Weekly Musings 34 8-30-11
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For those who are new to the Musings: they are basically a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights, and thank you for supporting the site.
A Late Musing
Normally I try to issue the Musings by Sunday, but a late return from our camping trip delayed this Week's Musings. Additionally, (corny joke alert) I flew down on Sunday to Los Angeles for a free-ranging, most interesting interview with my confrere and friend Richard Metzger of Dangerousminds.net, and boy are my arms tired. (Badaboom.) My apologies for the tardy Musings and for the joke....
Deglobalization's First Round: Europe
Deglobalization is one of my "five Ds" major systemic trends: deglobalization, definancialization, decentralization, delegitimization and deceleration (helpfully added by Chris Martenson when he interviewed me earlier this month). The first visible round of deglobalization is occurring in the Old World of Europe, as the "stateless State" of the Eurozone heads toward dissolution.
The Status Quo view of Greece is that the citizenry of that nation should "tighten their belts" via austerity because they benefited from all those loans from German and French banks, and they should agree to offering up some collateral to Finland in exchange for bailout cash.
My view is that the Greek financial and political Elites benefited from the billions in "free money," and they are pushing the costs onto the "owners" of the nation's income stream and assets, its citizenry.
The citizens would be crazy not to rebel against this debt serfdom, as they gain nothing and lose both income and their national assets as creditors demand collateral. The only sane choice is to renounce the debts completely and refuse to comply with their Elites' demands for austerity and selling off the nation's assets to satisfy French, Finnish and German creditors.
The conventional view is that the Greek economy will implode if Greece leaves the Euro. The Greek economy is imploding now, so how much worse could it be to renounce the debt, throw off their political Elites and start from scratch with a devalued national currency? At least they would conserve their national assets from seizure.
All credit/debt excesses must be purged before any financial system can be restored to transparency and equilibrium. The only way for the indebted nations in Europe to do so is to renounce their unpayable debts and exit both the Euro currency and the "stateless State" of the European Union. That's deglobalization, and counter to the endless propaganda, it's a positive trend for the debt-indentured citizenry.
The Game Is Over: Gloom Settles on Central Bankers
The Status Quo's mouthpiece, the Wall Street Journal, reluctantly confessed in Gloom Settles on Central Bankers that it's the fourth quarter in the global game of papering over insolvent banks, nations and creditors, and the Central Banks' Hail Mary passes sailed right over the receivers' heads.
The stock market is anxiously awaiting another "quantitative easing" save from the Federal Reserve on September 21, but as I have suggested on the blog, the Fed's hands are tied politically, and the best it will be able to manage is a tepid campaign to lower the yield on long-term bonds.
Does anyone seriously think this monetary gaming will actually have any effect on the real economy or the market? It may well spark another one-week-wonder rally, but the effectiveness of monetary policy has been revealed as near-zero.
What I Learned on My Summer Vacation
My wife suggested I do a blog entry on the time-honored return-to-school theme of "what I learned on my summer vacation."
We were both impressed with the "old growth" forests in Washington state; the Douglas Firs and cedars are almost as tall as redwoods, and the native forests are other-worldly in their splendor and spirituality.
Very little old-growth forest remains in the continental U.S.; I have seen estimates of between 1% and 3%. The other 97% has been logged, usually multiple times, and many of these "forests" are effectively tree farms.
Though I have often described the fundamental failure of "market pricing" on the blog, it struck me anew how completely incapable the "market" is at accurately "pricing" things like old-growth forests, as there is no "financial value" assigned or even possible for what amounts to spiritual and cultural value.
The wood in an old-growth forest is valued at the board-feet contained in its trees, just as in a tree farm that is basically a monoculture that lacks a real ecosystem.
This is one example of why any "ideologically pure" market system is fundamentally flawed. (I addressed this in more depth in my book "Survival+.") The only possible counterweight or limit on private greed and exploitation is a government controlled by the citizenry. Sadly, our government has been subverted by financial Elites, and we have the worst of both worlds: corporate monopoly/cartels enabled and supported by a captured Central State.
We were also struck by the long life-cycle of the old-growth trees. After living as long as 1,000 years, the trees die and topple to the forest floor, where they provide energy and nutrients for the next cycle of growth. You can see these huge "nursery trees" crumbling on the forest floor, with dozens of new young trees sprout from their decaying trunks.
Compare that to our economy, in which those living in the present are not storing energy or wealth for future generations; we are squandering our irreplaceable energy reserves and even worse, saddling future generations with heavy debt to support our own profligate lifestyles.
We could learn something profound from the old-growth forest.
From Left Field
Weird, Birdlike Mystery Drone Crashes in Pakistan (A journalist recently asked a U.S. general how many drones and air-robots would be engaged in the next war: dozens, or perhaps hundreds? The general replied: "Thousands." That is the future of high-tech warfare.)
Thanks for reading--
charles
