In the TV series M.A.S.H. Radar O'Reilly was the shortwave radio operator. He also had the rare gift of being able to hear things like helicopters filled with wounded soldiers and incoming artillery shells before anyone else did. One only wishes that there was a real Private First Class O'Reilly who could give us some guidance on the euro and Saudi Arabia.
Both major happenings are playing themselves out now beneath the surface, and both are momentous and filled with danger. But no one can predict which way the cards will fall right now. People with inside information may have a better grasp of the actual details than we do, but even they are stymied by the fact that it will all take place in the future.
The Economist has an excellent article on the perils of September for the European Union and the euro. It seems as if everything is coming to a head then -- posing a true make or break moment for the whole monetary structure. First, there is the issue of Greece. Needless to say, things have not gotten better in Athens lately. The PASOK government coalition may have temporarily reduced the level of rioting in the streets, but the ability to pay the tens of billions of euros in Greek debt has not improved one iota. The troika ( European Central Bank, IMF, and the European Commission) are scheduled to make their final report in September, and it's widely expected that they will call for both more austerity on the part of the Greek government in addition to the injection of many more billions of euros into the economy. Unfortunately, this is a virtual impossibility. The battered Greek euro cannot be in these two different places at once.
On top of this are the Dutch elections scheduled for September. As of this moment, the various parties appear to be competing with each other as to which one will take the hardest line against the southern countries. People are openly talking about kicking Greece out of the euro zone as if this is no big deal. But remember 2008's Bear Stearns and Lehman Brothers moments. Both were also seen as entirely controllable, and we are still reaping those painful results.
Both Spain and Italy are in the mix. Their creditworthiness as judged by the daily interest rates on their 10 year bonds have reached for new highs this week before dropping back only to the stratospheric 7% level on Friday. The problem with Spain and Italy is that they are the next dominoes after Greece. Greece's debt burden is totally manageable in comparison to potential Spanish and Italian defaults down the road. And any aid to support these countries debts fully goes far beyond any legal mechanism within the EU to support such a measure. If Greece is booted out of the market, there is a distinct danger that Italy and Spain will be placed into bond default, and the whole EU house of cards will fall down.
Last but not least, the German constitutional court will be ruling in September whether the Bundesbank can collateralize obligations from southern European countries and in what ways it could do so. As in any judicial finding there are no guarantees as to how judges will rule on any case. Social scientists have actually correlated judicial findings to what judges did or did not eat for lunch.
As far as I know, this news item has been relegated to fringe news sources, but what has been tossed about as rumor is disturbing enough. Supposedly, Prince Bandar Bin Sultan (AKA Bandar Bush) was assassinated by a bomb blast in Riyadh along with his deputy on July 21st. Since making a public appearance on July 19th, he has not been seen nor heard from, and the Saudi government has been as quiet as a tomb on any speculation or news on this subject.
The longer things go, the more the different rumors as to what happened have multiplied. The first rumor was that Syrian or Iranian intelligence had set the explosive device killing one of the most critical figures in the House of Saud. If so, such an act would demonstrate how vulnerable and tentative the entire ruling family's grip on the nation is.
Wingnut Alex Jones postulates that Bandar was killed by American intelligence because the Saudis are considering sheltering themselves under the nuclear umbrella of Pakistan and China rather than on US protection. Personally, I am 100% dismissive of US involvement in this. However, it would be logical to assume that some parts of the Saudi ruling family would be looking towards Pakistan and China as a counterbalance to Iran.
Another hypothesis is that if Bandar was killed, he was killed by someone inside the House of Saud. It's been widely rumored that dissent within the royal family has been increasing lately, although it's hard to imagine how dissent could possibly increase in such a nest of overmonied vipers. Bandar as intelligence chief is/was responsible for making war plans against Iran in the event that really bad things happen over there.
And now rumors have it that Bandar is in Switzerland, perhaps recovering from an attack on him. Regardless of whether any of these rumors is even true -- none of it is reassuring and all of it is extremely worrisome. One way or another, it would appear as if Saudi Arabia finds itself in a very delicate situation dealing with blowback from its covert involvement in Syria. Obviously, the possibility of a much larger conflict from Syria exists. And world peacekeeping efforts have not been going so well. Look at the resignation of former UN head Kofi Annan.
Perhaps the best approach is to take the Alcoholics Anonymous 12 step program and realize that there are some things that we can control, while there are other things totally out of our control. Live one day at a time. Unfortunately, our ears are picking up those annoying ultra-high frequency sound waves telling us that no damn good is approaching.