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Europe is a three-card monte game and Greece is the pea and for the moment I'd
guess that the pea is under a walnut shell called France. Or the French
banks, to be specific. Their vaults are stuffed with Greek bond paper that is
giving the whole neighborhood a headache from a stench like unto rotting
carp. Everybody else in the neighborhood has their own cache of deliquescing
fish-heads, but they pretend the air is fresh and bracing. In fact, so
exhilarating that they are avid to dump $3 trillion into a Euro bailout fund
that will solve the problem of that fugitive aroma wafting down the
boulevards.
Europe
can really only put out stories at this point, and
the $3 Tril bailout fund is just another story in a
tedious string of them. Where are they going to get the money? From the
machinists' union in Dusseldorf? The waiters and chambermaids in Munich? There's
that rumored swap line opening from the Federal Reserve to the European
Central Bank, but that's nothing more than a cheap loan window, and for a
measly half a trillion ($500 billion - the late Senator Ev
Dirkson is cackling in his grave). And where do
those dollars come from anyway? Who is supposed to pay it back, and how? What
kind of collateral is Ben Bernanke going to hold - the contents of the south
wing of the Louvre? One hundred million free dinners (wine and tip included)
at Taillevent? This game of musical chairs with a
hot potato is not fooling anyone, really.
All
it's doing is dragging out the process of the
civilized world getting right with reality. Reality has a ledger and is
calling in its notes. The civilized world can't believe this is happening, so
they pretend it isn't, with pompous ceremonials among the highest level
banking officials, and hollow declarations of heroic actions that are not the
least heroic because all they are designed to do is protect their fellow
bankers. It's certainly not for the sake of the nations involved, because the
standard of living in all these countries will take a painful hit any way you
cut it.
This
mummery could dissolve in tears any moment, or it might stretch out one more
month, but by going this route the leaders of Europe risk all kinds of
pressures in the other seams of the system, namely markets. They are testing
a 60-odd years long supply of the one indispensible resource: confidence. They've already
probably squandered the little that's left. All signs point to a mega-Lehman
moment when trust has fled and nobody will lend to anybody and business
cannot continue. That'll be a freaky-deaky moment
and it will be way worse than Lehman was. When it happens, what seemed
financial will instantly go political. The rage of millions will shred the
trappings of fakery, and for a while things will seem too real. The world has
no idea how all this might resolve. What a show.
I
can't imagine that the explosion in Europe will not affect the American banks
- we've already shoveled hundreds of billions into the Euro bank vaults the
past several years, apart from that new swap line. Anyway, Washington has
ramped up a new game of charades to divert everyone at this end - another
threatened government shut-down. If we don't cut this shit out, some Pentagon
general is going to have to ride across the Potomac and call a time-out on
the constitution. Financial chaos is not cool. Just so you know the sort of
fate we are tempting with our shenanigans.
Speaking
of the constitution, I'm getting a little sick of these corporate CEO
knuckleheads who come on CNBC and complain that the US Postal Service is
running at a loss, and therefore we should abolish it. There is actually
little beyond all those post offices that holds the fabric
of small town America together anymore. And anyway, delivering the mail is
one of the few actual government services that is
spelled out in the US constitution in no uncertain terms in Article One,
Section 8. It doesn't say the postal service must run at a profit, by the
way. The food stamp program is not spelled out in the constitution and it
doesn't run at a profit. Neither does the war in Afghanistan (if you don't
count the drug money). Congress runs at a profit, but not in any way that the
constitution provides for. Before long, a lot of people are going to want to
abolish it.
In
the meantime, can anybody answer this question: where is the Tea Party of
Progressives? Why are the Nascar morons and Jesus
jokers the only people in this country who can mount an aggressive political
movement? Will somebody please step up and take the baton?
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