Just a few weeks ago the world was wondering if we were about to be pitched into a deadly Black Hole created by CERN’s Large Hadron Collider in Europe.

Relax. The machine has broken down and will not be cranked up again until the spring.

Strange then that another Black Abyss stretches before us today in the shape of a virulent debt deflation of almost unimaginable ferocity.

Take these words by Ambrose Evans-Pritchard in today’s UK Telegraph:

We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars.

In case you think that smacks of hysteria, this is a man who has called this crisis correctly ever since the late summer of 2007. He adds:

“During the past week, we have tipped over the edge, into the middle of the abyss. Systemic collapse is in full train. … Central bankers still paralysed by a misplaced fear of inflation – whether in Europe, Britain, or the US – have become a public menace and should be held to severe account by our democracies. The imminent and massive danger is now self-feeding debt deflation.”

What this crisis shows is that world prosperity was built on a giant illusion: that there was real value in other people’s promises to pay at some future date, and that you could pass the parcel at a vast profit.

Time has run out and a bubble the size of an asteroid has landed and exploded in the centre of our civilization — the banking system.

The Sage of Omaha, Warren Buffett agrees, “In my adult lifetime, I don’t think I’ve ever seen people as fearful.”

Evans-Pritchard is lacerating about the EU and its Central Bank. It offered no “cover” to the Fed when Ben Bernanke slashed rates to 2 percent. The ECB simply raised its rate to 4.25 percent into a steep downturn, making oil inflation even worse.

As a last resort, it seems, the American authorities will use Bernanke’s famous printing press “to expand the menu of assets that it buys.” In the worst case, that could lead to a massive run on the dollar by foreign creditors and no end of misery for us all. But it may be necessary nonetheless.

At home, I have absolutely no confidence in the British government under Gordon Brown and Alistair Darling. They have been woefully slow to act, their policy to hide their heads under a pillow hoping it will all go away.

If Brown had even a small slice of a leader’s courage he would put together a massive package to recapitalize the British banking system; disown the “mark-to-market” accounting agreement, which forces banks into insolvency by estimating their assets on depressed valuations; take immediate control of interest rates by reducing them to 2 percent; begin to prepare for withdrawal from the useless European Union; and work closely with the Americans, who are, at the very least, fully aware of the immense dangers we face.

The Kraken is awake and bearing down on us fast. Over coming months and years we may wish that the Hadron Collider had swallowed us all up when it had the chance.

Update: The British Government has announced a variety of measures to recapitalize the banks and get the inter-bank lending markets working again. It amounts to a $900 billion bailout, eerily identical to the Paulson Plan for a country five times the size of Britain.

John Evans

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Hard times or better times?

It probably hasn’t escaped many people’s attention that on Wednesday an important event is taking place in the rarified world of Big Science.

At Geneva, CERN is to fire up its new Large Hadron Collider (LHC), a massive particle accelerator which is the child of the aborted American version in Texas.

This multi-billion dollar project may give an assorted band of scientists insight into what happened one-billionth of a second after the Big Bang, or so they claim.

That, of course, begs a number of questions. Was there a Big Bang at all, or do we have a Steady State universe, as the British astronomer Fred Hoyle asserted, in which matter is continually created?

Again, if space and time are illusions of the mind, as many scientists and philosophers believe, isn’t it likely that matter also is a figment of the mind’s buoyant imagination?

Strange that quantum physicists have no idea what gives matter mass. To fill the void in their knowledge they have plucked a new particle from thin air, so to speak. It’s called the Higgs Boson after its proposer, Peter Higgs.

Some commentators have jumped on this exquisite piece of fiction and named the new arrival, the God Particle. The Collider’s main mission is to discover traces of this elusive little bit of stuff.

And that’s where we’re at. Billions of European taxpayers’ money has been spent on trying to find Winnie the Pooh.

Naturally, they will come up with something. But will it be yet another fiction, arising from yet another mathematical model, and simply explaining the inexplicable by filling in the gaps with a bit of cartoon wizardry? We just don’t know, but can guess with a fair degree of confidence in the outcome. However, CGI is no substitute for the truth.

The end of the world is nigh
Most of the press and other media are concentrating on a more exciting aspect of this story.

That the forces unleashed inside the great particle accelerator will create a small Black Hole which will suck the Earth into it, and progressively, the rest of the universe bit by bit. As disaster scenarios go that must take the gold medal by a mile.

Others believe there’s a chance the reaction could change the fabric of space and time itself. It could speed it up, slow it down or even cause it to stand still. Result? We could all start saying or doing the same thing, over and over. Groundhog Day on acid.

Naturally, the Prophesies of Nostradamus are never far away from some people’s thoughts, especially the one that mentions Geneva.

So what is the most likely result when the big beast is finally switched on early Wednesday morning GMT?

Zilch.

How do I know that? Well, consider: the Earth is one vast particle accelerator, dwarfing even the great chunk of engineering buried beneath the French landscape. Countless cosmic rays are hitting the planet’s atmosphere every moment, colliding with all kinds of matter. So far, no Black Holes have been spotted lurking in the Van Allen Belt.

Indeed, the more honest of the scientists involved gave the game away when he admitted that the H.G.Wellsian machine may be much too small. “We may have to go back and ask for more money to build a bigger one,” he let slip. One wonders how safe his pension is.

The problem with all this peering into the soup of life is that it’s alive, just like us. The great Albert Einstein asserted that human observers affect the processes we observe. In other words we are co-creators of the universe. What we expect to see, we often get. The boffins want a Higgs particle that gives mass to matter. They will surely conjure up something like it.

But what, I’m inclined to ask, gives the property of mass-accumulation to the Higgs confection? Yet another particle? Where does it end?

The argument goes on and on, an infinite regression in human minds that can’t see the simple truth: that the universe is made of infinitely-adaptable mind-stuff, not hard lumps of rock floating about in a void with consciousness as “a disease of matter”.

One good thing may come out of this — with any luck. The new religion of Scientism may go into retreat when the last vestiges of the seven veils it holds up to the world are finally divested from the naked body of the universe and we find a mind looking back at us.

But I doubt the LHC is big enough even to make a start on that.

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