The Seven Hundred Fifty Billion and Change
The Telegraph says that European leaders have agreed to bail out Spain and Italy to the tune of 750 billion Euros. “Under the proposed deal, two European rescue funds – the £400 billion (€500 billion) European Stability Mechanism (ESM) and the £200 billion (€250 billion) European Financial Stability Facility (EFSF) – will buy bonds issued by European countries. … Under the new plan, the money in these funds will not be given directly to governments but will instead be used to buy up debts on the financial markets.”
In the other news, Mubarak is reported clinically dead after a stroke. The Pakistani Prime minister has been disqualified from running for office by that country’s Supreme Court. And President Obama has been lectured to on subjects unknown by Vladimir Putin.
Italy to be bailed out? Yes Italy. The Guardian’s John Hooper reports that Italy has to be helped out because it “has become incapable of sustained, significant growth.”
It has been at a virtual standstill since the start of the 2000s. In the first quarter of 2012, it shrank 1.4% year on year and last month, the OECD forecast that between 2012 and 2017 Italy’s GDP would grow by an average of only 0.5% per annum, the lowest rate among more than 40 countries for which it made forecasts.
What the crisis has highlighted, moreover, is that Italy’s growth potential is to a worrying degree restricted by deep-seated problems that have more to do with society than the economy. They include widespread corruption, an educational system that is turning out fewer graduates than almost any in Europe, courts that fail to offer investors judicial security and a deeply-ingrained view that women should not return to work after they become mothers.
Without growth, however, Italy will be in no position to start paying down its vast public debt, which is expected to top €2 trillion (£1.6 trillion) this year. As Reichlin notes, a stagnant economy also adds to the pressure on banks by increasing the danger of default by companies to which they have lent.
Maybe more borrowed money will solve that problem.
Max Hastings, the historian, reflecting over the events of the last weeks, wrote reflectively about his family holiday in the Daily Mail.
We spent most of yesterday on a beach in Devon — the family and me, that is. The sun was shining, the sand golden; gentle surf washed the shore against a backdrop of soft woods and green fields rising from the shore.
I mention these holiday scenic details only to make the point that our world yesterday — and yours, too, I expect — looked pretty much the way it did the day before and, for that matter, in years gone by.
Because this is so, because no bombs are dropping, nor Viking hordes sacking villages nor dinosaurs roaming city streets, it is difficult for us all to get our minds around the notion that hell is a’popping; that Europe is in the early stages of what will probably prove its gravest and most frightening tumult of our lifetimes.
Nearly a hundred years ago today, another Englishman, contemplating a familiar Londons scene, had similarly grim thoughts. Sir Edward Grey, the British Foreign Secretary, looked out of his palatial, imperial London office and said, “the lamps are going out all over Europe. We shall not see them lit again in our time”.
Grey was more prescient than he thought. How could he imagine that just when the West had won the Cold War, the top priority of its exalted leaders would include the phase-out of incandescent light bulbs? First all over the EU and then the United States?
There is in that obsession with the trivial — pursued relentlessly in the midst of the collapse of demographic, economic and military strength — something of the moral of the age. A civilization completely consumed by political correctness, which required counseling for the merest shock, which believed it would preside over the End of History, is now bankrupt, unable to defend itself and without a single darned light bulb in the hardware store. What lesson was it? Perhaps it is this: never mind if you lose your pants as long as you can save your face. Or as someone else put it, those whom the gods wish to destroy, they first make mad.
Never mind. Tomorrow is another day. Open thread.
- Where is Europe going to get the money to bailout Italy and how long will the relief last?
- What other good news are we expecting from the Arab Spring? In particular where does Egypt go from here?
- How easily will NATO be able to ship out its heavy equipment via Pakistan or via the northern route controlled by Russia?
Belmont Commenters
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To answer your questions in order Wretchard:
1. The bailout money will come from Germany, where else? Since the structural issues that have caused the problems have not been solved, I would think the relief will last less than 6 months, but possibly enough with some added US help to get Obama past the election. Then all hell will break loose.
2. If we are very, very lucky, other Arab governments will follow the Egyptian example and try to contain the rising tide of mob rule before theocratic fascism takes hold. I do not expect us to be that lucky. Odds are the Muslum brothehood works out a power-sharing arrangement. The Army may have the tanks but the Brotherhood has the people. The overall result is most likely Shaira law on the installment plan. Do not expect the peace treaty with Israel to last until the next year, if that.
3. Via Pakistan, most likely not at all. Via Russia? Fairly easily, as long as Obama gives Putin what he wants, which Obama will want to do anyway. Kiss missile defense and probably a good many if not most of our nuclear deterrent goodbye.
1. They’ll print it, natch. They’ll do this because if they don’t the Mediterranean states go straight to collapse and become vulnerable to foreign powers. Germany will accept some wealth destruction to delay or avoid this outcome.
2. The Magic 8-Ball says: “Outlook hazy, try again”
3. Most of the heavy equipment isn’t coming back at all. It’s pretty used-up, and its service life has been cut in half. Meanwhile, the price of retrieving it keeps going up. The Kandahar scrap dealers are going to be busy for a couple decades. Besides, the Army won’t mind being able to honestly turn their pockets out when Congress asks why their equipment budget request just shot up by a few billion to fund GCV.
Nigel Farage was on FNB, this afternoon, and his explanation as to why this situation is as it is was succinct. Rather.
Also, this might be a silly question, but why was the creation of the euro predicated on the eradication of the individual member countries currency in the bargain? (I ask this question because soon the whole thing will collapse, and individual member states will be back on their own currencies….so the sooner the member states start re-issuing their own currencies the better) The answer is probably as obvious as it is sinister- no more individual member state currency, more power and authority to the centralized planning state in Brussels.
But wouldn’t a euro in addition to individual states currencies have been a better idea? The euro for interstate/country trade, local currencies for intrastate trade?
1. They will print the money and the whole EU will blow up in one huge bank run about August.
2. Egypt will be the next Syria. A full scale civil war with various groups whacking away at Israel for recreation. Now if Israel premtively bombs Iran the whole ME just melts down in a noholds bared slug fest with or without mushroom clouds on the side.
3. When the Brits ran for the Border in the 1840′s and were anihilated but for one Scots doctor, they left their stuff behind. We’ll do the same except I hope it all has scutteling charges for a boom-cloud in the rear view.
The end of the socialist paradiem will be very messy and maybe the right war was one war to far.
n @ 2:
1. They’ll print it, natch.
2. Outlook hazy.
3. It’s used up.
Yes to all, but I’ll bloviate a bit more on each.
1. Printing has got to be somewhat inflationary and thus a tax on wealth but at the same time an inflator of real properties. Amazingly, and a bit mysteriously, we have not seen the bulk of inflation from Bernakecare. To some extent the inflation of real, productive assets explains the otherwise occult rise in the stock market over the past four years. With Europe now getting into the act, will that be too much for the world system? I dunno. You’d really think so. And they have to fight the ghost of Weimar to do it. Will they then raise the ghost by saying its name? Stay tuned.
2. Egypt seems to have given up enforcing order in Sinai, whoever wins. If Obambus and Hildabeast are not defenestrated in November, Israel is in for trouble with a new Islamic but mostly just lawless “territories” along its border. OTOH, who knows, they might just find that handy for certain things as well, lawlessness certainly cuts both ways.
3. I still want to see a fighting retreat back to the sea. That would finish using up the equipment and ammo in the best possible way. Just blast everything within reach, it’s really quite simple.
1) Europe can easily tap any one of the rainy day fronts they have maintained since the 1950s.
2) Mubarak is on a beach at this moment rehearsing his acceptance speech for whatever award they give these people after a fine acting career. Expect more of the same from this ‘brotherhood’ business.
3) See 1)
1) The cash infusion will come from Teh Won, who will send FLOTUS and her 40 or so BFFs to sunny Italy and the Costa del Sol for her next luxury vacation, along with the party-hearty boys (and gals) of the SS. A good time will be had by all except the US taxpayers, and Martha’s Vineyard is so last year. http://www.foxnews.com/politics/2012/06/19/exclusive-secret-service-agents-partied-like-rock-stars-on-obamas-vineyard-vacation/?test=latestnews
2) Egypt goes down Denial River.
3) What Josh said at #5.
Josh at 5. “If Obambus and Hildabeast are not defenestrated in November, Israel is in for trouble with a new Islamic but mostly just lawless “territories” along its border.”
Exactly, but “what else is new” with these people?
Lawless territories is ALL the Muslim world has pretty much been since its inception. The original Arabic usurpers of the Umayyad dynasty were Roman client sub-kings in what is now Syria/Jordan, who took advantage of the Byzantine/Persian Armageddon to do a coup in 622. But all they could ultimately do was live of the “Civilization capital the Roman-Greeks had spent hundreds of years building up in the area. When they were broke, the Abassids came in from Persia and built Baghdad and ran it till THEY were broke, then the Turks ran it (in various permutations, each poorer than the last–in no small part thanks to the Mongols’ obliteration of Persia and Central Asia–till the Ottoman Empire collapsed. (And the only reason the ‘Sick Man’ of Europe survived as long as it did was because of Great Power rivalry in the area.
Europe is niggling itself into oblivion. Well, the niggling will last a bit longer, it seems. But Greece showed democratic government can’t begin to cope with the reality that is upon them–so, look for Fascism to make a comeback in some form.
And for what it is worth, Caesar Magna Narcissus seems to be getting no real poll lift from his imperial power grab–he just looks stupid. The reality of his banality is trickling down to the masses. How long that will take, we’ll see.
But from our perspective, his Constitution shredding seems to be setting precedents, and adding yet another “mini-coup” to the Constitution’s gutting.
It might all be for nothing forObamus Bam, adding up to sound and fury signifying nothing (a line from MacBeth), but sooner or later, SOMEONE will “seize the crown he found in the gutter,” tossed there by a generation of short-sighted, live-by-the-polls-die-by-the-polls pols.
An Préachán
ap @ 8: Exactly, but “what else is new” with these people?
Nothing much, and that’s fine by me, we should encourage more of this and stop recognizing Pakistani sovereignty over land we need to use. Maybe Israel and the world should stop recognizing Egyptian sovereignty over the Sinai.
What we need is some new world organization to administer such territories. The UN is wholly unsuitable. If only something in Europe still breathed, but since nothing does I keep wishing that China were more aggressive and would partner with the US in these things for our mutual and enlightened self-interest. Sigh.
Italy has the money to bailout Italy in its collections of artworks, gems and antiquities. European states and European families have accumulated assets for centuries. A lot of that has gone technologically obsolescent, but not the great artworks and great antiquities (better materials science may make gems obsolete, though). Create tradeable claims on those artworks and antiquities — regulated better than the cultural artwork exchanges that blew up in China last year — and you’ll have a large supply of hard assets folks can hold in lieu of the world’s very limited supplies of gold, silver and other precious metals. If Italy — and Spain, Portugal, Ireland, Greece, and… whoever else??? — have to trade their sovereign treasures to retire their sovereign bonds, and especially if those treasures end up leaving the PIIGS countries for a trustworthy jurisdiction like Germany or the US, then PIIGS electorates might just go forward choosing politicians who won’t jeopardize whatever’s left of those nations’ accumulated assets. In that case, the relief could last quite a while. Will a Cultural Reserve Bank emerge to issue those tradeable claims backed by the national treasures of the debtor nations, giving those countries a means to retire their debts? I hope so. It would mean I’m a genius for spotting the value and figuring out how to activate it, rather than a crackpot for thinking there’s value where there is none.
@Josh, #5
It’s hard to get inflation going with a rapidly-aging population and the resulting drop in velocity of money. An awful lot of the funny money has gone to fund pensions or effectively reimburse banks for loan losses on private housing. The rapid increase in money supply is required just to maintain asset values, forget about increasing them.
All that is well and good, but it also represents a major transfer of power from savers to the first recipients of the new money. Eventually, they will attempt to use that power and then one of two things will happen. Either they succeed, and the money-printing turns out to have been a silent coup, or they fail as the non-recipients re-write the rules to claw back the transfer of power. The change in rules then causes hyperinflation as the recipients of the funny money all try to unload it, since it doesn’t imply a transfer of power anymore.
I’ve no idea how it’s going to turn out in our particular case.
n @ 11: It’s hard to get inflation going with a rapidly-aging population and the resulting drop in velocity of money.
I guess. Lot of funny stuff going on. Very good article somewhere the other day on China, that anyone holding cash in China expects it to depreciate in value, which is why they have accepted too-low rates on world investment, as even Hank Paulsen accused them of in 2008 (trying to blame them for the crash!). In China, wealth is recognized as a depreciating asset, and I wonder if that isn’t historically true there and a cultural meme. And now, thanks to Bernanke, the same is true here and worldwide. Only, he has been trying to balance depreciation and inflation, and somehow succeeding, perhaps accidentally a little too much on the side of depreciation, deflation.
And now, same kind of thing in Greece, and Europe. Capital in flight can’t be choosy about returns, and will happily accept small losses.
And these recent reports that the average American family has lost 40% of wealth since 2008 if you count housing, and now 22% even if you don’t, due mostly to lower stock prices in retirement accounts. Not to mention money in savings accounts returning zero interest. And yet, better such depreciation than a crash that wipes out the accounts.
Y’know, Obambus sometimes gives a hint of having at least heard some of this described, though it is clearly so far above his understanding that he doesn’t dare try to talk about it directly – when he does, guess what we get, “private sector doing just fine”, el wrongo. I’m just more than a bit worried that even Obambus knows more about this than does Romney, who gives no obvious signs that he knows anything at all is wrong with the economy. I’m sure Romney understands more economics than does Obambus, but I wonder if it’s enough to matter, or what kind of team he would bring to the game.
My impression is that the Euro falls from the heavens and goes down the drain — but causing a lot of flood damage first.
Maybe Arabia doesn’t have spring? Just sand storms?
Heavy equipment is just so heavy. Why not just leave it?
9. Josh: Maybe Israel and the world should stop recognizing Egyptian sovereignty over the Sinai.
They have already stopped. Hamas launches rockets from the Sinai into Israel, then Israel and the world give Egypt a pass. No consequences whatsoever. That means Israel and the world doesn’t recognize Egyptian sovereignty over the Sinai, since sovereignty involves a monopoly on the use of force.
8. An Préachán: Greece showed democratic government can’t begin to cope with the reality that is upon them–so, look for Fascism to make a comeback in some form.
Can’t buy incandescent bulbs, can’t buy 32 ounce Big Gulps, have to show proof of health insurance or pay a fine, the President just enacted Amnesty by executive fiat, Roman Catholic hospitals must carry the morning-after abortificant, the only time a home invasion robbery makes the mainstream media is when the homeowner kills the intruders, but we’re supposed to keep an eye out for fascism.
#3 Gaffe Prices “But wouldn’t a euro in addition to individual states currencies have been a better idea? The euro for interstate/country trade, local currencies for intrastate trade?”
You confuse DemSoc digital scrip with capitalist money.
The purpose of the Euro is the same as Fannie Mae-insured MBS junk bonds.
The New Money of DemSoc is digital scrip, used to buy influence, graft, and patronage. It is used for internal colonization; it demands inflationary expansion.
DemSoc ‘growth’ must be far above population growth, as it’s low cost, risk free, tax evading properties lead to exploding extortion and demands on subjects.
The purpose of the DemSoc ‘boss dollar’ is internal colonization.
(Vertical expansion is occuring because the land is closed.
Socialism is naturally more efficient in urban environments.)
You, however, are referring to captialism’s Old Money, a resource-based medium of exchange. Yardsticks such as restrictive gold, inflationary petrodollars, labor added value, or an interest rate give us predictability.
DemSoc cannot abide predictability.
Crime.gov positions itself beforehand, sparks a ‘crisis’, and then promises to restore order. The socialists will continue to fail up.
Citizens combined savings get robbed, and the politicals gain more positions with no clawbacks considered. Failing UP!
The politically connected are robbing the world!
How do we gain immunity?
When this collapses into a new stability, what will our world look like?
1. They print it.
2. Egypt becomes Somalia
3. Tell the IDF they can have it, if they show up and drive it home.
“Where is Europe going to get the money to bailout Italy and how long will the relief last?”
Print it and 6 to 8 months.
“What other good news are we expecting from the Arab Spring? In particular where does Egypt go from here?”
In the near term, there is nothing good for the USA about the Arab Spring. 2 centuries from now, it will be seen as the start of Arab/Islamic democracy. Lots of toil and trouble and several more revolutions until then.
Egypt falls into the grasp of the MB and starts a new chapter in their war against Israel. They get their arse kicked again and the MB loses all political clout leading to an Egyptian Spring. The Army loses just as much, since they have weapons to match the IDF so they will have no excuse for losing. That will force the military to examine the fundamental flaws in their society.
“How easily will NATO be able to ship out its heavy equipment via Pakistan or via the northern route controlled by Russia?”
Won’t happen. We will have to write off the heavy equipment. Not a big deal, just expensive. Once Mitt gets the ec0n0my rolling, we will have the $ to replace it with newer kit. That needs doing anyway. There is nothing secret about any of the Army gear. The modern gear, such as the tactical missiles are air portable. AFAIK, there is no Armor in the Stan, not that a Mid 70′s design like the Abrams has anything secret about it. The Heavy artillery is being retired anyway, so if we leave some behind it will save money. As for the rest it is mostly trucks and a truck is a truck. The only things important in the ‘stan are the men. The soldier and marines are the ‘seed corn’ for future generations of fighting men. And women. As such their worth is more then I could put a number on. The difference between America remaining a military power or falling behind the Chinese.
Right now Syria is the Schwerpunckt for America’s defense. Too many Americans lack the knowledge of history to see that. For two centuries America has mostly fought it’s war on the Enemy’s soil. When you do that you start off from a no lose position.
Syria is an ideal location to apply air power. The US Air Force has no real rivals. Nobody can match our technology and only Israel can match our pilots.
The best thing about Syria is the opportunity to trap the Russians and Iranians in a kill box and rough them up a little.
Pootie would have had a much better attitude during his meeting with 0bama is there were several thousand Russians cut off in Syria, surrounded by burning vehicles, without food or water, being bombed ever 4 hours by B-52′s. Much better attitude.
(Many apologies, web hangup, may I redo?)
Re-reply to Gaffe Prices #3:
You confuse the digital scrip of DemSoc with capitalist money.
One is used for internal colonization by politicals and their connected agents; the other is a medium of exchange by citizens. Virtual vs. Real.
“Kiss missile defense and probably a good many if not most of our nuclear deterrent goodbye.”
Not a high interest item in this economy so it’s a wash so far as 0bama’s re-election chances. It won’t change enough minds to matter. On the other side you have the next POTUS cancelling any treaty (START, LOST) giving away American Sovereignty. That happened with the original ABM treaty. Bush ’43 signed a piece of paper and the ABM treaty was no more.
The Russian know that POTUS has that power and a strong POTUS will use it. So any treaty they negotiate that gives them a huge advantage will just be cancelled.
The Senate wants to re-do Start II. The Russians had to send it thru their legislative body to be approved and changes were made. Those of us against START have created enough sparks to have certain Senators that approved it to want a re-vote.
From W’s link to the far-left wing Grauniad: … Italy has to be helped out because it “has become incapable of sustained, significant growth.”
Hey, pal! Why pick on Italy? It is not the only country which has become incapable of growth (cough, Obama’s America; Cameron’s Britain; Hollande’s France). And once all those export markets start going south, Germany is going to look quite frail also.
There is a big flashing ‘Exit’ sign for all those weak economies looking for a way out — cut spending on bureaucracy; roll back excessive regulation; Chinese-style rapid capital punishment for corruption; lower all the barriers to exanding job-creating, tax-paying business. Strange that none of those super-educated ‘leaders’ can read the sign.
Waiting for the Euro to fail has become like watching an interminable bad performance of ‘Waiting for Godot’. My guess is that the theater will catch fire, or the drains back up, long before we get to the end of the play. Instead of some damn fool thing in Greece/Spain/Italy/wherever, the black swan will come from Venezuela announcing it has nuclear IRBMs pointing at the US, or Turkey deciding to kick the Greeks out of Cyprus, or Russia picking off the rest of Georgia, or ….
But sleep easy. Obama the Magnificent is sitting by the phone, waiting for that 3 am call.
Baroness Ashton, our supposed EU foreign Minister, doesn’t know who is the president that she is going to meet, the newly elected serbian President
http://www.telegraph.co.uk/news/worldnews/europe/eu/9339670/Baroness-Ashton-caught-on-film-panicking-because-she-does-not-know-what-Serb-president-looks-like.html
that’s the person who is paid ~€24 000, that have at disposition a private jet…
Imagine, if the whole Apparatus of Brussels didn’t exist, how much money the EU states could spare
1. Germans and December.
2. None and down.
3. Hard and harder.
If my insane plunge into whirlpool of American politics has taught me anything, it is that the corruption and myopia of the ruling elite is much, much, much worse than I ever imagined. From a distance, it looks pretty ugly. Up close, it’s as ugly as the ugly end of an ugly stick that’s been beating the ugly face of a giant ugly thing.
It’s not that the people set out to destroy our system, it’s just that they don’t realize that if they continue to do what they’ve always done, the system cannot survive.
You see, a cancerous tumor thinks it is doing its job by growing. It can’t imagine that it is killing its host.
Yeah. That’s a good plan.
L3
“Italy has the money to bailout Italy in its collections of artworks, gems and antiquities.”
I doubt it. 700Billion (and counting) is a lot of Michelangelo’s;
http://www.karemar.com/blog/top-ten-10-most-expensive-paintings-musuem-art-house-or-exhibit-w-pics
The most expensive painting fetched 140 million. So you would need 50 of those to get 700 billion. Only if there was 50 of them, they wouldn’t fetch 140 million.
I’m leaving aside the problem of who is going to buy them. When everybody is broke, those that held on to a few alms will want a good price. It’s called a buyers market.Flood the market with art and the price will go down. Fools that can afford to pay 140 million for a painting are few and far between.
Big day tomorrow. Committee votes on a contempt citation for Holder. That will set the cat among the pigeons. I expect a straight party line vote, both in committee and the house. That will mean a year in jail for Holder. If they can figure out how to bell the cat.
House vote should be next week. About the same time the USSC issues their finding on 0bamacare.
I predict a long line of limo’s taking Clown Posse members to the airport. Should be fun. It will be interesting to see how the MSM avoids reporting on Holder. I’ll bet they don’t show his perp walk.
700 x 10^9/ 140 x 10^6 = 5 x 10^3…
5,000 top of the line artworks…
s @ 24: That will mean a year in jail for Holder. If they can figure out how to bell the cat.
Impeachment and conviction by the Senate. What are the odds. Of course, if Obambus won’t turn him over, they could escalate to impeach him too. FWIW.
1. “If you do not know who is the mark in the game look in the mirror.” The $$$ will come from you. Look in your wallet and say “Goodbye boys.” Check your bank statements carefully for any new surprise charges or fees.
2. Eventually I expect someone to attempt to blow the Aswan High Dam. It is like a nuclear bomb hanging over Egypt and Copts live downstream. So do tens of millions of Muslims but the Islamists do not care about them. The Copts have actually been dhimmified and beastly towards the Jews but it is sad that no one lifts a finger to save them. My expectation is that when genocide happens we shall hear the usual suspects blame Bush and the Joos.
3. Through the Stans after Obama gives away the store to Putin and the Chinese.
1. there won’t be any money. It is an optical announcement, one more attempt to make it look like things are under control. It will be forgotten as quickly as it has been announced, sooner if it has the desired effect of lowering borrowing costs for Spain and Italy in the market.
2. The wave of repression in Egypt will hatch another brood of broken amoral killers like the last one did.
3.Heh. Dumb question. Helicopters off of rooftops surrounded by a bunch of scuttled equipment.
Country A: We are screwed, we are headed for major deflation.
Country B: We are really screwed, we are headed toward a vicious cycle of inflation.
Country C: We are horrendously screwed, we are print as fast as we can but can’t stop deflation. When the deflation stops we’ll be hit by massive inflation.
Country D: If A,B, and C are screwed then we are screwed since they are our major customers.
Country E: Uhm, who do we blame, leadership, culture, academics, or the voters?
Country F: Blame the Americans, they’ll blame Bush, and maybe we can find someplace to hide till this blows over.
What is the difference between clinically daed and just plain dead.
I can see Tahir Square now:
The Mayor leads Dorothy to the Barrister and the City Fathers, who sing:
MAYOR
As Mayor of the Munchkin City
In the County of the Land of Oz
I welcome you most regally
BARRISTER
But we’ve got to verify it legally
To see…
MAYOR
To see?
BARRISTER
If she…
MAYOR
If she?
BARRISTER
Is morally, ethically
FATHER NO. 1
Spiritually, physically
FATHER NO. 2
Positively, absolutely
ALL OF GROUP
Undeniably and reliably
Dead!
CORONER unrolls “CERTIFICATE OF DEATH” scroll and sings:
As Coroner, I must aver
I thoroughly examined her.
And she’s not only merely dead,
She’s really, most sincerely dead.
MAYOR
Then this is a day of Independence
For all the Munchkins and their descendants!
BARRISTER
If any!
MAYOR
Yes, let the joyous news be spread.
MAYOR
The Wicked Old Witch at last is dead!
MUNCHKINS
(sing)
Ding Dong! The Witch is dead.
Which old witch?
The Wicked Witch!
As has been pointed out by better posters, this country and continent have truly prodigious resources, human and otherwise. This will pass, even if it must be at the cost of much exsanguination. Things are likely to get much worse before they get better. This is simply because the addicts running this spasm of extravagance will not even begin to awaken from their delusion until they smack at high speed into the bottom of the well.
(Jeez. How many similes and metaphors can I cram into this food processor?)
Another words, they will keep spending until the whole thing collapses.
There’s been so much Pride goething, gravity gonna have its way pretty soon.
Folks like Wretchard and L3 and certain commenters, though they man not have planned to, have been setting beacons along a path through the gloom.
____
toadold, just get countries A,B,and C to merge- their problems should cancel each other out!
1. They print it – the relief lasts for one month.
2. Egypt runs out of cash and can’t buy wheat. Hungry Egyptians increase border raids on Israel. Israel closes the Suez Canal with bombs.
3. Take the most valuable fraction of heavy equipment North. Leave the rest behind.
#24, #26
Don’t you know that the Holder contempt headline in the MFM will be, “another innocent black man ‘lynched’ by old white men.” Anyone think the race card won’t be played early and often, if not constantly?
1. It won’t get the money as promised in the Telegraph article. Keep in mind, the ESM has not yet been ratified by Germany or most EU members. And there is likely some fine print attached to the EFSF amount. My guess is that this is a ploy to buy time.
2. The so-called “Arab Spring” in Egypt was just a PR front for a military coup. The mask has slipped a bit, but the military continues to hold power.
3. Easy but expensive — it may be cost-effective to abandon and replace many items with new.
“There is in that obsession with the trivial — pursued relentlessly in the midst of the collapse of demographic, economic and military strength — something of the moral of the age.”
Not unique to this age. Anyone that’s served in the military knows what incompetent commanders look like. Bad leaders always focus on trivial issues because,
a. they think leadership is about control, and the only things that can be fully controlled are the details, not the big picture, and
b. they’re too stupid, delusional, and/or weak to recognize and take action on the big things.
The bottom line is that most of the world “leaders” out there these days probably couldn’t be trusted to lead a pack of Cub Scouts, let alone have the fate of the world resting in their hands. Winter is coming…
If the ruling class in Washington can hold out until the new oil sources come on line then the present system may survive. Of course the greens and most of the socialists are doing everything they can to prevent it. This must be the first time a whole class has declined the fuel of its survival.
1. Germany. At least for now. Within a few months Spain will be right back where it is, but the Germans will be tapped out and fecal matter impacts turbine. Dow drops to 7000. Could be before or after the election. Won’t matter – Romney wins either way. In January lots of US government regulators get pink slips and federal lands get drilling permits. Obamacare is just a bad dream. By fall 2013, the recovery is in full swing. Except in Europe, where National Socialists gain a big following.
2. Egypt’s money runs out by winter, food imports drop, whoever is in charge (doesn’t matter) launches a war against Israel to solve the problem, Egypt gets hammered, collapses into a bloody mess. Lots of hand wringing, no action. Famine ensues.
3. Most heavy stuff stays. Better stuff gets bought with proceeds from US oil boom.
In 2014 the Dow hits 16000, by 2016 N. America is 90% energy independent and Romney is re-elected. And by 2020 the US is about to start exporting oil/gas while buying none from our enemies. Demographic collapse in Europe and China and all of the attendant problems becomes evident to even the most blind, in contrast to the US.
By 2025 it is clear that the second American Century is well underway.
1. Under the rubric that the “debtor owns the bank,” the money will come from the US, Germany and China (and grudgingly from the UK, assuming they have anything to give). Until none of them can ante up any more. Whereupon the printing presses (already working hard) will start working overtime.
2. Rampant, indiscriminate, horrible violence. Until the new tyrants re-assert their iron fists and/or the killers are either totally exhausted or themselves killed (or there’s no one left to kill).
3. Who knows? It will probably have to be airlifted out (if possible) or blown up (unless Obama will make some kind of sordid deal with Putin—and you can be sure that all microphones will be supervised).
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A. The temptation to impeach Holder (and Obama) should be severely resisted. The temptation to be confrontational should likewise be resisted. The urge to be vindictive must be sorely resisted. (Think Lincoln again and again). However, the difficult questions should be asked over and over. Unyieldingly. Politely(?) Socractically(?) The rampant contradictions and the shameless lawlessness of this mercurially ideological administration should be exposed and splashed all over the place (which means the blogosphere, since one can expect the MSM to ignore them).
Again, the opposition to this administration must be seen to be constructive, creative, solutions-oriented. Anything but vindictive.
Let the people judge in November.
B. Serious problems (as though they weren’t already serious) will begin within the next two-to-three months, once it is clear to everyone with eyes to see (etc.) that this is a lame duck presidency. The administration, at that point—with nothing to gain (i.e., no “Jewish vote” to count on to save its ass from the fire)—will do its best to cause as much damage as it can to both American and especially Israeli interests. Countries intent on doing “mischief” will then attempt as much mischief as possible believing (correctly) that they will have the green light to do so until mid-January 2013 (and then some). (Gotta make hay while the sun shines, etc.)
Indeed, one of the ironic aspects of the still (absurdly) strong—if weakened—Jewish support for Obama is that Obama, while still under the impression that such support may well help him win in November, will continue to treat the I/P issue with caution. Once it becomes clear even to him that he is a one-term president, those gloves will come off, and Bibi had better be ready.
It will be an “interesting” summer-fall-winter of discontent. Perhaps the only opportunity that faces civilization is a necessary de-complication—a simplification—if that were possible.
On the other hand, “back-to-basics” may well be simple, brutal survival.
Who will rescue the rescuers?
From the NYT:
“We are, however, already in the fifth year of generous liquidity help to Europe’s uncompetitive members. Since late 2007, the European Central Bank has helped with an international shift of refinancing credit, also known as Target credit, from the core euro states to the periphery, to which the German Bundesbank has contributed $874 billion. Greece’s and Portugal’s entire current account deficits were financed that way.
Moreover, since May 2010, the E.C.B. has bought more than $250 billion in government bonds, while nearly $500 billion has come from rescue programs and help from the I.M.F. Add to that two European rescue funds, and you have a total of $2.63 trillion.
It is unfair for critics to ask Germany to bear even more risk. Should Greece, Ireland, Italy, Portugal and Spain go bankrupt and repay nothing, while the euro survives, Germany would lose $899 billion. Should the euro fail, Germany would lose over $1.35 trillion, more than 40 percent of its G.D.P. Has the United States ever incurred a similar risk for helping other countries?
Some critics have argued that Germany, having benefited from the Marshall Plan, now owes it to Europe to undertake a similar rescue. Those critics should look at the numbers.
Greece has received or been promised $575 billion through assistance efforts, including Target credit, E.C.B. bond purchases and a haircut after a debt moratorium. Compare this with the Marshall Plan, for which Germany is very grateful. It received 0.5 percent of its G.D.P. for four years, or 2 percent in total. Applied to the Greek G.D.P., this would be about $5 billion today.
In other words, Greece has received a staggering 115 Marshall plans, 29 from Germany alone, and yet the situation has not improved.”
http://www.nytimes.com/2012/06/13/opinion/germany-cant-fix-the-euro-crisis.html?_r=3&ref=opinion
1. The money to bail out Italy does not exist, never has, never will. If the yurps had any clue on how to actually “fix” their financial system it would have already happened. The only real solution is real economies that produce goods and services that people want and can afford to buy. Real economic growth and the Eurocrats cannot exist in the same space at the same time. One or the other will disappear forever.
2. The Egyptian military was in charge when Mubarack was president and will stay in charge until there is an internal fight that fractures the military council. I would bet dollars to donuts that some ambitious colonel with close ties to the MB is doing the math right now.
3. The heavy equipment will be “handed over” to the Afghan Defense Forces in a well photographed ceremony. Therefore, it is not “abandoned”.
The only question with an answer worth knowing is whether the global stock markets will crash before or after November. I’ve already placed my bet.
Fzzblemind
your article is written by a German
“Hans-Werner Sinn is the president of the Ifo Institute and the director of the Center for Economic Studies at the University of Munich”
He only selects the infos that suit his agenda, poor Germany that is always asked for bailing the others
“Germany would lose $899 billion”
that also means the clearings that Bundesbank had from Germany’s enterprises trades bills with the indebted countries, unveiled since ECB Q2
He forgets that the bailouts are ment to repay german banks loans (and the french’s)
TE has a interesting article:
“What happened to this debt after World War II? Here is where the Marshall Plan comes in. Recipients of Marshall Aid were (politely) asked to sign a waiver that made U.S. Marshall Aid a first charge on Germany. No claims against Germany could be brought unless the Germans had fully repaid Marshall Aid. This meant that by 1947, all foreign claims on Germany were blocked, including the 90% of 1938 GDP in wartime clearing debt.”
“So does Greece, does Southern Europe need a Marshall Plan? Is Sinn right to say that Greece has already received one—or a 115-fold one, as he argues? The answer to first question may be yes, in the limited sense that a sweeping debt relief programme is needed. The answer to the second question is a resounding no. Greece has clearly not received a Marshall Plan, and certainly not 115 of them. Nor has anyone else. As far as historical analogies go, what Southern Europe received when included in the euro zone was closer to a Dawes Plan. And just like in Germany in the 1920s, the Southern Europeans responded with a borrowing spree. In 2010 we didn’t serve them a Marshall Plan either, but a deflationary Young Plan instead.”
https://www.economist.com/blogs/freeexchange/2012/06/economic-history
#40 Peter Boston
The only real solution is real economies that produce goods and services that people want and can afford to buy.
I made a similar point on a previous thread about the European crisis. The notion of wealth creation is treated (or not treated at all) as if it were “dark matter” or something. It is almost never discussed among the European high-and-mighty.
f @ 39: In other words, Greece has received a staggering 115 Marshall plans, 29 from Germany alone, and yet the situation has not improved.”
Oh come on now. In 60 years we’ve certainly learned how to waste money faster than our grandparents ever knew, but 115x? What this goes to show, I suppose, is how much money is siphoned off the top by the banksters.
Maybe 99%? Could be. In which case the money was certainly recycled back into the economy, in the consumption of caviar and yachts, I suppose, or just ten figure swiss bank accounts where it mostly sits and molders to this day, there not being enough caviar and yachts on the planet to consume it.
I will point out one other thing: in 1950, one Marshall Plan *worked*.
In fact TE article is from:
“Albrecht Ritschl is professor of economic history at the London School of Economics and a member of the advisory board to the German ministry of economics”.
OT,
The White House has invoked Executive Privilege to shield Holder and the documents subpoenaed by Congress relating to Fast & Furious. The transformation of Barack Obama into Richard Nixon is now nearly complete. It should be noted though, that unlike Obama, Nixon wrote his own books and was braver, harder working, more intellectual, a better lawyer, a nicer more charitable guy, had better taste in women, and a was better musician than Obama.
Obama probably dresses better.
1. Funny money is the only thing that been available since late 2007, that’s why it keeps taking more and more but very little changes, US Wall Street is plumping up with Cash, because there is nowhere for it to go, the more that is being pumped in the less it is going to be worth when the correction comes, everyone knows that the only place you can “Reliably” put your stash is in the US, even the Chinese rich (Communist Country with Rich people???) are pouring money into America, they all know the financial world will crash but in America they will retain the most and best chance to retrieve it when the dust starts to settle, problem will be that after the dust settles from the crash all those funny money dollar bills will start to be withdrawn, that’s when the America will really feel the pain.
2. Egypt will go back to the pre 1960’s days, unless other ME counties go in on it at the same time they won’t mess with Israel, the military men know how bad it will be to go solo with the Israelis, Egypt may try a land grab from what use to be Libya, to calm the streets.
3. US turns heavy equipment over to Afghan forces minus any special equipment add on, US should do a Sherman march thru Iran with a Mountain reducing excursion than come home, again leaving the Heavy Equipment but melting their innards before leaving.
AG Holder has thrown the Gauntlet down at Congress! If 0bama shrouds the F&F files in Executive Privilege and Congress does not Fight it is over and we have our 1st Emperor! Hail Hope and Change. Hail Cesar Augusta’s 0bamus…
OT, but just another manifestation of Europe’s decline into genteel barbarism:
http://www.dailymail.co.uk/news/article-2161869/Top-doctors-chilling-claim-The-NHS-kills-130-000-elderly-patients-year.html#ixzz1yK7gbr7D
Patients deliberately killed just because they were old.
Re 14. Teresita
“9. Josh: Maybe Israel and the world should stop recognizing Egyptian sovereignty over the Sinai.
They have already stopped. Hamas launches rockets from the Sinai into Israel, then Israel and the world give Egypt a pass. No consequences whatsoever. That means Israel and the world doesn’t recognize Egyptian sovereignty over the Sinai, since sovereignty involves a monopoly on the use of force.”
By that metric there is no sovereign in Syria, Lebanon, Iraq, various immigrant populated banlieues across Europe, and a few urban areas of the US (after dark).
The Sinai problem is not really about a lack of Egyptian sovereignty. The Egyptian army could, if desired, lock down the Sinai and prevent practically all attacks on Israel.
The situation is that the Egyptian sovereign doesn’t want to stop these attacks as long as they stay below a certain threshold. Israel does not want to call them to task for this as the attacks are not a significant threat as yet. If they become a threat, expect F-16s over Sinai. If the threat continues and the Egyptians won’t do the job, sovereignty won’t matter and Israeli tanks will be sitting on the Suez 24 hours later.
Xenophon’s Anabasis*. I just hope we can get our people out. Putting the hurt on AQ and/or Iran on the way out would be very nice, but I would be just as happy dropping some sunshine a few of the Usual Suspects once we no longer have boots on the ground.
I still can’t figure out why the Yurps are screwing themselves over just to help Obama get re-elected. Or do they think by holding off the crisis until January they can appeal to a competent adult? That is surely the most charitable guess I can make.
*or this book: http://www.baenebooks.com/chapters/1416555536/1416555536.htm?blurb
So the facebook protesters have got to be in a deep depression at this point.
Having gone through all this trouble all they did was depose a president who would have been dead in a year anyway. Now they still have military rule, no real democracy and all of the remaining power going to Islamists who were the only ones ready to go with political organization.
Egypt is slipping fast and Saudi Arabia is buying them bread just to hold off the Brotherhood for a while.
I do not think it matters what the Brotherhood thinks of the terrorists attacking Israel. They have no power at all over security. If the military is looking the other way it seems very counterproductive to their interests.
#45-Blast:
Based on Maraniss, Nixon could probably take him in hoops. Based on my observations, he would smoke Obama in golf.
“Where is Europe going to get the money to bailout Italy and how long will the relief last?”
I don’t know, but I would assume they will just print it and I hope it lasts at least six or seven hours. Otherwise, it just wouldn’t be worth it, given the pain the inflation will cause.
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I guess this gives Soros a new avenue with his $2B worth of Italian bonds; I wish I could think like that
#47 Don Rodrigo
Some time ago I told our group of what my daughter saw while hospitalized in a NHS hospital while a foreign student in London. She saw two people deliberately murdered by NHS personnel, because it was too inconvenient and expensive to care for them. I was called a liar. I have just been backed by the head of their National Health Service. If the Supreme Court does not strike down Obamacare, which is the same plan minus any compassion and humanity; there will be violence.
#49 delayna
Reference the link to LAST CENTURION. The “Anabasis” section is riveting. But throughout there is some very insightful social and political analysis that is the real key to the book. The nature of the society determines its responses and survival or lack thereof. I second the recommendation wholeheartedly. Read this book.
Subotai Bahadur
1) The EU will print the money which is in effect a slow motion default.
2) What Arab Spring? They have merely sunk back to their aboriginally squalid historical norm. Stability and indoor plumbing are an aberration for them.
3) Where is Old ‘Cump when you need him? General Sherman would gas those tanks up and leave a 90 mile swath of utter destruction all the way to Haifa and eat what he killed en route. Of course what wil actually happen is we will leave the stuff.
#23. stoicheion
“The most expensive painting fetched 140 million. So you would need [#25. blert - 5000] of those to get 700 billion. Only if there was [5000] of them, they wouldn’t fetch 140 million.”
Qatar recently bought one of Cezanne’s Card Players series for $250 million, and at the link, the aggregator for the Top 10 list commented “As a fan of fine art, I believe some of these appraisals are on the low end, as it is not hard to imagine the Mona Lisa alone bringing in well over 1 billion dollars,” but I will happily concede it will take many more than 5000 artworks to bring in $750 billion. Still, we’re talking Italy here — not just Rome, but cities like Venice, Florence, Naples, Milan, and Turin, and thousands and thousands of smaller towns and villages. You wouldn’t have to strip the country to liquidate its debt, even if you’d have to make a fair dent in its collections of artworks, gems and antiquities.
“I’m leaving aside the problem of who is going to buy them. When everybody is broke, those that held on to a few alms will want a good price. It’s called a buyers market. Flood the market with art and the price will go down. Fools that can afford to pay 140 million for a painting are few and far between.”
Ah, but you’ve got all the holders of Italian debt! Not to mention holders of debt from all the other PIIGS… Don’t you think some of those folks would be willing to trade their rather-questionable sovereign debt holdings for securities backed by hard assets? These investors plowed billions into one kind of store of value, and if you offer them novel asset class with distinct return patterns offering better diversification, they might adjust their holdings enough to absorb some of Italy’s hard-asset holdings, giving Italy some relief on debt service.
Just because a thing hasn’t been done before doesn’t mean it won’t work or that it isn’t worth doing. It’s pretty clear that the existing way of doing things is on its last legs, but innovation can let the system adjust and avoid an unneeded collapse if the assets exist to cover the debts… and boy, does Italy have assets! Detroit, too, and the USA.