Social Fabric is Being Torn Apart

 

The social fabric since the urbanization caused by the industrial revolution has taken the majority of mankind out of a rural setting and thrust us into a more urban environment. The question which should be occupying a large part of those pondering the future is how will our society adjust the social fabric when approaching one third initially and within this century well over three-quarters of what we consider now as the workforce not only not having gainful employment but no opportunity for employment as more and more occupations are performed by robotic systems. In a recent study Oxford University researchers have forecast that machines might be able to perform half of all jobs in the United States over the next two decades, and by implication the same will be true for the rest of the Western and Industrial nations and beyond. Once robotic workers are capable of executing an occupation, that occupation will be on a fast track to making the human employee a luxury, no employer will be capable of wasting further investments and instead will automate or perish before the competitors who have automated their workforce. Our societies throughout the world will need to adjust to a permanent unemployable class which will far outstrip the active workforce projecting sufficient tax revenues no matter what the taxation rate to support the remainder of society. But do not fret as the price of production and delivery of most goods will be delivered at a great savings which will continually become more efficient and less expensive to produce.

 

One example I recently read of compared the human workers to a former workhorse which powered much of our production either by providing the raw power or was at least required to bring the products to the public. This power and transportation utilized animals such as plowing with an oxen or mule, horse drawn wagons transporting goods from production to the consumers and any other animals mankind once relied upon. In our modern age the sole use for animals is recreation or as a raw material such as sheep for wool and food, cattle for food, dogs and cats as pets and so on with the animals no longer being used as a source of power within modern and industrialized societies. Where the horse drawn wagons and carriages were commonplace on the city streets of New York, Washington D.C, London, Paris and across the world; now a horse within the city limits for transportation is relegated today as some form of recreational use normally reserved for tourists such as carriage rides offered around Central Park in New Your City or central tourist areas in London and Paris and so on. This has caused a drastic drop in the horse population where they have become something that relatively wealthy people keep for their own use and the noble steed has passed its use-by date. The most telling replacement was made painfully obvious when at the start of World War II some of the finest cavalry troops saw their last in the Polish Army until January 27, 1947, when the 1st Warsaw Cavalry Division was disbanded. The initial breakout of World War II saw the attempt to use horse cavalry, as pictured below, in the field against German tanks; one can guess the end result was not too good for the cavalry.

 

 

The use of machinery initially to aid and augment human workforce was the driving technology of the industrial revolution. Power was initially provided by draft animals or water powered systems some of which have been found dating back well before the Industrial revolution to the Roman Empire. Eventually animals were replaced with steam engines followed soon thereafter by more efficient engines such as the internal combustion engine and also the use of electricity to power the factories using electric motors. Whatever the use in the modern factories of the industrial revolution it could be traced back to either hydropower or petroleum and natural gas powered electrical generators or direct use of fossil fuels as in trains, planes and automobiles. The terminology often used to describe the current stage is the information age though one could make an argument for the full utilization of programmable mechanisms. Such systems can trace their history back to the card operated weaving machines which often were water powered used in the making of cloth fabrics. With the development of the microchip we have seen an explosion in the variety of automated machines and had their size drastically reduced and made more agile and adaptable. These robotic units can be programmed or taken through a routine by a skilled operator and then allowed to simply repeat the process it was ‘trained’ to perform. Electronic automating has taken leaps forward to a point where virtually any manual task can be performed by an automated system even to the point of self-driving automobiles, buses, trains, trolleys, trams and other conveyances. Modern airports have installed moving floors to remove the necessity of having to actually walk to your terminal to board or disembark your flight. The exacting standards can and will be facilitated, and will only become more versatile in material and intricacy, as 3-D printing continues to be developed and integrated into the modern, fully-automated factory with robotic employees and a minimal human presence to basically monitor operations and hit the ‘stop’ button in case of, what will be made less common, an emergency or breakdown. What is frightening is there are robots being developed which would facilitate the repair of such a breakdown.

 

One thing I can attest to from my own work experience is that the printed circuit integrated boards have reached a level of sophistication and the manufacture of the integrated circuits made so affordable that the vast majority of these boards, or even modules, are less expensive to replace the entire part of the unit and send the malfunctioning board to be recycled or even destroyed (in an environmentally sensitive manner, of course). One industry which has turned to automation in a big way has been the automotive industry, both in their products and the assembly of the product (pictured below). The muscle of a robot is one of its major benefits as it never tires of doing its assigned tasks, never takes a break, is rarely ill or out of commission, does not complain and is very efficient. The latest addition to the productivity and versatility of the robotic assembler is that the software is almost to the point where a robot will be fully capable of replacing the majority of service jobs as well. In the future there may well be some upscale stores which will offer their patrons a level of service advertised as the most personal service one could expect, and such a boutique would actually have real flesh and blood people. What will be amazing is those people may even approach the efficiency, attentiveness, level of service and any other category except for speed and acute knowledge of the entirety of products available but otherwise just as good service as one can get from an automated shop. The basic for such a machine requires a special set of electronics which will have a microprocessor board which will contain any number of required CPUs (central processing unit), Memory ICs (both read/write and worm, write once-read many), support data ICs holding the AI (Artificial Intelligence) and the various switching, logic gates, and drivers (all of which look a lot alike to the chip displayed below). The current form of Artificial Intelligence in a robot can take many various forms each with their own special abilities and limitations. Some you might choose to have around the home to do the cleaning and be a walking-talking data base to provide information or even take your selfies and post them on Instagram, Facebook or whatever is the latest and greatest once we all have our personal assistant. (see below)

 

 

 

 

 

The predictions are that humans as a part of the workforce will be limited to personal touch niche and specialty markets but manufacturing will be fully automated within the next fifty years. Some of the effects of just sending many manufacturing plants overseas have had a huge debilitating effect of employment and pay scale of average incomes. Additionally, the United States has faced this drain in particular and it is not simply the income of the workforce which has driven many manufacturers overseas but rather the additional restraints and extra costs of making many products which drove them from American soil. The cost of pollution controls are quite stringent by comparison to the near nonexistence of such laws and restrictions in China and other markets. Taxes are another driving force pushing these jobs overseas. One has to realize what the extra costs with compliance with all the labor laws, inspections, building codes, noise limitations and the additional costs of employees with the new addition of the Patient Protection and Affordable Care Act (PPACA) which in and of itself has produced an expected quirk as far as new hires in the United States. Where part-time work for people employed from twenty to twenty-nine hours per week has increased measurably, some estimates place it as high as twenty-five percent with the average assessments placing it at approximately twenty percent but on the other end. Full-time employment figures have not only not increased as well but in most assessments has dropped approaching five percent. College graduates can expect lower starting wages with many even working in their field starting at below fifty-thousand dollars a year. This is after at the minimum of four years at an average cost of over one-hundred-thousand a year for room, board, books and other supplies and fees. There are also a record number of college graduates who have been forced to accept employment in other fields and at positions which do not require a college degree, and we are not talking about those who majored in Renaissance French Sonnets of the Sixteenth Century.

 

The coming explosion in robotics will be from two perspectives. The first will be the rapid advancement of AI (Artificial Intelligence) to levels where one would have some degree of difficulty determining if they are speaking with an actual person or a computed employee, basically a telephone operator robotic unit. There is work being done now that has computer programs that write the codes for use in robotic systems. There are cad/cam software programs which enable the computer to design the systems to meet specifications using modular designs which are becoming as complex and intricate as anything produced previously by human beings. The truly frightening thing is that we may soon have robots designing and programming their own improved models and able to implement the manufacture and production of their improved design. This also implies that robotic systems in the not too distant future will also be capable of rewriting their own software and improving themselves for their own purposes. Once the machines begin producing more powerful and more capable machines and are capable of writing the programs allowing these improved robots the ability to supercede the level of competence of the initial robot we will have, as the human race, made ourselves superfluous placing us beyond the cusp and onto the endangered species list as we will have just as much relevance to robots speaking their own invented language and, who knows, inventing their own programming language which will completely shut human kind out of the formula. Let us hope the robots of the future find us to be cute little humans and get a good laugh at the humans posting their exploits on the internet. The robots are coming, the robots are coming and many of them are here already and they are assisting the government in watching you.

 

Beyond the Cusp

 

Our Economic World is Shakier Than We’ve Been Told

 

The mainstream media, especially the European Media, are all the news all the time covering the Greek economic meltdown. Some of the more honest media has also included the crises that could be soon to topple as if dominoes all in a row of which Greece is but the first domino to be tripped to fall and they have shown how Spain and Portugal would be precariously hanging and soon toppled partly as a result of Greece’s defaulting though it might be likely they would have fallen eventually all on their own. These would trigger a crisis in Ireland and Italy as to which would be the fourth victim and which would follow as the fifth victim signaling the end of the most endangered Eurozone nations too close to default to be comforting. The real horrific effect of these five weaker economies finally tripping the default cable and snagging the economic webbing, which has held the European Union and the Euro together since 1999, doing irreparable damage to the delicate webbing, more fragile than the most slightly laced spider’s web, tearing enormous holes in its intricate weaves slashing at the most vital threads and upsetting the ever so precarious balance that underlies its supporting structures threatening to unbalance and collapse even the previously though stable economies of France, Poland and many of the other east European economies possibly pushing them right to the cliff-face and potentially tipping them beyond the cusp and into default thus lacerating the last remnants of the Eurozone and possibly taking with them Germany and the ECB (European Central Bank) causing unimaginable damage to the financial structure of Europe and beyond, the ripple effect causing a second deep recession well more serious and taking longer to tank-out and hit bottom and then begin a long sluggish scent clawing for every single Red Cent and Dollar and Euro after having taken its toll on Asia and beyond. But the Euro, Greece, and the rest of the European Union and the Eurozone is but one whirlpool looking to sink every last economic boat.

 

The Euro is what we have been led to believe is the only threat. Where previously economic ships only had to worry about rising and falling tides, now they are adrift and facing not just one whirlpool representing the Euro dying, but now there is a second even more massive whirlpool coming from deep within Asia. China has hit the road’s end and is attempting to push its enormous mountain of debt using a garden trowel while piling on fresh debt using Caterpillar 990K series front end loader shoveling an additional $19.3 billion in an effort to end their three week slide totaling $3.2 trillion downturn in the past three weeks alone. These losses were the result of a Chinese Stock Market where as many as two-thirds of the stocks were frozen in a further attempt to stem the torrents of dollars flowing from their stock market and their economy like the icy waters which flooded the lower decks of the Titanic as she slowly but inexorably fell beneath the waves, something somewhat prophetic for the Chinese markets and economy. There is actually a comparison between the situation in Greece and the downturn in China as one must remember that Greece is as socialist as a nation can be without being either fascist or Communist and Greece has retained their spirit of a democratic Parliamentary system despite it all but China has taken socialism that one final step to communism, the addition of mostly state owned corporations and central planning of the economic engines and manufacturing. Chinese leaders had been attempting to liberalize their economic sectors, though not all of them, selling a number of previously State run businesses and even permitted competition between companies in the same market hoping this would charge their economy further and it had been working but even free-market economic liberalization was unable to stave off this meltdown. The problem obviously is what will this mean for the liberalization of the Chinese economy as the leadership are still Communists who serve the Party and depend on the Party, may decide that much of their financial woes are the result of these new policies and curtail or even reverse some or all of the liberalized companies, markets and take a giant leap backwards to increased government control over every iota of the economy and the manufacturing and sales etc.

 

United States Treasury Secretary Jack Lew commented Wednesday on the current crisis in China stating at the Brookings Institution, that the economies of the United States and China are “still pretty much separated.” In further testimony Secretary Lew queried, “I think the concern … it is a real one … is what does it mean about long term growth in China?” Further in his speech he pointed to the main potential impacts which could emerge as a result to the Chinese Stock Market bleeding financially leaving the leadership seeing ‘Red’ in more ways than one. The leading question is to figure out as soon as possible what the reaction of the leaders of the Communist Party is and whether they may decide that the problem dictates such as appointing new leadership, freezing prices, injecting even more dollars into the markets through the banks and state owned businesses or closing the banks and Stock Market for a week or two cool down and reset to normalcy again; the choices and potential marrying of any two or three makes predictions near to impossible. The one thing which can be computed and predicted as long as the numbers being released and any steps taken are done so in plain view then the impact of the Stock Market freefall on the Chinese economy’s core condition and whether it appears that it will have much elasticity and dynamics when the end is finally reached and the rollercoaster slides on in to the station signaling the end of the ride, and what a ride it was with vigorous growth only to drop who knows how large a percentage of that growth in this correction, and what a correction. Secretary Lew’s closing thoughts are worthy of being repeated as he emphasized, “The question isn’t their commitment to the goal; the question is the pace at which they implemented it, and do they do it fast enough for it to be effective. I hope this is not something that slows down the pace of reform. If the reaction is to put the brakes on reforms, that will slow that process.”

 

With China making a long overdue correction which will be far more severe than it should or could have been if the leadership was not so intent on what numbers they released to the world and on making their predicted economic increase and meet all targets set within the government as to fail was unthinkable and would have been a terrible loss of face thus undermining faith in the economy. This has caused the Chinese to follow the example first used by President George W. Bush and turbocharged by President Barack Hussein Obama which was in the old school simply called a ‘stimulus package’ but is now known by a more enigmatic phrase of ‘Quantitative Easing,’ either of which hides the actual result and method being implemented as who would stand for the government announcing they were devaluing the money supply and taxing every single American by a minimum percentage directly proportional to the percentage increase the total added funding was doled out in stacks of hundred dollar bills, literally thousands of such stacks in the United States and unknown amounts though what is known is the Chinese leadership pumped close to twice the percentage of GDP as did the United States. Just as the United States took their hit starting back in late 2008 and continuing through 2011 and briefly relieved with another round of ‘Quantitative Easing,’ this was like the third pitcher of beer at a table trying to drink their way sober. The economic burst from that mid and late 2011 ‘Quantitative Easing’ gave the economy a burst of hope which appeared to continue due to lowered interest rates and the paring down and mostly neutering of the Dodd-Frank Wall Street Reform Act gave the economy the needed push for President Obama’s reelection as he could run his campaign claiming to have turned the economy around and that great times lie ahead. Well, as far as that goes I’ll point to Greece and China and point out that the United States has followed similar patterns of fueling the economy and especially the Stock Market with borrowed monies and when loans were unavailable the Federal Reserve would electronically buy Treasury Bonds with funds they imagined into existence as a few strokes on a Federal Reserve keyboard and one produces and completed sale with funny money in that the receipt for the Treasury Bonds was used to balance the books as it represented the electronically derived cash used. This is a very convenient way to purchase items this way when you are the government or a very clever fraudster as just try using the sales slip from one register, say men’s clothing from a department store as cash at the Jewelry Counter and see how far that takes you. The catch, and there is always a catch, to ‘Quantitative Easing’ is that eventually you either have to pay back the money that was invented which can only be done some combination of these three methods, first is retire actual money from circulation which can also be done electronically by retiring any electronic payment made on credit cards, second is to remove the funds through higher taxes taking the money directly from the supply, and lastly one could raise the interest rates and siphon off a percentage of each loan to pay the Piper so to speak. The problem is that each of these methods actually hurt the consumer the most; it is the public that pays the price for the economic and financial misdeeds and ill-advised policies.

 

There are but a few redeeming features out of all of this and one serious and potentially unavoidable problem, and it is a big one. So, we will leave the bad news for last and the good news which will cause doom’s day to come and come quickly first. The best of news is that the meltdown in China is most likely to be relatively unfelt even amongst their Asian markets as China does not purchase many goods from outside and the few major needs she has will continue even if slightly abated, things essential like coal and petroleum. Further, the only nation carrying a trade deficit of any note is the United States and even should quotas be placed on any goods currently purchased from China will very likely have ten other sources with some popping up due to China cutting production. The European crisis is more likely to hit the United States harder than anything else on the economic horizon. Should the Eurozone break apart due to the collapse of several of their nations having financial difficulties and teetering at the edge of financial Armageddon plus one, Greece, which has in all honesty gone beyond the cusp and is currently running with his feet well away from solid ground just hanging there for that brief Wiley Coyote moment before collapsing into the darkness below only to make a small puff of dust rising depicting his hitting bottom. Even should the entire Eurozone collapse it may actually serve to keep a lid on inflation and allow for low interests rates, a necessity for the United States. That brings us back to the one thing that at first everyone would be glad to see, a real recovery with rising workforce participation which in the United States is down to approximately 63%, one of the lowest figures since the mid-1970s. This would also bring jobs, especially higher end job market opening up once again which would allow for a ripple effect. As the overqualified people working at menial or minimum wage jobs would leave those as jobs in their field became available and they gain employment thus making room for these other positions to employ more of the nations’ work force and soon inflation will return, something there has been no worry about as even the few months where such measurements showed a possibility for inflation to develop only for indicators to slide back the next couple of months with it often seeming like one big step forward and all promise breaking out only to be followed by three or four months of small to moderate steps backwards and everything gained to be lost and often more. When inflation does finally return for real then there will be a really bad situation. Once inflation starts to threaten then the interest rates will rise as a counter to inflation. Rising inflation takes a bigger bite out of people’s pockets all but actual theft. Inflation also helps with making the national debt somewhat more manageable by deflating the value of the currency taking the currency to new lows and the lessening to of the value of the debt and the purchasing power of that coinage. This was where Greece and the other nations in the Eurozone faced; they no longer had control over their coinage, their monetary worth so they were unable to simply lessen the value in order to get a handle on their debts and also make their nation more attractive to investors and new businesses. Perhaps leaving the Eurozone for a set period of possibly not less than two years and no longer than a decade or quarter century at which point they can reapply at the short end or must face a permanent decision at the longer end. Granted, this will possibly make some nations more reckless but the consequence is the only alternative to having the Eurozone nations turn their entire control of monetary and fiscal planning over to Brussels, they already control the monetary which is part of the problem, and most nations will refuse to be relieved of the power of the purse even if they are no longer able to control the coinage of said purse. Perhaps even a rotating schedule where every nation has to spend a decade using their own coinage would be another compromise. Until the Eurozone finds the answer they will be facing little impossible challenges as is Greece right now and others down the line. Let’s just hope their mistakes don’t become global economic-mines blowing the world markets haywire.

 

Beyond the Cusp

 

Greek Debt, the ‘No’ Vote, and the European Union

 

The first domino has fallen and Greece has laid down their challenge to the European Union (EU) basically asking if the European body will respect them the morning after the vote to thumb their noses at the demands made on the Greek government and its people demanding that they be further bailed out for free. The Greek people have chosen to support their government in firmly demanding they be granted support from the rest of the EU, European Central Bank (ECB) and International Monetary Fund (IMF) for restructuring the repayment schedule and not be so strict and mean demanding that the Greek government act what they define as responsibly using the restrictive austerity measures forcing the struggling nation to tighten its fiscal belt and stop the generous expenditures giving literally free tickets to the people and retired workers and other items standing directly in opposition of the demands for austerity measures for the struggling nation to be imposed by the EU, IMF and the ECB to prevent the very default on Greek debt which occurred late last week. The Greek default on their debt payment made them the first EU member to fail to meet their financial obligations slapping them in the face and throwing down their gauntlet. Now all that remains is a seemingly simple vote for the members of the EU on whether to hold the Greek government to impose strict terms in order to meet the financial demands of those attempting to collect on their ‘loans’ made with demanding Greece now act in good faith and honor the terms imposed on them and the restructure of the Greek governments debts such that they would be capable to repay those debts. The crisis was brought to a head with the Greek failure to meet the $1.7 billion payment to the International Monetary Fund as part of a previous set of further loans and restructuring made to avoid a similar crisis last year. Now an apparent ‘No’ vote is a direct challenge for all that entails.

 

The Greek people have now, with their ‘No’ vote, rejected the imposition of the austerity measures demanded of Greece by those holding the notes of indebtedness from the Greek government. This is forcing a crisis which has very few options and will now test the EU and whether its single currency policies are functional or inherently flawed. This threat to the EU single currency system was set into motion the second that there was not any central monetary planning unifying the disparate desires and quirks of the independent nations. Without such a system, the Euro was bound to produce just such a financial disaster leaving only the question as to which nation would be the first to fall off the fiscal cliff, the first to dare to tread beyond the cusp of financial responsibility. The predictions of an eventual default had raised its ugly face before threatening the very foundations of the Euro system and posing the exact challenge being faced today with the Greek rejection of the financial restraints being foisted upon them by the centralized powers within the EU. I suppose that Greece was as likely a candidate as any to be the first to face the imposition of external financial limits or simply defaulting thus threatening the stability of the Euro shared currency system. What are the questions needing to be answered and the actions available to be decided defining the path forward?

 

The questions are simple ones that get down to the basis of the Euro and through that to the entire EU. The writing is on the wall for anybody with the nerves to read the warnings telling the tale that there would be a day where a people made comfortable by the very structures put in place as a universal safety net designed to care for those unable to afford the necessities of life due to unemployment or other difficulties eventually making living off the government’s various programs sufficiently comfortable that work becomes an option and not a necessity. With such a system in place it becomes not only possible, but in some cases preferable to live a simple life permitting government to foot the bill. Eventually such a life would become far more attractive living large off the government than working and living not all that much differently and people would realize that not working was as much an option, and a far more enticing option, and simply choose to live an easy life seeking other means by which to have the government pay for more and more until there is no more and they start borrowing. This works for a while and the government stimulates the economy with infusions of money and the Ponzi scheme becomes the way of governing always staying one step from ahead of defaulting on loans. Finally there is a downturn of the economy and a country with finances so fragile becomes a nation unable to recover sufficiently to pay its debts. A nation unable to repay its debts is recognized immediately to be a threat to the entire system so this government cannot be permitted to collapse and start anew and is instead propped up by the wealthier governments and international bankers whose sources of income have always been shady and now are becoming downright unsustainable.

 

Soon another country teeters at the edge and begins to go down the exact same path as the previous, only more rapidly, then another and another until it becomes the crisis that is so large it can no longer be ignored or swept under the rug and propped up under auspices that this next new solution, austerity being the latest, will save the system, a system so broken that saving it is well past any possibility. The eventual default was set in motion at the very outset as was predicted by British Prime Minister the Lady Margaret Thatcher when she wisely refused to allow Britain to become dependent on the Euro and instead reached a balancing point that her merchants and industries would accept Euros as payment but that such payments must always be transferred into the Pound Sterling on the British ledgers and thus met by the EU. The Lady Thatcher once stated it referring to exactly this problem when during an interview with Thames Television’s This Week on Feb 5, 1976 she was quoted as saying, “I think they’ve made the biggest financial mess that any government’s ever made in this country for a very long time, and Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them.” This is exactly where Greece now finds itself and where Spain, Portugal, Italy and soon potentially others find themselves all in different points on that slippery slope, it is simply further along and at a steeper point that Greece finds itself, the point where other people’s money has run out and they have become reluctant to continue providing, period, or have they. There is one option where Greece is freely given yet another infusion of monies and the marry-go-round will continue. The debt will be restructured except this time there will be no set repayment process set up but instead a demand that Greece show its good faith of intent to eventually repay the debt once profitable times return, and those providing the crutch will continue to pour good money after bad with no false expectations of ever being repaid. Greece will have become that poor wretched relative who nobody ever speaks about but find themselves constantly meeting their bills for them. This eventually leads to the next crisis, what happens when most of the family of EU nations becomes Greece?

 

The EU cannot financially choose to continue supporting Greece but not because it would be a strain on them financially, it would hardly be noticed as such is how small a percentage of the total EU financial institutions that Greece requires even if it were to totally fail and every Greek citizen were receiving government livable wages. The problem is one of precedence. Once the EU sets the precedent financially holding Greece’s hand and paying its way then the path is set for other nations to demand similar treatment should they fall upon hard times. Should one look far enough down the road and it is not difficult to paint the picture they will envision, an EU that half its nations survive and are carried by the other half, and the wealth produced by the providing half is completely consumed supporting the rest. The entirety of the EU production and profits are consumed by the other nonproductive half. That is not a system that will survive even the slightest of difficulties and that will spell the end of the EU right behind the end of the Euro. But is the other option going to end any differently?

 

Imagine if the EU forgives the parts of the Greek debts it is able and forces Greece to return to their own currency yet remain in the European Union, where will that lead? Again it becomes a matter of precedent as now any nation which is approaching insolvency will demand the same generous exit strategy gaining a partial bailout which does not need be repaid and a return to their native currency without any penalty. There will come a point where the EU will no longer be the panacea promised and instead will become a small block of successful and wealthy nations having paid the exit fee for the remaining nations who now use their own currency and benefit from EU membership solely when conducting trade within the EU. This will have greater effects outside the EU as the EU will set their exchange rates for the Euro against their own national currencies until they are determined to be financially readmitted to the Euro club once again. There will always be the possibility that these less productive and less affluent nations will find their stride economically and be capable of rejoining the Euro based nations but most would be relegated to using their own national currency. The real problem will strike when even those nations which had been marginally able to keep astride the powerhouse economies of the likes of Germany will now constitute the least wealthy of nations still using the Euro and there may come during a time of economic stress where they too may be forced to return to their own currency or an even more frightening scenario would be the most productive nations decide to be like Britain, namely accepting the Euro in payment for trade deals or from tourists but operating using their own national currency as they would realize that would benefit them in deals outside of the EU and they also would no longer be pressed into supporting the economically weaker nations.

 

Any path taken would necessarily result in the end of the Euro and the stresses from the nations all returning to their own national currency eventually dissolving the EU as it would no longer serve any purpose beyond setting unified trade agreements through the Euro. Anyway one might slice this rotting cake that started with the Greek default; the result is the same, the unraveling of the EU starting with the demise of the Euro. The Euro might continue on much as Roman coins and the Spanish Pieces of Eight hung around well after their issuing nation no longer held the sway and influence they had in their prime. The question then comes as to what Europe may look like down the road without the EU as a calming inclusiveness that it once provided largely through the sharing of a common currency. Would this signal the return to the epidemic of conflicts, much as was the way of things throughout history? What will happen when the EU dissolves and there is no European unified front and each nation is now unleashed to trade completely without any concerns or other brotherly obligations. The initial return to cutthroat trade practices with each nation set against its neighbor may, over time, exacerbate old rivalries leading to skirmishes and even on to open warfare? Violence is only one part of the problems as there may be demands for reparations from the nations which had debt forgiven under a moment of weakness and magnanimity more forced by the EU than entered into with willingness and a smile. The failure of the Greek economy to sustain any kind of parity with the major economic powers within the EU will necessarily result in the end of the Euro as a trans-European unified currency, also as Lady Thatcher had predicted in her actions to forestall and eventually put to rest any hope that Britain would fully resign control over her own currency. This will prove to be the death of the Euro, the necessity for every nation to control its own currency unless they would willingly surrender their fiscal and economic planning to a central budgetary committee appointed and solely answerable to the EU and acting independently of the member nations forcing upon each their assignments for production and receipt of funds from Brussels. Nationalism or completely collective socialism, which would Europe choose. Britain would never enter such a trap, but could the entirety of the rest of the EU nations join such a group and actually make it work, that’s a tall order for any organization. Nope, could never happen, not in a million years. The other question that would remain to be seen is how the death of the EU would affect the relations out of Europe with the remainder of the world. These are interesting times, and they appear to be getting ‘curiouser and curiouser.’

 

Beyond the Cusp