As the Western world’s leaders pledged to wean themselves from government stimulus programs this past weekend, President Barack Obama continued to call for expanded spending, claiming the economy cannot recover without it.

While there was an agreement among developed nations at the Group of 20 summit to halve their annual deficits within three years, Obama continued his expansionist call for spending. Yet his solutions for the economy are mired in spending money we don’t have — running up the nation’s credit card.

Get full story here.

By PETER A. MCKAY And KRISTINA PETERSON

The euro sank to its lowest level since October 2008, trading below $1.24 on Friday after new economic data showed core inflation in Spain turned negative in April, potentially making it harder for Spain to grow out of its debt woes.

Some analysts questioned whether austerity measures announced this week in Spain and Portugal could lead to civil strife, and Deutsche Bank Chief Executive Josef Ackermann told German television Thursday evening that there are some doubts about Greece’s ability to repay debt.

Get full story here.

By: Jeff Cox

The US exposure to the European debt bailout could be at least $50 billion, but the chance of taxpayers actually being on the hook for that appears remote… But one rule-of-thumb formula puts potential US exposure at $54 billion should the entire IMF loan fund be tapped.

The US also is exposed in currency swaps, where the Federal Reserve loans dollars to foreign banks in exchange for euros, which it then holds for a period that can range from overnight to three months. The currency is sent to central banks such as the European Central Bank as well as those in Japan, Switzerland and Canada, which in turn then direct the money to banks seeking the safety of the world’s primary reserve currency… The swaps, though, will make the Fed’s balance sheet grow to perhaps $2.5 trillion from its current $2.3 trillion, said Delta’s [Michael] Pento.

Get full story here.