Over at PW, JHoward gleefully recapitulates a Helen Brown article in Global Research about a Kansas court case that has far-reaching potential to severely damage the housing finance market, and thus the whole financial and economic system of the United States. He says

Well then, it seems the house of monetary cards is everywhere.

Got news for you, JHoward: if houses of cards always fall down, there is no supportable economic system on the planet.

All economic systems are “houses of cards”.

There’s a story that pops up occasionally in the Far East to the effect that three Chinese merchants were lost in a shipwreck and found themselves on a deserted island. When they were rescued twenty years later, all three were immensely wealthy from trading hats with one another.

Silly? Impossible? Now go look at this image. That’s us, folks — that blue thing out there is us, money, mortgages, and all. Here we are, shipwrecked on a deserted island in the middle of a sea with no fish in it, and that no ship has ever got out of sight of, not even the robots we send instead of going ourselves.

The Chinese in the story had, in addition to their hats, the palm trees and other flora and fauna of the “deserted island”. We’ve got much more than a few palm trees, plus the ability to dig things up and call them “valuable”, and as a result we have lots of things other than hats to trade. But we’re still all stuck on a deserted island in space, trading hats with one another. So where does prosperity come from? How do we get rich?

By building houses of cards. Gold is no less (and no more) a “card” to build houses of than anything else — it’s dirt, stuff dug up out of the ground that we agree is valuable. It’s scarcer than iron, and prettier; you can make jewelry out of it, and coils, and pound out gold leaf to cover the domes of churches and Rathausen, but in the end it’s just something that was lying around on the deserted island when we turned up.

What holds the houses of cards together is belief — belief that such-and-such a thing is valuable because we want it, or because someone else wants it. That’s as true of financial instruments as it is of food, and “money” is just a way for us to reassure ourselves of something’s value. Close behind belief comes trust, the belief that other people will agree on value and agree to exchange it. It’s all cards, with nothing else holding it together.

The referenced case has to do with a technicality of the Law, revolving around whether or not a person who has been granted a financial interest has standing as regards the ownership of the property in question. It may be correct; it may not. It may be upheld, or not. Even the uncertainty about whether or not it will be a lasting decision tends to joggle the house of cards, and if it falls over it’ll take a lot more than just its own layer with it — that’s how houses of cards work: they have to be self-supporting, because they have nothing else to hold them up, and every economic system has the same basic weakness.

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