It's broken and we have to fix it

The Vanishing Point of Fiat Money

by Chris Martenson

Author and social critic James Howard Kunstler has been one of the earliest, most direct, and most articulate voices to warn of the consequences -- economic and otherwise -- of modern society's profligate wasting of the resources that underlie its growth.

In his new book Too Much Magic [7], Jim attacks the wishful thinking dominant today that with a little more growth, a little more energy, a little more technology -- a little more magic -- we'll somehow sail past our current tribulations without having to change our behavior.

Such self-delusion is particularly dangerous because it is preventing us from taking intelligent, constructive action at the national level when the clock is fast ticking out of our favor. In fact, Jim claims we are past the state where solutions are possible - instead, we need a response plan to help us best brace for the impact of the coming consequences. And we need it fast.

[We now live in] this weird, peculiar period in American history when the delusional thinking has risen to astronomical levels -- predictably, really -- in response to the stress levels that our society feels. And it is expressing itself as sort of "waiting for Santa Claus and the Tooth Fairy" to deliver a set of rescue remedies to us so that we can continue running Wal-Mart, Walt Disney World, Suburbia, the U.S. Army, and the Interstate Highway System by other means. That is the great wish out there. It is kind of understandable because that is the stuff that we have, and people tend to defend the stuff that they have in any given society and the systems and platforms that they run on.  But it is probably a form of collective behavior that is not really going to benefit us very much and really amounts to simply wasting our time, and wasting our dwindling resources, and even our spiritual resources when we could be doing things that are a lot more intelligent.

The jig is up

The Essence

By Bill Buckler

“What I was looking at was a tussle between two groups of mass-men, one large and poor, the other small and rich. As judged by the standards of a civilised society, neither of them any more meritorious or promising than the other. The object of the tussle was the material gains accruing from control of the State’s machinery. It is easier to seize wealth than to produce it; and as long as the State makes the seizure of wealth a matter of legalised privilege, so long will the squabble for that privilege go on.”

                               Alfred Jay Nock - Memoirs Of A Superfluous Man - 1943

Mr Nock published his memoirs after a lifetime of watching the state enhance and widen its means of making “the seizure of wealth a matter of legalised privilege.” He recognised the process as being exactly what it was far better than the vast majority of his fellow Americans and described it better still. Were he alive today, he would not be surprised at the state of the world. Nor would he be surprised at the degree of gullibility shown by the fact that most people still cling to the hope that the perpetrators of the mess can “fix” it if only the necessary power is invoked. He would, perhaps, be surprised that the entire structure has not yet fallen down around the ears of those who constructed it.

A Declining Power?

Here is a quote from the other “sophisticate” who runs the US financial system. A few days before Mr Bernanke’s speech, Treasury Secretary Tim Geithner was speaking at the Economic Club of Chicago. Among many other things, he said this: 

“Cutting government investments in education and infrastructure and basic science is not a growth strategy. Cutting deeply into the safety net for low-income Americans is not financially necessary and cannot plausibly help strengthen economic growth.”

Never A Dull Day In Euro-Land

Keynesian Ditch-Diggers

By Pater Tenebrarum

Ireland has been a model student of the bailout initiative so far, meeting its targets and implementing the 'Troika' devised austerity program very meticulously. However, since Spain is now getting 'special treatment' regarding the bank bailout, it was decided at the late June euro-group summit that Ireland would get special treatment as well. After all, the Irish bailout was primarily a banking system bailout too. Moreover, as Irish finance minister Noonan not unreasonably remarked, Ireland 'took one for the team' when it refrained from imposing losses on senior bank bondholders. The big fear at the time was that this would trigger 'contagion effects' across Europe (which were later triggered anyway by Greece).

In its summit statement the euro-group said:

„The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme. Similar cases will be treated equally.“

Noonan is now hoping to clinch a deal on the €64 billion in bank debt in the course of this year, which would help bring Ireland's public debt back below 100% of GDP.

The FT reports:

“Mr Noonan said he was pressing for a deal with European authorities for relief on Ireland’s €64bn bank debts that would reduce the country’s sovereign debt below 100 per cent of gross domestic product and help the country to re-enter international bonds markets in early 2013.

"The Great Utopia"

Road to Freedom or Highroad to Servitude

F.A. Hayek

There can be no doubt that most of those in the democracies who demand a central direction of all economic activity still believe that socialism and individual freedom can be combined. Yet socialism was early recognized by many thinkers as the gravest threat to freedom.

It is rarely remembered now that socialism in its beginnings was frankly authoritarian. It began quite openly as a reaction against the liberalism of the French Revolution. The French writers who laid its foundation had no doubt that their ideas could be put into practice only by a strong dictatorial government. The first of modern planners, Saint-Simon, predicted that those who did not obey his proposed planning boards would be "treated as cattle."

Nobody saw more clearly than the great political thinker de Tocqueville that democracy stands in an irreconcilable conflict with socialism: "Democracy extends the sphere of individual freedom," he said. "Democracy attaches all possible value to each man," he said in 1848, "while socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude."

The Man Who Predicted the Depression

Ludwig von Mises explained how government-induced credit expansions create the Boom and Bust cycles

By MARK SPITZNAGEL

Ludwig von Mises was snubbed by economists world-wide as he warned of a credit crisis in the 1920s. We ignore the great Austrian at our peril today.

Mises's ideas on business cycles were spelled out in his 1912 tome "Theorie des Geldes und der Umlaufsmittel" ("The Theory of Money and Credit"). Not surprisingly few people noticed, as it was published only in German and wasn't exactly a beach read at that.

Taking his cue from David Hume and David Ricardo, Mises explained how the banking system was endowed with the singular ability to expand credit and with it the money supply, and how this was magnified by government intervention. Left alone, interest rates would adjust such that only the amount of credit would be used as is voluntarily supplied and demanded. But when credit is force-fed beyond that (call it a credit gavage), grotesque things start to happen.

Government-imposed expansion of bank credit distorts our "time preferences," or our desire for saving versus consumption. Government-imposed interest rates artificially below rates demanded by savers leads to increased borrowing and capital investment beyond what savers will provide. This causes temporarily higher employment, wages and consumption.

Ordinarily, any random spikes in credit would be quickly absorbed by the system—the pricing errors corrected, the half-baked investments liquidated, like a supple tree yielding to the wind and then returning. But when the government holds rates artificially low in order to feed ever higher capital investment in otherwise unsound, unsustainable businesses, it creates the conditions for a crash. Everyone looks smart for a while, but eventually the whole monstrosity collapses under its own weight through a credit contraction or, worse, a banking collapse.

The system is dramatically susceptible to errors, both on the policy side and on the entrepreneurial side. Government expansion of credit takes a system otherwise capable of adjustment and resilience and transforms it into one with tremendous cyclical volatility.

The reformation of Islam

This youth movement has women covered

The mistake made by virtually the entire Western media during the Arab Spring was to assume that social progress is like technological progress.

By mark steyn

Media types like to talk about "the narrative": News is just another form of storytelling, and certain plot lines grab you more than others.

The easiest narrative of all is anything involving young people. "I believe that children are our future," as the late Whitney Houston once asserted. And, even if Whitney hadn't believed it, it would still, as a point of fact, be true. Any media narrative involving young people presupposes that they are the forces of progress, wresting the world from the grasping clutches of mean, vengeful old men and making it a better place.

Main Street Goes Broke

With local governments tapped out, the salad days of the public sector are over

By PATRICK J. BUCHANAN

San Bernardino, Calif., has now followed Stockton into bankruptcy.

Harrisburg and Scranton, Pa., and Jefferson County, Ala., home to Birmingham are already there to welcome them.

Detroit has been taken into receivership by Michigan. A plan under discussion is to level a fourth of the city and reconvert it into the pasture and farmland it used to be a century ago.

On the Web, one may find a pictorial tale of two cities: Hiroshima, a smoking flattened ruin in 1945, now a beautiful gleaming metropolis. And Detroit, forge and furnace of democracy in 1945, today resembling Dresden after Bomber Command paid its visit.

A Difficult Identity

Arab Citizens of Israel

by PETER BERGER

As a social scientist with broad cross-national interests, I subscribe to a number of periodicals that provide reasonably reliable information on what goes on in different parts of the world. But every couple of weeks or so I go to Harvard Square and browse for what looks interesting in the kiosk that sits in the middle there. Last week I picked up the international edition of The Jerusalem Post, the major English-language newspaper in Israel. Newspapers provide a flavor of everyday life that is often missed in the publications I normally read. In this instance I was intrigued by an advertisement in the real estate section for an apartment whose attractions include a health club and an automatic elevator running on the Sabbath, as well, under “Matchmaking”, an ad by a “wealthy, attractive and cultured widow” in her seventies who is willing to consider an offer from America. Much of this newspaper contains more or less ominous stories about the political upheaval in Egypt. It is somehow reassuring that, in the midst of all this, there may be an elderly religious lady about to use the automatic elevator to meet her American date in the health club.

There is one story in the newspaper that I found humanly intriguing in a somewhat similar way. Entitled “Love thy neighbor?”, it deals with young Arab citizens of Israel moving to Tel Aviv. Apparently this is an increasing phenomenon. Not only is Tel Aviv a good place to find a rewarding job, but it is the most cosmopolitan city in the country where young people, Jewish or Arab, can have a more exciting life than in the often provincial communities from which they come. The key character in the story is Areen Shahbari, a 28-year old woman from a “secular Muslim family” in Nazareth (the town with the highest Arab population in Israel). Ever since her teens she aspired to work as a television presenter. So she went to study communications at Tel Aviv University, in her third year there landed a job with the largest television production company, and worked herself up to heading a talk show devoted to women’s issues.

Plus ça Change—in the French Economy

If some things don’t change, everything will

Hollande has to do more than restore France's economy; he must recover its spirit of dynamism.

By NEIL ROGACHEVSKY

This year’s Bastille Day promises to be a very sombre affair.  In a move being billed variously as a “disaster”, “bloodbath” and “earthquake”, car marker PSA Peugeot-Citröen announced on July 12 that it would be laying off 8,000 workers throughout France and stopping auto production at one of its flagship plants at Aulnay-sous-Bois, not far from Paris in Seine-St Denis.

The subject of long speculation, the move prompted an outpouring of outrage amongst PSA employees, with many stating their intention to use the union to fight the decision. “This will be a war,” declared one employee. The socialist mayor of Aulnay-sous-Bois spoke in tones of emotional disbelief. “The government had done so much to make the area hospitable. Transportation links to Paris, including a stop just outside the factory,” he told French Radio. “This sends the wrong message.”

On the same day, Bloomberg reported that General Electric’s France division has been trying frantically to hire welders and cutters for an oil and nuclear valve factory in Western France but can’t find qualified employees. The head of the French Federation of Mechanical Industries Jerome Frantz said he expected a shortfall of about 15,000 workers for manufacturing positions over the next five years.  Pierre Berger CEO of one of France’s largest construction companies, Eiffage SA, also reported difficulty in recruitment. “Working with one’s hands in this country isn’t recognized,” he told Bloomberg, “except in luxury goods and for arty Parisian craftsmen.”

Just Wait Until It’s Free

“The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.”

J. R. Clark and Dwight R. Lee

The quip “If you think it’s expensive now, just wait until it is free” is funny because of the unfortunate truth it contains. The truth is unfortunate less because it’s impossible to provide benefits without costs than because politicians constantly try to convince voters otherwise. To paraphrase Thomas Sowell: 

"The first law of economics is that there’s no such thing as a free lunch; the first law of politics is to disregard the first law of economics."

Politicians convince only the naive that government can provide free benefits, but the political process creates a lot of naivety. This naivety in turn allows politicians to enact policies that make it rational for consumers to act as if they believe government has lowered the cost (often to zero) of goods even when they know better. As the joke suggests, however, the more the “as if” cost of a good is reduced, the more its real cost is increased. This can be explained by making use of the important distinction between the total cost consumers pay for a good and the marginal cost they pay—that is the additional amount they pay to buy one more unit of the good.

The most obvious way the government can make people act as if the cost of a good has been reduced is to lower its price. The most direct way to do that is by imposing a price ceiling below the market price. We mention a price ceiling briefly only to explain why we do not consider it in detail. When the price of a good is legally lowered, the amount supplied will decrease, so consumers cannot act as if the cost has been lowered by purchasing more, despite their desire to do so. Also, it quickly becomes clear to consumers, once the aggravation of longer lines, poorer service, and declining quality is considered, that the cost of the good has become higher, not lower.

A more lasting way for politicians to give the impression they have lowered the cost of a good is to subsidize its supply. This can be done by transferring an amount covering all or part of the cost to suppliers for every unit of a good sold to consumers. This per-unit subsidy would cause a corresponding drop in the cost of production and thus in the price of each unit of the good. We assume the supply curve is horizontal—that is, prices won’t rise to offset increased consumer purchases in response to the price subsidy.

The Global Economy

It's All About Increasing Leverage

If the global State/finance Empire can't increase systemic leverage, it will implode.

by Charles Hugh Smith

If we look at the global economy with unclouded eyes, we reach this conclusion: "This whole thing is about leverage." If leverage doesn't increase, the system implodes. But since collateral is disappearing from the global economy like sand castles in a rising tide, and disposable income has stagnated, there is no foundation for more leverage.

As a result, the State/finance cartel has only one choice: increase leverage by whatever means are left. There are only two:

1. Allow banks to claim phantom assets as capital/reserves

2. Lower interest rates so stagnant income can leverage ever greater quantities of debt

The State/finance Empire and its army of academic toadies (economists) must cloak this reliance on leverage from the citizenry, lest they grasp the precariousness of the entire financial system. As the economic Establishment is discredited by reality (that their sputtering reflation policies have come at an unbearable cost is now undeniable), their attempts to discredit their critics become increasingly comic: only PhD economists in the employ of the Empire are qualified to comment on the Empire's policies, etc.

Most discussions of leverage focus on the role of capital or reserves as the basis for leverage. This is the basis of the fractional reserve banking system: $1 in capital (cash, reserves) can be leveraged into $15 of debt.

The easiest way to "grow" is to increase leverage so more money/debt can be created. If a bank was constrained to only loaning the cash it held in deposits, that would severely limit the amount of money available in the system for purchasing villas in Spain, BMW autos manufactured in Germany, etc.

If we magically enable 25-to-1 leverage, then every euro supports 25 euros in debt (mortgages, auto loans, etc.)

The danger is obvious: if 1 of the 25 euros of debt goes bad, the lender has zero reserve. If 2 euros of debt go bad, the lender is insolvent.

The only way to "save" an over-leveraged system is to increase leverage and lower interest rates. If we claim phantom assets as real and increase leverage from 25-to-1 to 50-to-1, we have enabled a doubling of loans. All that wondferful new money will flow into the economy as spending, fueling "growth."

The Race for Energy Resources Just Got Hotter

Τhings are getting serious

by Marin Katusa

Malaysia's state-owned oil and gas company just made a multibillion-dollar bet that Canada will choose to export its shale gas riches. Even though the odds of securing permission to export liquefied natural gas (LNG) from the Canadian west coast are still pretty poor, the costs of such an endeavor immense, and the timeline in question very long, Petronas is putting $5.5 billion on the table – far more than it has ever spent on an acquisition before – to secure a large foothold in the British Columbia shale gas scene.

It's yet another sign that things are getting serious in the global race for resources.

The race for resources drives much of our thinking within the Casey Research energy group. It's more than a common theme – we believe that it is one of the strongest forces at work in our world today, and that it plays a role in determining the tone of many international relationships and domestic policies. Countries that have resources, from Russia to Australia, are altering fiscal structures and ownership rules so as to glean as much benefit as possible from their riches, while still reserving sufficient supplies to fuel their futures. Countries that lack natural-resource wealth, such as Japan and South Korea, are racing to lock up projects and partnerships abroad that can supply their future resource needs.

Standing Keynesianism on Its Head

As Employment Increases in Response to a Fall in Wage Rates, the Rate of Profit Rises, Not Falls

by George Reisman

With his usual astuteness, Mises observed that it is common for one and the same doctrine to circulate in more than one version, typically, in its original, scholarly version and then also in a greatly simplified version designed for popular consumption. He illustrated how this applied to doctrines as diverse as Catholicism, Darwinism, and Freudianism (Money, Method, and the Market Process, pp. 301f).

Not surprisingly, his observation also applies to Keynesianism and its claim that a free economy is incapable of eliminating unemployment, because its method of doing so, namely, a fall in wage rates, is allegedly unable to increase the quantity of labor demanded.

Popular Keynesianism

The popular version of the Keynesian doctrine, which is championed above all by the labor unions, is simply that a fall in wage rates, in reducing the incomes of wage earners, causes a fall in consumer spending, which allegedly serves to worsen the problem of unemployment. This doctrine can be disposed of fairly simply, before proceeding to the scholarly version of Keynesianism, which is known as the IS-LM doctrine.

First of all, it overlooks the fact that at lower wage rates more workers will be employed. The effect of this is to enable total wage payments and consumer spending in the economic system to remain the same or even increase while the wages of the individual worker decline. For example, 10 workers each employed at 90 percent of the wages earn the same total wages and can spend just as much in buying consumers' goods as could 9 workers each earning the original wage. (It's as simple as the fact that 10 times .9 equals 9 times 1.) And, of course, more than 10 workers employed at 90 percent of the wage per worker would earn more collectively and spend more for consumers' goods collectively than was possible before.

The Many Collapses of Keynesianism

Keynesianism is, after all, the economics of state power

by Llewellyn H. Rockwell Jr.

It should be obvious to everyone but the most dedicated adherent of Keynesianism that the stimulus did not accomplish its end. The combination of outright spending by Congress, the desperate schemes to reflate the housing market, the attempt to transfuse bleeding firms with other people's money, and the creation of trillions in artificial money, has not done a thing to lift the US economy.

Actually, the reverse has been true. All these efforts have prevented the adjustment of economic forces to the postboom world. And all the resources that the stimulus consumed were extracted from the private sector, for we must always remember that government has no resources of its own. Everything it does must come from the hides of private producers and the citizenry in general, in the future if not immediately.

The Collectivist War Against Cultural Heritage

Trading Freedom for Utopia

Naturally, every age thinks that all ages before it were prejudiced, and today we think this more than ever and are just as wrong as all previous ages that thought so. How often have we not seen the truth condemned! It is sad but unfortunately true that man learns nothing from history.

                                                               -Carl Jung

by Brandon Smith

Two things make man what he is; his soul, and his memory.  Lose one, or both, and he ceases to exist.  He might as well buzz over his own garbage like an insect.  When a society is drawn into the repugnant shadow of totalitarianism and collectivism, it is usually because the masses have abandoned (or been enticed to abandon) a piece of their inner and outer heritage, something which kept the darkness at bay, a lesson from the past, or a principle long honored.  In the wretched and psychotic quest for the “perfect” establishment system, we are even often encouraged by the elitist ilk to slough off the warm remnants of our cultural inheritance like so much skin and “look forward” to a bright and more promising tomorrow, where everything will be different, and certainly, better than today.    

Between a Rock and a Hard Place

The Tragic Decline of Gibraltar's Spanish Neighbor

By Walter Mayr

The residents of La Línea de la Concepción are leaving, like rats deserting a sinking ship.

They've been crossing the border by the thousands since early morning, first the cleaning women, nannies and construction workers, and then the smugglers. They all want to get out of Spain, if only for a few hours. There is work across the border, in the British overseas territory of Gibraltar, and work spells hope for a better life.

By around 11 a.m. on what promises to be a hot early summer's day, the traffic jam on the Spanish side already stretches from the border, across the coastal road and back to the town hall, where Mayor Gemma Araujo is holding down the fort in her office on the second floor, which has a view of the caravan of commuters. Araujo is 33, a Socialist and the first woman in her position. It's not exactly the most rewarding job in Spain. A "crisis tsunami" has reached La Línea, says Araujo, and the situation is more serious than ever before. "Our city isn't bankrupt, but it's close."

Α Night At The Opera

Those expecting Prime Rib for dinner are about to be disappointed

by Mark Grant

Some days it seems like an eternity. Other days it passes in the glimpse of a blinking eye. Most days it ekes out like a sore oozing infection and so the tragedy of Europe continues and lengthens and stretches as moments come and pass and as many await the defining moment where some kind of curtain descends and ends the Act or perhaps the play. This has been the way of it for the past two years but the muddling has become bumbling and the depth of the sorrow deepens and the possibility of escape is now all but impossible.

“One can't judge Wagner's opera Lohengrin after a first hearing, and I certainly don't intend to hear it a second time.”     

                                                                 -Gioachino Rossini

The Road to Totalitarianism

Total control over the economy must, in the end, mean total control over what people do, say, and think

by Henry Hazlitt, this article appears as chapter 6, "The Road to Totalitarianism," in On Freedom and Free Enterprise: Essays in Honor of Ludwig von Mises (1956)

In spite of the obvious ultimate objective of the masters of Russia to communize and conquer the world, and in spite of the frightful power which such weapons as guided missiles and atomic and hydrogen bombs may put in their hands, the greatest threat to American liberty today comes from within. It is the threat of a growing and spreading totalitarian ideology.
Totalitarianism in its final form is the doctrine that the government, the state, must exercise total control over the individual. The American College Dictionary, closely following Webster's Collegiate, defines totalitarianism as "pertaining to a centralized form of government in which those in control grant neither recognition nor tolerance to parties of different opinion."
Now I should describe this failure to grant tolerance to other parties not as the essence of totalitarianism, but rather as one of its consequences or corollaries. The essence of totalitarianism is that the group in power must exercise total control. Its original purpose (as in communism) may be merely to exercise total control over "the economy." But "the state" (the imposing name for the clique in power) can exercise total control over the economy only if it exercises complete control over imports and exports, over prices and interest rates and wages, over production and consumption, over buying and selling, over the earning and spending of income, over jobs, over occupations, over workers — over what they do and what they get and where they go — and finally, over what they say and even what they think.

Austerity’s Prophets

How Friedrich Hayek eclipsed J.M. Keynes and Milton Friedman

By MARK SKOUSEN

“Austerity” has become the watchword of the year. Governors, prime ministers, and presidents around the world are talking about cutting welfare benefits, curtailing public union power, and reducing deficits. We’ve over-promised at the public trough, and now we must pay the price. Whoever is elected president in November is going to face the need to retrench.

Yet only one school of economic thought, that of Friedrich Hayek and Ludwig von Mises, predicted and prescribed austerity before the Great Recession. More prominent branches of free-market economics, no less than the spendthrift left, have been slow to realize that neither fiscal nor monetary stimulus can cure what ails the West. As the psalmist says, “The rejected stone has become the chief cornerstone.”

Nobody in power was talking austerity in 2008, when the financial crisis hit. Big government and its patron saint, John Maynard Keynes, were in the saddle, with Republicans and Democrats falling over each other to run up deficits and pass the Troubled Asset Relief Program. Keynes’s biographer, Robert Skidelsky, came out with a bestseller, The Return of the Master.

The Divided Map of Europe

Europe remains a truly ambitious work in progress

By Robert Kaplan

The idea of Europe, in the minds of Westerners today, is an intellectual concept—liberal humanism with a geographical basis—that emerged through centuries of material and intellectual advancement, as well as a reaction to devastating military conflicts in previous historical ages. The last such conflict was World War II, which spawned a resolve to merge elements of sovereignty among democratic states in order to set in motion a pacifying trend.

Alas, this grand narrative now is under assault by underlying forces of history and geography. The economic divisions seen today in the European Union, manifest in the Continent’s debt crisis and pressures on the euro, have their roots, at least partially, in contradictions that stretch far back into Europe’s past and its existential struggle to grapple with the realities of its immutable geographical structure. It is this legacy—somewhat deterministic and rarely acknowledged—that Europe still must overcome and that therefore requires a detailed description.

In the years immediately before and after the collapse of the Berlin Wall, intellectuals celebrated the ideal of Central Europe—Mitteleuropa—as a beacon of relative multiethnic tolerance and liberalism within the Hapsburg Empire to which the contiguous Balkans could and should aspire. But while the Continent’s spiritual heart lies in Mitteleuropa, the political heart now lies slightly to the northwest, in what we might call Charlemagne’s Europe. Charlemagne’s Europe starts with the Benelux states, then meanders south along the Franco-German frontier to the approaches of the Alps. To wit, there is the European Commission and its civil service in Brussels, the European Court in the Hague, the treaty town of Maastricht, the European Parliament in Strasbourg and so on. All these places lie athwart a line running southward from the North Sea “that formed the centerpiece and primary communications route of the Carolingian monarchy,” observes the late scholar of modern Europe Tony Judt.¹ The fact that this budding European superstate of our own era is concentrated in Europe’s medieval core, with Charlemagne’s capital city of Aachen (Aix-la-Chapelle) still at its very center, is no accident. For nowhere on the Continent is Europe’s sea and land interface quite as rich and profound as along this spinal column of Old World civilization.