In this podcast, Bruce, Michael and Dale discuss the Republican desire not to be seen as the “Party of No”; China, the Euro, and the Dollar; and what seems to be a fundamental shift in the assertions of the AGW crowd. The direct link to the podcast can be found here.
The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.
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Sometimes, a message has to get out there, so that the people who need to hear it can hear it. Often, however, the message can’t be gotten out by presidents, finance ministers, or Fed officials. But, someone has to make the arguments. Samizdata’s Brian Micklethwait takes up the task today.
It needs to be said that under certain circumstances easily now imaginable, many Western citizens would argue, strongly and vocally, that those idiot foreigners who are now lending money to Western governments should in due course be told: sorry sunshine, you ain’t ever going to get it back. Our governments are bankrupt. Why the hell should we and our descendants in perpetuity be paying tribute to you? You knew that the money to pay you back would have to be stolen from us. You assumed we’d just cough up indefinitely. Well, we damn well won’t. You are now a definite part of our problem, and telling you to take a hike is going to be part of our solution. Our thieving class is now “borrowing” money from your thieving class like there is no tomorrow, and we are not responsible for the actions of either gang. A plague on both your houses.
We want you foreign thieves to stop lending to our thieves, now. And the best way for us to convince you that you should indeed stop lending, is to tell you that you are extremely liable never to see most of your money back.
Which has the added virtue of probably, approximately, being true, already.
The last sentence is the real kicker, because it’s beginning to look more like a question of when, rather than if. And, who of course. Of the Western nations, my favored picks, in no particular order, for winning 1st place in the 21st Century Debt repudiation race are, in no particular order: Hungary, Italy, Ireland, Spain, and Portugal.
Second place will be too close to call.
And you don’t have to couch it in Mr. Micklethwait’s incendiary libertarian rhetoric about their thieves and our thieves. I mean, I agree with it, but the plain fact is that even if you grant that everyone has the best intentions in the world, it still seems that we are very close to a tipping point where it could begin to happen. Bruce wrote about it earlier today.
If one of the Euro Zone nations decide to revert to Lira or Escudos, or whatever, the news that such a deal is in the offing will not only hammer the nation that tries, but anyone else who looks iffy, and, untimately, the Euro itself.
Investors are not going to sit around and wait to have their Euro-denominated paper revalued in Drachma. They’ll immediately start dumping that paper, and moving all the assets they can out of not only the offending nation, but any other country that looks like a weak sister. As the article Bruce quoted notes, “Such a wholesale shift would lead to a collapse in the money supply…” Gee, you think?
Germany, of course, would probably get the lion’s share of that new money, and to avoid a general economic collapse, they’d probably have to dump the Euro, too, and redenominate all that nice cash in Deutschemarks to avoid getting hammered as the rest of the Euro Zone economies collapse. Or, Germany might be the Euro Zone. Maybe France, too. France is more of a hindrance than a help, really, but palling around with the French is the price Germans paid for re-admittance to the human race, after the recent…unpleasantness.
No finance minister can yet say such unpleasant things publicly. But someone needs to to say them, especially since they are starting to sound less and less extreme.