“It was the banks doing crazy loans, it was borrowers taking crazy loans and a failure by government and regulators to do their jobs properly,” said Sean Kay . . .. “There was no adult supervision.”
Sounds like the U. S.
Instead it's Ireland, in a Bloomberg article about Ireland on the Brink.
Right now the U. S. is in a "Japanese" phase of my concept of a duality I have dubbed going or being Japanecian (or, Grecianese). The Irish are going Grecian. They are accepting austerity (a depression with debt deflation and high real interest rates) to stay in the good graces of lenders. So long as the U. S. can keep adding to its debt with central bank money created out of thin air, a la Japan, said debt replacing income to the government coming the traditional way from private sector taxes, then interest rates can continue to trend down. If that happens, then the long end of the yield curve will break to very low levels, no matter how high traders price the yields now. With 3-month T-bills at the same level as Japan's, at a trivial 0.12% annualized yield, that's my working hypothesis now.
At some point, however, the Grecian phase of a debt crisis can come to America.
Copyright (C) Long Lake LLC 2010