Tuesday, August 07, 2012

that old martial spirit...,

kunstler | A great orgasm shuddered through the money world last week when Mario Draghi paused between scamorza con arugula tidbits to remark that the European Central Bank (ECB) would stop at nothing to keep the financial blood of Europe circulating. Of course you wonder how many pony glasses of Campari he knocked back before that whopper came out. The markets squirmed with glee. I suppose it feels good to have quantities of smoke blown up your ass.

This is the last month of the Great Pretending over on that lovely continent of exquisitely preserved towns and the corniche winding down to the crashing green sea, and the lunch table under the grape arbor... I mean, compared to, say, the universal slum vista of tilt-up, strip-mall America along the deafening highways, with the wig shops, tattoo dens, pawn shacks, dollar stores, parking lot swap-meets, and supersized citizens waddling through the greasy 100-degree heat of a new climate regime. When things blow, as you may be sure they will, at least the Europeans will sink amid all that loveliness while the American experience will be more like getting flushed down a toilet.

The more you reflect on the Draghi remark, the more you wonder whether absolutely anyone out there is paying attention to the fact that there is no money backing up these pledges of continued bailouts. All the major banks of Europe are functionally insolvent and all of the nations that charter the banks are structurally insolvent, and the economies that depend on the circulation of funds around this Euro organism really cannot escape some sort of cascading collapse. The big unknown element of the story is how angry and batshit crazy the citizens of all these countries will get when summer ends. I don't believe they will fight each other just now, but it is very likely that the lampposts of all these lovely towns and cities will be decorated with swinging corpses of bankers, ministers, and a choice selection of politicians while a fight over the table scraps of a 30-year-long debt banquet occupies the folks in the streets.