The Phony War Revisited

Back in September, I made a post that referenced The Phony War that occurred from September of 1939 until May the following year. In that time, because no armed clashes occurred between the Allied and Axis forces, World War II didn't seem like much of a war, and certainly not the fearsome stuff of endless History Channel shows that feature unprecedented bloody battles between military titans that leave tens of millions dead, and most of Europe, from the streets of London to the Steppes of Russia, a burned out husk. Likewise, in our time, for the better part of a year, because no fresh disasters have appeared to demonstrably pound the U.S. economy, our ongoing depression, appears to be, well, not so depressing.

I fear this relatively halcyon time is coming to an end sometime this year. The key idea behind my assertion is that our economy is still very fragile, and that the remedies that have been heretofore applied will not hold in the face of growing threats. Such threats as I have in mind are China's bubble economy popping- an inevitability which is vastly under reported around these parts- Europe's still simmering sovereign debt crisis-which is what our sovereign debt crisis will resemble at some point in the future- the air travel imperiling volcanic eruption (which, strangely, may not have been) in Iceland-which had it continued for another few weeks would have surely been an economic boat rocker- the distinct possibility, not to say probability, of yet more bank blowups in the U.S., and, last, but not least, a destabilizing fresh outbreak of military hostilities.

I'm sure I've left out a few other major risk factors. After all, however unlikely it is that The Vampire Squid comes under a major legal assault that sunders the firm, or that J.P. Morgan is indicted for its manipulations of the precious metals market to salvage the dollar, all of these potential developments are out there waiting to press hard against our shaky economic edifice. If I can be allowed a moment of fantasy wish fulfillment, in the cases of the end of Goldman Sachs and J.P. Morgan, after some serious fallout into capital markets, I am inclined to imagine that the ultimate benefit to mankind would be profound.

Suffice it to say that, time, as it were, despite the better than year lull in local financial and economic catastrophes, despite the liquidity fueled moon shot in the stock market- the marquee display at "The U.S. Economy has Recovered" fun house- is, simply, not on our side. In the meantime, we must make the best use we can of our time in the eye of this enormous, once in an epoch, hurricane.