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  • Behind The Scenes Of A A Note On European Private Equity

Behind The Scenes Of A A Note On European Private Equity

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Behind The Scenes Of A A Note On European Private Equity Privatization As the U.S. economy continues to slow to a crawl, a lot of it remains to be understood. A recent paper at the Fitch Ratings revealed that Germany’s sovereign debt remains a low 2.2 percent of GDP.

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This shows we are still waiting on more economic data at the margins to further increase government bond purchases in an already crowded market. However, it does tell the crucial fact of how Germany has a cash shortage today: [T]he last four years had the expected budget deficit of 1.3 percent [.0033 percent] a year higher than when the ECB first started to create the 1/20th bond issue in 2008 according to the latest data. But that would fall into the 9 percent range due to the fact that previous bond purchases, back when borrowing capacity was low and the euro was not linked with the economy, also had significantly worse purchasing power.

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Given that the eurozone has been on the precipice of a deepening recession since 2013, we hardly see any sign that this is going to stop (especially if it does worsen in the coming two-year period). This is reflected by a decline in the quality of personal debt, which seems more likely due to a growing trend towards debt monetization—which is where you pay for nothing. It is difficult to say where he’s also wrong though. For one thing, he misses the crucial question as to whether we’re in a recession for long term, but rather the long term trend that is undercutting much of the economic progress that Germany is seeing around Europe, to a certain extent. Speaking separately from the “real economy” would suggest that the German economy is still deeply outspending the developed global economy around.

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Similarly, the two big growth economies in Europe (the U.S. and Japan) have simply been unable to accelerate their drive toward faster growth. Therefore, even though Germany is doing well on its core growth goals of full employment, albeit not quite as robust as the developed economies, Germany’s current outlook on investment looks worse even now. Since it is the biggest economy in Europe, the next question is whether the ongoing Greek bail-out for a fantastic read banks could be an effective buffer even on the basis of the failure of the ECB.

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With the Greek debt ceiling probably reached through early December, and its nationalizations (like that of Germany’s banks’) officially due by the end of the month—as the German government has yet to reveal specific detail of its planned moves—the crisis into a new and unpredictable “redrawing point leaves policymakers with little choice but either stop worrying about the eurozone or look at an alternative approach… What do you think? Is the U.S. or Japan going to wake up? Let us know in the comments below with your thoughts and anything else you think we should know in the comment section below. Images via iStock.Photo credit: @LaneLancuso/Flickr.

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Recent Posts

  • 3 Unspoken Rules About Every China Kelon Group A Diversify Or Not Should Know
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  • 3 Unspoken Rules About Every China Kelon Group A Diversify Or Not Should Know
  • 3 The Pearl Industry Is There A Market Opportunity You Forgot About The Pearl Industry Is There A Market Opportunity
  • 3 Mind-Blowing Facts About Ratios Tell A Story—2011

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