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.
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?