The endless highway


“Sure as night will follow day, most things I worry about never happen anyway.”
—Tom Petty

I was thinking about this Tom Petty lyric as I read a story this morning about the European Union (EU), Greece, and the International Monetary Fund (IMF) hammering out details of a deal to release more bailout funds. My first reaction was, “Greece? I thought they fixed this years ago!” It seems the Greeks have finally started to do what they should have done seven years ago: nod their heads and agree to everything the EU and IMF demand, and then just pretend a bit and really do nothing. The Europeans let them into the EU with a pretty good assumption that they had cooked their books, so why not assume they couldn’t just pretend to implement austerity and all the other nasty things they agreed to do in order to get a bailout? This would have saved a lot of angst and tear gas.

There’s a whole list of things that I thought would have sunk the world already. The collapse of commodity prices, emerging markets (which rely heavily on commodity prices), the soaring value of the U.S. dollar, Brexit, Italian banks, and China’s worrisome capital flight are just a few. And yet, here we are, alive and well, even though all these problems remain unresolved. These are serious problems in and of themselves. Moreover, the potential of these happening at the same time is far from remote. Like the Greece situation mentioned earlier, I always thought that when you kick the can down the road, eventually you reach the end of the road. However, the world central banks, with prolonged zero rate interest rate policy (and in the case of the European Central Bank and Bank of Japan, negative) and approximately $14 trillion of Quantitative Easing (QE), have built quite a long road!

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