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Category: government

Monday, 22 October 2012

08:11 – Oh, great. Not only is North Carolina among the nine “swing states” for the presidential election. An article in the paper this morning says there are about 100 “swing counties” nationwide, of which a dozen are in North Carolina. And we’re one of them. So I guess the flood of spam political phone calls we’ve been getting is likely to get even heavier over the next couple of weeks.

And the IMF is proposing a plan that would wipe out a large amount of the world’s sovereign indebtedness, proposing something I’ve favored since the 1960’s: eliminating fractional-reserve banking. For those of you who don’t follow banking esoterica, fractional-reserve banking is both simple and fundamentally dishonest. It amounts to private, legalized counterfeiting.

When you deposit money in your bank, you deposit it in one of two types of account: a demand-deposit account, AKA a checking account, or a time-deposit account, AKA a savings account. So let’s say you deposit $1,000 in your checking account and $100 in your savings account. With the demand-deposit account, you are not lending that $1,000 to the bank. They are holding your money for you, in a fiduciary role, and you are entitled to reclaim that $1,000 at any time. You pay a fee to the bank for holding your money safely. With a time-deposit account, you are actually lending that $100 to the bank for a specified term, typically six months (check the fine print). The bank is then entitled to lend that $100 to someone else.

Fractional-reserve banking corrupts that system, which had worked very well for hundreds of years. In fractional-reserve banking, the bank lends out not only the $100 you placed in your time-deposit account, but most of the $1,000 (typically $900 or more, depending on the reserve requirements in effect at the time) you placed in your demand-deposit account. In other words, they’re misappropriating money that isn’t theirs to lend. The effect is that the bank just creates $900 out of thin air. The result is difficult to distinguish logically from the bank simply counterfeiting $900.

Now, Ambrose Evans-Pritchard gets a lot of the details wrong. Adam Smith, for example, propagated no myths about this. He nailed it completely. AEP is also confused about how money worked in Sparta and Rome. There’s no evidence that Sparta used iron coins, for example. They probably did use iron ingots as a value store, but AEP ignores the relative value of iron then and now. At the time he speaks of, Europe was just transitioning from the bronze age to the iron age, and an iron ingot had significant inherent value. It could, for example, be turned into a sword. But Evans-Pritchard gets the broad-brush issue right. It’s long past time that we eliminate fractional-reserve banking, which is simply institutionalized theft on a gigantic scale.

13:07 – There must be some way to sue political parties for harassment. So far today, I’ve received eight–that’s EIGHT–political calls. It seems to me that despite their free pass from the DNC regulations, political parties should establish a DNC list of their own. That list should be propagated downward to every candidate running under the auspices of that party, from the president to local candidates, and severe penalties should result if anyone violates it.

13:51 – I don’t know why inflation continues to surprise me. Perhaps I’m more aware of it than most people, who aren’t likely to remember exactly what price they last paid for a specific item. But just now I cut a PO for sticky labels and other stuff from iBuyOfficeSupply. To do that, I copied the spreadsheet for the last PO to them, which I issued on 1 May. I ordered two of the same items this time as last time: sticky labels for chemical bottles by the box of 7,500 and sticky labels for running postage labels, by the box of 100. In 5.5 months, the price of the small labels had increased by just over 12.5%, and that of the larger labels by about 13.1%. It’d be interesting some time to go back and compare our Costco receipts from months ago to the most recent one. I’d guess food prices are increasing at the same rate, give or take. This really can’t go on. Of course, the official government inflation figures are grossly understated, much like the official government unemployment figures. Do they really think that no one notices that prices are going up much faster than they admit or that a boatload more people are without jobs than they admit?

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Saturday, 20 October 2012

09:16 – I’ve just set a new policy. If the USPS loses a package, I’m not going to waste any time trying to resolve the issue with USPS. I’ll just write it off and ship a replacement. It happens seldom enough–a small fraction of one percent in our case so far–that it’s just not worth wasting time to get a determination, which I’m told is almost always “we lost it; tough luck”. Even at that, it’s still much cheaper to ship USPS than to use UPS or FedEx. The packages get to their destinations in one to three days, and we’ve had very little shipping damage. So, I conclude that USPS can be very annoying, but they’re still by far our best option.

We’re just about finished packaging chemicals for a batch of 30 biology kits. We’ve also done 30 sets of the chemicals that (so far) will be included in the Life Science kits, which are a subset of those in the biology kits. All of those chemicals–stains and so on–have essentially unlimited shelf lives, so there was no downside to making them up now. In fact, like wines, some stains actually improve with age.

Back when I was a teenager, I couldn’t afford a good microscope. Back then, even student models were extremely expensive, probably the equivalent of $1,500 or more in today’s dollars. One of my parents’ friends gave me a WWI-era Zeiss microscope. I wish I still had it. I think it was probably produced for the German military. It came in a beautiful fitted wooden case that also included an assortment of accessories, including several stains. I remember thinking at the time that there was no way the stains could possibly still be good, since they were at least 50 years old. A couple of the bottles were empty or had dried out, but there were three or four that looked untouched. So I tried them, and they worked very well.

11:26 – This latest EU summit, like all of the other 20-odd EU summits since the beginning of the euro crisis, accomplished essentially nothing. The position of Greece, Spain, Italy, and the other spendthrift states remains unchanged: “We want Germany to pay all of our debts and continue to subsidize our irresponsible spending. Oh, yeah, and Germany can’t dictate terms to us. Just give us the money.” And Germany’s position also remains unchanged: “We’re fed up with paying everyone’s debts. We just want to get out of this mess as cheaply as possible. Ask us for anything other than more money.”

It seems that Rajoy and Spain are finally beginning to realize they’re not going to get the bailout-that-can’t-be-called-a-bailout. If Spain wants to beg money from the ECB and the ESM, they’re going to have to do so explicitly and accept whatever terms Germany insists on. Doing that would finish Rajoy politically, and he knows it. Rajoy is between the proverbial rock and hard place. He’s already made veiled threats to exit the euro, which would inevitably also mean exiting the EU. Spain’s debt for 2012 is essentially all sold already, but Spain is in deep trouble in 2013, when it has to sell hundreds of billions of euros of debt. Spain has zero prospect of doing this at all, let alone affordably, which means Spain is almost certain to default on a massive scale in 2013. Either that, or leave the euro, which amounts to the same thing. Creditors will no doubt be paid back in worthless local currency, artificially pegged to the euro at 1:1.

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Wednesday, 17 October 2012

10:20 – Work on the new batch of biology kits is proceeding apace, but we’re now down to just two chemistry kits in stock. Fortunately, we have everything we need to build 15 more quickly, but then the well runs dry. So, as soon as we finish this batch of 30 biology kits, we’ll start on another batch of 30 chemistry kits. The chemistry kits outsell the biology kits about 1.5:1, and kit sales have slowed seasonally, so the new batches should last us at least a month, if not through the end of November. Of course, starting in late November, kit sales tend to pick up for Christmas and second semester, so we’ll need to get more in the queue.

It’s difficult to see how things in the eurozone could be much worse on the eve of the first full EU summit since June. French and German leaders always hate each other, and Hollande and Merkel are no different. The difference this time is that they’re not keeping it private. Ordinarily, the French and German leaders meet on the eve of an EU summit and essentially agree on the agenda and decisions ahead of time. This time, Merkel and Hollande are in disagreement on everything, and are tossing public barbs at each other. The Greek talks with the Troika have collapsed entirely, with Greece saying there’s no way it’ll agree to the Troika terms. That means Greece runs completely out of money in the next six weeks, with no prospect of getting any anywhere. The markets are closed to them, the IMF won’t bail them out, and the EU won’t bail them out. That means Greece will default, not just on bonds but on public salaries and pensions and payments to the companies that are importing desperately needed food and medicines, or were importing them until they stopped getting paid. Meanwhile, as its price for continuing to support any EU bailouts, Germany is apparently now insisting on an EU fiscal overlord, which simply isn’t going to be accepted by other EU members. Obviously, Germany has already decided that enough is enough, but instead of just saying “nein” explicitly, they’re setting conditions that they know will never be accepted. That way, Germany can at least say “we tried” when the whole pathetic euro edifice collapses.

14:46 – Oh, wait. The Troika and the Greeks have kissed and made up. (Now there’s a disgusting image…) Greece says it’s going to get the long-delayed bail-out tranche in time to avoid catastrophe. The Troika says they and the Greek government have agreed on “broad outlines” of the terms needed to allow the bail-out to go ahead, albeit without additional IMF funds. The truth is, the IMF, the EU, and the ECB are all terrified at what’s going to happen when-not-if Greece collapses. When they talk about contagion from a Greek collapse being “containable”, they’re whistling past the graveyard, and they know it. Of course, as they say, the devil is in the details, and it wouldn’t surprise me if this latest deal, like so many others, collapses as a result of those little details. Yet one more attempt to buy time with smoke and mirrors. The trouble is, they’re running out of time. And smoke and mirrors.

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Thursday, 11 October 2012

08:06 – The other shoe dropped yesterday when S&P finally downgraded Spain’s sovereign debt by two levels, to one level above junk status. That was actually a gift, although Spain professes to be shocked that it was downgraded at all. But as the markets are perfectly aware, S&P should long ago have downgraded Spain to pure junk status. Italy is next.

And, speaking of wishful thinking, the MSM are reporting that Merkel’s position on Greece has softened and that she will likely approve more time and perhaps more money for Greece. I note that Merkel said absolutely nothing about granting Greece more time, let alone more money. She was too polite to say so, but Merkel along with the rest of Germany has already written off Greece. Any actions she takes now will be aimed at minimizing the adverse impact of Greece on Germany, not on helping Greece. German taxpayers are already on the hook for roughly a trillion euros of bad PIIGS debt. Enough is enough.

I’m one of those rare people who are being pursued by both major parties: an undecided swing-state voter. Not that there’s any chance at all that I’d vote for Obama. The last four years of Obama have been catastrophic; the country might not survive another four years with him as president. Romney isn’t much better, but he is marginally so in some respects. So, the question is, do I vote for Gary Johnson, who would actually be a good president but has zero chance of winning, or do I vote for Romney, who’d be only marginally better than Obama but has a good chance of winning? I really would hate to see Obama carry North Carolina by one vote.

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Wednesday, 10 October 2012

08:15 – Beginning 1 January, the Catholic church loses its tax exemption in Italy. It’s about time for something similar to happen here in the US, not just to the Catholic church, but to all churches and non-profits. There’s no good reason why churches and non-profits shouldn’t be paying property taxes and other taxes just like the rest of us. The problem, of course, is our First Amendment. Here’s the relevant portion:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof;

That’s all it says. The first clause refers to “established” (official, state-supported) religions. The Founders meant that Congress could not force states to give up their state-supported religions, if they had one, nor could Congress establish a state-supported religion at the federal level. The second clause meant that Congress must allow people to worship (or not worship) as they chose. That’s it.

Now, strict separationists might argue that the power to tax is the power to destroy, and they have a point. But the reality is that making churches subject to the same property and other taxes that we all pay, at the same levels that we all pay, in no way violates the Constitution. I could even argue that the tax-exempt status of churches forces me to subsidize them through my property taxes, which is a clear violation of the Constitution. Why should I have to pay higher property taxes to provide them with government services that they should be paying for themselves? Why should churches get a free ride?

09:57 – Interesting article on CNN: Are we throwing away ‘expired’ medications too soon?

The short answer is yes. Much too soon. Pharma companies would argue that they have no way of controlling storage conditions and that it’s better to be safe than sorry. Of course, what they’re really doing is covering their collective asses. The reality is that most drugs stored at room temperature out of direct sunlight are probably still perfectly good after at least five to ten times the shelf life on the label. Storing them in the refrigerator or freezer increases the shelf life of most drugs dramatically.

The rule of thumb in chemistry is that a 10C change in temperature doubles or halves the reaction rate. In comparison to typical room temperature of 20C, most home freezers operate at about -30C. Call it five doublings, or a factor of 32. So, a bottle of, say, amoxicillin tablets that has a one-year expiration date should in fact be good for at least 32 years if stored in the freezer. When you consider that that amoxicillin stored at room temperature would probably maintain the vast majority of its potency for more like five to ten years, that means storing it in the freezer extends its shelf life to something on the order of 150 to 300 years.

In the interests of avoiding the monetary and other costs of discarding perfectly good drugs, it seems reasonable to me that manufacturers should extend their published shelf-lives to something more reasonable. Obviously, there’s an issue here: the only certain way to determine actual shelf lives is to wait and see. You can do accelerated aging tests at elevated temperatures, but those are not perfect substitutes for waiting one year per year at normal storage temperatures. You can also do tightly-controlled drug assays at reduced temperatures. For example, store numerous very accurately-weighed specimens at -30C and then assay a statistically-significant sample of those specimens every six months for five years. That should give a reasonably reliable trend line, although again it’s not a perfect substitute for wait-and-see.

But one way or another, we should do something about this problem. Many drugs are in short supply, some of them critically so. It’s sickening to think of how much of many of those drugs has been discarded due simply to an arbitrary use-by date on the labels. Nor am I happy about the amount of antibiotics that end up in our waste water and environment. If you want bacteria to develop resistance to an antibiotic, there’s no better way than to have that antibiotic present pervasively at low levels in the environment.

Now, obviously, there are exceptions. Some drugs can’t be frozen at all, and the slopes of the reaction rate line will differ from drug to drug. But for the vast majority of drugs, refrigerating or freezing them in storage is a good solution. I certainly wouldn’t hesitate to use amoxicillin that had been frozen for 20 years or more. In fact, I’ve done it. I have a bunch of it as well as other antibiotics in the downstairs freezer. The expiration dates on most of them are in 2013, which means they’ll really expire in about 2113. But pharmacies don’t have to go to that extreme. They should install freezers for drug storage. The drug companies can continue to label their drugs with one-year expiration dates, but the regulations that govern pharmacies should explicitly permit them to store drugs frozen for at least five to ten times the nominal expiration data, unless the drug manufacturer explicitly lists a particular drug as not being suitable for freezing to extend its shelf life. And the drugs companies should have to show credible evidence that this is the case.

16:54 – Among other things, I’m making up a lot of stains for the biology kits. My vote for the stainiest of these is crystal violet. The kits include Hucker’s Crystal Violet, which is essentially a 1% (0.01) aqueous solution of crystal violet with 0.8% m/v of ammonium oxalate. That solution is nearly opaque in a one-liter soda bottle. I’d guess that it would impart a noticeable violet cast to water at a concentration of 0.0000001 or less. Fortunately, the stuff really is water soluble, and it pretty much washes off my skin with just soap and water. It’d probably even wash out of clothing.

19:14 – I was just walking Colin when I saw/heard something I don’t see/hear every day. A full-blown race car driving down our street. At first, I thought it was the replica I mentioned here. But it wasn’t. That one was bright yellow and mostly enclosed. The one I saw tonight was a much more open frame vehicle. I don’t pay much attention to car racing but it reminded me of an Indy car.

It certainly wasn’t the car I saw parked on our street a year or so ago. That one was a replica Can-Am car with a 2-liter 4-cylinder Honda engine. The one tonight had a serious engine. I heard it coming a block away, even though it was cruising very slowly. The headlights were bright, so I couldn’t see the car itself until it came flush with me. I thought it was a Corvette until it passed me slowly. The frame was pretty open, although there were headlights and taillights mounted. I couldn’t see if there was a license plate or not, but from the lights I assume it was street legal. The exhaust tone, even at near-idle was very deep and loud, and it wasn’t because the guy had a bad muffler.

Granted, we’re in the middle of NASCAR/Winston Cup territory, and it wouldn’t surprise me to see a NASCAR racecar on a flatbed in the neighborhood. But I can’t figure out why I keep seeing different types of race cars on our street. I’m expecting to see a Stanley Steamer any day now. It did, after all, hold the speed record for steamers until a couple years ago.

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Tuesday, 9 October 2012

08:54 – More lab work today, but I should finish making up most of the solutions we need for the new batch of biology kits. Then I’ll start filling bottles.

12:58 – Angela Merkel has apparently survived her trip to Greece, although many were concerned about her safety visiting a country that has compared her with Adolph Hitler. Love Merkel or hate her, one has to admit that she is a brave woman. The Greeks laid on a personal security detail for her that included 7,000 cops, water cannon, and at least one helicopter. Of course, they’ll probably expect Germany to pay for that, just as they expect Germany to pay for everything else.

I now have all but a few of the solutions made up for the new batch of biology kits. The main ones still missing are the ones I’m lacking a chemical to make up. Everything I need is currently on order, and I still have enough spares to put together several biology kits if we need them before the chemicals show up.

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Sunday, 7 October 2012

11:00 – Autumn weather has really arrived in Winston-Salem. Our highs for the next few days are to be in the mid-50’s (~13C), with lows in the low 40’s (~5C). Now if only we’d have a hard freeze to kill all the mosquitoes.

Barbara is cleaning house this morning, after which we’ll work on biology kits. She still has a couple sets of bottles and a bunch of sets of envelopes to label, and I have solutions to make up.

12:02 – It sucks to be a Greek in Greece right now, and it’s going to get a lot worse quickly. The ECB’s Asmussen has just rejected Greek pleas for more time, which, as Asmussen correctly points out, is actually a request for more money. Time is, after all, money.

As Greece said earlier this week, it runs out of money next month. Not just money to repay outstanding loans and bonds. Greece runs out of money, period. That means no money to pay government salaries, including those of the police and military. No money to pay pensions. No money to provide even basic health services. No money to import desperately-needed food and drugs. No money, period. And no one is willing to lend them any more. At this point, Greece is already a failed state. Its last hope was the €31.5 billion bailout tranche, which has been held up for months and looks almost certain to be a chimera.

For years now, Greece has pretended to be attempting to comply with the Troika’s terms, while in fact simply ignoring them. For years now, the Troika has been pretending to be convinced that the Greek government is actually trying to comply with their terms, while being aware the whole time that Greece has never made any attempt to do so and has no intention of doing so. I’ve known all along that Greece and Greeks would eventually pay the price for 30 years of partying on borrowed money. When something can’t go on, it eventually stops.

For years now, everyone has been completely aware that Greece was going to crash eventually. And the truth is that no one really cared about Greece and Greeks then, and no one really cares now. All the EU ever cared about was preventing the crash of Greece from crashing the euro itself. The general feeling is that Greece and Greeks are going to get what they deserved all along, and they’re going to get it good and hard. If that €31.5 billion tranche isn’t granted, which I don’t expect it to be, expect to see Greece descend into complete chaos beginning late this year. By January, I expect to see Red Cross and UN humanitarian relief teams thick on the ground in Greece. Greece will become a fourth-world country by then. And, even if that tranche is somehow miraculously granted, that puts off the collapse only for a few months. Greece is going down, big-time.

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Tuesday, 2 October 2012

10:04 – Oddly, given all of the hundreds of science kits we’ve shipped, today was the first time we got an order for a kit to be shipped to an APO address. Shipping it was just like shipping any other kit, with two exceptions. First, the city was “APO” and the state was “AE”, and second I had to fill out a customs declaration, which seems strange. Oh, yeah, and USPS doesn’t give a delivery estimate for Priority Mail APO shipments. Express Mail would be delivered Friday, so I’m guessing that Priority Mail will get the box to the customer sometime next week.

It appears that Spain is likely to request a second bailout this coming weekend. Germany may be a problem, as many of its politicians are loathe to approve a second bailout so close on the heels of the €100 billion they approved for the Spanish bank bailout a couple months ago. At this point, it’s pretty clear even to committed europhiles that Spain is going down the toilet, with Italy likely to follow soon thereafter. Germany is finally waking up to the fact that its taxpayers are already on the hook for as much as €1 trillion, less whatever minor amounts they can recover after the crash. They must realize that providing additional funding in the hopes of delaying the final crash of the euro is simply throwing good money after bad. Germany, Holland, Finland, and now Austria are all sending strong signals that they’ve had enough.

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Saturday, 29 September 2012

09:18 – I’ve just been reading the results of the Spanish bank “stress test”, which concludes that under the “adverse scenario” Spanish banks may need a bailout to the tune of up to €60 billion. The problem, as with all of the past “stress tests”, is that the “baseline scenario” is simply ridiculous and the “adverse scenario” is in fact the rosiest possible scenario. Here’s their explanation of their scenarios.

The adverse scenario was deemed by the Steering Committee to be appropriately conservative, both relative to the past 30 years of Spanish macroeconomic indicators (the economic scenario being three standard deviations away from long-term average for the three years of the exercise), as well as relative to adverse scenarios used in recent stress tests in peer jurisdictions (e.g. the EBA Europe-wide stress tests and the US CCAR). Moreover, the adverse scenario included a third year of recessionary conditions, unlike the two-year period commonly seen in other stress tests. (See Appendix: Macroeconomic scenarios for further analysis).

The reality is that perhaps €150 billion is about the best they can possibly hope for, and €250 billion or more is certainly not out of the question. Imagine that for the last 30 seconds a bicyclist has been riding along on more-or-less level ground, with small ups and downs. That’s the source of the historical data for their scenario. But a couple seconds ago, that bicyclist drove off a cliff, and he’s still falling. What they should have done was use historical data for only the past two or three years. Instead, they buried that recent, more significant data, with 28 years’ of long-term averages. Geez.

13:10 – Uh-oh. Barbara’s over at her parents’ old house cleaning things out. I just took Colin for a walk down the corner and back in drizzling rain. On our way home, I spotted what I thought was a kid’s bracelet or necklace in the middle of the street. Upon closer examination, I concluded that it was a dead juvenile Carolina Flatsnake (Snakus flattus carolinensis). I need to remember to mention that to Barbara before we walk Colin again after she gets home. I’d hate for her to be surprised.

I just shipped the last two biology kits we had in stock, along with two chemistry kits. Two customers each ordered one of each kit. We still have a dozen chemistry kits in stock and half a dozen more biology kits and 15 chemistry kits downstairs ready to pack up, which means I really need to get to work on making more of the biology kits.

16:10 – Three cheers for Whitney Kropp, the teenage girl in Michigan who was the victim of what the MSM describes as a “prank”. In fact, it was a vicious attempt to cause her pain, an unpopular student whom a bunch of punks decided as a “joke” to elect to the homecoming court. When she found out that they were making fun of her, she considered killing herself. Some prank. Instead, she decided to show them they were picking on the wrong girl. When the story hit the news, Whitney found overwhelming public support. Local businesses and the public, local and remote, donated funds or services to buy her a prom gown and accessories and treat her to a makeover. She attended the coronation surrounded by cheering fans.

And what I can’t figure out is why these vicious children were making fun of her appearance. No, she’s not drop-dead gorgeous, but she’s certainly a reasonably attractive teenage girl. What is their problem?

Kudos also to her date. I suspect there were a lot of guys lined up to be her escort. And I hope those punk kids realize what miserable excuses for human beings they are.

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Thursday, 27 September 2012

09:37 – The riots in Athens (which the Greek government describes as “peaceful protests”) were apparently on a larger scale than most of the MSM is reporting. The Greek government estimated that 70,000 “protesters” gathered in Athens alone. The strike leaders estimated 200,000. So, based on the likelihood that both estimates are biased, I’d guess there were probably about 135,000 Greeks taking to the streets in Athens, peacefully protesting by throwing bricks and firebombs at the cops. Meanwhile, in Spain it looks like Rajoy won’t be able to hold power much longer–perhaps not even the rest of this month–and there are rumblings from senior military figures. A coup d’état is by no means out of the question, particularly if, as they have announced they intend to do, Catalonia holds the referendum on independence that the Spanish government has forbidden. And the northern tier countries have announced that there won’t be any bank bailouts for existing bad debts, which really puts Spain behind the eight ball. The eurozone is coming apart at the seams.

15:03 – I’m just back from the dentist, and I see that, as expected, Spain has released its budget for next year. It’s a joke, also as expected. But almost no one gets the joke, it seems. Next year, Spain proposes to reduce the budget DEFICIT. Not the debt, you understand. The deficit. In other words, next year Spain plans to spend more than it takes in, again, just not as much more as they did this year.

That’s not going to help. The only way out of this mess for Spain or indeed any of the other countries with large debt piles, which is to say essentially all of them, is to spend less than they take in. Much less. What Spain should have announced was that it intended to reduce the DEBT by 10% next year and every year after that until it was retired completely. Instead, they announced that they plan to increase the debt next year, and presumably every year after that. Let me know how that works out. What’s that old saying about what to do when you find yourself in a hole?

Meanwhile, Berlusconi, who at least has more sense than the eurocrats, said publicly that Germany leaving the euro would be no bad thing. No kidding. No bad thing for Germany, at any rate. The real reason Germany is still in the euro is that it’s hoping to get out without it costing them anything more than they’ve already wasted on it. That’s not going to happen. The best Germany can hope for now is to get out as cheaply as possible. That’s not going to be cheap. But it will be a lot cheaper than staying in. What Germany still doesn’t get is that a promise to pay is not the same as payment. Right now, Germany wants to keep its exports to the southern tier at a high level to avoid unemployment and other undesirable economic consequences at home. But all those Mercedes-Benzes they’ve “sold” and continue to “sell” to the southern tier for what amounts to IOUs might just as well have been given away.

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