I landed back in the USA Wednesday from Sweden. What a downer to be reminded that more people speak English in the foreign country you just came from, and to notice what a slum airport New York's JFK is. "Wretched refuse yearning to be free," the poem at the statue of liberty's base declares. How prophetic. Nobody in baggage claim understood the sentence, "Which carousel does the luggage from BA 4872 come to?" Quien sabe? Vem vet? Kim bilar? 谁知道? Ποιος ξέρει?

The Europeans, by necessity, may excel at learning languages, but at banking and money matters they are perhaps not such geniuses - no matter how creamy the shopgirls are - and in the politics of the region things often devolve to the level of a lethal pie-fight. Now that Germany and France rolled out the latest provisional miracle rescue of their countries' banks, jubilation reigned in the stock markets and the OECD economy is presumably back to turbo hyper warp speed.

Expect this spirit of euphoria to expire by mid-week. The bankers of the western world and their government helpers have seemingly never heard of unintended consequences, or maybe even consequences, period. The crypto-voluntary bond default of Greece, with 50 percent losses to bond-holders, did not trigger a credit default swap (CDS) "event." Why? Because it is perfectly obvious to all concerned that the CDS market is a grand fraud, so the triggerers are told not to pull any triggers, and it's as simple as that. If CDS were actually allowed to operate as an "insurance" mechanism against dodgy bonds the entire global banking system would go Death Star. Counterparties to these debts could not possibly pay out what the contracts require. So, if CDS are magically "suspended" on Greece's default then they will be suspended for everybody's.

I don't think it matters so much that the CDS market itself is rendered meaningless, because the counterparties hardly put up any real money in the first place, just promises to come up with money at some future date. What matters more is that there really are no hedges on bonds, no real protection if any bonds flop, which means risk has instantly rematerialized in the bond markets and has to be priced back in to bond sales. Unfortunately, that in itself can easily collapse the global financial system, because if investors really require higher interest rates to buy this stuff, the governments issuing the bonds will all choke to death on the interest payments.

It will be interesting to see how the so-called advanced economies wriggle out of this dilemma. There may be yet some other ways of extending and pretending, but I don't see it. Rather, it would seem to open the door to universal default. The very next part of the official story is that, supposedly, every investor on God's green earth would come stampeding into American bonds, but where's the hedge now? There is none. Massive European defaults would winnow down the total liquidity supply anyway, and going into US treasuries would be like the remaining victims of a "towering inferno" style conflagration rushing from one burning floor to another. And how much of that hot money has already rushed into mis-priced American stock markets? All the rest of it? One of these days, there will be no buyers showing up for that stuff, and even the HFT robots will develop a sense of artificial trepidation.

Meanwhile, more than a few banks find that they are catastrophically short of real funds. They can't actually continue the daily churn that constitutes their hypothetical business. Interbank lending would tend to freeze. Suddenly, we are right back at the edge of the same abyss that opened up when Lehman Brothers went up in a vapor three years ago. Only this time it's Lehman Brothers times X.

There are really only two outcomes I can see in all this. Either money becomes extremely scarce or the money that's there becomes worthless. In either case you're broke, and what remains for all these nations is a fight over the table-scraps of the late and great industrial orgy.

I know a lot of people think that technology will save us from all this. The story line there is that we'll all be "connected." We'll all network up over the smart-phone and "communicate" and "share" and "innovate." Connection has become a pointless end in itself. It's what you do when the world is collapsing around you. Wouldn't it make more sense to learn how to grow potatoes and train a mule?