Then put your little hand in mine
There ain’t no hill or mountain
We can’t climb
I got you babe
I got you babe
– Sonny & Cher
Rise and shine folks, it’s Groundhog Day.
And so we wake up (or in the case of us Antipodeans, go to bed) as another summit to fix something or other gets underway.
This time, Germany, Italy, France and Spain meet in Rome on Thursday to decide how to get blood out of a stone. Germany wants more reform. The others want more money. Good luck with that.
The only solution these bureaucrats / technocrats / politicians have stumbled upon is a way to indefinitely prolong the crisis. Just plan rolling summits…keep dangling the carrot in front of the market and hope the speculative / dumb money plays along.
The promise of an imminent ‘fix’ is always enticing for speculators. It’s a chance to make some money for a few days before reality sets in.
But, like you, we have euro fatigue. We couldn’t give a hoot what the bozos come up with at the summit. Only a debt union can take the pressure off Italy and Spain’s economies, and that is just not going to happen.
We also have ‘banks behaving badly‘ fatigue. Regulators busted British bank Barclay’s for manipulating interest rates. But is anyone really surprised? It’s just the tip of the iceberg. The industry is full of crooks.
All the regulators did was give the bank a slap on the wrist. And opening up the bad banker playbook, the bosses offer words of contrition and pledge to forgo their bonuses for the year. How generous.
Let’s be honest here. It’s not the bankers that are the problem. It’s the system. Central banks manufacture money 24/7. The big global banks, being lucky enough to surround the bank in the middle, get first use of this new money…or we should say, credit.
The banks are the distributors of global credit. They siphon off huge wads of it as it travels to the outer reaches of the economy. When the flow of money and credit is so strong, is it any wonder that some stray into manipulation?
To the perpetrators, the act of manipulation itself doesn’t seem so bad. We’re sure they see it as a victimless crime. It involves no violence or obvious coercion, which makes it all the more insidious.
It reminds us of something Diggers and Drillers editor Dr Alex Cowie sent around the office earlier this week. It sums it all up, really.
for Markets and Money
From the Archives…
The US Deficit of Deceit
2012-06-22 – Greg Canavan
How Nice to Have Friends At the Fed
2012-06-21 – Bill Bonner
Deep in the Stock Market Trenches
2012-06-20 – Murray Dawes
In Praise of the Eureka Rebellion
2012-06-19 – Dan Denning
What Could Possibly Go Wrong With Infrastructure Investment Bonds?
2012-06-18 – Dan Denning