The Stubborn Stupidity of People

I just laugh every single day when I think about the whole Greek debt situation.  It is painfully obvious, and has been for well over a year, that Greece got trapped with multiples of the debt that its economy could bear as a result of narrow credit spreads engendered by the Common Currency.  Last night I missed selling the EUR again by a few ticks which is annoying me today (trying to sell GBP and AUD as well).  This morning I read this at ZeroHedge

ECB won’t take loss on Greek bond holdings – Benoit Coeure, member of the ECB’s executive board

And that is when I really started laughing.  The European Central Bank (ECB) may not REALIZE a loss on its books for accounting purposes and they may cross their arms and refuse to accept a Greek default.  But that in no way means they will get paid.  They will take a loss.  If the Greeks were smart, they would force their government to default on ALL their obligations immediately and start over.  Instead they are passing laws in their parliament mandating massive cuts in government spending.  While that is probably a good idea (less government can safely be assumed to ALWAYS be better), it simply is not going to fly.  They have had collectivist and even Communist leadership over the years and their whole system is completely FUBAR.  So what they have is a cultural problem.  At the end of the day, you may have a European Central Bank or its successor when my kids kids are going off to college that may try to press what by then will be ancient claims for repayment of the bonds from the start of the 21st century that are still on their books, and on which they never realized a loss.  Of course by not realizing it, they are being willfully blind.  And that is itself part of a larger cultural problem that has jumped all borders and spread like a plague to all corners of the world.  Willful blindness and stupidity.  It must share its psychological roots with man’s propensity for religion and religious thought.  In a word, fantasy.  And the problem with fantasy as a political proposition is that like all utopic urges, it leads in the end to totalitarian action and state sanctioned murder and repression in the name of the common good.  That is where the world is headed.

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