A.J. DiCintio
The most fearsome lion of all
By A.J. DiCintio
In another instance of his honest, insightful "Thoughts from the Frontline," John Mauldin (mauldineconomics.com) opened his post last week by quoting the following two passages from "That Which Is Seen and That Which Is Unseen," published in 1850 by Frédéric Bastiat:
"In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects the first alone is immediate [and therefore] is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.
"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect [while] the good economist takes into account both the effect that can be seen and those effects that must be forseen [sic]."
Having acknowledged the nineteenth century thinker's good sense, Mauldin goes on to acquaint us with "The Lion in the Grass," his recent speech whose "simple premise is that it is not the economic lions we can see that are the problem. . . but rather, in trying to avoid them, it is often the lions hidden in the grass that we stumble upon that become the unwelcome surprise."
Actually, the surprise is likely to be infinitely worse than merely unwelcome, as illustrated by a photo Mauldin shares with his readers.
When we first look at it, we immediately focus on two lions in the foreground, lazily taking advantage of an open area beside a rivulet that runs through an expanse of dry African grass.
But when the photo is put before us again, this time with the addition of a red outline that draws our attention to a spot perhaps fifty yards behind the resting pair, we make out (though barely) the eyes and nose of another lion, amazingly disguised yet watchfully peering from its lair in the wheaten plain.
That frightening picture presented, Mauldin first discusses European lions we can see, specifically, the problems we read or hear about daily as a result of the death spiral in which debt-ravaged, unemployment-choked, recession-gripped, capital-losing Greece, Portugal, Spain, Italy, Cypress, and Malta find themselves.
Then, turning to the notion of lions we can't clearly see, he suggests the most important one in Europe is France.
France, which the left-leaning elite media and Wall Street depict as worthy of assuming the role "of Germany's stalwart partner in guaranteeing [the PIIGS' irresponsible] debt."
But France which Reality tells us is currently rated AAA "by the same people" who lied that bundles of sub-prime mortgages were "gold," when they should having been exposing them as "nuclear waste."
France which the IMF claims is heading toward a debt-driven death vortex exactly like the one gripping Greece.
And France whose new socialist government began its tenure by lowering the retirement age to 60 and slapping everyone worth 4 million euros or more with a tax increase twice as large as expected, thereby causing Mauldin to wonder whether "a few [French men and women] might decide to move [where their capital] is loved and wanted."
All of which prompts thoughts about an unseen lion lurking in Germany, the only euro country with even a snowball's chance of bailing out its shamelessly profligate neighbors, though at a price to its people of a diminished standard of living, shocking levels of unemployment, and, possibly, raging hyperinflation of the kind that devastated the nation 90 years ago and which has sent tremors of fright through the German consciousness ever since.
To bring this hidden lion into perspective, we need only consider that German citizens find their entire political establishment dedicated to doing whatever it takes to preserve the insane experiment that is the decentralized, culturally and economically disparate eurozone, a reality that leads to the following question:
Where are they to turn when the screws of bailouts begin to twist with a vengeance that leaves them bitterly angry and writhing in pain?
As world history and current events reveal, they may conclude their only option lies in embracing demagogic political extremists, the degree of the extremity they are willing to risk directly proportional to the amount of pain being inflicted upon them.
Moreover, the basis for this disaster is not a foolish figment but frighteningly real; for, grounding his prediction not in foolish hope but hard fiscal reality, Mauldin foresees a euro nation "train wreck of [truly] biblical proportions," counseling us to "think of 12 plagues, not the run of the mill 10."
However real it is, the lion stalking Germany is rarely discussed. But neither silence nor denial changes the fact it exists in the form of a terrifying consequence of the social turmoil which ultimately results when humans ignore the simple, fundamental truth that "There is no free lunch."
Not that we Americans have any reason to react to its presence with a smirking smugness; for using the lure of unsustainable promises and the deadly opiate of debt, the contemptible liars who are our politicians have long been leading America to economic and social hell.
Making that truth all the more frightening is this one:
Our current president is a European "social democracy" loving, true-believing liberal ideologue whose speechwriters crank out new euphemisms daily to put a smiling face on free lunch dreams destined to become a fiscal nightmare whose most devastating effect transforms the entire national landscape into a plain of dry, high grass beloved by the most fearsome lion of all.
© A.J. DiCintio
August 3, 2012
In another instance of his honest, insightful "Thoughts from the Frontline," John Mauldin (mauldineconomics.com) opened his post last week by quoting the following two passages from "That Which Is Seen and That Which Is Unseen," published in 1850 by Frédéric Bastiat:
"In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects the first alone is immediate [and therefore] is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.
"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect [while] the good economist takes into account both the effect that can be seen and those effects that must be forseen [sic]."
Having acknowledged the nineteenth century thinker's good sense, Mauldin goes on to acquaint us with "The Lion in the Grass," his recent speech whose "simple premise is that it is not the economic lions we can see that are the problem. . . but rather, in trying to avoid them, it is often the lions hidden in the grass that we stumble upon that become the unwelcome surprise."
Actually, the surprise is likely to be infinitely worse than merely unwelcome, as illustrated by a photo Mauldin shares with his readers.
When we first look at it, we immediately focus on two lions in the foreground, lazily taking advantage of an open area beside a rivulet that runs through an expanse of dry African grass.
But when the photo is put before us again, this time with the addition of a red outline that draws our attention to a spot perhaps fifty yards behind the resting pair, we make out (though barely) the eyes and nose of another lion, amazingly disguised yet watchfully peering from its lair in the wheaten plain.
That frightening picture presented, Mauldin first discusses European lions we can see, specifically, the problems we read or hear about daily as a result of the death spiral in which debt-ravaged, unemployment-choked, recession-gripped, capital-losing Greece, Portugal, Spain, Italy, Cypress, and Malta find themselves.
Then, turning to the notion of lions we can't clearly see, he suggests the most important one in Europe is France.
France, which the left-leaning elite media and Wall Street depict as worthy of assuming the role "of Germany's stalwart partner in guaranteeing [the PIIGS' irresponsible] debt."
But France which Reality tells us is currently rated AAA "by the same people" who lied that bundles of sub-prime mortgages were "gold," when they should having been exposing them as "nuclear waste."
France which the IMF claims is heading toward a debt-driven death vortex exactly like the one gripping Greece.
And France whose new socialist government began its tenure by lowering the retirement age to 60 and slapping everyone worth 4 million euros or more with a tax increase twice as large as expected, thereby causing Mauldin to wonder whether "a few [French men and women] might decide to move [where their capital] is loved and wanted."
All of which prompts thoughts about an unseen lion lurking in Germany, the only euro country with even a snowball's chance of bailing out its shamelessly profligate neighbors, though at a price to its people of a diminished standard of living, shocking levels of unemployment, and, possibly, raging hyperinflation of the kind that devastated the nation 90 years ago and which has sent tremors of fright through the German consciousness ever since.
To bring this hidden lion into perspective, we need only consider that German citizens find their entire political establishment dedicated to doing whatever it takes to preserve the insane experiment that is the decentralized, culturally and economically disparate eurozone, a reality that leads to the following question:
Where are they to turn when the screws of bailouts begin to twist with a vengeance that leaves them bitterly angry and writhing in pain?
As world history and current events reveal, they may conclude their only option lies in embracing demagogic political extremists, the degree of the extremity they are willing to risk directly proportional to the amount of pain being inflicted upon them.
Moreover, the basis for this disaster is not a foolish figment but frighteningly real; for, grounding his prediction not in foolish hope but hard fiscal reality, Mauldin foresees a euro nation "train wreck of [truly] biblical proportions," counseling us to "think of 12 plagues, not the run of the mill 10."
However real it is, the lion stalking Germany is rarely discussed. But neither silence nor denial changes the fact it exists in the form of a terrifying consequence of the social turmoil which ultimately results when humans ignore the simple, fundamental truth that "There is no free lunch."
Not that we Americans have any reason to react to its presence with a smirking smugness; for using the lure of unsustainable promises and the deadly opiate of debt, the contemptible liars who are our politicians have long been leading America to economic and social hell.
Making that truth all the more frightening is this one:
Our current president is a European "social democracy" loving, true-believing liberal ideologue whose speechwriters crank out new euphemisms daily to put a smiling face on free lunch dreams destined to become a fiscal nightmare whose most devastating effect transforms the entire national landscape into a plain of dry, high grass beloved by the most fearsome lion of all.
© A.J. DiCintio
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