So the news of the day…<\/p>\n
The Prime Minster of Greece isn’t quitting today, but has agreed that he will step aside when a new government can take over.\u00a0\u00a0\u00a0\u00a0 The 10 year Greek Debt is approaching 25% interest rate.<\/p>\n
Swizterland is losing the battle to keep their currency from being a refuge.\u00a0 They had pledged to keep it aroud 1 CHF (Swiss Franc) =\u00a0 $1.20 euro.\u00a0\u00a0\u00a0 If too many euros pile into Swiss Francs, everything Switzerland makes will become too expernsive for Europeans to buy and Switzerland will go into a recssion (but probably will no matter what)…\u00a0\u00a0\u00a0 So the rate is up to about $1.24 even with the pledge to throw unlimited francs into the fight.<\/p>\n
The same thing is going on in Japan, although Japan is a much bigger economy.\u00a0\u00a0 In the past few days, Japan’s central bank has bought up around $100 billion in US Dollars to try to keep the Yen from getting too strong.<\/p>\n
Italy’s interest rates are going up fast.\u00a0 That means that the cost to borrow new money and refinance maturing loans is going up, which digs the hole for Italy even deeper. \u00a0 Their 10 year debt is about 6.5% now… \u00a0 The same thing will happen here eventually.<\/p>\n
We now have $15 trillion in US debt…\u00a0 but it is still “under control” because 10 year US Bonds are paying 2%.\u00a0\u00a0 4% is the more nomal historical number – if we just go up that far, that’s another $300 billion a year in interest, wiping out all of those supposed “savings” the supercommittee is working so hard to make up… but the interest is real.\u00a0\u00a0\u00a0\u00a0 You can’t keep tap dancing forever.<\/p>\n","protected":false},"excerpt":{"rendered":"
So the news of the day… The Prime Minster of Greece isn’t quitting today, but has agreed that he will step aside when a new government can take over.\u00a0\u00a0\u00a0\u00a0 The 10 year Greek Debt is approaching 25% interest rate. Swizterland … Continue reading