I hope everyone enjoyed their economic recovery. It’s all you are going to get. What it’s made from is not sugar and spice or puppy dog tails but anxious lies you have been selling to each other and yourselves. It is hardly possible to see a ray of light between the promoters of rigorously organized denial that emanates from the world’s governments, its markets, its finance enterprises, its pundits all save for a few lonely peak oil ‘theorists’ and environmentalists.

A handful that are not too far removed from wagging fingers and barking, “I told you so!”

Before they too … follow the others over the brink, as it were, into the abyss …

The lies of the Establishment reflected from the aggregate cupidity of billions immersed in false hopes. “Mundus Vult dicipi, ergo dicipiatur” – the world wishes to be deceived, let it be deceived. The market- making frauds hung around the neck of Goldman- Sachs only differ in degree from those that ‘We the People’ recycle among ourselves.

Who does not wish to live outside our means? Self deception is part of the process. After awhile fantasy becomes habitual, it cannot be turned off.

I lie to myself, therefore I am!

The world is a lot poorer than it was in 2008. What is wealth, anyway? Just another accounting trick, right? Certainly not husbanded capital or environmentally sustainable investments that provide decent returns under input- constrained circumstances. Environmental, ecological, sustainable … the words themselves are poisoned with more Enron- style accounting. There is no safe place to hide! The petroleum market makes its last gasp of oil over $85 a barrel. The recovery based on lies is murdered by its own success, its ‘efficiency’ in misusing and obliterating inputs for almost free. From here on in it’s downhill all the way.

“All the way to where?” you ask.

You really don’t want to know.

Think about it: all the countries, all the governments, all the establishment economists and most of the media are without exception peddling the same ‘hope’ and ‘growth’ snake oil. Without exception! How can an economic recovery of any sort be constructed of such material? Where is the country/politician/economist who is telling the truth?

To digest this sort of nonsense it help to also believe in unicorns. Watching the ministers of Europe, the bankers, administrators, central bankers and the rest stumbling helplessly while their pet currency union smashes itself to pieces suggests well- developed abilities to distance themselves from reality. “Let them eat cake!” How are these folks going to deal with a real crisis?

It never ends: the economic indicator to watch is the number of new articles by Ambrose Evans- Pritchard. More is always bad news, more European folly:

“We have gone past the point of no return,” said Jacques Cailloux, chief Europe economist at the Royal Bank of Scotland.“There is a complete loss of confidence. The bond markets are in disintegration and it is getting worse every day.

“The ECB has been side-lined in the Greek crisis so far but do you allow a bond crash in your region if you are the lender-of-last resort? They may have to act as contagion spreads to larger countries such as Italy. We started to see the first glimpse of that today.”

Mr Cailloux said the ECB should resort to its “nuclear option” of intervening directly in the markets to purchase government bonds.

This is prohibited in normal times under the EU Treaties but the bank can buy a wide range of assets under its “structural operations” mandate in times of systemic crisis, theoretically in unlimited quantities.

Mr Cailloux added: “This feels like the banking crisis in late 2008 post-Lehman, though it has not yet spread to other asset classes. The ECB will have to act it if does.”

Yields on 10-year Portuguese bonds spiked 48 basis points to 5.67pc, replicating the pattern seen as the Greek crisis started.

It is hard to say what the ECB is waiting for. The Eurobureaucracy dawdles while the bond and currency panic takes hold and never lets go. One can almost feel the fingers tightening around Europe’s throat. It’s of a piece; compare to Bear Stearns or Lehman Brothers … or Creditanstalt and the gold crisis in 1931.

Look through the other end of the telescope. The lying machine suggests a credit breakdown that makes the dollar more desireable. Rather an onrushing flight out of euros into dollars causing speculators to exit Euro- bonds starting at the periphery. Flight out of euros preceeds the Greek bond debacle. Think about it: if dollars are preferred now, why would anyone want euros at some small discount two or three or ten years from now? What the increase in borrowing rates suggests is a form of euro backwardisation. The market believes the currency will be worth less in the future and successfully arbitrage between the euro and the dollar using Euro- bonds as levers. This was the strategy of arbitrageurs who speculated toward gold away from sterling by means of dollars in 1931. The crude the world needs now is high priced and the markets now speculates towards it away from euros. Toward the dollar that is fast becoming the proxy for necessary crude.

The eurobond buyers are on strike, demanding more coupon to hold a position in a currency that has deteriorating appeal. From the other end of the telescope the euro is a lost cause. Particularly when that lost cause is intertwined with institutional denial of resource depletion and currency re- alignment. Absent the energy component, the Euro- establishment becomes cardboard cutouts.

Best for the European countries to begin to plan a parallel currency regime that is resource centered with a fiscal policy that scraps any attempt to substitute cheap lending for energy as a means to keep the endless consumption fantasies alive. No currency or fiscal regime has any chance of success unless it incorporates in parallel some form of significant energy conservation.

It is that or absolute ruin, there is no other choice.