Trust. The currently scarcest resource on the planet. Suddenly the game "You show me yours, I show you mine" has been called. The ante is stratospherically upped. The banks are turning against each other, distrusting those they know have screwed up just like they themselves have done. The question is: who has real money?
In Germany, the greatest gambler, the Deutsche Bank is ogling the naffest financial institute of the country, the Postbank. This is where students, pensioners and other impoverished people put their spare 75 Euros in that old-fashioned quaint way that the DB has never even considered: they have been saving. Now the Postbank is one of the few money institutes that has any real cash.
The convulsions on the international finance markets are no longer just a glitch where clever people with a long-term view can stock up on panic sold shares with solid fundamentals. It is a crisis of the whole system.
Ever since the origins of banking when the Lombards introduced cashless money transfers in the 15th century the financial system that are the backdrop of capitalism have been built on trust. No longer did people have to send out messengers with little sacks full of gold, but with a signed documents that could be exchanged for money if everyone in post-medieval Europe played ball and trusted that the piece of paper was backed up by the real goods.
And mostly the system worked. Theoretically every dollar, Euro and Pound Sterling is backed by some sort of reserve. My financial spies however tell me that the U.S. for example confounding her current problems, has been printing money for quite a while without backing it up with reserves.
This conjures up Black Friday and historic films showing people buying a loaf of bread with a laundry basket full of money during hyperinflation in Germany. To stop the catastrophic collapse of trust Germany had to put the entire country into hock. The final result was Hitler, exploiting a demoralised nation's disillusion with democracy.
This is then a truly scary possible scenario: not only might tackling Global Warming and other important tasks fall by the wayside, but democracy itself.
In human relationships a broken trust has to be healed through remorse and forgiveness, and eventually through rebuilding mutual trust. The basis for this is generosity and kindness.
So now, a reluctant taxpayer is being persuaded to agree to douse the flames after the bad boys have played with matches and set the house on fire. In the meantime AIG managers have been spending hundreds of thousands of dollars that they were part of the bailout scheme for the company they ruined. They went on an extraordinary junket, and showed a capitalist finger to outraged tax payers.
How long until the cry goes out: Aux barricades!