Sovereign debt crisis at 'boiling point', warns BIS

www.telegraph.co.uk...

"The aftermath of the financial crisis is poised to bring a simmering fiscal problem in industrial economies to the boiling point", said the Swiss-based bank for central bankers -- the oldest and most venerable of the world's financial watchdogs. Drastic austerity measures will be needed to head off a compound interest spiral, if it is not already too late for some.

The risk is an "abrupt rise in government bond yields" as investors choke on a surfeit of public debt. "Bond traders are notoriously short-sighted, assuming they can get out before the storm hits: their time horizons are days or weeks, not years or decade. We take a longer and less benign view of current developments," said the study, entitled "The Future of Public Debt", by the bank's chief economist Stephen Cecchetti.

Link to BIS source wroking paper:
www.bis.org...

This is all over the economic news:
www.businessinsider.com...
wallstreetpit.com...
www.forexlive.com...


[edit on 8-4-2010 by Moonsouljah]

Gotta love Ambrose Evans-Pritchard

This is legitimate doom-and-gloom people. Sovereign debt has been an ongoing issue and "debt spiral" is the key phrase. Hold onto your hats and hope your finance minister has what it takes.

Well, I know of a certain plant that, if made fully legal and government controlled/taxed, could put a healthy dent in debt around the world...

just saying.


I personally think most governments around the western world will have to simply collapse, a new thinking government instituted, and rules of the people installed....the governments are generally too stubborn and caught in tradition to think outside of the sinking box.

Originally posted by Moonsouljah
Gotta love Ambrose Evans-Pritchard

Agreed...He is the finest economic/financial journalist in the world...And a decent bloke who actually answers email too

If people thought the worst of the GFC was bad, wait until countries on the verge of default can't sell their debt at any price...Greece has to pay over 7.3% at the moment, that will look like small beer before the year is out...

It will be like the proverbial house of cards as one by one nations effectively go "bankrupt" and are unable to fund government services...

Originally posted by SaturnFX
Well, I know of a certain plant that, if made fully legal and government controlled/taxed, could put a healthy dent in debt around the world...

just saying.


I personally think most governments around the western world will have to simply collapse, a new thinking government instituted, and rules of the people installed....the governments are generally too stubborn and caught in tradition to think outside of the sinking box.

politicians are simply too bothered about looking after themselves to walk away and let someone else have a go..