When does debt go from good to bad? We address this question using a new dataset that includes the level of government, non-financial corporate and household debt in 18 OECD countries from 1980 to 2010. Our results support the view that, beyond a certain level, debt is a drag on growth. For government debt, the threshold is around 85% of GDP.
Great. According to this source, we're WAY past 85%.
The cherry bomb on that "frosted" crap cake - earlier today, Germany couldn't sell over a third of its scheduled 10-year bonds (of course, they weren't willing to part with more han a 2% nominal interest rate and a 1.98% yield).
ECB could buy them up.....but they won't.
Because overtly soaking up the debt would be an admission the Euro is a miserable failure (never mind it already is a miserable failure).
The Germans take massive losses in their banking system as periphery nations devalue and readjust their trade imbalances while exiting the Euro which should put a few million Germans out of work in the process over the next couple of years
That's a choice.
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