The US only gets away with it (for now) as they have the Worlds reserve currency....
Don't sound much but when energy such as oil is denominated in it other Countries are forced to trade in it. There is a conclusion drawn from that that if ever the US runs into trouble and the Bond Yields widen then there will be wide support to fix the issues. One of these 'fixes' of course as has already been pointed out is like us they are able to print (and devalue).
Pretty much the same as the UK the ConDems point to the fact that the reason we are able to sell debt so low as the fact the UK is seen as a safe pair of hands for investment. This is cobblers essentially we are simply seen by overseas investors the best of a bad bunch our debt to GDP is worse than Greece and the only difference between us and them is due to this quirk we are still able to borrow (sell bonds) on the international markets.
The current Government points to deficit reduction as the only way forward and claims success in achieving this. The truth is they have since they took power not reduced the deficit at all. If anything we continue to borrow more, all they have in fact so far achieved is the slow down a little the rate at which we were borrowing it.
The World is moving to another phase, the years of profligacy will come to an end of that there is now little doubt as the financial economic model which brought is here is well and truly broken. The growth they talk about we need to get things back to as they were is impossible with banks across the world as overstretched as they are. The growth that had been enjoyed up till the wheels fell off in 20087/8 was as the result of a worldwide credit and property speculation boom. In short there is far too much money out there in all forms of credit from personal to corporate mortgages lent by the banks than can ever be paid back.
Much more pain has yet to come not only when the Grexit occurs which will seriously damage all European banks but when the markets finally realise the growth model really is well and truly broke. I envisage not a movement of power to the centre but a hardening in individual Countries. These Countries are going to want to keep control of their internal security forces and police to keep the populations in line when they are told enough is enough.....
Sooner or later this will apply to the UK also...... There has already been some quite strong opposition to the cuts already made albeit peaceful. We even had a police federation conference last week heckling a Tory Home Secretary.... Unheard of.. What will they and the Trade Unions do when the real cuts are forced on upon us, moreover what will the general population do when they are told they cannot have their tax credits and pensions and other benefits have to be cut back, unemployment heads north of 3 Million again?
These things are already happening in Greece!!
Just found this on the DM from Simon Heffer..
http://www.dailymail.co.uk/debate/article-2146638/When-comes-ideas-saving-economy-leaders-bankrupt-Greece-No-wonder-offer-lies.html#ixzz1vN2qB91QSome juicy extracts but the whole article is worth a read.....
Quote:
Those who drove the federalist project in Europe knew that if their dream of a superstate was to be realised, a single currency was essential because it would eliminate national differences and dilute national identity.
Quote:
Today, even with Greece turning into a banana republic, the European political class is continuing, as best it can, its dishonest handling of what may well be the euro’s terminal crisis.
What is happening reminds us that one reason why politicians are so unpopular — not just here, but across the Continent — is that they insult the intelligence of the electorate.
The worst pretence this week was that Angela Merkel, the German Chancellor, and Francois Hollande, the new President of France, have agreed to put aside their ideological differences and fight to save the euro. The fact is that they agree on almost nothing, and short of sending the Panzers into Athens, they won’t save the euro either.
Quote:
The truth is that Europhiles are desperate to keep Greece in the euro not because they fear it will thrive if it leaves — though eventually it may — but because the whole European house of cards could go down after it.
And what would that entail? Banks would fail. Bankruptcies would spread across the Continent. Growth would end. And British banks, and British exporters, would be among the casualties.
I can see why British politicians don’t want to talk about this. The real reason is that they haven’t a clue what to do about such a nightmare. Equally, many of them will be embarrassed at having been proved so disastrously wrong.
Saving the World my Arse......What do you think this lot were watching last night? There is a big clue in the fact Cameron Celebrates and Merkel has a face like a slapped fish...
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