Dutch Boy Helps Confront Structural Problem

MAD-Little-Dutch-Boy

The little Dutch boy had temporarily stopped a leak in the dam by putting his finger in the hole. Alerted to the structural problem, stonemasons came later and repaired the dam. The structural problem of Holland’s dam is analogous to the structural problem of overwhelming debt. “The problems are structural,” said Axel Merk. “There’s only so much a central bank can do.” (Background: Can Dutch Boy Save Holland?, Ersjdamoo’s Blog, November 1, 2014.)

A different version of the tale of the little Dutch boy who saved Holland is told by “Dr. Boli.” [1] In this version, the Burghers award a Certificate of Good Citizenship to the lad and leave him there with his finger in the dam.

Then a second leak springs up in the dam. A second little Dutch boy is found and he is placed at the new leak with his finger plugging it up.

“It was, however, only a few days later that two more leaks appeared. This time it was much harder to persuade boys to stick their fingers in the holes.”

Within a week, six more leaks appeared. By this time no volunteers could be found amongst the population of little Dutch boys. So the Burgers met in special session. “What shall we do?” the Burgomaster asked the Council. “We may have to repair the dam itself this time.”

But the Council was too chickensh** for such a major undertaking. Instead, the Council visited the school and dragged a number of young boys by the ears to the dam, where they were forced to plug the leaks with their fingers.

But the dam, which was old and poorly maintained, continued to spring new leaks here and there, so that it was all the Burghers could do to find more boys to plug up the leaks with their fingers. At last the Burghers compelled every little boy in the Low Countries to stick his finger in a hole. All economic activity came to a halt, “as it is well known that young boys are the leading consumers of skates and cheese, on which the economy of Holland depended at that time.”

Of course, numerous little Dutch boys did not solve the underlying problem. Yet even then, instead of fixing the structural problem, the Council voted to remove the North Sea by digging a new seabed somewhere in Germany; and they voted themselves a number of solid gold spades, befitting their dignity, for the purpose. And if you go to part of Holland right now, and look into the field to your right as you drive westward on the Friedenstrasse, you will see a number of Dutch burghers very busy with their spades, trying to dig a new bed for the North Sea.

“You can’t print or deficit finance your way out of a depression,” said Jim Rickards on October 31, 2014. Rickards, chief global strategist at West Shore Funds and author of The New York Times bestselling book “The Death of Money”, appeared on Boom.Bust, a financial program broadcast by the Russia Today network. [2]

Deflation is the word being batted about these days by some financial commentators. “A Chinese drop in GDP will add to the deflation,” Rickards said. “There’s no good way out of this through monetary policy, because monetary policy cannot solve a structural problem. Japan, US, China and Europe all need to restructure.”

What do Rickards and others mean by a “structural problem”? The structural problem seems to be overwhelming debt, not just government debt and student debt, but an entire global economy based increasingly not on manufacturing and agriculture but on loans which must be repaid. Aristotle had written long ago that the most detestable manner of wealth-getting was “usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest. And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth this is the most unnatural.” [3]

So the “structural problem” would be the metastasizing usury creature, increasingly sucking the blood out of the real economy. And no amount of little Dutch boys is going to fix that.

A Chinese drop in GDP will add to the deflation, warned Rickards. “What about the oil prices? Where are they headed?” asked Erin Ade, host of Boom.Bust. “The world is deflating, so that tends to put downward pressure on oil prices,” Rickards replied.

“And what are the flashpoints for oil prices?” continued Erin Ade. To this Rickards replied, “Geopolitical flashpoints would be the South China Sea, the Senkaku Islands between China and Japan, Ukraine, Central Asia… and Venezuela could blow up. But we see these flashpoints. What is more worrisome are things not now on our radar screen: what could cause the whole house of cards to collapse is something we aren’t thinking about: that could be such as an unexpected bank collapse, an unexpected failure to deliver gold by an exchange or major broker… Something more like MF Global where it comes out of nowhere and catches people by surprise.”

(A series of perceived liquidity problems and large fines and penalties dogged MF Global starting in 2008, and led to its bankruptcy in 2011. [4])

First we have a default by Argentina. Next might be a Venezuelan default. “Could there be contagion?”, rhetorically asked Rickards. “Yes there could. You can see the defaults coming, but what you don’t know is, Who are the creditors? You don’t necessarily know. When AIG failed, the big loser was Goldman Sachs. Goldman Sachs was probably insolvent or close to insolvent when AIG failed. The bailout of AIG was really a bailout of their major creditor, which was Goldman Sachs. The same thing is true today: When you see Venezuela collapsing, you know who the debtor is but who are the lenders?”

“What is the next domino which is about to fall? That’s harder to know.”

——- Sources ——-
[1] The Little Dutch boy Who Saved Holland, from Dr. Boli’s Fables for Children Who Are Too Old to Believe in Fables, by H. Albertus Boli, LL.D. http://drboli.wordpress.com/2009/03/06/the-little-dutch-boy-who-saved-holland/
[2] http://www.YouTube.com/BoomBustRT
[3] Aristotle, Politics. Book I, Part X.
[4] “MF Global”, Wikipedia, November 2, 2014.

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About ersjdamoo

Editor of Conspiracy Nation, later renamed Melchizedek Communique. Close associate of the late Sherman H. Skolnick. Jack of all trades, master of none. Sagittarius, with Sagittarius rising. I'm not a bum, I'm a philosopher.
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One Response to Dutch Boy Helps Confront Structural Problem

  1. Pingback: How the Little Dutch Boy Came to America | Ersjdamoo's Blog

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