Mental Ghettos Weaken the US: People Who Lie to Themselves

Mental Ghettos Weaken the US: People Who Lie to Themselves

by Joel S. Hirschhorn

Global Research, December 3, 2010

So many intelligent Americans believe, say and do stupid things. When a large fraction of the population is like this, a nation rots from the inside and succumbs to external forces.

I have always searched for the simplest yet best ways to explain what I see as a multi-decade decline of every aspect of the United States , especially its political system and government. I keep coming back to the inescapable logic that a large fraction of Americans, regardless of their education, economic status and political alignment, must suffer from delusion. This delusion produces denial about hugely important subjects and issues.

Like a law of physics, this combination makes people seem incredibly stupid to others disagreeing with their positions. Stupid, because they are unable to accept facts and truths that conflict with their views.

This special kind of stupidity is independent of inherent intelligence. In this case brain power is overpowered by psychological deficiency, namely self-delusion.

This delusion is not genetically produced, but is a result of external influences, notably political, government, media and corporate propaganda intentionally designed to produce delusional beliefs and thinking. Who does this? All sorts of commercial and political interests. The result is a series of biases and blocks, such as cognitive dissonance, to objective facts and information that creates denial about very important conditions affecting the planet, the nation and individuals. People afflicted with this deadly combination appear stupid to those outside their mental ghetto that they gladly inhabit, along with similarly afflicted people.

National unity breaks down with countless mental ghettos that span economic, political and geographic boundaries.

Conservatives see liberals as stupid and vice versa. Democrats see Tea Party adherents (who only support Republican candidates) as stupid and vice versa. Those seeing climate change and global warming as serious phenomena posing real threats see deniers as stupid. People who give a high priority to tax cuts that mainly benefit the rich and superrich seem stupid to those who recognize that the wealthiest Americans have hijacked the US economy, as shown by endless statistics that reveal their preferential financial benefits. Those who reject religions think the religious stupid. People who shun social networking sites see those addicted to them as stupid. Growing numbers of obese people seem stupid to those eating healthy and exercising regularly to maintain healthy weights.

A prime example of a mental ghetto is the collection of radical, terrorist Muslims sharing hate and violence and blocking out teachings from authentic Muslims about peace and love.

You surely can think of classes of people who seem stupid, because of a particular belief or viewpoint rather than across-the-board limited intelligence. With conversations that have nothing to do with their position (or maybe several), you would likely think of them as reasonably intelligent and smart, not stupid. In other words, stupidity is often topic or issue specific.

Here are two examples of what I call psychological stupidity with their powerful implications for understanding why the nation is seen on the wrong track by so many Americans who cannot unite behind solutions.

There is no mystery why the top 20 percent of the population in terms of wealth votes for Republicans, but they are not enough to win elections. What makes far less sense is why many more middle class Americans vote for Republicans. They seem stupid in voting against their own economic interests because Republicans pursue policies that preferentially reward the richest Americans. This behavior can only be explained by the success of Republican propaganda (mainly trickle down prosperity), lies and deceptions that instill a set of biases and beliefs that enable Republicans to win elections. A prime example is obtaining broad support for keeping taxes on really rich people low.

On the other side, are millions of people who vote for Democrats because they have been sold rhetoric about reforming the government system, as if Democrats are not also in the pockets of a number of special interests that will not accept truly needed deep reforms. Why have we not seen President Obama pursue punishment of many people and companies in the banking, mortgage and financial sectors that caused the economic meltdown? He had received huge campaign contributions from them and then surrounded himself with cabinet officials and advisors from them. Otherwise intelligent people vote for Democrats because of their psychological stupidity based on false promises of change and reform that they have succumbed to.

Psychological stupidity has become a kind of cultural epidemic that no one is addressing, so it just gets worse. It invites manipulation and the continuing corrosion and corruption of government. The rich and powerful know how to take advantage of this stupidity, obtaining government policies and programs they want, selling products and services that consumers do not really benefit from, and grabbing more of the nation’s wealth.

Those afflicted with psychological stupidity are also likely to exhibit moral superiority, making it even more difficult to have intelligent and productive conversations with them. Such arrogance strengthens their defenses against facts and information that conflicts with their cherished views. The answer: Associate with others having exactly the same views and only get information from like-minded media sources, creating mental ghettos (such as the Tea Party and Fox News) that others can take political or commercial advantage of (Republicans and companies selling gold).

Self-deception is the widespread legal narcotic lubricating the slide of American society into the toilet that other once great nations ended up in. Maybe this old Arab proverb warrants respect: People who lie to others have merely hidden away the truth, but people who lie to themselves have forgotten where they put it.

Which mental ghettos do you belong to?

Contact Joel S. Hirschhorn through

Joel S. Hirschhorn is a frequent contributor to Global Research. Global Research Articles by Joel S. Hirschhorn


James Wolfe said...

Americans have a unique cognitive dissonance; in which Americans accuse others of wrongs that they themselves are doing or have done. Americans demonstrate shamelessness, brazenness, and impudence to behave immorally while simultaneously preach, lecture, and espouse morality to the world. Americans are incapable of recognizing or acknowledging their hypocrisies and double standards. This can be explained by Americans’ messianic, evangelical, and narcissistic view of themselves. Their sense of “mission”, for they the “blessed” Americans know best. For they are “the city on the hill”, a shining beacon to the rest of humanity.

Anonymous said...

"Exceptionalism" is another term they like to use about themselves, James. Also, God's Elect (otherwise how come they became the sole superpower?) which makes them such a good match for the other People Elect. In fact, one of those, is Elect on two counts, like holding two Ph.D's in two different subjects from two diferent universities. Wow!

As for "mental ghettoes", it's a beguiling thought, but it doesn't really explain the abysmal depths of US stupidity. The wealth (soon no longer) is skin-deep, below that it's hollow beyond words. Ignorance combined with atrophied thought processes, the whole sprinkled over with generous dollops of brainwashing.

And so that no one should think I'm playing favourites, what I say above applies just as much to the rest of west.

Anonymous said...

China passenger train hits 300 mph, breaks record
Buzz up!164 votes Share
EmailPrint.. AP – In this photo released by China's Xinhua news agency, a China Railway High-Speed (CRH) train enters Bengbu … 3.12.10

BEIJING – A Chinese passenger train hit a record speed of 302 miles per hour (486 kilometers per hour) Friday during a test run of a yet-to-be opened link between Beijing and Shanghai, state media said.

The Xinhua News Agency said it was the fastest speed recorded by an unmodified conventional commercial train. Other types of trains in other countries have traveled faster.

A specially modified French TGV train reached 357.2 mph (574.8 kph) during a 2007 test, while a Japanese magnetically levitated train sped to 361 mph (581 kph) in 2003.

State television footage showed the sleek white train whipping past green farm fields in eastern China. It reached the top speed on a segment of the 824-mile (1,318-kilometer) -long line between Zaozhuang city in Shandong province and Bengbu city in Anhui province, Xinhua said.

Anonymous said...

The above story has been posted twice here. The first time it seems to have vanished. The reason for the posting is simply to illustrate once again the "ghetto mentality" discussed in the initial opening article.

Anonymous said...

Gone again, my, my, my? What to make of it? What's it with the Carmel story that makes it persona non grata here? The source? Well, blogger, though I am, I'll adopt the soldier's creed for once: Mine not to question why, mine but to do ... etc.

I have a few reservations about Hirshhorn's article, but I'll mention just my main problem with it. I quote:

"A prime example of a mental ghetto is the collection of radical, terrorist Muslims sharing hate and violence and blocking out teachings from authentic Muslims about peace and love."

Now I'm not questioning the basic stupidity of Muslims. For all I know they are that. What I question is the division between "radical, terrorist" and authentic Muslims preaching love and peace. Now before 9/11, no such two groups existed. All created out of thin air.

Anonymous said...

Dollar tumbles after disappointing jobs report


The dollar tumbled broadly Friday after a November jobs report showed a higher rate of unemployment in the U.S., a sign that the economic recovery is still struggling.

"Economic recovery"?!? There is no "economic recovery"!!!!

Anonymous said...

Massive Monetization: The Failure of the International Financial System - 4.12.10

The Fed is creating money and credit at an annual clip of $1.8 trillion and is going to continue to do so. On top of that they have set interest rates at zero percent and they still cannot create a recovery. Worse they know what they are doing is not going to work. As a result inflation to 6 to 7 percent not the 1.2% government would lead us to believe. When government admits that inflation in the future is 5-1/2%, we can assure you it will really be over 14%. Overall interest rates are negative and being in dollar denominated assets is a losing experience unless you own gold and silver bullion, coins and shares. The only thing that has allowed the dollar to retain value on the USDX is that Europe’s banking system is in a state of collapse. Still, all currencies are falling versus gold.

Anonymous said...

I'm sticking with the original lesson plan; 'Fight' tyranny at all cost. The new plan; 'submit' to tyranny just does not qualify in a Free mans mind.
Gun control was inexcusable. Sunday shopping was inexcusable. Fireworks regulations inexcusable. Seat belt laws inexcusable. Offshoring inexcusable. Welfare cuts inexcusable. All was under control until the great lawyerly meddling and trans border traitor worshipping festival that began with murdering JFK and spawned the likes of Pierre Trudeau and his bogus 'charter'. Lady Liberty died somewhere in between '63 and '73 exact date unknown. Unacceptable it has reached the point of entropic rot.

Anonymous said...

02:11 - Brave words! And now what exactly are you and your fellow men going to do about it?

And it's all very well talking about seat belts and the like, how about some mention of the two million plis already killed in their wars by the brave people of US and the rest of the west? Shouldn't that deserve a mention at least in the sins and crimes of US?

If I live to be a hundred, I'll never understand the way US citizens always find ways to exalt themselves and debase all others. Was the concept of intellectual honesty unknown in your halls of learning?

Anonymous said...

War-mad US wobbling on its pins - 5.12.10

- Millions Bracing for Cutoff of Unemployment Checks: More than two million jobless Americans are entering the holiday season seized with varying levels of foreboding, worry or even panic over what lies ahead as they cope with the expected cutoff of their unemployment benefits.

- Fed wants to strip a key protection for homeowners: As Americans continue to lose their homes in record numbers, the Federal Reserve is considering making it much harder for homeowners to stop foreclosures and escape predatory home loans with onerous terms.

- Want JP Morgan to crash? Buy silver: The campaign to buy silver and force JP Morgan into bankruptcy could work, because of the liabilities accrued by its short-selling.

Anonymous said...

US Preparing for Latest War:

- North Korea As Pretext: U.S. Builds Asian Military Alliance Against China And Russia

Washington is proceeding at a breakneck – an alarming – pace with plans to politically and militarily polarize East Asia, using the crisis on the Korean Peninsula to do so. Attempts by China and Russia to defuse the conflict and resume negotiations aimed at its peaceful resolution are being spurned by headstrong and reckless U.S. government and military officials.

Russia and China share borders with North Korea. The U.S. is a continent away. A new conflagration on the peninsula would directly affect the first two nations. America can exploit a renewal of hostilities to reinstall itself in the Asia-Pacific region and use proxies – Japan as much as South Korea – to accomplish that objective.

- Spiralling out of Control: The Risk of a New Korean War

By the end of December, South Korea plans to hold another round of artillery drills on islands lying in disputed waters, including, dismayingly enough, Yeonpyeong Island. Nothing could be calculated to be more provoking under the circumstances. In preparation for the response to the drills that are expected from North Korea, island defenses are being beefed up. South Korea has added multiple rocket launchers, howitzers, missile systems and advanced precision-guided artillery to the Yeonpyeong arsenal.

Anonymous said...

Short comment on above:

This is what poiuytr has warned us of time and again. The beginning of WWIII, Part Two, the nuclear part. After the Muslim Wars, the real wars against China and Russia. How the present leaders of the Freeworld are going to deflect this menace, is unclear at the moment. The final outcome of any such confrontation, however, is written in stone. One hardly needs to spell it out, does one?

Anonymous said...

854 I've posted 10,000 pieces on the murder of Saddaam and his beautiful Iraq. The mockable farce that is the rape of Afghanistan. The ridiculous war on drugs and the poor. A few words on ucovering the roots, please. ...Formation of the Fed, JFK, today. All the dead millions are a given here. We know fully well who the villains are. Can only get so much into a single post with my pain shrivelled brain.

Anonymous said...

I sincerely apologise, 954, if I've been unfair to you or anyone else. It would be going wholly against the intellectual honesty principle I myself brought up above and make me an out and out candidate for the mental ghettos outlined in the opening piece.

Anyone who can talk of the murder of Saddam and his beautiful Iraq or the mockable farce that is the rape of Afghanistan can be no less than a friend of mine. Go in peace friend, go in peace. If nothing else, your pain at least is shared.

Anonymous said...

@ Rising Horus

What happened to Japan's Gold

The Empire of Japan accumulated much gold prior to surrender of Japan in 1945 since it dominated much of the Asian continent. What happened to gold taken from China and Asia by Japan has not been explained to the public . I do not think it went to Fort Knox or was given officially to US Congress. In war the costs are public but profits are private. I might guess the spoils of war were "privatized" and placed in private but politically connected hands. These politically connected hands likely were flooded with gold stolen from China and Asia . The central banks accumulated gold not silver. If I were China, I would accumulate silver, the poor man's precious metal which has not been concentrated in hands of the old guard capitalist connections of post World War Two. If gold escalates higher, China may buy back the gold take from them by Japan at inflated prices. What a shame.
Better yet China should investigate what became of the gold stolen from China by Japan and demand its return. I suspect it is in the hands of private owners of the world's central banks.
Interesting speculation of what happened to Japan's gold.

Anonymous said...

Econ News - Online Telegraph - 6.12.10

- IMF urges Europe to increase rescue fund

More money, bond purchases needed to insure against a fresh crisis.

- Benanke: QE3 is possible

US Federal Reserve chairman doesn't rule out more quantitative easing.

- Allied Irish bondholders set to sue Irish state

Investors' action could imperil government attempts to raise funds.

Anonymous said...


A highly placed source within the White House and CIA confirmed, in an interview, that the invasion of Iran was scheduled for 2006 but planned in 1999.

(That the invasion has been held off for these 4 years is a credit to the bloggers which hold the propaganda machine at bay!) - WRH

If Riviero sees this right, then another small victory can be chalked up to bloggers the world over. We are the biggest volunteer group at work naywhere. An occasional victory does none of us any harm.

Anonymous said...


It is called "Golden Lily" or "General Yamashita's gold." The legend says that, before the WW2 ends, Japanese army buried a huge amount of gold in Luzon, the Philippines. The gold was stolen from (i) South East Asia, or (ii) China, depending on the versions. After the WW2, the US may or may not have found it, by torturing Yamashita's aide-de-camp.

In English speaking world, the best-known source is probably the following book by the Seagraves,

Gold Warriors: America's Secret Recovery of Yamashita's Gold,
Stirling & Peggy Seagrave;

Although it is widely belived to be a made-up story, there are still so many treasure hunters.
For instance, Wikipedia Japan claims "it is just a myth," and "In 2007, the government of the
Philippines made a legislation which restricts/prohibits treasure-hunting."

This story is widely spread in Japan, too.
For example, listen to this fancy guy living in Tokyo. (By the way, I have met him several times before he went crazy.Hahaha.)

FULFORD: More About the Gold in the Philippines and Financial World War 3


My opinion? I think it's just a hoax.
Remember that a lot of Filipinos tried to find it with a metal detector.
Today's metal detectors are not very bad, I suppose.
Hence, it is unthinkable such a large amount of metal would go unnoticed, if it really existed.

Of course, it is impossible to prove it does not exist.
So, I might be wrong. In that case, I would apologize and eat McDonalds' hamburger everyday.



Anonymous said...

Thanks, RH. Lovely story. Thought it might just be that. Had it really existed, the Chinese might have been after it, too, knowing them. Shall have a look at the links you suggested.

And now for Fulford, has he really gone off his head now? He used to be pretty impressive at one time, but then world politics does do funny things to one. More's the pity.

Take care. Abd best to stay away from those hamburgers. It's inviting an early death, seems to me. BTW: Any views on the Korea situation? Why is Japan not staying on the sidelines after all its foul experiences in the past?

Anonymous said...

On the subject of China, here's the latest hype:

China's credit bubble on borrowed time as inflation bites - A. E.-P. (5.12.10)

The Royal Bank of Scotland has advised clients to take out protection against the risk of a sovereign default by China as one of its top trade trades for 2011. This is a new twist.

Officially, inflation was 4.4pc in October but not many in China believes it is that low.
It warns that the Communist Party will have to puncture the credit bubble before inflation reaches levels that threaten social stability. This in turn may open a can of worms.

"Many see China’s monetary tightening as a pre-emptive tap on the brakes, a warning shot across the proverbial economic bows. We see it as a potentially more malevolent reactive day of reckoning," said Tim Ash, the bank’s emerging markets chief.

Officially, inflation was 4.4pc in October, and may reach 5pc in November, but it is to hard find anybody in China who believes it is that low. Vegetables have risen 20pc in a month.

Anonymous said...


Royal Bank of Scotland -- there's a name that doesn't exactly conjure up feelings of confidence for you. What they're trying to do is drum up some business for Credit Default insurance for a situation where the credit default is rather low (compared to - well, you name it). They must think we're congenitally stupid or something.

China has 1054 tonnes of gold plus $2.6trillion in foreign currency and bonds in reserve.
We should have a bubble of those proportions.

Anonymous said...

Palestinian State - 6.12.10

Argentine and Uruguay have joined Brazil in duly recognising the State of Palestine.

Anonymous said...

Gen. Petraeus: Afghan victory not a ‘sure thing’

The commanding general of the war in Afghanistan says US victory in the region may not be a "sure thing" after all.

"I don't think there are any sure things in this kind of endeavor," Gen. David Petraeus told ABC's George Stephanopoulos in an interview published Monday morning. "And I wouldn't be honest with you and with the viewers if I didn't convey that."

(One has to wonder if General Petraeus isn't setting the American public up for a "Saigon Moment" in Kabul in not too distant future, even though it appears that the US and NATO have agreed to stay in Afghanistan permanently.)

Anonymous said...

A thriving US reports:

Mounting State Debts Stoke Fears of Looming Crisis: Arizona recently stopped paying for certain organ transplants for people in its Medicaid program. States are releasing prisoners early, more to cut expenses than to reward good behavior. And in Newark, the city laid off 13 percent of its police officers last week.

Anonymous said...

From American Revolutionary To American Apathy

What happened Americans? Where is your fighting spirit? Where is your passion? Where is your pride? Your sense of dignity? Your self-worth? Is there anything that you really care about anymore?

Your personal privacy is gone. Your standard of living has plummeted. You can’t afford to live a basic middle-class life, even though you have two working parents. Your police force abuses its power; your politicians are corrupt and incompetent; you’re so far in debt that your American Dream is to make next month's payments, yet you trudge along grinding out a living like there’s something honorable about it

(From one Usan to another. See how nicely the wars are left out of it. Only self and money, money and self ever play a role. But what would one expect from a country which considers the army a "social service"?)

Anonymous said...

Bank Run Times Two:

- Cantona's call for run on the banks causes
consternation - 7.12.10

FRENCH ministers and bankers have issued warnings that an appeal by Eric Cantona, the former Manchester United footballer, for people to withdraw all their money from banks could propel France into economic chaos.

(It is already in chaos, because a private central bank issuing the public currency at interest is a pyramid scheme that eventually must collapse. The chaos we see is not the fault of the people, who have an inherent right to withdraw their money from the banks any time they wish. The chaos is the fault of the bankers who profit from the pyramid, then when it collapses, demand the people pay for the bankers' failure.) WRH

- BoI phone, online and ATM services disrupted by technical fault - 7.12.10

Bank of Ireland customers are being affected by a technical fault, which is disrupting access to the bank's telephone and online services.

There is also a restricted cash service at the bank's ATMs.

ATM machines are either working or not working due to technical issues. If they are limiting cash withdrawals it is because they are terrified that Eric Cantona's call for a "Bank Out" protest will reach Ireland. So we get a huge double-shot of 100% Irish Banker-Blarney to explain why the Irish People are not allowed to get their own money back from the bank.) WRH

Anonymous said...

This article is stupid and only reiterates American propaganda beneath its pseudo-dissent.

One example:

"A prime example of a mental ghetto is the collection of radical, terrorist Muslims sharing hate and violence and blocking out teachings from authentic Muslims about peace and love."

This is a standard American propaganda meme.

"Bad" Muslims are those who resist American tyranny--as opposed to "Good" Muslims who passively accept American tyranny and their teachings.

And Americans are not ignorant, misguided, or whatever the article suggests. They are simply a nation of sociopaths from Main Street USA to Wall Street.

Americans are a predator nation that give a damn about themselves, their criminal Capitalist system and way of life, and ulimately their US Evil Empire.

Destroy them all.

This includes the minions of American phony opposition mouthpieces who are desperate to save the United Snakes itself.

Anonymous said...


It should be mentioned that Americans are of course the cultural spawn of the most rapacious and cunning people ever to walk this planet, a people that never fail to demonize other nations and arrogantly have appointed themselves the defenders of liberty and freedom throughout the world.

I am speaking about the WASPS, or WHITE ANGLO-SAXON PREDATORS.

Here is but one book chronciling their crimes:

Anonymous said...

Eurozone members left to fend off markets alone

European nations in crisis over their massive debts have been left to sort out their woes alone after Germany opposed any increase to the eurozone bail-out fund.

IMF chief Dominique Strauss-Kahn and ECB president Jean-Claude Trichet talk prior to the
Ministers said individual countries were taking the necessary actions, with Ireland outlining a €6bn (£5bn) austerity package for 2011 and Portugal expected to follow suit despite the recent general strike over planned reforms.

Instead, European Union finance ministers confirmed that a second, more stringent round of stress tests on the banks would be carried out in February and that the details of a permanent crisis resolution mechanism for troubled euro members would be outlined next week.

Weaker nations had been pushing for the €440bn euro area rescue package to be increased to calm tremulous bond markets. Facing resistance from Germany, the strongest nation in the single currency bloc, the plans were dropped. European Council President Herman Van Rompuy said: "Up to now there is no need to increase the means available for the facility. If needed, we will consider, but there is no question today."

Anonymous said...

I find the remarks above at 6:57 and 7:10 extremely pertinent and I'm grateful to whoever posted them.

I have one question, though. If they absolutely describe the day-to-day US reality, I wonder whether they can't be extended to the rest of the west as well. Aftrer all, they are all predators, all selfish, all capitalist, all eaten up by their superiority complex, in a word "evil", though it's a word I hate to use lightly.

Anonymous said...

FINANCE - Telegraph Online - 8.12.10

- Global bond rout deepens on US fiscal worries
Rise in yields of US Treasuries and bonds may harm benefits of stimulus. US inflation 'a sham'

- Euro woes hit Germany
German bonds yields rise as EU debt crisis divisions unnerve markets.

- Ireland faces Iceland temptation UK must follow Obama
Positives of extending tax cuts broadly outweigh the evident risks.

Anonymous said...

re: 09:16

Yes, the EuroNazis nations like France, Germany, Spain, Italy, etc. are just as venal and sadistic as the WASPs.

However, it's the Anglo-Saxon Predators who dominate the so-called West and the world.

Indeed, it's the inbred Britzies that have spawned so many degenerate nations ranging from Australia and New Zealand in one part of the globe to Canada and of course the United Snakes on the complete other side of the world.

Anonymous said...

07:23 - Perfect, nothing of what you say can be faulted. And your division of the West into WASPs-led and Anglo-Saxon Predators led, also makes perfect sense, though some overlapping there is bound to be between the two parts of the West construct.

If their heyday is now over, it will be a triumph of justice over the arbitrary, of humanity in its masses and their modest aspirations over a bunch of zombie elite and their extravagant vagaries.

Anonymous said...

Global bond rout deepens on US fiscal worries
- 9.12.10

Rise in yields of US Treasuries and bonds may harm benefits of stimulus.

Anonymous said...

Students back to fighting police - 9.12.10

- In Italy, students fought police in front of La Scala in Milan.

- England offered its own battles between students and the forces of law and order (HA!.

Wonder whether the French will follow Eric Cantona and start their bank run tomorrow.

Anonymous said...

EU Superstate Soon No More?

The EU is disintegrating, and if Irish voters reject the budget in the December 7 elections or if Spain starts to teeter, the dominoes could start tumbling and bring down the entire EU project. That's why Portugal, Spain and the rest are counting on the ECB to lend a hand despite Berlin's relentless fingerwagging. Here's an excerpt from the Telegraph which gives a good summary of what's going on:

"Spain's former leader Felipe Gonzalez warned that unless the European Central Bank steps into the market with mass bond purchases, the EMU system will lurch from one emergency to the next until it blows up....

Arturo de Frias, from Evolution Securities, said the eurozone will have to move rapidly to some sort of fiscal union to prevent an EMU-break up and massive losses on €1.2 trillion of debt lent by northern banks to the southern states....

The market will keep selling until the yields of Spanish and Italian bonds (and perhaps Belgian and French also) reach sufficiently horrendous levels. ("Mounting calls for 'nuclear response' to save monetary union", Telegraph)

The Irish bailout solved nothing. Brushfires are breaking out everywhere. Bondholders have figured out that Ireland and Portugal are broke and their debt will have to be restructured. Its just a matter of time before the haircuts. That's why bond buyers have gone into hibernation. It's not really a panic; it just shows that investors know how to read the financial tea leaves and make rational choices. Here's more analysis from Michael Pettis who points out the inherent contradictions of the one-size-fits-all currency (euro) and the urgency of settling on a remedy:

"If Europe is going to “resolve” the current crisis in an orderly way, it is going to have to move very quickly – not just for the obvious financial reasons, but for much narrower political reasons. I am pretty sure that the evolution of European politics over the next few years will make an orderly solution progressively more difficult.

Anonymous said...

10 December 2010 - EU acting against Israel at long last?

Twenty-six European grandees have urged the EU to adopt a tougher stance towards Israel including taking "concrete measures" and exacting "consequences" over continued settlement building on occupied land, which they say is illegal under international law.

The former EU leaders said that in the face of "the ongoing deterioration of the situation on the ground", the EU, in co-operation with other international bodies, should put forward a "concrete and comprehensive proposal for the resolution of this conflict". A deadline of April 2011 for progress in peace talks between Israel and the Palestinians should be set, after which the international community should intervene.

"Time to secure a sustainable peace is fast running out," said the group, which includes former EU commissioner Chris Patten, former EU foreign policy chief Javier Solana, former Irish president Mary Robinson and another nine former heads of state. It sent a letter to EU president Herman van Rompuy, foreign affairs chief Catherine Ashton and all EU heads of government before a meeting of foreign ministers on Monday, saying: "It is clear that without a rapid and dramatic move … a two-state solution, which forms the one and only available option for a peaceful resolution of this conflict, will be increasingly difficult to attain."

The letter says the group had received "signals" from US officials that the best way to help American efforts to reach a peace deal was to put a "price tag" on policies that contradict those advocated by Barack Obama.

Anonymous said...

Finance - Telegraph Online - 11.12.10

- 'A criminal soulmate'

Austria's Bank Medici hit with $19.6bn lawsuit over Bernard Madoff.

- China's property bubble

85pc of Chinese living in cities can no longer afford to buy a home.

- Ireland touts its banks

Crisis-hit country looks to the Middle East for potential investors.

(2 comments to above:

Why on earth should people in China wish to buy property? Is it the West all over? Really, a self-adoring people they are, nothing more.

What's wrong with Ireland? Do they really think the Middle East will have any money to spare once the prolapse really sinks its teeth? A fool's paradise, that's all the West has turned out to be.)

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