Tuesday, December 4, 2012

Say whuhhh?

Germany's Finance Minister, Wolfgang Schäuble, is trying to save the Euro, which task includes trying to get troubled European economies to make necessary reforms to regain economic health. Not without good reason, Mr. Schäuble likens his task to that of Sysiphus, the figure of Greek mythology who made wings of wax and flew too close . . . no, wait, was doomed to rolling a boulder up a hill and having it roll back down for all eternity.

Something along the lines of being a blogger in the age of Obama and Islam.

But, BTAIM, a pretty smart German guy, it appears, is tasked with the doing what is humanly impossible, with Germany potentially exposed to paying out about one year's budget worth of Euros as a result of its support for all its various buyout schemes. Schäuble is dealing with that German budget reality and whatever is being done with respect to Greece is either a part of that or a supplement to it.

Apparently Greece and the others are to "reform."

I am not making this up.

Reform roughly along the lines of persuading street prostitutes to take up holy orders, if I grasp the full import of recent Greek riots. I detect a whisper of resistance to the idea.

Good luck with that, as the saying goes, given what the WSJ's Matthew Kaminski notes below about "rosy assumptions about future Greek growth":

Last week's Greek deal depends on the successful buyback of bonds from private creditors later this month, and it makes rosy assumptions about future Greek growth. Within hours of its approval, Mr. Schäuble had to admit that the deal might not be enough to stave off Greek insolvency. He says that alternatives are available down the road but won't "explicitly" spell them out. Germany first needs to see the promised Greek reforms "fully implemented."

"If there is no crisis, Europe doesn't move," Mr. Schäuble says. "If you have success you start to destroy the basis of the success. That is what Sisyphus is about."

That last paragraph ought to cause a few more gray hairs on wise heads. Europe's course of action in the near term will be crisis driven and apparently little will be done before a crisis. On top of which the finance minister of the strongest economy in Europe, now seriously exposed financially, is on board with printing Euros (i.e., blatant theft) and mouths incomprehensible flapdoodle.

Keep an eye out for those other available "alternatives." Four-alarm confusion's my best guess. Steady as she goes for now, say our captains, and if you're into Greek mythology, meditate on the difficulty of sailing between Scylla and Charybdis. Now there's some serious mythological Hamburger Helper (part of our American cuisine, right up there with Jamaican chimichangas and Thanksgiving tacos).

All well and good but people without serious substance abuse problems know that we're all on that particular boat, worse luck, and Europe is instructive for its lessons on the application of the iron laws of arithmetic to welfare state finance. Over with us in the U.S., madness and delusion rule the roost and the same lessons are there to be learned. As Thomas Sowell points out:

No previous administration in the entire history of the nation ever finished the year with a trillion-dollar deficit. The Obama administration has done so every single year. Yet political and media discussions of the financial crisis have been focused overwhelmingly on how to get more tax revenue to pay for past and future spending.
At least Mr. Schäuble seems to sense that there's a crisis in Europe and that it's a bad thing. With President Barack Hussein Obama any crisis that he is aware of appears to be something he embraces as an interim step to chaos and some kind of new, post-chaos entity.

Mr. Sowell lays out the extent of Mr. Obama’s intellectual dishonesty.

It's not looking good for us Wolverines.

"Trying to Save Europe 'Step by Step.' Finance Minister Wolfgang Schäuble on Germany's balancing act between euro scold and bailout enabler." By Matthew Kaminski, Wall Street Journal, 12/4/12.


furball said...

"On top of which the finance minister of the strongest economy in Europe, now seriously exposed financially, is on board with printing Euros (i.e., blatant theft) and mouths incomprehensible flapdoodle."

U.S. translation of "incomprehensible flapdoodle" = Quantitative Easing.

They're idiots when they know we're idiots enough to believe this idiotic nonsense and then idiotically prescribe this idiocy as a solution.

The media, White House and Congress are guilty of trying to present the sequestration as the "financial cliff."

Small, inconsequential (but politically damning) cuts to social programs and defense budgets won't solve America's debt problems.

But by "solving" that "crisis," they're trying to fool the American people into believing (at least for another year or two) that they "are dealing with the problem," or are "protecting the middle class," or at least to pretend to know what they are talking about, when they haven't a f***ing clue.

As Karl Denninger notes, institutional problems in Health Care, Education and Financial Services cannot be papered over with dollars or creeping regulation. See market-ticker.org for some plain talk and original thinking about these and other subjects.

Anonymous said...

Smart people when faced with tough problems and a very diverse and large popular opinion "lie". (Dumb people lie most of the time and rarely for good reason.) But smart people are lying to us about the Euro and the future of the EU. I can assure you that today in at least half the countries in the EU they are at the very least discussing what the money should look like when they begin to print their own currency. No doubt Germany, who has the most to lose, has already set up the presses to begin printing the new Deutsche Marks. The "lie" is necessary because once anyone in the government actually states that this plan is in the wings it will be bedlam and any advantage to the government will be lost as citizens and corporations scramble to reduce the impact on them. One day in the near future, probably a Friday after 5pm on a holiday weekend the country (could be Germany or France or Spain or Italy...) will announce that the banks are closed because of a bank emergency. Then the following Tuesday or later a grim faced government spokesperson will come on the TV to announce the break from the Euro and what the new money will be and how mucvh it will be worth in old Euros and how long you have to trade your old Euros in. I would not be suprised if the U.S. has not began the process of printing the new dollar to be worth about 10% of what the old dollar is worth. It is impossible to predict with accuracy when and how bad it will be but it will happen and the indicators are lining up...

Col. B. Bunny said...

Thanks for the Denninger reference, fb.

I had a "discussion" yesterday with a friend which experience was much like trying to nail jello to a balloon. Nothing could ever be communicated to that woman that would cause her to begin to meticulously sift thru data and gradually developed an ever-more-refined understanding of, say, any of the fiscal problems facing us in the U.S. It won't ever happen and this is someone with an advanced degree. Her conclusions were not much different from that lady exulting about her Obamaphone or the other one crowing about her Obama cash from the Obama stash.

We live in fact-free, Constitutional-optional times and the quality of public discourse is abysmal. The political elites are delusional and simply cannot imagine the realities that are now knocking on every door throughout the Western world. Like France's President Hollande's doubling down with soak the rich taxes and trying to keep the welfare state benefits flowing. Or some of our fools presenting proposals that involve no real cuts in spending but the usual cut in the rate of increase of spending.

I mean we live in delusional times wherein we invite millions of third-world peasants and arrogant, subversive Muslims into our country to take jobs from Americans and vote back into office a man who hates the America and who started his political career in the living room of two communist terrorists. Two Americans are left to die in Benghazi and Romney couldn't bring himself to ask Obama what he PERSONNALY did to try to save them or to prevent them from being saved.

Americans by the millions accepted this and even embraced this. Why would any politician think that they should be required to speak the truth to the voters?

Reason and persuasion are of no use. Only brutal reality will open eyes to old ways of doing things.

Col. B. Bunny said...

Quite right, anon. I like the definition of diplomacy as saying "nice doggy" while reaching for the nearest big stick. Here we see the Europeans saying "lovely currency" and secretly sending out to Pyong Yang for the engraving work for the new bank notes.

In the meantime it's just moving money around like the pea in the shell game.

One of the first things that has to happen in the near future is for us all to withdraw from all supranational experiments and allow small states to compete for capital. America was for a long time a magnet for talent and money but that was when we were sane.

Let's see now who attracts whom and what and why.