John Hathaway - 8 Key Charts, Gold, Fed & The Big Picture

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/22_John_Hathaway_-_8_Key_Charts,_Gold,_Fed_%26_The_Big_Picture.html

Spain: The Ultimate Doomsday Presentation

"In summary, here are Carmel's five reasons why Spain's problems are worse than the market anticipates:

1. Spain’s national debt is 50% greater than the headline numbers

Spain’s debt-to-GDP balloons from 60% to 90% of GDP with regional and other debts

2. Spain’s housing prices will fall by an additional 35%

Spain built one house for every additional person added to the population during the past two decades; the fall will decrease GDP by ~2% each of the next two years

3. Spain has “zombie” banks with massive loans to developers and to homeowners

Banks have not begun to realize losses and are vastly undercapitalized

4. Spain’s economy has not stabilized and will continue to deteriorate

Spain has the highest unemployment in the developed world, one of the highest overall debt loads, and the most uncompetitive labor market in Europe

5. The EU will not have the firepower or political will to bail out Spain

Rescue fund headline numbers are misleading and count capital that is not yet committed

And here are the problems that will manifest themselves over the next 12 months:

• Spain’s true debt burden will pass the 90% “tipping point” identified by Rogoff and Reinhart
• Housing prices will fall further and faster than anticipated (consensus is 15%; CAM estimate is 35%)
• Banks underestimate the residential real estate loan defaults (consensus estimate is 2.8% vs. CAM estimate of 11%)
• Expected housing price depreciation and loan defaults will deepen Spain’s recession (additional 2% contraction in 2012 and 2013)
• Spain will need to refinance €186.1 Billion in 2012 alone..."

at http://www.zerohedge.com/news/spain-ultimate-doomsday-presentation

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El-Erian On The Bad Jobs Number: 'THE IMPLICATIONS GO BEYOND ECONOMICS'

"PIMCO CEO Mohamed El-Erian is shaken by today's disastrous jobs report.
Writing on FT.com, El-Erian listed off the disappointing metrics of the report, but he warns of much worse.

These disappointments partly reflect changing seasonal factors, including the prior impact of this winter’s unusually mild weather. But there is something much larger in play, and the implications go beyond economics; they influence key elements of the political narrative for the upcoming presidential and congressional elections.

The report demonstrates that firms "lack conviction" to hire for "expected future business."
Why? Uncertainty about everything, writes El-Erian:

American consumers, as a group, still carry too much debt and have to cope with higher oil prices. The prospects for exports, which have grown markedly, are gradually dimming now that the rest of the world is slowing. Meanwhile, policymakers have yet to find a way to deal properly with a year-end fiscal cliff, the result of Washington’s repeated inability to design coherent fiscal policy.

This demand uncertainty compounds worrisome structural impediments to growth.

His evidence that we already face structural problems: 5 million long-term unemployed; 9-month average time out of work; 25% unemployment for 16-19 year olds; and 12.6% unemployment for those without high school degrees..."

at http://www.businessinsider.com/el-erian-jobs-miss-2012-4?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29#ixzz1rIEleWaC

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The 15 Trillion Dollar Party

"If you knew that you could live in luxury for the rest of your life but that by doing so it would absolutely destroy the future for your children, your grandchildren and your great-grandchildren would you do it? Well, that is exactly what we are doing as a nation. Over the past several decades, we have stolen 15 trillion dollars from future generations so that we could enjoy a dramatically inflated level of prosperity. Our 15 trillion dollar party has been a lot of fun, but what we have done to our children and our grandchildren has been beyond criminal. We ran up the greatest mountain of debt in the history of the planet and we are sticking them with the bill. Sadly, both political parties have been responsible for the big spending that has been going on. Both Democrats and Republicans have run up huge budget deficits when in power. But instead of learning the hard lessons of the past, both political parties continue to vote for even more debt. They would rather continue to steal trillions of dollars from future generations than have the party end and have to face the consequences.
And the consequences will be dramatic when the party ends. During fiscal year 2011, the U.S. government spent 3.7 trillion dollars but it only brought in 2.4 trillion dollars. That means that the U.S. government spent about 1.3 trillion dollars that it did not have. It is important to understand that even if the U.S. government spent that 1.3 trillion dollars on really stupid things, that money still got into the pockets of ordinary Americans who then spent it on things like food, gas, housing, etc. In turn, most of those that received money from providing those goods and services would spend it on other things..."

at http://theeconomiccollapseblog.com/archives/the-15-trillion-dollar-party

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The Student Loan Debt Time Bomb

"Student debt is growing at an alarming rate. At the end of 2011, total student loan debt crossed the $1 trillion mark, a level that is higher than the sum of all credit card debt in the United States. Already, this category of debt has been likened to the subprime crisis, raising worries that a potential delinquency crisis could find its way into the wider economy..."

at http://www.economywatch.com/economy-business-and-finance-news/the-student-loan-debt-time-bomb.30-03.html

Is Spanish Regional Debt Out Of Control?

"Spanish regional debt currently stands at 13% of GDP and has surged from EUR60bn in 2006 to over EUR140bn currently. As Credit Suisse points out, the top four regions account for the majority of GDP, two-thirds of regional debt, and, with the exception of Madrid, substantially missed their deficit targets. What is more worrisome is the heavily front-loaded nature of the maturing debt with substantial refinancing needs in the next 2 years and this regional debt is split between bonds and loans - with many of the latter from Spanish banks - yet another illustration of the interconnected contagion that is building more rapidly. The growing crisis in refinancing (liquidity and costs) for regional debt developed the idea of Ponzibonos 'Hispabonos' - debt issued by regions but guaranteed by the central government. The conditionality of these guarantees with regard to deficit targets wil be critical but once they are issued, the risk is that the regions are unable to get their finances under control, the Spanish debtload increases, and there is no longer the flexibility for a regional debt restructuring, should one be necessary.

Spanish regional debt has grown dramatically in recent years..."



at http://www.zerohedge.com/news/spanish-regional-debt-out-control

BRICS cite obstacles to growth set by debt struck West

"The world’s five largest emerging economies claim the West’s quantitative easing policy is destabilizing their own growth.Should the western cheap cash injection last too long, the developed countries themselves will suffer, experts are warning.
Brazil's President Dilma Roussefftold the fifth annual BRICS summit that while the developed world's monetary policy "brings enormous trade advantages to developed countries, it results in unfair obstacles for others".
The BRICS summit joint statement, signed by the leaders of Brazil, Russia, India, China and South Africa states that the enormous cash slush created by the west to deal with its debt crisis has "been spilling over into emerging economies, fostering excessive volatility in capital flows and commodity prices".
The US Fed, Bank of England and the ECB have injected trillions into their banking systems and cut their key interest rates to boost domestic economies. Lately the ECB alone provided for $1.3 trln in form of the 3-year loans at a very low interest rate, seeking to cool worries around the European money market. The benchmark US Fed rate has been varying within the bottom coring of0-0.25% for more than three years. The ECB rate stands at 1%, while the Bank of England's charges 0.5%.
“Since western countries gets cheap money, they seeks to invest it into the most precious things, which is today commodities,” Tamerlan Khasimikov, a general director at BST Capital Management, told Business RT, “BRICS have real cause for concern, as high demand in commodity driven economies makes them the major destination for foreign investors”

at http://rt.com/business/news/central-banks-monetary-policy-738/

Greyerz - European Leaders Lying, Trillions Need to Be Printed

“Spain now has over 700 billion euros of debt, and of that about 14% has been issued in the last three months. That’s over 100 billion euros of debt issued in the last three months. So Europe is hemorrhaging and Spain will be the next Greece.
The Spanish problem is a lot bigger and will be a lot worse. Spanish banks have never taken the correct provision for their property collapse...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/3/28_Greyerz_-_European_Leaders_Lying,_Trillions_Need_to_Be_Printed.html

Farage - Western World Collaborated in Giant Ponzi Scheme

“What’s happened and we’ve seen it with the ECB, in America and around the Western world, is the central banks have acted in a very concerted manner and have created a whole new, fresh load of money. 

We call it quantitative easing in the United Kingdom, others might even call it a giant Ponzi scheme. But we’ve created all of this fresh credit, and for the moment we’ve kicked the can down the road.

So we are just getting deeper and deeper into problems. Leaving our children and grandchildren with loans that could well take decades to finish (paying) off. I fear we are now stoking up the conditions, at some point in the future, for serious inflation..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/3/28_Farage_-_Western_World_Collaborated_in_Giant_Ponzi_Scheme.html

Paul Mladjenovic: Economists Exhibit Lunacy and Confusion over the Gold Standard

"Some conventional and well-known economists have expressed the idea that a gold standard is a bad idea and that the gold standard was a major (and possibly THE major) catalyst for the Great Depression. One well-known fellow surmises that an equivalent of the gold standard is the reason why today’s European financial crisis is going on. In due course, I am sure that they will blame the gold standard for global warming and probably the heartbreak of psoriasis…

The point that critics make is that the gold standard “removes financial flexibility” when a system-wide financial crisis unfolds. They don’t like a gold standard because it is viewed as a “rigid constraint”.
In a monetary system that is on the gold standard, the amount of currency you can produce at will is indeed greatly constrained since the amount of currency (dollars or euros or whatever) is limited to the amount of gold that is on reserve. This condition puts the breaks on the unlimited creation of a currency.

The real problems behind today’s (and yesterday’s) financial crises and depressions have nothing to do with constraints such as a gold standard; the problems come from mismanagement of spending and debt… and governments that are too expansive in their size and scope.

Economists don’t blame governments for spending too much or creating too much debt or printing up too much of their currencies; they blame whatever may stop them from doing so (such as a gold standard). This is insane; it is like blaming the seat belt for a car crash..."

at http://www.munknee.com/2012/03/paul-mladjenovic-economists-exhibit-lunacy-and-confusion-over-the-gold-standard/

Eric Sprott - Mainstream Bashes Gold, But New Highs Coming

"Today billionaire Eric Sprott told King World News the central planners are desperately trying to convince the masses that everything is okay. Sprott, who is Chairman of Sprott Asset Management, also said the mainstream media continues to bash gold. But first, he had this to say about the global economy: “I think it’s safe to say we’ve hit that ‘Minsky moment’ where the productive capacity of the country is not capable of paying off the debt. All we’re trying to do is push it down the road so maybe there is some luck and these economies will come to life.”

Eric Sprott continues:

“But all the data we get, whether it’s European PMI, UK GDP, almost any data point we get seems to point to a contraction in Europe. So it’s pretty hard to imagine that anyone is going to pay off their debt when their GDPs are contracting.

So, I think it will be an ongoing process. The powers that be are trying to convince the masses that everything is okay, but the opposite is the case..."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/3/29_Eric_Sprott_-_Mainstream_Bashes_Gold,_But_New_Highs_Coming.html

3 Charts On Why Eurosis Never Really Went Away

"Somehow the investing public managed to convince itself that a massive liquidity flood designed to 'help' banks (implicitly buy sovereign debt) with their government reacharounds actually 'fixed' the European economic imbalance problem because yields fell and reflexively this means all-is-well. Just ask Eastman Kodak shareholders how good it felt to rally over 100% the week before bankruptcy? Morgan Stanley has the mother-of-all-chartdecks on the European situation but 3 charts standout in our view by summarising the problems Europe faces. The last few days have seen Eurosis return - but away from the momentum and liquidity - did it ever really go away? This time is no different except LTRO 3 is becoming harder and harder as quality unencumbered collateralizable assets are few and far between - and with the recent weakness in Spain, how long before ECB margin calls start to ramp up?

European bank assets-to-GDP are out of this world!



If ever there were banks that were truly Too-Big-Too-Fail, Europe has them - is it any wonder the Greek Bailout was so focused on rescuing the bank balance sheets. Swiss banks dominate the worst end of the spectrum along with Dutch banks (huge covered bond markets) but the French, Spanish, and Belgian banks are all around two times their nations GDP! Of course this assumes the asset values are 'correctly priced' and not some non-MtM dream and while they are deleveraging (which itself causes aggregate credit supply issues for the real economy and overhangs for the financial economy), LTRO has done nothing but slow the efforts in a false-sense-of-security way. We could add a bonus chart here on European bank reliance of ECB funding - that shows Italy and Spain nearing Portugal's level of aggregate reliance - not exactly a resounding success.

Interest Payments as a % of GDP high and rising fast



Perhaps the cleanest measure of 'stress' or service-ability for the currency-using sovereigns shows that the amount European sovereigns pay in interest relative to their productive gains as an economy is rising rapidly and forecast to rise even faster. This will obviously get worse as the recession deepens from both rising costs (as post-LTRO rate normalize) and lower GDP (as austerity and balance sheet recession impacts come home to roost).

Gross Government Debt to Government Revenue is over 150% on average, rising fast, and at decade highs



The 'leverage' of the Euro-Area has never been higher. Across every nation, we are at over 20 year highs in terms of this measure of leverage. To impact this via the fiscal compact by raising taxes and deleveraging at the aggregate level can only exaggerate the recessionary pressure Europeans will feel..."

at http://www.zerohedge.com/news/3-charts-why-eurosis-never-really-went-away

The Composition of Debt Across Countries

at http://www.businessinsider.com/us-debt-crisis-2012-3?utm_source=inpost&utm_medium=seealso&utm_term=&utm_content=2&utm_campaign=recirc#the-composition-of-debt-also-varies-across-countries-the-us-is-balanced-between-government-the-financial-sector-corporations-and-households-the-uk-meanwhile-is-buried-in-financial-sector-debt-3

Martin Armstrong: The Debt Crisis Will Rotate from Europe to Japan to the US−We’re Past the Tipping Point

"Jim welcomes back Martin Armstrong of Armstrong Econonics.com. Martin believes "capital knows something is wrong" and we’re past the tipping point of the debt crisis. He sees the crisis rotating from Europe to Japan and finally reaching the US, with devastating results. As to gold, he believes the best thing for gold would be a correction this year and a healthy period of consolidation, setting the stage for a launch higher as the debt crisis worsens..."

at http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/03/16/martin-armstrong/the-debt-crisis-will-rotate-from-europe-to-japan-to-us

Bad Economic News

"Just consider some of the most recent economic news....
*The number of U.S. home foreclosures set a record for the second consecutive month in May. How can the U.S. housing industry be recovering when the number of Americans being foreclosed on continues to set all-time records?
*As of March, U.S. banks had an inventory of approximately 1.1 million foreclosed homes, up 20 percent from a year ago. Instead of working their way through the huge backlog of unsold homes, U.S. banks continue to pile up a massive inventory of foreclosed homes at a staggering pace.
*According to figures from the U.S. Commerce Department, housing starts in the United States fell 10 percent in May, the biggest decline since March 2009. The data also revealed that single-family home starts suffered the biggest drop since 1991. There is already a massive glut of unsold homes on the market, so builders simply do not think it is profitable to build many new homes right now.
*Officials now tell us that the cost of "fixing" Fannie Mae and Freddie Mac, the government-backed mortgage companies that last year bought or guaranteed the vast majority of all U.S. home loans, will be at least $160 billion and could grow as high as $1 trillion. The twin pillars of the U.S. mortgage industry have become financial black holes that the U.S. government endlessly pours massive amounts of cash into. That is not a good sign.
*Fannie Mae and Freddie Mac are to be delisted from the New York Stock Exchange because their stock prices have been trading under $1 per share for more than 30 trading days. The truth is that Fannie Mae and Freddie Mac would have completely imploded by now if the U.S. government had not decided to step in and bail them out.
*The average duration of unemployment in the United States has risen to an all-time high. Not only are a ton of Americans out of work, they can't find work for a very, very long time once they are unemployed.
*For Americans younger than 25 years of age, the unemployment rate is 18.8%. But even those young Americans that can find employment often find themselves working in very low paying service jobs.
*Federal Reserve Chairman Ben Bernanke says that the U.S. unemployment rate is likely to stay "high for a while". Considering how badly Bernanke has been doing his job, it would be really nice if we could add just one more person to the unemployment rolls.
*According to one new study, approximately 21 percent of children in the United States are living below the poverty line in 2010 - the highest rate in 20 years. There are hundreds of thousands of American children on the streets each night, and yet we continue to insist that we are the greatest country in the world.
*For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011. How many tens of millions of Americans have to be on food stamps before we officially say that we are in a depression
"*According to the Wall Street Journal, the debates have begun inside the Fed about what it should do in the event of a "double dip" recession. If they are already debating what to do during the next economic downturn that means it is probably a foregone conclusion.
*If you were alive when Christ was born and spent one million dollars every single day from then until now, you still would not have spent one trillion dollars by now. But somehow the U.S. government is now over 13 trillion dollars in debt. According to a U.S. Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015.
*It is being projected that the U.S. national debt will grow to surpass our gross domestic product in 2012. Needless to say, that is a really, really bad sign.
*The total of all government, corporate and consumer debt in the United States is now equal to 360 percent of GDP. At no point during the Great Depression did we ever even come close to such a figure.
But things may be even worse in Europe right now. Unfortunately for the U.S., when Europe experiences an economic collapse it will devastate the American economy as well.
The economic news coming out of Europe lately has been extremely alarming....
*George Soros says that a European recession next year is "almost inevitable". Considering how much access George Soros has to inside information, the fact that he is so pessimistic about Europe is a very troubling thing indeed.
*A report by the Bank for International Settlements says that the debt crisis hitting southern Europe resembles the 2007 subprime mortgage crisis. Is history about to repeat itself?
*Moody's has downgraded Greece government bond ratings into junk territory, citing the risks inherent in the rescue package that the rest of the eurozone has put together for them. Soon Spain, Portugal, Italy, Ireland, Romania and a number of other European nations could have their debt downgraded as well.
*The U.K.'s new Office for Budget Responsibility has announced that the U.K. economy was more damaged by the recent financial crisis than previously admitted, and that it may never fully recover. But the same could be said for many other nations across the world as well.
*21.5% of all working-age people in the U.K. do not have a job. It seems like almost every country has a shortage of jobs these days.
*New U.K. Prime Minister David Cameron is warning that Britain's "whole way of life" is about to be significantly disrupted for years by the most drastic public spending cuts in a generation. In fact, severe austerity measures being implemented all across Europe could make this one of the most "interesting" European summers in ages.
*Spanish banks are borrowing record amounts of money from the European Central Bank as Spain's financial institutions are finding it increasingly difficult to acquire funds in international capital markets. But the truth is that it isn't just Spanish banks that are facing a liquidity squeeze - the entire world is heading for a massive credit crunch."

at http://theeconomiccollapseblog.com/archives/bad-economic-news

SPAIN MAY BE THE NEXT DOMINO TO FALL

"As Spain wrestles to contain its budget deficit which in turn is leading to a drop in bond market values, local banks are having a difficult time in locating funding due to their holdings of underwater government debt.
Chairman for one of Spain’s largest banks, Francisco Gonzalez said yesterday that for many of the country’s financial institutions, the “international capital markets are closed”. In addition, Spain’s Treasury secretary, Carlos Ocana said that the current environment for banks and corporations was “definitely a problem”.
Generally, European banks rely heavily on lenders from abroad for funding and less so on traditional deposits according to The Economic Times. They turn to the international capital markets in both money market land and in longer-term debt, to finance about 40 percent of their 33 trillion euros of assets. The remaining amount comes from deposits which is about half and the balance through equity.
With the inability to attract funding as evident by the rise in the interbank short term lending rates, Spanish banks are turning to the European Central Bank as a lender of last resort.
According to a Financial Times article, Spanish banks borrowed 85.6 billion euros from the ECB last month which was twice the amount needed right before the last credit crunch which was triggered by the fall of Lehman Brothers in September 1998. Furthermore, it is the highest amount since the beginning of the Euro Zone in 1999. Comparatively, the borrowing is an increase of about 14.4 percent from April’s tally of 74.6 billion euros."

at http://pragcap.com/spain-may-be-the-next-domino-to-fall

'Call It $130 Trillion or So'

"If you've ever had to deal with teenagers or IT workers, you know the drill: whatever they tell you something will cost usually turns out to be less -- often much less -- than you end up paying. Politicians, too, are especially good at this game, which is not surprising given that most don't expect to be around when the final bill comes in. So, in theory at least, no one should be unsettled by the fact, as the following National Review commentary, "The Other National Debt," by deputy managing editor Kevin D. Williamson, reveals, that the amount of money we (and our ancestors) are currently on the hook for is around ten times what our leaders say it is -- right?
About that $14 trillion national debt: Get ready to tack some zeroes onto it. Taken alone, the amount of debt issued by the federal government — that $14 trillion figure that shows up on the national ledger — is a terrifying, awesome, hellacious number: Fourteen trillion seconds ago, Greenland was covered by lush and verdant forests, and the Neanderthals had not yet been outwitted and driven into extinction by Homo sapiens sapiens, because we did not yet exist. Big number, 14 trillion, and yet it doesn’t even begin to cover the real indebtedness of American governments at the federal, state, and local levels, because governments don’t count up their liabilities the same way businesses do...

...The debt numbers start to get really hairy when you add in liabilities under Social Security and Medicare — in other words, when you account for the present value of those future payments in the same way that businesses have to account for the obligations they incur. Start with the entitlements and those numbers get run-for-the-hills ugly in a hurry: a combined $106 trillion in liabilities for Social Security and Medicare, or more than five times the total federal, state, and local debt we’ve totaled up so far. In real terms, what that means is that we’d need $106 trillion in real, investable capital, earning 6 percent a year, on hand, today, to meet the obligations we have under those entitlement programs. For perspective, that’s about twice the total private net worth of the United States. (A little more, in fact.)
Suffice it to say, we’re a bit short of that $106 trillion. In fact, we’re exactly $106 trillion short, since the total value of the Social Security “trust fund” is less than the value of the change you’ve got rattling around behind your couch cushions, its precise worth being: $0.00. Because the “trust fund” (which is not a trust fund) is by law “invested” (meaning, not invested) in Treasury bonds, there is no national nest egg to fund these entitlements. As Bruce Bartlett explained in Forbes, “The trust fund does not have any actual resources with which to pay Social Security benefits. It’s as if you wrote an IOU to yourself; no matter how large the IOU is it doesn’t increase your net worth. . . . Consequently, whether there is $2.4 trillion in the Social Security trust fund or $240 trillion has no bearing on the federal government’s ability to pay benefits that have been promised.” Seeing no political incentives to reduce benefits, Bartlett calculates that an 81 percent tax increase will be necessary to pay those obligations. “Those who think otherwise are either grossly ignorant of the fiscal facts, in denial, or living in a fantasy world.”
There’s more, of course. Much more. Besides those monthly pension checks, the states are on the hook for retirees’ health care and other benefits, to the tune of another $1 trillion. And, depending on how you account for it, another half a trillion or so (conservatively estimated) in liabilities related to the government’s guarantee of Fannie Mae, Freddie Mac, and securities supported under the bailouts. Now, these aren’t perfect numbers, but that’s the rough picture: Call it $130 trillion or so, or just under ten times the official national debt. Putting Nancy Pelosi in a smaller jet isn’t going to make that go away."

at  http://www.financialarmageddon.com/2010/06/call-it-130-trillion-or-so.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+financialarmageddon+%28Financial+Armageddon%29

9 Reasons Why Spain Is A Dead Economy Walking

"The following are 9 reasons why Spain is a dead economy walking....
#1) Even before this most recent crisis, unemploment in Spain was approaching Great Depression levels. Spain now has the highest unemployment rate in the entire European Union. More than 20 percent of working age Spaniards were unemployed during the first quarter of 2010. If people aren't working they can't pay taxes and they can't provide for their families.
#2) In an effort to stimulate the economy, Spain's socialist government has been spending unprecedented amounts of money and that skyrocketed the government budget deficit to a stunning 11.4 percent of GDP in 2009. That is completely unsustainable by any definition.
#3) The total of all public and private debt in Spain has now reached 270 percent of GDP.
#4) The Spanish government has accumulated way more debt than it can possibly handle, and this has forced two international ratings agencies, Fitch and Standard & Poor’s, to lower Spain’s long-term sovereign credit rating. These downgrades are making it much more expensive for Spain to finance its debt at a time when they simply can't afford to pay more interest on their debt.
#5) There are 1.6 million unsold properties in Spain. That is six times the level per capita in the United States. Considering how bad the U.S. real estate market is, that statistic is incredibly alarming.
#6) The new "green economy" in Spain has been a total flop. Socialist leaders promised that implementing hardcore restrictions on carbon emissions and forcing the nation over to a "green economy" would result in a flood of "green jobs". But that simply did not happen. In fact, a leaked internal assessment produced by the government of Spain reveals that the "green economy" has been an absolute economic nightmare for that nation. Energy prices have skyrocketed in Spain and the new "green economy" in that nation has actually lost more than two jobs for every job that it has created. But Spain so far seems unwilling to undo all of the crazy regulations that they have implemented.
#7) Spain's national debt is so onerous that they are now caught in a debt spiral where anything they do will harm the economy. If they cut government expenditures in an effort to get debt under control it will devastate economic growth and crush badly needed tax revenues. But if the Spanish government keeps borrowing money their credit rating will continue to decline and they will almost certainly default. The truth is that the Spanish government is caught in a "no win" situation.
#8) But even now the IMF is projecting that the Spanish economy is going nowhere fast. The International Monetary Fund says there will be no positive GDP growth in Spain until 2011, at which point it will still be below one percent. As bleak as that forecast is, many analysts believe that it is way too optimistic considering the fact that Spain's economy declined by about 3.6 percent in 2009 and things are rapidly getting worse.
#9) The Spanish population has gotten used to socialist handouts and they are not going to accept public sector pay cuts, budget cuts to social programs and hefty tax increases easily. In fact, there is likely to be some very serious social unrest before all of this is said and done. On May 21st, thousands of public sector workers took to the streets of Spain to protest the government’s austerity plan. But that was only an appetizer. Spain's two main unions are calling for a major one day general strike to protest the government's planned reforms of the country's labor market. The truth is that financial shock therapy does not go down very well in highly socialized nations such as Greece and Spain. In fact, the austerity measures that Spain has been pressured to implement by the IMF have proven so unpopular that many are now projecting that Spain's socialist government will be forced to call early elections."

at http://theeconomiccollapseblog.com/archives/9-reasons-why-spain-is-a-dead-economy-walking

US Total Credit Market Debt to GDP 1920-2009

at http://www.profitscore.com/articles/prof_TCMD-Mar10.jpg

'We Need to Recognize Reality'

"In a CNBC interview, David Walker, president and CEO of the Peter G. Peterson Foundation, doesn't pull any punches when he discusses our nation's precarious financial condition:
If we do not put our federal financial house in order, if we do not deal with the structural deficits, then our best years are behind us. This is about the future of the Republic; this is about the future of our country; this is about the future of our families. If you are not economically strong, you will not be strong with regard to international influence, with regard to national security, and ultimately our domestic tranquility will suffer. We have to learn from history and we have to not repeat the mistakes that others have made.
The former Comptroller General of the United States also takes issue with the notion that the recent strength in our currency and government bond markets is a sign that America is on the right course:
In the short term, we are a flight to safety, but we should not misunderstand the situation....People are all concerned about Greece -- Greece used to be the cradle of democracy; it was the greatest civilization on earth; it controlled most of the known world. And now, because of their financial situation, it's had a ripple effect -- not just in Europe, but it's affecting us. And guess what? When you look at debt held by the public -- federal, state, local -- we're already worse in the United States than Spain, we're worse than Ireland, we're two years away from being Portugal, and we're 10 years away from being Greece. We need to recognize reality.
Compelling -- and frightening -- as always."

at http://www.economicroadmap.com/