Gyroscopic Investing

Is the ivory tower of the Krugmanites finally beginning to tremble? See this article by Ambrose Evans-Pritchard:

http://www.telegraph.co.uk/finance/fina ... -high.html

Evans-Pritchard's article could be a wakeup call for those who still believe "debt doesn't matter" and that we can "write ourselves a check" or "print a trillion-dollar platinum coin" to magically solve the approaching crisis caused by massive, and ever growing, debt and unfunded liabilities. Will Chicago and the state of Illinois follow Puerto Rico as the next dominoes to fall?

When did the Puerto Rico domino fall?

goodasgold wrote: Is the ivory tower of the Krugmanites

Archie Bunker once called it an ivory shower. I like that image better.

Pointedstick wrote: When did the Puerto Rico domino fall?

Muni investors know a lot about this subject. And it will be interesting to see what Obama's response will be to ever louder howls that we reward PR governments for their folly by bailing them out (in advance of similar howls from Chicago, Detroit, etc. etc. etc. ad infinitum.)

The allure of the Perth Mint, as a (presumably) safe cubbyhole for the yellow stuff, is growing, at least until the Western Australian Workers' Committee, with Professor Krugman at their head, march to the Perth Mint to demand the turnover of the ill-gotten gains of the wicked PP investor-oppressors.

goodasgold wrote:

Pointedstick wrote: When did the Puerto Rico domino fall?

Muni investors know a lot about this subject. And it will be interesting to see what Obama's response will be to ever louder howls that we reward PR governments for their folly by bailing them out (in advance of similar howls from Chicago, Detroit, etc. etc. etc. ad infinitum.)

From that, it sounds like the Puerto Rico domino hasn't actually fallen yet.

Pointedstick wrote:

goodasgold wrote:

Pointedstick wrote: When did the Puerto Rico domino fall?
From that, it sounds like the Puerto Rico domino hasn't actually fallen yet.

On 9/11 a lot of people in the WTC died, after the evacuation notice was issued, when a new announcement told them to "return to their desks" because the emergency was over.

Those are all provincial gov'ts, which don't have their own currencies.

Lowe wrote: Those are all provincial gov'ts, which don't have their own currencies.

So their debts are "not worth a continental," eh? (or a Zimbabwe $10,000,000,000 note?) 

It means their debt is worth a lot.  When a currency issuer goes into debt, the bonds issued are as good as money, exchangeable at large banks and the central bank. 

That is not true for debt issued by provincial gov'ts.  Those are obligations they'll have to repay through taxes.  So budget shortfalls are a big deal for Puerto Rico or California, say.