True Economics is about original economic ideas and analysis concerning everyday events, news, policy views and their impact on the markets and you.
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Tuesday, May 10, 2016
10/5/16: Debt, Government Debt, Glorious Debt
It's a simple headline, really, for a single chart:
But it says so much... peace time and monetary financing and printing presses and private sector QEs and on and on... as the 'economic recovery measures' roll out, the old staple of Government debt is going up. Austerity or none, growth is weak. Yet, Governments are borrowing at rates that are simply beyond control.
In simple terms: we have deteriorating fundamentals (interest rates at nil or negative, but growth nowhere to be seen) and we have continuously mispriced risk. If this ain't a bubble, what is?..
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“It is not true that people stop pursuing dreams because they grow old, they grow old because they stop pursuing dreams.” Gabriel García Márquez
Nassim Nicholas Taleb was asked whether public protests in Athens is a Black Swan Event. He replied: “No. The real Black Swan Event is that people are not rioting against the banks in London and New York.”
"Getting worse more slowly is not the same as getting better", Prof. Brad DeLong