Economic and fiscal reality is a thing of the past

The Operatic Grandeur Of "More Europe"

by Mark J. Grant

Europe is becoming quite strange. The World is becoming quite strange. A politician gets up and speaks and says nothing, no one listens to what he said, then he is roundly congratulated for his bold words that were heard by no one and then everyone disagrees with what they think he might have said. The Continent seems to be in a dream-state where the worse it gets; the better it is because the ECB will be drawn in and provide liquidity like the ever-after will provide Redemption. I am not sure America is any better actually. In the United States we admit we are printing money while in Europe they “print and deny” but the outcome is about the same.

It is a weird economic scene these days, a Dali landscape that is melting, when worse is better and our leaders intone the old magic; “the higher, the fewer; the never, the less.” I expect, any day, that the ECB will buy all of the sovereign debt of Europe and declare each nation “debt free and without risk.” It will be a gigantic do-over where the ECB is to be re-capitalized by odd aliens that we have not yet met. Greece falls and falls again and the EU demands a plan, which is given, and we herald their actions for yet one more plan that will never be implemented and “God Save the Queen.” Portugal falls and Ireland falls and Spain drafts a new plan, as directed, so that they can get more money and the markets rejoice because it is one more scheme that has all of the chance of implementation of the Tudors taking the Spanish throne.

On the other hand I suppose it is because we cannot invest money off-world either so that we are stuck within the boundaries of what is available and something must be done with the paper printed by all of the Central Banks but it is getting increasingly difficult to make much sense of it. I sometimes feel, with the announcement of each piece of bad economic news as the markets rally, that it means that the Divinity is coming, disguised as a Central Bank, and that we should all close our eyes and partake of the ecstasy of the Saints as we and they receive Stigmata. I must be unclean and unwashed and not worthy as I have received none of blessings bestowed upon the sanctified believers. I watch, I wonder, I gape in fact and ponder just when reality will intrude back into our make-believe state of existence.

"’Tis but a Midsummer Nights Dream"

                                                           -William Shakespeare

Three Card Monti

You knew it would come to this! I smiled, all alone in my oak paneled office, I smiled and was delighted that it was finally put into writing. The German Chancellor had sung the tune from the rafters; belted out “More Europe” and it is a catchy tune designed for the entire Opera House of the Continent. She has formed the Aria into melodious tones and captured the hearts of her audience until they believed and fell into the Rapture that it was “Money for Nothing” and that the German’s and their bed fellows would provide it whenever asked all in the name of the national anthem which she had so wonderfully performed.

Monti had approached the altar and was received into the flock.

The first move made in the newest version of Three Card Monti is Mr. Monti’s “The European Central Bank should not impose extra economic conditions on nations using its bond-buying mechanism and the International Monetary Fund shouldn’t have an oversight role.”This sleight of hand may be translated into English as “We do not want to be audited either by the IMF or by the ECB; we do not need any foreigners looking at our books because that would be a disaster. We should be given the money for free which is the transformational theme of the Aria sung by Ms. Merkel entitled ‘More Europe.”

“Countries such as Italy and Spain are reluctant to request the bond-buying they championed because of uncertainty about what conditions the Central Bank would seek to impose,” said Mr. Monti as he moved the next shell ahead of the last one. The English definition here is that “We do not want conditions. We do not want anyone telling us how to behave. We do not want the Troika in Rome or Madrid. We just want the money that you have told us that you would give us when we want it. We love the German Chancellor’s rendition of ‘More Europe’ but we do not wish to pay for hearing it. You told us about the Opera but you never said we would have to purchase tickets for the performance.”

“Oversight should be limited to establishing checks so the countries behave in a positive way,” Mr. Monti said in a recent interview. This may be translated into the formalized checks such as “How was lunch? Was the fettuccini cooked properly? Everything going ok? Need any more money  today or can we wait until tomorrow?” The very incorrect Italian translation would be, “You must reduce your deficit. The austerity measures that you agreed to must be actually implemented. You cannot give government jobs to family members. Our money is not your money and has to be repaid regardless of how loudly and often you sing ‘More Europe’ on the steps of the Vatican.”

So Here We Are

Good is bad. Bad is wonderful. “More Europe” was written in Babylon and no one can understand the meaning. Economic and fiscal reality is a thing of the past as the world’s Central Banks will provide manna, sustenance and well-being. It is not just the ECB but the markets that are “unlimited and uncapped” and the conditions, there are always conditions I assert, while ignored for the moment, have a funny way of rounding the corner and saying “Hello” just when you don’t expect them. This is where we are as we round the corner. This is where we are going I predict. Good will become good and bad will become bad once more

You may say, “It ain’t so” but I say that it is.