Savor The Moments

It’s maybe worth reminding ourselves that events in late 2008 prove there are more things in finance and geopolitics, Keith Olbermann, than are dreamt of in your ‘philosophy’. Paulson flings $600 billion more in fictional Fed money at the already sloppy financial wall this morning on top of Team Boy King’s unsubtle floating of a $500-700 billion ‘stimulus’ plan yesterday. The delusions continue apace.

The Boy King (perhaps wisely in the short term, but definitely foolishly in the medium) avoids two crushing truths. First, he and the American people are no longer masters in their own house. A future sustainable American standard of living based on a real economy will require a 25-30% reduction in consumption across the board. No matter what is said at a press conference. There is and will be no ‘return’ to a ‘stable’ economy as invoked circa 2003. That jenga block got knocked over by self absorbed boomers long ago.

Blue Screen Of Death

Second, hyper inflation is now all but unavoidable. The printing presses are running non stop. This is not the first time a Great Power debased its currency to paper over inconvenient truths. Yet history also teaches such expedient measures always fail and boomerang in the medium term. Already we see signs from erstwhile pillars of the dollar economy like the Bank of Japan balk at holding the giant hand grenade for Joe the Plumber let alone the Masters of the Universe. Imagine. They want the U.S. Treasury to issue bonds in foreign currency like, say the Yen. (This defeats the whole printing press thing, those fiendishly clever Japanese!)

Hyper inflation will not appear immediately. But will sooner than the voices whispering in Andrea Mitchell’s ear (at work *and* and home) can admit. The only immediate response Team Boy King can be expected to do for political – not economic reasons – is wage and price controls. You betcha.

Americans again forget history. Economies and sinews of economic productive activities do not sprout in a day, a quarter or even a year. Once the residue of the false, bubble and fraudulent finance economy is exposed and scraped away then what?

The quaint contempt Americans have for actual labor is on blatant display with the disparate reactions to and money poured on knowingly fraudulent banks versus millions of Americans who just happen to work for or depend on incompetent bosses in Detroit.

But let’s move past all that. What exactly are 20, 30 and 40 somethings with MBAs to do? They’ve known nothing but punching Excel spreadsheets and practicing their professional equivalent of phone sex on conference calls day after day swapping CDOs? What are they supposed to do the next day? Build cars? Bend steel in New York sewers? What do real estate brokers (ex house husbands or house wives) do now that they realize with a shock that $220,000 for doing literally nothing but driving people around to houses with a chipper smile is not a career? Pour concrete rebuilding I-95? This new reality is A Big Deal (and probably will not be recognized as such until Tom Friedman writes a book and gets it wrong again to boot). To quote Yul Brenner, ‘Et cetera, et cetera . . .’

Perhaps not days of wine and roses. But these few days should be savored nonetheless. A hard rain’s gonna fall.