Friday, May 21, 2010

The Archdruid Report

It's been awhile since I've read The Archdruid Report but I will be fixated on it for the near term. He's just begun a new series and here are a few tidbits from his most recent post.

"The uncontrolled simplification of a complex system is rarely a welcome event for those people whose lives depend on the system in question. That’s one way to summarize the impact of the waves of trouble rolling up against the sand castles we are pleased to call the world’s modern industrial nations."

Read that again - a few times - and then continue on. He soon switches metephors from sand castles to icebergs but his thoughts have stuck with me like the sunset over Lake Superior last night.

And this: "Right now there are a great many dollars in the global economy that are no longer worth the same as any other dollar. Consider the trillions of dollars’ worth of essentially worthless real estate loans on the balance sheets of banks around the world. Governments allow banks to treat these as assets, but unless governments agree to take them, they can’t be exchanged for anything else, because nobody in his right mind would buy them for more than a tiny fraction of their theoretical value. Those dollars have the same sort of weird half-existence that horror fiction assigns to zombies and vampires; they’re undead money, lurking in the shadowy crypts of Goldman Sachs like so many brides of Dracula, because the broad daylight of the market would kill them at once."

A few lines later he continues with this: "Letting banks meet capital requirements with technically worthless securities is only one of the maneuvers that government regulators around the world allow without blinking. Driving this spectacular lapse of fiscal probity, of course, is the awkward fact that governments – to say nothing of large majorities of the voters who elect them – have been propping up budgets for years with their own zombie hordes of undead money.

Underlying this awkward fact is the reality that the only response to the current economic crisis most governments can imagine involves churning out yet more undead money, in the form of an almost unimaginable torrent of debt; the only response most voters can imagine, in turn, involves finding yet more ways to spend more money than they happen to earn. So we’re all in this together; everybody insists that the walking corpses in the basement are fine upstanding citizens, and we all pretend not to notice that more and more people are having their necks bitten or their brains devoured."

I could keep posting snippets from his blog but please, please, read it yourself.

The man is brilliant, IMO, and worthy of your time and attention. Do I always agree with him? No, but that doesn't mean I won't consider what he has to say.

1 comment:

Mayberry said...

"Undead money". How fitting...