Chart of the Week: Same Ol' Euro Blues

The financial news from Europe is not getting any better, as the technocrats continue to muddle through the debt crisis. France lost its AAA credit rating last week in the latest round of credit downgrades. The Greeks are on strike again to protest the destruction of their economy at the hands of banksters otherwise known as "austerity". The Greek government needs €14.5 billion in March just to keep its debts current. Talks between the European Central Bank (ECB) and the Greek government have hit an impasse over the size of investor losses. The dire situation has some financial pundits predicting a Greek default will occur.  More than $75 billion has left the country already as people move their savings abroad, and there are grave doubts the country has the political will to stay the painful course set for it by "the troika"--ECB, IMF and the EU.  If the country implodes, it could loose up to 60% of its GDP. This chart shows why there is turmoil in Euroland:

If the current crisis can be boiled down to one cause, it is the existence of too much debt compared to economic growth, or to put it another way, economic growth based on credit expansion and not actual production of goods. France has been borrowing money since the 1970's to pay for current operating budgets.

The chart below shows an interesting dilemma of our times in the US:

Is it the chicken or the egg? Companies need increased revenues to hire additional workers without cutting their profits. Sales are surely highly correlated to employment, but without wages only the rich can consume conspicuously. One can only buy so many Picasso's before one becomes simply tasteless. Meanwhile the 99% go to jail without passing "Go".