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Spain is officially insolvent: get your money out while you still can

 
Tess2012

User ID: 39652318
Ireland
05/11/2013 07:42 AM

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Spain is officially insolvent: get your money out while you still can
I'd not noticed this until someone drew my attention to it, but the latest IMF Fiscal Monitor, published last month, comes about as close to declaring Spain insolvent as you are ever likely to see in official analysis of this sort. Of course, it doesn't actually say this outright. The IMF is far too diplomatic for such language....

Next year, the deficit is expected to be 6.9 per cent, the year after 6.6 per cent, and so on with very little further progress thereafter. The situation looks even worse on a cyclically adjusted basis. What is sometimes called the "structural deficit", or the bit of government borrowing that doesn't go away even after the economy returns to growth (if indeed it ever does), actually deteriorates from an expected 4.2 per cent of GDP this year to 5.7 per cent in 2018. By 2018, Spain has far and away the worst structural deficit of any advanced economy, including other such well known fiscal basket cases as the UK and the US.

So what happens when you carry on borrowing at that sort of rate, year in, year out? Your overall indebtedness rockets, of course, and that's what's going to happen to Spain, where general government gross debt is forecast to rise from 84.1 per cent of GDP last year to 110.6 per cent in 2018. No other advanced economy has such a dramatically worsening outlook..

[link to blogs.telegraph.co.uk]
Into my heart an air that kills From yon far country blows:
What are those blue remembered hills, What spires, what farms are those?
That is the land of lost content,I see it shining plain,The happy highways where I went And cannot come again.
Anonymous Coward
User ID: 1496863
United Kingdom
05/11/2013 07:46 AM
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Re: Spain is officially insolvent: get your money out while you still can
I'd not noticed this until someone drew my attention to it, but the latest IMF Fiscal Monitor, published last month, comes about as close to declaring Spain insolvent as you are ever likely to see in official analysis of this sort. Of course, it doesn't actually say this outright. The IMF is far too diplomatic for such language....

Next year, the deficit is expected to be 6.9 per cent, the year after 6.6 per cent, and so on with very little further progress thereafter. The situation looks even worse on a cyclically adjusted basis. What is sometimes called the "structural deficit", or the bit of government borrowing that doesn't go away even after the economy returns to growth (if indeed it ever does), actually deteriorates from an expected 4.2 per cent of GDP this year to 5.7 per cent in 2018. By 2018, Spain has far and away the worst structural deficit of any advanced economy, including other such well known fiscal basket cases as the UK and the US.

So what happens when you carry on borrowing at that sort of rate, year in, year out? Your overall indebtedness rockets, of course, and that's what's going to happen to Spain, where general government gross debt is forecast to rise from 84.1 per cent of GDP last year to 110.6 per cent in 2018. No other advanced economy has such a dramatically worsening outlook..

[link to blogs.telegraph.co.uk]
 Quoting: Tess2012


the sh1t will hit the fan soon
Anonymous Coward
User ID: 39653228
Italy
05/11/2013 07:53 AM
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Re: Spain is officially insolvent: get your money out while you still can
bump
Anonymous Coward
User ID: 36771362
United States
05/11/2013 08:27 PM
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Re: Spain is officially insolvent: get your money out while you still can
spain is not alone...
Anonymous Coward
User ID: 26300532
United States
05/11/2013 10:14 PM
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Re: Spain is officially insolvent: get your money out while you still can
and so how does the US look on that report of yours?

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