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For years, he's worried about excessive borrowing and debt. He sees an inevitable day of reckoning coming. He calls himself a realist. In recent years, policies employed haven't worked.
"Everything is fine as long as the cost of ten-year debt doesn't exceed the nominal growth rate." When it does, servicing it it "becomes an unsustainable burden."
Spain, Italy and Greece passed the point of no return. Other countries risk following. America isn't quite there yet. It's heading in the wrong direction.
Piling on debt "can't go on forever." Germany will stop backing Eurozone monetary expansion. Th Fed will "get uneasy as well."
At some point, inflation "will become a factor." Massive money printing's at fault.
Before things fall apart, "authorities will pull out every trick in the book to prevent catastrophe." At best they'll buy time. Problems aren't being solved. Greater ones are certain.
Spain and Greece will default, he predicts. "In the short term, interest rates should rise because debt is growing faster than GDP." The same dynamic affects America.
A banking crisis will follow one or more defaults. "What we are experiencing is an accumulation of bad decisions."
Banking worldwide got through the 2008 crisis, but "hasn't done so well since then." Looking ahead, things look grim. Wien said he left the smartest man's office "somewhat dazed." He hopes he's wrong, but his track record suggests otherwise.
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