oftwominds-Charles Hugh Smith

Euphorestra Side Effect Alert

Pharmaceutical Safety alert! This site has just learned that Astra-Zastra's new drug, Euphorestra, has a terrible though long-delayed side-effect: after one year of completely blocking reality, the drug rapidly loses effectiveness, dropping the hitherto complacent, sunny customers into a sharply disconcerting world they have lost the ability to cope with: Reality.

Even more disturbing: the drug was widely used by our stock market and political elites, who are now finding Euphorestra no longer blocks out a shockingly dismal reality. We've all noticed an incredible disconnect from reality over the past year: the unceasing ascent of highly risky speculative markets, the descent of the dollar and the astonishing insistence by our elected Administration that there is light at the end of the tunnel in Iraq. (Isn't that what people report as they near death's threshold? A brightening light?

The list of insane denials of reality goes on for pages: that the subprime loan meltdown is contained, that derivatives such as CDOs lower risk for investors, etc. etc. etc. But let's take a look at the official Astra-Zastra Euphorestra ad:



Looking ahead to the near future, as the U.S. economy spirals into a recession the likes of which few of us have seen, I would suggest the following ad to the marketing mavens at Astra-Zastra:



At least the puzzling euphoria of our financial markets and tone-deaf politicos can now be explained--and there is some small comfort in knowing the bullet-proof denial of reality has a pharmaceutical cause. After all, many were beginning to question the sanity of those claiming absolute absurdities, such as "this administration supports a strong dollar."

Maybe that's why it's dropped 33% in value since late 2002? If this is "supporting a strong dollar," I'd hate to see what a weak-dollar policy looks like.

But it is troubling that Astra-Zastra found such willing volunteers for this powerful medication amongst the ranks of our financial and political elites.

Judging by the role call of those wolfing down Euphorestra by the handful (sorry, the list is restricted due to privacy concerns), it would seem our leaders actively sought some fantasy or drug-induced relief from the realities they spawned and nurtured for the past seven years.

The withdrawal is apparently as vicious as the one visited on working-class addicts of crystal meth (ice), another euphoria-inducing drug with a horrible letdown.

Reports of breakdowns and sobbing fits in the most elite corridors of power are becoming alarmingly common. It seems many of those in the top ranks of our elites--including those guiding our government and those in the shadow government of hedge funds, military contractors and the like--actually believed the poppycock their handlers fed them (along with heavy doses of Euphorestra) about the outstandingly wonderful unassailable strengths of the U.S. economy and its place in the world.

As if all this wasn't disturbing enough, it now appears that the leaderships of other nations from Denmark to China have also been soothing their angst with black-market Euphorestra.

This suggests that when the wheels have undeniably fallen off the rickety U.S. economy, the world will be ill-prepared to deal with the resulting reality. It is cold comfort to finally grasp why the Chinese leadership has continued buying stupendous quantities of depreciating dollar-denominated bonds--they're in a Euphorestra-induced happy-happy daze.

Skeptical of Euphorestra's early effectiveness? Take at look at the chart of Amazon.com, once and again an Internet stock darling with outrageously high price-earnings ratios:

please go to www.oftwominds.com to view the chart.

This is a chart of euphoria rising to dizzying nosebleed heights--heights which guarantee a painful plummet back to reality (say, a PE of 20).