“The dove descending breaks the air
With flame of incandescent terror
Of which the tongues declare
The one discharge from sin and error.
The only hope, or else despair
Lies in the choice of pyre or pyre-
To be redeemed from fire by fire.

Who then devised the torment? Love.
Love is the unfamiliar Name
Behind the hands that wove
The intolerable shirt of flame
Which human power cannot remove.
We only live, only suspire
Consumed by either fire, or fire.”

T.S. Eliot, Four Quartets

"And he led him up to the highest place, and showed him all the kingdoms of the world and their splendours."

Matt 4:8

If you are not familiar with the classic game theory example of The Prisoner's Dilemma you may read about it here.

I see quite a few instances in the world today that seem like the types of standoffs as described in that example of two people who can broadly benefit if they come to an agreement, or both suffer if one or the other seeks a short term advantage.

The Ukraine, Syria, Israel, the Congress, the great inequality in the US economy. The examples are almost everywhere. It seems as though working for some broader benefit, and engaging in productive compromise, is utterly out of temper in this utterly selfish, hard-hearted world of ours.

For me the most interesting aspect of The Prisoner's Dilemma is watching the Western Central Banks trying to come to terms with their unsustainable positions in the monetary metals markets, vis a vis the BRICS.

Certainly no one in some better, more objective future will view an ulta-easy monetary policy combined with domestic fiscal stimulus as anything short of a bizarre form of policy error, bordering on malpractice if not sadism. The notion of giving free money to the very entities that caused the recent financial crisis, while saying nothing while the fiscal authorities do little or even punish their innocent victims, requires a monumental ability to rationalize the unthinkable for the benefit of one's career. 

Well, perhaps the economic class is just following that one divine commandment of the modern order: Thou shalt not speak ill of insiders. Even when the ruling class begins acting like the Captain in The Caine Mutiny.

China, and to a lesser extent Russia, have the Banks by the short hairs. And you know exactly what I mean by this. He who sells what isn't his'n, must make it good, or go to prison. And they don't know how and who to stick with the tab for their folly. And to take responsibility is off the table.

So the Banks and their high priests are refusing to come to terms with their counterparts on the international currency regime based on the principle that the truly powerful never concede any substantial advantage.  Besides, they have become so used to controlling the world's reserve currency that they cannot imagine any life without it.  What is an empire without power?  And bureaucrats like granny and Uncle Ben have been caught between the proverbial rock and a hard place of the political realities and the politicians' masters.

Always, it is that terrible choice, no matter how they might phrase it.  All who assume high office must decide.  Whom do you serve? 

Truth is the only recourse from their error, but that option does not make the short list of the things that our moderns' love.  Truth does not serve power, or the will to have it all. This is the credibility trap. 

And the pressure continues to build, day by day, with the reckoning's choice between fire, and fire.

Have a pleasant evening.