The World Is Entering The Twilight Zone

Here at Conservatives on Fire this humble observer has written numerous posts often relating a sense of gloom and a potential for doom. In most cases these articles have ended with a caveat of hope; that if we could do this or if we could do that, we might be able to stave off the coming disaster. Admittedly, these caveats of hope were as much or more for my own benefit than for my readers. Frankly, it is getting very hard for this old man to justify any reason for hope  the future will be better than what we have now. The world seems to be entering a twilight zone of uncertainty or at best a limbo of status quo.

Western civilization and maybe beyond is experiencing a crisis of faith. There is a general loss of faith that the future can bring progress. This crisis of faith is many faceted, There is a general loss of faith in governments that have gotten so big and bloat they can not and do not function. There is a loss of faith in the central banks that have run the world for two hundred years and now appear to have dropped the  reins. People have lost faith in the stock markets where a handful of investment bankers have found it easy to manipulate the markets and yet they have often outsmarted themselves. Who still believes in the usefulness of the UN, the World bank or, the IMF? Even the major religions, with the possible exception of Islam, have seen a loss in their relevance in the daily lives of the people.

In the twilight zone, strange and bazar things can happen. Take Greece for example. We look at the Greeks and we say they are insane. And, yet we can not see the same insanity in ourselves.

It’s easy to see denial and defiance in the refusal of Greek citizens to face up  to the austerity that will be necessary to address that country’s financial  problems. What may be tougher to concede is that the U.S., with its huge budget  deficit and low personal savings rates, may be guilty of the same type of  denial. (source)

On the other hand, you almost have to  admire the Greeks. They have played the system like a fine violin. And now they are betting that the EU will continue to support their lust for the good life for fear of the entire EU house of cards falling down. Who knows? Maybe Greece will be the only winner in the short-term.
Let me share another example of how bazar the twilight zone can be.

Germany sold 4.56 billion euros ($5.8 billion) of bonds carrying a zero percent coupon on Wednesday, its first-ever sale of debt offering investors no regular return and underscoring its safe-haven appeal at a time of turmoil in the euro currency zone.

Germany—which joins a select band of counties including Japan which have issued conventional debt carrying little or no coupon payment—attracted strong demand for the two-year bonds, whose sale completes nearly half of its 2012 funding target.

(source)

So, let’s try  to wrap our heads around this. Germany issue two-year bonds at zero interest and investors suck them up in a heartbeat. Why would investors do this? because they have lost faith in the EU markets and the EU and they need a save place to park their money. For Germany this is a great deal. Germany can borrow money at no cost and if they wish they can turn around and lend it to their desperate neighbors to the South at a nice profit, and thereby, prop-up those neighbors for a while allowing their citizens to continue to buy German exports. Someone please explain to me how this can work any  place but the twilight zone?

Over a year ago, I was betting that the fall of the Euro Zone economy was imminent and that the US economy would fall shortly there after.  Yet, here we both are still muddling along. It would seem that as long as the US dollar is the world’s reserve currency _  and I see zero threat to the dollar’s status even from China _ the muddling is likely to continue.

Nothing makes sense to me anymore. One thing I do know is that besides being a place where strange and bazar things happen, the twilight zone is also a very dangerous place. There is a leadership vacuum in the world and we know how the world feels about a vacuuum.

Well, that’s what I’m thinking. What are your thoughts?

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28 thoughts on “The World Is Entering The Twilight Zone

  1. Good points. We can laugh at Greece all we want but we are only a bigger, more bloated version of Greece waiting to collapse. But one thing we can be assured of: When our economy does collapse the MSM will blame the Republicans. (Some things never change.) Not that the Republicans are blameless – they are just another version of the Democratic spend and borrow and debt party.

  2. The Twilight Zone is right … San Francisco is naming a street after Nancy Pelosi (I assume it’s a dead end) and its city board has voted to support a movement to name a U.S. Navy ship after that timeless hero of the seven seas, Harvey Milk — joining the U.S.S. Cesar Chavez in that great, green, algae-powered fleet of Obama’s that will undoubtedly strike terror in the hearts of foreign homophobes (and domestic conservatives).

    1. A Naval ship called Harvey Milk? Remind me, what war did he fight in? Which branch of the military did he serve in? What medals did he receive?

  3. I started blogging to try to make sense of what is going on, and my studies took me down some interesting roads. If you notice my X-files section is down because I’m revamping it to help others struggling to see the method in the madness.

  4. We fail to appreciate that we hit life’s jackpot in living in this precious time and country. Let us make the best of it, and play out the hand with some optimism. It is their wish that we get discouraged.

    1. Jim is right, that is good advice. But I am finding it harder and harder to stay positive everyday. You are probably right, they want us down and depressed so we will give in to them and we have to fight to make sure they don’t get us.

      1. I agree as well. I hope I can at least go down kicking. The fact that the media is not covering the news is a hard one to take day in and day out.

  5. Under normal conditions the world’s financial markets are the twilight zone.

    For example, most of the world’s major equity markets finished down 2%+ lower today. There was absolutely no good reason for optimism Wednesday afternoon, yet both the DOW and S&P 500 both rallied from nearly 1.5% down to break even on the day.

    Nothing makes sense.

  6. I’m with you Jim, it is hard to figure this whole thing out but I do know that nobody seems to be taking this impending crisis seriously and I fear we will be the next Greece in the near future.

  7. A ray of hope cracks my pessimism. When big governments fail, that doesn’t mean dispair. They will dust themselves off and start again, smaller, humbler, with a withered grasp, leaving the rest to the people, who have powered every advance in human history.

  8. The most chilling iine in your post:
    “There is a leadership vacuum in the world and we know how the world feels about a vacuuum”.

  9. Jim, I agree that we are in a twilight zone, now. But its not such a phony world, but a world where we just don’t understand what is going on. Germany can issue zero coupon bonds, and investors can buy them with the expectation that they will gain. The situation is certainly not under stable interest rates, or inflationary times. It only works under deflation.

    That is the scary thing about the whole mess. It seems to me that we have been building-in inflation into our currencies and economies for the last few years, and now Germany is selling bonds without any interest rate attached. How weird can you get?

    Does this mean that the economic expectations are different on both side of the Atlantic? I don’t have a model that explains this.

    Yep. Let’s continue to call it a twilight zone, and look for the changes between our markets and theirs.

    1. I nust admit that I’m confused, Bob. However, the EU, in my opinion, was promoted generally for the benefit of Germany and to a lessor extent for France. The zero cupon bonds are a major win for Germany.

  10. My friend, you hit on all the losses of faith we experience but the most important: faith in God.

    At the risk of making those who believe differently somewhat uncomfortable, I would remind you and your readers that this nation was formed through a covenant with God – the God of Israel, Abraham and Moses. Our founders knew it. They even remarked that we were the ‘New Israel.’ (though they did not mean the new Israel mentioned in prophecy).

    Our nation was blessed because – as a people – we recognized our need for Him and his providence. You will find this acknowledgement throughout our founders’ writings. And we continued to grow and prosper so long as the majority in our nation remained devoted to and relied on God.

    People of Biblical faith understand that our government was founded on the same Biblical principles as the ancient Israelites. Those principles can be found in the Bible, especially Leviticus and Deuteronomy. Franklin, himself, said directly that our govt. was founded upon ‘the ancient principles’ as found in the Bible. This is why our system of govt. will only work for a faithful people.

    But today, we have turned our backs on the Lord. In the 1960’s, we kicked him out of our schools, govt. and the public square, and look what has happened since. Do a Google search for the social indicators such as STD rates, violent crime, abortion, teen pregnancy, single-parent households, out of wedlock births and education scores. You will find they all take a dramatic turn for the worse starting from the last half of the 1960’s. If it were not for the fact that it is obviously connected to turning our backs on God, any sociologist worth his/her salt would look at the numbers and conclude a direct causal relationship. But not us, not today. Today, we ‘know’ that sophistication and technological advancement = ‘sufficient wisdom’ to be sure there is no God. And that is all well in good save for one thing: sophistication, education and technological advancement do NOT = intelligence, and intelligence does NOT = understanding, and understanding does NOT necessarily = wisdom. In short, we don’t know nearly as much as we think, and certainly a lot less than our parents and especially our grandparents.

    So I’ll close by asserting that, unless we turn from our current path and back toward God, back to the covenant our founders made when they formed this nation, we will continue our slide into the abyss. History is VERY clear on this point, and we have earned no magic exemptions to this rule.

    1. black3actual, I agree wholeheartedly with your comment. Religious views are something I intentionally stay away from here at CoF. At the end of my lost-faith list, I did say “Even the major religions, with the possible exception of Islam, have seen a loss in their relevance in the daily lives of the people.” I do believe that America and the rest of the West has lost their moral compass and I addressed that i my post “Winning The Cultural War Is Critical To Winning The Political War” , which you can find here:
      https://conservativesonfire.wordpress.com/2012/05/14/winning-the-cultural-war-is-critical-to-winning-the-political-war/
      Modern Western civilization is rotting from within as have most prior civilizations.

      1. My apologies. I didn’t realize you had intentionally avoided the subject. However, might I suggest that this is precisely the source of our problem? It’s hard to repair the house when we decide to ignore the foundation, is it not?

        🙂

      2. No apologies necessary, my friend. I was only stating a fact. I do not diccuss religous views here. But, that doesn’t mean I don’t talk about our the importance of our Christian-Judeo history and the role it played with our founding and in establishing a set of social norms which was the common bond that held our society and our nation together. As you so correctly pointed out, we have been losing that common bond since the middle sixties. This is true throughout the western civilizations. There is a leadership vacuum in the secular and the non-secular worlds today. Very, very dangerous! This we do talk about at CoF.

      3. Understood. Thanks for letting me know about the etiquette here. Will do my best to conform – but no promises because – me being me – I’ve learned I am not too good at keeping them 😉

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