Eurozone countries are falling like dominos. Next: Slovenia. But bailouts – by taxpayers in other countries – keep banks from collapsing, governments from defaulting, and investors from incurring well-deserved losses. In the US, President Obama’s budget, with its new taxes, is causing heart palpitations left and right. But how do countries really stack up?
In March, the ECB-organized Eurozone-wide household-wealth survey results trickled out. But when the Bundesbank refused to publish the German data, insiders leaked the reason: too explosive for the bailout era because Italian households were far wealthier than German households. Shocking! And a red herring. The truth turned out to be far more shocking.
In 1969, notes greater than $100, including the cool $10,000 note that would still pay for a lot of things, were retired due to “declining demand.” Prematurely, it turns out. Because demand for cold hard cash, despite plummeting use of it for transactions, has surged. Reason: fear.
The mood in France is dark and has turned away from politics, he said. People always expressed hatred for certain politicians; now they express hatred for the system. Comments are more violent. People are looking for a strong voice that can pull them out. “When the Fourth Republic collapsed, we had de Gaulle. What if the wrong person comes along now?”
Engineers have done a great job developing nuclear technologies to serve mankind’s many endeavors: medical devices, power generators, or formidable weapons to wipe out mankind and its many endeavors. Yet they haven’t figured out what to do with the radioactive, toxic materials these technologies leave behind. And we’re shuffling them to the next generation.
Some Mile Stones: Working gas in underground storage, the primary measure of whether gas is in over- or undersupply, has now dropped 2.1% below the five-year average for this week, and a dizzying 31.6% below the same week last year. But the price of natural gas – it doubled over the last 12 months – is still below the cost of production.
France might not even notice if the Eurozone fell apart—that’s how tangled up it is in the Jérôme Cahuzac fiasco that blew up with phenomenal effect. Former Presidents Chirac and Sarkozy were dogged by investigations and trials that laid bare misdeeds they personally had been involved in. By contrast, the Cahuzac fiasco doesn’t implicate President François Hollande. Not yet. But it’s tearing up his government.
Everyone learned a lesson from the “bail-in” of Cypriot banks: Russians who’d laundered their money there; bondholders who’d thought they’d always get bailed out; Cypriot politicians whose names showed up on lists of loans that had been forgiven; even Finance Minister Sarris. His lesson: when a cesspool of corruption blows up, no one is safe. And German politicians learned a lesson too: that it worked!
I’ve been a fan of David Stockman ever since he got in trouble for speaking the truth as Budget Director under President Reagan. But his new book, The Great Deformation: The Corruption of Capitalism in America—what an awesome romp through the economic, financial, and monetary shenanigans of our times!
Amidst the things in the US economy that aren’t going in the right direction, the debacles, fiascos, and nightmares, is an industry of scrappy upstarts, tiny operations, and larger companies that use American ingenuity, marketing, and the right amount of hops to stand up to Wall-Street-engineered giants—and they’re winning the amazing American beer war.