In his new book
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