in tax revenues.

But with Republicans refusing to increase the ceiling without massive future spending cuts, the longer the fight over bridging the country’s deficit goes on, the higher the stakes will get.

If nothing is done by about August 2, there is a chance the United States, which has always merited a top-grade credit rating, could do the unthinkable — default on its debt payments.

Few think it will get that far, as the White House leads behind-the-scenes talks on a grand strategy on the deficit — with Republicans insisting on spending cuts and Democrats demanding tax increases as well.

Still, some liken the fight to a game of chicken being played with the country’s credit standing at Read more…