Thursday, December 01, 2011

"The Issue is One of Solvency, Not Liquidity"

Mr. King said provisions of liquidity — such as the concerted central bank action taken by the BOE [Bank of England], U.S. Federal Reserve and other major peers Wednesday — won't solve the euro zone's problems in the long term because the issue is one of solvency, not liquidity.

-from today's WSJ. Mr. King is Governor of the Bank of England.

The market brought down the Soviet Empire. The euro zone is a bump in the road next to that. The US is a bit more than a bump, but it has no special exemption either. The British, according to the article, are getting ready for the zone's fall. I trust we are as well, even as we, along with the BOE "and other peers," are throwing more money at the crisis. I suppose those actions are window dressing, so that when the zone finally goes down, we can say that we tried.

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