Bob Lyddon – Unpacks the Euro Zone’s Finances

posted in: Economy, Europe 0

In his new book

The Shadow liabilities of EU member States, and the threat they pose to global financial stability.

Bob Lyddon has exposed the fault lines in the Eurozone’s financial framework. The standard measure of a countries solvency is its Debt to GDP ratio. What it owes / its turnover. Bob’s calculations show that in the order of €10 trillion, has been hidden from that calculation. The result of this is that the Credit Ratings Agencies give Germany a Debt to GDP ration of 69% and an AAA credit rating, which gives them a competitive advantage, because they can borrow cheap money on the Bond Markets.

Bob’s calculations show that the real Debt to GDP ratio is 130% which equates to a BBB+ credit rating.

However, if you include all the debts accumulated by the Eurozone states, which in the event of default, all track back to Germany, then the Debt / GDP ration is 353%, and the Eurozone is insolvent.

So how does this pan out?
Bob believes that given a money printing press and a Protective Rubber ring around the Eurozone, that they will survive, however they will become increasingly isolated from the outside world, and decline over time.

This is a well written and approachable book. Well worth a read for those with Inquiring Minds.

“The mark of a truly civilized man is confidence in the strength and security derived from the inquiring mind.”

                                                                                                                                                                                Felix Frankfurter 1882 – 1965

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