Join Date: Aug 2011
Location: Albuquerque, NM
Ferrari Life Posts: 11,856
The ability to devalue or revalue one's currency is one of the most important items in a treasury system's bag of tricks. Without that ability, all you can do is play with interest rates on national bonds. So now you have a failing or flagging economy, your national borrowing interest rates are high to make up for the risk, and you are trying to pay off your mountain of debt with usurious interest rates.
The only thing making the US national debt affordable is the extremely low cost of borrowing with interest rates hovering around 1%. Throw in a little inflation that causes interest rates to rise, and the cost of servicing the national debt goes through the roof. That is where a third of the EU economies are now, and it can be a death spiral. Spain's banks had the same problems as US banks, initiated by the crash in the residential real estate market. $100 or so B will likely not fix the problem.
Great time to buy a house on the Costa del Sol, like a lot of Brits have been doing in the past. I am sure many of them are underwater on those properties now.
Present: 575M 135171
Past: Dino 246 GT 02984, 365 GTB/4 14009, 308 GTS 25125
Every day I look around, and if nobody is shooting at me, it is a pretty good day.
Last edited by tazandjan; 06-13-2012 at 05:55 PM.