Greece Once Again Boiling Over

Posted 2012-11-21 09:35
by Karl Denninger
in International

Eventually you run out of other people's money to pledge, and are forced to either pledge your own (and face that you'll never see it again) or tell the person with their hand out to stuff it.

That day may be at hand for Greece:

With creditors led by Germany refusing to put up fresh money or offer debt relief, the finance chiefs were unable to scrape together enough funds from other sources to help alleviate Greece’s debt burden, set to hit 190 percent of gross domestic product in 2014.

Yep. And now the IMF has a problem because its bylaws prohibit lending to nations with "unsustainable" debts, which it defines as 120% of GDP.

Then we must define "debt"; the US violates this in spades if you use the discounted cash flow requirement for entitlements as part of "debt."

Isn't it convenient that despite the claims of many, and beliefs of virtually everyone, the law does not define those forward promises in Medicare and Social Security as debts, and that is a settled matter within the courts as well?

Use your thinking caps folks; while at the present time the market is having a few shots of eggnog and (Wild) Turkey, the hangover is just around the corner.

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