Inter Trader wrote on September 15, 2011, explaining the European Sovereign Debt Crisis:
[The core of the problem was most likely irresponsible lending by banks. A credit bubble was created through banks lending out money to individuals and businesses to acquire assets that proved to be worth less than the amount of the loans. This was especially true in the real estate sector – something we also saw happening in the United States.
When these banks got into trouble because of bad loan practices, the government had to bail them out using public funds. This happened in the United States and it was repeated in Greece and other European countries.
The government of course has no money of its own – it has to raise it either through taxes or through loans. Since tax money is normally used to finance the current budget expenditure, the money to bail out banks had to come from loans. What therefore happened is that the US, Greece and subsequently other European governments issued government bonds to finance these bailouts.
The problem with government bonds is that you have to pay interest on them and when the market starts doubting your ability to repay the loan, the interest rate will become higher and higher. In the end it is a downward spiral – the government takes up more loans to roll over existing ones, but the interest rates keep on getting higher and higher.]
Yesterday for the first time the EuroNews TV stated in a news bulletin that the new PMs of Greece and Italy and other EU officials are Goldman Sachs associates and ex-employees.
What is called “irresponsible lending by banks” is actually a deliberate act of sabotage for the sovereignty of specifically targeted some European states.
It is a replay of the tragic comedy “The Merchant of Venice”. cutting a iuſt pound of his fleſh
But can the money lenders take their loot without dropping blood?
These debts were made with evil intentions and they must be either written off or rescheduled by the people without additional usury.
External Debts of Rich Countries:
|Country||External Debt in US $||PerCaptia in US $||% of GDP|