Last Updated: Mon Aug 01, 2011 13:36 pm (KSA) 10:36 am (GMT)

From Japan Times: Debt surrealists defy reality

"Ceci n'est pas une pipe" ("This is not a pipe") under his impeccable portrait of a smoking pipe, keeps flashing off and on in my mind as I look at what is going on in the increasingly surreal world of global public finance. (File Photo)
"Ceci n'est pas une pipe" ("This is not a pipe") under his impeccable portrait of a smoking pipe, keeps flashing off and on in my mind as I look at what is going on in the increasingly surreal world of global public finance. (File Photo)

Images of "The Treachery of Images," the painting by the Belgian artist Rene Magritte, who wrote "Ceci n'est pas une pipe" ("This is not a pipe") under his impeccable portrait of a smoking pipe, keeps flashing off and on in my mind as I look at what is going on in the increasingly surreal world of global public finance.

Government after government is stumbling head on toward bankruptcy. The latest bailout package put together by the Europeans to support heavily indebted Greece (as well as Ireland and Portugal) involves a lowering of interest rates charged on the bailout loans, longer maturities on those same loans and a grace period of 10 years thrown in for good measure. Private-sector creditors have been asked to bare a share of the rescue burden by taking part in various bond-exchange schemes and existing loan rollovers. Estimates have it that the private sector stands to lose some 21 percent or so on the face value of their bond holdings.

For more on this please see: http://search.japantimes.co.jp/cgi-bin/nb20110801jp.html

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