I am not blogging about the EU summit. It is pointless. It will of course produce a communique to reassure the markets. It makes no difference.
The economic system in which most of our readers live is little to do with capitalism. The value of goods traded is an insignificant fraction of the flow of funds around the world, much of which relates to either bets on the future values of goods, or bets on the consequences of the vectors of financial flows of which the bets themselves are a part.
The whole edifice is based not on a market for exchange of goods and concrete services, but on an astonishing matrix of state enforced legal instruments creating an extraordinary pile of paper money produced by states, but ultimately worth nothing real. This legal framework was designed to shift the great bulk of this wealth from people who actually work for a living to a small financial elite, most (but not all) of whom create little or nothing real.
If the state compelled everyone to play a pyramid scheme, then you could keep it going for decades. As the system started to reach inevitable collapse, the state moved in with bank bailouts and quantitive easing, both of which simply moved yet more money from ordinary people to the super-rich. In fact the last three years have seen the biggest transfer of resources from poor to rich in human history.
It cannot last, and whether it is Greece or Italy or Spain which is this week’s fashionable media focus is irrelevant. In making these vast levied and leveraged transfers of resources from poor to rich, states have exhausted the capacity of their people to actually pay them. That is true all over Europe, the UK and US. The currency crises are a tiny symptom of a very large impending crash.
That is why I am not blogging about today’s EU meeting or a specific statement of the US Federal Bank Chairman. They are all pissing into the wind that is shortly to be a tornado. I expect before I die I will see a genuine social revolution. I expect that, as always happens, middle class liberals like me will start by being elated by it, and end up being shot by those who seize on the change, to take their turn to use the power of the state to corner resources for themselves.