Federal Spending Grew Nearly 12 Times Faster than Median Income...

PERCENT CHANGE IN INFLATION-ADJUSTED DOLLARS (2012)

What if Families Handled Finances Like the Federal Government Does?

INFLATION-ADJUSTED DOLLARS (2012)

Sources: Congressional Budget Office and U.S. Census Bureau.

In 2010, median family income was $51,360. If a typical family followed the federal government's lead, it would spend $73,319 and put 30 cents of every dollar spent on a credit card. 

This family would have racked up $325,781 in credit card debt—like a mortgage, only without the house. 

What credit card company would continue lending money to this family?

It's The Spending, Not The Taxation...

Cartoon of The Day: Who Are Les Miserables? Our Children and Grandchildren...

Interest Rates Go Negative in Switzerland, Denmark & Germany...

High Anxiety: Interest Rates In Spain and Italy Rise to the Highest Levels of the Year

Quote of The Day: Three Nagging Problems That Won't Go Away...

“Three things continue to keep me up at night: 
housing, unemployment, and the euro zone debt crisis,”  
says Scott Wren of Wells Fargo Advisors. 

“None of these problems are going away anytime soon.” 

Euro-Zone Debt Exploded in 2011...

22% of U.S. Homeowners Underwater...

Why The Welfare State Is Unsustainable...

Global Debt Levels Threaten Economic Growth...

Not Even Germany Has Complied With European Union Debt Limits!

Hedge Fund Bridgewater Associates Takes Grim 2012 View

Hedge fund Bridgewater Associates, one of the largest if not the largest pure hedge fund, put up a +25% positive return last year.

Bridgewater has a grim 2012 outlook for the global economy, citing slow growth, a debt overhang, solvency issues and high unemployment for the world’s developed economies.

“What you have is a picture of broken economic systems that are operating on life support,” said Robert Prince, co-chief investment officer.

Jim Rogers: Another Financial Crisis Likely...

The world is definitely going to face another financial crisis stemming from problems in Europe, Jim Rogers said recently.

"We're certainly going to have more crises coming out of Europe and America; the world is in trouble. The world has been spending staggering amounts of money that it doesn't have for a few decades now, and it's all coming home to roost," Rogers, CEO and chairman Rogers Holdings told CNBC.

He added that the crisis would be much worse than the one markets saw in 2008 because the debt is much higher now.

"Last time, America quadrupled its debt. The system is much more extended now, and America cannot quadruple its debt again. Greece cannot double its debt again. The next time around is going to be much worse," Rogers said.

"In 2002 it was bad, in 2008 it was worse and 2012 or 2013 is going to be worse still – be careful," he added.

You Think It's Bad in The USA? Be Thankful That You Don't Live in Spain...

Chart of The Day: France vs Italy Government Bond Spreads Widen...

Concerns over the ongoing European debt crisis continue to weigh on the markets.

For some perspective, today's chart compares the 10-year government bond yield of the 2nd (France) and 3rd largest (Italy) euro zone economies to that of the largest (Germany).

As today's chart illustrates, the crisis for these two relatively large economies really began to escalate in Q2 2011 and again in Q4 2011. Note how the French 10-year government bond spread really began to increase over the past couple months as the severity of the Italian situation began to approach extreme levels.

This is due in large part to the fact that French banks hold a great deal of Italian sovereign debt – and Italy has a great deal of debt outstanding (€1.9 trillion which equates to $2.6 trillion).

While there are clearly no good solutions to the crisis, one of the least bad solutions has the European Central Bank printing out significant amounts of euros in order to buy a significant amount of European debt.

Chart & Commentary Courtesy of Chart of The Day

Quote of The Day: Euro-Zone Debt Deal Skepticism...

“The weaknesses of Europe’s common currency area, ranging from its design to a persisting dearth of bank funding and anemic economic growth, weren’t properly addressed in this accord. It avoids an imminent catastrophe and means Greece should be able to meet its obligations in the near future, and it may restore a bit of confidence. But it won’t prevent the debt crisis overall from rambling on and indeed escalating.” 


- Harvard University economist Kenneth Rogoff and Jonathan Loynes of Capital Economics

Quote of The Day: Italy and The Euro-Zone Debt Crisis...

Even after the Euro-Zone debt deal, some analysts are not sounding the "all clear,"...

"With a 120% debt-to-GDP ratio and 10-year Italian bonds yielding roughly 7%, they can't do that forever or the borrowing costs will get to an unsustainable level," said Eric Stein, portfolio manager at the Eaton Vance Global Macro Absolute Return Fund. "As your rates go up, it means you're paying more and more to service your debt, and your whole debt dynamics become harder and harder and harder."

Why The Euro-Zone Debt Deal Could Easily Fail...

The Euro-Zone Debt Deal: The Italian Bond Market Remains Skeptical...

Despite the Euro-Zone debt deal, interest rates on Italy's 10-year bond rose to a new high, a sign that bond investors are not convinced that the European sovereign debt crisis has been resolved.