Max Keiser has said that European economic growth will be insufficient in paying off the mountain of debt afflicting the Eurozone.

In an interview with  Press TV, the legendary financial journalist spoke about the reality facing European banks in what can only be described as a liquidity crunch and whether or not French, German and UK banks would survive a Greek default considering their massive exposure to Greek debt believed to total $106 billion.

"Well, the Market is saying no where Societe Generale hitting multi year lows, BNP is hitting lows.

The problem of course is that when you start to sell off Greece and the bond holders get some portion of the par value of their bonds, the banks have carried the bonds on their books for 100 cents on the dollar.

So, this is where the contagion spreads. The balance sheets of the banks are very fragile and these banks are highly leveraged to begin with. So they can't withstand another kick to their balance sheet.

We are facing a bit of a liquidity crisis or a Leman like moment here in Europe and this is triggering all kinds of interesting effects."

The markets will open on Monday with full knowledge that the Greek Prime Minister,  George Papandreou has cancelled his visit to the The United States citing a crucial week for Greece, his office said:

"next week is particularly crucial"

The cancellation was done after consultations with Finance Minister, Evangelos Venizelos.

Greek default is looking more likely by the day with zero hedge suggesting the 20th of September will be the day of default seeing as two of the big bonds have coupon payments on that day.

The bonds are 4.5% of 2037 and 4.6% of 2040 totaling 769 million Euros which would make it a good day to default unless Greeze has the available funds for that payment.

Back to Max Keiser's Press TV interview.

On the matter of debt forgiveness and ability to pay back 'the debt', Max said

"Well, the debt simply can't be paid so the sooner people realize that the better. In Greece, the austerity measures have lowered GDP, so the ability to pay off any debt has been reduced."

"Asset sales are going to cover the debt and we see this all over Europe; we see this in the United States as well in huge mortgage scandal; trillions of dollars worth of fraudulently induced mortgage debt that can't possibly be paid back.

So there will be debt forgiveness or repudiation of this debt in some form. Now whether that is done in an orderly basis or a disorderly basis, that is the only question left remaining on the table."

Is Max right or will the intervention of central banks do the trick?

I tend to think Keiser is right, after the delay in decision regarding the next plaster to stick on the Greek economy it looks like an orderly default is being negotiated this weekend.

We must wait and see.

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