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Euroarea 2011 Debt/GDP Rises To Record, Set To Rise Further

Tyler Durden's picture


Hardly news to anyone who has not been living in a Santorini limestone cave over the past 4 years, but as was reported overnight, official Euroarea debt to GDP (excluding trillions in contingent liabilities of course: these will only be considered in due course) rose in 2011 to a record 87.3% from 85.4% in 2010. What was also announced without much fanfare, yet oddly was not swept under the Friday 5 pm rug, was the news that Greek 2011 government debt/GDP was revised to 170.6% from 165.3%. That the number deteriorated in retrospect is no surprise: the issue is that increasingly all official economic recordkeeping in Europe has fallen under a Heisenberg blur: the second you spot a number it is no longer what it was a picosecond ago. The one agency that still does believe European numbers, a key reason why it has become a laughing stock even among "serious people", is the IMF. As the chart below shows, even the IMF expects 2012 debt/GDP to keep rising into 2013, at which point it will gradually decline. Hint - it won't, as the sovereign is now the only source of incremental leverage in a world that has run out of money good assets, and in which the consumers and corporations are receiving ever less real cashflows that can be levered on an unsecured basis (thanks to the Fed's own real money dilutive policies).

Visually, courtesy of Bloomberg Brief:

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Mon, 10/22/2012 - 08:48 | 2909162 GetZeeGold
GetZeeGold's picture



Do you believe in miracles?

Mon, 10/22/2012 - 08:52 | 2909172 economics9698
Mon, 10/22/2012 - 10:20 | 2909373 Zero Govt
Zero Govt's picture

the debt (bill) is rising for politicians to fix the problems caused by debt-spending politicians being in bed with bonus-seeking bwankers

not sure this is a "miracle", more like very predictable because they've been repeating this error for 3,000 years

the History books in State schools don't teach this plain simple fact, wonder why? 

Mon, 10/22/2012 - 08:49 | 2909167 Muppet of the U...
Muppet of the Universe's picture

Silly IMF, tricks are for kids.

Mon, 10/22/2012 - 08:51 | 2909171 EscapeKey
EscapeKey's picture

A trick is something a whore does for money... or cocaine.

Mon, 10/22/2012 - 09:00 | 2909190 economics9698
Mon, 10/22/2012 - 09:21 | 2909229 Stock Tips Inve...
Stock Tips Investment's picture

The problem is the same. A GDP grows not (enough) and a deficit falls not (enough). Consequently, these countries need more funding, increasing its debt. Projections indicate that in 2014 this could begin to change. Seeing is believing.

Mon, 10/22/2012 - 08:50 | 2909168 crito
crito's picture

I beleive, debt can flyyyyyyyyy

Mon, 10/22/2012 - 08:52 | 2909175 EscapeKey
EscapeKey's picture

The debt/GDP ratio gently drifted across the pond exactly the way a bowling ball wouldn't.

Mon, 10/22/2012 - 08:49 | 2909169 youngman
youngman's picture

Let me guess....the EURO is getting stonger today

Mon, 10/22/2012 - 08:51 | 2909170 EscapeKey
EscapeKey's picture

Having a debt/GDP of over 100% is so hot these days.

Mon, 10/22/2012 - 08:54 | 2909178 economics9698
economics9698's picture

The pigs feeding before the slaughter.

Mon, 10/22/2012 - 10:33 | 2909389 Zero Govt
Zero Govt's picture

Yep, they're buying time to make good the ingratiated cretins losses

All Govt policy can easily be traced to which bunch of losers/parasites need subsidy, bailouts or legal protection rackets to prop them up

then you wheel out Paul Krugman to dribble an academic smokescreen over the corruption

Mon, 10/22/2012 - 08:52 | 2909176 Dr. Engali
Dr. Engali's picture

Just in case anybody out there still believes the election outcome isn't already decided check out this story...especially the graffic.

CBS News affiliate calls 2012 presidential race for Barack Obama weeks ahead of election

Read more: http://dailycaller.com/2012/10/21/cbs-news-affiliate-calls-2012-presidential-race-for-barack-obama-weeks-ahead-of-election/#ixzz2A22Xddv8



Mon, 10/22/2012 - 10:10 | 2909344 kridkrid
kridkrid's picture

Of course it is already decided. Either Romney or Obama will win. The side that looses will claim that the election was stolen and the distraction/charade of presidential elections will continue.

Mon, 10/22/2012 - 08:58 | 2909186 JPM Hater001
JPM Hater001's picture

This is reminicient of watching the Titanic depart.

Mon, 10/22/2012 - 09:01 | 2909191 yogibear
yogibear's picture

In the Keynesian Institute of Central can kicking more debt is good. So pile it on ever higher and print it away.

Many people who have to eat already notice the increases in food prices and taxes to pay for public union pay increases and pension payouts.

Mon, 10/22/2012 - 09:04 | 2909199 Aegelis
Aegelis's picture

"We forecast it will go down in the future.  Wink wink, nudge nudge, say no more."

Mon, 10/22/2012 - 09:10 | 2909209 youngman
youngman's picture

Are the revenues going up..you know..tax revenues...no they are not...are the debts getting bigger...yes they are...so as an "investor" what do you do...Investor..that is a funny word now...should be changed to survivalist...if you want to survive the next 5 years what should you do...do you buy Apple on the dip????  CAT????  go to cash and put it in a CD...lol?????  Buy Treasuries????  Or buy Gold and Silver.....the non printibale relic....

Mon, 10/22/2012 - 09:15 | 2909213 falak pema
falak pema's picture

when growth is zilch, debt has to rise; its math! As the interest accumulates; all other things being equal. 

Mon, 10/22/2012 - 09:17 | 2909222 ak_khanna
ak_khanna's picture

Countries around the world are taking on more debt without any fruitful attempts to curb their expenditures. This has resulted in a much more fragile and artificially held up financial system which is on a much shaky ground than it was in 2008. In 2008 companies failed due to excessive leverage and debt and now countries are likely to default because they took on the same bad debt on themselves so that the bankers can continue to gamble in the commodity, stock, bond and currency markets with other people's money and enjoy ever increasing bonuses and pay packages for themselves.

A single currency for an economy as strong as Germany on one hand and relatively weaker economies like Greece or Ireland on the other is not sustainable in the long run. The idea of the stronger countries in the Euro zone to keep on bailing out the weaker ones repeatedly will be a difficult one to sell to the citizens of the economically stronger countries. Their is no practical way to save the Euro, the only thing that the politicians can do is to lavishly spend tax payers money towards bailouts which creates a much bigger crises a few months down the line but does not solve anything.


Mon, 10/22/2012 - 10:16 | 2909365 kridkrid
kridkrid's picture

Taking on more debt and curbing expenditures is mostly a contradiction. They take on more debt in order to EXPAND expenditures, namely the interest on the debt created. Here is the game... Expand debt to pay interest on debt... Period. Everything else is noise meant to distract.

Mon, 10/22/2012 - 09:27 | 2909244 dolph9
dolph9's picture

Have you all noticed that things are always projected to get better in the future?  Which of course means that in 2014, they'll be projecting that the debt will be lower in 2017!  And in 2017, that it will be lower in 2020.

No accountability, no responsibility, it's somebody else's problem, no consequences, is the modern way.  It's just so depressing, isn't it.  How did it come to this?  What are the psychological factors that can make people believe these things?

Mon, 10/22/2012 - 09:32 | 2909247 Vegetius
Vegetius's picture

The news gets better and better, as the Governments tell lies to each other the problem grows. If we look at the poster boy for the EU in regards the PIIGS, Ireland the land of "An Béal Bocht" (The poor mouth) which we are told is on the way to recovery. What a load of bull the country is about to implode and what are the Irish Government hoping for, lets see -

 08.59 Irish papers were reporting that Merkel had told Ireland's Taoiseach Enda Kenny that the country's bank debt is a "special case".

12.26 Germany appears to be refuting everything today.

German news agency DPA is reporting that German government spokesperson Steffen Seibert has said Ireland won't enjoy exceptions to the European Stability Mechanism procedure, but said special circumstances are taken into account.

He added Ireland does not enjoy “special status” in the support of its banks.


Well in case someone does not understand, to quote the immortal words of Hudson-

"Well that's great, that's just fuckin' great, man. Now what the fuck are we supposed to do? We're in some real pretty shit now man..."

Same goes for the rest of the Hobo's included in that is France

Mon, 10/22/2012 - 10:04 | 2909317 Vince Clortho
Vince Clortho's picture

If more debt is better, why are we pissing around with adding debt in relatively small steady increments ?

Hit the freaking afterburners and take that parabolic debt curve straight up!

Mon, 10/22/2012 - 10:43 | 2909409 Freewheelin Franklin
Freewheelin Franklin's picture

Don't worry, they have a plan. Yes, it's official. The US and EU are Banana Republics.





You knew it was going to come to this, right?

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