photo courtesy of dailymail.co.uk
The debt crisis is being played out publicly in Europe, and the play is country by country in the Euro Zone. The recent debt negotiation by Greece with its creditors was not enough to stave off any additional crisis in the short term. Spain‘s issues are now coming to the forefront in the sovereign debt crisis. Recent bond offerings by Spain have been received poorly. Refinancing of Spain’s debt is essential to keep the country solvent in 2012, and the poor performance of Spain’s bond offerings have moved this country solvency to the forefront. What does debt do in a society like Greece or Spain? Are we seeing the same impact in America? When is the tipping point for Europe and America?
America is the world’s reserve currency and dominates the world’s financial system, and we are able to kick the debt can along longer without consequences being realized quickly as in the Eurozone. Basically, America can print more money if needed. It is unwise but a tool at the country’s disposal. The current debt scenario is having an impact on the current American economy. The federal infrastructure repairs on our roads, bridges, rail systems, and airports are funds being reallocated to pay interest on the monies that the government borrowed. Unemployment is 23% or civil unrest has not broken out in communities in America. Step by Step, America does inch closer to the fiscal wall where the confidence in the fundamentals erode to investors, and the debt must be handled on someone else’s turn.
In a tipping point, the first shoe to drop will be Europe, and America will follow. When the shoe drops? Will America be caught with pants down or up?
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Filed under: Article Content Future Publication, Uncategorized Tagged: america, Business, debt, economy, European Central Bank, Eurozone, Financial services, Greece, Italy, sovereign debt, Sovereign default, Spain
