The Chain Will Break in the Center


Essentially every article one reads regarding the current Eurozone mess focuses on one end of the chain of irresponsibility or the other. Half of the finger-wagging is directed at the stingy Germans, who are deemed recklessly irresponsible for their reluctance to shovel their savings into the endless money pit that is southern Europe in order to socialize the losses of various bankers who have profited enormously from the previously artificially inflated credit-worthiness of the PIIGS. The other half is typically directed at the PIIGS themselves, most notably at  Greece since it seems to be the pig on the spit at the moment. This half of the self-indulgent finger-wagging is intended to admonish them for not tightening their belt enough . . .  with a fair amount of hand-wringing about the proles and their inconceivable unwillingness to either sell their country's assets at fire-sale prices, or to accept a descent into abject poverty via austerity measures imposed to reduce an astronomically high level of completely unserviceable debt to a slightly lower level of completely unserviceable debt.

Actually, to be much clearer, the overall goal of this, bi-directional campaign of misinformation has one singular purpose: To convince the Germans and other Eurozone populations who are not entirely bankrupt (yet) to continue to divest themselves of their wealth for as long as is humanly possible. In order to achieve this end, two things need to happen: Firstly, the Greeks must be discouraged from hanging their politicians from trees and overthrowing the state . . .  or at least to delay these measures. Secondly, the puppets in still-solvent European “democracies” who pretend to represent their citizenry must continue to transfer buckets of money into the pockets of the bankers, without finding themselves decorating trees and light-posts like bloated, overly expensive Christmas ornaments either. This latter process seems to consist of artfully sized transfers of wealth and power to the European Financial Stability Fund, each of which is supposed to save the day, of course—until it doesn't a few weeks later—upon which another shipload of taxpayers' savings is demanded—basically on the erroneous argument that since shiploads of money have already been “invested” in the effort to saving the Euro, the effort must be continued until successful (or until there's no real wealth left so sink into the project). It is the logical fallacy of sunk funds writ on a continental scale.

I think that the question is ultimately not one of will the Eurozone collapse, but rather a question of when the collapse will take place. In attempting to ascertain this, people tend to look at the aforementioned two ends of the chain...or maybe more precisely, the two ends of the bucket-brigade that is carrying out the wealth transfer: the Germans at one end . . .  a bunch of ungrateful, partially reformed Nazis who are complaining entirely too much about fulfilling their eternal obligations to all of humanity (or more specifically, to international capital). And of course the aforementioned PIIGS . . .  the question in that case being basically, how long can the charade of solvency be maintained in these banana republics?

I believe this is entirely the wrong perspective and that the collapse will actually be triggered somewhere in the middle of the chain, when a smaller, financially stable but poor Eurozone country will freak out at the outflow of their own capital and refuse to contribute (i.e. lose) their wealth in this manner. I envision this taking place in a two-part process: The first part of the end-game will be the aforementioned refusal of one or more (probably more) of these weak links to participate in the bucket-brigade. This will have a two-part knock-on effect: The revelation that refusal to commit financial suicide does not result in financial suicide shall remove the Sword of Damocles that the Eurocrats hang over the heads of the taxpayers every time more money is demanded of them. This revelation of the toothlessness of the explicit threat—that failure to support the Euro will have dire, negative consequences for the abstaining country—will be coupled to the ever-weightier burden on the shoulders of the shrinking number of countries who find themselves alone in footing the ever-growing bill. If things turn out well, then Christmas will come earlier than planned in Europe . . .  at least as far as the decorating is concerned.

Enter Slovakia

I just got back from a little vacation in Central Europe, much of which was spent there. Among other things, I wished to know if the German saying "In Sachsen, wo die schönen Mädels auf den Bäumen wachsen" was true, and if Slovakian women were as insanely hot as the Czechs appear to be (FYI, the answers appear to be “no” and “no” respectively. And in an amazingly ironic twist of fate, the most captivating girl I met on the trip was an American I already knew, whom I had the pleasure of meeting again in Krakow. Which seems to imply that I've relocated a bazillion kilometers to the east on a completely different continent for entirely no good reason).

I'm not going to pretend these analyses—chick hotness or economic health—are scientific. However, I lay a fairly decent amount of value on qualitative measures. The benefit of going somewhere and getting a feel for the place has more real value than tomes of statistical records. My impression of Slovakia, in comparison to the Czech Republic and Poland, its two neighbors, was interesting. While the latter two countries seem to be buzzing with activity and infused with a sense of optimism and positive inertia, one had the unsettling feeling in Slovakia that something just wasn't working right. I do not think it is an accident that of the three, Slovakia is the only one to have adopted the Euro. I also do not consider it accidental that the façade of the democratic Eurozone took a body blow there over the last few days, as the Slovakians at first appeared to behave sanely by rejecting the latest, billion-Euro bailout on Tuesday—but then, through the kind of back-door arm-twisting and shenanigans that pass for democracy in our upside-down world, now appear to have lost their marbles and have joined their wealthier neighbors in flushing more of their wealth down the collective toilet.

So the fire-brigade has been able to put out another of the many little conflagrations that seem to be popping up with some frequency hither and yon. It's like a Euro version of Whack-a-Mole.

The real question will be if they will be able to quietly strong-arm Slovakia and other countries in similar circumstances in perpetuity—and to what extent can they continue to maintain the veil of “democracy” and “freedom” which hides the hideous visage of the porcine and corrupt monsters whose inconceivable power lurks behind it. Sooner or later, something is not going to go the way they want it within the framework of this plutocratic charade. When it does, the gloves are going to come off and soft totalitarianism is going to be replaced by something our ancestors were a little more familiar with.