http://www.lateralthinking.biz/euro-crisis.html . Fri, 30 Jul 2010 13:15:17 -0700 http://wordpress.org/?v=2.8 hourly 1 http://www.lateralthinking.biz/euro-crisis.html/comment-page-1#comment-4132 Euro Crisis Mon, 15 Feb 2010 12:15:43 +0000 http://www.lateralthinking.biz/?p=100#comment-4132 <a href="http://israelfinancialexpert.blogspot.com/2010/02/euro-crisis-and-euro-collapse-germany.html" rel="nofollow">Euro Crisis</a> There is a big difference between a liquidity problem and a solvency problem. When a company or a country has enough assets to cover its liabilities but they have a problem raising the money they need to pay off the loan they have a liquidity problem. But when an entity has more debt than it can serve than it has a solvency problem and in that case more debt and loans will only dig it into a bigger hole. Greece has a liquidity problem since it has much more debt than the economy can serve. Germany and the Euro are perhaps will to give them loan in attractive interest rates but unless they are willing to consistently transfer money from the core of Europe to the weak countries those countries are doomed. If German politicians think they can convince there citizens to fund Greece's recklessness throw transfer payments all I have to say to them is GOOD LUCK! Euro Crisis
There is a big difference between a liquidity problem and a solvency problem. When a company or a country has enough assets to cover its liabilities but they have a problem raising the money they need to pay off the loan they have a liquidity problem. But when an entity has more debt than it can serve than it has a solvency problem and in that case more debt and loans will only dig it into a bigger hole. Greece has a liquidity problem since it has much more debt than the economy can serve. Germany and the Euro are perhaps will to give them loan in attractive interest rates but unless they are willing to consistently transfer money from the core of Europe to the weak countries those countries are doomed.
If German politicians think they can convince there citizens to fund Greece’s recklessness throw transfer payments all I have to say to them is GOOD LUCK!

]]>