An unsigned editorial in today’s NYT, probably written by Paul Krugman, as it bears his Cassandra-like voice, bears down on northern Europe for not funding immediately a central monetary fund. To prevent the collapse of the nations that have accumulated massive sovereign debt, the author reasons, a monetary fund could print money, create jobs, and so on, rather than watching austerity measures limit growth, cause civic unrest, and ultimately lead to the collapse of the Euro Zone.
Sorry to say, but it’s not going to happen. For one thing, the Chinese have no interest, excuse the pun, in accumulating more debt. Private investors are following a different course: They are shorting the debt and hope and expect the Euro and all that goes with it to collapse. Profit will accrue through the collapse for the hedge funds.
John Lanchester, writing in the London Review of Books and The New York Review of Books, notes that all this is bound to happen, anyway, but that the collapse of the Euro zone will speed up the emergence of the Chinese century. In the book I’m currently reading, “Boomerang,” Michael Lewis tells of a world gone nuts with financial speculation, of nickel hoarders, and of Icelanders who simply made up numbers. I find all this entertaining, in a miserable kind of way, as it reveals the coarseness and temporality of human nature.
For day to day life, it means that increasingly we will see diminished regulation of the unseen and the untraceable: Ever been to China? The safety of the food supply and the safety of pharmaceuticals are already compromised.
On a personal level, here in The Haas Test Kitchen, we’ve stopped buying all products from China, many cheeses from southern Italy, and all fish from Japan. The ban will stay in effect until the geiger counter at the front door stops beeping.
This leaves us with doughnuts and coffee.