Get an exclusive free story about Carey when he was a boy. Click here!Exclusive free story about Robert Carey, aged eight

HEADLESS ZOMBIE CHICKENS

While vandals in masks romp around London and other cities, burning and looting, something similar is happening in the stock exchanges and markets around the world. The vandals throwing petrol bombs are doing what they\’re doing because they think they can get away with it.
***
The people panicking in front of their screens in the world of finance are doing what they\’re doing because they\’ve suddenly realised they might not get away with it. They\’ve suddenly realised what anyone who has ever read any history has known for a while: countries can and do go bust. Either they stop paying the interest on their loans (known as default) or they just print more money. A lot more money. If you don\’t believe me, read a brilliant book called \”This Time is Different: Eight Centuries of Financial Folly\” by Carmen M Reinhart and Kenneth S. Rogoff. It\’s actually quite funny so long as you don\’t have any investments or a pension.
***
When a country has a mountain of debt it can\’t pay back, that country is in a much better state than an ordinary person with the bailiffs coming round. Especially if the country has a big army and quite a lot of nukes. Who\’s going to send the bailiffs in then?
***
It doesn\’t matter how much oil President Obama tries to pour on the troubled waters, because the financial markets will keep setting light to it.
***
Both the riots and the stock market falls are rooted in the same problem: a lack of the beliefs that keep civil society going. The rioters don\’t believe the police will really do much to stop them. The markets don\’t believe a word said by any of the ignorant lunatics currently in power.
***
The rioters know that the Met have been in the tabloids\’ pockets for years and don\’t respect any of them. The markets have watched European politicos dither as the consequences of bailing out the ungrateful banks become clear. They\’ve just gaped in horror at the spectacle of Washington playing a massive game of chicken with the financial system of the world.
***
The bankers have realised a fundamental truth. There are more poor people than there are rich people. Lots and lots more. And the politicians can\’t help them this time.
***
The headless zombie chickens are coming home to roost. In flocks.

2 Comments

  1. Mel Richter says:

    I agree, Yet Ken Rogof who coauthored the book said just two days ago on Bloomberg, the Us needs a QE 2.5 or more printing.

    Is his loyalty higher to Harvard than his research of defaults? I wonder.

    1. Patricia says:

      I think he believes that with the US government as deeply in the hole as it is, printing more money will be a less damaging way of reducing the debt than default. I’m not certain he’s right.

Leave a reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.