What Price A Taylor Of Virtues?

"I don't actually think there's going to be a catastrophe... I think the Enemy have spent the past century learning how to run the world in their image and that system is now bedding in. They'll save the Euro and continue building the global society thing they want to build, and it'll go through occasional crises and they'll learn from each one and get better at it."

Ian B over at Samizdata prompted by a discussion of the EU and IMF's decision to bail out the heavily indebted Greek province of Europe.

I found Ian's little predictive tangent far more interesting than the actual news item itself.

So is Ian right or wrong? Let's consider...

The predicted catastrophe he refers to is a worldwide currency collapse - starting with either the Euro or the Dollar, and spreading around the world in domino effect. Although there may be room for speculation as to what the precipitating event(s) would actually be, the key components of a currency collapse would be (a) the inability of whichever governments are initially involved to obtain further borrowing to secure their debts and (b) therefore the move toward a hyperinflationary monetary policy from which most or all of the debt could be paid off at the expense of ruining the formal economy in that country (with of course large ripple effects around the world).

Warnings of such a collapse are often given by people like Paul Marks partly because what is happening in both Europe, in the case of the PIIGS particularly, and in the United States is an apparently relentless accumulation of government debt (a significant share of which is NOT actually Federal). The pressure on the global banking system to continually obtain further borrowing to prevent monetization of toxic debts (and thus hyperinflation and the possibility of currency collapse) is now immense. So if Ian is right, then fairly soon we'll have to see some drastic combination of spending cuts and tax increases all across the EU and the US if currency collapse is to be avoided. But wouldn't this in itself be a catastrophe in the form of a very very long-lasting global economic depression? And while that would be eating its way through the adult lives of today's children (what comparatively few there are of them) the mere choice of which party to vote for is going to keep a lid on all the political pressure?

In the meantime of course, the sloppy laboratory of the European Union is as weird as it has ever been and there is the - I think rationally incontestable - view that the current President of the U.S. is an ideological Marxist and enemy to the essential epistemological and ethical underpinnings of Western culture and the institutions it has produced over the last several centuries. At a time like this, doubt has great importance and can bestow very peculiar values; care and clarity are the only clothes that will fit this hideous angel...