It was just last June that Greece was about to default on 150 billions euros of debt. Not a lot of money by today's standard, but that 150 billions euros was linked to about 2 trillion dollars in counter-party exposure throughout the European and US Banking system.
And the markets watched, with baited breath: Will they or won't they? What is going to happen? Can the European Union avert this disaster?
Yesterday the Greek parliament passed an "austerity measure" (that they will never adhere to), but is designed to assuage the European Union when they meet for another Bailout Session this weekend. The markets wait, yet again, with baited breath: WHAT WILL HAPPEN? Will they keep their austerity pledge? Will the ECB bail them out again?
This is the modern way of looking at the unfolding Greek Tragedy. It is built on the modern predilection for "Suspense." Suspense leads us to believe that a series of twists and turns will unfold, built on choices made by the central character. Flawed characters will make flawed choices, strong character make strong choices. This gives power to the illusion that Humans are in control. So again and again we watch the exact same show, with baited breath.
It betrays a fundamental misunderstanding of Tragedy.
According to the principles of Tragedy: Greece is currently in Default. The whole audience knows Greece is in default. Greece can not adopt sufficient austerity without going into terrifying depression. The whole audience knows this. The banking system can not bail themselves out of the Greek/Italian/Spanish/Portuguese problem without creating trillions in new debt which will functionally bankrupt even the healthier economies of Germany and France. And yes, the United States. Which is also already bankrupt.
By the tenets of Tragedy: The whole audience knows this
The unfolding drama that ensues is a matter of watching the actors (The Greeks debtors and the world banking system that lent them the money) struggle mightily against the inevitable conclusion: Disaster, Ruin, Death.
Why do we watch together? Catharsis. Emotional release from the horrible pressures inherent in Life on Earth. And the emotional release of understanding we're all in this together. All men are pathetic pawns in the Drama of God's Will. (Something that once upon a time Christians believed too.)
This is the principle of Dramatic Irony. The audience understands the situation in the way the actors can not. It reflects the idea that Humans are not in control. There is a Divine Order. All we can do is hope not to upset it. Our hopes will be in vain. Because man is Vain.
Man's vanity, Hubris leads him into constant struggle to assert his will over the human condition. He does not realize that the human condition is struggle: Polemos.
But at least we - the Demos - can weep together, can struggle together.
But modern man rejects this. Because we are not a Demos. We are not The People. We are now a collections of Individuals each as powerful as God, struggling not together but against each other, in a giant Zero Sum game, to Game each other, to destroy each other.
Modern man has turned even the word Polemos into a virtue. We call it Passion: a quality to be admired and emulated. The word means struggle: a condition to be suffered - at best, with dignity. We embue Super Men with Super Passion that allows them to defeat all fellow men. And we admire these Super Men. We worship them. (See goldman sachs.)
Now, if the few destroy the many, it's because they deserve to. They are superior. They are Supermen.
So what does this have to do with gold?
Well, gold is for those who see the world in terms of Greek Tragedy, rather than Hollywood drivel. Gold is for those who see Greek Drama, the European Drama, and the unfolding US drama in terms of Dramatic Irony rather than Suspense.
These are Dramas in which the conclusions are known. They can not be averted. They have been written into the script in accord with the laws of human nature. All we can do is prepare for the inevitable. And hope to derive a measure of catharsis.
Now, I know gold has been driven down a few hundred bucks lately. And if you believe is Suspense you're probably wondering what will happen. Is the bull market over?
But if you believe in Tragedy, you know the answer.
I will say - from a purely modern perspective - that Catharsis is a whole lot easier with a little gold in vault.
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