Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts

Thursday, September 15, 2011

Productive Pain

Living with chronic pain is not pleasant, no matter how you look at it. But there is pain and then there is pain from actually doing things. The last two days I’ve hurt quite a bit because I’ve been doing some physical activity to make up for lost time.

It is all yard related, except for taking down my filthy blinds and deciding replacing them was easier than cleaning them. We bought some Colorado Blue Spruce and Black Hills Spruce pine trees to plant as a mini windbreak. Three of them went in the ground yesterday just in time for frost last night. The fourth and last one is indoors for the moment and awaits the removal of a diseased Asian Elm tree – if we can get a neighbor with a chainsaw to help out.

Speaking of sawing, a replacement pole saw and lopper finally was purchased a couple of months ago. Tuesday was my first chance to use it and I discovered to my dismay that my recent slide in health is worse than I realized. It was torture using it and one oak tree branch will take multiple days to get through.

No, it is not very thick being six inches in diameter or so. I am just that weak now. Oy.

Back to the frost. Last night set records for lows in some places around the area. We could use some global warming right about now. Pity it is junk science since humanity always prospers in warm periods.

Prosperity would be nice, but the coming storm is nearly upon us. China is going to be liquidating their U.S. treasury bond holdings. This shows that borrowing to increase our national debt is not going to work anymore. But that is not stopping the Fed from assisting in bailing out European banks. The insanity continues until everything falls down, I suppose.

At least the view from my window is nice with the blinds removed. It is amazing how plastic attracts dust that never lets go. I made the mistake of trying to dust them with a Webster extendable duster yesterday. The clouds of dust that arose could have felled a horse and drove me from the room.

I had purchased them close to twenty years ago to be able to vary sunlight since my eyes are very sensitive to light. But years of working on pain tolerance has helped a bit with that so I am ready to evict the things in favor of Asian blinds. Temporary plastic fake reed blinds (left overs from upgrading the dining room twelve years ago) will go up while I budget to get the real thing.

I’m thinking of painted bamboo ones but need to check my finances first.

Egad, the windows are dirty. Something will have to be done about that. Also have tomatoes to can today. So despite all the pain, at least it has been a productive week. That is something I have not been able to write down in some time.

That is worth the pain.

Monday, December 14, 2009

Another Debt Crisis or Two

Ran across a few interesting economic pieces last week, but didn’t feel well enough to write about them. Fortunately, or more accurately unfortunately, they still apply. I’ve been warning that bad commercial real estate loans would be the next shoe to drop.  We’ve seen that happen in Dubai, which I’ll write about further on.

But another debt problem is brewing and it will dwarf the real estate bubble.  That debt problem is the debt of sovereign nations, with the United States poised to be in major trouble.  Earlier in the year, the federal government had problems with some of its bond auctions not selling.  Now a new complication has entered the picture.

Ralph Benko’s op-ed at The Washington Examiner lays out the details of our debt servicing problem.  I was surprised to find out that we are only giving 1-2% interest on treasury bonds.  What country would want to buy those from us when inflation could easily turn them into losses rather than investments?  Something has got to give.

Quote of the piece:

The federal government currently pays, according the article, $202 billion a year in interest. White House estimates that interest payments will rise to $700 billion a year in 2019.

That doesn't count the projected catastrophic increases in entitlement costs in Medicare as the baby boomers retire. And you thought the American people were already shellshocked!

I don’t know, I think there is a point where the barrage of bad news ceases to register emotionally.  How low can we go is the question I ponder reading the news anymore.

Meanwhile, Greece is in a financial meltdown that is spooking investors in Europe.  Credit agencies have been making noises about what’s going on, even lowering ratings for Greece.  Quote of the article:

Analysts and credit-rating agencies are warning that countries with already high debt levels have rung up historically large deficits during the financial crisis, with tax collection plummeting even as public spending has soared.

The same principles that apply to individual debt apply to nations as well, duh!  Yet the idea of more spending by governments has taken such a firm hold on policy that increasing deficits are the norm rather than the exception.  But when it is someone else's economy they have no trouble in telling them to make cuts.

Instead, most officials in Europe are pushing the Greeks to clean up their own mess by making tough cuts.

"Considering the gravity of the situation, I am confident that the Greek government will in the near future take the courageous and necessary measures required," European Central Bank President Jean-Claude Trichet told the Belgian economic dailies L'Echo and De Tijd this week.

I can’t decide if it perverse hypocrisy or an indication the other European countries don’t have any capital they can infuse into the Greek system.

The Dubai financial crisis has been a problem that rippled out all the way to Scotland.  Now their neighbor, Abu Dhabi has come to a short term rescue to the tune of $10 billion.  It looks like a temporary solution that doesn’t address the long term defaults that may happen. After all, it a $80 billion debt that still need to be addressed. 

Buying time is a scary part of solutions offered by debt ridden governments and is becoming all too common. I think the truth is that nobody knows how to deal with what is happening world wide and domestically. 2010 is going to be interesting.