Perhaps the most significant factor to consider is the following report (excerpted) from the federal National Oceanic and Atmospheric Administration’s (NOAA) American consul at Norway, George Ifft:

The Arctic seems to be warming up. Reports from fishermen, seal hunters, and explorers who sail the seas about Spitzbergen [an island 12 degrees south of the North Pole – ed.] and the eastern Arctic, all point to a radical change in climatic conditions, and hitherto unheard-of high temperatures. In fact, so little ice has never before been noted. The warmth of the waters makes it probable that the favorable ice conditions will continue for some time.

Many old landmarks are so changed as to be unrecognizable. Where formerly great masses of ice were found, there are now often accumulations of earth and stones. At many points where glaciers formerly extended far into the sea they have entirely disappeared. The change in temperature has also brought about great change in the flora and fauna of the Arctic. There were few [white fish and] seal in Spitzbergen waters this year, and last winter the ocean did not freeze over even on the north coast. With the disappearance of white fish and seal has come other life in these waters. This year herring in great shoals were found along the west coast. Shoals of smelt were also met with.

Ifft’s report appeared in NOAA’s Monthly Weather Review of November 1922. Whatever caused the “favorable conditions” in 1922, it is certain man-made greenhouse gases had nothing to do with it, and the rest of the world went on with the political and cultural revolutions of the 1920s without noticing any catastrophic climate change.

Related posts:

1. Global Warming Hoax Exposed
2. Examining the Theory of Catastrophic & Man-Made Global Warming
3. The Global Warming Religion

Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.

This is, however, a really bad analogy in at least two ways.

First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.

This was clearly true of the debt incurred to win World War II. Taxpayers were on the hook for a debt that was significantly bigger, as a percentage of G.D.P., than debt today; but that debt was also owned by taxpayers, such as all the people who bought savings bonds. So the debt didn’t make postwar America poorer. In particular, the debt didn’t prevent the postwar generation from experiencing the biggest rise in incomes and living standards in our nation’s history.

But isn’t this time different? Not as much as you think.

It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of U.S. claims on foreigners. And because foreigners tend to put their U.S. investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction.

Now, the fact that federal debt isn’t at all like a mortgage on America’s future doesn’t mean that the debt is harmless. Taxes must be levied to pay the interest, and you don’t have to be a right-wing ideologue to concede that taxes impose some cost on the economy, if nothing else by causing a diversion of resources away from productive activities into tax avoidance and evasion. But these costs are a lot less dramatic than the analogy with an overindebted family might suggest.

And that’s why nations with stable, responsible governments — that is, governments that are willing to impose modestly higher taxes when the situation warrants it — have historically been able to live with much higher levels of debt than today’s conventional wisdom would lead you to believe. Britain, in particular, has had debt exceeding 100 percent of G.D.P. for 81 of the last 170 years. When Keynes was writing about the need to spend your way out of a depression, Britain was deeper in debt than any advanced nation today, with the exception of Japan.

Of course, America, with its rabidly antitax conservative movement, may not have a government that is responsible in this sense. But in that case the fault lies not in our debt, but in ourselves.

So yes, debt matters. But right now, other things matter more. We need more, not less, government spending to get us out of our unemployment trap. And the wrongheaded, ill-informed obsession with debt is standing in the way.

But the government HAS been running deficits!

This just as a sidenote:

Actually the US government is, has been, and is planning to continue to be running record deficits above $1 trillion:

The total public debt has more than tripled since 2000!

So technically, according to this guy it should all be good, right?

Any serious scientist proposes a null hypothesis.

What’s his null hypothesis?

How much longer should the government follow his policy recommendations before he’ll stop and wonder if
maybe they are aggravating and prolonging the economic crisis in the US?

How much did all this debt help rid the US of unemployment? Didn’t unemployment rather rise alongside the debt? In spite of corroborating data like that, I’m not even claiming that there necessarily is a direct correlation. But the author above obviously claims that there is a correlation in the other direction. If he thinks so, wouldn’t it make sense to have a curious and open discussion about such contradicting data, if he were serious in his pursuit of the truth?

Is it not at least reasonable food for thought to propose the that the public debt doesn’t seem to be a cure against unemployment, that maybe the problem needs to be tackled elsewhere?

Anyway …

What are the problems with the public debt?

The author conveniently picks all the wrong amateur arguments against the public debt to shoot down, and ignores the accurate ones.

The problem with the public debt as I see it, is that, even if “we” were completely indebted to “ourselves” (note the grade A sophistry in such imprecise analyses), the working population is over time more and more on the hook to rich investors and politically connected bankers who just lean back and let the IRS collect for them.

While there may be some small retirees receiving interest payments (which is also unfair because those young people who will be funding their retirement never had any say in the matter), there is a significantly larger percentage of foreign and domestic big time investors who get to collect from people who never had a say in the debt they now need to pay off.

Just look at the Federal Reserve as one example. What do you think happens with all the revenue they earn from interest payments?

People like this author here will likely tell you “It’s all good because it’s all paid back to the Treasury”.

Well, that’s just pure and lazy sophistry!

What’s paid back to the Treasury is the Fed’s PROFIT, which is a more or less negligible sum after all the Fed’s board members, employees, contractors, partners in holding companies held by the Fed, and shareholders have been paid off.

Guess who the Fed’s shareholders are? It’s the big national banks, receiving a handsome preferred dividend every year.

And yes, they can rollover debt for as long as interest rates are low. I may note that I have consistently and correctly predicted record low Treasury rates for years to come. (Just by the by: I don’t know that the author above has ever made such a prediction, except when rates were already way low which doesn’t make it a prediction since it’s already happened. In fact he actually predicted sky rocketing rates and complete fiscal doom back in 2003 with the public debt at a third of today’s level, but then … it’s not like I ever expect consistency and sound methodology from biased academics on either side of the political aisle.)

All these low rates will do is allow the debt to get even more bloated. And interest rates won’t remain low forever, as you can see in Greece and similar situations. Did people like the above author see any of those sovereign debt crises coming?

What about Japan? Their debt is the most crushing of all industrialized nations, and I’m predicting that their time of low rates will be drawing to an end any day now, with their debt and pension crisis having entered its final stage. Then what?

They have been running deficits for two decades, people like this author ought to love what they did. Now what? … All you’ll hear is chirping crickets.

And then for someone like that to go on public record and say “Nobody understands debt.” – It’s embarrassing!

It’s the same old tired Keynesian paradigm: Debts don’t matter … until they do. And then it’ll most likely be too late.

Of course people like the above author may say: “But it’s just the rich who’re supposed to get taxed to pay off the debts.”

Yeah right, the rich people who bribe all the politicians in charge will let that happen, that’s the way of the world in the hazy deluded minds of state tenured academics … get real people!

For a more detailed analysis, read my post What’s the Problem With Government Budget Deficits?, I’ll just post its conclusion here:

As I explained, the ultimate damage caused by public budget deficits occurs at that point in time when taxpayers are forced to restrict their consumption and unjustly bear the cost of malinvestments from the past.

Ironically, when you look at the political stage, all you will hear in regards to “solutions” to deficits in the end, will for the most part be tax hikes. These are not solutions. They are the ultimate manifestation of the very problem at hand. They are, in fact, the precise opposite of a solution. Keep this in mind whenever you hear politicians talk about deficit solutions. Raising taxes to reduce deficits is absolutely and 100% an admission that one has completely failed to solve this deficit problem, and in fact laid the final brick that was missing in the very process of the public’s depredation via deficit spending.

A real solution would of course be to make investors suffer the consequences of their unproductive investments, default on the public debt, stop stealing money from people, and allow for voluntaryism to take the place of interventionism.

Related posts:

1. Mountains of Debt – The Keynesian Legacy
2. US Debt Outlook Lowered – The Bills Are Coming Due
3. Republicans in Congress Boldly Pledge to Raise the National Debt Ceiling

“President Obama’s action today is a blight on his legacy because he will forever be known as the president who signed indefinite detention without charge or trial into law,” said Anthony D. Romero, ACLU executive director. “The statute is particularly dangerous because it has no temporal or geographic limitations, and can be used by this and future presidents to militarily detain people captured far from any battlefield. The ACLU will fight worldwide detention authority wherever we can, be it in court, in Congress, or internationally.”

As I’ve argued since the beginning of the Obama presidency, the more disillusioned young people get with who they thought was for sure going to be their savior, the better it’ll be for the ideas of peace and liberty, and the more devastating it’ll be to the dying concepts of governments and nations in the long run.

Thus Obama’s election and tenure have indeed been a great success in helping push our ideas and we could have hardly asked for any more.

Related posts:

1. President Obama – Elevating Bush’s Inattention to Deficits to an Art Form
2. Prolonged Detention – Change?
3. Obama vs Obama on Raising the Debt Ceiling

The last trade for 2011 at the leading Bitcoin exchange was at the rate of $4.72 USD. For the year, Bitcoin’s exchange rate rose from $0.30 — a 1,473% increase. For the fourth quarter, the exchange rate dropped from $5.14 — an 8% decrease. For the month of December, the exchange rate rose from $3.06 — up 54% for the month.

The number of transactions where Bitcoins are used for both the transfer of funds and for commerce has not risen for the past quarter. The explanation for the exchange rate rise would seem then to be mostly attributed to a combination of short term speculation and the use of the currency as a store of value rather than it being due to organic demand from use as a trading currency. World financial events that have motivated investors towards previous metals such as gold might be having the same effect in driving investor interest in Bitcoin.

Because there is so little definitive information that can be learned from observing the transaction data of a pseudonymous digital currency, speculative theories are plenty in explaining the price rise. Whether or not this is simply greed being stronger than fear at this point is hard to tell. What is known is that rallies of this current magnitude have already occurred for Bitcoin more than a dozen times over the past year-and-a-half.

I may add that today Bitcoin is already at $5.33.

I myself am currently mining at around 800 MH/s and planning on adding another Radeon some time this year.

Happy 2012! =)

Related posts:

1. Bitcoin – A Formidable Challenge to the Powers That Be?
2. Bitcoin Triples Again; Thoughts on Money and Freedom
3. Gold, Treasury Notes, Dollar – May 2011

Now imagine this mafia allowing the people of its district to submit votes, allowing them to choose who will be the main guy or party in charge of all its extortion runs.

Now imagine this mafia extending their extortion runs to every single working resident within its territory, demanding a percentage of incomes earned.

Now imagine this mafia demanding that the residents pro-actively send in the tribute “owed” and supply every detail about how much they earned and how and where in order to avoid having someone knock on their doors to collect.

Now imagine this mafia borrowing money from local and remote investors, against the collateral of future extortion proceeds which they then use, among other things, to expand their scope of intrusion into the lives of the residents.

Now imagine this mafia setting up learning camps that it funds with money from increased extortion threats. For generations moving forward the mafia would determine the curriculum used to educate the children of residents and shape their beliefs accordingly.

Now imagine this mafia establishing a bank where it prints its own currency the use of which it makes compulsory by demanding it in extortion payments, and by threatening aggression against anyone who doesn’t accept it in the settlement of debts and anyone who dares to compete in the production of currency.

Now imagine this mafia establishing its own permanent standing army, equipped with tanks, grenades, nukes, fighter jets, aircraft carriers, bases, helicopters, etc.

Now imagine this mafia establishing an institution where it approves or denies drug producers the right to sell drugs to its residents. Producers need to pay fees and wait for years before they’re granted this right.

Now imagine this mafia using its arms to attack other mafia gangs of other adjacent and remote territories, year by year killing millions of non-mafia residents in the process, all funded by money from increased tribute demanded in extortion threats and money borrowed against the promise of payment from yet more future extortion threats.

Now imagine this mafia setting up buildings with giant cages where it locks away people who don’t follow its orders, such as the prohibition against owning or selling certain pieces of harmless vegetation, or resistance against extortion payments.

Now imagine this mafia using extorted money or money borrowed against future extorted money to reward connected businessmen who made bad or economically harmful decisions with other people’s money.

Now imagine this mafia setting up thousands upon thousands of regulatory boards, institutions, departments, sub-departments, and agencies, equipped with rules, decrees, and the police force necessary to enforce them by shaking down businesses or individuals who are in violation of any of such rules or decrees.

Now imagine this mafia operating on a nationwide scale.

Imagine people having been brainwashed in those compulsory education camps over the decades, telling you with a straight face that it is this mafia that we need in order to protect us from people who may steal from or aggress against us!

Now imagine some of the residents in its territory supporting a group that proposes an increase in the mafia’s extortion proceeds and regulatory shake downs. This group of people is today commonly referred to as “Democrats”.

Now imagine some other residents supporting a group that proposes an increase in the mafia’s attacks on other mafias and murders of residents in other territories and an increase in the cagings of carriers and sellers of unwanted vegetation. This group of people is today commonly referred to as “Republicans”.

Now imagine a group of residents proposing that there be no extortion runs and wars at all. This group of people is today commonly referred to as “radicals”.

Imagine all these things and you get the largest and most dangerous mafia gang of all – the state.

Related posts:

1. The State and Childhood Memories
2. Texas Judge Beats Daughter; The Facts About “Spanking”; Child Abuse The Root of All Evil
3. State Pensions Owe $5.17 Trillion – Total US Debt at 700% of GDP

Allowing some private ventures, the NEP allowed small animal businesses or smoke shops, for instance, to reopen for private profit.

(…)

Rather than repossess all goods produced, the Soviet government took only a small percentage of goods. This left the peasants with a marketable surplus which could be sold privately

(…)

The state, after starting to use the NEP, migrated away from Communist ideals and started the modernizing of the economy, but this time, with a more free-minded way of doing things. The Soviet Union stopped upholding the idea of nationalizing certain parts of industries. Some kinds of foreign investments were expected by the Soviet Union under the NEP, in order to fund industrial and developmental projects with foreign exchange or technology requirements.

The results:

Agricultural production increased greatly. Instead of the government taking all agricultural surpluses with no compensation, the farmers now had the option to sell their surplus yields, and therefore had an incentive to produce more grain. This incentive coupled with the breakup of the quasi-feudal landed estates not only brought agricultural production to pre-Revolution levels but surpassed them.

The only problem with the policy was that the state still maintained control over significant other aspects of the economy, leading to the usual problems of interventionism:

While the agricultural sector became increasingly reliant on small family farms, the heavy industries, banks and financial institutions remained owned and run by the state. Since the Soviet government did not yet pursue any policy of industrialization, and did not allow it to be facilitated by the same private incentives that were increasing agricultural production, this created an imbalance in the economy where the agricultural sector was growing much faster than heavy industry. To keep their income high, the factories began to sell their products at higher prices. Due to the rising cost of manufactured goods, peasants had to produce much more wheat to purchase these consumer goods. This fall in prices of agricultural goods and sharp rise in prices of industrial products was known as the Scissor crisis (from the shape of the graph of relative prices to a reference date). Peasants began withholding their surpluses to wait for higher prices, or sold them to “NEPmen” (traders and middle-men) who then sold them on at high prices, which was opposed by many members of the Communist Party who considered it an exploitation of urban consumers.

And when government intervention in free markets creates problems, what do bureaucrats always inevitably pursue as panacea? Right, more government intervention:

To combat the price of consumer goods the state took measures to decrease inflation and enact reforms on the internal practices of the factories. The government also fixed prices to halt the scissor effect.

Naturally, a policy that increases the wealth of the common man is a thorn in the side of tyrannical sociopaths, thus Josef Stalin ended the NEP in 1928 with the Soviets’ first 5 year plan.

Related posts:

1. The Objectives of Economic Policy
2. Mish & Max Keiser, Economic & Political Predictions for 2012
3. Credit Expansion Policy

Here are Mish’s predictions for 2012:

1. Severe European Recession as the sovereign debt crisis escalates: Austerity measures in Italy, Greece, Spain, and Portugal plunges all of Europe into a major recession. Spain and Portugal will follow Greece into an outright depression.
2. Political Crisis in Europe: French President Sarkozy loses to socialist challenger Francois Hollande. German Chancellor Angela Merkel’s coalition collapses. The Merkozy agreement is either modified to do virtually nothing or is not ratified at all. This chain of events will not be good for European equities or European bonds.
3. Relatively Minor US Economic Recession: The US will not avoid a recession in 2012. Retail spending ran its course with the tail-off into Christmas of 2011. The Republican Congress has little incentive for fiscal stimulus measures in 2012 so do not expect any. However, with housing already limping along the bottom in terms of construction and investment (not prices), a US GDP decline will not be severe. The US may see a recession even if GDP barely drops. Certainly the US recession will be far less severe than the recession in Europe and Australia.
4. Major Profit Recession in US: Profit margins in the US will be torn to shreds as businesses will be unable to reduce costs the same way they did in 2008 and 2009 (by shedding massive numbers of employees).
5. Global Equity Prices Under Huge Pressure: Don’t expect the same degree of reverse decoupling of US equities we saw in 2011. The US economy will be better than Europe, but equities globally will take a hit, including the US. Simply put, stocks are not cheap.
6. Fiscal Crisis in Japan Comes to Forefront: Japan’s fiscal crisis and debt to the tune of 200+% of GDP finally matters. The crisis in Japan will start out as a whimper not a bang, but will worsen as the year wears on. If Japan responds by monetizing debt, not a remote possibility at all, Japanese equities will massively outperform in nominal and perhaps even in real terms. “Real” means “yen-adjusted”, not “inflation-adjusted” terms.
7. Few Hiding Spots Other than the US Dollar: US treasuries and German bonds were safe havens in 2011, but with yields already depressed don’t expect huge gains. Expect to see a strengthening of the US dollar across the board against all major currencies. Moreover, cash (one the most despised asset classes ever), may outperform nearly everything, even if the dollar goes virtually nowhere. Hiding places will be few and far between for much of 2012.
8. US Public Union Pension Plans Under Attack: States finally realize the need to rein in pension plans much to the dismay of public unions. Social and economic tensions in the US rise.
9. Regime Change in China has Major Ramifications: China will start a major shift from a growth model dependent on housing and infrastructure to a consumer-driven model. The transition will not be smooth. Property prices in China will collapse and commodity prices will remain under pressure.
10. Hyperinflation Calls Once Again Will Look Laughable: Unless there is a major disruption in the Mideast (which I do not rule out by any means), oil prices will drop and food prices will follow. If so, we will once again see silly talk from the Fed about preventing “unwelcome drops in inflation”. As always, the deflation key is not prices at all but rather credit and credit marked-to-market. Expect credit in all forms to come under attack and expect junk bonds take a hit as well. By the way, regardless of what happens to oil prices, hyperinflation calls will look silly.

As always, out of all the experts out there, Mish’s predictions are probably the ones I would pay most attention to.

Related posts:

1. Mish: Expect Continued Rally in US Dollar
2. Mish on Tech Ticker on Stimulus & Markets
3. McCullough: Is this finally the economic collapse?

In light of that, it’s interesting to see the Chinese leadership take the exact opposite view to the US government’s regarding housing prices:

China’s leaders affirmed they will stick next year with a campaign to bring down property prices even as a “very grim” global outlook threatens growth in the second-largest economy.

The nation will target “basically stable” consumer prices and “unswervingly” implement real-estate curbs, according to a statement after an annual economic planning meeting in Beijing. At the same time, officials will seek “steady and relatively fast growth,” Xinhua News Agency said.

Premier Wen Jiabao’s officials may limit the scale of monetary and fiscal easing to support growth as officials grapple with elevated house prices and local-government debt burdens after record lending in 2009 and 2010. So far, the government has cut banks’ reserve requirements, while leaving interest-rates unchanged at a three-year high.

I don’t think I’ve heard a single US politician in any position of power even hint at the idea that maybe it’s not only desirable but necessary for home prices to come down in order for any meaningful recovery to begin.

The respect for concept prices as a steering and balancing indicator for entrepreneurs and capitalists in an economic system is one of the most basic pillars for understanding the economics of voluntary action, that is free market capitalism.

It’s a bit misleading for the Chinese leadership to say they are going to “bring down” property prices. Property prices are going to come down no matter what they do, the question is just how fast.

It’s possible the the Chinese have learned from the recent attempts of the US and European governments to support or stimulate housing prices and the not so recent ones next door in Japan, and figured if prices are going to come down anyway why not take credit for falling prices and even make it look like it’s them making this happen deliberately?

Related posts:

1. Chinese Property Owners Smash Showroom in Protest over Falling Prices; The Chinese Housing Bust is Underway
2. China Housing Bust – Prices in Ordos Fall by 62.5 Percent
3. Chinese Inflation Spirals Out of Control

Hours before leaders arrived in Brussels , the Finnish parliament ruled that treaty changes proposed for the European Stability Mechanism (ESM) were “unconstitutional”.

The summit was further put at risk with news that after failing stress tests, European banks need to raise €115bn (£98bn) in fresh capital to satisfy regulators.

Finland’s grand committee said decisions made by the ESM – the eurozone’s permanent bail-out fund set for launch in 2012 – had to remain unanimous, and not changed to the “qualified majority” that French president Nicolas Sarkozy and German chancellor Angela Merkel have agreed.

The Finns are backed by the Netherlands, which fears proposals to withdraw veto powers from the ESM is an erosion of democracy and would make it vulnerable to funding bail-outs without recourse. Meanwhile, the Irish want to block plans for the “convergence and harmonisation” of the eurozone’s “corporate tax base”.

And this just in – New euro accord to include 23 countries:

The president of the European Council said Friday that a new intergovernmental treaty meant to save the euro currency will include the 17 eurozone states plus as many as six other European Union countries — but not all 27 EU members.

The failure to get agreement among all the members of the European Union at a summit meeting in Brussels reflected in large part a deep split between France and Germany on the one hand and Britain on the other. France and Germany are the two largest economies in the eurozone; Britain does not use the euro as its currency.

French President Nicolas Sarkozy said early Friday he would have preferred a treaty among all the members of the European Union. But that could not be achieved, he said, because the British proposed that they be exempted from certain financial regulations.

“We could not accept this” because a lack of sufficient regulation caused the current problems, Sarkozy said. The new intergovernmental accord should be ready by March, he said.

Note Sakozy’s assumption that anyone who hears him talk is a complete moron. The Euromess is a complete and total result of bureaucratic regulation from all angles, to assume people can’t see that is to assume that people are literally mentally challenged.

And then to bring it up against the British who avoided this bureaucratic mess precisely by staying out of Euro currency regulations … that, my friends, truly takes the full force of arrogant, negligent, and shameless statesmanship that only a Nicholas Sarkozy could display.

Anyway, the number of future member stats is already down to 17+6, the Euro has officially begun to crumble. Expect more states to quit this failed experiment until it finally disappears where it belongs: the dustbins of history.

Related posts:

1. The Euro Has Failed
2. Eurozone Breakup Inevitable?
3. German Parliament Approves Bailout for Greece

Ladies and Gentlemen, this is what a lender of last resort looks like. What you’re looking at here are three lines. The black line is Morgan Stanley’s market capitalization, which tends to hover in the $40 billion range but which fell as low as $9.8 billion in November 2008. The orange line is the amount that Morgan Stanley owed to the Federal Reserve on any given day — an amount which peaked at $107 billion on September 29, 2008. And the red line is the ratio between the two: Morgan Stanley’s debt to the Federal Reserve, expressed as a percentage of its market value.That ratio, it turns out, peaked at some point in October, at somewhere north of 750%.

Many congratulations are due to Bloomberg, for extracting this information from the Fed after a long and arduous fight. It couldn’t have come at a timelier moment: if the ECB wants to avert a liquidity crisis, charts like this give a sobering indication of just how far it might have to go, and how quickly it might have to act.

The Euromess has everything to do with the fact that the ECB exists in the first place, and the fact that it enabled irresponsible bureaucrats to hide behind relatively responsible ones and borrow beyond their respective taxpayers’ means.

Almost 3 years ago I already said that if European government bureaucrats don’t quit the centralization of power which enables the above, things would only get worse and worse.

Then about 2 years ago I wrote:

The truth is very simple: The best that can be done for the people of Greece is to not provide one cent of assistance to its corrupt, bloated, and union-controlled government apparatus. A country’s bailout is like a corporate bailout, only many times worse! From this logically follows that the absolute worst Europe could do to the people of Greece would be to give their rulers any more means to continue their irresponsible policies.

The European Currency Union and the European Union itself are both such gigantic failures that it is already pre-ordained that the entire experiment will go down in flames sooner or later. Now is certainly not that time yet. What we are seeing are just a few more cracks emerging in the structure of the system. The European bureaucrats will come up with some sort of pseudo solution to paper over and patch the Greek problem for now.

Even if the Greek government were saved to the detriment of the people it tyrannizes, this won’t be the last time we’ll be having this discussion, and it sure as hell won’t get any better!

We’re having that discussion again now, and the time has run out for patchwork and pseudo solutions. The system is going down as predicted.

To say that the Euromess is caused by a lack of even more ECB intervention is to say that the heroin addict’s withdrawal pains are to be imputed upon a lack of an increase in his dosage.

I think that’s pretty lazy and irresponsible stuff to put out there and it genuinely hurts reading it.

Wouldn’t it make sense at some point to stop and think a little more carefully and precisely about the things we say in public discourse?

Bank of England governor King pointed out a few weeks ago: “This phrase ‘lender of last resort’ has been bandied around by people who, it seems to me, have no idea what lender of last resort actually means, to be perfectly honest. It is very clear from its origin that lender of last resort by a central bank is intended to be lending to individual banking institutions and to institutions that are clearly regarded as solvent. And it is done against good collateral, and at a penalty rate. That’s what lender of last resort means.”

And about the Fed having solved any problems in the US … are you going to say the same thing when the public debt burden, subsidized by QE1,2,3,4,5…, will have reached an amount where the government’s automatic spending cuts start to kick in and begin to impoverish more and more of the millions of people who have been made dependent upon government handouts?

Or better yet, are people going to be asking for the Fed and government to step in, grab more power, and regulate all these banks’ irresponsible speculation binges, because for some inexplicable, magical reason they don’t seem to have much of an incentive to conduct business prudently, to pay themselves reasonable salaries, or to lend responsibly, and not, say … invest in Greek bonds for example?

The pattern is simple and boring: Keynesian and other statist clowns out there will continue doing what they’re paid for. They will support one stupid ass government spending and expansion program after another, applaud one newly created government institution after another, be completely incapable of predicting the long term effects of those unsustainable policies, ignore or even ridicule those who are capable, and then when the inevitable crisis hits they will boldly “predict” that a tragic crisis is going to hit, should all those unsustainable programs not be sustained.

This is truly embarrassing to watch.

But at the same time it’s encouraging to see other people around the world wake up to the truth, and ditch the repetitive dronings and platitudes of entitled and state tenured ivory tower academics whose cumulative output will supply plenty of instructive and awe-inspiring entertainment for future generations.

Related posts:

1. Roubini on Europe: We Are Kicking the Can Down the Road
2. Eurozone Breakup Inevitable?
3. The Failing European Experiment – A Wakeup Call