There are very few headlines today. The U.S. Trade deficit rose 7.4
percent in February, which oddly suggests economic strengthening as
consumers and businesses purchase more goods. By now everyone in
America should realize that we are not an export drive country, at
least not for goods. Our economy is based more on services and
technology development.
Also, Greece managed to raise $2 billion at 4.55% from investors. This
rate is lower then the proposed EU bailout rate of 5%, but it is still
very high. Greece needs to raise at least $15.6 billion next month,
which may be possible given the recent interest in Greek bonds.
However, Greece still needs to lower the interest rates on it's bonds
(through additional government spending cuts) or it won't be able to
make interest payments over the long run. Greece is a test case for
potential so erign default (basically a government that is unable to
pay for it's loan interest). A Greek default could have widespread
effects on the global economy. If it fails it would raise fears in
other struggling countries, which could result in a domino effect that
causes more countries to default. This situation is akin to your
neighbor defaulting on his mortgage, which causes a foreclosure and
lowers your property value while simultaneously causig banks to lend
less money. The result is less flexibility and growth onthe econmy.
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