The Art of Tetman Callis Economics Then we saw its face

Then we saw its face

“A banking system is an act of faith: it survives only for as long as people believe it will.” – Michael Lewis, Boomerang

5 thoughts on “Then we saw its face”

  1. I’m so confused about this mess in Spain right now. And since it’s all about me, terrified that we are relocating at exactly the wrong time.

    Lie to me, Tetman. Tell me it’s gonna be okay.

  2. Averil, you may not be able to imagine how much I would like to get high right now. If that gives you any clues. Nowhere to run, nowhere to hide.

    Since your relocation is underway, what can you do but put on a shit-eating grin and welcome the adventure? Susan and I are moving only across town, but I am so tied up in knots I told her this morning that if it seems over the next few weeks that I am undergoing a slow-motion, low-intensity panic attack, that’s because I am. So I’ve been practicing my own shit-eating grin, borrowing money left and right, living on emergency savings, and avoiding alcohol, pot, and tobacco like the plague.

    Spain. The PIIGS. The Euro. The Great Recession. What happened was many of the peoples in the so-called Western World borrowed way too fucking much money in the first decade of this century. Way too much. Way way way too much. It’s hard to see how it’s ever all going to be paid back. Some of the debt the US Gov’t purchased in 2008 and 2009 to keep the banks from collapsing won’t be paid back until you and I and our whole generation have died of old age. That’s assuming it’s paid back, instead of some future administration finding a way to write it off.

    And I’m over-simplifyng just a little. Part of the immense debt-load on the Western peoples consists of securities that are essentially gambling debts. The global economy turned into a huge casino. It still is. When the Western governments kept the global economy from collapsing, they kept the casino from shutting down. While in the short run it’s arguably for the best, since without the myth of value inherent in money the only surviving power would be that which flows from the barrel of a gun, there are basic changes in the economic system which could not be made without a more profound and disruptive collapse–which could still happen.

    The US Gov’t, through the Federal Reserve and the US Treasury, kept the global economy from collapsing in 2008 and 2009. Pure and simple, that is what happened. But the minions of government, insofar as they understand what happened (and some of them do), do not go around crowing about this. They would rather not bring too much attention to just how bad things were and how bad they still are and how bad they may get. Money is only worth what people believe it to be worth.

    As an analogy, we are living in a mansion where for years we never called the termite inspector to come by. One day, while we were having a wild party that was loads of fun and just seemed to go on and on, the front porch collapsed. People were dancing on it when it came down and a few of them got hurt. We had the termite inspector come by and he quickly discovered that the entire mansion was riven by termites and in imminent danger of collapse. We told him to keep it to himself, because we were renting out the top floor and didn’t want to lose our tenants. We called repair crews to come in, but since we had spent all our money on the party, we can only afford to have the mansion repaired bit by bit. We’re hoping it doesn’t collapse before they finish their work–it could take years, they said, to get it all done, what with all the additions we had put on (all paid for with borrowed money). We’re praying we don’t run out of time, and we’re praying we don’t lose our tenants (some of whom have become suspicious) because we need their rent payments to help finance the repairs.

  3. I would take your analogy a step further and call our mansion the Winchester Mystery House.

    Imagine if you will that you and Susan have a 10-year-old child and two college-bound kids, and are moving two states away with no jobs and only a few months’ cushion before you find yourselves out on the street.

    If you don’t want that joint, pass it the fuck over.

  4. Averil, you and Dean will be all right because you have no other choice. Failure is not an option you will allow yourself. You are made of sterner stuff. So take a toke or two, then steady on. A great adventure is inviting you.

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