31st May 2012
The Euro isn't just going to Hell in a handcart, it's bought a regular visitor's season ticket. All around us we've got chaos, misery, derision and an orgy of finger-pointing the likes of which we haven't seen since – well – since just about any session of the current Leveson enquiry into media murkiness. Even the venerable Mario Draghi, head of the European Central Bank, seems to have run out of the bureaucrats' wonder drug, the life-giving Vitamin H (where 'H' stands for hypocrisy). It can't go on, says Senor Draghi. The Euro is doomed in its present format. It cannot survive as it is. And he's right – it can't, and it won't.
Intelligent discourse would lead us to analyse possible future scenarios with attendant consequences for all of us – professional investors, amateur market players, households with a few quid in a fund or two. And I'll get to that. But first, let's deal with the issue that's going to dominate the sad, sappy, narrow mindset of mainstream media. Who's to blame? The answer to that one doesn't really help anybody very much, but it's still the question that will dominate much of the reporting as the metaphysical marble temple of the common European currency transmogrifies into dust.
And I know just who's to blame for this appalling mess. Me. Oh, and you too come to think of it. Yes, we're all culpable for the chaos in these markets.
Allow me to swap metaphors in mid-creek (or, indeed, mid-metaphor…). Essentially, we all want to be drivers but are horrified at the thought of changing a tyre. The AA guys we use (those who 'know' about money) are necessarily corrupted by the experience of servicing us, since we are lazy and arrogant enough to let them take our money in exchange for the benefit of not having to think about it. Yes, bankers and traders (the AA personnel of this improbably extended analogy) are reprehensible – but so are the politicos and bureaucrats who colluded in this mess – and, above all, so are we for wilfully refusing to engage with it.
The major consequence? A monetary system that's screwed – the very concept of money itself is disrupted by today's events.
Many of us fancy ourselves as being sophisticated citizens, discerning – mindful, even. But by choosing to disengage, we're no better and no worse than the African nations who let themselves be ruined by the neo-colonialism of the dollar (eg the big Western corporations who exploit mineral resources and effectively run certain countries in exchange for enriching the political classes and keeping the workers fed and watered). We have willed ourselves into a state of paralysis. We've become a truly marvellous set of Wildean cynics: collectively – as individuals and as a set of civic institutions, we know the price of everything and the value of nothing.
I get to the more serious issues – what happens next and why – in a set of revisited, updated and re-vamped (OK, all right, you win – 'recycled') chapters from a collection of satirical essays published in the 1990s. A Fool And His Money offered a thesis (rather unpopular at the time) that the markets, wonderful, energetic and engaging as they were, might be a little bit unstable – capable of collapse, even.
Below, I offer some of the key prognoses that emerge from the revisitation of A Fool And His Money.