Via Mark J. Grant, author of Out of the Box,
How many European nations does it take to screw in a light bulb?
Twenty-seven. One from Brussels to identify that the object in question is, in fact, a light bulb. Someone from Northern Europe to hold the bulb. A group from Southern Europe to turn the guy holding the bulb around and around until the thing is screwed in. A person from Germany or France to flick the switch and then the rest of the group, after tea, strudel and champagne to stand in front of the microphones and laud the effort.
In the recent summit, however, they couldn’t even identify the light bulb. Since the European countries could not agree on almost anything they performed their usual trick once again. We will have a supervisor of banks in some fashion, at some time in the future, under someone’s direction that will supervise some amount of banks. More tea, more strudel, more champagne and at what time am I scheduled at the microphone?
Nothing is as foolproof as sufficiently engineered promises of future results.
Did the European summit deal with the Cyprus issue; no. Did they provide an answer for Greece or Spain; certainly not. Was anything of value accomplished at the European summit past platitudes and congratulatory speeches that they had come up with a few lofty notions of someone doing something with the European banks; decidedly a negative answer. More fluff, more stuff and more “pass the risotto if you please.”
In the meantime the markets, all of the markets, are living off of intervention. The world’s central banks provide capital and we all have to put the stuff somewhere. Euroloans by the ECB, the printing of money by the Fed and the Bank of England and “the spice must flow.” This is a rather famous comment in Frank Herbert’s wonderful novel, “Dune.” In this science fiction book intergalactic commerce could only happen if the navigators imbibed spice so that they could steer their ships from one galaxy to the next. No spice; no commerce.
In our present circumstances the normal course of some type of fiscal responsibility provided by governments had significantly diminished and virtually faded away.
No one in America or Europe wants to own up to the very serious problems facing both continents and so the central banks are acting not only as lenders of last resort but decision makers of last resort. This has been in play continuously since the American Financial Crisis starting in 2008. We live in a dream state where no one wants to decide anything and so the central banks not only provide liquidity but they have taken over as the government by fiat. Ben Bernanke and Mario Draghi, elected by no one, are effectively in control of the purse strings of the western world. From here you get to two scary questions; “what happens when all of this stops” and then “what happens if it never stops?”
“They did nothing, absolutely nothing and it was everything that they thought it would be.”
While almost no one recognizes it; we have not only “passed the buck” but we have passed the government. The famous sign that once resided on Harry Truman’s desk, “The Buck Stops Here” has now been moved to Ben Bernanke’s office. We have dysfunctional governments now in both America and Europe and the central banks are now in control because there is no one left. This is a dangerous state of affairs in my opinion and the consequences are mystifying.
Pass the salt, pass the government and no I did not ask for the check.