Yes...but!

April 22 2008

Home > Columns >Yes...But! Year 8-24

Last week I crisscrossed my native land, the Netherlands, re-discovering that the prevailing color there is green-- green meadows, greening trees, and people environmentally ‘green’ in name, but just as indifferent to the plight of creation as we North Americans.

We had rented a bungalow in central Holland, close to some of our rapidly shrinking extended families. My wife is one of 12 children of which 6 are left, including one sister in Canada. Of my 8 siblings 6 are still alive, with one in Alberta. Of course we did a lot of family re-connecting on both sides.

What struck me in that low-lying country--our vacation home was on a “mountain” all of 20 meters high--were the number of autos and the multitude of enormous three-bladed wind mills, gigantic structures rising some 40 meters into the sky, severely despoiling the landscape. Even though I see myself as an environmentalist, I hated the sight of these monstrous generators, erected everywhere, especially along the sea coasts and in the ‘polders’, the lands reclaimed from the seas. This army of swaying branches reminded me of a passage in the first Bible book. In Genesis 2 verse 9 trees were described as ‘pleasing to the eye and good for food.’ One chapter later -3:6 - when Adam and Eve are contemplating eating from the tree - the order is reversed, ‘Good for food and pleasing to the eye.’ Thus the biblically correct attitude is to place the aesthetic aspect before the economic emphasis. However when greed enters the picture the utilitarian consideration – windmills, eating the Apple - precedes the beauty factor. When I saw these legions of tilting mills swinging their enormous blades in their synchronized, monotonous rhythm, pragmatism certainly had priority over creational beauty. I guess I am ‘tilting against windmills’, quoting the most famous Spaniard Don Quixote, (I write this in Spain, after all) when I condemn something that is supposed to be good alternative energy.

The Dutch have reason to dread Climate Change. I spotted in one of their newspapers a map of the Netherlands with as heading, “Of the three top fears of the Netherlanders the first one is fear for flooding.” No wonder: when Global Warming really starts biting, Greenland melts, and the seas rise, then 80 percent of their populated areas – big cities such as Amsterdam, Rotterdam, The Hague, Utrecht and Groningen - will be flooded. Only Eindhoven, where Philips is located, is safe.

The Dutch government is supposed to be more Kyoto conscious, but everywhere we traveled they were building new highways. Last Friday afternoon, returning to Schiphol, Holland’s main airport to fly back to Barcelona, we had uninterrupted driving, but streaming out of Amsterdam, for some 100 km, were tens of thousands of vehicles slowly crawling to wherever, in spite of trains traveling everywhere every fifteen minutes.

I guess these ubiquitous windmills are but a conscience soother. We really don’t want to sacrifice tomorrow for today. So what will tomorrow bring?

September, and the climax of the global financial crisis, is coming closer. In the Netherlands – as in North America – we seem oblivious to the looming danger. The current quietness is like the calm before the storm. However, behind the scenes bankers everywhere are frantically trying to get rid of Ten Trillion US dollars worth of ‘ghost-assets,’ money that was created out of nothing, and now is reverting to that same status: no more valuable than its paper. Banks have these worthless assets on their balance sheets at face value, which means that these financial bulwarks are basically broke.
This will also bring on a global social crisis. Already we see hunger riots erupting. Soon we’ll have 25 million unemployed in the USA alone, signalling the onset of “the Very Great US Depression.”
As the dominoes start to tumble one after the other, the situation will get progressively worse, because the problem is beyond fixing. Neither the G7-finance ministers – among which Canada’s Jim Flaherty with his simplistic answer of cutting taxes - nor IMF (International Monetary Fund) governors can do anything about it.

The root of the problem involving the enormous sum of some 10 trillion of fictitious US dollars circulating on the planet lies with US mortgage loans, US dollars, and more generally US dollar-denominated assets, which were magically fabricated during the financial euphoria of the past decade by the “sorcerers' apprentices” of Wall Street, the City – in London - and the other major financial centres of the world.

The bankers with these torrents of worthless dollars, based on quickly depreciating real estate, are now trying to buy anything else of value, which is causing a general rise in commodity prices and is bringing the world each day closer to the ultimate outcome: infinite inflation.

This inflation will probably reach an annual 10 percent average in the US, starting later this year, will go above 5 percent in Europe, and approach 20 percent in China, according to some sources.