Nobody Knows Anything
That sound you hear out there is spaghetti hitting the wall. Everybody wonders: will it stick? The European Union lobbed a wad of kartoffelkloesse at a Greek wall last week. The thud was impressive, but then the darn thing started sliding down the greasy wall to where a gang of CDS counterparty wolves waited, snapping and slavering for it. And then there was a crowd of curious Germans in the alley, wondering who stole their precious kartoffelkloesse and lobbed it at the Greek wall, anyway. Grumbles were heard but, as yet, no mob action against the flingers of the purloined kartoffelkloesse.
Here in the pitiful tweet-sphere that contains the atomized remnants of USA governance, there is no such clarity. We don't know if that's spaghetti hitting a wall or the shit hitting the fan. But due to the amazing obduracy of the parties involved, the next sound you hear may just be the wall itself tumbling down, perhaps even the famous wall with the famous street attached.
All I know is that I dumped a largish bundle of 13-week US treasuries on Friday, a tad shy of the August 4 rollover and moved the hypothetical cash into less freaky hypothetical foreign sovereign instruments. I found a great bid for the T-bills, too. The whole transaction cost me a buck. I wondered: what were these people thinking who bought this crap at just the moment in history when everything is flying into walls and fans?
Whatever other conclusions can be drawn from the great debt ceiling debate of 2011, the main one seems to be that this country can no longer govern itself. Our reverence for the constitution appears to be inflated along with everything else in the USA these days: gas prices, waistlines, cable TV bills. Even congresspersons themselves seem to hold it in low regard, since proposals for a "super-congress" were floated last week. A lot of sentient folk who follow national affairs actually wondered out loud, "what the fuck is that supposed to mean?"
I took it to mean that our faith in the apparatus of governing has evaporated at the same rate as faith in our promises to pay back stuff-of-value denominated in certificates called dollars, our faith in which also melts into air. One thing for sure everybody knows: this is not a good time of year for financial shenanigans and chicanery. The rough beast called Reality comes back from its vacation in foul and turbulent spirits. Things shake loose when it roars.
There is widespread and growing agreement that the two major political parties have reached the end of their useful lives. No other serious faction is waiting in the wings to replace them, except the one led by a claque of overfed radio clowns and know-nothing Jesus Jokers with an axe to grind against the wicked hosts of birth control. Seek no further for the answer as to why our political leaders are not serious: there is nothing they can do at this point. In order to conceal the reality of epochal economic contraction, they have run our money affairs off a cliff - and so the next sound you will hear may not be of things hitting walls and fans, but of a sickening crash, as the overloaded carriage of government (drawn by a scrawny coyote) spirals down into the Canyon of Lost Causes.
We need a financial convulsion to sweep away the accumulated debris of poor choices, false hopes, squandered resources, frauds, swindles, and lies. Such an event can't help but set off a true political convulsion. Let the banks eat their own tails and strangle to death. I hope somebody catches a photo of Lloyd Blankfein paddling a surfboard due south off Georgica Beach, destination: Fortaleza. I hope he brings a few Red Bulls with him for the trip, and perhaps a whiffle bat to hold off the sharks - if there are any left in overfished deep blue sea.
I post a few seconds before the markets' openings this ominous Monday. Gold is already riding high. The rest is largely up to the robots in Lower Manhattan and the zombies in Washington.