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The political air lies thick and heavy upon us, like the subtropical
wedge of atmospheric sludge that has bogged down the northeast USA for weeks
of soupy gray days when there is nothing to do but wonder when things will
become unstuck. If the world is an organism, something is wrong with its
blood. That blood is money,
which allows the “developed” nations to run their advanced
techno-industrial economies. Only the “money” is not exactly what
we suppose it is, that is, colored paper coupons representing claims on
future work or tangible collateral. The “money” is a matrix of
counterparty entanglements so abstruse and impenetrable that all the vicars
of Christendom (plus the mullahs of Islam, the monks of
Mahayana, and the Op-Ed flunkies at The New York Times)
would not avail to describe its metaphysical substance. Rather, a cosmic
shell game is being played and we are the pea.
Unlike other commentators, I don’t see
this as a conspiracy of one-percenters, Rothschilds, Bilderbergers, and United Nations
intriguers. Rather, it is just a sticky pass in world history. Things have
gone a certain way for us for a long time, and now they can’t, and the
inertia from all those decades of doing and being what we were persists in
the illusion of motion, like the sound of a truck that still rings in your
ears after it has passed by. So we, the pea, sit in the dark under our cosmic
walnut shell, waiting to see what happens next.
When the Great Bernanke spoke not long ago,
an ominous rattling was heard throughout the banking system as of things
shaking loose. Even if nobody quite understood exactly what money was
anymore, an intimation wafted on the still, muggy
air that there was liable to be less of it, at least in the form that The
Wall Street Journal pretended to understand — a particular digital
carry-trade between the US Treasury and the Federal Reserve. Markets puked at
Bernanke’s mild utterances as though he was Thor flinging a thunderous
hammer at them. The gold
market, already punch-drunk, went reeling into the roadside weeds, covered
indecorously in its own vomit — leading many to suppose that gold would
soon be as precious as sheetrock. Then, the Great Bernanke, via subordinates,
tapered his tapering talk and a nervous, tentative, march forward resumed
into the summer pea soup of events. Here we are, waiting, waiting in the
murk, for the sound of shoes dropping.
If you listen carefully enough, you can hear
a few things in motion distantly. The mobs roistering in surprising places
— Sweden, Turkey, Brazil — ought to unnerve even the quants
immersed in their charts and auguries. Something wicked this way emanates
from Japan. It has the outline of a political death-wish and is being played
out with the sharp instruments of capital. The Japanese, I suspect, have at
least had enough of uncertainty and have elected to move toward resolution,
whatever that may hold. One thing it will mean is that the hands of bankers
elsewhere around the world will be forced by what Japan does. Interest rates,
for example, do not exist in exquisite isolation but only in relation to
other things, most particularly that money earlier alluded to, of which
nobody knows the value. The answer to
that may lie in the riddle wrapped in a mystery inside an enigma known as
derivatives.
My own guess is that we’ll discover the
value of gold is not equivalent to its weight in sheetrock. The third quarter
of 2013 might go down in history as the great moment of price re-discovery in
a world that thought — for a while — that the price of things can
be whatever you say it is. Historians of the future, squatting in the plastic
and silicon midden-heaps of bygone technocracy, may note that FASB Rule 157
provoked a four-year psychotic episode of worldwide accounting fraud in which
anything could mean anything. That only goes on so long until civilizations
shudder and fall. The pea under the walnut shell can’t see much
outside, but it can certainly feel the earth tremble
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