Wednesday, 20 July 2011

08:53 – In the lead-up to the EU crisis summit tomorrow, it seems that the EU authorities can do nothing but bicker about which unworkable plan each prefers. It seems that the leading candidate is now Euro bonds, which would allow unstable economies like those of Greece, Ireland, Portugal, Italy, and Spain to issue sovereign debt instruments that are backed by the creditworthiness of Germany and other stronger northern European economies. In effect, this “solution” gives Greece Germany’s credit card and allows Greece to run up essentially unlimited debt which Germany is then responsible for paying. That’s kind of like asking me to co-sign a mortgage loan for an unemployed homeless person. Why would I do that? Why would Germany? If this is the best solution the EU authorities can come up with, the Euro is doomed.

Ultimately, the problem comes down to one of authority versus responsibility. The Europeans have an economic union, but not a fiscal union or a political union. Eurozone member nations are actually not nations in the traditional sense. A nation controls its own money. Eurozone members have given up that control, which amounts to giving up sovereignty. A sovereign nation can never be forced into default on debt instruments denominated in its own currency. The US, for example, is never in danger of defaulting on dollar-denominated bonds because, if push comes to shove, the US can simply print more dollars. The same is not true for Eurozone members, who have accepted responsibility while giving up authority.

The result of all this is that we now have a cat fight, with poor, unproductive, and deeply-indebted EU nations able by their actions to destroy the common currency, and wealthier and more productive nations faced with few alternatives but to pay the huge bills that have been incurred by those profligate nations. What’s worse is that this won’t be a one-time bailout. Those poor nations will continue returning to the well, expecting the richer nations to go on subsidizing them indefinitely. Obviously, that’s unsustainable.

UPS showed up yesterday with boxes from one of my wholesalers, which contain about 20% of the components I need to assemble another 60 chemistry kits. I already had about 10% of the components in hand, and nearly all of the remainder should arrive by the end of this month, with one exception. One small item is backordered, and I can’t find another source for it. It’s due to ship by 15 August, so I’m limited to on-hand inventory for about the next four weeks. Fortunately, this is the slowest time of year for kit orders, so I shouldn’t have to backorder many kits. I hope.

09:45 – I finally decided I had to do something about my inbox. I use it as a kind of pseudo-to-do list, marking action items as “unread” and think-about items as read. As of this morning, I had more than 600 messages in my inbox, some of them from last year. All real messages. So I just spent the last 45 minutes getting rid of the ones that were OBE (most of them), doing something about the ones that still required doing something about, and leaving the ones that require doing something about, but which will require more time than I have to devote to them at the moment. I’m now down to eight messages in my inbox.

Usually, I try hard to keep the number of messages in my inbox small enough that they don’t fill the message-list pane. When a scroll-bar appears for that pane, I know I need to do some pruning. This time, I let it get completely out of control. I’ll try to keep that from happening again.

2 thoughts on “Wednesday, 20 July 2011”

  1. But, you forget one thing, the banks, allow them to break? Germany Banks are exposed a lot to Greece, French to Italy, Spaniards banks to Portugal, and so on.

    As we saw the movie, the end is another Brady plan whcich saved US banks exposed to Latin America debt in the 80s. (Citi etc)

    Sell everything and continue with debt 20 years, until default is defined, I saw the movie, in the meantime, Banks transfer the debt to pension funds, people, etc, look what happended with Argentina.

    I read your website since 10 years ago, since I dont pay, I dont comment, but, this old movie about the default, again and again and again

    Best regards

    PS: If this comment doesnt serves any purpose, please feel free to throw away

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