Ace of Spades HQ

May 27, 2012

Echoes of DOOM: Spain on the brink [Fritzworth]
— Open Blogger

Yeah, I miss Monty's regular DOOM posts here -- he had some of the best links and commentary on the various economic disasters on the horizon. I like to think that Monty is now in a repurposed missile silo somewhere in North Dakota, sitting on a stack of saddlebags filled with Krugerrands, looking up at the monitors every now and then when the motion sensors detect a jackrabbit or antelope. Sigh.

In the meantime, this article by Ambrose Evans-Prichard -- while not easy to read and chock full o' obscure jargon -- makes it clear that (a) Spain in on the brink economically and (b) the fault lies not with Spain but with the behavior mandated by the European Central Bank (ECB).

The damage from this double-barrelled contractionary shock on a fragile Spanish economy is before our eyes, conforming with precision to textbook time-lag theories. Private sector credit has fallen for 18 consecutive months. Industrial output fell 7.5pc in March. Brussels expects the economy to shrink 1.9pc this year, with the crunch yet to come.
Unemployment has reached 24.4pc, or 32pc in Extremadura. More than 1.5m households have no earner at all. They have exhausted their benefits, surviving on savings and - for now - on Â€420 a month in back-stop support.
Faced with such woes, any sovereign country would call for full engine reverse with every policy lever. The Faustian Pact of EMU allows no such escape. Europe has ordered premier Mariano Rajoy to cut the budget deficit from 8.9pc to 5.3pc in a single year, four times the therapeutic pace.
He cannot devalue. He cannot cut rates or print money. He cannot mobilize a lender of last resort to eliminate all risk of sovereign default. He can only lament. "Europe has to come up with an answer because we can't go on like this for long," he said.

While the common (and largely correct) wisdom is the the PIIGS were living high off the Northern European hogs, Evans-Prichard's contention is that Spain, at least, was denied the monetary policy tools it needed to restart its economy or at least glide it in to a soft landing. Instead, it appears to be in full nosedive mode, with someone else's hands locked onto the controls.

Ever seen those videos where someone throws a brick or other heavy object into a washing machine? Slow one down by a factor of 100 or so, and that's what's happening in Europe. It's precisely the slowness of the destruction that keeps people -- including those in charge in the European Union -- thinking that things might turn out OK after all. But the slo-mo demolition is going on regardless, and we're just about at the point in the video where another piece of the washer is going to go flying off at a tangent. Put on your safety helmets, boys and girls -- we're not a safe distance from the washer. ..fritz..

Posted by: Open Blogger at 06:08 PM | Comments (53)
Post contains 502 words, total size 3 kb.

1 Whatever happened to Monty?

Posted by: Joffen, fucking sunshine patriot at May 27, 2012 06:11 PM (nUY/O)

Wasn't Spain's green energy model something to aspire as told by President Bumper Sticker?

Posted by: stillers at May 27, 2012 06:17 PM (wbyfw)

3 Monty? It's...a secret.

Posted by: comatus at May 27, 2012 06:17 PM (ZOlM3)

4 I believe the chaos is being coordinated and targeted. Europeans are not united in any sense. It's like Cloward-Piven for a continent. The people pulling the strings have much greater plans.

Posted by: tom daschle concerned at May 27, 2012 06:18 PM (Fb6jF)

5 Monty: repurposed missile silo. It says right in the post. duh.

Posted by: elizabethe at May 27, 2012 06:18 PM (nHtaS)

6 Yeah. Good thing Bammy wants the US to be more like Europe!!!

Posted by: MrCaniac at May 27, 2012 06:19 PM (1grxW)

Whatever happened to Monty?

Assimilated.

Posted by: garrett at May 27, 2012 06:19 PM (ZFgrs)

8 Go to HotAir and watch Bill Whittle's latest video on Greece and the collapse of the Euro. Being a pilot himself he gives a great analogy as to what is happening.

Posted by: Scottye_fl at May 27, 2012 06:20 PM (kb15i)

9 I also can think of a good analogy too, Scottye_fl!

Posted by: francesco schettino at May 27, 2012 06:24 PM (nrW1y)

10 Sorry to go OT so early but I just read that Erick Ericson was 'Swatted' tonight. His tweet:

Sheriff is at my house. Someone spoofed my phone number and said someone had been shot at my house.

Posted by: Tami at May 27, 2012 06:25 PM (X6akg)

11 Can we get Monty back for a post or two, to translate all this into Moronic for us? Please? Pretty please?

Posted by: Popcorn at May 27, 2012 06:25 PM (OOehk)

12 Ooops....here's the link to Patterico with the story

http://tinyurl.com/cq8z5mr

Posted by: Tami at May 27, 2012 06:26 PM (X6akg)

13 Seriously guys, he's not dead is he?

Posted by: Joffen, fucking sunshine patriot at May 27, 2012 06:27 PM (nUY/O)

Fritzworth,

Thank you.

Europe's Euro falling apart is going to be the story of the week and probably most of June.

Please keep posting these stories for us.

Posted by: rd at May 27, 2012 06:27 PM (9sUlj)

15 Well, we can count on that Beener guy to protect us from harm.

Posted by: doom am I, full-ripe, dealing death to the worlds, engaged in devouring mankind. at May 27, 2012 06:28 PM (ZUb+x)

16 Seriously guys, he's not dead is he?
No. It was two local sheriffs and not a SWAT team; they knew him already; and he had told the local sheriff's office to expect something like this so while it was bad it wasn't the same sort of threat to life that the Patterico (and another critic IIRC) SWATting was.

Posted by: andycanuck at May 27, 2012 06:30 PM (nrW1y)

17 *sniff* Still has that new thread smell to it.

Posted by: Dave C at May 27, 2012 06:30 PM (WvfYF)

Well I've never been to Spain,

But I've been to Oklahoma.

You know they told me I was born there,

But I really don't remember.

But Oklahoma.....or Arizona,

What does it matter? What does it matter?

Posted by: pendejo grande at May 27, 2012 06:31 PM (zW3Po)

19 @16: I was asking about Monty.

Posted by: Joffen, fucking sunshine patriot at May 27, 2012 06:32 PM (nUY/O)

20 Europe s on the brink of collapse and eventually war. And if they cut loose again, we should sit around and make popcorn.

Posted by: Christopher Taylor at May 27, 2012 06:32 PM (r4wIV)

21 BTW, Glenn Reynolds has also forewarned his local cops to keep an eye out for such a tactic against him as well. (See my sock for all the stories.)

Posted by: andycanuck at May 27, 2012 06:33 PM (nrW1y)

22 Monty announced that he was ceasing doing the DOOM posts shortly after Breitbart's death. Work was getting busy, as I understand it

Posted by: Armando at May 27, 2012 06:33 PM (V2BF+)

23 Has Ericsson been the victim if that demon from MD? What is being planned for the fall by those f'ers?

Posted by: ParisParamus at May 27, 2012 06:33 PM (n9Vbj)

24 Oops, Joffen. (Although still a good read in #21.)

Posted by: andycanuck at May 27, 2012 06:34 PM (nrW1y)

25 And, oops, Tami, I didn't notice your link to Reynolds' post about it.

Posted by: andycanuck at May 27, 2012 06:35 PM (nrW1y)

26 Why don't they raise taxes on the rich?

Posted by: B+rry Ob+owmao at May 27, 2012 06:35 PM (gRt8w)

27 The Leftists are getting to be full-blown Nazis.

Posted by: Joffen, fucking sunshine patriot at May 27, 2012 06:36 PM (nUY/O)

28 2, they had those amazing solar panels that generated power at night. Who wouldnt want a piece of that?

Posted by: Jean at May 27, 2012 06:37 PM (pawS5)

29 I keep wondering if Canada will collapse soon. They have a lot of the same programs Europe has and they also have a populace that has absolutely NO freedom.

Posted by: Joffen, fucking sunshine patriot at May 27, 2012 06:39 PM (nUY/O)

30 "Spain punches above their weight"

Posted by: Lemmiwinks at May 27, 2012 06:41 PM (61yvg)

31 Pretty sure Spain is Bushs' fault so therefore the US economy is Bushs' fault, but if I went to mexico to escape terrorists and wound up eating pork, the DHS gesatpo could show up at my house and arrest me, guns drawn,
Watch out for the mean ass cocker spaniel, the meaner cat and worst of all the wife of concealedkerry brown shirts!

Posted by: ConcealedKerry or SubMitt at May 27, 2012 06:41 PM (nonzP)

Actually its worse, ZeroHedge is reporting that Swizerland just put in capital controls, which is rare when money is flowing into a country, however the rate at which people from Spain, Greece, Portugal are putting money into Swiss accounts is causing the Swiss currency to fall faster than they had anticipated, hence the reason for the capital controls; meaning bank runs are accelerated at an increbily fast rate than the media is letting on.

Posted by: johnc_ex-democrat at May 27, 2012 06:43 PM (ACkhT)

33 I keep wondering if Canada will collapse soon. They have a lot of the same programs Europe has and they also have a populace that has absolutely NO freedom.

Ah no, they are selling oil and printing all the news the Presstitutes down on their knees for their Messiah wont print here in the states.

Posted by: ConcealedKerry or SubMitt at May 27, 2012 06:44 PM (nonzP)

34 How do you say "Who runs Barter Town?" in Spanish?

Posted by: eman at May 27, 2012 06:44 PM (6KkLK)

35 Canada's actually doing very well, they got rid of the Kyoto treaty, they are selling their oil in more places after Barry essentially gave them the finger on the Keystone pipeline. They created more jobs last month than was expected. Harper's doing a pretty good job.

Posted by: johnc_ex-democrat at May 27, 2012 06:46 PM (ACkhT)

36 There will be no war in Europe, at least not between nations...there is no military buildup that will support one like what was present prior to WWI and II. What to look for is civil war... it is very possible that the commies and nationalists will fight it out in a post economic European apocolypse.

Posted by: SoCalMe at May 27, 2012 06:46 PM (s72/N)

37 36 How do you say "Who runs Barter Town?" in Spanish?

Posted by: eman at May 27, 2012 10:44 PM (6KkLK)

Quien es el jefe de Barter Town?

Posted by: MrCaniac getting ready for the fall at May 27, 2012 06:46 PM (1grxW)

38 I have a warm bed waiting for hot Spanish babes fleeing the turmoil.

Posted by: eman at May 27, 2012 06:47 PM (6KkLK)

39 Canada's collapse is inevitable. Read Mark Steyn's "America Alone".

Posted by: Joffen, fucking sunshine patriot at May 27, 2012 06:49 PM (nUY/O)

40 Will the SCOAMF try to confiscate more American capital to bailout European banks or all they all so wedded that ours will necessarily collapse also?

These crisis are really too good for a narcissist or Black Liberation Alinskyite to waste!

Posted by: ConcealedKerry or SubMitt at May 27, 2012 06:50 PM (nonzP)

41 Wanna see my tapas eman? Posted by: Florella Flamingo de Espana at May 27, 2012 10:48 PM (hvwLi) Please get back in line and wait for your number to be called.

Posted by: eman at May 27, 2012 06:50 PM (6KkLK)

42 John, that money flow is important stuff, if true - you gotta check everything from ZH, some sketchy fingers on the triggers over there. Ths swiss could deal with greece, but they cant handle Spain or Italy. Combine that with people buying the US 10y at essentially negative rate, basically paying us to hold their cash, and you have a storm warning.

Posted by: Jean at May 27, 2012 06:50 PM (pawS5)

43 I would love to have a line on the basics at the various currency printers, eg paper purchases, trucking activity, cash balances, cars in the parking lots after hours, and/or delivery delays for no n-critical customers.

Posted by: Jean at May 27, 2012 06:54 PM (pawS5)

44 Who's shorting Spain? That's whoever is responsible.

Posted by: Purp (@PurpAv) at May 27, 2012 06:55 PM (nFXVt)

45 Purp, you know the big capo is stroking his fuzzy white cat over this

Posted by: Jean at May 27, 2012 06:58 PM (pawS5)

46 To the rough men and women: Would that I were worthy of those who stand ready and those who stood ready and those who gave all. Words are pitifully inadequate. You and your kind have preserved the greatest nation the world has ever known. May that nation, in fulfillment as much as conception, always deserve your sacrifice. Thank you.

Posted by: irright at May 27, 2012 07:10 PM (RzLbD)

47 Spain is every bit responsible for the fix they're in. They have the usual welfare state issues and had a housing bubble that makes ours look like a blip. Ambrose Evans-Pritchard is a Keynesian dummy who thinks that fiscal and monetary looseness can avert the debt-deflation disaster when in reality it will only make the inevitable collapse that much worse. There is no painless way out of this; for them or for us.

Posted by: somebody else, not me at May 27, 2012 07:19 PM (nZvGM)

48 France's deposits in its banks has been going up and up as other banks are being drained. Part of the reason is that they're offering higher interest rates in an attempt to build up capitol in their finance system. They've also heavily loaned to a lot of countries like Greece. If there's an evil cat-stroking villain this, its France.

Posted by: Christopher Taylor at May 27, 2012 07:26 PM (r4wIV)

Salma Hayek, when the SHITF, you have a home with me.

Jock

Posted by: jock waggen at May 27, 2012 07:55 PM (HhIzT)

50 Obama is a stuttering clusterf*ck of a miserable failure.

Posted by: steevy at May 27, 2012 07:55 PM (7W3wI)

51 #38 Civil wars in Europe -- Russia supplying the leftists, Saudi supplying the islamists and the natives get hind most teat. I don't think we're up to intervention #3.

Posted by: rabidfox at May 27, 2012 09:04 PM (lN3q9)

52 47 Who's shorting Spain? That's whoever is responsible.

Posted by: Purp (@PurpAv) at May 27, 2012 10:55 PM (nFXVt)

[Whistling softly as he saunters away]

Posted by: George "Capo" Soros at May 28, 2012 04:41 AM (708Gm)

53 Yinz all do know that North Dakota isn't the middle of nowhere any more, right? Before long the standard will be Bakken Mean Time.

Posted by: Irascibli at May 28, 2012 02:53 PM (1V1zm)

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