It has since added formidably to its debt liabilities.

Europe s debt problems should, in fact, still be quite manageable provided the requisite write downs and debt restructurings are implemented.

Europe s debt problems should, in fact, still be quite manageable provided the requisite write downs and debt restructurings are implemented.

If micro financiers are making profits off the poor, it must be because they are bilking them.

During the Great Depression, many debt contracts were indexed to gold.

And Europe s debt problems are now widely acknowledged to be due to ill conceived aspects of European integration.

If the debt ceiling absolutists are naïve, so, too, are simplistic Keynesians.

Countries debts undoubtedly play a vital role in the global financial system.

Borrowing countries such as Argentina or the Ottoman Empire regularly defaulted. They were then punished for a few years by not having access to international capital markets.

Will it be possible for them to rollover their market funding in these circumstances?

But even large and stable countries such as Britain and the US are finding auctions of government paper increasingly problematic.

Borrowing countries such as Argentina or the Ottoman Empire regularly defaulted.

Some crisis prone countries such as Latvia are already unable to sell any more debt.

Time alone will tell whether the financiers who invest in and run this program make a fortune.

Many Wall Street financiers, having received their gobs of cash, are returning to their fiscal religion of low deficits.

The debt ceiling absolutists grossly underestimate the massive adjustment costs of a self imposed sudden stop in debt finance.

The banks then dump the IOUs on the European Central Bank, which then provides the actual cash.

What really upset investors, of course, was the realization that, yes, some day untenable debt guarantees will have to be withdrawn.

They would have to tackle the banking and the sovereign debt problems simultaneously, without neglecting to reduce divergences in competitiveness.

Nothing less will persuade investors to go near debt issues from the eurozone s fiscally challenged members.

Perhaps not by financiers and economists, but others who were watching how markets were developing often with dismay were more than worried.

Lenders to defaulting countries were also punished, as their instruments (mostly bonds) became worthless.

On one side is the danger that today s alarmism will prove self fulfilling that trade officials and investors will turn the doomsday scenario into reality by panicking.

It might have worked like a dream and until about a year and a half ago, many financiers, economists, and policymakers thought that it did.

Of course, the fact that micro financiers charge the very poor relatively high interest rates exacerbates the perception that they are gouging society s most vulnerable members.

That is what textbooks and financiers tell you, but we have now many reasons to be wary.

To be sure, a huge, sustained burst of growth could still cure all of Europe s debt problems as it would anyone s.

While conservatives vilified him, Keynes actually did more to save the capitalist system than all the pro market financiers put together.

The great nineteenth and early twentieth century financiers, men like J.P. Morgan, Henry Frick, and Andrew Mellon, spent a large part of their fortunes on art.

The financiers, however, will argue for caution let s see how the economy does, and if it needs more money, we can give it.

Because financiers and savers have limited confidence in the future, such regimes can t readily build and maintain strong foundations for financial development.

David dan Charles Koch, pemberi dana kampanye terbesar di Amerika Serikat, keduanya hanyalah pemilik perusahaan minyak yang melakukannya untuk melipatgandakan kekayaan mereka yang luar biasa besar, meskipun menimbulkan kerugian bagi manusia.

Indeed, Russia is running fiscal and current account surpluses of 2 and 17 of GDP respectively. Despite being up to its neck in debt its obligations equal 75 of GDP Russia appears able to pay its creditors.

Shorting bonds by purchasing a CDS contract carries limited risk but almost unlimited profit potential, whereas selling a CDS contract offers limited profits but practically unlimited risks. This encourages short side speculation, which places downward pressure on the underlying bonds.

Despite being up to its neck in debt its obligations equal 75 of GDP Russia appears able to pay its creditors.

This encourages short side speculation, which places downward pressure on the underlying bonds.

So the Asians are coming as markets, as states, as consumers, as financiers (Asian central banks, for example, are responsible for financing America s whopping budget deficits), as scientists and engineers, and as corporations.

One extreme is the simplistic Keynesian remedy that assumes that government deficits don t matter when the economy is in deep recession indeed, the bigger the better. At the opposite extreme are the debt ceiling absolutists who want governments to start balancing their budgets tomorrow (if not yesterday).

Of course, the IOUs now lodged with the ECB may themselves have to be written down, threatening to undermine the ECB s own balance sheet.

As a consequence, they are crowding into bonds and debt instruments that they view, rightly or wrongly, as safe vehicles.

Major eurozone economies like Spain and Italy have huge debt problems of their own, especially given anemic growth and a manifest lack of competitiveness.

At the opposite extreme are the debt ceiling absolutists who want governments to start balancing their budgets tomorrow (if not yesterday).

NEW YORK Sovereign debt crises such as the one in Greece can be resolved only through bold steps by both debtor and creditor.

If the European periphery countries had their own currencies, it is likely that debt problems would morph right back into elevated inflation.

Domestic resource mobilization, remittances from expatriate workers, private debt and equity flows, and philanthropic contributions exceed official international aid by a wide margin.