Cyprus-Forum.com

[Paphitis]

The important thing is that they are paying less than 1% in interest because of their AAA rating.

Also, their GDP is rising meaning that their actual debt is declining as a percentage against GDP. Problems begin when that is not the case like it was a couple of years ago.

Also, if you add all the debts of the EU member states, then compare to the US, you might find that EU debt is higher.

Try it! Add the UK, German, French, Spanish, Italian debts and you are well on your way!

Furthermore, if the US declines, then the entire globe is in the shit. The EU would pretty much collapse because Italy and Spain will be tipped off the edge for starters. You can say bye bye Germany!

This is true, but don't forget that the US recently changed the way it calculates its GDP, skewing it to the upside (surprise, surprise). The gross investment portion of the calc now includes R&D spending, art, music, film royalties, books and theater. This will raise GDP by about 3% and no other countries include these factors in their GDP calcs. This effectively adds slack to debt-to-gdp measurements, and will shortly justify additional debt.

This is in addition to imputations (i.e. if you own your house, you are assumed to pay yourself rent and this is added to GDP) and hedonic adjustments (if a TV is cheaper than it was last year, the difference in price is added to GDP) that are already included in the calc.

Probably 15-20% of US GDP measurement is not transaction-based at all.

Cheers Dinos.

Personally I hope the US balances its books. Not very good just to keep adding to the mountain of debt.

They have a responsibility to the world because if the US and/or China go down, then it is not going to be pleasant for any country. If those 2 sneeze, the rest of the world will catch the pneumonia.

In fact if the US go down, China goes down, then all the Asia Pacific will go down but the very first to go will be the EU because Italy and Spain will go down and Germany will not be in any position to deal with it purely based on the volumes in question and because they too will go down and so on and so on.

We must be very careful what we wish for, because it won't be pretty at all.

[Paphitis]

the bottom line is, is that the US dollar has maintained itself as the numero uno currency of the world despite its debts...ask yourself why?

Perhaps by its meddling in Europe, enticing the UK to NOT join the Eurozone? Destroying Oil producers (Saddam) that would have opted for the Euro and given up the petrodollar? Despite all that engineering, you have to ask yourself why the US Dollar is still in such a mess!

Former U.S. Federal Reserve Chairman Alan Greenspan said in September 2007 that the Euro could replace the U.S. dollar as the world's primary reserve currency. It is "absolutely conceivable that the euro will replace the US dollar as reserve currency, or will be traded as an equally important reserve currency." Econometric analysis by Jeffery Frankel and Menzie Chinn in 2006 suggests the euro may replace the U.S. dollar as the major reserve currency by 2020 if (1) the remaining EU members, including the UK and Denmark, adopt the euro by 2020 or (2) the recent depreciation trend of the dollar persists into the future.

wiki

Why the hell would you want to join the German Eurozone for?

The biggest mistake the RoC made was joining the Eurozone. We had probably the strongest currencies in the world, and now look at what is happening.

The Brits are smart to stay out, and their currency is shitloads better than the Euro!

Bravo UK for exercising their sovereignty. One day, Greece and Cyprus will do the same.

[Oceanside50]

by joining the euro Greece and Cyprus gave up their free will...knowing these two groups of "kleftes" (Greeks, Greek Cyps) it may be a good thing in the long run..