Many sources, both mainstream and alternative, are reporting that a series of events is converging in March that signals a major turning point in the ongoing financial collapse.
On the surface, “all is well in Dodge City,” as the usual strait-laced suited actors stalk the cattle, traipsing from summit to summit, never bothering to water their horses or oil their saddles, as they pull their bounty-hunting financial scams on the cattle. But the harsh reality is that the cattle are growing seriously unsettled, to the point of running wild at the hands of the steel-capped, riding-booted vanguard of the “Financial Compact.”
At the time of writing, the jury is still out on whether the Greek debt vigilantes will quietly roll over and drink the proverbial milk, or whether they will ride noisily into town, shoot and kill the sheriff and his deputies, clerks and other junior staff on the EU euthanasia train, blow up the “fiscal restructuring” express and unleash the cows to crush the fools who jumped into last week's economic suicide pact. If you wake up tomorrow in a steaming pile of cow dung, you will know that the sovereign default circus has come to town and is finally going to tumble this economic desert region on the brink of sanity over the cliff.
If reports that both Germany and Switzerland are urgently liquidating their global gold holdings in preparation for imminent repatriation demands are correct, we are on the brink of a very big development. For the uninitiated, the central bank cartel led by the New York Fed holds the majority of the world's physical gold that underpins the US Dollar's role as the world's reserve currency. Even the mere hint by national governments that they will challenge the status quo in this area is a sign that fundamental changes to the global monetary structure may be imminent.
Meanwhile, after his internal memo “Help! Who's Driving This Bus?” was leaked, Lord Vincent de “the Incompetent and Incompetent” Cable (Government Minister for Economic Mismanagement) firmly cemented his incompetence this week. One can only conclude that his fellow Ministers, first and foremost the Chancellor of the Exchequer himself, are equally clueless about what is going on in this country, as their medicine of “scrape it all down to the bone and hope for the best” free market extremism has little or no effect on the barely twitching corpse of UK PLC, despite being liberally and heavily dosed.
It should come as no surprise to anyone, at least not to those without a PhD in economics, that pumping more debt into a bankrupt banking system will not lead to increased productive economic activity unless the black holes in the balance sheets of the banks to which we lend are forcibly transferred to “bad banks” and left to rot for creditors who think they actually own some of the worthless “assets” so described. To Cable's credit, he recommends breaking up RBS as “long overdue”. We entirely agree. The only criticism of his proposal on this point is *why stop there*.
It is interesting and encouraging that his memo mentions a “lack of economic vision” and the need for a “long-term planning” approach to economic policy. We have long said that we are long past the point where we can rely on “Austrian School” monetarist orthodoxy to solve the converging systemic economic disasters facing the country. So if Vince is serious about concerns in this area, we can start by abandoning the idea that money has intrinsic value and start considering public credit and national infrastructure investment as a means to raise the entire foundations of the physical economy. That is the only meaningful way to address the now inevitable reality of national bankruptcy.
In summary, a green pound and legitimate banks are the only solution to this mess we have created for ourselves.
That's certainly better than the class war “managed decline” tactics we were subjected to this week. The government is trying to convince us that low-income families deserve child credits, but middle-income families don't. Divide and conquer only works if people haven't read your “Rules for Extremists” playbook. So, our advice is to stop tugging on that particular chain, Mr. Osborne. We know your game, Sonny Jim!
