Saturday, March 23, 2013

Are We Near A Tipping Point? Cyprus Confiscation Still On Hold.

Anyone watching the financial industry has to be aware of what is going on in Europe but if you are busy raising your family or watching your favorite reality show or listening to political idiots tell you the economy has recovered, the EU has recently threatened to withhold a bailout for Cypress unless Cypress itself confiscates some large portion of its bank deposits.  The confiscation metrics vary based on the latest proposed schemes. 

I haven’t written of this recent event in Europe but that’s really because the entire system is cracking and there is just too much to write about.  And because I have beaten Europe like a rented mule over the last eight years.  Because of how complex systems work, the outcome of the crises we see around the globe today are essentially pre-ordained.   Even if we saw a debt repudiation, that really solves nothing.   In other words, there is nothing the status quo can do to stop it.  Now, that certainly doesn’t mean the status quo aren’t trying their damndest.  

The Eurozone, the Euro financial system and the Euro currency as structured are toast.  Just as is globalization and global finance, inventions of U.S. hegemonic policies of force are also toast.  It’s all just a matter of what the tipping points are to destabilize the system beyond recovery.   Is it a natural disaster or a manmade disaster and when?   Those who believe none of this will happen in our lifetime, a common response I hear, don’t appreciate how completely unstable this system is or the exogenous and esoteric factors of volatility driving it.   Or, that when a complex system becomes this unstable, how much greater and greater force (ego-motive or control) must be applied to the system in attempt to maintain its integrity.  Or how the entire global system is intertwined and the unstoppable chain reaction it can create.   At some point, the system will lose its integrity and we are likely to see a Chernobyl-type event as the chain of events simply become uncontrollable.   

What I find more interesting than the latest Cyprus storyline at Reuters is the graphic provided with the story.  I never put Cyprus and the Golden Dawn Party together but I should have.  For those who haven’t been following the nearly complete collapse in Greece, the Golden Dawn Party is a highly nationalistic, right-wing extremist party in Greece that has been growing substantially in its popularity.  (I wrote we were headed into an environment of nationalism seven years ago when globalization was in its greatest bloom ever.   And when the idiots who created it were on top of the world with giddiness at the horror they had created.) Unlike Grillo in Italy who has called his party the French Revolution without the guillotine, the Golden Dawn Party is the French Revolution with the guillotine.

I’m not predicting this but we could easily see EU military or police forces crossing borders in some attempt to maintain control before this cycle ends.  Umm….  can you imagine if Mexican or Canadian troops were brought to the U.S. to help maintain order in a time of civil disobedience due to state-sponsored violence against American citizens?   In many regards, unless this crisis ends quickly with a total collapse of the EU system, this crisis as horrendous as it has already been, may just be getting started.   It all depends when and how the people of Europe decide to take back their freedoms.

I still get a fair amount of feedback from people who somehow still outsource their thinking to the likes of Barack Obama or Bill Clinton or others who helped create this horror show.  And, therefore, they believe that I, and others, are overblowing this crisis.   So, for those who have still have a lack of appreciation for what I and others are talking about, I’m going to provide some context for you to consider.  The first atomic bomb dropped on Hiroshima had well known, horrific consequences.   Yet, that event only took a second.  That horrific devastation was started by one simple neutron splitting a single atom.  The amount of energy of that first event was so insignificant, no one in the world would have ever noticed it.   Yet before the chain reaction was complete, an entire way of life was lost.  An entire society disappeared.  Literally in the blink of an eye.   Today, we have a global system of control that too can experience similar consequences with the effect of a single “neutron”.  And, any number of neutrons exist to start the reaction.  The simplest of events can have devastating consequences when a system is overly complex.  Especially when it is overly complex for one reason;  to achieve some level of artificial control.  It’s not debt that people should be worrying about.  Debt is an illusion.  It’s global capitalism and global finance.  And if you think someone smarter than you or some political idiot has your back, well, then you really are deluding yourself. 

We could easily see the entire system fall like dominos.  One failure leading to another in an unstoppable chain reaction because political idiots and their corporate masters have literally rigged everything.  The system only maintains its inherent instability through force.  Yet, the force required to maintain it is so great that maintaining it is impossible.   As if I need to remind regular readers and those who any any sense of what is going on, this environment is far more fun than the Great Depression.   It’s not even close. 

Update:  A Cypriot tells us that Cyprus should let the banks fail and create a public banking system.  Bingo!  A long term thesis on here is the world needs to do away with private banking and replace it with public banking systems.  This understanding of private, for-profit capital being a criminal enterprise is growing around the world.

posted by TimingLogic at 11:23 AM

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