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There is no reason why funds that had previously flown into government debt instead had to flow into private corporate debt. If the owners of those funds had been prudent they would not have lent that much, nor would those in the real estate business borrowed as much as they did if they had been prudent.

There is no simple mechanical explanation here, which says that funds flowing out of Spanish government debt has to create a credit bubble somewhere else in the Spanish economy. There were, and are, other asset classes available for investors.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Dec 14th, 2011 at 09:19:59 AM EST
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