It is IMPOSSIBLE for the US to default!!!

By John T. Harvey – With so many economic, political, and social problems facing us today, there is little point in focusing attention on something that is not one. The false fear of which I speak is the chance of US debt default.

The reason the US could never be forced to default is that every single bit of the debt is owed in the currency that we and only we can issue: dollars. Unlike Greece, we don’t have to try to earn foreign exchange via exports or beg for better terms. There is simply no level of debt we could not repay with a keystroke.

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” Alan Greenspan

Mind you, that doesn’t mean there might not be other economic or political consequences. more> http://tinyurl.com/9sdxbfd

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Romney: Debt is like ‘prairie fire’

By Rachel Streitfeld – In an appeal to middle America on Tuesday, Mitt Romney compared the national debt to a rapidly growing fire hurtling across a prairie.

“A prairie fire of debt is sweeping across Iowa and across the nation and every day we fail to act, that fire gets closer to the homes and the children we love,” Romney said.

Though Romney gave his speech in a state where, only months ago, the Republican presidential candidates battled for the support of conservative caucus-goers, on this trip Romney made an apparent bid for independent voters in the general election battleground. more> http://tinyurl.com/7stdxw9

IBM sets record low coupon for 7-year note

IU at IBM plant in Huntsville (Photo credit: Wikipedia)

By Andrea Johnson – International Business Machines Corp on Tuesday (May 8, 2012) set a record for the lowest ever coupon on a seven-year note, breaking through the 2.00% barrier in that maturity for the first time.

IBM, rated Aa3/A+/A+, sold $1.5 billion of debt in a two-part deal, consisting of $900 million of three-year notes and $600 million of seven-year notes.

IBM already holds the low coupon record in three-years with its 0.55s due February 2015, a tough number to beat. more> http://tinyurl.com/dyclvae

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Awash in money and piles of debt

Detail from Government. Mural by Elihu Vedder. Lobby to Main Reading Room, Library of Congress Thomas Jefferson Building, Washington, D.C. Main figure is seated atop a pedestal saying "GOVERNMENT" and holding a tablet saying "A GOVERNMENT / OF THE PEOPLE / BY THE PEOPLE / FOR THE PEOPLE". Artist's signature is "ELIHU VEDDER / ROMA–1896".
(Photo credit: Wikipedia)

By Stella Dawson – The amount of money thrown at rescuing the world economy since the Great Recession began is truly staggering, probably more than $14 trillion, and the financial spigots are still open.

Major central banks haven’t finished pumping money into the global economy either.

The Federal Reserve meets on Tuesday and Wednesday and the Bank of Japan meets on Friday, and their bias toward monetary easing through bond purchases is likely to remain firmly in place. Japan may even ease again to counter deflationary pressures.

But can all this money restore growth to robust levels anytime soon? more> http://is.gd/V6OCDa

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• ‘Frontline’ Blames Bankers, Lawmakers for Crisis: Review, Greg Evans, Bloomberg

Which fundamental issues has Europe solved?

Euro bank notes Türkçe: Euro banknotlar
(Photo credit: Wikipedia)

Economist – The calm that descended in the wake of the European Central Bank‘s flood of cheap, long-term bank lendinghas broken. A trillion euros will buy you about four months, as it turns out. What happens now?

What are the euro zone‘s problems? Primarily:

• Peripheral workers are uncompetitive and easy routes to devaluation are off the table.
• Markets therefore question the ability of sovereigns to make good on their debts. In the absence of a lender of last resort to governments, yields rise and fears of insolvency are self-fulfilling.
• Because governments are individually responsible for domestic banking systems, this leads to fears of banking collapse, which feedback into the growth and debt problems. Without a printing press, governments can’t credibly promise to be bank-lender of last resort without further undermining solvency.

How has the euro area addressed the fundamental problems? The slow, grinding process of internal devaluation is underway but is a long way from completion. There have essentially been no active steps taken to facilitate internal rebalancing. more> http://is.gd/G53exg

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