Posted on 03/08/2013 7:10:03 AM PST by SeekAndFind
Have you read the opinion section of any newspaper in the last three years? Yes? Then there is a better-than-even chance you have come across some impressive-sounding analyst predict that the United States is "turning into Greece."
Maybe it's been a while, so we'll recap. The short version of this story is that we'll spend ourselves into bankruptcy. The longer version says that too much public debt makes markets nervous. Nervous markets demand higher interest rates. Higher rates mean higher deficits and lower growth, both of which mean more burdensome debt. More burdensome debt makes markets even more nervous. And around and around we go in a vicious circle into insolvency.
As far as scare stories go, this is pretty damn scary. It's also just a story. Rates haven't risen as debt has the last few years; they have fallen to historic lows. Of course, that hasn't stopped the Greek chorus from predicting that the economy is going to Hades. But when? Is it when debt reaches 100 percent of GDP? Or 90 percent, as Carmen Reinhart and Kenneth Rogoff famously argued?
What about 80 percent?
That was the bright white line drawn in a recent paper by David Greenlaw, James Hamilton, Peter Hooper and Frederic Mishkin. Greenlaw & Co. ran regressions on 20 advanced economies from 2000 to 2011 to see if there's a relationship between a country's borrowing costs one year and its gross debt, net debt, and 5-year current account average the previous one. (Glossary Interlude: Gross debt refers to the total amount of debt, including debt the government owes to itself. Net debt is the amount held by the public, minus any government assets. Current account is the balance of trade, which includes both net exports and net income on foreign investments).
(Excerpt) Read more at theatlantic.com ...
Good one cubanleaf - list worthy...
You're right on this - it's the reason countries like Haiti can't 'print money' to buy their way out of problems.
China's basically quit buying our debt - others are following... Reserve currency status is an honor and responsibility. If treated as a way to rip-off other countries - and scam our own citizens - we'll lose it. When that happens, we won't be Greece - we'll be Haiti.
I too live in Kentucky. My wife and I had been searching for a place since 2003, (Yeah, I saw the writing on the wall even back then), We found our little slice of heaven here in central Kentucky in 2005 and moved here in 2007.
It’s a great place but the economy is poor. It’s best to have an outside the area income if you can manage it. It’s poor in my county and I’ve heard that up to 80% of the populace is on assistance of one sort or another. All of the store have the “We accept EBT” signs.
So if the “Zombie Apocalypse” aka TSHTF occurs it will affect us here just as much as anywhere else. The caveat is that with some land you can homestead easily and at least feed your family.
Best of luck in your searching.
Ours is 12 acres in the form of an entire finger of a plateau. Part of it is wooded hillside, but there are about 8 acres of field around our house. We have a half acre garden and 20 or so chickens. The rest we cut as hay for now. The great thing is the property is perfect for both solar and wind power. We get just enough wind to be a potential source of power but not be annoying.
I too live in Kentucky. My wife and I had been searching for a place since 2003, (Yeah, I saw the writing on the wall even back then), We found our little slice of heaven here in central Kentucky in 2005 and moved here in 2007.
It’s a great place but the economy is poor. It’s best to have an outside the area income if you can manage it. It’s poor in my county and I’ve heard that up to 80% of the populace is on assistance of one sort or another. All of the store have the “We accept EBT” signs.
So if the “Zombie Apocalypse” aka TSHTF occurs it will affect us here just as much as anywhere else. The caveat is that with some land you can homestead easily and at least feed your family.
BTW, the remarks on the economy hint at why I do a 75 minute commute at 70 mph.
I’ll be retired by then and hopefully on a good pension for at least a few years before things get bad. Even if the pension doesn’t materialize being there is better than being where I am now. For as much as one might fantasize about a “target-rich environment,” this area will be a deathtrap for anyone not of the Dem-o-graphic norm, if you get my drift.
At least then they will be useful for something.
Sounds like paradise (I know, that’s in western Kentucky). A garden, some animals, distance if not seclusion. In my mind maybe more than 12 acres, but I’m not familiar with any kind of farming so that might be plenty.
Thanks for the information!
This year the FED is predicted to buy 90% of Treasury debt.
The rest of the world has figured out the scam....
In general relativity, an event horizon is a boundary in spacetime beyond which events cannot affect an outside observer. In layman's terms it is defined as "the point of no return" i.e. the point at which the gravitational pull becomes so great as to make escape impossible. - wikipedia...
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