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Title: Global Obamanomics Number of the Week: $10.2 Trillion in Global Borrowing
Source:
WSJ
URL Source: http://blogs.wsj.com/economics/2010 ... -trillion-in-global-borrowing/
Published: Nov 8, 2010
Author: Mark Whitehouse
Post Date: 2010-11-08 06:46:51 by Happy Quanzaa
Keywords: Global Obamanomics
Views: 2056
Comments: 4
$10.2 trillion: The amount of money advanced-nation governments will need to borrow in 2011 As the debts of advanced countries rise to levels not seen since the aftermath of World War II, it’s hard to know how much is too much. But it’s easy to see that the risk of serious financial trouble is growing. Next year, fifteen major developed-country governments, including the U.S., Japan, the U.K., Spain and Greece, will have to raise some $10.2 trillion to repay maturing bonds and finance their budget deficits, according to estimates from the International Monetary Fund. That’s up 7% from this year, and equals 27% of their combined annual economic output. Aside from Japan, which has a huge debt hangover from decades of anemic growth, the U.S. is the most extreme case. Next year, the U.S. government will have to find $4.2 trillion. That’s 27.8% of its annual economic output, up from 26.5% this year. By comparison, crisis-addled Greece needs $69 billion, or 23.8% of its annual GDP. So far, with the notable exception of Greece, major advanced nations haven’t had too much trouble raising the money they need. Japan’s domestic investors have consistently bought its government bonds despite their low yield. Foreign investors have been snapping up U.S. Treasury bonds, which remain the world’s premier safe-haven investment. Still, there’s reason to be concerned that governments’ appetite for borrowing could ultimately push up interest rates, or worse. For one, government borrowers are tapping into smaller international capital flows. The total amount of foreign portfolio investment sloshing in across advanced countries’ borders averaged about 3.8% of global GDP in the twelve months ended June, compared to an average 9.5% in the eight years leading up to the recession. Beyond that, the U.S. and other advanced nations are putting pressure on China to allow its currency to appreciate against the dollar. All else equal, such a move would curb demand for dollar-denominated debt from a country that is the largest foreign holder of U.S. Treasurys. In the U.S., domestic investors could pick up the slack. The Federal Reserve has committed to buy an added $600 billion in U.S. government debt over the next eight months. Demand from households has been very strong as U.S. consumers boost their savings rate. Tighter regulations could push banks to buy more safe assets such as U.S. Treasurys. But as the IMF warned in a report this week, the chances that investors will balk at lending to governments “remains high for advanced economies.” That’s a highly undesirable outcome — picture a financial crisis in which governments can’t step in to help, because government finances are the problem. We can’t know how close we are to such an outcome, and the need to keep the recovery going would make cutting back now a risky move. Ultimately, though, we’re heading in the wrong direction.
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#1. To: Happy Quanzaa (#0)
"I will say that the Fed's mandate, my mandate, is to grow our economy. And that's not just good for the United States, that's good for the world as a whole," Obama said."And the worst thing that could happen to the world economy, not just ours, is if we end up being stuck with no growth or very limited growth," he said. Obama returns fire after China slams Fed's move - Yahoo! Finance Nov 8, 2010 ... President Barack Obama speaks during a joint news conference with Indian Prime Minister Manmohan Singh after their meeting in New Delhi ... finance.yahoo.com/news/Obama-returns-fire-after-rb-3174141268.html?x... The Problem for USEmpire. With dwindling supplies of oil=energy, there can be no more growth. There can only be rapine and plunder. Lock and Load. Here it comes. 8D
KA-BOOOOOOOOOOM: By Susan Taylor Martin, St. Pete Times Senior Correspondent In Print: Sunday, May 3, 2009 PALM HARBOR Despite the turmoil in the lending industry, Bryan Bly seems to have no trouble finding a job. On Aug. 3, 2007, Bly signed a document as vice president of Option One Mortgage. On Feb. 13, 2009, Bly signed a document as vice president of Deutsche Bank. And on Feb. 18, 2009, Bly initialed dozens of documents – this time as vice president of Citi Residential Lending. In fact, Bly never worked for any of those. His real employer is Nationwide Title Clearing, a Pinellas County company that helps lenders clean up problems that can complicate efforts to foreclose. Try Googling Nationwide Title housing trillions BofA. See what comes up. “Around the world we have $10 trillion of hot money flowing around, more than the $9 trillion in hot money at the beginning of the global financial crisis,” Zhu said. The U.S. “has not fully taken into consideration the shock of excessive capital flows to the financial stability of emerging markets.”
# # Show Me the Note Matters Mar 17, 2009 ... Missouri courts hold that a creditor must be able to prove they hold a mortgage, and all the parts of a mortgage, in order to have standing ... www.bankruptcylawnetwork....show-me-the-note-matters/
Every bank is insolvent. QE2 won't work any more than QE1. In that chart above? Japan tried it. Ireland wants to. Japan is building a nuclear arsenal now. The Irish only wish they could. 8D
#2. To: Happy Quanzaa (#0)
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