Achtung Baby!

I think there are times in history when an impending reality can be so eclipsing --so anathema to the status quo-- that denial is the only available psychological response, especially among those with the most to lose, the so-called elite, our feckless leaders.

I understand the theme of this year's Davos confab is 'Shaping the Post-Crisis World'. Post-crisis? Mid-crisis perhaps? The end-of-the-beginning-crisis? Even the bumper sticker is an exercise in denial. The crisis hasn't been navigated yet. How presumptuous to postulate a post-crisis world until we get there (God willing.) Then the ultimate hidden inference glossed by today's elite: shaped by whom? Of course we know who THEY think the shapers are going to be. Quite possibly we haven't met the shapers. Not yet. And more than likely it ain't Bono. Achtung baby!

"The U.S. is, in dollar terms, bankrupt. How did this happen? Well, there are $800 TRILLION dollars in over-the-counter derivatives floating around in the market. That’s 10 times the GDP of the WORLD. These dollar-denominated paper assets are likely worthless or close to it. Which means that the dollar is already...effectively worthless." --Richard Young

This may be the re-start button I've been pondering. The US dollar is worthless. So we HAVE been reset back to zero. It's the restart PROCESS that's being hindered. The reality is too horrific to be publicly acknowledged. So don't expect a ribbon-cutting ceremony or a Wall Street Journal headline. No one standing on a podium is going to come clean. Political instituions --governments and central banks-- will never openly acknowledge the obvious: "Dear America, due to an epic dereliction of duty we ground your currency down to nothing." Nah, they're going to sidestep the pomp and circumstance.

Even the markets, normally politically unbeholden, are still grappling with the almost-unimaginable implications. The financial engineers created so many dollar instruments that they soared beyond the intrinsic measure of global wealth (GDP) by an order of ten. That is, it would take ten years of the world's productivity to 'pay them down'. The whole world will not submit to a decade of debt peonage to bail out the banking elite. At least, not willingly.

Gold seems to be a no-brainer.

Eat the Rich

I had imagined a financial elite that, inordinately perhaps, enriches itself during periods of economic prosperity. This is a tax, if you will, on broad-scale prosperity, a necessary toll. As sure as taxes.

I had not considered an elite that turns to preserving its 'boom time' earnings during hard times by such unconscionable methods as nationalization and socialization of risk. Suddenly the rich look unvarnished, almost ridiculously in love with their mansions. They have no ideological purity. They are not capitalists --they just sport just vanity plates with 'laissez-faire' stamped on them. There is nothing to recommend the rich. They are craven. They are nakedly opportunisitc. They are greedy. Period.

Devil's Dictionary

We need a Devil's Dictionary for the New Economics...

Globalism: the consolidation of incompetency set atop massive complexity while awaiting epic catastrophe.

Cronyism is the greatest impediment to a rational prescription. The attempt to rescusitate Wall Street while Main Street burns is a huge tragedy. It makes you want to cry 'cause it ain't gonna happen. I think the economy is screaming for simplification. By supporting small regional banks, we reduce the network effect and break the risk into manageable bite-sized pieces. The food chain is tied to small-time, regional lines of credit. Who needs Manhattan?

Obama's no Huey Long. He's not even FDR. He's Clinton/Blair.

Bikini Sand Wrestling!!

Here it is. The video your mother warned you about --while your father surreptitiously slipped it under your arm. That's me an' the kid in the vid, and me covering vocals (D.L. Roth called in sick with an ingrown hair plug.)