A new golden age

“The designers of the good ship euro wanted to create the greatest liner of the age. But as everybody now knows, it was fit only for fair-weather sailing, with an anarchic crew and no lifeboat. Its rules of economic seamanship were rudimentary, and were broken anyway. When it struck a reef two years ago, the water flooded one compartment after another.. European officials now recognise the folly of creating the euro without preparing for trouble. It would be wise to be planning now for what to do if it sinks.. Even now, after decades of “European construction”, many Eurocrats cannot conceive of the euro as a wreck. Those who have worked hardest to keep it afloat are exhausted and know it is not in their power to save it anyway.”

-       Charlemagne in ‘The Economist’, November 26th.

The business of investment for at least the past four years has been akin to conducting a detective inquiry: whodunit ? Just how did we end up in this mess ? To tackle one’s enemy, one first needs to identify it. In the popular conception, a myth gleefully adopted by politicians, it is all down to corrupt American investment banks, poisoning the collective well of global capital with subprime mortgage filth – what Professor Robert Vambery in this week’s Economist nicely if grimly refers to as adding three quarts of milk to a quart of sewage and creating four quarts of sewage in the process. And then the poison spread. It is a neat little tale but nowhere near sufficient to explain the extent of our current malaise. We can throw some mud in the direction of politicians, but that is a little like shooting the messenger; they have only been dispensing the bread and circuses and pension and welfare benefits on the never-never that everybody has been clamouring for. The culprit we find the most culpable, and which draws all these disparate threads of blame into one cohesive narrative, is a fundamentally corrupt money system.

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Comments

[Dennis The Menance]

I have to say you sure have the nerve to invest in banking stocks. I have never regarded banks' insurance companies' financial services companies as real busineses. All they do is recycle money. I also have never invested in any financial services companies and never will. Just look at their record almost 2 out of every 3 savings and loans went out of business in the 1980's and just think about what happened a couple of years ago. Do I need to say anymore. Oh one other thing most If not all of the publicly traded subprime lenders are out of business today.

[Go Green]

Yea…thats really a informative post. I’m new blogger it would be sure helpful information for me i always keep in mind Thanks for sharing.

[Lysette Bide]

For sure, looking at the current economic climate, one might wonder: did they ever think about the outcome if the Euro did not work out? It does seem like they didn't.
First and foremost, I think there was bound to be a problem as they mixed really strong economies with really weak economies and gave them the same currency without taking into account whether those economies had the ability to support such a strong currency.