I just have a look at the European stock markets and on the surface everything appears to be quite normal.
The banks are doing especially well!
Today’s showing in the markets is the most clear indicator so far, as to the utter confusion generated by the intransigence and incompetence of senior politicians.
Today President Nicolas Sarkozy of France and Chancellor Angela Merkel are involved in pointless discussions with Greek Prime Minister George Papandreou. Why pointless? Because they probably all began their telephone conference chat with this afternoon’s communique already written.
Chancellor Merkel has expressed the schizophrenic views of the Eurozone. She has stated that the Eurozone will not allow Greece to default but on the other hand Greece will not secure access to the next 8 billion euro bailout unless new budget cuts are made.
Greece will be running out of cash in about three weeks.
Everyone, understandably, is beginning to feel frustrated and impotent at the pace of the so-called rescue package.
If the Eurozone is serious about the Greek bailout, the cash should be handed over today. That more than anything will placate the markets which must by now be feeling as if they’re on a bad acid trip. The current situation is certainly a candidate for the old 1960s hippie slogan ‘Stamp out reality’.
In reality though, the politicians will wish to leave all options on the table rather than make a move which could be catastrophic. The fact is that whichever move they make, there is bound to be either a national catastrophe or a pan-European catastrophe. More likely both.
That in turn will generate an American catastrophe ; the U.S has been teetering on the edge for many months.
There is only so much time that we can all just stand staring into the abyss.
Currently we are all keeping an eye on Ben Bernanke and the Federal Reserve, because we fully expect them to start printing money at any minute.
In fact we should be looking at the French because it cannot be too long before they make a similar decision – and they will probably ink their printing presses well ahead of the Americans.
If the French go ahead and print money in order to provide a cushion for the French banks against a Greek default and the Greek default overhead anyway, it will be the equivalent of them having unnecessarily dumped billions of euros.
Unfortunately, that’s the ONLY plan which the French government has.
Today, the United Kingdom has announced another 80,000 unemployed between May and July. That is NOT the sign of an economy in recovery. THAT is the sign of an economy still in recession. The official unemployment figure in now in excess of 2.5 million. In fact, the actual number has probably been in excess of 3 million for quite a while.
In recent months there has been a bit of Schadenfreude-induced gloating from the United Kingdom’s senior politicians and commentators in respect of the Eurozone’s woes. That will stop very soon – as our meagre exports dry up because no-one in Europe has the cash to pay for them.
It is not just the Eurozone which is crumbling, it is EUROPE.
It is NOT just the European Economic Class System which is going to be everyone’s downfall. It is NOT because the “HAVES” dictating to the “HAVE-NOTS”.
On a macro level, the vast socio-economic differences within the Eurozone do no more than reflect socio-economic differences within individual states.
They tried an experiment whereby the poor (countries) were expected to compete with the rich and as we should all know by now, this type of “Faux cross-border Socialism” can never work.
There can always be “liberté” and “fraternité” between such disparate states but there can never ever be anything even vaguely resembling “égalité” between the rich and the poor.
In the Eurozone, some are definitely more “égal” than others.
Currently, the more equal are terrified that the less equal will take them down.
(Personally, I believe that Greece will be allowed to default. Glad I kept those Drachmas!)