The Angry Exile, upside down correspondent.
A couple of nights ago the ABC's Foreign Correspondent program covered the legal use of cannabis for medical purposes in California and how, given the huge financial hole the state is in, this could be expanded to provide a useful cash crop if the state grasped the nettle (or weed, as it were) and simply repealed the prohibition on adults smoking it. A few years ago I saw an episode of Penn & Teller: Bullshit! that also dealt with drug prohibition, which if I recall claimed that there were only a handful of people in the whole US who were allowed to smoke cannabis for medical reasons. Judging by Tuesday night's Foreign Correspondent things have moved on a bit since then. The program, appropriately titled 'High Finance', is worth a look and is on the ABC's iViewer here, though I have no idea if that thing will work for anyone outside Australia or if, like Auntie Beeb's iPlayer, will show you the electronic door. If it doesn't work or you don't want to watch a half hour TV program the next best thing is the transcript, which is available here.
Interesting stuff.
The Angry Exile, ʇuǝpuodsǝɹɹoɔ uʍop ǝpısdn. - In our sensible moments we would acknowledge that this government or any government for that matter are not going to solve our problems for us. Let’s face facts, no government can or should. Governments can’t raise our children and we wouldn’t want them to. Small businesses must sink or swim on their own trade. If they can’t get by without another government hand out, they shouldn’t be in business at all. more
The rescue team, which consists of the stronger countries and the IMF, are damned if they do and damned if they don't. Instead of banks being insolvent with runs occurring on them as in the 1930s and 2008, we have whole countries being bankrupt, but their paper is held by banks in France and elsewhere, so there is a contagion thing to worry about. If the EU lets default happen, there is a run against all the bonds of all the weaker countries. Their yields rise, and they have to default too, and then that weakens a host of banks and others who hold the paper, and then they demand to be bailed out. If instead they rescue Greece and others, then the rescuing governments have to issue more debt, or else the IMF does too, or else the ECB gets into the act too, and this weakens the stronger countries and drives down the euro. So, either way, there are problems. It appears that the rescue option has been invoked, although tardily and reluctantly. This means that the governments are rescuing the bondholding banks and whoever else holds the Greek paper. That's the bailout here. This is preferable to the rescuers as compared with an outright default which then starts a contagion via the bond yields rising sharply which induces country bankruptcies and defaults.
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