And now for the really bad news on the European economy.

Nils Pratley from the Gaurdian posted this in the Guardian today. The latest              “bad” news all surrounds Italy and their 2 trillion euro debt. This chart makes Italy look good, and its easy to see why Merkosy and Obama want this sorted. I think even Julia Gillard put her 2 bobs worth in.

Italy’s finances look shaky but some of its neighbours in the eurozone – and the UK – might be even worse off

Italy’s finances look shaky – a debt-to-GDP ratio of 118%, a heavy proportion of debt to be rolled over and growth almost at a standstill. On the other hand, the level of household debt is much lower that of most other large European countries.

Nor does the government have the same size of unfunded pension and other liabilities as some other European countries.

This chart and caption, published a couple of weeks ago by Société Générale analysts, is alarming. For those interested in graphs, there are more on the following page which give some further indication of the dire state of European and global indebtedness. As an example, Australians are constantly re -assured that the banks have little or no exposure to Greek debt, but as the graphs show, they may have a lot of exposure to French debt, which in turn has a lot of exposure to Greek debt, and so the wheel turns.

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