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Friday, April 23, 2010

Sovereign Debt Blowout in pictures

The world by following the US example, will be experiencing government blow-ups, which may result in government failures. Iceland failed spectacularly last year, with very little fanfare in the press.

This year Greece, Portugal, and eventually Italy and Spain will come under attack. The contagion will spread over the year(s), culminating in the USA, if the US doesn't reform before then.

Mish covered Greece's sovereign debt attack in pictures, to show how quickly interest rates can get out-of-control. Notice Greece's rates where inline with all the debtor nations, including the US. Click on Mish's article for complete coverage. Portugal is next up to bat, then Italy. Curious to see how much the German's will be willing to "give" money to these other countries to keep the Euro alive.

General point is, storing wealth in government bonds is also not 100% safe, although for the next few year(s) US bonds is a great bet. I am just not convinced that the US is good for next 5 years.

US – White
Germany – Red
UK – Blue
Portugal – Orange
Italy – Green
Greece – Yellow
Spain - Purple

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