Monday, September 10, 2012
Baklava and Bull Fighting Anyone? . . . .Anyone?
Where will we be if we don’t get a handle on our fiscal problem? Let’s just say I hope you like Bull Fighting and Baklava. The sovereign debt crises’ faced by Spain and Greece are indicative of where we might be headed if we continue down our present path. In July Maria Bartiromo interviewed Sean Egan, CEO of Egan-Jones, the first ratings agency to cut the U.S. debt rating last year. When asked what were the biggest problems in the Eurozone, Egan responded, “The largest problem, and it's a very difficult problem to solve, is that debt relative to GDP has continued to increase for most European countries.” When asked why are these countries in so much debt, he simply noted, “They've been spending a lot more money than they've been taking in. With the decline in the GDP, the assumptions that were made in setting the budgets have not been met, so the deficits continue to build.” Sound familiar?