World Economic Deathwatch

There is resigned acceptance upon the Stoa this day. It is not everyday you stand on Deathwatch for an entire economic way of life.

The world markets are dying. I will explain why I'm saying that, but first I want to demonstrate its equivalence in nature.

I have had the honor, due to my career in the healthcare field, to be present at the passing of many individuals. There is a power and energy in the room at those moments that is difficult to describe. It is the feeling that something important is happening.

Generally, if a person is about to die in their beds, either through a long illness or simple old age, there are two general styles of passing. If the person is conscious, they will become tired and take a nap. Their breathing will gradually slow until it becomes gently inconsistent. If one is still sitting nearby, you will also hear the last, long breath released from the lungs as all the muscles go slack in the chest. Frequently, I'm there looking at silenced monitors and know when this point is approaching. Sometimes it is the gentle release from the torment of cancer or some other painful ailment that has ravaged the body. Frequently, you can see the look of relief on their faces as they go.

The other way, which can be frightening to those who have not experienced it before, is a gasping and gulping that begins when death is near. I believe that the person has not completely resigned themselves, or accepted the fact that it is their time. No matter how they struggle, their moment has arrived. The underlying cause of their demise, be it heart failure, organ failure, cancer, etc. will not resolve, even if doctors are able to "keep" you alive on machines. Our technology is stupendous, but when it is your time, it is your time.

The body may "rally", but the ending is still a foregone conclusion.

Over night, the Federal Reserve and numerous Central Banks around the world stepped in and provided "Dollar Liquidity" to the world markets. Many companies, banks, and businesses...and governments, borrow and pay off debts every day in dollars. Loans and transactions are in dollar denominations.

In 2008, when Lehman Brothers was allowed to collapse, the credit market locked up around the world. There were not enough dollars to loan or pay in the world market (in circulation). No one wanted to take the risk of making loans in less stable currencies. No on wanted the exposure of someone making a run on shorting currency (think George Soros and Great Britain). At the time, the Fed made a special loan window available to keep the gears of finance turning with special interest rates.

That window opened wide last night and money like you have not seen before was made available to the world. Dollar denominate loans for everyone.

Why did this happen? The Euro is gasping. It knows the end is near and they are flailing. Except the Germans of course. There is a lot to admire and fear about those people. The European Central Bank, dominated by Germany, refused to participate in the world-wide bailout. Good for them. They understand what is happening and do not wish to squander their last reserves on this fools' dream.

Everyone looks at the world stock markets and smiles. Everything is up!

Did everyone's optimism leap because industry around the world came up with new technologies? No. Did the EU solve its debt crisis? No. Did the US Congress realize how deep the doo-doo is they are swimming in? Certainly not.

So, there has to be SOME reason why the markets were flush with cash. That is why. Everyone is looking for a place to "park" their money. The bond market in Europe is about gone. It is so expensive to sell debt, and the risk is simply too high that people with money are refusing to park it in Europe. There is not enough physical gold to purchase, and there are fewer and fewer people willing to buy "gold certificates".

So, they flee to the stock markets around the world. Central banks are not good places to keep money. Banks in general have begun to CHARGE rich people for the right to "park" their money with them, i.e. keep it safe since they know they can not grow that money safely.

The only problem is, the stock markets are not safe at all either and that will soon become very, starkly even, apparent to everyone. The United States has its own debt issues. Japan, in debt. EU, in debt. China, in debt despite all the favorable press they get. Oil nations, screwed because their customers are...in debt.

In 2008 I argued with my co-workers that the system, the entire system, be allowed to fail. It had to be allowed to reboot. Only by punishing those that made poor decisions would the rest of us learn what not to do. All the bail outs under Bush and Obama have done nothing but delay the day of reckoning...and make it much worse because we are in EVEN MORE debt.

We would be rebuilding now if not for that. Instead, we seek to entirely devastate the financial world as anyone alive has known it. It will be interesting to see what rises in its place.

The world market is gasping right now. The Unites States has shot the world full of adrenalin in an attempt to jump start things. An attempt to "give Europe more time to get things going in the right direction". That is not going to happen. The adrenalin will wear off and the US will have shot its last reserves off in a vain attempt to stave off the inevitable for another few days.

Yes, I said days. I don't think this will last more than another week or 10 days. Consumer confidence simply can not grow in this political and economic environment.

So I will sit upon my Stoa and continue to watch the monitors as they slow and then stop. I will stand in respect when the lines flatten out and the tone begins to drone.

Death is one thing that we all must do, and we must do it alone. It is natural to be afraid. To fall into the darkness and rely on faith that someone will be on the other side to catch you. I too am afraid, though I hope that if I am old enough, I will be at peace to allow it to come.

So too with the world markets today. No one can see what will come after this. Governments know that someone will be to blame and their cushy jobs are on the line. Thus, they delay the agony that we find ourselves in.

Live well, everyone. The sun will rise tomorrow, and for the next 5 billion years after that. Come join me on the Stoa and we will watch it together.

--Zavost