Your Money this Week: Greece Gets Debt Help, Gold Prices Soar and Borders Goes Under

July 22nd, 2011 Brock Hailes Leave a comment Go to comments

Debt is the number one concern on the minds of everyone these days, both in the U.S. and abroad. In fact, national debt has been threatening to turn economies upside downluckily, it seems like Greece has averted their own debt crisis. Now lets see if our own country can do the same. If not, at least we can get books and music at a steep discount as the bankrupt national chain liquidates its stores.

EU Unveils Greek Debt Plan

The U.S. isnt the only country struggling with debt. The Greek debt crisis has been an issue for months, but a solution has finally been presented by European leaders. There are a number of changes that will be made to Greeces outstanding loans, including:

Lower the interest rates
Extend the repayment period on existing loans from the EU and International Monetary Fund
Reduce interest rates and extend repayment period on loans made by the European Financial Stability Fund in the future

The total aid package will total about 109 billion euros, while a number of private investors and financial institutions will also voluntarily contribute about 37 billion euros. Though it is a costly bailout, markets abroad and here at home went up noticeably now that default has been avoided in Greece. Now, if only the U.S. would do the same.

Gold Prices Increase as U.S. Nears Default

Today marks the deadline President Obama gave lawmakers to come up with a debt deal, or face default on August 2. Obviously, a deal has not been reached yet, which has only heightened investors fears that the U.S. economy may soon plunge into another financial crisis.

Gold has always been a refuge for wary investors when the health of the economy appears to be on its way down, so the current debt ceiling problem has sent the price of gold for August delivery to just over $1,600 per troy ounce today. Silver also gained value, rising above $40 per troy ounce.

Borders Bookstore Goes Bankrupt, Out of Business

Borders has announced it will be going out of business and liquidating it books and store fixtures, including furnishings and shelving, at stores nationwide. That equates to $700 million in inventory.

Borders blames the emergence of e-readers and an overall bad economy for its demise. Now that it will no longer exist, Barnes & Noble is the only national book chain left. Only time will tell if they survive the evolving book industry or follow in Borders footsteps.

What This All Means for You

Debt isnt just a consumer issue, entire nations can be affected by poor debt management. That means having a well-diversified investment portfolio, as well as a substantial savings safety net, is extremely important when debt crises threaten the stability of the economy. Especially since Obama has warned government benefits may not be paid out next month if the U.S. defaults, anyone who relies on them for income needs to have a back-up plan.

Further, while nationwide liquidation sales can be good news for anyone trying to save money, it also signals a red flag for the industry. If you dont pay attention to shifts in the economy, you could be left behind.

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