Interest rates are scary!
The amount of borrowing that the ‘West’ – including US and Europe have as of today is scary! The US and Japan will need about 5 and 3 trillion respectively in the next year (2012) – to remain where they are.
Funny that the same countries who were telling the EAST -( in 1997) are in such a bad shape today. Exactly when their economies are slowing down, they will have to raise a LOT of money to stay where they are / where they were!
The US is borrowing at about 3.5%p.a. and Spain is borrowing at 5.7% ! Not sure if all the risks are priced in EVEN at these price levels!
geodesic
Read the book Boomerang by Michael Lewis, you will get an idea of the mess Europe is in. If Greece were to spend all the revenue it collects in a year, and use it for nothing other than debt repayment it will still take them 5 years to repay what they owe.
Imagine using all your tax revenue just to repay debt and on nothing else! No wonder they are rioting and overthrowing governments.
subra
do not even have to read that just read Michael Lewis’s article in Vanity Fair about Greece, dats enough 🙂
Ravinder Makhaik
Guys, if the near collapse of the Asian Tigers in 1997 threw about such a ruckus, these big boys, US, Spain, Italy Greece et al will not go down without a world wide catastrophe.
What Tsunami awaits us lesser mortals – God only knows.
shinu
Isint it the same situation staring at India… Just see the indicator in HDFC’s new offer of 9% rate for NRI ( Tax free and repatriable…). I am not able to interpret….