By now most people have realised that we are not talking of venerable ships but something most of us had never heard of a couple of years ago.
This idea has now become fundamental to the fate of our politics, economics and society for this decade.
The corporate media are softening us up with the idea that the second round of Quantitative Easing (QE2) is imminent.
Indeed, when the US Federal Reserve meets next week, they are expected to launch QE2. We can think of it as money printing (though technically it involves a lot more than that).
The numbers being talked about at $500 billion (on the low side) to $1 trillion.
We need to re-read those numbers again.
Question: Since when is half a trillion a ‘low figure’…… ?
Answer: when the financial world has gone crazy, where black is white and profit = loss
The world’s most powerful finance talking heads – Bernanke, Trichet (and to let us feel the UK is still very important, let’s add hapless Mervyn King) – are out of their depth.
Only this spring were they chirping that we needed to exit from QE1.
So why are they saying we need QE2 then?
Answer: because all those billions and trillions have not worked in getting the engine to power forward. All it did was prevent the engine stalling.
What it also did was put those billions upon billions in the hands of the guilty bankers who should have lost their shirts (and yachts, penthouses and pensions) are now making us lose our shirts.
Money has to go somewhere for bankers & traders to make money.
Which is why when we hear that ‘things are bad’, the stock markets are roaring.
Since the low of 666 (yes the US S&P 500 touched this infamous number of the devil…. you couldn’t make this up) in March 2009 and the G20 summit in London, the US stock market has leaped to close to 1200.
Of course bankers & traders are paying themselves bonuses – they have made stupendous amounts of money on equities (and bonds).
What they did not do, and have no intention of doing, is to lend to small businesses who actually employ more people that large businesses (who can much more easily relocate abroad for cheap labour anyway).
So, as they say in America, it’s heaven on Wall Street but hell on Main Street.
Now, if QE1 didn’t kick start the economy enough to get people back to work, why should QE2 work?
Very few people are asking this question.
Because they know it will not work either. At least in its official purpose.
What it is really meant to do is to help devalue the US dollar (so that it can export its way out of trouble) and more importantly it will lead to inflation.
When you have inflation, the value of debt you owe goes down in real terms.
The US has unimaginable amounts of debt (they owe the Chinese and Japanese $2 trillion alone) so you see why they want to do this.
And so, you will have QE3 perhaps this time in 2011 and QE4 maybe in 2012.
The Japanese have been doing this on and off for the last decade so this is not totally unprecedented though it is on a global scale.
The catch is that the bankers and traders are insisting that government debt be slashed in Europe to pay for the rise in private debt held by the same bankers and traders.
The ideological and intellectual problem is that we are all going to have learn about the new economy of Quantitative Easing.
It’s like playing football on pitch which keeps shifting and changing and the goal posts move too . It is no longer predictable so we won’t know whether Mervyn King’s curling Beckamesque freekick flies into the top corner, or ends up in the stands.
The ultimate solution is of course to apply shock therapy on the financial markets (just as they did to Latin America in the 80s, Russia in the 90s and Asia in the late 90s). And invest in the real economy and save state funding and therefore jobs and our social and economic infrastructure.
Instead of $10 trillion worth of daily currency trading by 2020, we should impose capital controls which we had up to the 1980s.
But the meek, mild and mutilated political class have no such ambition.
Which means radical political movements have to accept that this upside-down economic scenario of QE3 and 4 and fiscal slaughter is the order of the day and we have to really understand all its implications (including the shift of power to China etc).
We cannot just call for a return to 2005 public spending levels and add a couple of cycle lanes to make us look green.
It has to be a lot more fundamental, robust and visionary that that.