“We will defend the euro, whatever it takes,” European Commission President Jose Barroso told reporters early today after the leaders met in Brussels.
The solution is simple. I offer up the following three point plan:
You have banks that are reportedly still carrying Iceland paper at "par", or 100 cents on the dollar, even though it defaulted.
You have banks that make ours look like Girl Scouts in terms of balance sheet opacity and truthfulness.
You have sovereigns that lied about their fiscal condition, and yet both they and the banks that did it along with them have seen little or no real penalty, and in fact you have tried to bail one of them out (Greece.)
Confidence comes from truth.
Confidence is destroyed by lies.
You, like our so-called "officials", have been lying like crazy for years.
The market is tired of it and called your bluff.
Now you get to choose - either you stop the lying, or market participants will continue to seek ways to force the lying to stop.
Ultimately the market will win if you do not stop lying.
It always does.
And to those who think that Bernanke, Geithner and Obama "got away with it" when they changed the accounting rules here in the US to make legal balance sheet fraud, I point you toward Greece, which thought it got away with it too - for several years.
The Greeks were wrong.
The ECB is wrong.
And our administration is also wrong.
There is only one solution that will work: The Truth.
Yes, it will hurt.
Yes, those who are insolvent will be recognized as insolvent, and go out of business.
Yes, economic pain will have to be taken.
The choice is between pain now and lots more soon, much sooner than you think with these "can-kicking" measures (remember, just one year ago you thought you stabilized the entire system and now we have nations at risk of failure, not just banks!)
The time has come to face reality gentlemen, before it forces recognition upon you - both here and abroad.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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