A Financial Permanent Crisis
By: Andy Sutton
Jul 08, 2011
As the financial world breathed a collective sigh of relief as the Greek Parliament voted to impose further austerity measures on the people of Greece, I wondered aloud to no one in particular how many times we’d have to see this movie before people finally realize that this crisis is a permanent one. There are many analogies that we could use to illustrate what has gone on, but probably the best is a trauma patient coming into the hospital with a severed carotid artery. Instead of performing surgery and repairing the wound, doctors throw the unlucky fellow on a gurney with a piece of gauze taped over the incision. Every so often they check back in, throw another piece of gauze on it and walk out, never fixing the problem. That is precisely what is going on with regards to the Eurozone mess. And America’s too. Lots of tape and gauze with precious little in the way of real solutions has been the norm for quite some time now and there is no reason to think that this will change unless it is out of dire necessity.
In my opinion, there are (at least) three overriding macro themes that are driving this crisis, and will continue to do so. Like most other recent economic and financial dislocations, it will go until it doesn’t. Looking at the macro drivers below, it is easy to see why this is the case: old habits die hard and most importantly, this crisis, along with most others, is insanely profitable for a select few.
The Psycho-Moral Problem…