On Belgium’s 140% Debt / GDP!
- The world is over burdened by an insurmountable debt mountain. The resolution of this problem will not be peaceful. It will be a meltdown. All paper assets will be affected negatively. Fiat currencies will be revealed for what they are: a CONfidence Job! Got physical gold yet?
On Belgium’s 140% Debt/GDP!
by Tyler Durden,
From Mark Grant, Author of “Out of the Box and onto Wall Street”
I have now concluded a much more accurate debt to GDP ratio for Spain and Italy that may be found in my prior commentaries. It is a slog, I can assure you, to find accurate information on each country past the size of their Gross Domestic Product. Eurostat does not count sovereign guarantees as part of any ratio and hence the accurate debt ratio, as I have demonstrated, is miles apart from the headline number we are given. It seems that in Europe a contingent liability is just a footnote to any financial statement and not anything of real meaning. Nowhere is the fantasy any larger than in Belgium and nowhere is there a larger detour from the truth.
Belgian GDP (U.S. Dept. of State) $467 billion
Admitted Public Debt $466 billion
Sovereign Guaranteed Debt (Eurostat) $113 billion
Bank Guaranteed Debt (Dexia, Fortis et al) $181 billion
Bank Loans $ 11 billion
Debt to GDP Ratio 140%
So we find, in the case of Belgium, a 40% miss from what is bandied about by the Europeans. Then it should be noted that in the case of Dexia, Fortis et al that the guarantee of contingent liabilities may not be the amount of money that is required and so the situation could still worsen from here. Belgium, in fact, is not much better off than Greece and, as their economy sinks into recession, the numbers and ratios are bound to get worse. Not only do I expect further downgrades for this country by the ratings agencies but I also expect a further rise in yields as the more sophisticated investors grasp the reality of Belgium’s issues and respond accordingly.
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