Scary: Latvia can't raise debt, 1/3 of school teachers fired
You think the California budget cuts are harsh? From Ambrose Evans-Pritchard yesterday:
Latvia has become the first EU country to face a sovereign debt crisis after failing to sell a single bill at a treasury auction worth $100m (£61m), prompting fears of a fresh storm in Eastern Europe as capital flight tests currency pegs.If the US is finding it harder and more expensive to finance it's debt (just have a look at treasury yield curves this year), then what hope does a tiny, massively overleveraged country like Latvia have?
The finance ministry expects GDP to contract 18pc this year. House prices have fallen 50pc , the world’s most spectacular crash. A third of the country’s teachers are being fired and public salaries will be slashed by up to 35pc to meet bail-out terms imposed by the IMF and the European Commission. The policy risks a deflation spiral that defeats its own purpose.Wow...stunning what is happening to these small countries. Will it stop with the Latvia's, Iceland's, and Ireland's, or are larger countries also at risk?