Greece Cuts Wages, Pensions yet the Solvency Concept is too hard to grasp

By John Galt
September 22, 2011 – 04:55 ET

The headline from Bloomberg speaks volumes as to the ignorance of the world’s political elites:

Greece Cuts Wages, Pensions to Ensure Aid Payment

Unfortunately for the ECB, Western economies, and those married to John Maynard Keynes behind, this does not create the one thing Greece needs:

Solvency.

A bankrupt nation is just that and all of the wage cuts, benefit cuts for retirees under age 55 (ugh!), and promises of future economic growth within a nation which has a totally invalidated economic model will do nothing to cure the problem. The banksters have blown a fifty year bubble and the consequences of this have arrived. To paraphrase a quote from one of my favorite movie’s, Full Metal Jacket, they have created a poop sandwich and we’re all going to have to take a bite out of it.

Meanwhile the Greek 1 Year Bond equivalent per Bloomberg has calmed all the way down to a yield of 133%:

Needless to say, economic collapse in PIIGSland is on the way….

 

1 Comment on "Greece Cuts Wages, Pensions yet the Solvency Concept is too hard to grasp"

  1. Desertrat | 25/09/2011 at 21:15 |

    Ah, but “Didn’t we have us a ball? Didn’t we have us a ball? We came for first set and we stayed til last call; didn’t we have us a ball!”

    Trouble with Saturday night sprees is that they’re always followed by Sunday morning.

    Coming down is a bitch, sang Kristofferson.

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