Never under-estimate the irrationality of markets, nor of the fecklessness of the socialist-loving lame brain media. Europe is not too big to fail. It is too bankrupted and rotted not to collapse. Another communist nirvana implodes.... but expect more rhetoric, magic shows, 'commitments', off the balance 'vehicles' and sundry other clown acts to 'convince' markets that they really truly will 'resolve' the debt crisis [with nothing in the way of social, capital, labor or economic welfare state reforms].

Foster in the NP

“To provide Greek bailout funds, recapitalize deadbeat banks and provide more “confidence” that there really is a plan, we get back to that trillion-euro figure, which is the amount to which the European Financial Stability Fun, EFSF, will notionally be hoisted. Do you feel your confidence rising at the idea that a debt crisis can be cured with more debt?

Anyway, the ethereal €1-trillion is not actually a trillion folding euros per se. It is a commitment to provide guarantees to private investors, and/or backing for an Enron-esque “special purpose vehicle” to attract private and public investors. Terms and conditions? Come back next month.

Where will these investors be found? Well, there’s that sunny little girl standing beside the pile of doo-doo. Also, EU/eurozone representatives are even now winging their way hither and yon — to Beijing, Moscow, Brasilia and Riyadh, among other exotic locations — under the pretext that there are sovereign wealth funds with proverbial “deep pockets” willing to pour good money after bad. This so that Greece can slack another day; the banks can go on making lousy loans to lousy governments; and the European dream of a socialist superstate can be kept alive.

Despite ritual diplomatic statements of solidarity from the BRICs, it’s hard to see what’s in it for them, although some seek a larger role in the IMF, that fount of moral hazard. Meanwhile, doesn’t China already have a pretty hefty investment in another dodgy currency?

The most fantastic suggested solution to the European problem — that is, the problem of governments addicted to borrowing to buy votes and fund entitlements, and of a compliant and politically dependent banking system acting as pusher — is that government just isn’t big and comprehensive enough.”

More charades, hyperbole and conferences will solve the Euro debt crisis. More debt as well should be the tonic. Or so the media and irrational markets intone. The systemic default of Euro banks and states is far greater than the condition of Magna Graecia. The state is the banking sector and banks are a part of the state. When one or the other defaults the entire edifice of Euro-Marxism will come crashing down notwithstanding the power of habit and of ignoring reality.