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News Link • Economy - International

Greece, Spain, Italy: Time's Up


The IMF forecast that Greek public debt will rise to 171 percent of gross domestic product (GDP) this year and 182 percent in 2013.

The IMF has also warned the Eurogroup of finance ministers who met in Luxembourg on Monday that Greece's debt would need restructuring and that it will be almost impossible to reduce the country's debt levels to a target of 120 per cent of economic output by 2020.

But the private holders were already restructured.

The remaining debt is held by the ECB and other institutions -- including national banks.

"Restructuring" those bonds will trash their balance sheets, which in turn will force the ECB to either monetize the paper (in which case the cost of living will rise and so will unemployment and deficits) or the ECB will blow up.

The ECB and other officials put this noose around their own necks, and now the hangman is standing on the platform with his hand on the lever.

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