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Huguenot Wrote:

-------------------------------------------------------

> What on earth is this problem about the SDR now?

>

> It was invented in 1969 FFS.

>

> It's just a way for credit worthy governments to

> support their spending/debts if the banks go tits

> up. They borrow off eahc other instead of the

> banks. It's not rocket science.

>

> If you want to understand what this means just

> remember that 40% of UK annual government spending

> is borrrowed. If we can't borrow it we're all

> fecked.

>

> SDR covers our arses.


When the SDR replaces the dollar - what banks and finical institutions are going to take an haircut on their holding?, None.


The system will try inflate its way out of the black-hole of debt that the world is in, and that means average Joe & Jane paying the price.


I like to draw your attention again to the Minsky Moment.

Debt can no longer be rolled into the future.

Please just calm down - you seem to have no sense of proportion.


Everything for you is black or white, dollar or disaster.


I can assure you that we'll still have debt tomorrow, and still have debt the day after.


We've already had several 'Minsky Moments' and we're still here. If you haven't noticed the stock exchanges are all down 35% over three years ago.


We're all still here.


You're just too young NN, we've been through boom and bust so many times it's laughable. It's not the end of the world.

Huguenot Wrote:

-------------------------------------------------------

>

> If you want to understand what this means just

> remember that 40% of UK annual government spending

> is borrrowed. If we can't borrow it we're all

> fecked.

>

H, grateful if you could further explain your figure of 40% please? It doesn't make sense to me.

I'm not sure what you don't understand UDT?


Borrowing is the difference between what you spend and your receipts.


The last figures I quoted were for November 2010: total govt. expenditure ?53.9bn, borrowing was ?22.77bn - 42.2%


Of that ?53.9bn interest costs were ?4.5bn, so a quarter of what we were borrowing was to pay interest on what we borrowed before. This is credit card junkie stuff.


I quoted it a few months ago, I hope you don't mind me using the same figure as an illustration?


I could have updated it, but I was simply trying to illustrate a point.

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