Showing posts with label Europe. Show all posts
Showing posts with label Europe. Show all posts

06 August 2011

SOCIETY: Between a rock and a hard place

The USA's credit rating has dropped from AAA to AA+ and people are upset. Like most economies, our friends in the USA are between a rock and a hard place. Most nations have over-borrowed, financing current expenditure by selling government bonds and securities.

Euro notes and coinsThe only ways out are to cut spending or increase taxation (or some combination of the two). Neither is palatable.

So what will happen next? Nobody knows! The BBC's Mark Mardell writes on the political aspects and Robert Peston covers the financial situation.

Here are some extracts that strike me as particularly interesting.

From Mark Mardell
  • The decision by Standard & Poor's ... puts the USA below the UK, Germany, France, Singapore, Finland and 14 other countries.
  • All America has been saying: Washington doesn't work.
  • America's debt will continue to balloon and [S&P] have little hope of the politicians fixing it.
  • They single out Republicans for ruling out tax rises.
  • Americans are likely to bemoan the failure of politicians to bridge an apparently unbridgeable gap between two different world views. They may put their faith in Washington politicians, in an outburst of patriotism and goodwill, stumbling on a synthesis that suits all sides. But I wonder whether any of them will muse that the system itself may not be fit for purpose.
From Robert Peston
  • Almost everything in the world - loans, goods, services - is priced in or priced off the dollar ... the dollar has a status in the financial system once occupied by gold.
  • Whenever investors believe that the world is becoming a riskier place, their instinct is to buy US Treasury Bonds, to lend to the US government.
  • When the price of US government debt rises and the yield on that debt falls, that typically means investors believe prospects for the global economy have deteriorated.
  • Last week ... global share prices fell on the back of concerns that the eurozone isn't gripping the problem of investors declining confidence in the ability of Spain and Italy to repay their debts.
  • The US losing its AAA rating ... is a very loud statement that there has been an appreciable increase in the risk ... that the US might one day struggle to pay back all it owes.
  • The fiscal and economic challenges are conspicuous: a substantial and intractable gap between public spending and tax revenues in the US at a time of anaemic economic growth.
  • Chinese news agency Xinhua said: "China, the largest creditor of the world's sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets."
  • Probably the only thing to be said with any confidence is that the downgrade could hardly have come at a worse time, in that conditions in global markets are febrile.
In other words the world is at an economic crossroads and we have no idea where we will find ourselves in the future - but none of the options look very promising.

Meanwhile Europe and the USA are both struggling with debt issues while China, the major creditor, is anxious about losing its savings.

The future doesn't look good, does it. Things could easily get much worse.

17 May 2010

News - Internet postings, interviews and more

I have five items for you this week. Dip into these and follow up any individual items that catch your attention, the Holy Spirit will lead you to the things you need to see.A megaphone
  • My friend and accomplice in Christ, Sean, greatly enjoys David Wilkerson's Blog. And with good reason. For a taste of his writing read 'He brought us out to bring us in' or 'The spirit and power of Elijah'. Great stuff! His posts are challenging, exciting, and thought-provoking.

  • More on Felicity Dale's book, 'An Army of Ordinary People'. This time she's interviewed by Roger Thoman.

  • Frank Viola responds to someone who is troubled by the confusion over the term 'organic church'. This is a useful response because it points out very clearly the difference between allowing Jesus to take control and merely going through the motions to the best of our own ability.

  • The House2House e-letter contains some clear but necessary thoughts on spiritual warfare. Spiritual oppression on our lives can easily be mistaken for no more than a series of coincidences or 'just bad luck'. Don't believe it for a moment! Tony Dale reminds us that if we can identify the enemy's interference then we can (and should) resist. The e-letter also contains some useful links to various resources.
  • Simplechurch.eu links to a series of helpful stories from the church in Europe.

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