Debt Crisis

Newly re-elected President Obama must deal with the country’s pending fiscal cliff, but America shouldn’t feel alone; the eurozone and Europe also have a massive debt burden that needs to be rectified. The European debt crisis took Greece down with two separate bailouts. Greece actually needed the second…

On the eve of the presidential election, the world and America are anxiously waiting to see whether President Obama or Governor Mitt Romney will become the 45th U.S. President. The outcome of Tuesday night will be critical not only for the direction of the country on both the…

Spain is just a mess; the country’s economy contracted for the fifth consecutive quarter, according to the Bank of Spain. (Source: “Quarterly Report on the Spanish Economy: Economic Bulletin,” Bank of Spain, October 2012, last accessed October 23, 2012.) The bank also highlighted the 1.2% decline in “national…

As the decline of the U.S. dollar continues, central banks around the world are scrambling to protect their foreign reserve and are questioning the U.S. dollar as a reserve currency. I have been warning you about this issue for some time now. For central banks, gold bullion seems…

I recently wrote about the fact America has over $16.0 trillion in national debt and about how to deal with the situation. (Read “We Can’t Ignore It: America’s Going Broke.”) There is increasing talk of a potential upcoming “fiscal cliff” that could drive the U.S. economy back into…

The financial crisis of 2008-2009 crumbled the U.S. economy to a degree not seen since the great depression. Now another economic problem is emerging—a problem 46 times bigger than the gross domestic product (GDP) of the U.S. economy. It’s the financial crisis involving derivatives markets. Starting next year,…

The U.S. national debt just surpassed the $16.0-trillion level and is accelerating with each passing minute. The problem is that with the U.S. economy slugging away and an unemployment rate of 8.3%, there are also less tax revenues to collect, which will ultimately impact the government’s balance of…

There is calm before the storm looming in the U.S. that is called the “Fiscal Cliff”—a bigger issue than perceived by the majority of the American population. A fiscal policy implemented during President Bush’s period in office, which included cuts in taxes and increased government spending, is set…

I’ve been writing in Profit Confidential about the spree of bankruptcies in cities across the U.S. While the majority of them are in California, cities across America have been getting their credit ratings slashed. In the second quarter of this year, Moody’s downgraded some 300 U.S. municipal bond…

The budget deficits among many municipalities in theU.S. are running deeper into the red because of rising pension benefits and lower municipal tax revenues. As such, many municipalities are coming up with some very creative thinking on deficit cuts. Highland Park, Michigan, has three schools responsible for educating…

This week, we have renewed fears that the financial crisis in Europe is worsening by the day, leading to a continued lack of investor confidence. Ten-year bond yields in Spain are surging to record interest rates of 7.6% on news that additional regions within the country are requiring…

Just outside Los Angeles is the City of Compton, home to 93,000 people…a city running out of money. As the city treasurer eloquently put it, he has $3.0 million in cash and $5.0 million in bills due in the next month. (Source: Reuters, July 18, 2012.) If debt…

The release of the minutes from the last Federal Reserve meeting, which took place on June 19 and 20, came with some interesting items that weren’t mentioned at all. The financial crisis around the world is continuing to worsen, and investors were hoping that the Federal Reserve would…

San Bernardino, with a population of 209,000, has become the third California municipality to declare bankruptcy within the last few weeks. The budget deficit that San Bernardino faced was $46.0 million and its money was gone, leaving the council little choice but to declare bankruptcy, especially in an…

Although not a coordinated effort, the desperation to boost economic growth around the world by central banks was very apparent late last week. The European Central Bank (ECB) cut interest rates to a record low 0.75% on Thursday in response to the financial crisis gripping the eurozone. The…

Buried under a huge budget deficit with pension obligations it had no way of honoring, Stockton, California could not reach a deal with its creditors and so will be forced to declare bankruptcy within days. The mayor of Stockton, Ann Johnston, felt she had no choice. Before reaching…

On the historic day of August 5, 2011, when Standard and Poor’s (S&P) downgraded the U.S.’s credit rating for the first time in its history, the world took notice. Today, credit reporting agencies Moody’s and Fitch maintain their AAA credit rating on U.S. government debt, but that could…

The U.S. Congressional Budget Office (CBO) has issued another scathing report on the state of the mountainous U.S. national debt. The CBO says the national debt will double by 2026 and reach 200% of gross domestic product (GDP) by 2037 unless firm action is taken to stem America’s…

Just when the U.S. economy and the housing market are turning up, Europe’s sovereign debt bomb critically injures global capital markets. That’s my biggest fear going forward and it’s a very real possibility. The U.S. stock market would be quite a bit higher if there was more certainty…