NP - And Greece created Europe: the cultural legacy of a nation in crisis

[Joseph Tracy]

Here is the latest highly relevant article by Ilargi of the excellent blog  Automatic Earth, who along with several other non-mainstream writers on the economy very accurately predicted the 2008 economic crash.
Ilargi: I get acutely nauseous when I see things like new Italian PM Mario Monti, king of cuts and lackey of bankers, calling the draconian austerity measures about to be unleashed on his own people "reforms". 

That's the vocabulary that comes straight from the IMF and World Bank playbook on Chile, Argentina, Russia. It's the sort of "reform" that opens up economies to be raped and pillaged, as their 99% see their national assets privatized, their wages cut and their jobs lost due to legislative changes that relax "too stringent" job protection laws.

Spain is next in line: selling their 10-year bond at 6.975% today signals an imminent change in government in Madrid as well. And not through democratic means either: technocrats to the rescue, to infinity and beyond. 

EC chief Herman Van Rompuy said it all in a few words this week in Florence:"We need reforms, not elections" (No, I kid you not). Democratic elections have been judged too risky and bothersome; economists must take over, as long as they adhere to the right school of economics.

What Spain also indicates is that Europe has turned the corner, or rather: has been stretched around it. You may see it as the little boy running out of fingers to put in the dike, or as a chess game in which you are outmaneuvered so badly the only thing left to do is surrender your king. 

On Tuesday, every country but Germany saw their bond rates rise vs the Bund. A warning shot across the bow in case anyone still needed one. Last week Italy, this week Spain, and soon France. And Europe has no defense left. Or attack, for that matter. 

The ECB, perhaps alongside the IMF, may still bring out alleged big guns at the eleventh hour, but we should hope not; it makes no difference, other than it will make the crisis on the ground that much worse. And that crisis will be plenty hard to begin with. 

Sovereign debt has ruled the airwaves over the past little while. It may soon have to make way and move over for more bank bailouts. In the upcoming days and weeks, we will see an increasing number of stories about banks having funding trouble. 

Even though they can largely make up their own rules, and even though they have an amazingly powerful arsenal of accounting tricks, they're still falling ever deeper into their self-dug holes. 

The banks need another bubble to inflate, or they will be exposed as the giant bubble they themselves are. Well, they already have been, of course, it’s just that your trillions -which you never knew you had- have been used to prop them up like so many Norwegian Blues.

On that same ground level where the crisis is deteriorating, Occupy Wall Street -and many of its sisters- are trying to regroup and recommit. It won't be easy. 

The reason why, while obvious again today through arrests on Wall Street and tear gas in Athens, is also presented very well in the piece below, which I decided to run in its entirety in today's intro, because it captures in a few words a lot of things that I personally care about.

I don't know Simon Black, he may be just another wealthy international investor. Still, he does capture the zeitgeist for me, without perhaps even trying to do so. The picture he paints makes me think of the song "Baby, it’s cold outside". I'll leave you to contemplate it.

On Nov 18, 2011, at 3:01 PM, David Morris wrote:

> http://thinkprogress.org/yglesias/2011/11/18/372479/deutsche-bank-dig-a-hole-in-the-ground-and-hide/
> 
> Jim Reid at Deutsche Bank says that if Angela Merkel won’t relent on
> ECB action to prevent the collapse of the European debt situation, you
> ought to “dig a hole in the ground and hide” as your best solution for
> avoiding economic catastrophe:
> 
> If you don’t think Merkel’s tone will change then our investment
> advice is to dig a hole in the ground and hide. It’s difficult to see
> any other scenario than widescale Sovereign defaults without an
> aggressive ECB. Indeed it doesn’t seem we’re alone on this anymore. An
> Irish Times story overnight said that Sarkozy told his deputies
> yesterday that the euro would not survive unless the ECB decisively
> entered the fray.
> 
> On Fri, Nov 18, 2011 at 1:38 PM, David Morris <fqmorris at gmail.com> wrote:
>> The future value of money printed to prime our now stagnant pumps will
>> (hopefully) be less because of a growing economy and, thus, some
>> inflation.  The magic of printing (borrowing) money now is that
>> interest rates are zero, thus inflation w/o interest enhances the ease
>> of future repayment.  A growing economy with controlled inflation
>> (3%+/-) is the goal.  If the economy inflates too much, higher
>> interest rates will kick in.
>> 
>> This has nothing to do w/ "loaning money to the banks."  This is the
>> US borrowing money from its Central Bank. Yurp should do the same
>> thing for the same reasons, but their unity has been show weak.  Their
>> rich want to punish their poor.  It is very possible that only a few
>> countries (if any) will remain on the Euro.  If the US is lucky, Obama
>> will get a 2nd term w/ control of both houses again, and a new round
>> of stimulus for jobs (not banks) will happen.
>> 
>> David Morris
>> 
>> On Fri, Nov 18, 2011 at 9:10 AM, Joseph Tracy <brook7 at sover.net> wrote:
>>> But isn't the only value of money printed in a debt crisis dependent on the future real value of  citizens hard earned taxes paid to repay debt. Meanwhile, without reforms, you are merely fueling the speculation that screwed you in the first place. In the US all the benefit went to the  top tier of the 1 percent. This  has artificially propped up the value of real estate, fueled commodities speculation to the detriment of the world's poorest and shielded a criminal racketeering conspiracy .  The real state of banks needs to be revealed when they are bankrupt.
>>> 
>>> Anyway my point is that this crisis is just the speculative crash part of a deeper crisis of a high tech industrial  capitalistic economy that is unique in history in its ability to fuck over the biosphere for fast cash.
>>> 
>>> What your idea amounts to is that people have to loan money to banks in order to borrow it back at higher interest to prop up a system that gives them no meaningful voice in decisions. This arrangement cannot last, because even the dimmest bulbs will catch on and say fuck you, which is what OWS is all about. Hooray!!!
>>> 
>>> David I have real respect for you and your thoughtful consideration of any topic. Perhaps you are more right on this than I  am. Even Yoda admits that the future is hard to see. I have every personal reason to hope you are right, that this is financial and fixable and that the global economy will return to "normal". My business has been suffering since the Bush administration.  I would like a brighter future, but I don't foresee anything like the "normal growth" of the past ahead.
>>> 
>>> On Nov 18, 2011, at 9:05 AM, David Morris wrote:
>>> 
>>>> Debt is so relative, as should be the value of a nation's currency.
>>>> And this is especially so in a serious recession, when inflation and
>>>> interest rates are nearly non-existent.  The simplest and quickest
>>>> solution to Recession here and there is to PRINT MORE MONEY, and
>>>> spread it around as quickly as possible.  Unfortunately, austerity has
>>>> become the new religion, and will only prolong suffering.
>>>> 
>>>> And gold's value is purely an illusion hearkening back to
>>>> pre-Keynesian times.  It's sparkle is its only real worth.
>>>> 
>>>> David Morris
>>>> 
>>>> On Fri, Nov 18, 2011 at 4:05 AM, Kai Frederik Lorentzen
>>>> <lorentzen at hotmail.de> wrote:
>>>>> 
>>>>> If your country had experienced hyperinflation twice during the 20th
>>>>> century, you'd talk different.
>>>>> 
>>>>> Oh, by the way, did you recently look here?
>>>>> 
>>>>> http://www.usdebtclock.org/
>>>>> 
>>>>>> Euro structure not allowing quick monetary expansion (print more money) is the real villian. But ECB is Old Gold obsessed, a sort of monetary BSM fetish, so musty 29's.
>>> 
>>> 
>> 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://waste.org/pipermail/pynchon-l/attachments/20111119/8d2abec4/attachment.html>