With the kind of aplomb characteristic of a waiter lifting the silver serving dome to expose a roasted goose, Europe has looked deep into its organs of finance and produced 100 billion E-bucks for the ailing banks of sad-sack nephew Spain. Where did all that money come from? Out of Europe's ass. That is where all new money comes from these days: an international diarrhea of money. Maybe that is why the great nations of the West feel like shit.
They are not likely to feel better if they keep shitting money all over themselves. Rather, they will end up sitting in the gutter in Chinatown being laughed at by Chinese businessmen passing by on the sidewalk. The Chinese businessmen will glance down and say, "Look, here are the clowns we used to see at Davos, Switzerland, every year eating foie gras. Now they are pathetic crack-heads beshitting themselves. And, hark, the lice crawling all over them are shouting and banging on pots!"
We are those lice.
This is what comes of pulling money out of your ass. Sorry to be so graphic but it is not a pretty story.
The Spanish government now turns around and lends money to Spanish banks choking on bad debt. The Spanish banks will instantly vomit up bonds in return. The bonds will be of an unsecured subordinated kind as to be perceived as functionally worthless, and (according to financial flaneur Bruce Krasting) will inspire a subordinating of bond-holders all over Europe and hence either a massive dumping of bank bonds or an orgy of credit default swap bets between counterparties absolutely unable to cover their side of the wager.
We're at the point where money has been asked to perform like a trained monkey in the street, doing all kinds of tricks to distract the public from the sad spectacle of the monkey's owner dying in the gutter. When the owner expires, the talented monkey will not know what to do with the coins that passersby tossed to it.
These street scenes of late spring, 2012, represent what they call "unhealthy life choices" in the rehab business. All the once-great western economic powers have decided to become crack-heads, winos, and beggars with amusing monkeys. They are all dying of their addictions. They are all dark stories with unhappy endings. They all ended that way because the addicts refused to make different decisions that would have drawn them through a frightful passage out of their addiction into a new place with a different psychology.
The frightful passage at issue is the reality-mandated economic contraction that the planet and its very various inhabitants require for a necessary re-set to health. The human race can either get with the program or expire in the gutter of its septic industrial slum. To fully understand the meaning of contraction, you have to at least first entertain the possibility of no further expansion. The doctors in charge of the case can't stretch their minds to imagine that possibility, so their ministrations are at odds with the requirements of reality. Rehab is not going so well.
Of course, we lice on this body politic will not be so happy when the body slumps against the curb and exhales its final rattle of breath. So, bang those pots and yell as loud as you can as we move into a summer of criticality. Crawl down to Charlotte, NC, or Tampa, Fla, to the political conventions, and be heard. Fellow lice: America was once a great body to live on, six-foot-three, mounted on a white steed, a sword on the hip, resolute and brave. Look at us now! See how we are!