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Tag Archives: Debt

Could we be at war with China before the next presidential election? Some informed individuals say maybe

What’s the old adage? Never engage in a land war in Asia? Well we tossed that one out a while ago and now it looks like we might be heading for one on the high seas. No kidding. China is building island bases in the South China Sea, right over massive deposits of oil and smack dab in the middle of Asian trade routes, and we are not happy about it. In fact we’ve ordered China to essentially stop immediately.  They are not complying, and are using diplomatic talk of the kind which isn’t very diplomatic.

We have gotten to the point where sober minded people (well probably most of the time) with serious skin in the game are getting concerned.

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Want to get cash out of your bank account? You have to pay a tax first in Greece

At this point if you still have a pile of euros in a Greek bank you almost deserve to be taxed in such a terrible way. Of course most of the accounts in play here aren’t stuffed to the gills with money but are everyday accounts used for paying rent and buying groceries.

But not to worry, rich folks may soon see capital controls on transfers of over a million euros. And if you have a million euros in a Greek bank at this point, after all that has happened, I don’t have all that much sympathy.

Both the withdrawal tax and the capital controls still have to be approved by authorities. One can only assume that queues are wrapping around the Athens Wells Fargo as I write this.

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Does debt lead to (psychological) depression?

I read something somewhere which went something like this;

“Those who don’t understand interest pay it. Those who do earn it.”

This is an oversimplification but the spirit is right on the money (so to speak.) Vast swathes of the suburbs are awash in debt. It contributes greatly to the quiet (so quiet that for many it is unspoken) desperation of the American middle class. It’s pretty sad actually. Particularly when the banks lending via credit cards are getting their money at near 0% interest from the Fed.

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Negative interest rates put world on course for biggest mass default in history

Call it the new abnormal.

Since 2008 the world has been turned upside down. In our collective panic we have disrupted whatever used to pass for economic homeostasis. Now the globe is moving (moved) toward a negative interest rate environment for government bonds.

Please, take my money. I’ll pay you to take my money! Why am I paying a government to hold my money? Well, because the economy is so healthy of course.

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MARK CUBAN: This is just the start of the college implosion

My wife and I were just talking about how we hoped the student debt bubble would hurry up and deflate. We have kids to put through school in the not too distant future and the sooner things settle out the better. The current situation cannot continue. Tuitions are unsustainable. Student debt has fueled a bubble in the University system and it is going to end. Perhaps badly.

This week we may have gotten a glimpse of things to come. Just down the road from me, Sweet Briar College has decided to close up shop. Mark Cuban thinks it’s the first of many.

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There is no such thing as a free lunch

It’s a simple truism. Everything, everything, has a cost. What appears to be free isn’t. Debt fueled spending? That comes from somewhere. It’s not like the law of thermodynamics was somehow suspended for economic purposes.

But many people act like it has been. This is folly.

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This Is The Biggest Problem Facing The World Today: 9 Countries Have Debt-To-GDP Over 300%

Fundamentally it comes down to whether one thinks one can get something for nothing. If it has been your experience that something can actually be gotten for nothing, no work, no money, no “other people’s money,” no blood, then congratulations. You live in an easier world than the rest of us. If however you are inclined to think that for every action there is an equal and opposite reaction, then perhaps you should be concerned about the piles of sovereign debt stretching into the wispy stratosphere.

The stakes are now so high for the proponents of central bank debt creation that even if they saw the error of their ways (unlikely) they will still run us off a cliff if unchecked.

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