by Bill Holter, Miles Franklin:
The latest news out of Greece is truly a head scratcher. After agreeing with the Eurozone to a four month extension, the new plan to get from here to there can only be described as insane. In order to roll over current debt, Greece plans to borrow from public pensions!
They had a T-bill auction yesterday which was supported by funds from their public retirement fund, the method employed was comical. What Greece has decided to do is to pledge securities into the “repo” market to raise cash, this cash is then used to bid at auction …the new funds then are used to pay down past debt. Do you see how this works? As a graduate of the venerable University of MCV (University of My Cousin Vinny), I will try to explain it to you on street level terms.
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