Sense on Cents

With social unrest increasing in Greece, anxieties skyrocketing across the EU, and the Euro making new 12 month lows, the question begs as to whether this crisis within the EU can be contained. Is the EU, with the support of the IMF, willing to collectively underwrite the fiscal disaster currently focused within Greece? The German citizenry is showing very little appetite to subsidize this Greek tragedy.

While the EU’s political fortitude is a critical question, ultimately the reality of the mountainous debt levels must be faced. Global government stimulus has been able to mask, if not outright disguise, these debts for a period, but the debts themselves are not going away. How will the EU address this debt?

1. Devalue. That’s a given. It’s only a question of how and when.
2. Restructure. Look for more on this.
3. Default. Do not discount this reality. (more…)