Sunday, July 31, 2011

Debt-Cieling Crisis Update

This just in: Charlie Sheen, Mad Money's Jim Cramer and Bruce Springsteen have stepped in at the last moment to broker a deal and avert a global financial crisis! Thank you Loord! Just when it seemed the full faith and credit of the United States (of America) was in question, when many were beginning to think our political process was "dysfunctional", order and common sense have returned and we can all rest easier knowing...something...or nothing...whatever.

The details of the deal ( Tea Party prefers the word covenant) remain sketchy at this hour but the crux of the resolution rests on having Oprah Winfrey take over as the Debt Czar, and possibly Prime Minister of Ideology, with exclusive power to sign checks, levy taxes and find out what exactly is the deeper reason so many people are troubled in our modern world.

Global financial markets, China and Bill Gates have all signed on so it appears our Democracy is safe and regular programming will not have to be diverted. Once again America has shown the world that where there is a will there is a way and it is widely expected that Greece and Spain will set up their own Debt Czars. The names of Tom Brokaw, Willie Nelson, and Sandra Day O'Conner are just a few that have been suggested.

Hey, whatever happened to the Arab Spring, anyway?

Saturday, July 02, 2011

The Last Pig

I hosted a dinner the other night with the ex-CEO of Carnival Cruise and an ex-executive officer of Merril Lynch. The conversation turned to gold, it's history and current use/exchange value. The arcane debates about currency and inflation seem circular and abstract but what intrigued me was when Carnival noted that he owned a great deal of gold as a hedge against catastrophic collapse.
His grandparents had got their way out of Poland during the war using gold and he thought that if/when worse came to worse, his gold would help him survive as well. Because it is so shiny he could trade it to me for some gasoline and I could then trade it for some apples.

Then he started talking about Italian debt as the next shoe about to drop. Merrill-Lynch looked around the table and said "We're all capitalists here." ( he doesn't know anything about my politics) "The sooner we get it over with the better."

I assume he was talking about the "creative destruction" which must occur eventually to clear out the toxic debt. The capitalists appeared tired of dragging this thing out, massaging numbers, bribing governments and tear-gassing people. It was time to be done with it. Because capitalism works, it's just a bit brutal. Those at the table will be hurt in terms of luxury consumption certainly. They may even have to break out the gold reserves. But it did not shake their faith in the system any more than a tornado turns a Christian against God.

It is unclear to me whether the European masses are ready to bring it all down or how many Tea Party folks on this side of the pond are ready. But all this brinkmanship is certainly a sign of things to come. And Italian debt is being discussed more and more in the mainstream news. Break out the ducats and Krugerrands.