It’s only a matter of time

by His Grace the Devil

On the 25th of September, Dr Eamonn Butler wrote the following over at the ASI blog

So, the eurozone and the IMF are putting together a £1.7 trillion fund to save Greece (and for that matter Portugal and Ireland) and stave off a default. Right?

Wrong. The whole purpose of the £1.7 trillion is not to give aid and comfort to Greece. It is designed to give aid and comfort to the European banks who are stupid enough to be still holding Greek debt when Greece is obviously bust. It is intended to allow—and indeed it will hasten—the inevitable default of a country [Greece] that is overspent, over borrowed, that cannot pay its way and shows no sign of putting its house in order—not one single member of its bloated and lazy bureaucracy has been let go, not one single item in the Greek government’s bizarre portfolio of nationalised firms has been privatised.

And yesterday morning, I wrote

… throughout the Western world, both states and the banks that have bought their bonds are, effectively, bankrupt.

Not only this, but the various governments do not even seem to understand that they are bankrupt, and are continuing to spend far more than their income; their one concession to the problem being to mutter futilely about cutting a few billion—out of structural deficits of many tens of billions—at some point in the next decade.

Even in Greece, public sector workers strike and riot as though their government had any alternative to the—frankly risible—cuts to public spending.

And tonight, I am greeted by this wonderful little nugget on the BBC website

Greece has said its budget deficit will be cut in 2011 and 2012 but will still miss targets set by the EU and IMF.

The figures come as inspectors from the IMF, EU and European Central Bank are in Athens to decide whether Greece should get a key bail-out instalment.

Greece needs the 8bn euros (£6.9bn; $10.9bn) instalment to avoid going bankrupt next month.

Bankruptcy would put severe pressure on the eurozone, damage European bank finances and possibly have a serious knock-on effect on the world economy.

These politicians simply aren’t taking this seriously, are they?

There is, I think, not one single Western economy that is not up to its eyeballs in debt: the vast majority of them are still running colossal, unaffordable deficits that are adding—every minute of every day—to that eye-wateringly massive pile.

And yet these politicos and technocrats keep throwing these vast sums of money about with the air of a millionaire lending a tenner to his mate—as though these vast sums of money were peanuts in the grand scheme of things. Not only are they not peanuts, they are largely illusory—there is no value behind the paper anymore.

In the meantime, the banks keep on buying the government debt hoping that—when the inevitable crash comes—the governments will not allow their buddies, the banks, to fail. In the end, there will be little choice.

Ultimately, the European Central Bank can print as much money as it needs: but, when it does so, the amounts required will be so mind-bendly massive that hyper-inflation will be the inevitable result.

The Western governments—and, just as importantly, their peoples—need to open their eyes and realise that this cannot continue: they need to understand a very simple, blindingly obvious fact…

The social democratic model—funded, as it is, on ever-increasing state spending on special interest groups using fantasy money—is bust. Kaput. Gone. Fucked beyond all measure.

And they need to realise it quickly. Because the impending crash is going to be bad enough: but the longer it goes on, the worse it will be…

4 responses to “It’s only a matter of time

  1. C H Ingoldby

    Amazing that entire nations of people are being deliberately ground into penury in order to protect French banks investments.

    This is a crime of remarkable scale and wickness.

  2. But C H, you don’t understand. These are _/French/_ banks you are talking about. They are run by enarques. By what authority were you even _thinking_ that they might be allowed to suffer the consequences of their decisions? You can’t obviously be living in the real world.

  3. C H Ingoldby

    But of course, I do apologise, we should simply be grateful for the chance to contribute to the well being of such cultured and superior beings.

  4. Your momentary lack of judgement, C H, in that you criticised French institutions even obliquely and not deliberately, will be forgiven, and will not be logged in the human-remains-department’s files……