Italy, in case you were wondering, is screwed.
This is scary. This is 1931 all over again. After the market crash in '29, the economy wobbled around and then hit the skids like Lindsay Lohan unchaperoned in Vegas. At least in part this was because of the actions of central bankers.
Guess what?
The European Central Bank is behaving an awful lot like the Central Banks of England, France and Germany in the Depression. They aren't doing the same thing exactly, but rather they all pursued policies that bright people all knew to be bad ideas. This is what Barbara Tuchmann defines as "folly".
Saving Greece badly taxed the Eurozone. Now, they have another economy - even larger - to save. It is worth pointing out a few things.
Mostly this is about bailing out banks and saving the Euro as a currency. This is NOT about jobs or supply and demand, this is about financial markets. In other words, this is about the frakking 1% again.
Of course, as we know, that this is about the 1% doesn't mean that it won't rain shit on the 99% when this all goes sideways.
So, to recap: Financial institutions and central banks feed a massive real estate bubble. The bubble bursts because that's what they do. The US and the EU bail out the same institutions that created the mess, because the world needs liquidity. The US and EU do almost entirely nothing to help the average middle class working families who are suffering.
Small efforts are made to rein in the worst abuses of the financial markets. But because of "globalization" - which mostly benefits the same institutions that caused this crisis - there is no way to really put the screws on them. These financial institutions then start shorting the PIIGS to make a quick buck, helping to drive their bond markets to the edge of collapse. But because they are also involved on the non-derivative side of the bond market, they need the PIIGS shored up so the banking system doesn't fail again.
Lather, rinse, repeat.
Can I haz my revolution now?
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