- By Bill Bonner
Over the weekend...it rained!
As expected, the Greeks voted 'no'. When you ask a debtor is he'd prefer not to pay, what would you expect? And imagine what would happen if he had never gotten the money in first place. When government elites borrow the money rarely gets to the voters. Small wonder they don't want to pay the bills.
So, Europe holds its breath waiting to see what will happen next. We are sitting in the lounge at the Hilton Hotel in London. A TV monitor tells us "Markets Fall."
Meanwhile, in China...the stock market has lost nearly 30% in the last 3 weeks - wiping out $3 trillion in 'wealth' that never really existed.
And in Baltimore...
A drum and fife group marched up Charles Street in the pouring rain. Dressed in 1800's uniforms, they made their way to the crowd waiting at the Washington Monument in the heart of Baltimore's Mount Vernon area. It was the 4th of July. Young and old gathered under umbrellas. Banners proclaimed the 200th anniversary of the monument.
The day before the celebration we had gotten a private tour. The monument is a marvel of masonry, with the central shaft supported on a vaulted foundation of brick and stone, with 225 steps from bottom to top.
Recognizing the contributions of his trade, the head of the local masonic lodge was handed the microphone to blab the usual felicitations. He was dressed in a black outfit, with medals aplenty and a top hat. Having no familiarity with the masons, we weren't sure whether his garb was current or antique.
"You'd never see anything like this in France," whispered Elizabeth.
"You mean, his uniform?"
"No...I mean...a Free Mason at a government event."
The Free Masons are feared and despised in France. They are believed to be in league with the devil...or worse, the anglo-saxons! Like the Bilderbergers or the Council on Foreign Relations, the Free Masons in France are thought to be pulling strings and plotting chicanery. How that distinguishes them from democrats and republicans, we don't know.
But when the hidden danger stepped down, the obvious one took the podium: Mayor Stephanie Rawlings Blake.
"She so completely mishandled the riots," said a friend. "She's working hard to redeem herself."
Politicians get re-elected by giving away things that don't belong to them. They dedicate a bridge, built with stolen money. They promise lavish pensions to firemen and policemen - and pay for them by squeezing the pensions of bakers and bricklayers. But redemption, in politics, is based mostly on amnesia. And debt. After a few years of dedicating monuments and bribing public employees, most people have forgotten the dirty dealing and civic disasters. And heavy borrowing allows them to push the cost onto people with no memories at all - many of whom aren't even born yet. By the time the bills come payable most people have forgotten who contracted them or what they were for.
The renovation of the Mt. Vernon monument takes place once every 100 years. This was the first monument built to honor George Washington; built in 1815, it was begun with private financing, later helped by the state of Maryland. As far as we know, no debt was involved.
But today, debt is everywhere...mountains of it. And the more it rains bad news, the greater the danger of mudslides and avalanches.
"Governor pushes for bankruptcy as default could still be a reality," USA Today informed us last week. It was not talking about Greece, but about another small economy, this one under the protection of the United States of America.
Puerto Rico has plenty of debt too. Here's how Chris described it last week:
...the governor of Puerto Rico told The New York Times that the island's $73 billion in debt is "not payable"... and that it's in a "death spiral" as a result.
That amount is more than 70% of Puerto Rico's GDP. For perspective, there's not a single state in the U.S. with debt of more than 20% of its GDP. Also, Puerto Rico's debt load is about half of the entire debt of the state of California... even though the population of Puerto Rico is only one-tenth the size.
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.