Firstly me – on the 9th of February I received a call from the Endocrinology Department of Waikato Hospital asking how long it would take me to get to their clinic – when I hesitated to think, the specialist said “I mean today!” I turned up at the hospital to find the Doc himself standing in the middle of the corridor tapping his foot. Two minutes later, I found out that I had been a walking time-bomb for at least the past two years and had I had an accident or fall in that time I would have most likely died before reaching hospital. After a lifetime of trading and living on adrenaline, I apparently have none of my own. Rather my pituitary is not sending messages to any of my hormonal centres to order up the required stuff.
I’m 60 as you know and I believed that most of the energy I lacked was just getting older, but simply not so – it was a complete lack of essential hormones throughout my body, and they are now being provided in an accurate dosage of little white pills. In two weeks I have my complete life back – I simply cannot believe all the struggle I had for almost three years to do even the simplest of things is over, and I feel amazing. With hormone replacement therapy, which will continue forever, I feel better than I did 10 years ago and it has been the most stunning experience in my entire life.
And now Europe – boy, I bet they wish they could solve their problems with little white pills too. But I don’t suspect they’ll be able to.
Prior to the call from the Doc I had been reading everything I could find about the present state of Europe and it was a bit sparse. Then the “global bond vigilantes” turn their attention to Greece and all of a sudden Europe IS the topic and everything else fades into the background. I expect this will be the way of 2010; once a topic has had its run the attention will turn to somewhere else and the market casino will move on.
The Greek economic numbers are certainly very dangerous and it’s ironic that a country with so many very high earners has so few of them turning up at the tax office. Similarly, even before the troubles erupted onto the front pages over 10 Billion Euros disappeared out of the country, much of it from Greeks themselves. As pointed out in something I read a couple of days ago this represents maybe as high as 400 Billion Euros when fractional banking impacts are considered, and this is the sort of money movement that will bring any country to it’s knees in a few weeks. (These numbers suggest a gearing ratio of 40 to 1 but in the last few days I’m discovering there are Greek banks on gearing as high as 90 to 1 – suicidal).
So what does Europe do about Greece, because push and shove as hard as you like, but without the benefit of a flexible and falling currency that can assist the necessary changes that Greece must make, all that is left is austerity, and I doubt the ‘Greek in the Street’ is going to stand for too much of that! In fact of course they’ve started to kick up a fuss already, and they’re obviously hungering for a bit of a scrap.
And that was written yesterday – so tonight on the news I see my predictions are already playing themselves out – in fact during yesterday’s reading I see there is a growing concern from European commentators about the possibility of contagion, where the disgruntled throughout Europe take to the streets, as they have been so apt to do whenever they are upset.
It’s hard to imagine NZ farmers turning up at parliament in their tractors in vast numbers but this is a feature of Europe, as it is with truckers boycotting ports etc. Europe has always dealt with its problems in such a manner, and it’s easy to see that this could turn into a maelstrom in all of the so-called PIIGS countries and elsewhere. We’ve seen it in Iceland already, which caused some significant political fallout.
Greece of course is quite small in terms of the total size of Europe, about 2.5% of the whole, similar in size as Bear Sterns was to the US system, but this is not the real problem anyway – it’s that there are many, maybe even most, countries in Europe who are stretched both in fiscal and banking exposure terms. The Swiss are most exposed to Greece, the Austrians to the Baltic States such as Latvia, Lithuania etc. and just about everybody to the excesses of ‘market-driven’ lassie faire economics of the last 30 years. In fact all of southern Europe appears in trouble, but the solution looks near impossible with European sovereign debt ‘rollovers’ of over 2.2 Trillion Euros coming in 2010 alone.
What concerns me the most is simply this – when you put together an alliance of historical enemies it simply must hold through all adversity; for as history will show in every example of failure, (the most recent being the split up of Yugoslavia into the various Balkan States), extreme chaos inevitably results. Power vacuums are always filled by people desiring power, and the chaos arrives quickly and violently as power-seeking groups make their move before their natural enemies do it first. History is absolutely alive with examples of this, and so the entire world has a stake in what happens in Europe and should they fail then we will all be impacted and probably quite severely.
For anyone who has not considered the danger of this possibility I have read and kept a graphic account of what happened in Russia only 20 years ago written by a Russian-born American who repeatedly re-entered Russia during their turmoil, and the story he tells is a very frightening one. I won’t go on about this but if anyone does want to read the story then send me a request at w.lochore@wave.co.nz and I’ll send it to you.
Don’t get me wrong – I don’t in any way look forward to being right about these concerns, but if we don’t take Europe’s problems very seriously then we are quite likely in some considerable danger of a total break-down of the economic and social order we have become used to. This is far too big and far too encompassing to leave in the hands of the same group of people who got us into these debt problems in the first place – globally the time is well past when any of the ‘talking heads’ of the past few years can be trusted to do anything but protect their own self-interest, and quite frankly they are simply getting it wrong, and at the average Joe Blow’s expense rather than their own!
I’ve watched this develop over 5 years now, and everything I suspected would happen has happened basically as scripted by myself and a few others throughout the world, and yet the very same group of people who messed up so badly still think they have a good handle on these problems, when their actions so far suggest the absolute opposite. Again anyone who thinks I might just be sounding off here please contact me at w.lochore@wave.co.nz and I’ll send you a copy of the 8 essays I wrote between early 2005 and mid 2006 and you’ll see this is just a really bad movie for me that I’ve seen many times, and I’m sick to death of it!
You cannot solve the problem of too much debt with vastly increased levels of the same – switching personal debt for sovereign debt does nothing apart from destroy the fabric of societies that people throughout history have given their lives to attain. Yet we stupidly continue on digging our financial graves because not enough adults are prepared to say enough is enough! Democracy has a very bad record in dealing with the need for fiscal restraint – we all want more and we want it now otherwise we’ll vote in the other mob.
So come on adults throughout the world – isn’t it about time we owned up to the fact we are leaving our young an impoverished world both socially, financially, and in resource terms if we continue to plunder the planet as hard as we have been doing for the last 50 years??
N.B. The second half of this piece wrote itself in about 10 minutes – it is a plea from a 60 year old grandfather who has just spent three years thinking he was dying, and now 2 weeks knowing he is not!
I deliberately didn’t post it until it had sat over the weekend, but damn it, it deserves to be read – how many others feel the same, and if not why not?
Wayne Lochore
Tags: Think Global, Wayne Lochore
Wayne,
I am delighted for you in your acquisition of a new life. Make every day count. Cellaring wine is a sin – a waste of a good life – you may never get to enjoy it. “Drink it today” is my motto.
Your plea will go unheeded but still it is your duty to try.
I am interested in your 8 essays of impending doom. I would be privileged if you could make them available to me. I, too, am trying to make some sense out of this nonsense. History has always been a harbinger of the future. We are deemed to repeat the mistakes of the past. But we now live in a world devoid of principle or discipline. Potentially this augurs badly.
Peter Paterson (we share an age)