Remember the old time telephone party lines? When my parents bought a 40 acre retirement farm in Southern Maryland in 1948, and all we could get for a telephone, was a party line. Two wires, with several phones on them. If one was talking, no one else could talk, but a lot of people eavesdropped on other’s calls. If one went down, they all went down. There were hundreds of jokes about party lines. “Hang up! I know you’re listening.” There’s a similar situation going on in the world right this minute, and it’s about to crumble, I am afraid.
It’s the euro. Why the euro? Because, like a party line telephone, lots of nations are on line with the euro. Also like a party line in an old time rural area, some of the parties on the line may have been wealthy, smart, and sophisticated, while others may have been poor busybodies, snoops, or not too a desirable a party. Likewise with the euro. We took a Mediterranean cruise last fall, and everywhere we went, from Barcelona, Italy, Turkey, Greece etc, all took the euro, and it was very convenient. However, there are, like party lines, some using the euro, who aren’t very good neighbors, and who have over-spent, over-subsidized, and in general, have not acted like good economic policy would dictate. The result for Greece right now, is that it is broke, and can’t come anywhere near meeting their payments on huge debts. This is just as aggravating for solvent euro using nations, as it was when a party line motor mouth, tied up the line for hours at a time. How can Greece pay its debts? So far, France and Germany have loaned it just shy of a billion euros. That is only a temporary solution for Greece, as she is deeply in debt. Far more than a billion euros in debt.
Spain, has an economy several times as large as Greece’s, and it really in bad economic condition. In Spain, unemployment is huge, government debts are enormous, and Spain can see no way out of it. Portugal is right behind Spain, and both are euro nations. Who will bail out Portugal and Spain? Who will continue the bailout of Greece? Germany, I have heard, is just waiting to get out of euros, and supposedly are right now printing Deutschmarks. Who can blame them? Is France printing francs, just waiting for the proper time to exit the euro? Can the euro continue, with all the bad debt nations hooked to it like a telephone party line?
Japan has the worst economic situation anywhere in the world. Japan’s debt is larger than anyone’s, but there is a big difference between Japan, and Greece. Japan has its own yen currency, and the yen is not in any way tied to any other paper, un-backed paper money. Japan then, can go on its way, at least not tying up any other nation with its debt. Japan’s huge debt, could of course, cause Japan’s own economy to crash, and this is a distinct possibility. Japan doesn’t seem too worried about its plight, at least publically.
Then there is America. We are in a dismal economic condition, which is an understatement. Huge debt, which is unpayable other than with printed, un-backed, paper scrip, known as dollars. China has been suckered into buying over a trillion dollars of our debt, in exchange for us buying her goods, which of course, used to me made here and of far better quality. (Seen the new Jeep commercial? Wonderful!). China got the manufacturing and jobs, because of our huge taxation, stifling bureaucracy, and plunging dollar value.
The situation in the world now, as far as I can see it anyway, is that the entire world is operating on basically worthless, un-backed, paper money, and all nations also have run up huge debts, thanks to their individual politicians and governments. Germany and France can’t loan any more to Greece, Greece can’t pay its bills, and neither can Spain or Portugal, who are in the euro party line. Japan and America, are heavily in debt in their own paper money, neither of which can be paid, other than with the printing press. Is the whole world broke? I think so. What will happen? Probably the euro will be abandoned by Germany and France, which will be followed by Greece. Greece will print to pay, and the euro will collapse. Spain and Portugal will print to pay, but their payments will not be acceptable probably, because they will have to print so many, that they will become worthless. Will world trade cease, because of the lack of a satisfactory trading currency with some value? Remember, Hitler came to power because of the worthless Reichsmark. Will we see dictators rise up from the rubble of bankrupt nations? We’ll see, but remember, gold and silver are historic money in all nations, in all civilizations, and are self backed, having value in themselves, with no need for a government to guarantee them. Government guarantees have always been worthless anyway.
Obama’s Speech
Obama’s speech Tuesday night from the Oval Office, almost two months after the blowup, was trite, and as empty as a clam shell. The first half told us nothing that we didn’t know already, and that is lots of oil is polluting the Gulf, and BP is going to pay. The second half was pure political. A hard push for Cap and Trade, which will double everyone’s electric bills, raise gas prices, and cause a million layoffs…to put it kindly. We have hundreds of years worth of coal and natural gas in America. As the LA Times headline said yesterday, “There’s a pipe spewing a gazillion gallons of oil into the Gulf, so let’s build more windmills.” If the six month ban on Gulf exploration holds, thousands of jobs will be lost, and probably the rigs will move elsewhere, so they can make a living. Maybe a comparison to the ban on oil drilling is: “My town has 17,000 cars, and yesterday there was a fatal accident. Let’s ban all driving for six months.” Make sense? Hardly. If Obama and his gang convince BP to allow them to administer escrow funds, who knows where they will go? What a creeps Obama and his gang are.