Greece and the Eurozone: What could Possibly go Wrong? The Debt Cannot be Paid Back
By Bill Holter
Global Research
March 13, 2015
The latest news out of Greece is truly a head scratcher. After agreeing with the Eurozone to a four month extension, the new plan to get them from here to there can only be described as insane. In order to roll over current debt, Greece plans to “borrow” from public pensions!
They had a T-bill auction yesterday which was supported by funds from their public retirement fund, the method employed was comical. What Greece has decided to do is to pledge securities into the “repo” market to raise cash, this cash is then used to bid at auction …the new funds then are used to pay down past debt. Do you see how this works? As a graduate of the venerable University of MCV (University of My Cousin Vinny), I will try to explain it to you on street level terms.
While business is good, you live a little better than what your income would provide. You do this with confidence because each year has been at least as good if not better than the year before, so living a little large and adding debt to your balance sheet is not a great concern. Then you start living even further beyond your means. As time passes, the leader of the local gangs asks you if your gang would like to join? Of course you want be part of this well known and prestigious group of gangs but one of the preconditions is your business must be good. It doesn’t matter what your businesses are, what does matter is you can make money and not be a drag on the other gangs. Knowing that you already owe some out of town loan sharks what do you do?
First off you hire Golden Suks to help you with some creative accounting and enter into a few contracts with them so you have something to show when you open the books for your entry audit. “Sure we owe Clive down the street but Guido owes us and will pay Clive directly if his interest rate starts to rise, so it’s all good!”. This is where it gets interesting, you are accepted in as one of the gangs but business begins to slow and even your crew starts holding back on you. Normally you get a 25% ”tribute” on anything they steal or conjure up, but now, even on deals you find out about you aren’t getting what you used to. This is a problem, a BIG one!
The Rest…HERE
