Monday, September 26, 2011

The Kola Superdeep Borehole of Debt

I am not a Monday person, that is a fact.

The Kola Superdeep Borehole of Debt
A while back I wrote what kinds of things had to happen for a real bottom to form in a credible way. Number one was some kind of progress on Euro debt woes. Today may have been the paper over promise that markets want. Cullen Roche of Pragmatic Capitalism has a great summary and discussion:
MORE DETAILS ON EURO TARP
His conclusion:
In sum, this looks like a start, but not a fix. Like the original EFSF, this plan will have teeth. But let’s not sugarcoat it. This is a kick of the can even if it’s a swift kick. The real resolution lies in measures not confronted by this plan. And until then, we can expect economic weakness and turmoil to ravage Europe as the inherent imbalance remains in place.
Not too exciting, but a break from the fears perhaps.

Readers know this kind of thing drive me nuts. Playing shell games using special vehicles to swap junk for cash does not fix anything, but it does allow everyone to go about their business.

So how much cash can be set aside to recapitalize banks and paper over bad debts across the world? I have no idea, but it just keeps coming. Where to stash all the bad debt? I maybe have a solution.

The Kola Superdeep Borehole
So how deep is it?:
The project attempted to drill as deep as possible into the Earth's crust. Drilling began on 24 May 1970 using the Uralmash-4E, and later the Uralmash-15000 series drilling rig. A number of boreholes were drilled by branching from a central hole. The deepest, SG-3, reached 12,262 metres (40,230 ft) in 1989, and is the deepest hole ever drilled, and the deepest artificial point on earth.
Would that do it?

The process is to continue to provide cash and call it a liquidity problem. It's a debt problem. In the borehole the debt stacks up, but happens if it's not turtles all the way down?

Have a good night.

7 comments:

Audrey said...

Oh thank you for this perspective on the debt parade of lies. I think it's probably not turtles all the way down. But what a wonderful image of the ongoing tragedy.

getyourselfconnected said...

Audrey, wow thanks! It might be empty turtle shells at the bottom....

Audrey said...

You mean like a shell game??? Another good joke...

GawainsGhost said...

Now I know where the Dallas Cowboys will play their next Super Bowl.

That was one of the most inept offensive performances I've ever seen. But, as they say, there's no such thing as an ugly W.

Budd said...

If they keep printing money, we will be able to fill that whole with almost enough euros and dollars to buy a loaf of bread with.

Jennifer Hillier said...

I'd like to know how many times you've used the word "hole" in a blog post title.

And that's the extent of my contribution to this discussion.

getyourselfconnected said...

Gawains, at least they won.

Budd, good point, ha!

JH, thanks for the great addition to the discussion. :)