Who owes what to whom

October 30th, 2011 at 9:00 am by David Farrar

This diagram is from the New York Times. This shows how France is in danger, if the PIGS crash, and that may then flow on to the US.

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16 Responses to “Who owes what to whom”

  1. MyNameIsJack (2,415 comments) says:

    The folly of turning currency in to commodity. Even with all the woes in Europe the Euro is still trading at 40% above the US$

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  2. tom hunter (5,075 comments) says:

    Gawd – are we still sourcing from the NYT when the zerohedge blogsite had these graphs two months ago.

    We’re never going to bury the MSM if we keep referring to the useless bastards, and in an increasing number of cases it can’t be said that they’re even taking the lead on the news items. Quite the opposite in fact.

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  3. Scott Chris (6,176 comments) says:

    Crikey, the Swiss banks have certainly managed to isolate themselves well.

    Canny people, the Swiss. No Pan-European union for them, just a whole bunch of bilateral agreements.

    Bureaucrats heaven, but probably very sensible. Works on the principle of economic relativity rather than the flawed assumption that FTAs amount to genuinely free trade.

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  4. tom hunter (5,075 comments) says:

    Canny people, the Swiss.

    The people perhaps – but not the Swiss Central Bank. A couple of months ago they announced that they would peg the Swiss Franc (CHF) against the Euro. They did this to ensure the Franc would not continue to rise in value and destroy their exporting base.

    Of course the real problem was that the CHF was rising because people across Europe (and around the world) were switching money away from the Euro economies and into Switzerland to try and protect themselves against the Euro-crackup.

    Since that threat has not yet receded what the Swiss Central Bank has effectively done is place the future of the CHF into the hands of the Euro bureaucrats, because if the Euro situation continues to worsen the SCB has to buy shitloads of crappy debt issuance from Euro countries – which means they have to print Swiss Francs at Bernanke rates to maintain the peg. In other words – big-time inflation. Not to mention other risks: after all, you can now effectively borrow CHF at 0% interest to buy crap Euro-debt instruments generating 5%-30%, with virtually no downside risk. We’ll see where that leads in a year or so.

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  5. Scott Chris (6,176 comments) says:

    tom hunter says:- “but not the Swiss Central Bank”

    Yes, but they’re obviously between a rock an a hard place, trying to appease their domestic constituents as well as being forced to act as a responsible international banking warden.

    BTW tom, did you catch this outstanding interterview with Libertarian Judge Andrew Napolitano by Jon Stewart?

    http://www.thedailyshow.com/watch/thu-october-27-2011/exclusive—andrew-napolitano-extended-interview-pt–1

    I suspect that you’d approve. Napolitano gives a good account of his ideas.

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  6. kowtow (8,721 comments) says:

    Canny people those Swiss

    Yep, they have a confederation and genuine democracy where real issues are decided by the electorate,not the political classes that have brought us ruin.

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  7. whoisthisguy02 (29 comments) says:

    http://www.thedailyshow.com/full-episodes/thu-october-27-2011-andrew-napolitano

    ^^ Link to that video.

    Judge comes on at 10:00 mins.

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  8. Someone Else (135 comments) says:

    Where’s China? I thought they ‘owned’ the US?

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  9. tom hunter (5,075 comments) says:

    The Chinese “own” a couple of trillion of US treasuries – which Ben and co are busily deflating. Cue pissed off Chinese who threaten to do …. something. Somehow I don’t think “threatening” to sell all that carries much weight when the question will be: to who?

    Scott
    So so interview. It should have been longer and perhaps a debate, given the length of Jon’s statements-as-questions. I think any left-winger who supports government loves talking theory as opposed to talking about how things work out in practice.

    I love Jon’s standard exemplar of taxes=fireman as the classic example. If all I had to pay tax for were cops and fireman – hell, even the socialist world of NZ doctors and nurses – that would probably be acceptable to me. Listen to garbage from the likes of Obama at the moment: he only talks about nurses, fireman and cops. If only! In fact I pay taxes for a whole lot of other shit: shit that actually feeds on itself and grows, which to me is the key point that Stewart refuses to accept when he talks about a government that is “accountable” to voters. Hah!

    I think this article is more interesting, though I realise it’s whole premise – that ruling elites have run amok – cuts against the grain of your faith in hiring the right experts. WARNING: It’s a damned long article.

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  10. reid (16,630 comments) says:

    Where’s China? I thought they ‘owned’ the US?

    My thought as well, SE and thanks tom for that answer.

    In addition it would seem to be suggesting that China’s capital markets haven’t yet developed to the point where Chinese banks need to start finding international business. Which is interesting in itself.

    Some say that both Japan and China are playing a long game and combining forces against the US with their massive T-bill holdings which both have. Who knows? There’s certainly no love lost as a result of 1930’s Manchuria, that’s for sure, but putting that aside, it is something to note and file away, as a possibility on the great game’s chessboard.

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  11. Tautaioleua (309 comments) says:

    The Germans were too liberal with their card playing tricks, too far from the chest if you ask me. Now they will suffer as those dependent on them continue to decline.

    Indeed, a real pity.

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  12. Grant Michael McKenna (1,160 comments) says:

    I’m surprised that nobody has referred to this yet: http://youtu.be/I5QwKEwo4Bc Messrs Clarke and Dawe explain it all.

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  13. reid (16,630 comments) says:

    Now they will suffer as those dependent on them continue to decline.

    In light of which this is interesting Tt.

    http://www.express.co.uk/posts/view/279312/French-and-germans-in-super-treasury-plot

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  14. Nick K (1,253 comments) says:

    Who owes what to whom? Easy.

    A family of four in NZ owes the Government $67,000 because said government is borrowing $380million per week offshore to fund its deficit. Put that on the end of your mortgage, mums and dads.

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  15. Rich Prick (1,719 comments) says:

    American and British print media leave our lot for dead. That is a great graphic and story and makes a RWC one point loss pale into insignificance, really. But seriously, why can’t our media do that sort of story instead of endless breathless bits about seagulls with SPF300 on them? Or someone’s Mum with the obligatory bad perm, who is fucked off because her daughter’s cat wants compensation because of a bit of crude on her paws?

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  16. RRM (10,001 comments) says:

    The girth of the USA –> Japan arrow is quite something. America may have won the war, but it sure looks like Japan is winning the peace!

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