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Wednesday, July 20, 2011

Bill Gross: Developed world cannot thrive at ‘stall speed’

Bill Gross: Developed world cannot thrive at ‘stall speed’ Debt is the disease – growth is the cure, but as the latter falters, economies and their associated financial markets hang in the balance.

Academics Kenneth Rogoff and Carmen Reinhart have outlined what happens when countries assume liabilities that future growth cannot comfortably pay. Ninety per cent debt to gross domestic product is their Maginot line beyond which leverage dynamics begin to work in reverse, slowing growth instead of enabling it, promoting too much risk as opposed to potential gains.
http://link.ft.com/r/DHGUVV/VLLJMX/40OA1R/6V6LPF/AM7R4E/7V/h?a1=2011&a2=7&a3=20

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