Archive for April, 2010

The Euro Is A Trap For American Supremacy.

April 30, 2010


Abstract: Driven by impotent tribalism, some American economists have gone over the deep end about Europe. This is serious, because these are the same people who advise the Obama administration to pursue a zero interest rate policy (which advantages huge banks and Wall Street, but only encourages the little guys to get more in debt, while punishing the little savers, while not bringing real jobs back).

In other words, the European case shows that many American economists, even among those who, like Krugman, have been on the right side on health care or the stimulus, have a clear propensity to talk loud and clear about what they know not, because of their active anti-Europeanism.


American economists award themselves profusely with an imitation Nobel Prize, to be taken seriously. Here is yet another rant of Paul Krugman against the Euro, mocking “European economists”, etc… Never mock, if you do not want to be mocked back. Says Krugman, abstracting himself in the comments section:


“When Greece, Portugal and Spain joined the euro zone, they put themselves in a policy straitjacket. Now they face a debt crisis. There is a lesson here.”


Cute. What an impressive set of sentences. This is written for general readership in the New York Times, and will be reprinted throughout the USA, and innocent children will read it, unbeknownst of the bare facts, and how they logically articulate. Or not.

Krugman’s turn of sentences gives the impression that joining the Eurozone had to do with being crazy (“straitjacket” is the garment restraining those who foam at the mouth in a mental asylum), and that joining the Eurozone created a debt crisis.

This is completely erroneous. A deliberate lie, in other words. And it is hard to see how it could: the Eurozone regulations specify a maximum of 3% current yearly public debt, relative to GDP, and a low maximum total public debt. As it turns out, individuals in the Greek administration conspired with the gang at Goldman Sachs to lie to Eurostat, the statistical institution in charge of checking the finances of Euro members, which is based in Luxembourg.

Krugman finishes his editorial with a magnificent demonstration of his misunderstanding of the European Union. He pontificates thus: “And when crisis strikes, governments need to be able to act. That’s what the architects of the euro forgot — and the rest of us need to remember.”

No, the architects of Europe did not forget what it means when “governments need to be able to act… when crisis strikes”. It means war, and devaluations have often preceded wars, indeed. The whole idea of the European union, precisely, is that the governments of the various states are NOT able to act to do whatever when a crisis strikes. When governments in Europe could do whatever they please, the USA was king of the world. The plutocracy of the USA, if not its government could set up business with fascist regimes, and undermine the democracies. And they did. In Portugal, Italy, Greece, Spain… and Germany.

But this era of wars partly telerobotized by predators from Washington and New York is over, so neoconservative economists for USA supremacy such as Krugman (who used to be, with Larry Summers an architect of “Morning in America” of Ronald Reagan, hence my carefully considered adjective of “neoconservative”) are now increasingly sad and spastic.

Hence Krugman’s basic anti-European rant, understanding totally nothing, except irrelevant superficialities. The euro is here to prevent war in Europe, not to please the USA. And the euro is still massively overvalued, relative to the dollar. Let the “euro crisis” go on! Of course, as the euro plunges, so will the economy of the USA: imagine, if the euro was where it ought to be, at parity, BMWs, VWs and Audis, Mercedes, Airbuses, French cars, Eurocopters, launches on the Arianne rocket, European nuclear power plants, Very High Speed trains from Alstom and Siemens, and countless other machines and devices would be one third less expensive… with the same profit margins, as seen from the EU (the EU has more large companies than the USA). The economy of the USA, already reeling from having given all its money to gangsters, would definitively collapse. No wonder Obama asked Kanzler Merkel to do something (but she has crucial elections within 2 weeks, and, after years of austerity in Germany, people there are, understandably, little inclined to work more than the Greeks, to serve the Greeks… and moreover there is the problem of the massive fraud perpetrated by Goldman Sucks).

It does not come to Krugman’s mind that maybe, just maybe, we are also dealing here with European politicians (especially French ones) who try to change, and fix a few things, such as French retirement at 60, and German over-exportation inside the EU itself. The PIIGS (= “Portugal Ireland Italy Greece Spain”) crisis will allow to address these problems, through a discourse AROUND Greece. If Greece has to fix its retirement system, so does France. If Germany has no one to sell its goods to, because Greece is broke, maybe Germany ought to buy more of its own goods, as stiff lipped French officials pointed out.

All what Krugman knows is that devaluation is good, union is bad. In other words: Weimar republic good, Eurozone bad. In the early 1920s. the Weimar republic, in a plot with Wall Street, had let the German currency collapse, to keep a comparative advantage over France, instead of repairing the deliberate damage and sabotage of a huge portion of France, French mines, industry, infrastructure, and castles the retreating and surrendering German imperial army had just perpetrated. In particular Germany had deliberately destroyed hundreds of thousands of telephone poles, and refused to replace them in sufficient numbers. Exasperated, France and Belgium invaded, and soldiers of African origins bred with German women, causing great revulsion in Germany, hence Nazism. Or so said the Nazis… but I digress. Let’s go back to our war monger at hand, the American Reaganite Krugman… (One should set up a Reaganites’ Anonymous associations where addicts to profiteerism would confess and self criticize.)

Devaluations are horrible, it’s not just deflations which are bad. Greece and company will get some guidance from steady hands. The IMF is called in, but it is led by the most prominent French socialist (who would handily crush Sarkozy in a French presidential election, according to polls).

Devaluations have caused horrible wars in Europe, but Krugman, like most Americans did not study history, enough, so he plain does not know, and says whatever.

By the way, French financial institutions, banks and insurance companies, are the most exposed (the German total exposure is second). It would not change ANYTHING if those institutions had invested in a Greek currency: they would still be dangerously exposed just the same, and the French and German governments would need to intervene.

Actually, Greece’s membership in the Eurozone decreases the potential of a nasty default. And why did the French, and German, and other northern Europeans lend so much to Greece? Well so that Greece could purchase goods and services made in northern Europe.

Krugman calls the euro a “trap”. Indeed, the euro is a trap. For the supremacy of the USA.

Today Belgium found the guts to outlaw tent like outfits for women, in the guise of religion, that was much more important than the Greek problem, and the proof that Europe addresses the most important questions.

Please would American economists mind their gangsters in high finance… Instead of being ravaged with Euro envy… And the fear that the same ardor to punish Greece be extended someday, should it not be stopped right away, to California (say), which is not a in a much better situation. Meanwhile the Obama’s administration silly target of doubling exports in five years, is showing itself to be the silliness it is (with the euro going down, it’s European exports that will go up).

But it is not Obama who is to blame, as much as the poor instruction that American economists received when they were students, and apparently seriously not studying enough history.




P/S:  The euro was a calculated French creation obtained in exchange for the reunification of Germany. Although I do not like French president Mitterrand, it was his idea, and certainly by far the best he ever had.

There are about 27 countries in the EU, for 500 million people, on an area the size of the American West, they can’t all use their own currency, it is as simple as that. Not anymore than the USA could use 50 different currencies (remember, when you are driving a truck, and cross several countries in one shift, you would have a serious problem, if you had to keep all the currencies in your pocket!)

How Big Bankers Became Outlaws.

April 28, 2010

[A much larger post will develop the full picture in a civilizational perspective].


1) We are living in a state of law. Supposedly.

2) That state is democracy, the rule of the demos, the people. It is not the rule of the bankers. Supposedly.

3) Political leaders have recently given PRIVATE unelected individuals, the bankers, the means, and the right to create money, the money everybody uses, through debt, ex nihilo, starting from PUBLIC funds. (This is called, somewhat misleadingly, the fractional reserve banking system.)


3) Contradicts the union of 1) and 2). Because money is power, and power is supposed to be exerted by the people. But big bankers create money at will, with the complicity of the political leadership. So they create power at will.

Thus, the present system incite, big, MONEY CREATING BANKERS TO BECOME GANGSTERS, and OUTLAWS. Indeed the huge  power bankers are allowed to gather overwhelms the power of the people.

It is as simple as that. Thus one needs to get rid of the private fractional reserve PUBLICLY funded money creating system.

The situation has been rendered worse in the last decade by the blossoming of synthetic derivatives which are out of this world bets which could not possibly be paid back.

Synthetic derivatives transformed a 300 billion dollars loss in real mortgages into a potential exposure of 24,000 billion dollars, thanks to the leverage of the derivatives squared.

Then political leaders, accomplices with the bankers, offered to pay the 24,000 billion dollars, on behalf of taxpayers, leaving the economy in tatters.

Not all is lost: Goldman Sachs got its entire 2008 profit, 13 billion dollars, from taxpayers, through AIG, thanks to US politicians, and the USA loves a winner. Love and dove, there are still many a feather to  pluck.




Technical P/S:

1) The numbers above pertain to the USA, alone. European banks use the same derivatives, and some had losses so great that they survived only from the injection of public funds. But, differently from the USA, this was not a complete gift: some of the biggest banks became property of the public (starting with the British “Northern Rock”).

2) Synthetic derivatives are, mathematically and philosophically, a generalization of the licentious money creation, at will and from thin air, or no air at all, of the privately managed, publicly funded, fractional reserve system, thus proving further, if need be, how erroneous the latter can be.

3) The fractional reserve system ought to be kept, to provide the capital needed, simply it ought not to be anymore the province of a small private oligarchy gaming it.

4) The huge  power bankers are allowed to gather overwhelms the power of the people. Proof? Look where the job of the people are (overseas) and where capital and investments have gone (overseas, from Grand Caiman to China). This empowering of a small elite, while weakening the rest of us, violates the spirit of our law, all the more since it is due to a mechanism, not to any sort of merit. Moreover, it is a financial mechanism, and thus that oligarchy is actually a plutocracy. Plutocracy is to civilization what cancer is to animals. Terminal.


The Worst.

April 16, 2010



In two sentences: Below is to be found a kaleidoscope of many problems: Pakistan, religious fundamentalism, fascism, nuclear explosives and their technology, quakes, volcanoes, the Middle East… united with the common mood of not looking at the possible catastrophes, as much as one should. The Obama administration has adopted many a correct stance, though.


Abstract: Pakistan is, by far, the greatest danger in the world at this point. Some people claim there are no dangers, just paranoia, and that what did not happen recently will not happen tomorrow. I have a volcano to show them.

The Obama administration (contrarily to previous US governments) seems aware of the danger posed by Pakistan, and has been doing something about it. Pakistan, a Muslim regime, hence a dissembling fanatical dictatorship, should be defanged (in the Qur’an it is said that lying for the faith is no sin, thus Pakistani shady types lie about everything, including assassinating PM Bhutto, as the UN officially determined). Suicide ready bellicose primitive superstitions detonate best with thermonuclear fuel. Just crashing planes into buildings is amateurish.

A scenario is easily imaginable when the immense disaster of a nuclear war of Pakistan with India, besides having drastic consequences on the climate and environment, worldwide, could well throw the entire world in a nuclear war. So Pakistan needs to be defanged, ASAP.

The nuclear disarmament of Pakistan will have to be entangled with Iran: both have to respect the Non Proliferation Treaty. But then what of India and Israel? Well, a worldwide nuclear disarmament is necessary, but it depends upon a fail-proof monitoring regime (as I have long advocated). The peaceful use of nuclear power will help, both in promoting inspections, and in imposing measures decreasing the stores of dangerous nuclear explosives. Moreover, it is impossible to explode in a bomb, what you have already burned in a reactor: 10% of American nuclear power comes from Soviet nuclear explosives reprocessed into fuel, and quite a bit from American bombs (reprocessed in… France).

What we are talking about here is building a pragmatic, partial form of world government. It is much better than nuclear war.

Pragmatism is the way the European construction works: establish supranational structures, when and where needed, but still keep the entanglements of national safety nets and bilateral, or multinational accords below… as long as they are compatible with the highest supranational system.

This model of integration works magnificently in Europe.

Some obdurate neo conservatives doubt that international accords work. But European construction works, and the absence of all out war, worldwide, in the last 65 years, is due in great part to the respect of international accords. No important international accord was violated in the last 65 years.

The last massive violations of international accords were made by the Nazis, when they violated the Versailles Treaty several times, ultimately attacking powers created by Versailles such as Austria, Czechoslovakia, Poland. (They had been encouraged by Great Britain in 1935, and the USA, though…)

However, the Nazis themselves respected international accords in the case of neurotoxic weapons of mass destruction (and millions of surviving Nazis were sure glad, after the war, that so they did… because they would have been annihilated otherwise!)

The Nazis also more or less respected the Geneva Conventions on the western front (but for the occasional savage mass assassination of French and African troops in 1940, and US troops during the Battle of the Bulge). So even fanatical idiots of the worst type can be brought to some international respect. By contrast, the Nazis justified their savagery in the USSR by arguing that the Soviets had not signed the Geneva Conventions.

Let’s notice that international relationships resting on reason can be long lasting: France has been at peace and collaboration with the USA since its creation, and both France and the USA have been in equally good collaborating relations with Britain since 1815. Let’s apply this strategy now to the likes of Pakistan, by forcing them to become our friend, and that means less ready to kill us all.




I have advocated the catastrophic calculus instead of the usage of probability on important matters. This is very practical, and the applications go from Pakistan, to building codes, to the so called “climate change” (where “The Economist” just adopted the same exact reasoning in its lead editorial) to what the French state and law call the “Principle of Precaution”.

It is wiser to use the catastrophic calculus rather than standard probability for earthquakes. Buildings are made half as strong in Seattle than in San Francisco. Why? Because earthquakes are half as frequent in Seattle than in San Francisco, the authorities decided Seattle buildings would suffer half the damage, over, say, a century. This is completely stupid. The correct reasoning is so obvious, that one could view this as criminal

The correct catastrophic calculus is, instead, to forget about computing probabilities, and just finding out if there is a plausible catastrophic scenario, and how catastrophic it could get.

In the case of Seattle versus San Francisco, the result is simple. Bad quakes around San Francisco seem to top out at 8 something, Richter. In Seattle: 9 something, Richter. At least 10 times more powerful (this comes from the nature of the faults: horizontally slipping in San Francisco, whereas Cascadia adds a vertical flipping component).

So, instead of making them much less strong, the buildings in Seattle ought to be much stronger. The last mega quake in Seattle was in 1700 CE, causing a giant tsunami which wiped out countless native villages, and struck Japan. This “Cascadia” quake may have been as much as 9.2 Richter. Seattle skyscrapers may collapse.

Thus catastrophic events should be measured by the catastrophe itself first, and not the exact value of the “probability”. Rare events happen because of a conjunction of factors, the probability for each impossible to compute if one did not even imagine it first. Thus the importance of imagining scenarios rather than computing away from trite assumptions.

Another example. Last year I explained that dinosaurs probably died from earth core volcanism, not an asteroid. One of my motivations was to show that injecting SO2 in the atmosphere to cool the planet would be insane.

An example I gave on the way was an eruption in Iceland in 1783, which killed a quarter of Iceland, 250,000 people in Europe, and increased the financial deficit of the French monarchy. Reading this, some could scoff, and say we are not in 1783. But actually massive catastrophes have impacted civilizations in the last 4 millennia, from giant volcano exploding: Crete, to possible cometary impact (or maybe submarine volcano?), under Justinian, to a terrible drought killing the Maya, to the Little Ice Age, etc.

So now we have a volcano erupting in Iceland, and air travel is stopped over Northern Europe. Most expect a momentary inconvenience. But, in truth, all we know for sure is that, someday, a volcanic eruption in Iceland will exterminate most of Northern Europe’s fauna. It clearly smacks of something that ought to have been studied before. Don’t forget that the mid-Atlantic ridge is the most formidable convection feature on earth (with the belt of fire around the Pacific; which drives which is not clear to me).

It is easier to find a scenario allowing Pakistan to get more people killed, though, and pretty soon.



President Obama gave a wrap up news conference after the nuclear summit. As required by the seriousness of the matter, he did not smile. His delivery was perfect: highly presidential, sober, well informed and as frank as he could get away with. He had a good answer for everything. He quoted Baker about Palestine and Israel: “You can’t want peace more than they do.” Well, a great part of the Israel-Palestine problem, starting way back during the Roman empire, has been superstitious fanaticism (aka Judeo-Islamism). The Romans, exasperated by Judeo national-tribalism, promoted the word “Palestine”, to help forget about Israel. The Latin Palestina came from the Greek Palaistine (Herodotus), itself from the Hebrew Pelesheth “Philistia, land of the Philistines”. So Palestinians speak Hebrew. Whatever. Anyway, back to more serious, but related, problems.

Obama also pointed out that the Arab-Israeli conflict is a threat to the security of the USA, and had a cost in blood and treasure. Well, same for Europe, and same for the West-Islam conflict, which is partly fed by the Arab-Israeli problem.

A deal could be made: Israel nice, calm and friendly in its box in quid pro quo for literal Islam outlawed (as it was in Egypt in 1300 CE, something the fanatical Islamists know all too well!).

This can all be solved: the European Union and the USA can put Israel in whichever box they please, whenever they want, if they act jointly. Arab countries could get more economic activity from the EU… As long as they accept the mental and intellectual, not to say civilizational, activity that go with it, and a few more things direct from Israel, as the following Saudi prince suggested…

Indeed recently, the Saudi foreign minister was asked about the Iranian nuclear posturing, and he declared soberly that “the introduction of nuclear weapons in the Middle East would be a disaster”. This is superior diplomacy at its best; if the prince had been completely truthful, and less crafty, he would have mentioned instead the official introduction of nuclear weapons in the Middle East. Everybody knows, and especially the Arabs, that Israel has plenty of nuclear warheads, around 200, enough to wipe out all the Muslims, and any other contradictor.

Maybe the prince considers Israel to be its implicit nuclear shield against big bad Iran? Iranians and Arabs have detested each other, and this long before they came, through the most violent means, to share hostile variants of Islam.

Rising to the challenge of superior Saudi diplomacy, President Obama said that “the worst” would be a nuclear attack by terrorists. Well, he has to say this, at this point. However, the word “terrorists” could be interpreted with a broader meaning than the usual one, and that is why the US administration, with the European leadership, is insisting so much about the Iranian nuclear problem. Terror states exist: for example, most fascist states turned into terror states.

The Washington conference was centered around bombs terrorists could grab, or contrive, using radioactive materials. Nasty elements wrapped around a simple explosive could cause tremendous damage, by transforming an area inside a city into a mini Chernobyl. More important, though, is the fact that world leaders were brought to admit to the seriousness of nuclear materials. Simply banning them is no panacea, because: 1) it can’t be done. 2) nuclear materials, properly used, may be just what the doctor ordered.

Radioactive elements are the most concentrated energy sources or reservoirs known (liquid fuels are an extremely distant second). Nuclear technologies are the only ones presenting us with new, clean, powerful energy. Contrarily to intuition, they could augment, not decrease, nuclear safety. But they need capital to be developed, and that means that banks will have to stop sending created capital to the netherworld of shadow banking and its derivatives.



The 50 Megatons Tsar Bomba mushroom cloud, towering over the Arctic, 64 kilometers high, 40 kilometers wide. It could have been made, easily and cheaply, much more powerful (see below). The USSR deployed ICBMs equipped with 50 Megatons warheads.

97% of the power of the Tsar Bomba came from thermonuclear fusion, which lasted 40 nanoseconds, during which its output was 1.4% that of the entire sun. It was more than 3,000 times more powerful than the Hiroshima bomb, and, if exploded over its center, would have completely annihilated the largest megalopolis on earth, all its distant suburbs, all its 30 million inhabitants.



The worst man-made danger on earth is posed by Pakistan, a brutal regime founded on exclusion, hell bent towards stuffing itself with nuclear weapons (it is building a new reactor designed to make 50 Plutonium “pits” a year, i.e. 50 bombs).

OK, Pakistan’s military dictatorship is presently masquerading as a democracy, because the Obama administration insisted to talk about “AfPak” (“Afghanistan-Pakistan”) instead of just “Afghanistan”.

Even before the Afghan war started, even before the first defense treaty between Afghanistan and the Soviet Union, “Muslim” terrorist teams were sent into Afghanistan by the Pakistani dictatorship (it long did the same with India, and persists to this day).

Pakistan never signed the Nuclear Non Proliferation Treaty (NPT).

India and Israel did not sign the NPT either, but, at least, they are democracies, and democracies are rarely outrageously aggressive to the point of suicide (at least in the onset of a conflict, because Athens became outrageously aggressive during its war with Sparta, and so did the Roman republic later, and in modern times, democracies such as France, Britain and the USA, when seriously attacked, were of an awesome ferocity).

Pakistan is a theocratic dictatorship masquerading as an Islamist “republic”, a contradiction in adjecto. Moreover, as a result of its long financing of the Taliban, and organizing Al Qaeda through its own Muslim fundamentalist “Inter Service Intelligence“, Pakistan is completely perfused with fanatics. Islamism is not Buddhism, a would be supine religion. Islamism was designed as a war machine against Westerners and authentic Persians. As long as Pakistani rockets cannot reach Europe and America, Pakistan is subdued. This will not last.

Per its unstable and intrinsically mock religious nature, Pakistan ought to be deprived of its thermonuclear fangs, ASAP.

Pakistan’s dangerousness is accentuated by its long frontier with India. India is the world’s largest democracy, and it is a secular, religiously tolerant republic. Now, when you put a fascist, self delusional, superstitious regime next to a secular democracy, the former, being secretly persuaded, while fully in official denial, about the latter’s superiority, is ready to detonate.



We have seen that situation many times before. We saw it between Macedonia and the Greek cities. Between Rome and Carthage. Between Rome and Greece. The most famous recent case occurred when the fascist German “kingdoms” (“Reich”) were sitting next to republican democratic France, putting both on a war footing, for decades (just as Pakistan and India in the last few decades). Finally the German fascists cracked, and attacked, because it was their last chance (the way they looked at it).

Notice that, at the outset, the odds of winning, for fascist Germany, were very low. The Prussian generals attacked both in the west and in the east, simultaneously. In the east was democratizing Russia, developing at blazing speed, propelled by French money. In the west was the French republic, heading an empire of 100 million men. As it turned out the Africans in that army played a crucial role, starting with the first battle of the Marne.

The French army was formidable, state of the art, and the Russian army was gigantic. The German commandment massed nearly all its forces to crash through (neutral) Belgium into France, around the French defenses, hoping to stall the Russians (which did not quite happen). All this, because the Prussian generals had decided that Britain would betray her “Entente Cordiale” with France and her status of guarantor of Belgium’s safety. Maybe they remembered too much when Britain used to bankroll German forces against France in the Seven Year war, 160 years before .

As it happened, the Prussian generals had not breathed the air of the times. Britain declared war to Germany within two days, and the French army, after mightily retreating for four weeks, helped by the African army holding Paris, and the British Expeditionary Force, counter attacked and nearly destroyed the entire German army, while the Russians put East Prussia in peril. Thus, within weeks, Germany had lost the war, and the fact that it was not a democracy, and that it started the war, guaranteed that a huge coalition would rise against it, as did (Italy soon joined France and Britain).



So here you have it: generals, left to themselves, tend to be delusional. They miscompute. They are brutal; as they moved through neutral Belgium nearly two million armed men, the Prussian generals threatened the population, and, when they got shot at, or so they said, they engaged in large scale, deliberate, ordered-from-the-top, atrocities.

Democratically supervised armies (US, all the British commonwealth, Italy, France, etc.) were never caught in the blatant atrocities the fascist supervised army engaged in Belgium in August 1914 (from there to what happened with the Nazis is just continuity: more of the same).

Fascism is intrinsically unpredictable, because only a few men from a small clique take all the decisions, or, more generally, the interpretation of a small exclusionary ideology (such as Islam as a governmental system) is the pretext used for arbitrary decisions. Since such a regime rests on military force inside, it is natural for it to attack outside (hence the attack of various German fascist regimes on Europe, or the attack of the Argentinean dictators on Britain, fascist Italy upon Ethiopia and Greece, the USSR onto Finland, etc…).

Fascist regimes are paranoiac because, resting on force, nothing holds them up, except more force; they are standing on one leg, and a single leg can kick, that is what legs do. (By contrast, democratic regimes rest, and are inserted in various democratic institutions and authorities, which buttress them in many ways, but also restrain them.)

Why are fascists mad? Because fascism is a human instinct, but to be used only in the case of war, when stress and combat hormones are sky high. Living day in, day out, with those stress hormones decay brains, both in the submitting and the submitted. Moreover, human brains are best when free, so the mental performance of fascism is second rate (as demonstrated by the German attack on the rest of Europe in 1914: it was hare brained). That, in turn, creates further problems, with further stress, increasing the combativeness and further stupidity resulting from it.

Unchained fascism rests on the metapsychology of ultimate violence, it lives by it. The top guys, and their underlings, reign by force, so they fear force, and use even more, to make sure they stay on top. Thus they advocate the metaphysics of force, and learn to justify it as an ultimate good, day in, day out, so, in the end, they are anxious to prove how omnipresent force is, and they are drawn to prove it, by visiting it upon themselves, because it’s all they know. (This analysis translates to plutocrats and their Wall Street.)

This is why the Nazis kept on fighting against all odds, against several vengeful military powers, each of them able to eradicate them, from German city to German city, each of them completely destroyed, in the last five months of the war. By fostering their own destruction, the fascists justify the core of what made their rule possible, thus, they justify themselves, to themselves.



Thus Pakistan presents an extreme danger, much greater than Iran (The fifty years old Pakistan has a history of aggression, whereas Iran has a much longer history of being attacked, but not striking out, in the last few centuries).

All of this makes a nuclear attack of a fanatical, Islamized, fascist and paranoiac Pakistan onto India probable, in the fullness of time (15 years or so).

As I said, we have seen that movie before: as Pakistan sinks, and a democratic India blossoms ever more, next door, the rage and fear in Pakistan’s leadership can only grow. It does not matter that Pakistan would become a radioactive hell, and would be utterly destroyed, if it attacked India. It only compounds the attractiveness. Fascism is attracted by the bitter end, like the butterfly by the flame.


As Russian artillery barrages could be heard in the distance, the Nazi elite went to listen religiously to Wagner’s Gotterdammerung in the Berlin opera house, complete with holed roof. Fascists live like Gods, giving death arbitrarily, thus they want their dusk of the Gods. 


After a nuclear exchange between Pakistan and India killing 100 million people or so, India would come out swinging, with a bloodied, but very powerful military, resting on a very stern, determined, aggrieved population, little inclined to be pushed around by fascism again.


And guess what, speaking of non democratic regime? China sits next door, arguably occupying territories it does not really own historically. Moreover China was Pakistan’s ally, in those times not so long ago, when it, and China, were at war with India .

Thus, China could well be blinded by the contempt for democracy fascist regimes are inclined to feel, and feed (it would be similar to the contempt the Nazis had for the Western democracies; fascists believe only them can take tough decisions, because they do not know that the very concept of fascism was invented by a democratic republic, Rome, during her best days).

Thus a future somewhat fascist, or, let’s say, insufficiently democratic governmental structure in China, could well decide to strike victorious (but heavily mauled) India, as it mops up Pakistan. Then the West would have to threaten China unambiguously. And, if need be, go to war against China.

This scenario, is, by far, the most probable of the most dangerous scenarios on earth. And it looks more likely than not.

Not only would a nuclear war between India and Pakistan turn China crazy. It may well turn the rest of the planet pretty crazy too: a nuclear war, by exploding thermonuclear fission-fusion-fission devices over cities would nearly guarantee a nuclear winter, and a radioactive one at that. For a scientific study on this, see:

It is probable that, should such a scenario rise above the horizon, many countries’ military would scream for their own nuclear arsenal. To maintain an edge the present military nuclear powers would then engage in an all out arms’ race. This time, instead of a duopoly USA-USSR, it would be a many body problem (as physicists call it). In such a problem, there is guaranteed long term instability (it’s a mathematical theorem). In other words, guaranteed generalized nuclear war. Thus: No NPT = Armageddon.

On the good side, nuclear Armageddon would save the biosphere, because human civilization would collapse, perhaps not to be seen again. Indeed, civilization’s rise depended upon cheap and abundant crucial minerals such as copper, and iron, and coal and oil. They used to lie thereabout, but now we can only extract them by spending first enormous energy. Cut the availability of that energy, and the bronze age will be remembered as El Dorado. Rarely again will the whale have to fear the steel point of the harpoon, as the last iron rusts away.

On the bad side, well, Earth would join the countless planets, in this galaxy alone, where intelligence failed for this, that, or the other reason. A forever Paleolithic mankind may well ultimately be wiped out by the many cosmic disasters that Earth has so far avoided, by sheer luck.

So Obama is right: something has to be done to set up a worldwide nuclear monitoring regime.



In the past, the USA ruled by dividing, and Muslim fundamentalism was found very handy that way. Now we should rule by superior reasoning, as in the past.

9/11 has demonstrated, even to the obdurate American leaders, the unpleasant side of the strategy of encouraging brutal criminals of the fanatical type. Bush was all confused about it, but Obama’s insistence to deal with “AfPak” as a single entity seems to exhibit a deep understanding of the tragedy in waiting, should one do nothing.

Under the clueless Bush, the USA funded part of the nuclear weapons program of Pakistan. Besides being insane, that was, supposedly, under the pretext of helping with nuclear safeguards. Obama expressed his confidence in the latter, which, with all due respect, is about as smart as trusting the Nazi government in 1933. (But, once again, Obama has to be diplomatic… and I don’t.)

Pakistan was a long favored by American diplomacy. This theocracy was considered to be a counter balance to India, which was viewed as too socialist, too friendly to the USSR, too inimical to Western plutocracy. Pakistan was part of the general American strategy, started under president FDR, to use Muslim fundamentalism against democracy.

Time to correct all this. Forcing Pakistan to nuclearly disarm ought to be the number one priority, before North Korea, before Iran, before Israel…



So what of Iran in all this? Iran is a theocracy, a religious “republic” giving even more place to Islam than Pakistan does. So it is paranoiac, and preoccupied with preoccupying the people with exterior conflicts, to justify its military rule upon it. It also has the suicidal component of fascist psychology.

Iran, although an oil exporter (in particular, to thirsty China) is incapable of having enough refineries, and imports the gasoline it needs.

A complicating factor in Iranian psychology, is that Iran is not just a country with a 4,000 year old history, it was, for many millennia, one of the most important civilizations. In particular the old religion of Persia, was refurbished by Zoroaster maybe 3,300 years ago, with a very advanced philosophy which obviously impacted Greek thought, Judaism, and, later, Christianism and Islam.

The last 13 centuries have not been fun and games in Iran. After the Muslim invaders took control of Sassanid Persia, a sad defeat, a severe civil war erupted between Muhammad’s family and some of his generals. The generals won, Muhammad’s family members were either defeated or assassinated, creating the schism between Sunni and Shiite, with the later severely mauled. Persia followed the Shiites, sad defeat, multiplied by the violent death in combat and assassination of Ali’s sons, who led the Shia, another sad defeat. Revenge followed soon after, as the Syrian-Arab Caliphate, exsanguinous after three catastrophic invasions of Francia which had shredded its military capability, fell to the Persians, who moved the Muslim capital to Baghdad.

Then the Mongols came around, wrecking nearly everything, snuffing Baghdad, destroying the elites. The elites got replaced by superstitious low quality leaders who had hidden in the wilds. Finally, in the 20C, Palahvi Senior, following the lead of Ataturk, took severe measures against superstition (maybe inspired by similar, but even more severe measures taken in Russia against superstitious religion by Czar Peter the Great).

In recent decades, Saddam Hussein’s Iraq attacked Iran, after the later turned Shiite fundamentalist. The perfidious Euro-Americans incited Hussein to do so, helping him with all sorts of military capabilities, from dual use chemicals (of German origin, handy to gas Kurds and Iranians), to outright battle planning operations with satellite data, courtesy of the USA, taking into account Iraqi chemical attacks, and advanced supersonic interceptors (French Mirages) and bombers (French Exocet armed Super Etendards to block Iranian oil exports; it is said that some particularly difficult missions were flown by French pilots).

Meanwhile, Reagan was selling American weapons to Iran secretly, for his pocket change. The capitals of Iran and Iraq got bombed by rockets, and the war killed about a million people. No wonder Iranians are a bit leery of the West’s lenifying discourses.

But, of course, Iran is a signatory of the NPT, whose spirit is not just to prevent the proliferation of nuclear weapons, but eradicating them in the long run.



So what to do with existing nuclear weapons? Well there are still thousands around, mostly in the USA and Russia. They ought to be reduced ASAP. Global zero nuclear weapons ought to be the aim, and, in theory, it is the aim of the NPT.

However, nuclear reduction towards zero can proceed if, and only if, absolutely certain monitoring can be established. Only crisscrossing the world with military inspectors, of the diverse powers, both in one on one more or less standardized bilateral treaties, and, independently, from UN inspectors, can insure this. Maybe a global nuclear weapons transparency treaty ought to be signed by all powers, and enforced at will, by any signatory. During the transition, the wasting asset of the nuclear striking capability of the five permanent members would insure encouragement, enforcement, and dissuasion.

Rabid neo-conservatives, but also much wiser people may be genuinely worried about quitting an obvious equilibrium point in military terror. Indeed, there was no major war since 1945, at the cost of a Berlin blockade, firing general Mc Arthur, etc… It is plausible that this happened because of nuclear terror, but other factors were in play: the three largest powers, the USA, the USSR and China, could not believe their luck to be masters of the world, and one does not see why they would attack further. Both China and the USSR has suffered huge losses (20 to 30 million killed), and the USA reigned over the rest of the world like the fully stuffed fox over the chicken coop.

The fact remains that one single strategic nuclear sub of the type made by France, the USA and Russia, can annihilate a large part of the population of any country. This is exemplary of the power of nuclear weapons. One single powerful nuclear bomb could annihilate any city on earth, if it was cheaply boosted as a fission-fusion-fission device.

Of course, the present permanent members of the Security Council have zero interest to get into a nuclear war.

Peaceful nuclear energy can help, because it could burn the offensive materials, while concentrating on non weaponizable technologies, which have been little developed so far, but which do exist (such as the Thorium technology, or fusion-fission thermonuclear reactors, which are perfectly feasible, NOW).

A few nuclear bombs ought to be kept at the ready, using the Security Council, to handle the odd extravagant terror threat (probably deep underground), or the odd comet. I know some studies have claimed fusion bombs would ineffective against comets, but that is simply a ridiculous statement: if we have 72 months, that is what it will take, and nothing else would do it. And a fortiori, if it is just 72 hours. Remember, with thermonuclear fusion, we have the power of the sun at our disposal. No comet can resist a fireball 10 kilometers across.



Tsar Bomba detonated over the gigantic Novaya Zemlya island of the Arctic ocean. Soviet scientists did not used the cheap trick of wrapping it in inexpensive and abundant Uranium 238 (U 238 fissions when bombarded by fast neutrons produced in immense quantities by thermonuclear fusion, just as U 235 fissions under slow neutrons). Wrapping Czar Bomba with U 238 would have boosted its power to 100 Megatons, half the energy of the Krakatoa’s main explosion. It would also have caused gigantic radioactive pollution, that is why Soviet scientists did not do it. But of course, nuclear terrorists, especially of the bin Laden persuasion, do not have to show as much restraint.

In conclusion, here is the Tsar Bomba’s fireball, measuring 8 kilometers (5.0 mi) in diameter, licking the ground, and nearly reaching the altitude of the deploying Tu-95 bomber.



On the positive side, no comet could resist that.




April 11, 2010




Abstract: For George Washington: "Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master." Although I do agree, in first approximation, these concepts are more entangled than Washington suspected. And force starts with a single word.

I will worryingly argue that force is what humanism ought to be mostly about. Civilization itself is violence, but there are reasons for this violence. Even the apostle of love, Jesus, admitted this snidely. And human force is driven by the logos (Jesus, I hope I am not turning Christian!). But ideas are not just contained in logical propositions. The very logical elements the discourse is made of, matter. A single word or two, can carry so much semantics, that extreme violence ensues, right, or wrong.

Symbols, misleading or not, even reduced to one word, can induce massive force by impelling deviance from reason. Debates on race or around the meek euphemism "climate change", have been perverted by errant semantics.

The president of the USA ought not to label himself "black", as he is arguably much more white than black, while his color is brown. Such an offense to the color spectrum is an homage to racism. OK, some may want to make a few points, by claiming to be "black" when they are not, but points are often what vengeance, thus stupid violence is about (that is what the Lex Talonis is: keeping scores).

Similarly, to claim that one is against "climate change" is pusillanimous bimbo babble: it’s not the main problem.

Reciprocally, appropriate eloquence can frame a debate correctly. And eloquence starts with the very concepts, even reduced to a single word, that it animates.

An example is the expression "climate change", a potential partial description of what is going on. It should be given up, for a more responsible description: CARBONIZATION ought to replace it. Indeed, CARBONIZING the earth, an intrinsic evil, is what we are doing, which may, or may not, result primarily in man-made "climate change". Just arguing about the climate, and whether it is changing or not, is an homage to distraction.

Modern physics, with it accurate philosophy, is centered around the idea of using the correct words, and all of them. Time to get inspired by this.

The problem is not violence. As (the mythical) Christ observed, defending love with the sword is no sin. But defense starts with a discourse. As the Evangels (John 1;1) says, liberally stealing from Greek philosophy: “In the beginning was the Word, and the Word was with God, and the Word was God.” And that word better be good and appropriate.



“I was right 70 percent of the time, but I was wrong 30 percent of the time,” said Alan Greenspan as he testified on Capitol Hill. Imagine the captain of the titanic, the pilot of the jumbo jet, or the commander of a nuclear strategic submarine telling that much.

Surveying America’s moral landscape in his Inaugural Address, Barack Obama called for “a new era of responsibility”. Well, responsibility starts with the careful choice of words, even with the careful choice of every single word. To call black what is white is wrong, and so is calling black, what is black and white.

"Responsibility" requires first to know what one would respond to. It starts with the choice of words. Because words represent the concepts logic manipulates.

In today’s USA nobody is responsible, no predatory fish who is big enough is ever caught.  Be it official judicial precedent to make torture as official practice in the USA, or colossal theft endangering the world economy, nobody is to be prosecuted, because it’s a new era of (ir)-responsibility. Some will say that, so it is, in a kleptocratic plutocracy.



The USA is making its census, as it does every ten years or so. Besides finding how many Americans there are, where they live (thus determining the political circumscriptions), it finds which "races" Americans are. "Race" is important in the USA. The census is, literally, racist, and Americans feel that is OK. One of the races proposed is "white". Another is "Black, African-American, Negro". In a bold leap forward, because soon most Americans will be of mixed origins, people are allowed to write down more than one "race", thus making "race" into the irrelevance it ought to be.

Sadly, this point seems to have officially eluded Barack Obama. He wrote: "…I ceased to advertise my mother’s race at the age of twelve or thirteen, when I began to suspect that by doing so I was ingratiating myself to whites…"

Never mind that his white grandparents showed up at every school event at the time, as people who knew him very well testified. Moreover, since most people in Hawai’i are of mixed race, nobody cared to start with. (I spent my childhood in black Africa, where, just as in Hawai’i, nobody cared about what "race" one was, and where attention to race was called racism.)

But now everything is different for Obama, because the force is with getting votes wherever they are, in the racist continental USA. So he has to demonstrate he identifies himself to a race, to get the racist vote. So, OK, no more "mother’s race advertizing". Ingratiating to people who are just white, is pretty useless anyway.



In France,  racist or religious demographics have been unlawful since the nineteenth century, and racist cultures are viewed with contempt. Indeed, one cannot even ask officially people about their religious obsessions, either. France does not even know how many of her citizens are "Muslims". Anyway, how to define "Muslim"? Most French are atheists, and genetic studies have shown that in South-West France, many French partially descend from Muslim invaders.

Why did France become so adverse to racism and religionism? Because of the atrocities committed against Cathars, Jews, Protestants, Atheists, and Catholics, on religious grounds, from the 1200s to the 1700s. One full blown crusade happened on French soil (!). Centuries of massacre motivated by paying homage to the exclusion principle. Only at the end of the 16C, seven religious wars occurred in quick succession. A century later, the protestants were kicked out, helping to foster a global European war.

So, when the Nazis occupied France, they could not tell who and where, the Jews were. Out of roughly 400,000 Jews in France, 75,000 were deported and killed by the Nazis, and the majority of the dead were not French Jews, but recent Jewish refugees from Nazism. Many were from Germany: the USA had refused to let them in. Small place, the USA, sometimes.

In the Netherlands, in contrast with France, people had to declare their "religion" on official government forms. Such was Dutch law, prior to the war. The Nazis liked that, a fellow country where "race" mattered. The Nazis were all about race. With a bit of help from IBM, most Dutch Jews were found out. In 1941, there were 154,000 Jews in the Netherlands. All of them, but a few thousands, were killed subsequently, including Ann Frank.



In 2010, president Barack Obama declared his "race" to be "Black, African-American, Negro". However, Obama was brought up by his 100% "white" mom and his 100% "white" grandparents in non-"African-American" society in Hawai’i and for four crucial years of childhood (age 6 to 10) in Indonesia.

OK, here is Obama’s black family:


[Barack Obama and half-sister Maya Soetoro, with their mother Ann Dunham and grandfather Stanley Dunham, on Punahou’s campus, Hawaii (early 1970s). His white grand-mother, who brought him up in Hawai’i, as he refused to go back to Indonesia with his mom, is missing in this picture, she is probably taking the photograph.]

After you believe that this is a black family, you are ready to believe Wall Street has nothing to do with the decay of the USA. Good for you, because you have no choice in the matter.



Of his early childhood, Obama recalled, "That my father looked nothing like the people around me—that he was black as pitch, my mother white as milk—barely registered in my mind."

He described his struggles as a young adult to reconcile social perceptions of his multiracial heritage. That could have been only after he left Hawai’i because, at the time, most of his school and friends there were multiracial. Reflecting later on his formative years in Honolulu, Obama wrote: "The opportunity that Hawaii offered—to experience a variety of cultures in a climate of mutual respect—became an integral part of my world view, and a basis for the values that I hold most dear."

Somewhat confusedly, Obama confessed about using alcohol, marijuana and cocaine during his teenage years to "push questions of who I was out of my mind". Obama identified his high-school drug use as his "greatest moral failure." Little problem here: as I said, at that elite private school, Punahou, most of his friends were multiracial, in a Pacific Islander-White cocktail (and some looked pretty much like Obama himself). And, as Obama himself pointed out, little racism was around.

One may wonder if opting to deny one’s "white as milk" origin, is more of a "moral failure". All the more since Obama knew his absentee father, a Kenyan polygamist, only for a short time, as a baby, and later, for one month. Now, of course, the characterization of Obama as an "African-American" came up during the electoral campaign, and Michelle Obama stepped loudly forward to call non sense assertions to the contrary (she is a genuine African-American). Thus, the Obamas made sure that all "African-Americans" would vote for him. But it is pretty obvious that Obama was elected precisely because his mind-set is not that of an African-American (his white, and world backgrounds made the difference).

To call someone a "negro" in the USA is viewed as an insult. To celebrate Obama as the "Negro In Chief" would be viewed, by most Americans, as racist. But to consider whether they are "negroes" or not "negroes" in the census is not. Go figure.

It is also disheartening to see Obama follow the infamous "one drop rule". In the racist USA, even if you were blonde with blue eyes, you were counted as "black", as long as you had one drop of African "black" "blood".

In America, "black" is that strong a magical curse; a drop of it, and blackness pervades you. That way the American racists were way worse than the Nazis, who counted as fully Aryan anyone who had less of one grandparent of heinous "blood". The Nazis also had the notion of intermediate type ("Mischling"), and several types of Mischlings at that (depending how many Jewish grandparents, and if one was declaring Judaism as one’s religion, etc.) Thousands of Mischlings served in the Wehrmacht, and notoriously the Marshall invading and torturing Norway was a full Jew (he and his family were aryanized by an attentionate Adolf).

But, in the USA, for the racists, one drop of heinous (black African) blood does it. So, let the "conservatives" be reassured: Obama dreamed of his father, found him black as pitch, and therefore observed the "one drop rule". Obama is a good, traditional American. His mother was white, therefore, he is "black". The stain shall not be rubbed.

My take on it: the famous writers Cesaire and Senghor, in France, made the point, long ago, that there was no reason to be ashamed of the niger (= black in Latin), negre, negro qualificatives. They, correctly, celebrated "art négre", and négritude philosophy. This being said, to call, in France, or Africa, somebody who is brown, "black", is viewed as racism, precisely because it implies the "one drop rule", the most racist violent violation which ever was.

It is violating semantics to call "black" who is brown. It is as if one admitted that "black" origin changes everything. One drop of black, and all is carbonized. That later idea was the essential mental facilitator of American slavery. The pope, in the Middle Ages, decided that it was OK to enslave black Africans, as if they were not fully human. In other words: "monkey = black = slave". Because the whites wanted a lot of slaves, they then introduced a further equation: "non white of plausible partial black African origin= black = non human".

To call "black" who is brown, or beige, or vaguely tinted non white, is a reverence to the concept of the quality-that-changes-everything.

I do not want to pick on Obama, who has made deliberate efforts, precisely, to avoid the traps of misleading semantics. And most elder Americans embrace the "one drop rule", a sacred feature of what passes for culture in the USA. But, still, it is a flaw, an homage transmogrifying exclusion into a religion.


The reverence to details that-changes-everything is the neurological root of tribalism, racism, exclusion. To call "black" who is "brown" is viewed in Africa as a deliberate insult. (Instead, Africans qualify each other with their ethnic origins, which are numerous, with different languages, even within the existing nations bequeathed by European imperialism. Overall, the word "African" is preferred, since it eliminates the obsession with skin color and, thus, race.)

To view a partial origin from somewhere as the quality-that-changes-everything is the root of racism, because it makes violence to reality. It makes a detail into a world. Once one has made violence to reality, one is ready to make violence on anybody.

And violence on reality, racism is: races can, in general, not be defined, even using modern genetics, because alleles of genes are all over the place. For example I have a friend who is, in appearance, completely Scandinavian: blonde hair, striking blue eyes, white skin, and what the Nazis would have seen as classical Aryan features. This is not just her appearance, but the reality of who she is: much more Aryan, superior white race looking than, say, Hitler’s wife, Eva Braun. Although this ideal Aryan views herself 100% "Jew", and born that way, being an American, the Nazis would have certainly sent her to the oven (except if Hitler had made her a "honorary Aryan", as he did, with thousands of Jews).

Why so much absurdity? Because mental violence is irresistible to humans. Among other advantages, it allows them to go to the bitter end of their errors, and, thus, to find the truth… by exclusion.



Violence is about force, powerfully applied. Some situations require swift, powerful force, and nothing else could remotely address the situation. So force has to be brought to bear.

When a fanatic decides to explode in a crowded place, that is violence, and only a swifter violence will prevent a great mayhem.

Smaller violence to kill much larger violence is violence well applied.

"Non Violence" is similar to "non-force". Philosophically, it is warm mud. Indeed, man is all about the modification of the environment, which means, the usage of manly force, energy. Thus "Non Violence" means actually "Non Human".

Some will scoff at this notion, but we have a zillion examples of this. Many tremendous warriors brought magnificent peace, whereas limp, non violent types brought only war. Examples are Henri IV of France, a warrior who put an end to the religious wars, whereas the hands off, holier than thou attitude of the USA relative to Hitler, condemning France for threatening to do the dirty work, brought only a world war, and a holocaust. As the Romans used to say: "Si Vis Pacem, Para Bellum!" ("If (thou) want peace, prepare war!")



An example of violence working for the good, contrasting with showy goodness propelling crime: Gandhi and Mandela. Both were lawyers, experts in British law. Both exerted their profession in South Africa. Both are revered. But they went opposite ways. Gandhi was an hypocrite, Mandela a honest thinker. One embraced goodness with poisoned lips, the other embraced violence, because it was the lesser evil.

Gandhi opted for "Non Violence", and is famous for it. Conclusion: not only was he violently assassinated by an Hindu fanatic, but his allegedly "non violent", certainly self satisfied, low quality thinking led to about 10 million people killed, and perhaps 100 million, soon. Or more.

Indeed, Gandhi’s religious, Hindu nationalism, in the guise of resisting the Brits, enraged and worried the Muslims living in India. Opportunistic Muslim leaders were then happy to have an excuse to get their own state to reign over, in turn. Gandhi was not the dragon itself, maybe, but he certainly woke it up, played with its tail, provoked it, and lit the fire. India would have been better off imitating Canada: it would not be divided as it is right now, perfused with conflicts, the thermonuclear match at the ready, to visit gamma rays upon itself.

Moreover, Gandhi’s entire show was pretty useless: Britain administrated India with a tiny number of officers (sometimes less than 2,000). Britain was on its way out, India was basically already independent.

Mandela thought bigger thoughts. And he faced a real, determined enemy. After he saw that the crushing power of racist white violence could not be finessed with, Mandela, this partisan of progress and human rights, deliberately decided that only violence in kind would allow the pride of non whites to wake up, and shock them into action, while it would make the world notice apartheid’s violence, and the reaction would prove too costly to the racists.

After a few bombs exploded, Mandela went to jail, switching to mental power, from inside, turning his own jailers around. Hence he succeeded to avoid a blood bath in South Africa, and to foster national and racial reconciliation. By using great mental energy, and physical violence, as needed. A much more difficult task that going around nearly naked, spinning one’s wheel, as Gandhi used to (the wheel being an Hindu-Buddhist symbol so, under the guise of making one’s own clothes, anti-Muslim emotions were promoted, not the best thing after 1,000 years of Hindu-Muslim civil war.)

This being said, violence is what we humans do. To know this, it’s enough to watch the Space Shuttle, or the Arianne rocket take off. We just have to do it well. But often, as Gandhi unwittingly proved (and understood too late!), the devil is in the details.

There is nothing more human than violence mixed with technology: the Nazi philosopher Heidegger had not understood anything in that matter (as in many other matters).

The ancestors of man arose from eating meat, much more meat than the meat obsessed chimpanzees, thanks to the use of weapons. Meat gives superior energy, hence force. Force is how Washington kicked imperialism out.

Weapon usage, feeble in chimps and baboons, was allowed by locomotion on two legs in humans, as it freed the arms to swing down from heavens, crashing various projectiles on a dejected fauna (baboons throw stones from below, swinging up weakly, humans throw stones from above, swinging them mightily; I have known quite a few baboons in Africa who could have testified to this).



But of course, stealth is half the victory as Sun Tzu pointed out. So it is often best for aggressors to do like Gandhi, or (the mythical) Jesus, and claim goodness, when they are hell bent at encouraging implicit aggression

Although the mythical Jesus was more honest about his aggressiveness than the Hindu fanatic Gandhi, since Jesus admitted that: "I come not to bring peace, but to bring a sword" (Matthew 10:34); OK, philosophers are dangerous, at least to others’ minds, and the mythical Jesus was a philosopher of love, so, he, indeed, brought a "sword".



The euphemism "Climate Change" is another deviation from reality opening up the possibilities for lots of implicit aggression. It reminds us of Don Quichote charging windmills: who wants to fight the climate, and its changes? Does not the climate have a right to change itself? After climate has changed, what is it going to wear? Fighting the climate: does not that sound ridiculous? And even if it implicitly means a warming of the climate, this does not have to be negative: tropical beaches in Alaska, why not? Agriculture and forests in Antarctica; why not? Millions of square kilometers in gigantic Siberia and central Asia, free of permafrost, at last, why not?

Indeed the way the planet is, most of the warming would be at the poles. "Global Warming" means the poles would melt. Temperate zones would become tropical, some would get in the desert belt, true, but most of the changes would happen in the refrigerator, and the freezer of the planet, which would get busted.

So it was in the heydays of dinosaurs: the poles were very warm. Dinosaurs and saurians thrived there. Ever since the climate has cooled down. And the biosphere had 100 million years to get used to the cooling, although there were hick-ups along the way, like the extinction of dinosaurs, and their flying and swimming cousins.

Unsurprisingly, the mammals, who descended from mammalian reptiles who had warm blood to live in cold areas, 200 million years ago, and the birds, flying dinosaurs with high metabolism and a very warm temperature, replaced dinosaurs, and their cousins, who were not adapted to the cold (dinosaurs liked Alaska, Greenland and Antarctica, but only when those were covered with forests now found closer to the equator, with species such as Patagonian beech).



So it is not the climate which woke up, some day, and decided to change. And, even then, it does not have to be a bad thing. By emotionally framing the debate thus, those who want their carbon profit friends to keep on messing the planet, win it automatically; climate is doing its thing, and its thing is a nice warming.

Framing the debate thus is a fallacy. Such fallacies are historically important: human beings are reasonable, and, if you frame their reason craftily, an oligarchy will put them in any mental corral it likes.

For example, the Nazis claimed that they improved the economy of Germany. Everybody swallowed that lie, and it is repeated to this day. But, in truth, they ran a super gigantic deficit, while stealing their self declared enemies bare, and redistributing the stolen wealth to their followers, making them rich. But, by asking the question to their followers and their admirers: "Are we better off under Nazism?", they framed the debate around erroneous emotions, such as glee for their "success". (This strategy inaugurated by the Nazis, of focusing just on partial apparent economic success was used again by American neo-conservatives, as they were sinking the USA in the last 40 years. As Wall Street GDP went up, they misrepresented it as a success for the USA.)



Thus the expression "Climate Change" is inaccurate, and misleading. It is even fallacious; most of the real change is a massive extinction of the biosphere, and a poisonous acidification of the ocean (indeed half of the CO2 created by the carbon industry goes into the sea). Thus it’s not so much the climate that is changing than the BIOSPHERE THAT IS POISONED, AND EXTINGUISHED, BY MAN.

So I propose to label the process of injecting billions of tons of CO2 into the atmosphere by evoking it, as it is. I propose "CARBONIZATION". I am against the CARBONIZATION OF THE BIOSPHERE. "Climate Change" is an amusement. "Carbonization" is, obviously an inconvenient crime.

The concept of "Carbonization" includes the warming of the lower layers of the atmosphere, of the oceans, and the soil, plus the acidification (through carbonic acid), plus mass extinction, and depicts what is going on, namely the injection in the biosphere of half a billion years of buried carbon.



After Louis de Broglie launched the full blown Quantum Wave Mechanics in 1924, there was a tremendous philosophical debate about the importance of words in physics. Bohr argued forcefully that classical words led to the erroneous Classical Mechanics irresistibly. Nearly a century later, it is clear that Bohr was right. For example, there is nothing such as the "trajectory" of a particle involved in a fundamental quantum process. To utter the word "trajectory" is already to assume what is not. One word is uttered, and everything is wrong.

Interestingly, as Heisenberg told a recalcitrant Einstein, the later, adopting Poincare’s pragmatic approach to space, had changed the semantics of space and time, and thus changed Classical Mechanics already a lot. Some words (such as simultaneity), and the physics associated to them, had been eliminated, others were born (such as spacetime, or mass-energy).

Responsibility starts with responsible words. As Frank Rich points out in "No One Is To Blame For Anything", "Obama has been less forceful in stewarding a new era of responsibility when it comes to adjudicating unresolved misdeeds in the previous White House. “Turn the page” is his style, even if at times to a fault. Many of the Bush national security transgressions, including the manipulation of the case for war, are rapidly receding into history and America’s great memory hole.

The president will not have the luxury of mass amnesia when it comes to the recent economic past… Most of its victims are genuinely innocent bystanders who lost their jobs and savings while financial elites cashed in on the crash… the fear that the Obama administration is protecting its friends persists. On the same morning that Rubin testified last week, Eamon Javers of Politico wrote about his continued influence on his many acolytes in the White House. That includes Geithner, whom Rubin talked with repeatedly in the weeks before the president released his financial regulatory reform proposal last June.

Americans still waiting on Main Street for the recovery that lifted Wall Street once invested their hopes in Obama. Getting the new era of responsibility only 70 percent right won’t do."

Responsibility starts with the correct words because each word, in each mind, neurologically connects to a number of other words and concepts. Connecting irrelevances together is just as irrelevant as the irrelevances it is made with. Pedaling besides the bike does not an efficient mind make. Black and white is not just black, climate change is not just the problem, and so on.

Quantum Mechanics has shown that, in any fundamental process, nature takes into account the whole context, and never just a fraction of it. Taking into account only a fraction of the context of a fundamental quantum process changes its Hilbert space, hence the eigenvalues and eigenvectors, hence everything. It’s irresponsible.

It is high time to bring daily human logic up to the level of rigor our study of nature has revealed. Responsibility starts with responding to nature as we know it. Quantum Mechanics has shown that contextuality is everything, and it starts with the exact words.





Annex on acidification, and global carbonization: NOAA states in their May 2008 "State of the science fact sheet for ocean acidification" that:

"The oceans have absorbed about 50% of the carbon dioxide (CO2) released from the burning of fossil fuels, resulting in chemical reactions that lower ocean pH. This has caused an increase in hydrogen ion (acidity) of about 30% since the start of the industrial age through a process known as “ocean acidification.” A growing number of studies have demonstrated adverse impacts on marine organisms, including: The rate at which reef-building corals produce their skeletons decreases. The ability of marine algae and free-swimming zooplankton to maintain protective shells is reduced. The survival of larval marine species, including commercial fish and shellfish, is reduced."

The Intergovernmental Panel on Climate Change (IPCC) writes in their Climate Change 2007: Synthesis Report: "The uptake of anthropogenic carbon since 1750 has led to the ocean becoming more acidic with an average decrease in pH of 0.1 units. Increasing atmospheric CO2 concentrations lead to further acidification .. While the effects of observed ocean acidification on the marine biosphere are as yet undocumented, the progressive acidification of oceans is expected to have negative impacts on marine shell-forming organisms (e.g. corals) and their dependent species."

IPCC also includes in its last report that with a probability greater than 0.66: "the resilience of many ecosystems is likely to be exceeded in this century by an unprecedented combination of climate change, associated disturbances (e.g. flooding, drought, wildfire, insects, ocean acidification) and other global change drivers (e.g. land use change, pollution, fragmentation of natural systems, overexploitation of resources)."


Final Solution For Banks.

April 6, 2010



(Warning: some sections in the middle are mathematically complex, and readers ought to jump over them in a first reading.)


Abstract: Many argue that Too-Big-To-Fail banks caused the financial crisis of 2008-2009. However the crisis had mostly to do with leverage in a shadowy private universe. For centuries, starting in the Middle Ages, financial leverage was the main weapon of aggressive states, republics with a big appetites expanding fiercely with, within, and against, the largest empires. Leverage was about states. It was never big enough, and it never failed. In particular it financed the Italian republics (Venice, Genoa, Florence, Milan, etc.), expanding successfully their might and economy.

What went wrong recently was that basic public safeguards of state finance were privatized. Putting greed on the throne, while forgetting law and order, does not keep leverage sustainable.

Creating money historically was, and ought to stay, a regalian privilege. Giving that regalian privilege to the few, the unelected, the unsupervised, the evanescent, the bankers, with their invisible hands, is not just plutocracy, it’s a kleptocratic anarchy. This very recent development, should it be allowed to persist, will crash civilization.

I propose a drastic remedy, namely the re-establishment of democracy’s reach in leveraged finance.

Kleptocracy is what we have: the five top guys at Lehman Brothers retired with 2.5 billion US dollars. Their business went down, nearly bringing the entire world financial system with it, among other reasons, because it was entangled with the US government bonds’ market.

That private-public thievery system was made possible by getting money from a plutocratic outfit masquerading as part of the US government, the Federal Reserve (truly an emanation from private banks). More similar secret arrangements have been revealed in 2010, between the Fed and the largest private financial oligopolies (AIG, Goldman, etc.) This problem of secretly supporting some private outfits with public money, is not confined to the USA.

The entire philosophy of the financial system is wrong.

Confronted to this civilization threatening situation, Barack Obama decided to do what he was told was the bare minimum course: write a blank check to Wall Street, trust in the genius and common sense of his fat cat banker "friends". Obama was misled: the banks which were helped with trillions of US dollars of direct, and indirect, US tax money, ought to have been nationalized. Be it only for fairness’ sake: if you pay for it, you own it. The people paid for the banks, so the People ought to own the banks.

But there was an even more important reason for nationalization: changing the managements of the banks, and their entire investment policy, which is centered on Shadow Banking (as it is called!) and derivatives, and which deprives the economy of capital, by diverting it to the Shadow.

It is hard to blame Obama for not seeing all of this: he had been focused on his health care Machiavellian plan, for years. And nobody foresaw the financial hurricane coming. Why? Because the banks lied on a cosmic scale. Moreover, nobody was remotely conceptually ready to handle the incompetence and organized crime aspect of what finance had become. Even Marx would have been out of his depth (the problem existed in his time, in inchoating form, and he did not really see it). Genuine philosophical perspectives are involved in the kleptocratic mess that finance has become. This essay tries to fill some of them in.

For accidental historical reasons, debt, private oligarchies and government, became entangled during the European Middle Ages.

The smaller European powers, the republics, became highly successful by financially leveraging themselves, with the help of private individual networks. This worked splendidly against Spain, or against and with France, or to leverage Britain, or France, and other European powers into world empires.

But these wars are over now. It is time to rein in the dogs of war, the bankers. We don’t need these mercenaries anymore. Now that Mr. Obama has allowed the health plutocrats to swallow his health plan, hook, line, sinker, and soon, the boat itself, he will be able to concentrate on the financial plutocrats, and how to conceptually hammer them when the next crisis come. Because that next crisis will certainly happen. Verily, looked at it the right way, the crisis is already here: the way it goes, many economic indicators will look worse, over a 15 year period, than they ever did on any 15 year period around the Great Depression. The fundamental cause of this is exposed below.



Socrates thought competence was not guaranteed by elections. Bankers think neither competence, nor elections are needed.

The banking problem gets very complicated, when we try to tinker with it, working inside the existing plutocratic labyrinth. But it’s actually very simple, when we look at it with civilizational class, from a millennial perspective.

We ought to act like Alexander, and cut the Gordian knot. This does not mean the end of capitalism, or free markets, quite the opposite: both have been captured, together with the political system, by private banks, making Mafiosi look like dilettantes.

In his times, Socrates insisted that it was not enough to be elected democratically to be able to serve the democracy adequately. When one’s shoes are ruined, one goes to a shoemaker, a professional long trained in this skill, Socrates observed. One does not get elected shoemaker, one trains for the job.

Socrates extended that criticism to other positions one could get elected to in Athens, such as general, or judge. He, rightly, considered that the elective approach to important positions made the democracy incompetent.

The solution to Socrates’ critique was found in the Middle Ages, as an extension of, and inspiration from, the very efficient Roman administration at the apex of the Greco-Roman empire (which everybody still had in mind, in the Middle Ages; the Merovingian and Carolingian Frankish governments, after 486 CE, saw themselves as Roman governments, and they used elaborated Latin language and Roman concepts, and that of public institution was central).

Europeans in the high Middle Ages learned to build institutions, which were democratic, and based on merit, inside, while delivering competence, outside. To some extent, after centuries of heavy meddling by the Franks, and before its take-over by the plutocrats, and theocratic fanatics, the Catholic Church (monasteries and cathedrals) was such an institution. In turn, it gave rise to the nascent universities, while the guilds grew with the cities (which were independent of local potentates).



OK, so Socrates’ big problem with democracy got solved. in the Middle Ages. So how come we have now private, unelected, completely incompetent individuals, the bankers, who overlord above the world’s financial and economic system? How did we get there, down below, at their feet?

For millennia, a state was first an army, and, second, the controller of a currency. The state was many other things, true, but those things were not besides, but below, these prior two. (The state of law appeared 37 centuries ago, at one of the apexes of the Babylonian empire, which means millennia after the organization of powerful states, characterized with army, and currency.)

Long distance trade has been central to human evolution for several dozen thousands years (we have the archeological proofs in Australia, thanks to its dry climate), and probably much more than that. A means of exchange was necessary to motivate people to transport irreplaceable goods over gigantic distances. Thus currencies appeared early.

OK, the gigantic Inca empire did not have a traditional currency, and instead traded in energy credits, directly.

The Incas used a direct "barter" of goods against work, and reciprocally. Thus it would appear that they had no currency. However, it is the exact opposite: the Inca state used the very essence of a currency, namely the energy based system for currency (I personally advocate it as the ground for valuation of everything).

The powerful Inca state did not need bankers, but instead let the economy be guided by the value of work, and, one may even speculate, by the value of goods according to how much work was needed to provide them. Energy as currency is beyond the purpose of this essay, so I will leave the advanced Incas behind, and proceed with my broadside against so called modern banking (which is actually back to primitive chieftain mentality). But let the bankers impale themselves volubly on their own hubris:



Says Mayer Amschel Rothschild, founder of that plutocratic family: "Give me control of a nation’s money and I care not who makes the laws." Says Baron Nathan Mayer Rothschild: "I care not what puppet is placed on the throne of England to rule the Empire, …The man that controls Britain’s money supply controls the British Empire. And I control the money supply."

Where does this plutocratic arrogance come from? In the Imperium Francorum, the empire of the Franks, also known as "The West", private individuals who created their own money, without the authorization of the government, were, according to the law, slowly boiled in a variety of fluids, after being confined, alive, in special cages made just for this purpose. Not just great entertainment, Middle Age style, but also an efficient way to insure that arrivistes kleptocrats did not threaten the established order.

The reason for this ferocity was that the Frankish states used Fiat Money: the face value, also known as the nominal value, of the coins was much greater than the value the coins’ material was made of. Such a system worked reasonably well under Rome, and extremely well in the Imperium Francorum, after the boilers were activated.

One of the advantage of conquering Europe was that the Franks got silver from mines in Eastern Europe. Deep silver mines, with pumps and slaves, had perhaps been Athens’ main economic prop. Thirteen centuries later, silver mines helped the much more powerful empire of the Franks. Having silver allowed to create a lot of money in Europe, and thus, a lot of trade. (About at the same time, paper money was introduced in part of China; but tradable promissory notes, in clay, existed since Babylon, 25 centuries earlier.)

An empire needs enough money to optimize trade. Too much money, though, and nobody works, or, rather, too many people work inefficiently, if at all. This happened to the Spanish empire after it brought back from the Americas huge quantities of gold and silver. Thus Spaniards got plenty of goods from the rest of Europe, in exchange for all this gold and silver… and progressively lost the ability to make goods themselves (having thrown Muslims and Jews out, and the fascist Inquisition in, also lowered the civilizational level considerably, making Spain into a mental retard).



Another civilization which went astray, although it looked splendid for centuries, for the very reason that made it astray, was Britain.

Britain had been at war with its alter ego, France, for somber succession reasons. After being confined in England, the English monarchy with a population and resources which were tiny in comparison to France, had to leverage itself financially.

So Britain used money changers, and first of all, German Jews, the Rothschild. This allowed it to build a great fleet, and pay various German warriors, as England fought France, by all means, fair and foul.

(The war with France was an extremely complex war, 5 centuries long. An example relevant to the financial context here: Louis XIV, asked by the king of England to save his throne, and send his army over, refused, arguing that it was an English internal affair. But those Dutch he had refused to attack, having conquered England, attacked France nevertheless, using Dutch style financial leveraging to pay for the war. Then they persuaded others, such as the Duke of Savoy, to attack France too… And it was then, circa 1694, that the Bank of England was created, showing the mighty connection between war and finance… The French were a bit slow to understand, and founded the Banque de France only in 1800…This war caused enormous destructions and deaths in the Alps and Northern Italy, among other parts.)



Money changers, starting in the Middle Ages, received people’s valuables, such as gold, and gave "promissory notes’ in return. People learned to trade the promissory notes, and money changers learned to give more notes than they had reserves for.

The fractional reserve system was born thus, with the complicity of thoroughly broke, war making governments such as the one of King Francois Premier. Francois’ eternal adversary born a few miles away, Emperor of Spain and the Holy Roman empire, his fellow Francois speaking Charles Quint, was using German bankers, and Francois I, used the Medicis, as bankers.



After helping considerably the rise of the "Anglo-Saxons" in the last 300 years, PRIVATE fractional reserve banking has become the backbone of "Anglo-Saxon" like capitalism.

But it rose as comparative advantage to France and other European competitors. Thus there is nothing intrinsically "Anglo-Saxon" about it. For a while, powerful private fractional reserve was kicked out of the USA, or let’s say strongly attenuated by USA presidents such as Madison and Jackson, who detested bankers in general, and the Rothschilds in particular. Twice, the Bank of the United States bit the dust, pushed by the presidents into it. Instead they replaced it by the same, but made of much smaller banks. So trying to solve bankers’ powers by making them small enough to fail, has been tried before, and, it failed. Big time.

The rise of enormously powerful private fractional reserve was consecutive to Reagan’s, Clinton’s, and Bush’s reigns, with the powerful plutocratic influence of Larry Summers, who advised the first two, before returning in his glory with Obama, a real life Jesus of derivatives, and leveraged finance, on his third coming.

Enormous leverage insured for a while an apparent prosperity in the USA, so the private fractional reserve system was welcomed everywhere, and this plutocracy generating mechanism was viewed as the best government for the planet.

For example, American plutocrats advised president Yeltsin to constitute a plutocracy in Russia, ASAP. The richest billionaires in Russia came from that period, they were typically young communist knowing a bit of finance, and given national banks to manage privately, with the full backing of the state (this became again the 2008-2009 "solution" to the problem, in the USA and other parts).

Thus the private fractional reserve, and its generated plutocracy generalized to the entire planet. It has become hubristic, and here we are. It was made more complicated by the rise of derivatives, and, more generally Shadow Banking. These allow the plutocrats to arrange with each other fake profits, and then reward themselves for their considerable "talents". Meanwhile, the real economy is starved of capital.

Marx used to complain about capitalists exploiting the workers, but now we have banks having confiscated capital from (what Marx called) the capitalists themselves, and exploiting everybody.

What’s the way out? Well the confiscation of the world financial system by an oligarchy, namely plutocracy, is a metastatic cancer, it needs a drastic treatment.



"Derivatives" are related to interesting subjects such as insurance, risk management, probabilities.

As with many things, the subject started with Rome. Rome was by far the world’s largest city that ever had been, at the time. More than a million inhabitants. The survival of Rome, and the largest cities of the Greco-Roman empire, depended upon an extensive trade system. Wheat and other foods were produced in distant places, and then brought swiftly to the giant cities by boat, thanks to the "Mare Nostrum". (This worldwide unique possibility for fast and major trade is why and how the Mediterranean sea, and the extensive fluvial networks flowing into it, gave birth to the most advanced civilization, and why civilization concentrated on Egypt, Sumer, Babylon, Tyr, Crete, Greece, the Etruscans, before reaching the Roman peasants, and why the Greco-Roman empire united later all these places in a coherent whole, before the fasco-theocratic degeneracy overwhelmed it.)

It was tempting to make as sure as possible that the grain would come in. So Romans invented Forward Contracts. Those insured that so much grain at such and such a price would get in, in a timely manner. This was not new: earlier forward contracts are on clay tablets from Babylon, in the second millennium BCE.

Roman law, though, assimilated forward contracting to betting.

Fast forward to the European Middle Ages. Republics sprouted all over Europe. The republics rose from cities, which were independent of the aristocratic hierarchy set-up under the Carolingians; one precedent for such an independence of cities was the powerful Venetian republic, which Charlemagne protected, but otherwise left alone… instead of seizing its enormous fleet, which would have been very convenient for the Carolingians, which had none.

Republics, rising from these rich cities, were juicy targets, so they had to be defended, so they needed a lot of money, and they got it by becoming, in part, money center banks. From Antwerp to Florence, financial innovation flourished. It was successful, in part because the rest of Europe, aristocratic Europe, did not have it, so was a natural, wealthy clientele… for the republics’ financial sector.

Republican finance was promoted by the republican STATES, first of all. The republics used bonds, again and again, to finance their wars (The republics could exist only because of these wars; for example, the Venetian fleet depended upon naval construction, which depended in turn upon strong oak for the limbs of vessels, coming from protected forests far away, in various mountain ranges.)

The republic in the Northern Netherlands was at war with Spain, which depended upon Antwerp financial engineering.

The Dutch started a full-fledged derivative market in some shares.



The author has a background in mathematics, and is perfectly able to make its own, even in financial mathematics. So what is a "derivative"?

In pure mathematics, the derivative of a function is a function made from the values of the slopes of the tangent to said function. It all generalizes to higher dimensions and fancier settings.

The informal sense of derivative, used in common language, is much more general, though, and it is readily definable with mathematical precision. So, in that sense, the traditional meaning of "derivative" in mathematics is too restrictive, and therefore unfortunate: one should have stuck with "tangent" (which is a better description of the computation made to obtain it).

I will try to make the meaning of "derivative" precise mathematically, in the sense general enough to cover derivatives in finance. Let me define a derivative of a function f, in finance, to be any function g one can get from f. So: g = h(f), where h is some operator. (The so called "first derivative" in the usual mathematical sense, which I prefer to call the "tangent", is the most obvious example; the differentiation operator, d, is such an h.)

In general, some information contained in f will be lost.

The financial idea was to insure against noxious fluctuations of f by taking positions in a (financial) derivative of f.

"Taking positions" means trading: buying, selling, borrowing, etc. This is what traders started to do in the Netherlands in the 17 C: they traded derivatives of stock values.

An example of derivatives was forward contracts. When traded those are called "futures". Then one can introduce a further level of abstraction by introducing options, which are the right to buy (or sell) some traded "security" if some conditions are met ("security" = function, as used in normal math).

It all became very confusing, and this led Penso de la Vega to write a best seller, "Confusion des Confusiones" (1688). This confusion of confusions is now supposed to be the beating heart of the world’s financial system. Dumber than that, you die.



But why to use derivatives? Well, first, the bankers set them up, and thus understood them better, allowing them to fleece more easily their naïve clientele. The clientele had no choice, because, if they wanted to use bankers, that was the way it was.

Secondly, mathematically, let’s go back to the simplest example of derivative, differentiation. When a function f varies a lot, its differentiated function (that tangent as I call it above) varies less. Reciprocally, a small variation of the differentiated function leads to much larger variation of the function itself. In other words, differentiation offers a huge natural leverage. This sort of leverage is how derivatives offer insurance.

Verily, one wants to insure against a nasty fluctuation of f, so one buys a much smaller amount of the derivative of f; if f varies a lot, the derivative of f will vary, much less.



The danger is that, if one buys and trades too much derivatives, they will fluctuate all over the place, as markets tend to do. But, because a small variation of the derivative of a security corresponds to a huge variation of the security itself, varying the former significantly, one will guess, corresponds to enormous variations of the later.

When the value of crude oil rocketed towards $150 per barrel, there was a controversy about whether the futures (of oil) dragged the value of oil itself with them. Nobel laureate Krugman claimed he did not see the relationship. But it exists. In two ways. First, the futures indicate what the price will be, so, if the price of the future of f goes up, people who trade f will expect f to go up, so they will hold back, making f go up more (from "less offer, same demand, higher price").

Secondly, and more importantly, suppose someone wants to invest in the "oil sector". They have the choice between three possibilities: investing in oil itself, investing in oil companies, and, finally, investing in oil derivatives.

Suppose they invest in the later. Per the nature of derivatives, they get huge leverage, so little money gives a big effect. So it is much easier to drag up the price of oil in this indirect manner, and amplify other investments they made (if any) in the sector. The devil is in the details, so, I will advocate, to cut the devil out, take the details out first, especially those hidden in the Shadow.

To make matters worse, that money they invest in the derivatives is as much money that will not be invested durably in the real economy (namely, oil companies, and oil itself). Instead it is fast, Brownian motion money, supposed to work like Maxwell’s demon.



Most of an influential bank’s balance sheet (like 97%) is made of ‘SHADOW BANKING". That is what has to be brought in the light, and then eradicated.

Indeed, what do big banks officially do? Shelter deposits, and invest in the real economy. But what do really influential banks really do, in the West? Mostly? Well, they invest, but not in the real economy. Instead, they invest in Shadow Banking.

Leverage in Shadow Banking through derivatives such as Credit Default Swaps transformed a housing correction, into the instantaneous annihilation of perhaps dozens of trillions of dollars, worldwide, dwarfing world GDP.

Why? Let’s consider an example. JP Morgan, led by (officially named thus) "co-conspirator" Jamie Dimon, has an 80 trillion dollars derivatives portfolio. His colleagues from big, influential banks were, and are, in similar positions.

These positions in the derivative universe dwarf completely the big influential banks’ real world investments. For example Citigroup claimed to have assets of 1.7 trillion dollars, or so, throughout the 2007-2009 crisis. This was part of Citigroup’s official balance sheet, in the real world. So why did Citigroup fail?

Because most of the balance sheet of Citigroup was in derivatives, and it was so by roughly two orders of magnitude, namely about 100 times more. But big influential banks use big, influential semantics made to hide their real situations, words such as off balance inventory, shadow banking, notional valuations, etc. When it is convenient to them, they incorporate these investments in describing themselves, and, when it’s not convenient, they don’t.

Big, influential banks have mostly investments in a shadow universe, which are leveraged onto the real world. They are made to allow the banks to claim great profits in the netherworld (thus justifying real bonuses, in the real world).

Hence banks, in the present system, are allowed to divert immense capital, most of existing world capital, to the netherworld (they will say, it ain’t real, except when bonus time, and the time to claim profits, come around). Thus, they starve the real economy. The netherworld investments dwarf the real world investment by a factor of ten (roughly: it’s all so secretive, we don’t know the exact quotient).

As I said before, part of the way out is just to remove the ability of private banks to use leverage insured by the State. Instead, let them just eat what they kill, without the regalian privilege of State insured leverage, and without the regalian privilege of using government money as seed capital.

Regalian leverage, and regalian capital, should be used only by the rex, the king, namely, the State. Render to Caesar what belongs to Caesar, as the other one supposedly said.



Money creation is regalian, give it back to the ultimate authority, the State.

We need a monetary authority that is focused on the best policies for our planetary economy. This cannot be a central bank such as the US Federal Reserve: this one is infeodated to the private banks, in the mental state where they think they are the kings. Federal Reserve independence means mostly INDEPENDENCE FROM DEMOCRACY (enormous secret support from the Fed to the very bad actors was revealed recently, as I said above).

Other central banks are differently constructed: the ECB is different from the Fed.

Thus solution to private banking as rulers of the world, the way we have it today: all private banks should have zero leverage, and they would be able to invest their deposits, nothing more.

The national banks would be the only one allowed to use leverage, and thus create money, through debt. Bankers would be civil servants, but investment directors, and their helpers, would get bonuses, according to the long term profitability of the projects they invest in. No more giving money to friends, politicians, and themselves.

Only derivatives with a direct commercial interest, would be preserved. Others, and all Shadow Banking, would be unlawful. National investment directors would be allowed to invest in lawful derivatives, with smaller leverage than the commercial operators themselves.


Time to cut through the plutocracy, and cut all the heads of this hydra at once. We, People of the earth, technological and scientific progress, the cause of peace and sustainability, we all need a lot of capital. That capital is in the Shadow Banking universe, let’s go get it! We need it, they don’t!

Patrice Ayme