Zero Hedge 
Feb 13, 2013
Submitted by Charles Hugh-Smith of OfTwoMinds blog ,
The Eurozone is not a debt crisis that is “fixed,” it is a debt crisis waiting to implode.
The happy-talk that the Eurozone debt crisis has been resolved is ubiquitous. But when did ubiquitous happy-talk make it correct? Since the crisis is about debt–too much of it, and too much of it cannot and will not be paid back–then perhaps it would be prudent to look at two charts of eurozone credit, courtesy of the insightful chart-based website Market Daily Briefing .
Here is total Eurozone credit since the inception of the euro. This is roughly equivalent to TCMDO (Total Credit Market Debt Owed) in the U.S.
Notice that total credit owed has nearly tripled since the introduction of the euro in 1999, and that it continued to expand robustly after a brief pause in the global financial crisis of late 2008-early 2009. Recently, its expansion has flattened, but there is essentially no evidence that credit has declined, i.e. deleveraging.
Next up: Eurozone credit growth. Recall that debt-based, consumption-based economies like Europe, the U.S., China, Japan, et al. cannot expand without credit growth. Thus any decline of credit growth spells deflation:
This is not a debt crisis that is “fixed,” this is a debt crisis waiting to implode. Total credit owed is still sky-high–only a trivial percentage of the debt has been written down or renounced.
Meanwhile, the credit growth needed to drive expanding consumption has literally fallen into the abyss.
This is the worst of all possible worlds in a debt-dependent economy: a massive overhang of impaired debt and a collapse in credit growth.
The only thing that’s been “fixed” is the mainstream media’s perception management propaganda. So is perception all there is to reality? The next six months should provide an answer.