Thoughts From John Mauldin on the Crisis in Europe and more…


John Mauldin is one of my favorite economic writers and I highly suggest you subscribe to his free newsletters. His most recent ones, that you can find here and here, put a challenging context around recent events in Greece. What he suggests is that the problems faced by Greece we face here in the US as well.

“Let me briefly sum up last week’s letter. They wrote: “Today, interest rates are exceptionally low and the growth outlook for advanced economies is modest at best. This leads us to conclude that the question is when markets will start putting pressure on governments, not if.

“When, in the absence of fiscal actions, will investors start demanding a much higher compensation for the risk of holding the increasingly large amounts of public debt that authorities are going to issue to finance their extravagant ways?” “
This is the fundamental question I started asking over two years ago when I began this blog. Put another way I suggested that you cannot solve a debt problem with debt. ( yes I studied business to figure that one one.. ha ha ) Sooner or later debts must be paid off, or written down. The former is more painful for the borrower, the second of course for the lender. It seems the day of reckoning is coming sooner versus later. Time to deal with the big problems. If you want to read an insightful comment read Chris Gray’s from two blogs ago….

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