Wednesday, April 20, 2011
Well well, it looks like Finland is going to throw a spanner into the works about that Portugal bailout, and by extension the whole Euro stability mechanism. Who'd've thunk. Anyway, here's the deal in brief, with my thoughts about it.
The slow-motion train wreck we've been seeing in Europe is due to reality catching up with a structural problem that was inherent in the Euro to start with. The Euro is a currency that has a monetary policy but no associated fiscal policy. That means that the money supply is controlled by the European Central Bank, but bonds are issued by sovereign governments, who also set taxes and control government spending. It also spans a much wider range of different kinds of economies than, say, the dollar.
A number of Eurozone economies—Portugal, Ireland, Italy, Greece, and Spain—have gotten their public finances into trouble. The reasons for this vary. Greece is just a structurally unsound economy, with a corrupt, bloated public sector; Ireland was seduced by the neo-liberal chimera and went from a massive debt-fueled boom into an equally massive bust; Spain and Portugal had a property bubble driven by plentiful foreign money, and Italy is... well, Italy. Each in their own way fell victim to hot money and the illusion of stability provided by the euro.
Saturday, October 23, 2010
There was an article in today's Helsingin Sanomat (that's the big Finnish daily) about luxury cars. It was slightly unusual in that it wasn't your usual drooling over the latest Mercedes; instead, it was about the people who own, or want, luxury cars, why they want them, and what they mean for them. It mentioned a professor who has a factory-fresh Porsche in his yard, but never drives it; instead, whenever he's feeling blue, he just goes and sits in it for a bit, starts the engine, and listens to its comforting rumble.
Luxury cars are crystallized craving. Nothing is ever enough; there's always another one to desire, as the one you own becomes the new normal. Even if you were to take the Maybach treatment, spending a million euros on a car, decorated with rare tropical hardwoods and the softest leather to your personal specifications, there would be a new model next year, or that oil-sheikh's diamond-encrusted Rolls Royce to envy.
Were there a mountain all made of gold, doubled that would not be enough to satisfy a single man: know this and live accordingly.