What Plutocracy Giveth…

Paul Krugman long favored currency collapses to solve economic problems efficiently (he said). He advocated such curative apocalypses for Greece, Spain, Portugal, Ireland, Italy… while lamenting for years that the Euro was an unquestionable disaster because it… prevented such disasters!

I think that currency dramas do not reflect economic reality, as much as they reflect the wealth of highly leveraged currency manipulators feeding off the Public.

Not yet aghast, the noble Princeton luminary is looking at the Rupee Panic: “OK, the plunging rupee is the big economics story of the day, and I’m trying to get up to speed on the issues. My immediate question, however, is why the panic?

rupeekrugman

We are talking about the worth of entire countries going down 20% in a few days. Krugman, unfazed, pursues:

“Yes, the rupee is down a lot in a short time — along with other emerging market currencies. In fact, its fluctuations are small compared with the obvious comparator, Brazil…

So the recent decline is sharp. But should India panic?

This would be scary if India was like the Asian crisis countries of 1997-1998 or Argentina in 2001, with large amounts of debt denominated in foreign currency. But unless I’m misreading the data, it isn’t… So at first examination this doesn’t look like as big a deal as some headlines are suggesting. What am I missing?”

Well, honorable Krugman, you are missing most of the argument. What has animated the BRICS (Brazil Russia India China South Africa) is the massive flight of Western plutocrats there. For various reasons, the plutocratic tide is now recessing, so Old Economies Rise As Emerging Markets Falters.

India’s population is growing at 1.4% a year, three times the Chinese (or French!) growth. So India needs to grow fast, just to maintain the status quo ante, especially considering that most of India’s population is very poor (much poorer than China; around $6,000 per capita in China, a fourth of that ($1,500) in India).

Thus India is very sensitive to its lifeline to the world’s economy, in other words, the plutocracy. (Apparently India has 172 billion dollars in short term debt owed by March 2014; the collapse of the Rupee will not make this easier.)

This planet’s main organization is the global plutocracy. Not the United Nations. Thus greed, not human rights.

The plutocrats go somewhere, corrupt all their interlocutors, make their money, and flee before the short arm of the law can catch them. Or, at least they used to operate that way (and they dearly hope their boy and symbol, Mr. Summers, will come to head the federal Reserve of the USA, as a reassuring presence). It’s becoming harder these days. Is the game over?

Global plutocracy? What’s that? The few getting all the money, hence all the power. Let me illustrate.

Watch the 30 year old Chelsea Clinton buying herself a 10.3 million dollars apartment, across the street from her present 4 million dollars home. Or watch the children of the Fats Cats who lead China (yes, some attend Harvard, of course!).

In most countries, fate is what the global plutocracy does.

In the world we live in, no idea is an implemented idea, unless it’s backed by power, that is money, that is the plutocracy and its hungry babes. So don’t worry your little head: Chelsea thinks for you. Or prepare for war.

Plutocrats loved India in recent years, but now a cold breeze is rising, as the People of the West are starting to ask questions about the way their masters treat them. Their lords act concerned and have imposed a few regulations. Which are starting to bite.

Industry is actually coming back to the USA, and not just because of fracking (saving the auto industry helped).

I have personally advocated a worldwide carbon tax to hasten this movement (not just to fight unemployment in the West, but also as transportation is subsidized now, an unfair advantage to the mighty plutocracy, and a cause of major pollution that kills the planet).

In 2003, it used to cost 60% LESS to produce in China rather than in the European Union. Ten years later, in 2013, the gap is down to only 23%. A major (Swedish headquarterd) textile maker followed others, Chinese ones, and opened a factory in Ethiopia. Textile workers are paid about 40 euros a MONTH in Ethiopia, a tenth of what they are paid in China.

China has a solution to save itself from the retreating plutocratic tide: hunkering down, purifying itself with time-tested Maoist redemption. It’s not called the Middle Kingdom for no good reason. President Xi, himself the half billion dollars man, seems aware that the compromission with the global plutocracy has gone far enough.

Interestingly, Mr. Xi had his justice department accuse some major Western pharmaceutical companies of massive corruption inside China.

The USA department of justice followed. Not to enquire about Xi, but about the pharmaceuticals the Chinese are accusing. (It’s completely obvious that the pharmaceutical-health industry machine in the USA is corrupt from top to bottom; Obama, too crafty by half, apparently thinks his ObamaCare monster is going to eat it alive, with its full cooperation… well, good luck!)

Sending corrupt plutocrats to jail for life will do wonders in China against the frantic corruption (the wife of the ex-mighty princeling on trial tomorrow, Bo Xilai, an assassin of a dubious UK businessman, is already enjoying life imprisonment).

India does not have a solution at the ready. India, a representative democracy, is much less in a good situation to crack down than China is, should the population get more agitated. It is already agitated: a Marxist rebellion reigns over a huge part of the country (maybe a third; there is no rebellion even remotely resembling that in China).

There is every reason to believe that, should the plutocrats be forced to invert their globalized flight to distant shores for tax and law evasion purposes, the West could monopolize growth. After all, that’s where most of the know-how is.

The very latest growth numbers out of France and Germany (2% and 2.8%, annualized) are now higher than in some BRICS…

This discussion would not be complete without mentioning Quantitative Easing (QE), the Carry Trade and Derivatives. Derivatives allow to use tremendous leverage when trading bets about where currency markets will move. They give sleek operators tremendous manipulative powers, because most of the world “money” is made of derivative contracts.

QE is the giving of money to banks by the central banks, that banks then leverage to create “credit”, that is, money. Then the fast buck artists take the cash and run to places where interest rates are much higher (like emerging markets). That works splendidly, except when said emerging market currencies collapse. Then they stampede the other way.

In other words, the financial plutocrats are still out there, playing, and their accomplices the politicians on the pay roll (see Chelsea Clinton, above) still let it happen. (The total volume of derivatives has barely gone down 10% since 2008, and is still around ten times world GDP.)

Some will say I took a cheap shot at Chelsea Clinton, the first corrupt babe. But she was a hedge fund manager paid by one of the rich financiers who fed her father like a pigeon. So is her husband. How many Indians did they sell to get that rich?

The funny thing is that there are laws against this, such as the “Foreign Corrupt Practice Act”. USA authorities, at the request of the Chinese, are looking at whether the bank JP Morgan (one of Hitler’s sponsors) hired the children of some Chinese officials to win business. What about Ms. Clinton? Ah, I forgot, she is not foreign!  For American justice, corruption happens only overseas.

The number one enabler of the extreme corruption of the plutocracy we, and India, enjoy, is the ex-pigeon in chief. He gave full powers to Rubin, Greenspan and Summers to organize the world as they saw fit.

So here you have it, my dear Krugman: what Our Lord The Plutocracy giveth, Our Lord the Plutocracy taketh away! Especially if We The People of the West spur it that way.

In a world where plutocracy has been allowed to go on a rampage, and control nearly everything, rebalancing the world economy democratically, will not happen without shocks to the system: contemplate Egypt.

The globalization of scoundrels has brought an enormous disorder. A study just published by Nature showed that flooding from sea level rise will cost in excess of 750 billion dollars by 2050. Each year. One will have to build dams along entire coast lines.

This is mostly happening because “democrats” (demoncrats?) such as the Clintons could not care less. All they worried about as the New York Times’ Maureen Dowd just pointed out, was what their sponsors paid them to care about, so they could get more “Money, Money, Money, Money, MONEY!” 

Let me quote Maureen, to show I am not the only one to worry about insufferable Lords: “CLINTON nostalgia is being replaced by Clinton neuralgia… The Clintons’ neediness, their sense of what they are owed in material terms for their public service, their assumption that they’re entitled to everyone’s money.

Are we about to put the “For Rent” sign back on the Lincoln Bedroom?

If Americans are worried about money in politics, there is no larger concern than the Clintons, who are cosseted in a world where rich people endlessly scratch the backs of rich people.”

George Packer observed in The New Yorker: “The top of American life has become a very cozy and lucrative place, where the social capital of who you are and who you know brings unimaginable returns.”

And they suck up it, worldwide: last year, Clinton, Bill, extracted about a million dollars from Nigeria, one of the poorest country on Earth, from which the USA already extracts oil. The giant sucking sound of plutocracy without any decency.

In the future, to limit shocks, and over-exploitation, there is just one solution: the rule of governments controlled by We The People, real democracy, using full blown governmentalism, worldwide.

The Swiss example can be followed, to start with: direct democracy undermining corruptocracy.

But first, one has to get rid of the corrupt ones, and become allergic to the stench of corruption.

A necessary precondition for that would be for the USA, to prefer electing somebody clean and effective, such as the governor of California, Jerry Brown. Rather than the thoroughly corrupt Clintons, and the giant decomposition they wrapped the world with.

Because, yes, of course, it’s Mr. Clinton’s sponsors who profit from the collapse of the Rupee. That’s what Paul Krugman is mostly missing.

***

Patrice Ayme

About these ads

Tags: , , , , ,

15 Responses to “What Plutocracy Giveth…”

  1. Paul Handover Says:

    Just read this, Patrice. Still in bed! Will read it aloud to Jeannie within the hour. Then, perhaps, my anger and disgust will have subsided sufficiently for me to comment further!

  2. Paul Handover Says:

    As it happened, my anger was assuaged only by an email from Jon Lavin that became the inspiration for today’s post over at LfD.

  3. Dominique Deux Says:

    Test post

  4. Dominique Deux Says:

    So it seems that between catastrophic Democrats and apocalyptic Republicans, US voters have little hope of seeing sanity, decency and vision at the helm anytime soon.

    Of course they have all my sympathy, but as it happens, previous American leaders included some _real_ statesmen and as a result, the US is top dog among nations. Its catastrophes and apocalypses are all ours to share in, except we foreigners have no say in the matter.

    Since the logical Roman solution (make everybody on Earth an US citizen and voter) is not going to happen anytime soon, we plebeian nations have to live with the 800 ton gorilla in our sitting rooms, ignoring it politely as it turns its baleful NSA eyes on anything that moves and its drones on anything that moves the wrong way.

    A bit like seeing a beloved family head slowly go down with Alzheimer. Nothing much to do.

    • Patrice Ayme Says:

      Dear Dominique: Good analysis. The USA’s alzheimer is its plutocracy.
      However, the essence of New World existence is the exploitative model. It was over-exploited in South America, going from plutocracy to feudalism. In the USA, a more crafty line was followed, a mix of militarism, socialism (free distribution of militarily or plutocratically cleared land to Europeans), and exterminationism (not applied in Mexico or further south, except Brazil).

      There is a will and a system in what the USA empire is doing right now. First, strong immigration (until very recently). Second a population whipped into shape by relentless exploitation and propaganda by the plutocracy.

      The immigration component is neglected, but some individuals born long ago will soon see the population of the USA TRIPLE relative to that of their youth. That was may be Sarkozy’s worst crime, and is Cameron’s crying mistake (Germany and Switzerland, Norway, Sweden are doing lots of immigration; quality in the case of the former two).

      There is lots we can do. First reinforce the EU, ASAP. Forget about British obstructionism, cling to Merkel as the Great Mother (she is childless, should work!)

      Second, admit the USA to the EU (start with trade). The USA leadership practices a very cynical imperial policy, but it’s mainly unconscious. When confronted, they intellectually melt. (That has happened with SCOTUS, whose supremes don’t like to be spited for their death penalty stances…)

      Another thing is to adopt crafty American stances… where they are superior (Sarkozy was unable to distinguish the bad and the good, he was just pseudo-Americanized!). Such as, FIRST OF ALL, the carefully organized mess/lawlessness about immigration. If we don’t, millions of Europeans, and others, will unformally move to the USA (they are already doing that).

      Let’s start by persuading them to give up the irresponsible F35, and adopt the Rafale instead (the French minstry of defense was crafty to buy USA drones, but the reciprocal has to be suggested!)
      PA

  5. Jennet Says:

    Something’s wrong with wordpress.

    • Patrice Ayme Says:

      Jennet: Indeed, a lot of people have told me they can’t post comments. Very sorry about that (especially as I use the feedback!). I would spend some money to improve the situation if I knew how to do it, like paying money. But I’m very busy. I’m open to suggestions to change things. Maybe it’s the NSA, or Al Qaeda (aren’t they co-dependents?), god knows…
      PA

  6. Jennet Says:

    A strong case for Summers not getting the FRB post:

    http://www.gregpalast.com/larry-summers-and-the-secret-end-game-memo/

    • Patrice Ayme Says:

      Dear Jennet: WOW! This is spectacular! THANKS! What I long suspected (one of my essays early in Obama’s reign was called “Time For RICO?”). Here is an extract:

      “It begins with Summers’ flunky, Timothy Geithner, reminding his boss to call the then most powerful CEOs on the planet and get them to order their lobbyist armies to march:

      “As we enter the end-game of the WTO financial services negotiations, I believe it would be a good idea for you to touch base with the CEOs….”

      To avoid Summers having to call his office to get the phone numbers (which, under US law, would have to appear on public logs), Geithner listed their private lines. And here they are:

      Goldman Sachs: John Corzine (212)902-8281 begin_of_the_skype_highlighting FREE (212)902-8281 end_of_the_skype_highlighting
      Merrill Lynch: David Kamanski (212)449-6868 begin_of_the_skype_highlighting FREE (212)449-6868 end_of_the_skype_highlighting
      Bank of America, David Coulter (415)622-2255 begin_of_the_skype_highlighting FREE (415)622-2255 end_of_the_skype_highlighting
      Citibank: John Reed (212)559-2732 begin_of_the_skype_highlighting FREE (212)559-2732 end_of_the_skype_highlighting
      Chase Manhattan: Walter Shipley (212)270-1380 begin_of_the_skype_highlighting FREE (212)270-1380 end_of_the_skype_highlighting

      Lamy was right: They don’t smoke cigars. Go ahead and dial them.”

      Thanks again!
      The obvious conclusion is that Obama is either clueless (although he was very explicitly warned)…or playing along…
      PA

  7. pshakkottai Says:

    Hi Patrice :Re So the recent decline is sharp. But should India panic?

    This would be scary if India was like the Asian crisis countries of 1997-1998 or Argentina in 2001, with large amounts of debt denominated in foreign currency. But unless I’m misreading the
    data, it isn’t… So at first examination this doesn’t look like as big a deal as some headlines are suggesting. What am I missing?”

    India creates its own money and will never go broke. Any monetary sovereign is in the same situarion.
    The equation for India is DEFICITS = PRIVATE SAVINGS – NET IMPORTS and India can deficit spend to its hearts content.
    Not only that but Cumulative sum of (DEFICIT – NET IMPORTS) = NATIONAL WEALTH.
    As shown in

    http://pshakkottai.wordpress.com/2012/07/31/cumulative-deficit-

    vs-household-net-worth/
    using US data but true for all monetary sovereigns with different scales.
    Partha

What do you think? Please join the debate! The simplest questions are often the deepest!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


Follow

Get every new post delivered to your Inbox.

Join 351 other followers

%d bloggers like this: