The Real Suicide Bombers? Western Democracies
It was a brief article — six paragraphs buried on C10 of the February 3 Wall Street Journal. The headline: “More Investors Position for Possible U.S. Default.” It began:
The net amount of derivatives used to hedge or speculate against a default on U.S. government debt rose 12% in late January, according to Depository Trust and Clearing Corp. figures. The increase suggests investors are becoming more nervous about the quality of U.S. debt.
As is well known by now, whenever a murderous blast goes off somewhere in the world there’s a good chance that the perpetrator’s name will be Mohammed or some variation thereof. But lethal as these misguided human missiles may be — especially when they act in concert, as happened on 9/11 — the damage they inflict isn’t decisive. Societies may steel themselves, as Israel did in the wake of a string of bus bombings and other atrocities, to take effective measures to bring them under control.
If and when the West vaporizes itself in a thermonuclear explosion of debt, however, the effect will be truly cataclysmic.
A friend of mine, a Times-worshiping “progressive” who nonetheless is a staunch supporter of Israel, said recently that he was afraid changes in Egypt could tip the world into chaos. I agreed, but added that, as bad as the Egyptian situation may turn out, it could still be among the least of our problems. My friend scoffed. What could be worse than the pivotal Arab country becoming a terror state? That certainly would be bad. But it would be worse if there’s no one able to fight back.
That’s the powerless position the West could find itself in after decades of policies designed to keep pols in their jobs, “progressives” in the redistributive catbird seat, and the populace lulled into a false sense of social “security.” Those in the know say Greece and Ireland can’t possibly pay back the debt they’ve incurred, but that may be just the tip of the iceberg. What if Greece, Ireland, Portugal, Spain, Italy — and California, Illinois, and Rhode Island — all went belly up at more or less the same time? (Technically, a state can’t default. But, technically, Greece didn’t default last year either.)
It may seem farfetched that they’d all go at once. But in the fall of ’08 we saw a fast-moving financial chain reaction that almost instantly shook Wall Street and the global financial system to its core. AIG and others might have failed the same week as Lehman Brothers if the government hadn’t stepped in. Is it really so hard to believe that the European debt dominoes might start to fall at about the same time as their American counterparts? And isn’t it possible, if not likely, that a big European default could set in motion a big U.S. default (or vice-versa)?
One thing we know for sure is that markets are interconnected. An investor who sees an American state tottering (e.g., unable to issue new debt), and who believes that others are close to the same condition, might well decide that he requires a much higher indemnity (coupon) to take Euro debt off issuers’ hands. And, as we saw with Greece, an issuer can suddenly run out of options — having to sell bonds to fund current operations or roll over old debt, yet being unable to pay the higher interest necessary to float them. It’s the ultimate rock-and-a-hard-place scenario, and our esteemed Uncle Sam himself, pushed by our Ponzi president, is rushing in.
There is nothing new under the sun. The cyclical mechanism of wealth concentration and redistribution has caused the world millions of deaths and exceeding unhappiness for survivors of such conflicts. Yet, it is described in quite matter-of-fact terms in the Bible as property redistribution in the Jubilee year at 50 year intervals and debt forgiveness every seven years in the Sabbatical year. Being so easily conceptualized in “olden days” speaks to our own naive views of property and wealth. The Romans – much later – also tried to address such issues through law – unsuccessfully. We, for the previous few hundred or so years, kill each other over these matters. However, a partial solution not involving violence is through tax policy. Long Island, New York is littered with the remains of great mansions that even the wealthiest of families could not support. We visit them regularly, since they are now open to the public. As always, farmers remain the primary land holders – as it should be. But American inheritance law will soon put an end to that system. How sad is the lack of coherence!
Regarding the revolution in Egypt, it is Obama’s policy of seeking American emasculation that has directly caused this geopolitical debacle.
Obama’s financial support for Brazilian offshore oil drilling and the shutting down of US offshore drilling guarantees that America will be sending its wealth overseas, thus depleting American treasure.
His policy of spending borrowed money from China, Japan, Russia, Britain and the Fed to support social legislation again depletes American coffers, in effect making us poorer.
Most crucial is Mr. Obama’s implicit support for devaluation of the US dollar. Designed to pay off US debt with cheaper dollars, it has the effect again of pauperizing the American public. Gasoline at $4.10 depletes the consumer of purchasing power, thus reducing the rate of economic recovery.
An aspect of Mr. Obama’s inflationary intentions is not spoken of often enough or understood at all by the public, including readers of this blog. This President holds himself out as a man of peace. However, his inflationary policy designed to pay off American debt is bringing the world to starvation and thus rebellion. He is directly – not indirectly – responsible for the decline in the value of the dollar, which forces other countries like Egypt to purchase its food with more dollars that it does not have in any abundance. This causes societal pressures that lead to unrest. Some countries will be shut out of the US food market as the increasingly wealthy Chinese and Indians purchase the food products that would have gone to Africa and the Middle East. It is Mr. Obama who is bringing poverty and hunger to the world in his attempts to bring America to its knees.
In regard to the last point, please take this opportunity to read Spengler in Asian Times to gain a truly superior understanding of how this mechanism operates: http://www.atimes.com/atimes/Middle_East/MC29Ak02.html
Excellent comment, indeed.
But who, that can do anything about it, is listening?
John, elections are the mechanism for self-correction of policy. Unless elections are sabotaged, purchased, or disregarded, we can come back from the brink. Even if the poop hits the fan in a major way before elections, elections have the potential to bring healing and redirection. Elections are the basis of a form of genetic algorithm: We repeat the same game many times (elections) on an ever-changing chessboard. What comes out is different in each round, but the game goes on until the outcome of a given round prevents further change. We are nowhere close to the end of this game process. The 2008 election addressed the issue of race bias in the United States. The next election will be to correct exceedingly wrongheaded social engineering policies.
Something to factor in:
George Russell: Friend of Warren, Money Manager for Bill & Melinda, “Pioneer of Pension Fund Consulting,” Closet Islamophile. Part One
http://wwwtwosetsofbooks.blogspot.com/2011/04/george-russell-friend-of-warren-money.html
Incompetence cannot explain this administration’s actions. The Washington Examiner’s expose’ of ‘who funds the Democratic Party’ includes a multi-billionaire who has made his fortune from betting against currencies. He’s a smart guy who knows socialism always destroys economies (he mastered economics101), and we are reaching the end of the road.
The big question is ‘Where do we go from here?’
Jeff Durstewitz
I wanna remember this name as the man who trivialized mass murderers for a headline.
This was a disgusting choice of title with complete lack of empathy for the families of the victims of these monsters.
OZZY: Listen Mr. Precious,Durstewitz’choice of title is apposite and licit.Great wars and massacres that dwarf 9/11 follow national bankruptcies (ever hear of the French revolution or theWeimar republic)?So stop your self righteous pompousity and grow up!
Nothing was trivialized, Ozzy. The point is: pinprick barbaric attacks vs. societal breakdown. If the West goes bust, the latter is what we’ll have. And if that happens, there’ll be no one to fight the suicide bombers — not to mention Iran, North Korea, Chavez, etc., etc.
Take a look at this recent posting by Daniel Hannan: http://blogs.telegraph.co.uk/news/danielhannan/100083764/iceland-was-right-not-to-bail-out-its-banks-if-only-we-had-done-the-same/
He is the one who castigated Gordon Brown, who was Prime Minister of the United Kingdom, at the European Parliament, as seen here: http://www.youtube.com/watch?v=94lW6Y4tBXs
So the Chinese troops 60miles south of Laredo are for real after all. Just waiting for the right time to move on the U.S.A. I wonder if all of these guns that Obama has the ATF sending to Mexico are ending up in the hands of these Chinese invaders?