Outright denial no antidote to Rumour Control Central
As France fiddles while the rest of Europe burns? The Euro is a dead duck and like an alcoholic in denial, there can be no cure till admission prevails.
But no sweat I have a solution. All it needs is a re-christened Euro. Let’s call it the new Reichsmark and rename the ECB, the Bundesbank. Begone you doubters, renaissance is at hand. All it needs is the realisation that Anglo Saxon realism, rules OK and its problem solved.
It was always going to be this way, because no one across the entire continent of Europe can organise like the Teutonic machine. You have to hand it to them for a nation with little in the way of natural resources; Germany has used their one exclusive, almighty talent of organisational ability, to raise the ante post bet.
Can it succeed economically where all else fails on the back of exporting superior over-engineering. Quite possibly the answer is yes, but what it really lacks is the Anglo-Saxon flair for design. There really is no way that over-engineering can be a substitute for design flair. It just doesn’t work.
You can engineer a product to last far longer by over-engineering, but beauty is in the eye of the beholder and people will soon junk stuff because they get fed up with its appearance, when something which appears to be new comes along. So inevitably the blending of Anglo Saxon realism and Teutonic engineering is the real solution to the woes of Europe.
The theory that it needed to be bound together in an economic colossus, to match the USA, has proved to be a bogus argument. For ever since the Wall Street Casino set out to rule the world and the strait-jacket of a duo-metallic monetary system was abandoned in Europe, circa 1717. The present hiatus has been brewing.
The final nail in the coffin of postwar European endeavours to build an empire to match the USA was delivered on August 15th 1971 when the US$ effectively became a Fiat Currency an IoU. That nations across the world and in particular China, as it clung to Communist Rule while vying to be the factory for the world in consumer manufactures, failed to realise that default by the USA had from that moment on, become an inevitability.
The great American Casino known as Wall Street, could not believe its luck as the hi-rollers in China, feted for their gambling instincts, piled into US IoUs. Now they have accrued billions of what are effectively US junk bonds, they stand to be the nation above all others with the most to lose, as America’s Wall Street prepares for default.
Siren voices claim a return to the gold standard is the way forward, but the fact that the value of the precious metal would need to plateau out at a value equivalent to the US IoUs issued since August 15th 1971 at around 35/45/60,000 $/ troy ounce, invalidates this argument in perpetuity and other solutions will need to be devised.
What is the answer? Revaluation, devaluation, default, it really does have to be one of these three things. Though even a revaluation to realistic values, would mean upheaval on such a vast scale that it has to be discounted. Devaluation solves nothing; it just postpones the day of reckoning. So the only real solution is default. Debts are written off, credit is destroyed and the roundabout starts all over again.
Watch this space, I’ll be back!
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