Crisis of Confidence in Public Debt

Many financial market watchers are calling the last week of rising stocks the "Santa Claus Rally."  But now the three wise men (actually 2 men and 1 woman) have spoken and it appears that they don't believe the upsurge in financial markets will hold for 2012.

Interesting that one of them is the leader of the IMF and she sees a real problem continuing to build in the area that is so vital for sustainability....CONFIDENCE!

Nouriel Roubini, the New York University economist who predicted the unraveling of the financial system in 2008, is calling for “a recession in Europe, anemic growth at best in the United States, and a sharp slowdown in China and in most emerging market economies.”

Kenneth Rogoff, the Harvard economist who has studied 800 years of financial crises, calls for a “second great contraction” caused by a badly over-leveraged global economy that requires deleveraging that “typically takes many years to complete.”

You want a more official rendering? I give you Christine Lagarde, who keeps warning that the world economy is in a “dangerous situation.” This past weekend she explained that the “Santa Claus rally” in the U.S. was due simply to “only temporarily calmed markets.”

Be forewarned: Ahead of us, predicts the IMF leader and gritty former French finance minister, is “a crisis of confidence in public debt and the solidity of the financial system.”

Here;  http://www.forbes.com/sites/robertlenzner/2011/12/26/from-2011s-santa-claus-rally-to-2012s-perfect-storm/

OK....I may not be a wiseman, but you have to admit that when the leader of the IMF uses a phrase like "crisis of confidence in public debt and the solidarity of the financial system"....that sounds pretty serious.

If the public starts to realize that France owes Italy $billions, and Italy owes Greece $billions, and Germany owes France $billions, and the UK owes Germany $billions....and no one actually has any money to pay the $billions that they owe the other without borrowing it from someone else....the realization could really put people into panic.

On top of this news we have the U.S. government realizing that once again they need to raise the debt ceiling this week by another $1.5 trillion to keep things going along on all of our unsustainable programs that we indebted to.

I am seriously beginning to wonder if the ONLY reason that this whole house of cards has not already collapsed is because the retraining hand of God has been held up to stop it all from crumbling....until HIS perfect timing allows it to crumble.