The Greek Parliament has agreed and will get another few billions.
Has this changed the fundamental problem? Well let us assume the Greeks really will be able to sell of a few “assets”. How often are you able to do that? Exactly one time.
Now if still the income is not sufficient without this sellings, what will happen then? Now if the Greek have a deficit of more than 10 % in their budget and the selling just bring in this 10%, what
have they won then?
Next years they have the same amount of debt. They have not paid principal they just have used the money for the runnings costs. Well lthe stuff is sold and what now?
Let us assume they do nothing else to make the gap between expenses and income smaller. Then in fact they are worse of next year. They have lost “assets” which potentially can be profitable. But this “profits” are “gone”.
No it’s playing on time. One hopes that in year or so everything will be better. But how will that be done. How many new production lines can one open in a year. And what should they produce? They have not find a way of producing enough for the last 10 years but next year everything will be “solved”?
What you see is what happens if government takes it all. Too many bureaucrats to less productive workers. The result is obvious and still do they start changing that? Well it seems unemployment is on the raise. And now guess what government can not extend the expenditures and if you’d produce in Greece and Greece may default. What will happen to your products. Assume they will get buyed mostly in Greek and the people are unemployed and government also can not afford anything. What are your chances then?
Now without a really reduction of the debt and without budget surplus they have no chance. As I wrote just the payments last year and this year are probably twice as much as every Greek earns a year. So the debt will probably raise up to 180 – 220 % of the GDP and Greek is not known of being a big exporting country. Indeed they earn their money more or less with tourism….
Here are the economic figures of Greek according to http://www.querschuesse.de/griechenlands-industrieproduktion-im-marz-2011-mit-8-zum-vorjahr/ the production has gone down around 8% !!!
the output is down to a level from 15 or so years ago !! the producing part on the BIP in Greece is as low as 9,17%, the overall BIP is something around 320 billions, 10 % of it are 32 billions. Their debt is somewhere in the 400 billion region. Just with 5% interest they would have to pay 20 billions on interest. Fact is the interest they have to offer on the markets are somewhere above 20 % !!!
The import/export budget is 4/2. That means the Greek have to import much more than they could produce. I have not found any figures about the capital in/outflows. But I bet those Greek having something have brought their money abroad. And so tell me whose going to invest then?
A sound rescue looks a bit different to me….
I’m puzzling, was the buying of Skype the beginning of the end of Microsoft? What does have driven MS to spend as much money as 8 500 000 000 for that.
I don’t know where I’ve read it but there it was discussed that leaving one’s main area hardly is successfull very long. So what could MS have reached with their Cash cows for
8.5 billions? The MS-OSes are the “market” leader and office means nearly alway the MS Office suite. It is the tool for literally billons of people. This alone is “breath” taking.
And it runs on “your” machine.
For what will MS use Skype if not for “leaving” ones machine? So isn’t it the case that Skype is against the MS business model?
I really do not know if it was clever to take this step. I’m under the impression that MS just is “afraid”. Or maybe overconfident to “solve” the problems of the future. But if they leave their business behind
what else do they offer? MS is IMHO bound to “personal computers” and now they want to leave the “personal” behind….
I just will first start with 2 numbers
3 800 000 000 000
1 300 000 000 000
Now let’s see how this numbers are “related.” Let’s see
1 300 000 000 000 / 3 800 000 000 000 = 0.34211
or in per cent 34.211 %.
Well the US budget consists of 34.21% new debts.
Let me break it down for you.
You are earning 66 000 Dollar and you “spend” “100 000” Dollar.
The calculate the deficit will go down to 700 000 000 000 in 2014 (see http://www.usatoday.com/news/washington/2010-02-01-budget-obama_N.htm)
Let us assume a linea decrease over this 4 years so we’d have roughly 1.3 + 0.7 = 2.0 / 2 = 1.0
So overall 1 000 000 000 000 new debts over the next four years for every coming year.
The official debts of the US are nearing the 14 000 000 000 000. So we add another 4 / 14 = 28.6 % to this enourmous sum. And this are just the official figures.
Not included are every promise for retirement payments and probably a few thousand other “things.”
For just the 4 000 000 000 000 in the next 4 years the US will have to pay (assuming 5% interest) 200 000 000 000 a year. Just to get that “figure” right The German overall budget is
around 389 000 000 000. The overall interest to be paid will go up to 18 000 000 000 000 * 0.05 = 900 000 000 000
Let as assume that the budget will not grow (ha ha ha). So in 2014 the US has to pay 900 000 000 000 / 3 800 000 000 000 = 23.7 %
Nothing can grow forever and so they still face a new debts in 2014 than the end is near. It would mean the new debts of roughly 1 trillion is needed to just pay the interests. It’s absolutely impossible to bear. You can not us new debts to pay all debs for “long”. One still has to remember each year the interest raised around nearly a trillions. So something will happen. Past times show, inflation is the most likely outcome which let’s back to my My Predictions
Just see how others react on such debt avalanches: http://news.bbc.co.uk/2/hi/business/8518438.stm. See that the is the world largest holder of governement bonds all over the world.
See some discussions about the implications at: http://www.federalbudget.com/
It’s worse than I could ever imagine. And it has started with “just” the 700 billions of Paulson…. I’ve always written against this kind of madness. But you know the deledefs know “better”….