Reading time: 950 words, 3 to 4 minutes
As expected, the incumbent French President Sarkozy has been ousted by left-wing Hollande who vows an end to austerity. Greece is left with messy minorities in Parliament elected by Greeks fed up with austerity. The Dutch government fell a few weeks ago being unable to form an alliance with another party willing to support austerity. German States are openly rebelling and electing leftish governments and even Serbia’s
leftists, oops, Progressives have taken the lead in their elections.
Not that any of this matters anymore. Austerity or not, the West is beyond the point of no return. We are in a debt driven death spiral. Even if all austerity measures were cancelled and governments went back to printing more money out of thin air (which they’re still doing but surreptitiously) it would make no difference. Massive money creation has already been done for several years now with to no discernible effect. All the Band-Aids in the world are useless if we address symptoms rather than causes.
This is the first time in history that all the major central banks have been printing money out of this air. As Martin Weis says, “Four of the world’s largest central banks have gone absolutely berserk, running the money printing presses like never before in history”. Check the chart below to see the insanity of the U.S. Fed, the Bank of Japan, the European Central Bank and the Bank of England.
Poor Spain is down for the count but that doesn’t stop Argentina from kicking it. Argentina nationalized one of its major Spanish owned oil companies. And, Bolivia is nationalizing the Spanish company that runs Bolivia’s electric power grid. Spanish bank Bankia cannot account for $3.5 billion of its customer accounts and has been quietly nationalized by the beleaguered Spanish government. Europe is quietly circling the drain.
It’s not just the U.S. that’s become a dangerous wounded animal. Many other countries are snarling and biting their neighbors and fighting currency wars. South American countries are forming their own trading blocs outside the influence of the U.S. while Russia has offered South Korea an oil pipeline. China is developing African infrastructure to extract the Dark Continent’s vast resources while expanding its own blue-water navy. Iran is selling its oil and gas in non-U.S. currency while China, India and Japan are flagrantly violating U.S. embargo by buying Iran’s petroleum and there’s nothing the U.S. can do about it.
CIRCLING THE DRAIN
Mining companies, including commodities giant Glencore, are poised to fight resource nationalism by threatening to pull out of countries that are demanding too large a share of the pie. That’s all this fragile global economy needs right now. Reducing output reduces supply which will further increase high commodity prices which will add to inflation and further weaken global economies. You see, when we’re circling the drain, everything we do has negative consequences.
Japan finally shuts down its last working nuclear power plant while Fukushima keeps boiling its radionuclides all over the planet. To compensate for the nuclear power loss, the Japanese will increase buying Liquefied Natural Gas and other petroleum products for their carbon-fired electricity generators and send the price of petroleum through the roof after it briefly dropped below $100 a barrel. Higher energy prices are also the last thing a fragile global economy needs. You see, when we’re circling the drain, everything we do has negative consequences. Oh, I already said that …
YOU CAN’T MAKE THIS STUFF UP DEPARTMENT
Just when you think you’ve heard it all …
New regulations in New York ban the donation of food to homeless shelters.
NEW IN THE NEWS
This from yesterday’s Financial Times, another of the elite’s cheerleaders,
The A-List: Raghuram Rajan – Stop beating up on Bernanke
“Poor Ben Bernanke! He has gone further than any other central banker in recent times to try to stimulate the economy through monetary policy. He has cut interest rates to the bone. He has adopted innovative new methods of monetary easing such as quantitative easing. Again and again he has repeated that while inflation is contained, his main concern is the high level of US unemployment. And yet he is chastised by progressive economists for not doing enough.”
Completely absent from this dreck is any mention of the facts:
1) “Poor” Ben Bernanke’s U.S. Federal Reserve like most western central banks is complicit in CREATING the financial crisis in the first place.
2) Cutting interest rates to the bone has led to commodity speculation, higher prices and unofficially high inflation.
3) “Innovative new methods of monetary easing” is a euphemism for printing money out of thin air and lending it cheaply to the banksters, none of which makes its way to …
4) the people suffering “high levels of US unemployment”
5) And is chastised by me and other Austro-Libertarians as doing TOO FRIGIN’ MUCH by CREATING the financial crisis in the first place which brings us back to #1 again.
6) Rinse, repeat and continue the insanity.
And this from today’s Financial Times,
The A-List: Nicholas Stern – We need a Queen's speech for growth
“Neither the pomp and ceremony of the Queen’s Speech nor its accompanying bills can hide the fact the UK requires urgent action to restart economic growth. So too does Europe as a whole. A European recovery would help the UK greatly. But Europe will take time to agree a strategy: the UK can and must get on with it.”
Sorry boys and girls but if all we have is pomp, ceremony and speeches from the Queen then we’ve used up all our ammunition and Nicholas Stern’s admonitions to “get on with it” won’t do a damn thing to keep us from circling the drain faster every day.
Stay tuned. It gets more stupid all the time. At least admission is free…
May 9, 2012
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