It's clear that the global strategy of central governments is to deal with the economic crisis by pretending it is over. Nobel prizes, H5N1 flu, Health Insurance Reform, Afghanistan, and DOW 10,000 rally caps are all subterfuge to keep us from looking too deeply at what has been the largest PONZI scheme in history; a time when trillions of dollars of assets were funneled to people living in the capstone of the pyramid. Naked Capitalism has compiled a great post detailing the extent of the fraud.
Industrial activity and manufacturing have been usurped by financial engineering on an unimagined scale - the new credo "Greed is Good" has become doctrine instead of a catch-phrase. But as Roger Bootle writes in the Telegraph, "Greed is not good, It's dangerous".
And for all the happy fizz-bangs coming from resource-rich countries, the Chinese, Australian and Canadian economies have similar asset bubbles waiting to be burst. Flush with capital, China has been on a commodities buying binge. At the same time, the dragon has been on their own real estate spree inflating the cost of land, housing, and commercial real estate. This has been documented by John Mauldin, a founder of the site: Thoughts from the Frontline Mauldin references The China Files when he writes:
The real estate market in China, particularly the residential side, is a burgeoning bubble that is growing bigger and more breakable by the day. Land and housing prices were already rising steadily when Beijing's stimulus package hit the sector in early 2009. Now prices are surging, with developers, bureaucrats and investors cashing in while urban Chinese - once encouraged to invest in home ownership by the central government - become less and less able to buy.c/o John F. Mauldin
This Youtube video provides a glimpse of China's foray in commercial real estate.
The planet suddenly seems much smaller. The US has become a very large stopper in a sea of global debt. Any belief that emerging economies - like China, have the capacity to backstop the freefall of capitalism are founded on a vague hope. When the New World Order takes shape it is clear that those of us born in the '50s will chronicle a lifestyle that will seem mythical to our grandchildren.
The whimsical nature of our changing world is found in Judith Warner's Op-Ed piece in the New York Times To me it captures a feeling of disconnect between reality and our hopes for our children. All of us who remain silent are complicit in the legacy of debt we leave our children. Josh, a fellow blogger, quote Robert F. Kennedy:
"All it takes for evil to prosper, is for good men to do nothing"