Greece's debt is now 175% of GDP and its annual deficit is -12% i.e. an economic depression saved merely by massive Ponzi borrowing. Bond yields have nearly doubled since August, because the markets know that Greece is imploding. It's only a matter of time until the same fate reaches Spain which has an annual deficit of -7% and Italy which has a debt to GDP ratio of 132%.
Greece 10 year yield
The Paul Krugmanite specious narrative all along - gobbled up by math-dunced liberals - is that Germany could easily bail out Greece and "fix" this problem once and for all. Why anyone reads or listens to that guy anymore is the greatest mystery of this entire era. He co-opted Keynes' theories and turned them into a debt-sponsored ponzi scheme thereby allowing NeoCons far and wide to conflate Keynesian policies with both Monetarism and with their beloved Supply Side Voodoo Economics, the dominant paradigm of the past 35 years. Keynes was neither a Monetarist nor a Supply Sider. Nor did he create the specious dichotomy between "producers" and "consumers" that led to the outsourcing of the entire fucking economy under the auspice that low prices at Walmart "benefit jobless consumers".
The Austrian school of economics has been of course "right" all throughout this madness, they did nothing "wrong", other than mis-label Monetarists and Supply Siders as "Keynesian". According to the Austrian School, Government should step aside and do nothing. No intervention in the economy, fiscal or monetary. Ever. Let everything sort itself out. That is, until homeless kids are roaming the streets eating out of garbage cans, riots and mass anarchy are breaking out, aggregate demand is falling to zero, Communist and Nazi parties are vying for election, then maybe just a bit of 1930s-style Keynesian intervention might not be such a bad thing. But let's get there first before we can get everyone on that same page. I see no value in being a slave to ideology, unless it sells text books.
Where was I...
ZH: January 4th, 2015
Greece Debt to GDP:
Up 80% in six years and growing 12% compounded annually
My, how the weeds have grown in six years of doing absolutely nothing.
Up 80% in six years and growing 12% compounded annually
My, how the weeds have grown in six years of doing absolutely nothing.
