Recommended reading: The UK is hooked on debt + Is The ECB Bond-Buying Program Illegal?

A selection of interesting articles from around the web…

UK hooked on debt, PIMCO boss warns

In his latest monthly investment outlook, Bill Gross, PIMCO’s founder and chief investment officer, compared the UK to a drug addict who is hooked on debt and struggling to kick the habit.

From the article:

“In his latest outlook, Mr Gross picked up the theme of government debt and deficits again, with a particular eye on “the possibility of a fiscal train wreck over the next decade” in the US. He said the US, with its high level of national debt and government borrowing, belonged in the “ring of fire” with Greece, Spain, France, Japan and the UK, where “only gold and real assets would thrive” unless spending is cut and taxes rise.”

Read the article in full…

Concerns Mount that ECB Bond-Buying Program Is Illegal

The markets have celebrated Mario Draghi’s announcement that the European Central Bank will embark on unlimited purchases of sovereign bonds from crisis stricken countries. But are such purchases really legal? Draghi’s own justification for the program leaves plenty of room for doubt.

From the article:

“Bond purchases are a treatment with side effects. Falling interest rates on sovereign bonds reduce the cost of government borrowing. The question is whether these side effects are the real motivation behind the ECB decisions, while the arguments surrounding monetary policy are merely a pretext. In that case, the purchases would be little more than government financing in disguise.”

Read the article in full…

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