Oct 03 2008
The Fat Cats
I have learned to refrain from comments on the USA — the hard way. Blaming the US for anything substantial will inevitably result in outcries of US citizens who describe themselves as patriots. They will immediately point a finger at you and accuse you of “America bashing”. Now that is hilarious, I know, with the whole world being enslaved both territorially and economically by the US, while nobody ever speaks of “World bashing” on a public forum.
This week however I almost felt sorry for US citizens. First a lot of them lose their jobs, then they lose their homes and in the end their economy collapses under the weight of consumer and government spending and what does their president (elected twice) do? He comes up with a plan that could have been invented by one of the early economy strategists of the old USSR.
Money gone? No problem. We will just print more.
Because basically that is what it boils down to and you can do that in a virtual economy as long as you own enough clean shaven, nerdy looking economists who show off their optimism in the media in a vain attempt to reassure the people that they are not investing their money in a crapper.
Of course Obama and McCain applaud this free market intervention and Bush may get to finish his second term without too much market mayhem after all. The US tax payers who have lost jobs and housing will soon find new and worse paid jobs so that they will be able to dump their tax money in a bottomless pit that is mainly set up to protect the fattest cats of that same banking system that brought them on their knees in the first place. They are asked to pay twice for the house they lost to the bank. And as good working bees they will do that without too much moaning. Yes sir, thank you sir. As long as they can keep their pitiful jobs. I have said it before; Americans are great workers and lousy philosophers.
Since last week I am all for cultural exchanges between older Russian citizens and Americans. The older Russians still know how it is to suffer under government controlled markets.
You will say I am cynical. This government bail-out of the banking system will prevent us from total market failure and long lasting economical depression. I hope you are right. My worry is not that an orchestrated virtual world economy will collapse sooner or later. Chances are it won’t, just because of its virtual nature but I see a danger lurking in the East. Those nice smiling Asians have been keeping the world money market afloat for some time now. That makes sense too, because you know what they say about Asians; they like to gamble. They have a tradition in gambling, they have become pros in risk management. Professional gamblers don’t blink an eye when they work the numbers until the right one pops up, but they usually know when it is time to leave the table too.
My guess is that the bottom of the market will fall out from under our asses one day, when we in the Western world are still sound asleep — at the opening of the trading markets in the East. After all, they have bailed us out of a large economical depression, not Mr. Bush and certainly not McCain or Obama. Why should the Asians leave the table while the game is still hot and the stakes are high? After all they depend on us, they want to sell goods to us. Well, history has taught these same Asians some very nasty lessons about us in the West. They might dump us for reasons that no economist can foresee. Maybe now we need historians and anthropologists to predict the market.
Or psychologists, maybe? Gamblers can become destructive quite suddenly for no apparent reason. Ask your local addiction specialist.
[update October 10th]
I thought it would take more time, but today in Tokio the market plunged to a four year low at the opening and Europe followed with a less spectacular but alarming drop.