"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 13 hours The FANG Stock Investors Should Avoid
  • 2 days Is This The Death Of The iPhone X?
  • 2 days Is London Still The Financial Capital Of The World?
  • 2 days Is Gold Staging A Comeback?
  • 2 days The $200 Million ‘Golden Parachute’ For Rupert Murdoch
  • 2 days Bitcoin’s Breakout Is Not As Bullish As it Seems
  • 2 days Farmers On Edge As Trade War Hits U.S. Grain Shipments
  • 2 days Is Silver Poised For A Massive Break Out?
  • 3 days Meet The Hedge Fund Billionaires Club
  • 3 days The Next Housing Crisis Could Be Right Around The Corner
  • 3 days Cartel's, Pirates And Corruption Cost Mexico $1.6 Billion Per Year
  • 3 days Africa’s Fastest Growing Economy
  • 3 days The Blockchain Boom Hits The Utilities Sector
  • 3 days Why Smart Money Is Selling Off Right Before The Bell
  • 3 days Tech Giants Rally Ahead Of Earnings Reports
  • 4 days Global Debt Hits 225% Of GDP
  • 4 days The World’s First Trillionaire Will Be A Space Miner
  • 4 days How Student Debt Could Cause The Next Real Estate Crisis
  • 4 days This $550 Billion Industry Is Betting On Bitcoin
  • 4 days One Commodity Set To Soar On Russian Sanctions
Is This The Death Of The iPhone X?

Is This The Death Of The iPhone X?

Apple’s stock has slipped more…

Investors Bullish As Earnings Season Kicks Off

Investors Bullish As Earnings Season Kicks Off

The first round of earnings…

Le Monde Headline 'No, France is Not Bankrupt'

This amusing headline story by Bruno Moschetto, a professor of economics at the University of Paris in the French newspaper Le Monde has me laughing out loud this morning: "No, France is Not Bankrupt"

No, France is not bankrupt ... The claim is untrue economically and financially. France is not and will not bankrupt because it would then be in a state of insolvency.

A state cannot be bankrupt, in its own currency to foreigners and residents since the latter would be invited to meet its debt by an immediate increase in taxation.

In abstract, the state is its citizens, and the citizens are the guarantors of obligations of the State.

In the final analysis, "the state is us." To be in a state of suspension of payments, a state would have to be indebted in a foreign currency, unable to deal with foreign currency liabilities in that currency.

Economic Illiteracy

Economic illiteracy is nearly everywhere you look and that article is a prime example. Bruno Moschetto suggests France is not bankrupt because the state is not indebted in a foreign currency.

Actually, France does have its debts in a foreign currency, euros. Note that France cannot print euros at will to pay its debts (the very essence of a foreign currency).

Moschetto says citizens would be "invited" to help France meet its obligations. Invited? The same way citizens of Cyprus were "invited" to bail out Cypriot banks?

The ability to tax citizens to death to bail out the state is hardly a reasonable measure of non-bankruptcy. I suggest having to confiscate the wealth and savings of citizens to bail out the state is proof of bankruptcy. Greece is a nice example.

Hollande has tried 75% taxation. He has tried government takeover or threats of takeover of various auto manufacturers. Hollande also seeks financial transaction taxes.

Many French citizens have had enough of Hollande and his socialist policies and have fled to Belgium, the UK, and Switzerland.

The French economy is imploding as I type.

Thought of the Day

France is Bankrupt, and it is the policies of socialist fools that put France in that state.

The thought of the day comes from reader "PTCruiser" who chimed in with "Aujourd'hui, la France. Demain, le monde entier."... Today France, tomorrow, the world!

Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com

Note: Some ATT users (not a fault of ATT) received timeouts on my "Wine Country Conference" link (see below). If you were one of them, please try again. The problem has been fixed.


Wine Country Conference

I am hosting an economic conference on April 5 in Sonoma, California. Proceeds go to the Les Turner ALS Foundation (Lou Gehrig's Disease).

Please see My Wife Joanne Has Passed Away; Stop and Smell the Lilacs for my association with the disease.

To learn about the economic conference with world-class speakers including John Hussman, Michael Pettis, Jim Chanos, John Mauldin, Mike "Mish" Shedlock, Chris Martenson with guest moderator Lauren Lyster and other Special Guests, please visit Wine Country Conference April 5, 2013


Back to homepage

Leave a comment

Leave a comment