Flotilla inquiry? (Updated)

The flotilla affair: does the Israeli government owe anyone an inquiry over what went wrong in what looks to have been a seriously-botched operation? If the answer is Yes, then to whom does Israel owe an inquiry (and why), and to whom it doesn’t? Here is what Norman Geras has to say about this whole issue (an enlightening read).

UPDATE 7:30 pm
This is what may be written without a blush in the contemporary liberal press: a column by Fintan O'Toole in yesterday’s Irish Times, as an example of the filth that has poured out upon Israel’s head during the time since the flotilla incident (via normblog, again).

It’s all Bush’s fault

It’s George Bush’s fault. Everything is George Bush’s fault. Why? Well, because it’s always someone else’s fault. “This is reaching the level of hilarity. Except it’s so sad,” says Steven at The Metaphysical Peregrine. And I think he is right. One might also say, yes, it would be funny, except it is happening to me, to us Americans. You have all my European solidarity—after all every country has its own Dems and liberal media…

'I killed Mgr. Padovese! Allah Akbar!'

Bishop Luigi Padovese, the apostolic vicar of Anatolia—that is the Vatican’s representative in Turkey—who was stabbed by his Turkish driver Thursday, besides being a high-level scholar and among the major experts on St. Paul, was a good and wise man. Just like another Italian priest, Father Andrea Santoro, who was killed in Turkey in 2006. And the man arrested in that case was also described as mentally unstable. Coincidence? Well, everything is possible in this crazy world, even though, to tell the truth, I don’t believe in coincidences. And I’m not the only one. AsiaNews.it:

As the days pass, new details emerge on the story of murder and the alleged "insanity" of the assassin. The doctors who performed the autopsy reveal that Mgr. Padovese had knife wounds all over his body, but especially in the heart (at least 8). His head was almost completely detached from his neck, attached to his body by only the skin of the back of the neck.
Even the dynamics of the killing is clearer: the Bishop was stabbed in his house. He had the strength to go out the door of the house, bleeding and crying for help and there he was killed. Perhaps only when he fell to the ground, was his head cut off.
Witnesses said they heard the bishop cry out for help. But more importantly, is that they heard screams of Murat immediately after the murder. According to these sources, he climbed on the roof of the house shouted: "I killed the great Satan! Allah Akbar! ".
This call coincides perfectly with the idea of beheading, making sense that it is like a ritual sacrifice against evil. This correlates with the murders of ultranationalist groups and Islamic fundamentalists who apparently want to eliminate Christians from Turkey.
Moreover, according to a Turkish newspaper, Milliyet on June 4, the murderer had told police that he his actions were the result of a " divine revelation."

As it was not enough, the timing of Padovese’s killing was significant, as the bishop was scheduled to travel to Cyprus for Pope Benedict’s visit last weekend. Yes, the timing was highly suspect. Cyprus—do you remember? A former British colony, Cyprus became an independent republic in 1960. Following violence between ethnic Greek Cypriots and minority Turkish Cypriots, Turkey invaded in 1974, leading to the division of the island between the internationally recognized south and the north, which is only recognized by Turkey.

On his first day there,

Benedict was greeted warmly by both Catholics and Orthodox, but quickly saw how tense the situation on the small island is, as a Cypriot Orthodox bishop told him that Turkey was trying to take over the entire nation.
“It has turned the Orthodox Christians of Cyprus out of their ancestral homes, where they had lived for centuries,” said His Beatitude Chyrsostomos II at an outdoor ceremony in Paphos. “They want to make everything Greek and Christian disappear from occupied Cyprus.”

And to think that when Father Andrea Santoro was killed in Trabzon in 2006, Bishop Padovese succeeded in finding words of peace and kindness: “We forgive the one who carried out this gesture,” he said at the funeral Mass. “It is not by destroying those who think differently that conflicts are resolved,” he added. “The only way to follow is that of dialogue, mutual knowledge, closeness and sympathy.” Unfortunately, in order to establish a dialogue there must be two sides, two interlocutors. Hopefully alive.

Commenting between tears the death of Bishop Padovese, Father Andrea Santoro’s sister, Maddalena, said, “I hope that eyes will open in Turkey to try to understand and comprehend what there is behind this situation. Because Muslims must also be able to accept Christians, without fearing that we wish to convert people.” In the meantime many people in the Western countries are learning something new everyday about Turkey.

Francesca, or When Nothing is Impossible

Her nose smudged with the red crushed-brick powder that tops the courts at Roland Garros, Francesca Schiavone, the first Italian woman to win a Grand Slam singles event, “clambered into the stands. She immersed herself into a section of Italian family and friends, some of whom drove to Paris overnight, wearing black T-shirts that read ‘Nothing is Impossible.’”

What I like most about this victory is what Francesca (nicknamed “the Lioness”), who had only won three WTA titles in her entire career, has demonstrated: “Nothing is impossible.” This means that “everybody has a chance to be who you really want to be and to do everything in your life. This is what’s happened to me,” she said. That’s so Emersonian. I definitely like that.

Afghan MP calls for execution of Christians

The “Religion of Peace” strikes again. International Christian Concern (ICC)—a Washington-DC based human rights organization aimed to help persecuted Christians worldwide—has told the ASSIST News Service (ANS) that Abdul Sattar Khawasi, deputy secretary of the Afghan lower house in parliament, has called for the public execution of Christian converts. What occasioned Khawasi’s “irritation” was a video broadcasted by Afghan television network Noorin TV showing footage of Christian men being baptized and praying in Farsi. “Those Afghans that appeared in this video film should be executed in public, the house should order the attorney general and the NDS (intelligence agency) to arrest these Afghans and execute them,” said Khawasi. As a result, according to ICC sources within Afghanistan, many national Christians are in hiding, fearful of execution.

Hey, not to forget the Florentine secretary

Do you remember the famous Machiavellian “eulogy” of mankind in the seventeenth chapter of The Prince, entitled “Concerning cruelty and clemency, and whether it is better to be loved than feared?” If you don’t, here is how it goes—brace yourselves, it’s not exactly what we could call an optimistic perspective on human nature, nonetheless please read carefully the following passage (I’ll explain why later on …):

Because this is to be asserted in general of men, that they are ungrateful, fickle, false, cowardly, covetous, and as long as you succeed they are yours entirely; they will offer you their blood, property, life, and children, as is said above, when the need is far distant; but when it approaches they turn against you.
[…]
and men have less scruple in offending one who is beloved than one who is feared, for love is preserved by the link of obligation which, owing to the baseness of men, is broken at every opportunity for their advantage; but fear preserves you by a dread of punishment which never fails.
Nevertheless a prince ought to inspire fear in such a way that, if he does not win love, he avoids hatred; because he can endure very well being feared whilst he is not hated, which will always be as long as he abstains from the property of his citizens and subjects and from their women. But when it is necessary for him to proceed against the life of someone, he must do it on proper justification and for manifest cause, but above all things he must keep his hands off the property of others, because men more quickly forget the death of their father than the loss of their patrimony.

The whole thing couldn’t have been formulated in a more straightforward and clear language. I said I would explain later why a careful reading of the above passage was needed. Well, you can find the reason here (Jeremy Rifkin’s “fresh ideas about human nature” …):

The new understanding goes hand-in-hand with discoveries in evolutionary biology, neuro-cognitive science and child development that reveal that human beings are biologically predisposed to be empathic. Our core nature is shown not to be rational, detached, acquisitive, aggressive and narcissistic, as Enlightenment philosophers claimed, but affectionate, highly social, co-operative and interdependent. Homo sapiens is giving way to homo empathicus.
Fresh ideas about human nature throw into doubt many of the core assumptions of classical economic theory. Adam Smith argued that human nature inclined individuals to pursue self-interest in the market. Echoing Smith's contention, Garrett Hardin wrote a celebrated essay more than 40 years ago entitled "The Tragedy of the Commons". He suggested that co-operation in shared ventures inevitably failed because of the selfish human drives that invariably surfaced.
If this is universally true, how do we explain hundreds of millions of young people sharing creativity and knowledge in collaborative spaces such as Wikipedia and Linux? The millennial generation is celebrating the global commons every day, apparently unmindful of Hardin's warning. For millennials, the notion of collaborating to advance the collective interest in networks often trumps "going it alone" in markets.

And so on. At this point, as Norman Geras puts it, one might well reply, “Not to forget the dark side, hey.” That is, “Hey, not to forget the Florentine secretary.” And you wouldn’t even need to read the eighteenth chapter (“Concerning the way in which princes should keep the faith”)—the one which “has given greater offence than any other portion of Machiavelli’s writings,” in Laurence Arthur Burd’s words—to believe me:

A prince, therefore, being compelled knowingly to adopt the beast, ought to choose the fox and the lion; because the lion cannot defend himself against snares and the fox cannot defend himself against wolves. Therefore, it is necessary to be a fox to discover the snares and a lion to terrify the wolves. Those who rely simply on the lion do not understand what they are about. Therefore a wise lord cannot, nor ought he to, keep faith when such observance may be turned against him, and when the reasons that caused him to pledge it exist no longer. If men were entirely good this precept would not hold, but because they are bad, and will not keep faith with you, you too are not bound to observe it with them. Nor will there ever be wanting to a prince legitimate reasons to excuse this non-observance. Of this endless modern examples could be given, showing how many treaties and engagements have been made void and of no effect through the faithlessness of princes; and he who has known best how to employ the fox has succeeded best.
[…]
Every one sees what you appear to be, few really know what you are, and those few dare not oppose themselves to the opinion of the many, who have the majesty of the state to defend them; and in the actions of all men, and especially of princes, which it is not prudent to challenge, one judges by the result.
For that reason, let a prince have the credit of conquering and holding his state, the means will always be considered honest, and he will be praised by everybody; because the vulgar are always taken by what a thing seems to be and by what comes of it; and in the world there are only the vulgar …

And so on, just in case …

Silence

“ Under all speech that is good for anything there lies a silence that is better. Silence is deep as Eternity; speech is shallow as Time. ”

~ Thomas Carlyle

Memorial Day

~ “LETTERS FROM AMERICA” - by The Metaphysical Peregrine ~

"With hearts fortified with these animating reflections, we most solemnly, before God and the world, declare, that, exerting the utmost energy of those powers, which our beneficent Creator hath graciously bestowed upon us, the arms we have compelled by our enemies to assume, we will, in defiance of every hazard, with unabating firmness and perseverance employ for the preservation of our liberties; being with one mind resolved to die freemen rather than to live as slaves." ~~Declaration of the Cause and Necessity of Taking up Arms, July 6, 1775

This coming Monday is our Memorial Day, to honor our fallen. I’m a combat veteran (Vietnam), and each year this Day becomes more and more personal; I’m reminded of men I knew that actually fell. With God’s grace I survived.

The last line of our Declaration of Independance: "For the support of this declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor."

The oath we (enlisted) take when we join the military: "I, _____, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; and that I will obey the orders of the President of the United States and the orders of the officers appointed over me, according to regulations and the Uniform Code of Military Justice. So help me God."

Officers’ Oath: "I, _____ (SSAN), having been appointed an officer in the Army of the United States, as indicated above in the grade of _____ do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign or domestic, that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservations or purpose of evasion; and that I will well and faithfully discharge the duties of the office upon which I am about to enter; So help me God."

Since the American Revolution 1.2 million servicemen and servicewomen have died fulfilling this oath, and 1.4 million have been wounded. We have extended that oath beyond our shores, for the cause of liberty of all humanity. Benjamin Franklin: "Our cause is the cause of all mankind, and that we are fighting for their liberty in defending our own."

Honor. Duty. Country.

In Memoriam.

All gave some, some gave all

Memorial Day Weekend 2010.

In honor of the Fallen Heroes of the US Army, Navy, Air Force,
Marine Corps, Coast Guard, and Reserves.
Let us remember where our freedom has come from and honor those who have given their lives for it.

If Cameron is so much more than Blair reincarnated

Simon Jenkins in yesterday's Guardian:

The bond formed by David Cameron and Nick Clegg on May 11 produced an almost surreal moment in British politics, not so much a coalition as a fusion. Two lookalikes have become feelalikes, and it is hard to see how they can ever part. A cynic can add: fine so far … wait and see. But something remarkable has happened. It is time to take stock.
[…]
The government's ideological ambitions are almost identical to Blair's in 1997, which is why Cameron was so deftly able to fashion a centre-right coalition out of the ruins of New Labour's centre-left one. But he is a cleverer, deeper politician than Blair, with whom he once compared himself. Blair was hobbled by his obsession with headlines and his failure to understand how government worked. He surrounded himself not with doers but cronies.
Cameron suffers some of the same handicaps. But he seems a more original political personality. He is less blinded by the glamour of office. He walks to work and has dictated an ascetic administration. He seems to care about civil freedom, unlike Blair, and to be thinking afresh in areas of foreign policy.

Read the rest.

Since there are no cynics here, let’s put it this way: Fine so far ... keep up the good work, Mr. Cameron and Mr. Clegg!

'How Great Thou Art'

I love this one! Especially in Spring ...

O Lord my God, When I in awesome wonder,

Consider all the worlds Thy Hands have made;

I see the stars, I hear the rolling thunder,

Thy power throughout the universe displayed.

Then sings my soul, My Saviour God, to Thee,

How great Thou art, How great Thou art.

Then sings my soul, My Saviour God, to Thee,

How great Thou art, How great Thou art!

When Christ shall come, with shout of acclamation,

And take me home, what joy shall fill my heart.

Then I shall bow, in humble adoration,

And then proclaim: "My God, how great Thou art!"

So spoke Tremonti, and Brunetta answered...

As two of Berlusconi’s most-trusted aides, Paolo Bonaiuti and Gianni Letta, had announced it a couple of days ago, “The time has come for sacrifices,” and they will be “very heavy, very hard and let’s hope temporary.” And yesterday, in an effort to comply with the International Monetary Fund calling on Italy not to relax fiscal discipline, to reduce the public debt and boost its long-term growth rate, the government of Silvio Berlusconi approved budget cuts of up to €24 billion ($29.7 billion) over the next two years. The austerity package is the most stringent put in place since Italy tightened its belt in the late 1990s to enter the euro.

This should hopefully bring the deficit back below 3% of GDP (3.9% in 2011 and 2.7% in 2012) from last year’s 5.3%—which is, after all, relatively modest compared with other EU countries—and offer reassurance about the country’s accounts to financial markets.

“This is not a classical budget law. It is an intense discontinuity for the system that all of us must understand,” said Finance minister Giulio Tremonti. “What we did last night is a change of direction,” Berlusconi’s Public administration minister, Renato Brunetta, said on Sky Italia. “Enough uncontrolled costs of the state.” And, perhaps, they both are right. Why? Well, first of all because the government will carry out half of the cuts by reducing the amount of funds that Italy’s central government allocates to regions and cities. This means that major regions running large deficits (Lazio, Campania and Calabria) will be forced to raise business and income taxes. And it was time for this to happen, in my humble opinion. After all, as Stefano Manzocchi, international economics professor at Rome’s Luiss university, puts it, ”Italy is like a microcosm of Europe,” and just as Brussels labors to impose fiscal discipline on Athens, so Italy’s central government has (always had) to fight a desperate battle to control the debt-laden finances of its own wayward regions, and that’s perhaps the most serious challenge that the country is facing today. Furthermore, provincial governments with less than 220,000 inhabitants and some publicly funded think-tanks will be abolished. This is what one might  call “structural cuts,” or at least this is how, in my deep ignorance (this is the plain truth, believe it or not…), I understand it. But “structural cuts” is exactly what everyone was hoping for from the government …

Other key measures in the plan include a crackdown on tax evasion and false benefit claims (100,000 checks per year in 2010-2012 on claims for invalidity pensions, and a ban on cash payments for sums above 5,000 or 7,000 euros). The rest, so to speak, is just routine.

However, analysts say the plan is an encouraging first step, though probably not enough, in the long run. “We feel this should be a forerunner of a prolonged period of better fiscal management,” said Raj Badiani, of IHS Global Insight. And I personally couldn’t agree more, if this may be of any interest to you readers.

Ahmadinejad was in Khorramshahr to commemorate a victory, but ...

And to think that it was meant to be a rousing speech of national pride, a speech to commemorate the liberation of the south-western city of Khorramshahr after an 18-month occupation, at the time of the Iraq-Iran war. But the Iranian president, Mahmoud Ahmadinejad, experienced a very different atmosphere: instead of the usual government-approved cries of God is Great, and Death to America, he was greeted by hundreds shouting at the top of their voices, “Unemployment! Unemployment!”

Iran’s economy, in fact, is suffering double-digit inflation and the official jobless rate stands at 11 percent. But the actual number of people looking for jobs is believed to be almost two times larger.

Why Rome is not Athens

National debt. Pourquoi Rome n’est pas Athènes? And at what price will the comparison between Rome and Athens remain a subject of debate for lovers of ancient history?

Le Monde answers as follow …

'The Face of God'

Roger Scruton’s series of Gifford lectures on “The Face of God” are available for listening online. Five of the six lectures have been presented so far. Listeners may leave comments and a recording session is planned in which Scruton can respond to some of them.

Science has a unique authority among thinking people today, and its popularizers have presented a picture of the human condition from which God is absent. Yet, according to Scruton, by understanding the world in this way we fortify those destructive tendencies in our culture which are wiping away the face of the world. These lectures are devoted to showing that this is so, and to pointing to the remedy.

Roger Scruton is currently Research Professor for the Institute for the Psychological Sciences, where he teaches philosophy at their graduate school in both Washington and Oxford. He is one of Britain’s best known and most distinguished philosophers and public intellectuals. He engages in contemporary political and cultural debates from the standpoint of a conservative thinker and is well known as a powerful polemicist.

His publications include Art and Imagination (1974), The Aesthetics of Architecture (1979), The Politics of Culture (1981), The Aesthetic Understanding (1983), Kant (1983), Sexual Desire (1986), Spinoza (1987), The Philosopher on Dover Beach (1989), Modern Philosophy(1994), Animal Rights and Wrongs (1996), The Aesthetics of Music (1999), Death Devoted Heart (2004), Culture Counts (2007), Beauty (2009), Understanding Music (2009) and a volume of autobiography, Gentle Regrets (2006).

Roger Scruton's blog. Via botblog.

Yvonne Loriod

Paul Griffitths in the May 18, 2010, New York Times:

Yvonne Loriod, the French pianist whose musical exactitude and intensity inspired numerous masterpieces by her husband, the composer Olivier Messiaen, died on Monday at a retirement home in Saint-Denis, on the edge of Paris. She was 86.
[…]
In Ms. Loriod he [Messianen] found a musician who could provide avian qualities of agility and spectacle. “I have,” he once said, “an extraordinary, marvelous, inspired interpreter whose brilliant technique and playing — in turn powerful, light, moving and colored — suit my works exactly.”

Read the rest.

The “historic” and pretty funny video below is highly descriptive of what that story is all about.

American Heart

They say that we need changin’
As if all the Founding Fathers

seem to get it wrong

But I say I still believe in

The greatest Liberator, Innovator, Cultivator

Freedom knows

Sarah Palin called the tune “an amazing love song for America.” Former United Nations Ambassador John Bolton recommends it to foreigners “who want to know how the real America feels.” And after hearing the song one woman said, “We are so used to hearing the entertainment industry bash our country and bash us regular folks. It was amazing to hear someone put into words how so many of us feel about our Nation. It gave me chills.”

So no wonder if “American Heart” is becoming the default theme song at Tea Parties across the USA. And it’s really an amazing song, a hymn to America and to Freedom.

Although known as “Jon David,” his real name is Jonathan Kahn, a Hollywood screenwriter/director and singer/songwriter. Using the same pseudonym, he also authors a popular series of articles at Big Hollywood, “My Weekly Date with a Liberal.” Why the pseudonym? Why the baseball cap and the sunglasses he wears when performing in public? It’s to protect himself, he says, from the overt liberal bias toward conservatives in Hollywood, where, in his own words, “being a conservative is the kiss of death.” Yeah, because “the industry responsible for setting the cultural tone in America, which keeps itself warm under the expansive blanket of free speech, has no issue attempting to silence the conservative voice within its ranks,” as it can be read on the song’s page. Hmm… that sounds familiar here in Europe…

But I’m American made

I got American parts

Got American faith

In America’s heart

Go on raise the flag

I got stars in my eyes

I’m in love with her

And I won’t apologize.

The Polanski case: prosecution vs. persecution

Several film directors attending the Cannes film festival have signed a petition in support of their colleague Roman Polanski, currently under house arrest  in his Alpine Swiss chalet, asking the Swiss government to refuse an extradition request from California, just a few days after a California judge denied Polanski’s request to unseal testimony in the 33-year-old case (but Hollywood star Michael Douglas—in Cannes to promote Oliver Stone’s Wall Street: Money Never Sleeps—said he would not sign the petition).

The signatories include the Franco-Swiss director Jean-Luc Godard, and French directors Mathieu Amalric, Bernard Tavernier and Xavier Beauvois. What Polanski advocates think is that, also in the light of what the Franco-Polish film director himself has recently maintained, he is unjustly persecuted. “The United States continue to demand my extradition,” he said, “more to deliver me as fodder to the media of the entire world than to pronounce a judgment on which an agreement was made 33 years ago.” The essence of Polanski’s claim is that he was led to believe that his time in a state facility in Chino would constitute his full sentence, and has been frustrated for the past three decades as US authorities have maintained otherwise.

That’s why, as one who is against any form of persecution, even by judicial means, based on race, nationality, political opinion, personal beliefs, habits, cultural mores, etc., and even though I have to admit that I don’t like Roman Polanski as a person—for what he did, not for what his private views may have been or still be, and apart from my own personal beliefs, habits and cultural mores—I have felt morally obliged to wonder whether he might actually be a victim of persecution because of what he represents. But in all honesty, after reading everything I could get my hands on about the subject, I have come to the conclusion that there is no persecution, just prosecution.

And this even without considering the new allegations by British actress Charlotte Lewis, who on Friday accused Polanski of abusing her just after her 16th birthday. If anything, what is most surprising—and very similar to a persecution—are some reactions to Charlotte Lewis’s allegations. France’s culture minister Frederic Mitterrand, who admitted to paying “young boys” for sexual acts while on holiday in Thailand, referred to them as “pseudo-accusations.” Without the least doubt or hesitation. “I got into the habit of paying for boys,” he wrote in his 2005 autobiography The Bad Life, “[…] All these rituals of the market for youths, the slave market excite me enormously. One could judge this abominable spectacle from a moral standpoint but it pleases me beyond the reasonable.” It’s the world turned upside down.

Climategate - How the science of global warming was compromised

It was James Delingpole who, on his Telegraph blog, coined the term “Climategate” to describe the scandal revealed by the leaked emails from the University of East Anglia’s Climatic Research Unit, namely, the conspiracy behind the Anthropogenic Global Warming myth, and the greatest scientific scandal of our age. “The reason why even the Guardian's George Monbiot has expressed total shock and dismay at the picture revealed by the documents,” he said, “is that their authors are not just any old bunch of academics. Their importance cannot be overestimated, What we are looking at here is the small group of scientists who have for years been more influential in driving the worldwide alarm over global warming than any others, not least through the role they play at the heart of the UN’s Intergovernmental Panel on Climate Change (IPCC).”

To refresh everyone’s memory on what this whole thing is all about, here is the accurate reconstruction of what happened provided by Spiegel Online International, the English edition of the German news magazine Der Spiegel: How the Science of Global Warming Was Compromised (and how the conflict between climate researchers and climate skeptics could be resolved).

One more tip for those looking for a different perspective on the climate debate than the MSM gives you: be sure to tune in to PJTV.com/ICCC: LIVE coverage of the Heartland Institute’s 4th Annual International Conference on Climate Change (ICCC-4)—a worldwide gathering of global warming “realists”—on May 16-18 (direct interviews with participants and live streaming the keynote speakers).

First written for The Metaphysical Peregrine

Meanwhile, gold is rising ...

Will the euro bailout work? No, the bailout has slowed the euro’s slip, but it hasn’t solved the problem. That’s what the gold market seems to think, in fact the price of gold is rising against every major currency, not just the embattled euro. This, according to Royal Bank of Scotland foreign exchange strategist Greg Gibbs, is because the market sees the true scale of the sovereign risk problem, the solution and fallout:

If the market won’t buy the government bonds, the central banks have to. There is no other choice. The alternative is just too damaging for the economy to contemplate. If the central banks don’t buy the debt, then governments are forced into a budget surplus (a surplus is required to cover interest payments on existing debt). Imagine the carnage if major economies were forced from double digit deficits to surplus, you are talking Great Depression type scenario or worse.

Even getting close to that outcome is too bad to consider, so when borrowing costs start to rise, as they did recently in the Eurozone periphery, making borrowing difficult, the contagion spreads to equities and global asset markets. This forced the Eurozone governments to promise to throw money at the problem. The US$ 1 trillion bailout package only has some credibility because it involves core countries and the IMF which still have relatively low borrowing costs. However, the package would have little bite if the ECB were not involved. The ECB’s purchase of government bonds (monetization) is critical. It is the most credible source of funds since it creates the money.

It is undoubtedly true that the actions of the ECB this week make it clearer than ever what the real threat of the sovereign debt problem globally is. All countries, not just the Eurozone, when push comes to shove, when bond yields start to rise because of sovereign default risks, will force their central banks to buy the bonds (monetize). You can talk all you like about sterilization, but when the central bank is forced into this path, you can be sure they will not be raising cash rates. They will aim for negative real rates, and until the fiscal house is put back into order, they will aim for nominal GDP growth. Whether this arises from higher inflation or real growth will be of second order importance.

Even though inflation is yet to break out, the price of gold is telling us that this threat is very real over the longer term. People rightly so do not trust fiat money anymore.

Via Chicago Blog.