Archive for the ‘Fractional Reserve System’ Category

Boosted By Soros On Europe:

June 7, 2012

BAD GERMANY, BAD EUROPE:

Abstract: I agree with much of what Soros said on the bank and currency crisis in Europe. Under his calm language, his indictment of Germany is frightening. I add fuel to the fire, naturlich.

[This is the European centered part of Soros’ discourse.]

***

  Soros:The fallibility of market participants, regulators, and economists must also be recognized.  A truly dynamic situation cannot be understood by studying multiple equilibria.  We need to study the process of change.

PA: In the case of European Monetary Union (EMU), even the equilibrium analysis was flawed from the start. It is not a question of Europe not being an optimal currency area (as American Europhobic destroyers often have it). It was much more basic than that: the nature of money was misunderstood.

  Soros: The euro crisis is particularly instructive in this regard. It demonstrates the role of misconceptions and a lack of understanding in shaping the course of history. The authorities didn’t understand the nature of the euro crisis; they thought it is a fiscal problem while it is more of a banking problem and a problem of competitiveness.

PA: As Soros himself would say further on, it’s even deeper than that: the possibility of making “fiat money” was denied. Thus European states were cut at the heel. “Fiat Money” goes at the heart of the concepts of money… and state.

There is also a massive corruption problem, and it is not confined to banks. It implicates the very nature of today’s constitutions.

The very nature of representative democracy is to put a lot of power in a few hands. This is also what plutocracy does. Make interact together the very few elected ones with the very few who have a lot of money, boost all of this with the fractional reserve privately money creating banking system, and churns out the rule of wealth, an aspect, with titanic corruption, of plutocracy.

  Soros: And [European Officials] applied the wrong remedy:you cannot reduce the debt burden by shrinking the economy, only by growing your way out of it. The crisis is still growing because of a failure to understand the dynamics of social change; policy measures that could have worked at one point in time were no longer sufficient by the time they were applied.

PA: They applied the wrong remedy deliberately. Merkel, Sarkozy and the Brussels’ fauna are in cahoots with the private financial pirates; they are their legal arm. All they wanted to do is that their friends, the pirates, recover their principal, after squeezing hard enough the colonized. So they set-up an aid system nominally for the latter, but, truly for their bankster friends. 

The delay in the correct measures was also deliberate. The allies of plutocratic banks (Merkel, Sarkozy, Barroso, etc.), have used it as a tactic to do nothing.

Always doing too little, too late, is an efficient way to do nothing, while claiming one meant well. Let’s not be fooled by Merkler and her kind.

The basic, deliberate flaw at the base of the EMU, is to make money creation a plutocratic affair. It would have emerged anyway. It emerged now, because we have a plutocratic bubble.

That bubble, in turn, was caused by the arrogance consecutive to the Bush-Obama(-Blair-Sarkozy-“Citizens-United”) years, when the plutocrats’ influence has started to look unimpeachable, and this once-in-a-civilization chance to grab power once and for all has made them frantic! 

The same happened after 150 BCE in Rome. Then, the plutocrats won, and Rome started its long decline. This time the decline is guaranteed to be short and brutish.   

  Soros; Since the euro crisis is currently exerting an overwhelming influence on the global economy I shall devote the rest of my talk to it. I must start with a warning: the discussion will take us beyond the confines of economic theory into politics and the dynamics of social change. But my conceptual framework based on the twin pillars of fallibility and reflexivity still applies. Reflexivity doesn’t always manifest itself in the form of bubbles. The reflexive interplay between imperfect markets and imperfect authorities goes on all the time while bubbles occur only infrequently. This is a rare occasion when the interaction exerts such a large influence that it casts its shadow on the global economy. How could this happen? My answer is that there is a bubble involved, after all, but it is not a financial but a political one. It relates to the political evolution of the European Union and it has led me to the conclusion that the euro crisis threatens to destroy the European Union. Let me explain.

PA: Agreed that there is a political bubble. But to say there was not a financial bubble is, simply false. The financial bubbles in Greece, Ireland and Spain were blatant. So was a general real estate bubble. For years, decent, hard working upper middle class people could not afford to live decently in the world’s most expensive cities, although those concentrated much of the GDP of the world (this is an allusion to New York, London, Paris, Tokyo, among others). So the main producers of added value work could not afford to live where they added the value, making the West’s economy inefficient (and society unjust).

Actually there is even, worldwide, a plutocratic bubble, the one Soros does not want to see. But I agree with him that the European Union is threatened at this point. Mountainous decisions have to be taken in days, in a system made to produce a few mice in a decade.

  Soros: I contend that the European Union itself is like a bubble. In the boom phase the EU was what the psychoanalyst David Tuckett calls a “fantastic object” – unreal but immensely attractive. The EU was the embodiment of an open society –an association of nations founded on the principles of democracy, human rights, and rule of law in which no nation or nationality would have a dominant position. 

PA: Although I see what he is trying to say, Soros is starting to thread very dangerous ground here. The European Union has to be, or there will be another war. It is not a bubble, it is the main weapon against insanity.

Europe is not a “fantastic object’, it is a necessity.

  Soros: The process of integration was spearheaded by a small group of far sighted statesmen who practiced what Karl Popper called piecemeal social engineering. They recognized that perfection is unattainable; so they set limited objectives and firm timelines and then mobilized the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step. The process fed on its own success, very much like a financial bubble. That is how the Coal and Steel Community was gradually transformed into the European Union, step by step.

Germany used to be in the forefront of the effort.

PA: Sort of. Although German politicians used to be in the forefront of the effort in the 1920s, after Germany fell into Nazism, it was of course unable to lead mentally. If nothing else, Nazism had decapitated Germany. Instead, after the Nazi disaster, Germany followed the lead of French statesmen, who had brandished the olive branch (say by not insisting to recover the entire West bank of the Rhine; the same generosity was mysteriously applied to Italy, although clearly major ex-French speaking parts of Italy such as Val D’Aoste, and next to Turin, used to be part of French speaking Savoy, and, after Mussolini’s forced Italianization could/should have very well be annexed!).

One can observe Soros’ drift into anti-European, pro-plutocratic and (implicit) anti-French bias. All students of the early European Union know that Robert Schuman and Jean Monnet, two Frenchmen, played the leading roles, and the German role consisted mainly to salute the French led effort, and goose-step behind it. The tables of collaboration had been turned around.

Many surviving Nazi generals knew all too well that they got incredibly lucky in 1940, and had been in excellent position to observe the self defeating nature of the war against France. So, although still influential in German society (!), in the 1950s, they pushed for the symbiosis with France, that Hitler himself, at Speer’s urging, had to admit had to happen. That drove Hitler to many a feat of rage.

But if even Hitler had to collaborate with France, the country that he hated so much, how could any German refuse to collaborate with France?

If Hitler had to collaborate with France, then why did he start the war? Hitler obviously felt. The answer, as the Nazis insisted at Nuremberg is that it was France, not Germany, which had started the war. Well, France had to start the war, it was a question of civilization, and the proof was Auschwitz.

Hitler and Rommel had admitted earlier that the French strategically destroyed the Afrikakorps at Bir Hakeim (don’t believe what all Anglo-Saxon Wikipedia says about it; they quote from some vengeful Nazi). The resistance at Bir Hakeim to the fury of the entire Afrika Korps deprived it from its only chance to surrender and destroy the British army protecting the Middle East. The scythe move in the desert before Tobruk, was blocked by the tiny army of (ironically named) general Koenig.

By the time of this strategic French victory (May-June 1942) the Americans had not fired one shot against the Nazis yet. If Israel exists today, it’s thank to Bir Hakeim. OK, back to our Jewish survivor here.

  Soros: When the Soviet empire started to disintegrate, Germany’s leaders realized that reunification was possible only in the context of a more united Europe and they were willing to make considerable sacrifices to achieve it. 

PA: Soros here is starting to get really crafty. He knows very well that what he says he is not true: it’s the French (and, especially Mitterrand, who I do not like, but was right on that) who insisted upon the Euro, in exchange for supporting Germany’s reunification. As Mitterrand had (unlawfully?) financed his good friend Kanzler Kohl’s re-election, it was hard to say no. The French idea was precisely to make European Unification impossible to reverse.

(Mitterrand used similar methods on Thatcher, by supporting her crucially for the Malouines/Falkland war, he extracted from her the Chunnel and the Single European Act…)

So why is Soros lying? Because he is trying to put in sharp contrast the alleged wisdom of Germans in the 1990s versus the sort of neo-Nazism we are now condemn to contemplate the apparent rise of. Here we have the spectacle of a Jew, Soros, being too crafty by half, and much too polite with proto-fascism, the sort of process philosopher Hannah Arendt, also a Jew, loudly, and justly,  decried in the 1930s and 1940s.

  Soros: When it came to bargaining they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement.  At that time, German statesmen used to assert that Germany has no independent foreign policy, only a European one.

PA: That’s the least Germans could do, after fostering, for a century, a policy of systematic assault against other nations, starting with a war against Denmark in 1864. This policy was ended by force, in an action started by France (leading) and Britain (following belatedly), on September 1, 1939 (Ultimatum to Germany) and ended May 8, 1945 (capitulation without condition of said Germany. Now some Germans are saying they are tired of the “Nazi blackmail”. Well, then, they should not practice it, again.  

  Soros: The process culminated with the Maastricht Treaty and the introduction of the euro. It was followed by a period of stagnation which, after the crash of 2008, turned into a process of disintegration. The first step was taken by Germany when, after the bankruptcy of Lehman Brothers, Angela Merkel declared that the virtual guarantee extended to other financial institutions should come from each country acting separately, not by Europe acting jointly. It took financial markets more than a year to realize the implication of that declaration, showing that they are not perfect.

The Maastricht Treaty was fundamentally flawed, demonstrating the fallibility of the authorities. Its main weakness was well known to its architects: it established a monetary union without a political union.

PA: This is true, but that was a deliberate plan, to force unification from the top down.

There was an more proximal flaw. As created the European Central Bank was deprived of many fundamental powers that all other central banks have had, since there are central banks. (The first central bank was the Bank of England, with a tight relation to the financing of the Royal Navy, followed later by the Banque de France.)

In general, sovereigns have always struck coinage. However, under Dutch (highly leveraged) influence (“Glorious Revolution”, 1688, truly an invasion), Britain set-up a highly leveraged plutocratic system, the fractional reserve. (That it is plutocratic was observed by the Rothschild themselves, who were at the core of it.)  

  Soros: The architects believed however, that when the need arose the political will could be generated to take the necessary steps towards a political union.

PA: The main architect was the French, Jacques Delors, a socialist and loud Christian. He amplified thus the system put in place by French banker, Rothschild servant, and also French president, George Pompidou. A law of 1973 outlawed the financing of the French state by its central bank (something all other central banks do). Instead the French state had to go to plutocrats to beg for money.

As leveraged banks are truly state institutions, this established a further control of the French state, hence Europe (after the European Monetary Union), by private individuals, the bankers.  

  Soros: But the euro also had some other defects of which the architects were unaware and which are not fully understood even today.

PA: Those architects claimed to be socialist, while ruling that banks would rule thereafter. In other words, if they were not arrogant idiots, they were deeply corrupt (yes, I am talking about Delors… somebody I long viewed as a European hero, and now looks more like a European horror!)

  Soros: In retrospect it is now clear that the main source of trouble is that the member states of the euro have surrendered to the european central bank their rights TO CREATE FIAT MONEY. They did not realize what that entails – and neither did the European authorities.

PA: Not just that: the power of the ECB to create fiat money is ALSO very restricted (it cannot be lent to states directly, governors can’t be overruled, etc.) As it is, it left only the plutocrats with the power to create, through private banks, money in Europe.

As I already said, can one be that idiotic without being deeply corrupt?

Money is nothing without a state. A state is nothing if it cannot project power, and this it is does through military power, first of all, and financial power, when it is in a good mood. The stick, and the carrot. The way the EMU was set-up, there was not carrot in control of the state, the carrot was in control of wealthy people and their managers. Nor was there a stick. And the state does not really exist, either.

  Soros: When the euro was introduced the regulators allowed banks to buy unlimited amounts of government bonds without setting aside any equity capital; and the central bank accepted all government bonds at its discount window on equal terms. Commercial banks found it advantageous to accumulate the bonds of the weaker euro members in order to earn a few extra basis points. That is what caused interest rates to converge which in turn caused competitiveness to diverge. Germany, struggling with the burdens of reunification, undertook structural reforms and became more competitive. Other countries enjoyed housing and consumption booms on the back of cheap credit, making them less competitive. Then came the crash of 2008 which created conditions that were far removed from those prescribed by the Maastricht Treaty. Many governments had to shift bank liabilities on to their own balance sheets and engage in massive deficit spending. These countries found themselves in the position of a third world country that had become heavily indebted in a currency that it did not control. Due to the divergence in economic performance Europe became divided between creditor and debtor countries. This is having far reaching political implications to which I will revert.

PA: Perfect analysis, nothing to add.

  Soros: It took some time for the financial markets to discover that government bonds which had been considered riskless are subject to speculative attack and may actually default; but when they did, risk premiums rose dramatically.

PA: Soros is admitting here implicitly the culpability of money changers (such as hedge funds… there are 20,000 of those; one, failed for being on the wrong side of trades in Italian government bonds; it was headed by J. Corzine ex-gov of New jersey, ex-head of Goldman Sachs… Billions disappeared mysteriously…)

  Soros: This [speculative attacks] rendered commercial banks whose balance sheets were loaded with those bonds potentially insolvent. And that constituted the two main components of the problem confronting us today: a sovereign debt crisis and a banking crisis which are closely interlinked.

The eurozone is now repeating what had often happened in the global financial system. There is a close parallel between the euro crisis and the international banking crisis that erupted in 1982. Then the international financial authorities did whatever was necessary to protect the banking system: they inflicted hardship on the periphery in order to protect the center. Now Germany and the other creditor countries are unknowingly playing the same role.

PA: Once again, for pedagogical and diplomatic reasons, Soros is extravagantly polite with the German authorities. There is no way they do not understand that they are destroying Europe. (…And helping Putin’s Russia. BTW, Merkler speaks Russian.)

  Soros: The details differ but the idea is the same: the creditors are in effect shifting the burden of adjustment on to the debtor countries and avoiding their own responsibility for the imbalances. Interestingly, the terms “center” and “periphery” have crept into usage almost unnoticed. Just as in the 1980’s all the blame and burden is falling on the “periphery” and the responsibility of the “center” has never been properly acknowledged.  Yet in the euro crisis the responsibility of the center is even greater than it was in 1982. The “center” is responsible for designing a flawed system, enacting flawed treaties, pursuing flawed policies and always doing too little too late. In the 1980’s Latin America suffered a lost decade; a similar fate now awaits Europe. That is the responsibility that Germany and the other creditor countries need to acknowledge. But there is no sign of this happening.

The European authorities had little understanding of what was happening. They were prepared to deal with fiscal problems but only Greece qualified as a fiscal crisis; the rest of Europe suffered from a banking crisis and a divergence in competitiveness which gave rise to a balance of payments crisis. The authorities did not even understand the nature of the problem, let alone see a solution. So they tried to buy time.

Usually that works. Financial panics subside and the authorities realize a profit on their intervention. But not this time because the financial problems were reinforced by a process of political disintegration. While the European Union was being created, the leadership was in the forefront of further integration; but after the outbreak of the financial crisis the authorities became wedded to preserving the status quo.

PA: Merkozy caused a lot of damage, in other words.

  Soros: This has forced all those who consider the status quo unsustainable or intolerable into an anti-European posture. That is the political dynamic that makes the disintegration of the European Union just as self-reinforcing as its creation has been.  That is the political bubble I was talking about.

At the onset of the crisis a breakup of the euro was inconceivable: the assets and liabilities denominated in a common currency were so intermingled that a breakup would have led to an uncontrollable meltdown. But as the crisis progressed the financial system has been progressively reordered along national lines. This trend has gathered momentum in recent months. The Long Term Refinancing Operation (LTRO) undertaken by the European Central Bank enabled Spanish and Italian banks to engage in a very profitable and low risk arbitrage by buying the bonds of their own countries. And other investors have been actively divesting themselves of the sovereign debt of the periphery countries.

If this continued for a few more years a break-up of the euro would become possible without a meltdown – the omelet could be unscrambled – but it would leave the central banks of the creditor countries with large claims against the central banks of the debtor countries which would be difficult to collect. This is due to an arcane problem in the euro clearing system called Target2. In contrast to the clearing system of the Federal Reserve, which is settled annually, Target2 accumulates the imbalances. This did not create a problem as long as the interbank system was functioning because the banks settled the imbalances themselves through the interbank market. But the interbank market has not functioned properly since 2007 and the banks relied increasingly on the Target system. And since the summer of 2011 there has been increasing capital flight from the weaker countries. So the imbalances grew exponentially. By the end of March this year the Bundesbank had claims of some 660 billion euros against the central banks of the periphery countries.

The Bundesbank has become aware of the potential danger. It is now engaged in a campaign against the indefinite expansion of the money supply and it has started taking measures to limit the losses it would sustain in case of a breakup. This is creating a self-fulfilling prophecy. Once the Bundesbank starts guarding against a breakup everybody will have to do the same.

PA: Yes, Germany is rotting at the head, and it’s not just the heads of Chancellor Merkel and her government.  Launching a self fulfilling prophecy of evil is no small matter, morally speaking.

  Soros: This [a self-fulfilling prophecy of breaking up] is already happening. Financial institutions are increasingly reordering their European exposure along national lines just in case the region splits apart. Banks give preference to shedding assets outside their national borders and risk managers try to match assets and liabilities within national borders rather than within the eurozone as a whole. The indirect effect of this asset-liability matching is to reinforce the deleveraging process and to reduce the availability of credit, particularly to the small and medium enterprises which are the main source of employment.

So the crisis is getting ever deeper. Tensions in financial markets have risen to new highs as shown by the historic low yield on Bunds. Even more telling is the fact that the yield on British 10 year bonds has never been lower in its 300 year history while the risk premium on Spanish bonds is at a new high.

The real economy of the eurozone is declining while Germany is still booming. This means that the divergence is getting wider. The political and social dynamics are also working toward disintegration. Public opinion as expressed in recent election results is increasingly opposed to austerity and this trend is likely to grow until the policy is reversed. So something has to give.

In my judgment the authorities have a three months’ window during which they could still correct their mistakes and reverse the current trends. BY THE AUTHORITIES I MEAN MAINLY THE GERMAN GOVERNMENT AND THE BUNDESBANK because in a crisis the creditors are in the driver’s seat and nothing can be done without German support.

PA: Europe is so organized that one country can block everything if so determined. However, even Thatcher’s Britain never did this. That Germany is thus cornering Europe, on the first real threat that European integration faces in 65 years, is astounding, considering history.

  Soros: I expect that the Greek public will be sufficiently frightened by the prospect of expulsion from the European Union that it will give a narrow majority of seats to a coalition that is ready to abide by the current agreement. But no government can meet the conditions so that the Greek crisis is liable to come to a climax in the fall. By that time the German economy will also be weakening so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities. That is what creates a three months’ window.

Correcting the mistakes and reversing the trend would require some extraordinary policy measures to bring conditions back closer to normal, and bring relief to the financial markets and the banking system. These measures must, however, conform to the existing treaties. The treaties could then be revised in a calmer atmosphere so that the current imbalances will not recur. It is difficult but not impossible to design some extraordinary measures that would meet these tough requirements. They would have to tackle simultaneously the banking problem and the problem of excessive government debt, because these problems are interlinked. Addressing one without the other, as in the past, will not work.

Banks need a European deposit insurance scheme in order to stem the capital flight. They also need direct financing by the European Stability Mechanism (ESM) which has to go hand-in-hand with eurozone-wide supervision and regulation. The heavily indebted countries need relief on their financing costs. There are various ways to provide it but they all need the active support of the Bundesbank and the German government.

PA: Even the famous anti-European magazine “The Economist” said as much about all the preceding.

By the way, there is more than 1.1 trillion dollars ready to help (before leverage), allowed by existing treaties. However, let’s notice that, in spite of funds being at the ready, and dedicated for Greece’s research and high education, they have not been disbursed for two years. So, it’s not because the money is here, that Germany will allow to use it. Is Germany deliberately trying to sabotage Europe?

  Soros: That is where the blockage is [Germany]. The authorities are working feverishly to come up with a set of proposals in time for the European summit at the end of this month. Based on the current newspaper reports the measures they will propose will cover all the bases I mentioned but they will offer only the minimum on which the various parties can agree while what is needed is a convincing commitment to reverse the trend. That means the measures will again offer some temporary relief but the trends will continue. But we are at an inflection point.  After the expiration of the three months’ window the markets will continue to demand more but the authorities will not be able to meet their demands.

It is impossible to predict the eventual outcome. As mentioned before, the gradual reordering of the financial system along national lines could make an orderly breakup of the euro possible in a few years’ time and, if it were not for the social and political dynamics, one could imagine a common market without a common currency. But the trends are clearly non-linear and an earlier breakup is bound to be disorderly. It would almost certainly lead to a collapse of the Schengen Treaty, the common market, and the European Union itself. (It should be remembered that there is an exit mechanism for the European Union but not for the euro.) Unenforceable claims and unsettled grievances would leave Europe worse off than it was at the outset when the project of a united Europe was conceived.

PA: After so much insanity deployed and allowed to rampage, the British and French military budgets will also have to be cranked up… To insure that further insanity is contained, looking forward, all the more since, as in the 1920s and 1930s, Germany is flirting with the dictators of Russia.

  Soros: But the likelihood is that the euro will survive because A BREAKUP WOULD BE DEVASTATING NOT ONLY FOR THE PERIPHERY BUT ALSO FOR GERMANY.

PA: However, Hitler started a war, just so that he could lose, as Salvador Dali pointed out. A country with a culture so idiotic and criminal that it could develop Nazism, over several generations, as the great philosopher Nietzsche pointed out at the outset, is perfectly capable to keep on acting dramatically against its own interests, just in the hope of punishing everybody.

Punishing everybody, that’s what Germany did in 1914, and 1939, launching wars it had no moral right, nor reason, to wage, and a quasi zero probability of winning without enormous devastation to itself.

Maybe Germans like so much to be the bad guys and to lose, they want an encore?

  Soros: It would leave Germany with large unenforceable claims against the periphery countries. The Bundesbank alone will have over a trillion euros of claims arising out of Target2 by the end of this year, in addition to all the intergovernmental obligations. And a return to the Deutschemark would likely price Germany out of its export markets – not to mention the political consequences. So Germany is likely to do what is necessary to preserve the euro – but nothing more. That would result in a eurozone dominated by Germany in which the divergence between the creditor and debtor countries would continue to widen and the periphery would turn into permanently depressed areas in need of constant transfer of payments. That would turn the European Union into something very different from what it was when it was a “fantastic object” that fired peoples imagination. It would be a German empire with the periphery as the hinterland.

PA: Soros is 100% wrong here. There will be no German empire. Germany is completely delusional and delirious at this point. German domination of Europe will not happen, because German culture is on its way out, whereas French culture is on its way up.

France rests on universalism, Germany on tribalism. Just to get the workers it needs, Germany is forced to draft non Germans into tribal Germany.

Let me explain more: in 1940, France had less than 40 million inhabitants, and Germany more than 80 millions. Nowadays, France has 66 millions, and her population augments by 350,000/year, internally (no immigration, thanks to the ferocious and ungrateful Sarkozy, now eliminated). These 350,000 new French a year are real French of fangs and claws, not the imported kind.

Whereas, even with significant immigration, the German population is decreasing. A fiortiori, the part of Germany of genuine German culture, so to speak.

Already now there are 30% more young French people than young German people (and, as I hinted, many of the latter are not really of issued from German culture). Merkel herself had no children. Her nasty cultural disposition will not be passed to her children.

German median age is 5 years older than the French (although the French live two years longer).

Verily, part of the senile reaction of Germany to the Euro crisis is directly imputable to Germany’s aging and scared behavior.

  Soros: I believe most of us would find that objectionable but I have a great deal of sympathy with Germany in its present predicament. The German public cannot understand why a policy of structural reforms and fiscal austerity that worked for Germany a decade ago will not work Europe today.

PA: Soros is right, “most of us would find” that sympathy for Germany should be limited. In some ways Germany is a plutocracy led by rich Mittelstand owners. I know some. Those mini plutocrats are the kings and queens of Germany. They work the little people hard, while scaring them with destitution. Those who know history will be reminded of the old landed aristocracy, especially of the Prussian type, which was a major, probably the major factor, in the rise of German fascism and racism (craftily, their tool, Hitler, electorally campaigned against them)

There is no minimum hourly wage in Germany. The states force some of the poorest people to work for one Euro an hour.

  Soros: Germany then could enjoy an export led recovery but the eurozone today is caught in a deflationary debt trap. The German public does not see any deflation at home; on the contrary, wages are rising and there are vacancies for skilled jobs which are eagerly snapped up by immigrants from other European countries. Reluctance to invest abroad and the influx of flight capital are fueling a real estate boom. Exports may be slowing but employment is still rising. In these circumstances it would require an extraordinary effort by the German government to convince the German public to embrace the extraordinary measures that would be necessary to reverse the current trend. And they have only a three months’ window in which to do it.

We need to do whatever we can to convince Germany to show leadership and preserve the European Union as the fantastic object that it used to be. The future of Europe depends on it.

PA: The future of peace, too. To believe that a fractious Europe, after such a stab in the back, the deliberate destruction of the European Union by Germany, would stay long at peace, is delusional. In any case, socialist France has already constituted a vast coalition, and, differently from 1939, Spain (conservative), Italy (conservative), and the USA (more to the right than any European country) are in it. Even Britain is scared out of its wits that German driven selfishness will drag it further down the abyss.

So what are German officials thinking of? (Besides the desire to self destroy?) Well, the siren song of the ex-KGB officer, Putin, is obvious in the distance. Putin is trying to seduce Germany, which gets already all its gas from there (more than 22% of total German energy usage). The mutual seduction between Germany and Russia in the 1920s and 1930s had a deplorable effect on both, a mutual feedback loop of brutish behavior.

Brutish behavior is what we see today when Bundesbank officials talk as if they ruled Greece. They don’t. What is happening in Greece, as Soros said, is more the fault of the creditor countries than Greece’s. The aid programs to Greece have been, truly, mostly aid programs to non Greek banks which financed their friends in Greece (often plutocrats they had dirty deals with).

The arrogant, offensive and injurious attitude of so many German officials shows that those who did not learn humility from history cannot be trusted.

So are we back in the 1920s and 1930s? Is the collaboration between Germany and Wall $treet based plutocracy back on the front burner? (It sure sounds that way; major Wall $treet banks, such as JP Morgan, have come out with astounding pieces of propaganda, as a reader kindly informed me)

Are we back in the 1920s and 1930s? … When Germany was secretly plotting, and training with Stalinist Russia? That blossomed in the formal alliance in 1939, of the USSR and Nazi Germany, in a vain attempt to block France’s thirst for justice.

So is Merkel working for the Putin, that is for the KGB, or Goldman Sachs and its ilk? Both maybe? Like Hitler, in the end, rather ironically, did? (The Fuehrer basically said so himself in his political testament…)

There are very good reasons to suspect all these schemes, and they will be further divulgated soon. It would be all very funny, if it were not so disconcerting.

***

Patrice Ayme

Banking Demons.

May 21, 2012

MONEY CREATION BY THUGS = CIVILIZATIONAL COLLAPSE.

***

 People of more than zero influence are waking up to the fact that they have to admit that there is something  wrong with the banking system as it is. A delicate task: something has to be revealed, but not so much that the pyramid upon which the wealthy rest, would crumble.

 Paul Krugman, long extremely partial to private banks, wrote an editorial in the New York Times on the subject of how outrageous banking, as presently practiced, is. Krugman could have written this years ago. But he did not. Instead he waited until the plutocratic party went one outrage too far.

 In Dimon’s Déjà Vu Debacle, Krugman focuses on the fact that the state insures the banksters. Of course the state does much more: it reassures the banksters, thus encouraging them in their crimes. But not just that. The state gives trillions to banks so that they can play with each other. Krugman will not tell you that. For years he has been pushing stridently for Quantitative Easing, giving trillions to banks, no strings attached.

 Same idea as Reaganism, or Sarkozism: give to the rich, so that the rich will give to you.

 The bank JP Morgan Chase lost 3 billion, or maybe 5, or 100 billion. No problem, says Romney: it’s not their money, it’s theirs! If it’s not to some banks, that money, it’s to some other guys. Guys like me, guys, say romney, and he beams with pride.

 In truth, though, that money is neither to the banks, nor to those other guys. That money is yours. Private banks are in charge of creating public money, in guise of private credit.

 Some will say: this is how capitalism works. No, that’s how a particular form of fractional reserve based financial parasitism works. Proof: the Nineteenth and Twentieth century revolutionaries (Marx, etc.) did not talk about it. Instead they mostly talked about the abuse of workers by great capital. (Now there are not even workers to abuse…) At most Marx complained a bit about the monopoly of banks. The scam existed already at the time, but it was discrete.

 Romney lauded the plutocratic doctrine in relation with JP Morgan’s loss. Milder partisan of the established order, such as many in the democratic party, feel that Romney is going too far. More importantly, he wants to take their place. So, to their regret, they have to mention a bit of what’s wrong with banks.

 Romney said that JP Morgan’s loss was excellent, because it benefited somebody else, namely an evil plutocrat laughing all the way to his private jet. Romney conveniently forgot to mention that, ultimately, it’s the taxpayer who foot the banks’ bill (as Krugman finally points out, when, as I already said, he could have done it years ago). Romney is pedagogical.

 Extolling the theft of taxpayer money by hedge funds may look like a blunder on Romney’s part, but of course it’s not. Romney and his operators are clever, they know what they are doing. What they are doing is to prepare the minds to finding this sort of reflections part of the natural order of things. Instead of a blunder on Romney’s part, it’s an attempt to have all Americans become friendly to the notion of rising, shining, and boasting in the glory of that evil plutocracy is best to bring a better world.

 In other words, Romney is not just running for himself, but also, deliberately, on the behalf of plutocracy. It looks clumsy, but it’s crafty, and manipulative at the emotional, “subconscious” level.

 I immediately sent (a version) of the following comment, which put the problem in a wider context, to the New York Times (a context readers of this site will be familiar with). It should have appeared among the very first comments, thus influencing thousand of readers, and endangering the established order. Instead something happened, and it was published in # 195 position (!) Typical treatment given to my comments, when they are too clever by half.

 “It is of foremost importance for the plutocratic order that the following is not understood by the masses. What Romney and the class he campaigns for do not want the simple minds of the People to comprehend, is that BANKS ARE ACTUALLY PUBLIC INSTITUTIONS.

 OK, if a number of individuals put money together, and then lent it, that, and only that, would be a true private bank. Instead what is happening is that banks, especially very large banks, lend much more capital than they truly possess. They can do that, thanks to the full complicity of the government, which, then, in turn, become their accomplice and creature.

 Such is the nature of the Fractional Reserve Banking System. Banks, using leverage, something only possible with the backing of the state, create all the credit, and therefore, most of the money. Money creation, a basic public function, has been farmed out to private individuals.

 Just as tax collecting was farmed out to “general farmers” under (some of) France’s Ancient Regime, and (some of) the Roman empire. However, in France and Rome, money creation stayed an exclusive activity of the state.

 So let me rephrase it: instead of calling banks private, one should realize that any bank using leverage is a public institution. It’s a fact, not an opinion. It’s a crucial fact. That is why, on his first day in office, president Roosevelt could, and did, close all banks in the USA.

 Insisting that banks are private is like insisting that public money making is private, a monopoly the state give to unsupervised, unelected individuals.

 That public character of leveraged banks makes all bankers, including Mr. Dimon, head of JP Morgan, and loudly admired by Obama, into public servants. As they lend to their friends (in finance, or their collaborators in their class (hedge fund managers who use leverage, as they all do), that makes those bankers and the banking they do, fundamentally corrupt.

 When banking executives pay themselves immense amount of money, they do so with public money. The head of the unit of JP Morgan which was playing with derivatives, Ina Drew, a blue eyed blonde, earned more than 31 million dollar in 2010-2011 alone. (She has now been fired to the regret of Dimon, who did not want to fire his “sister“… Said the New York Times.)

 This nature of banking, the exploitation of the public sphere, by a few self selected private individuals, has grave implications on Quantitative Easing and the like. The USA’s central bank gave (or lent at such low rates, it was like giving) trillions of dollars to the very banks and managements which caused the 2008 financial crisis (example: Goldman Sachs). It was quite a bit like paying off the mobsters who just burned your house. Payments are ongoing, and explain why the likes of Dimon fill Obama’s mind with awe.

 In Europe, the central bank lends at 1% to banks which then lend that exact same money to the states at 6% or 7% (Spain, Italy) or well above 50% (Greece). In other words, the public finances the plutocrats rather than the real economy.

 Merkel then barks, and push to cut off funding for public transportation in Greece, so common people cannot go to work anymore, but can, instead, be accused of laziness (feeder trains from suburbia into Athens have been often stopped, and the tracks overgrown with weeds. Meanwhile Merkel sells Porsches to her friendly plutocrats in Greece). Why does she do all that? Because she is protecting the leveraged banks by shifting blame to the common Greeks.

 (Not that the Greeks were blameless: tax avoidance was a tradition in Greece, something that forced the country to live on credit more than could be sustained.)

 The fundamental nature of the present crisis is the rise of plutocracy, naturally accompanied, as it always is, by the crushing of democracy (see all students having to pay colossal tuitions, so that only the children of the hyper rich can study, just like in the middle Ages; and if you protest, the Quebec government will come to arrest you, so please, approve!)

 The present “fixes” only make the situation worse. (As was demonstrated, say in Greece!) Those “fixes”  consist into shuffling ever more money to banks which then lend that money to their friends, or then to states at usurious rates, while augmenting stratospherically the public debt to said banks. This only augments the power of banks, hence of the financial plutocracy, and thus the crisis.

 Is it deliberate? Probably. I have mentioned it on Krugman’s blog for years, but Krugman, who is very intelligent does as if he did not notice. Why? because if he did, he knows he would sitting in the hot, ejection seat. So he bids his time while munching on caviar, and sipping champagne.

 The only way out is a general default, as advocated in:

 https://patriceayme.wordpress.com/2011/09/14/to-save-the-world-please-default/

 Radical, sure. We have to grab the problem by its roots. Otherwise, we face collapse of civil society, while drowning and boiling.

 Accompanied by a stiff regulation of banking, along the lines of president Roosevelt in 1933. Instead the Roosevelt laws were dismantled under president Clinton, a greedy critter, well rewarded since.

  A few little men of modest extraction, get absolute power, and they want to keep some thereafter. That echo of power is provided by the Lords of Finance. As long as they took the right decisions. Singing hypocritically with U2 lead singer, the so called Bono (not his real name, just a bon mot to make him sound good, bon, bono, bueno, etc.) will help.

  Bono, like Bill Gates, sings about the misery in Africa, while raking the billions in one of Goldman Sachs’ latest conspiracy (he was on the Facebook IPO, and made nearly two billion). Warren Buffet has served the public buffet of forbidden evil foods, and they splurge. Those all too visible plutocrats also make the same lethal mistake as the tiger in Kipling’s Jungle Book… Hopefully their public splurging may attract attention from the destituted commons.  They don’t know that the Lord of the Underground, Pluto, makes itself invisible, for very good reasons. They are blinded by the very goodness they perceive in themselves, after inverting all values.

***

Patrice Ayme

Outrage Dictionary

October 19, 2011

CONCEPTS TO FIGHT PLUTOCRACY.

I Will Add Further Material To The Following Dictionary As Relevant Concepts Come To Mind.

(All the more since the crisis is extreme, & could turn (more) murderous, as it mutates into greater virulence. Readers’ help is respectfully suggested, as usual.)

***

Aid to Banks: In general, I approve aid to faltering banks, so that they can keep on operating. As long as it comes with big strings attached. After all, banks are public institutions, in charge of money creation, although they are privately managed (see fractional reserve). However, when a bank holding corporation is given financial aid by the public, the public should acquire ownership and control. If the bank does not like it, it can find somebody else to steal. And if it does not, then it has no choice.

American: word used by abuse of language to qualify the USA. That usage is clearly offensive to all of Latin America and Canada, which have significantly different civilizations. Although I try to use the qualitative “USA” as much as possible, “American” is so common, and flows so smoothly, that I will use it myself, in spite of the fact that Latin America is escaping the hegemony of the USA (known as the Monroe doctrine).

The nature of American civilization has made it most friendly to plutocracy. Actually the world headquarters of plutocracy are on Wall Street. So occupy it with a liberation army!

American Civilization: A deviant branch of European civilization, rendered possible as the colonies of the Americas stayed out of reach from European law (differently from, say, Siberia). This lawlessness allowed the physical extermination of the natives in North America.

That immense availability of riches, in turn, made American colonists the richest people in the world for 350 years: they found themselves with a gigantic continent to exploit, which had been spared abuse by middle age European agricultural technique. (The American colonists started by cutting the giant forests of the Eastern USA, with their giant trees, of a size unknown in Europe for millennia; actually places such as the Alps in Europe were still trying to repait their forestry, the main source of wealth, from the Roman over-exploitation, let alone the over-exploitation culminating in the early Fourteenth Century.)

The American holocaust happened initially in the Spanish empire, until emperor Charles Quint, made aware of the massacre by the outraged Las Casas, ordered various enquiries, judgement, debates and reforms. Finally the multilingual Charles Quint, born in Bourgogne, and elected emperor as a young adult, ordered the halt of the conquista. That is why so many of the natives survived in Latin America.

This is also why Spain did not colonize North America. Charles’ son, the fascist Catholic fanatic Philippe II respected his retired father’s orders, although he went out of his way to exterminate the French colonies on the Eastern seaboard of North America (as part of his total war against France, England and the Netherlands, which finished in total French victory, after no less than 160 years of war…).

As England experienced wars, republic, and revolutions, throughout the Seventeenth Century, she was unable to keep control of her American colony, which had re-instituted slavery as early as 1620 CE, followed by deliberate extermination of the natives as if they were vermin.

After England had unwisely got rid of France in North America, she tried to clamp down on her colonists, who were all too keen to invade Indian lands. That, plus a vengeful France, led to the “American war of Independence“.

Independence allowed the colonists’ full return to savagery, while paying lip service to civilization, to better obscure their outrageous practices. Presidents Jefferson and Jackson were particularly ferocious against the natives. However Jefferson is revered to this day, and has a grand mausoleum in Washington by a lake, probably the best looking edifice in the capital.

American civilization is characterized by the massive, industrial practice of slavery, and holocausts, for several long centuries. These markers of deep civilizational devolution left a deep imprint, explaining why, say, president Obama finds normal to kill those who are presented to him as a threat to the USA, without even a semblance of enquiry, or trial. Same old, same old. (English judges, in the 17C would hang seven year old children for, say, arson; however tough justice was in Europe, European society knew that it was crucial to keep the formal domination of the law, a crucial idea from the Roman republic, a big difference between 17C England and 21C USA!)

American left: The fundamental quandary of the American left has been that American plutocracy bought it off… The American middle class was by far, an order of magnitude, richer than any other middle class after 1945.

Nevertheless, subsequent to its tremendous defeat in Vietnam, the American pie started to shrink, as more and more countries, worldwide, became ever more independent of the USA, making the post WWII American empire ever less profitable. 

A split within the Western left occurred in 1968, as youth rebelled both against the established order, and the established opposition.

In Europe the official left progressively accepted many of the ideas of 1968, as shown by the strong and lasting influence of the ecological movement. In the USA, though, the split persisted, as the unions refused to support McGovern against Nixon. It got worse after the pseudo left president Carter (see Afghanistan) made the bed for the outright pro-plutocratic regime of Ronald Reagan and his successors.

As the left was not united, and the army had become private, Reagan was free to crack down on unions. His employees Summers and Krugman helped establish a world order friendlier to chain reaction plutocracy.

Except for a few colorful, ineffectual old characters (Chomsky, Nader, etc.), the American left basically does not exist. Not anymore. It used to exist, for maybe a full century, and was often savagely repressed (May 1, celebrated worldwide, was a plot by American plutocracy to kill union leaders; repression by the McArthur led army in the 1930s was also savage).

No European leader could have stayed in power producing as much extreme right-wing legislation as Obama did. People would have revolted, and assaulted Congress and the White House, forcing power to show its true, savage, barbaric face.

American plutocracy: Its triumph in 1945, made it an ally of American democracy, for a full generation, as socialist minded presidents (Truman, Ike, JFK, LBJ, Nixon) ruled in times when the gigantic might of the (socialist minded) popular army of the USA weighted heavily in the minds of leaders. The un-election of Ford demonstrated, though, that the assent of the People was not really necessary. The privatization of the army did the rest (in 2011, the Pentagon employs officially about 300,000 private mercenaries, besides the regular professional army).

The Iraq and Afghan wars would have been impossible with a drafted army.

American Plutocrats: unsurprisingly, full-blown plutocracy did not appear in the USA before it became a wealthy empire, in the late 19C. After being bashed over the head by the Roosevelts, American plutocracy found a new line of expansion overseas by collaborating with fascist regimes hostile to the imperial West European democracies, mostly Britain, France and the Netherlands.

This was not just highly profitable at the time, but the government of the USA, by supporting one side, then the other, with exquisite timing, was capable of leveraging its entanglement of plutocracy with fascism. For example American plutocrats supported and encouraged the Nazis, like farmers support, fatten and encourage pigs. After 1945, Nazis were refurbished and re-used to further American plutocratic rule.

After Nixon went to China, it dawned on American plutocrats that they could repeat their performance with Hitler and his colleagues, by manipulating carefully the alliance with China. However, that remains to be seen, since China was not born yesterday.

Also, whereas American plutocracy and Wall Street were instrumental in giving birth to Nazism (above and below the surface), there again, Chinese civilization is more than 3,000 year old.

American plutocracy repressed: The first two manifestation of plutocracy in the USA were cracked down upon by the two presidents with the Roosevelt family name. The first, Teddy, having obviously inspired his spiritually very close cousin, FDR (the former indeed played father in law for the later, a significant fact those who describe them as distant cousins always omit).

So it all started with Teddy, a very aggressive man. Teddy killed bears, and charged Cubans on horseback. And he was just warming up. Later he ran as president, again, against all odds. A lesson for Obama: if you want to lead men up the righteous path, staying meek, cool, and respectful will not do it. Harsh, self-assured, domineering is more like it. (Those who throw the lamentable, self-contradictory Gandhi as a counter-example do not really know what they are talking about. Mandela, by the way, was a terrorist, and rightly so.)

Aristocracy: It means “Rule of the Best”. Even if that were true, it would still be wrong, because THE MANY IS BETTER THAN THE BEST. If nothing else, it’s more clever. (Contrarily to the self-serving legend promoted by plutocracy that just a few geniuses did it all.)

Assassin In Chief:The United States conducted an operation [mini pause] to KILL [followed by another mini pause for accentuation] Osama Ben Laden…” This is a quote, word for word, accent for accent, pause for pause, announcing the assassination of the USA’s main ally in Afghanistan for two decades. Most Americans thought it was cool to have assassinated Ben Laden.

Having little knowledge of history, those Americans do not understand that what was  assassinated, once again, was the primacy of the rule of law. Just when we thought we could not sink ethically lower than Bush!

In comparable situations, say with Jugurtha,  the Roman republic arrested the perpetrator in a special operation led in person by a top general, Sulla. Jugurtha had famously said Rome was for sale, and his betrayal caused much greater losses to the Roman republic than 9/11 did to the USA.

The deliberate non application of the rule of law to Ben Laden goes hand in hand with the non application of law to banksters. It is the same meta principle: spare Bin Laden from the law, spare banksters from the law.

The prerogative of the King of France to make his own law with his own secret committee was one of the most important reason evoked to make the French revolution of 1789. The objects of the King’s own personal justice were imprisoned in the Bastille. One of them was Sade. He had six other fellow prisoners. The method was often used to spare the imprisoned the rigors of normal justice.

The last case when a French monarch ordered a traitor to be executed for all to see, was when King Henri III ordered the “45” (his bodyguards) to kill the Duc de Guise who had fomented religious civil war in France in a plot with Philippe II of Spain for many years (Sixteenth Century). Henri III’s action was fully justified, in light of the ongoing full-scale war Guise was leading against state and society.

Balls: What Obama seems to have discovered he may need to stay president. Since that is a part of a very recent evolution towards common sense and populism, not to say popularity, I reserve my judgment. By the way, full-fledged women are also pretty aggressive (and several prominent women officials played a courageous role in fighting the plutocracy, whereas none sided with it: Sheila Bair, etc).

In general the Passion of the West explains its neurological superiority over the supine societies inspired by submissive slave religions, which have kept the East, well submitted. However all of South and East Asia has now adopted the Passion of the West (with the late increasing exception of Japan, smothered by its spiritual isolation, and vanishing demographics).

Banksters: The gangsters who manage the big banks, and make the mighty Mafia pale into insignificance. The more they lend to their friends from their class, the more powerful they get. They apparently hoped to destroy the economy, so that straightforward feudalism could be re-introduced, before the outraged People could revolt. After all, that trick was accomplished many times in history, and first of all, in Rome (although the Romans were well aware of the danger).

Banks’ president: Also known as “first black president” (although a president of the USA claimed before “black” ancestry, which, in Americana, is enough to qualify someone as “black”).

Obama banked his entire presidency into saving banks which deserved to disappear, be it only for the sake of the economy. Indeed, whether in ostensibly helping homeowners (but truly only 5 homeowners with a few pennies, and the all the big banks with trillions), or Quantitative Easing, it was all about helping banks, disguised under other semantics. By comparison, in his entire presidency, Obama gave less than ten billion for trains. 

Bear Sterns: An investment banks which failed, as a forerunner of the Lehman failure. In this case the Treasury stepped in, and set-up a sweet gift to JP Morgan Chase, led by Obama’s “friend”, Jamie Dimon. That 30 billion dollar gift came to be known as the “Jamie Deal“. So Jamie swallowed Bear, and was viewed as a genius. Other may just view corruption therein.

Bernanke, Ben: Fallow head of the fed under Bush-Obama, playing wise old man behind his beard. Recruited Krugman at Princeton (it’s a small world…). A student of the Great Depression, he provided “liquidity” (= cash) to banks until the bulls came charging home (this had not been done in the 1930s, but was done continually by Greenspan, for more than a decade, for no good reason whatsoever; at least Bernanke had a good reason). Having run out of bullets, Bernanke admitted in Fall 2011 that it was for the politicians to find a way out. He added two weeks later that he “can’t blame” protesters for taking to the streets.

Big Banks: Private organizations given the monopoly of public money creation by their accomplices and co-conspirators the politicians. Politicians get financed and facilitated by the big banks and in turn allow them to create, or be given, as much money to put common job and property out of reach of common people, in a race to create a new serfdom before the masses revolt.

The top 6 banks in the USA have assets equal to 65% of the GDP of the USA.

Black: Unbelievably, it is all what Obama wanted to achieve by becoming president, in his own words. He is well on his way to total success that way, having achieved strictly nothing else.

In Suskind’s book, “Confidence Men“, brand new Senator Obama decides to run for president. Michelle Obama confronts her own husband in public, and asked him “what is he running for”? Obama thinks carefully. It is remarkable that those two never had a pillow talk about it, and Obama never even asked himself the question. After a bit of hard thinking, Obama says just having somebody with his skin color as president will be good enough. Well, good enough to re-awaken a lot of racism. As Deng Tsiao Ping nearly said, whether the monkey is black, brown or white does not matter, as long as he does his job. But if he does not his color does not matter. On top of that, Obama was born from a white woman and raised nearly exclusively by white people without a connection to Africa, in places such as Hawai’i, Indonesia with basically nobody of African ascendency. As a genuine African, I say this with perfect relaxation.

Black William: well-known professor of economy and law at the University of Missouri has condemned the present financial system. He described how some of the USA’s largest financial institutions engaged in massive fraud. He entitled his book The Best Way To Rob A Bank Is To Own One.

Bush: American dynasty founded by one of Hitler’s most important collaborators, Prescott Bush, manager of Auschwitz slave labor for Hitler’s most important defense company. Although the first president by this name was well-behaved after leading the CIA, his son engaged in a civilizational devolution, which, philosophically speaking, went further than the Nazis did, in some very important aspects. Torture and war of aggression (called “war of choice” in the USA) , for all to see, were initially enthusiastically welcomed by the American population. Although people who voted for him expected Obama to prosecute those violations, he endorsed them, and went further (while hypocritically claiming he did not).

Another aspect of Bush’s rule was the reduction of taxes on the richest lower than those on the lower middle class. As if that were not enough, Obama went further down that path to hell, brazenly boasting that it was “stimulating”.

Central Banks: Their nature and missions differ according to countries. In the USA: the “Fed” is a private organization masquerading as a public utility. In Europe: an academy of national central banks, with an insufficient mandate.

Clinton, Bill: United States president who allowed ex Reagan advisers and Goldman Sachs to finish the job allowing banks to do whatever with money, such as fake trading among themselves to mimic profits. Clinton became immensely rich after his miserable tenure, to reward him and inform his successors that they would be immensely rewarded too.

Clearly, as Obama became president, he got enticed by the Clinton example: help the plutocracy, and join it, since you cannot beat it.

Clinton, Chelsea: Hedge Fund princess, straight out of college. When she got married, the United States Secret Service closed airspace over a large part of the USA, thus training the common People to accepting, de facto, the notion of American Princess served by the state, greatly revered by simple folks, although she was never elected to anything.

Connivance: Connivance is how the 1% reign over the 99%. Connivance was at the heart of the globalization set-up before July 1914. It permitted the ever higher rise of plutocracy. That, in turn, incited the instauration in an advanced country such as Germany of a fascist system led that country to improve its economic performance less than perceived strategic threats such as democratic France and democratizing Russia. Thus German generals conspired, then plotted an attack, and finally assaulted the world at the first pretext they could find.

The connivence network is strong because, as a super organism, it supports its members, first, independently of all other considerations. That is why big banker CEOs are Too Big To Jail

Colbert: French minister of the army and then of economy and finance who deployed a science oriented intervention of the government in the 1600s, following the ideas of Henri IV and his finance minster Sully (a reconverted top marshal of Henri IV’s army). Colbert is infinitely more modern, and superior to Keynes. Although they both speak warmly about state intervention, Keynes and Colbert are radically opposed.

Indeed, Colbert’s policy was radically opposed to that of the Roman emperors, who hated technology, and the advancement of the economy it provided with: if the economy advanced, why would not democracy advanced too? (Remember that, even under imperial form, Rome viewed itself as SPQR: Senate and People of Rome, so the return of the republic was always a threat, since, technically, it was not gone.) Instead emperors preferred to throw money at the People, exactly what Keynes advocated brazenly. OK, Roman emperors threw money at people, but Keynes wanted them to dig holes, and fill them up, to get the money, so Keynes had a sadistic side Roman emperors were deprived of (OK, I present my excuses to Sade, who was not like that; let’s just say Keynes was more cruel than Roman emperors, at least on paper).

Death Panel: According to Reuters, an American information company:”– American militants like Anwar al-Awlaki are placed on a kill or capture list by a secretive panel of senior government officials, which then informs the president of its decisions, according to officials.

There is no public record of the operations or decisions of the panel, which is a subset of the White House’s National Security Council, several current and former officials said. Neither is there any law establishing its existence or setting out the rules by which it is supposed to operate.”

One cannot emphasizes enough what a regression of civilization that is. It would not have been lawful, permitted or practice during the European Middle Ages. It would have been a no-no even in Imperial Rome, let alone Republican Rome, or Greek City-States (such as Athens; by the way, Socrates was legally judged, condemned, and executed).

The Reuters article gives the context. Let’s just say even the Nazis or the Stalinists did not sink that low.

Democracy: The natural organization of human society as found in the small bands which constituted human prehistory for millions of years of evolution. Democracy maximizes the production of ideas, so it is the optimal regime for civilization.

Derivatives: Fake accounting and conceptology to cook the banksters’ books. Suck all the world’s capital into the banksters, and other plutocrats’ possession and influence trafficking. Total GDP of derivatives is about ten times world GDP.

Should be allowed only as insurance for commercial operators with some reduced and tightly regulated liquidity from outside speculators with much lower, or no, leverage.

Education: is being made extremely expensive and private in the USA. Two interests: it is profitable, and it gives the higher class, the plutocracy, exclusive access to knowledge, and the ability to select as savant servants those who have the most submissive attitude.

European Leaders: A bunch of conservatives, friends of financial terror, masquerading as open to reasonable change, but desperate to change as little as possible from the piracy they profit so much personally from. They copied the American plutocratic method of giving public money and offering the entire economy, to the exact same banksters who caused the crisis, without any counterpart in any sense. Thus they make no sense socialistically, nor in a pure capitalistic system, and, of course, this is explained by their love of plutocracy. Plutocracy is not just the fundamental enemy of democracy, it’s also the enemy of free capitalism, and the free market.

Soon to be thrown out of their jobs by resurgent socialists (except in Spain, where the latter are too corrupt). Starting with the French presidency. 

Euro: European currency. Malevolently and malignantly presented by the plutocracy, its servants and the enemies of the open society, as the cause, and scapegoat of the European Banking Crisis. In truth, not only the euro had nothing to do with the influence lending by banks, but the ECB, by going beyond its mandate, was able to attenuate the mauling of European economies by the plutocracy and its Weapons of Market Destruction.

Eurozone: 17 countries with insufficient institutions to cope with the gathering crisis. Fallow leaders, quite a bit like Obama, do not want to turn against their plutocratic sponsors, although it’s the only way out.

Exceptionalism, American: the doctrine that the USA is above normal civilization. Illustrated by Obama’s leitmotiv that only in the USA his story was possible (ignoring the glaring fact that French president Sarkozy has exactly the same story).

Unfortunately all the most significant objective makers of American exceptionalism are completely monstrous: slavery, holocaust of the native, and the worst civil war in many centuries (it killed many times more both absolutely and relatively than the French revolution and its attendant wars).

American exceptionalism is now used to justify invading other countries, torture, out of the law assassinations, and the general non respect of the law by the state, its representatives and its plutocratic allies. A very troubling devolution.

Esso/Exxon/Standard Oil Of New Jersey: A great supporter of European fascism, throughout World War Two (like IBM or Ford, etc.) To celebrate, the Italians hanged the fascist dictator Mussolini from an Esso/Standard Oil station in Milan.

Fed: Central American bank. Seven of its governors are appointed politically (i.e., with a semblance of democracy). However the remaining 12 members of the board are appointed by the private banks. In other words, the foxes sit inside the hen-house, and make policy. (It’s a bit like the CIA allying itself to Bin Laden, oops, wait…)

The individuals sitting at the Fed, among the most powerful financial individuals in the world, do not have to disclose personal conflict of interest, in a striking contrast with other central banks of the West, from Australia to Europe. In other words, the “Fed” is the most corrupt, most powerful large financial institution in the world.

There is evidence that 16 trillion dollars (more than the GDP of the USA, and even the EU) of loans were given by the “Fed” to a number of institutions and wealthy individuals, worldwide.

Right now the private bankers inside the “Fed” are voting against any stronger measures to fight the slump, which makes sense as the banks profit mightily from it, as all that has been organized is a rescue of their profits and machinations (all the more since some of the measures slowly adopted will prevent the full use of the old piratical methods, causing pain to the likes of Goldman Sachs…)

Financial Transaction Tax: One reform to implement right away, be it only because it is so simple to do so, and it can hurt only the worst speculators engaged in high frequency trading, especially methods to lead the market. The idea is to tax a small amount, say .1 of one percent. Normal investors will not see the tax. It will also establish a dynamic speed limit on transaction, thus re-establish causality. 

If Obama is real about fighting plutocracy, he can go ahead with that. Apparently he suggested it earl in his administration, in accordance with the main train of thought here. But the agents of plutocracy in his government shut it down. 

Foundations: A way for plutocrats to further their power without any interference from states. Allows the richest people in the world to also claim they are the best, and, moreover, humble and devoted servants of the People. 

Fractional Reserve system: the private monopoly of money creation allowing the rich to lend ever more money to themselves with full public backing. 

Ford Henry: Hated Jews, wrote a book who inspired Hitler. Earliest financial and mental backer of Adolf Hitler, before 1923. Later one of the pillars of the Nazi regime, which he armed all the way through. Got away with it.

Gangsters: Individuals constituting a gang for unlawful profits, personal, or that of their friends and, or family. Goldman Sachs bought at auction the Treasury Secretary job, and has held the position directly or through proxy for two decades. Paulson, Geithner, Bernanke, Holder, Summers, Bush, Mr. Clinton are responsible for the organization of a criminal racket, as I advocated to do under RICO since February 2009. However they could first be prosecuted under simple fraud (See the work of professor Black). 

By the way, people such as Paul Krugman are accomplices too, because Krugman has never uttered the word FRAUD in connection with the rigged largest criminal organization ever.

GDP: Supposed to mean Gross Domestic Product, the sum of all transaction. In truth has come to mean Goldman Demonic Power. It is way too much about financial transactions, which, by themselves, detached from what financing can accomplish, mean nothing for the 99%. What we need instead is a Grand Divine Plan, to fit what our ancestors would have viewed as our divine powers.

Globalization: Fundamentally, in first order, a good idea. Everybody works, worldwide, and because people have different abilities, for different jobs, they trade, worldwide. It’s certainly better than the division, xenophobia, threats and wars, which constitute the alternative to globalization.

However globalization happened before, in somewhat similar circumstances. Moreover the globalization then was even more extensive than now, in many ways. For example identification papers were not needed for travel. And there was a lot of connivence. The kaiser was the grand son of the Queen Victoria of Britain, and his cousing was the Czar, etc. It all ended on August 1, 1914, when a half dozen military men acted on their plot, and attacked the world.

How come? Well, there was, first of all a globalization of plutocracy, just like now. When plutocracy is cornered, plutocracy calls onto Pluto and Mars, the gods of hell and war. Plutocracy, faced with the loss of its advantage, an existential threat, as far as it is concerned, prefer to launch armies, as it is never in the forefront of them, but leads them from behind. Example: in the Libyan war, Kaddafi was the last to be killed, or so, and then the war stopped. Same for Hitler, Mussolini, etc.

This is also exactly what happened to the Prussian plutocracy. By 1912, it had figured out that the march of democracy, outside (France, Russia), or inside (German socialists in the Reichstag), spelled its doom. So it doubled up, and went to war. World war, as it knew perfectly well. 

Could it happen again? Yes, if we don’t pay attention, and let the erosion of civilizational standards proceed (the path Bush II engaged on). 

Global (Democratic) Institutions: an indispensable way to keep the world out of the most outrageous clutches and machinations of plutocracy. The UN, UNESCO, WHO, IMF, World Bank, BIS, etc. are examples. They are not perfect, and they have to be improved democratically and that means transparently. Of course. But for that they have to be engaged.

Other international organizations, such as Mercosur, encourage trade instead of war, and that is good. Even NATO prevents war between Greece and Turkey (at least now). There is no doubt that more economic cooperation, including Israel would make things better in the Middle East.

Geithner Tim: Famous for never paying $40,000 he owed the IRS, on the ground that he got away with it (more than 3 years had elapsed between his fraud, and it being revealed). Now heading… the IRS.

As the well paid head of the New York Fed, he was main architect of giving trillions to his friends the banksters. Under Bush. yes, more than Paulson. Picked up by Obama to extent giving public money to his Wall Street friends, and his friends in the biggest banks, who had financed him much more than Hillary Clinton.

Now tiny Tim is furious that the conservative European leaders are slowly oozing towards asking the big European banks to take perhaps more than a 50% loss on Greek loans (the solution I have long advocated, and which was viewed as iconoclast, because it is equivalent to rejecting the rule of the wealthy). Tim knows all too well that would break the spell, and Americans would ask: if right-wing European leaders refuse to send public money to banks, why should our pseudo democratic president be allowed to keep on doing it (as he does through the housing crisis and “The Twist”)?

GE, General Electric: One of the largest American corporation. Sent millions of American jobs overseas. Declared it would transfer secret American aviation tech to China to gain influence. Pays no taxes. Its CEO, Mr. Immelt, is chief of economic advisers to Obama. As such he declared that what is good for GE is good for the USA, just as what is good for Siemens is good for Germany.

Such statements exhibit a total lack of knowledge of German Kurtzarbeit and other deals between German managers, companies and shareholders, and the rest of German society. The grandeur of Immelt, like that of most American CEOs is demonstrated by his immense physical size, thus making clear that bulk is smarter than smart. At least, for American plutocracy.

Goldman Sachs: An investment bank which has been at the forefront of the silent coup of plutocracy against democracy in the last few decades. Accurately depicted as “Government Sachs”. G-S has always several officers in the White House, telling their employees, that is, the politicians, what to say. G-S even allowed the right-wing  Greek government to lie to Eurostat to dissimulate the extent of the Greek deficit.

G-S played a very important role in the sub-prime crisis. Having set-up an elaborate plot with AIG to insure derivatives, it would nevertheless had gone bankrupt. But the government of the USA stepped in, and offered to Goldman Sachs up to 60 billion dollars, without any counterparties. That was all the more remarkable, since, as an Investment Bank, Goldman Sachs was not protected by state insurance system (as deposit banks are).

Great Depression of the 1930s: A warning sign on the way to, and a lower dimensional version of the present Greater Depression. The Greater Depression we are enjoying has ecological and globalization dimensions not encountered before. Moreover, the plutocracy is now operating in plain sight, whereas in the 1930s its support for fascism was hidden by an opposite language.

Greater Depression: All the basic factors of the depression of the 1930s are present today, but others, even more drastic ones, have appeared. Thus this is a Greater Depression, and not a “Great Recession” as well compensated half-wits have soothingly called it.

The reason why there is no panic yet is that some of the stabilizers put in the 1930s (such as banks’ rescues, and deposit insurance) are in place. Also, this time, states have not been at each others’ throats.

Greece: Undermined by a combination of overspending on not sufficiently profitable investments plus too many plutocrats paying no taxes (the Orthodox Church, the state religion, and ship magnates and other plutocrats pay no taxes, as they plead that they are friends the People cannot do without). See PIIGS.

Greenspan, Alan: was made head of the central bank after his predecessor, the esteemed Paul Volcker, refused to play the plutocratic game. Certainly delusional and probably corrupt, he did exactly what president FDR had warned again, namely borrowing more to pay old debts.

Obama tried to use Volcker mostly as a verbal smokescreen. However some reforms Volcker advocated are more or less, or rather less rather than more, been adopted, threatening some of the feeding habits of Wall Street’s greatest sharks.

GSEs: Government Sponsored Enterprises: USA plutocratic propaganda depict Europe as the land of the welfare state, and the USA as the “land of the free“. Including the “free market“. However Europe has nothing comparable to the GSEs.

The GSEs were set-up to artificially make mortgage affordable to people, thus making the banks their lords, and people into serfs. They collapsed financially in 2008, and had to be nationalized to the cost of 150 billion dollars.

Since then, most mortgages were bought by the GSEs to allow banks to flourish again. So the GSEs carry toxic investments the banks have been cleansed from. There is evidence that the GSEs will collpase again, augmenting the taxpayers’ bill.

Gross, Bill: The California based manager of world’s biggest bond fund, PIMCO, declares that it’s no surprise that the 99% are fighting back “after 30 years of being shot at.

Hessel Stéphane: French citizen born in Berlin, who escaped to France. Published in October 2010, Time for Outrage! (original: Indignez-vous!… Be outraged!). Hessel advocates to Occupy Wall Street. One has to find the time and energy to be outraged when human values are not respected says the 94 years old. He has been an immigrant to France, French Resistance fighter, concentration camp survivor, diplomat, advocate and author. A fighter caught by the Gestapo during World War II, he was sent to the Buchenwald concentration camp, escaped during transfer to Bergen-Belsen. Later he helped draft the United Nations Universal Declaration of Human Rights.

IBM: Famous for having the monopoly of computing in Hitler’s Germany, and occupied Europe. The Nazis leased all its equipment to IBM, which was managed from New York by CEO and founder Watson. every extermination camp had one or several IBM machine, managed directly from New York, as I said. See the book:”IBM and the Holocaust” (by Mr. Black). An example of an American plutocratic corporation, getting away with it. It was only fair: familiar with the American holocaust, the Nazis deliberately decided to copy the ways of the USA, but inside Europe (as they explained among the few who were in the know). 

Imperialism: derived from the Roman term “imperator”, the supreme title given to a top Roman general, by acclamation, by his troops, and held until a triumph. Came to mean vast realms administered by a government. Empires can be good, or bad, depending. There is no doubt that the empire of the USA was excellent especially for the USA. It was an unmitigated disaster the way it came to be, through the connivance of American plutocrats and racist fascism of the hypernationalistic variety. 

Income Inequality: One of the main causes of the Greater Depression. Income inequality does not just abate economic activity, it deprives most social actors of a share in society. Ultimately if just one plutocrat owns everything, nobody else does anything, or everybody else is a slave.

Inequality, Taxes:  The higher the incomes of Americans, the less taxes they pay. It is not necessarily better overseas: de Bettemcourt, a wealthy French woman, owned an entire Seychelles island with a runway, without the French IRS knowing about it (among billions of property she had, unbeknowst to them). Don’t worry: far from getting in penal trouble, she was declared senile!

Iraq: Invaded because the invasion would pay for itself, by selling Iraqi oil, said the Neo-Conservatives at the time. The idea, exposed again and again on Fox News, at the time, by the elements of the U.S. regime, was a totally gross violation of the Geneva Conventions. When that fact dawned on the Bush administration, it could only decide to evacuate Iraq. 

Keynes: Pro and proto-Nazi British economist famous for inventing in 1919 the thesis that the Versailles Treaty was a casus belli. Namely that the French republic, by making independent the gigantic portion of Eastern Europe that Germany and Austria occupied, had fatally weakened Germany, and was an offense against peace.  The thesis was adopted by the Nazis, and Hitler in particular.

Keynesianism: The doctrine that the government should replace a meaningful participation in society with make belief work. Very popular with the fake opponents of plutocracy.

Philosophically and historically, Keynesianism is nothing new, it’s 2,000 year old. It was central to the undoing of imperial Rome. It is the idea that you pay the People to do nothing, to keep it occupied and peaceful. Keynes illustrates this by explaining how good it would be to pay people to dig holes in the ground, and they fill them up, and doing it again. It goes well with his Nazi like contempt for the People.

The Roman emperors used to distribute massive amounts of money and bread to the People of Rome. The result was no Roman revolution whatsoever (only military coups), and a slow plutocratic decomposition over a period of more than six (!) centuries. 

Krugman Paul: Famous editorialist at the New York Times, later made Nobel Prize in economics. Started his career with his friend Larry Summers at the White House with B movie actor Ronald Reagan, one of the plutocratic figurehead presidents. Summers deregulated the finance industry, Krugman deregulated globalization. An ambivalent figure, like most individuals of the pseudo left of the USA (Pelosi, Obama, Clinton, etc.).

Krugman ardently supports Keynes and (Neo) Keynesianism.

Lehman Brothers: 158 year old Investment bank which got over leveraged and over extended in unprofitable investments. At the end its leverage was more than 50 (meaning it had four billion of assets when it lent 200 billion). Running out of cash, the Fed lent it 50 billion each morning, which it recovered in the evening. Hank Paulson, Treasury Secretary, who, as CEO of Goldman Sachs, two years before, refused to save it. It was a major mistake. The USA ought to have saved Lehman, by nationalizing it (which was done with the GSEs). There is evidence that Paulson had a personal grudge against Mr. Fuld, the head of Lehman, and may have thought the elimination of Lehman would profit Goldman Sachs.

The collapse of Lehman, a major bond market maker, made the banks unwilling to do business with each other, freezing the entire financial system, worldwide.  

Lending: The more they lend, the more powerful banks get, especially if they lend to each other. As it occurred to the biggest banks that the government would save them, they did whatever. Solution: make all and any loan and the reason(s) why it was lent, public and transparent. Violations of that to be prosecuted, and the same for bad loans. Worldwide, from loans to aircraft makers, to loan to car buyers.

Some will say that I am promoting the end of the free market. But banks are private, secretive monopolies, with the full backing of the state: they already have nothing to do with the free market, and everything to do with the connivance between state and plutocracy.

To break that connivance, only one solution: bring in the enlightenment of democracy, plutocracy’s arch enemy. So I propose to replace the connivance of the state and plutocracy, which is unconstitutional and anti-civilizational, by the connivance of the state and democracy, which is both constitutional and civilizing. 

Mafia: Pales in comparison with the present plutocracy. 

Medicare: Existing national health care system in the USA. Covers people above 65. Extended to drug coverage by president G. W. Bush, in his one and lonely positive contribution. Forgot to pay for it. My suggestion was to transform it in Medicare For All.  Everybody could have used it as health insurance in lieu of private insurance (and at equivalent spending levels). Advantage: permanent coverage, independent of government. By adjusting things carefully, Medicare For All could have paid for most uninsured. It ought to have been given full ability to negotiate with health providers and drug companies, as national health plans have in other countries. Medicare for All could have been signed into law in five minutes, by executive order.

Obama instead opted for Obamacare, which forces individuals into private contracts with for profit companies, and that is obviously unconstitutional in any democracy (when the government forces the public to serve the privates, that’s called servitude). 

Money In USA: In 94% of cases the candidate who spent more money wins elections in the USA.

Median Income In The USA: Down 7% from 2000 to 2010. Everything indicates it will get worse, as no measure whatsoever was taken to stop that. Plus: the pillars of middle class’ well being, such as middle class free education, all the way to the PhD, are collapsing (whereas they have been instituted in say India, or China, or even Brazil). 

“Militant”: Subject to assassination, upon recommendation to the president by a secret White House subcommittee. Will they come for Obama some day? Just asking.

Monroe doctrine: The ill disguised assertion that the American continents belong to the USA, and that the Europeans, in particular, should stay away from them. It is a natural extension of the doctrine that the land of the Americas belong to Washington and its agents. Put in practice by organizing plutocratic dictatorships all over the Americas for more than a century. Culminated with terror in Chili, Brazil and Argentina. It was de facto overthrown by the British counterattack (secretly helped by France) against the Argentinean dictatorship (Falkland war). 

Nazism: is intimately tied to the rise of American plutocracy. However, this is suppressed in the USA, and in places such as Wikipedia. One can only suspect that agents are paid to do so. The reason is simple: to realize American plutocracy created a lever called Nazism, and then used it carefully, would open a whole can of worms about the nature of American plutocracy and the absolute viciousness it is capable of. It would also lead to worry about a possible repetition of the scheme. 

Obama: Uncle Tom as president? (Since there are many non American readers let me explain. “Uncle Tom” is a derogatory term for a person who perceives themselves to be of low status, and is excessively subservient to perceived authority figures; particularly a black person who behaves in a subservient manner to white people.

Obama’s motivation to run for president? After Michelle Obama incisively asked him in public why he, her young and inexperienced husband, wanted to run for the highest office in the land, Obama, after lots of ponderous thinking, lamely replied that being “black” and sitting pretty as president would be enough. Well, he is not black, and it’s not enough. If he does not want to just been viewed as the most despicable “Uncle Barack” of history, he has to do way better. That means to chose between plutocracy and history. He has only a few months to do so. 

Obamacare: Obama’s ways of ingratiating himself with the health care potentates (his friend Warren Buffet, another hypocrite, among them). Barack had forgotten to fund it, though, and so he dropped a major part of it October 14, 2011, demonstrating that Obamacare was mostly for show. Meanwhile Obamacare gave a pretext for health care premiums to go up 9% in one year, and health care from 16% to 18% of GDP.

Passion of the West: The real engine of Europe in the last 3,000 years. Already in evidence when the Greeks resisted stubbornly the Persians, and counterattacked devastatingly over the next two centuries, going all the way to India.

But it is not just the Greeks and Romans who were passionate. In a way, the Germans were even more passionate, as demonstrated during the Roman victory on the invading Teutones below the Sainte Victoire (thus its name!) next to Aix en Provence (102 BCE). To their dismay, the legionnaires found that German women had grabbed weapons and cut down some of their own men fleeing the legions, accusing them of cowardice. (In truth Consul Gaius Marius, with superior generalship, had hidden troops in ambush, and soon more than 100,000 Teutones were rotting in the sun, giving its name to the town of “Pourrieres”.)

Neurology’s engine is passion. Superior neurology leads to superior science, and then superior economics. Something China, India and Brazil have finally understood, but that Europe and especially its rogue American colony, seem to have forgotten.

Paulson Hank: Ex football player made bully in chief at Goldman Sachs. Became Secretary of the Treasury by Bush as the financial crisis loomed. Sent, with his boy Geithner and Bernanke, thousands of billion of dollars to fellow bankers and past alumni, like himself, at Goldman Sachs. Owns an island with seven villages. 

Paulson John: Hedge Fund manager. Personally earned, for several years, after tax, enough to pay for 50,000 teachers, a year, with benefits.

PIIGS: Portugal Ireland Italy Greece Spain. Countries where big banks invested in private projects which were bound to be unprofitable. But they did not mind, because they knew that their friends the politicians would come to rescue them.  

Philanthropists: Title used by plutocrats in the USA. Generally accompanied by an oath to give, free of taxes, the management of one’s immense fortune to oneself, and family, to increase further one’s importance and obsequious adulation.

Plutocrats: Plutocrats are more or less vicious. Some are like Soros, making a billion from breaking the pound, and then using his influence and money to give a PhD to Saif Al islam el Qaddafi. Some plutocrats are like Bill Gates, playing the foundation trick to the hilt. Others are even richer, like the Walton family (which controls more than 100 billion dollars), and unfriendly to organized labor. Some are outright promoting Pluto’s underground wealth, like the Koch brothers, also financing the Tea Party and those who believe that poisoning the atmosphere with CO2, CH4 and a monstrous cocktail of man-made greenhouse causing poisons, is what the doctor ordered.

And then there are outright genocidal plutocrats, like the Ceaucescus, Qaddafis, Assads, and the like. One has to understand that the Kaddafis controlled more than 150 billion dollars, managed overseas by Western banksters (who ought to be jailed as objective accomplices, and their properties seized).  

Was Hitler a plutocrat? Of course! So was Stalin (who started by attacking and stealing banks, sometimes in a very bloody way). Not only do leaders of great nations have huge power, hence wealth, at their disposal, but the often rule using the Darkest Side imaginable, the one way down there, where Pluto dwells (before Pluto there was Hades; Hades got such a terrible reputation among the very ancient Greeks, that the word “Pluto” was rolled out to replace him!) 

Plutocracy: Usually described as the rule of wealth. However, it is not just the rule of wealth, but also of Pluto himself, as the Greeks had already established.

Plutocracy is mode of mental organization of the multitude which civilization made possible. So it is a paradox that civilization created its own enemy. But so it is when one suppresses fire too much: the all too lush forest can turn into the ultimate inferno.

Plutocracy is the ultimate enemy of democracy.

Nowadays, with the god like technology of destruction we have, the return of plutocracy would probably mean the irreversible annihilation of civilization, and, soon, enough, humanity. Maybe that happened many times among the stars.

Nazism was just a warning. So was the rule of the Aztecs. The return of full blown plutocracy would do much worse than those two combined. There would be no limit, as everything has proven relative, except the limited resources of the planet. It does not require much imagination to realize what the largest, and troublesome, biomass is.  

That the two latest presidents of the USA gloat of ordering torture and extra judicial punishments, incarcerations and arbitrary executions, is another warning that Pluto is becoming ever more arrogant.

This was all encouraged by the greatest fraud ever committed, the Wall Street machinations which culminated with the financial crisis of 2008. To this day, no prosecution was engaged against any of the perpetrators, thanks to their obsequious servants, the best politicians wealth ever bought.

Plutocratic Trans National Corporations: Complex systems theorists at the Swiss Federal Institute of Technology in Zurich mapped ownership among the world’s Trans National Corporations (TNCs). Previous studies had found that a few TNCs own large chunks of the world’s economy, but they included only a few companies and, naively, omitted indirect ownerships.

From Orbis 2007, a database listing 37 million companies and investors worldwide, the theorists pulled out all 43,060 TNCs and the share ownerships interlinking them. A core of 1318 companies with interlocking ownerships became apparent. Each of the 1318 had ties to two or more other companies. On average they were connected to 20. Although they represented 20 per cent of global operating revenues, the 1318 TNCs appeared to collectively own through their shares the majority of the world’s large bluechip and manufacturing firms – the “real” economy – representing a further 60 per cent of global revenues.

When the team untangled the web of ownership, it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Mr. Glattfelder, one of the authors. Most of those were the usual suspects, the top financial institutions. The top 20 included Barclays Bank, JPMorgan Chase, Bankf of A, UBS, and Goldman Sachs, and quite a few French and German financial giants exposed to Greece.

The apologists of plutocracy hasten to add that this does not prove conspiracy, thus demonstrating they do not know what conspiracy means. It means “breathing together“. A fortiori so if one owns each other.

Popular Arising: The USA is one hundred percent opposed to the suppression of popular demonstrations, as long as they are not happening in the USA.

Quantitative Easing: a technique hidden by technicalities to transfer thousands of billions of dollars to the banks, and their wealthy bankers and wealthy shareholders, from the 99%, while claiming to be helping “the economy”.

The technique consists into the USA central bank buying long term bonds so that banks which have bought them make plenty of money. How did the banks get the cash? From the zero interest rate policy Krugman and the like advocates. This way money has been transferred from the little savers and little grandmothers to the wealthiest people in the world, while forcing the rest into the bond and stock markets were their money disappear, thanks to market manipulations by the wealthiest people in the world, and their operators, such as both Paulsons. Now called the: “Twist“, to avoid criticism.

Radical: from the Fourteenth Century medieval philosophy, from the Latin radicalis “of or having roots” from radix “root“. Meaning “going to the origin, essential” is from 1650s. Political sense of “reformist” (via notion of “change from the roots“) is first recorded in 1802 (by then the fractional reserve public-private monopoly was established). In other words, not only there nothing wrong about being radical, but sometimes it is the only way.

Rating Agencies: The so called “Three Sisters”, Standard & Poors, Moody, and Fitch, rate how much the institutions which borrow money can be trusted. They rate companies, states, and even cantons. States don’t pay them, although the USA engaged a criminal inquiry after being downrated (a sort of negative payment!)

However companies (such as banks) do pay them.  Thus during the subprime times, AAA ratings were given to junk. In the end, this was profitable to the entire big banks connected plutocracy, as it allowed the co-conspirators to create a super giant fraud which the plutocracy then was able to surf.

Reforming Finance: 1) A worldwide Financial Transaction Tax should be first, immediately, at the G20 in November, because it’s a no brainier.

2) To provide immediate relief, systematic and systemic default ought to be organized, as needed, throughout the financial system. Start with Greece. Address the problem of homeowners in the USA.

3) The next lines of reform would have to be derivatives, shadow banking and further lending. The first two ought to be mostly outlawed, and what’s left, made transparent. All and any lending ought to be made completely transparent, according to the philosophy that banks, are, truly, agents of the state (under private management).

Revolution, American: There was a strong anti-plutocratic component in the American Revolution, as the king, the plutocrat-in-chief, was vigorously attacked verbally and philosophically. But there was also a pro-plutocratic component, as the evil design of invading Indian lands was high on the agenda of land speculators such as Colonel Washington. The American states gave the right to vote under various conditions, such as property or religion.

Revolution, French: The Revolution started mildly, with the General States having proclaimed themselves a Constitutional Assembly. Under the impulsion of Sade, and thinkers such as Danton or Mirabeau (Comte de…) though, the Revolution took an ever stronger anti-plutocratic character. Finally all European plutocracies conspired to crush it, and a war to death between the republic and the plutocrats took shape.

There had been plutocratic republics in the European Middle Ages, but, being plutocratic, precisely, they were never perceived as threats against established plutocracies. The Holly Roman empire had no more problem being allied to the Venetian republic, than Charlemagne himself. Quite the opposite, as the republics were full of bankers leveraging through fractional reserve (to find money to pay mercenary armies!). Those republican bankers were keen to bankroll the likes of Francois Premier or Charles Quint (even when that was just to fight each other! The wars maintained plutocracy dynamically, by presenting with pretexts to crush popular energy).

But the French revolution was a completely different beast: it was a full return to the Roman republic, as every man was a citizen, and every citizen could vote. Plutocracy has dreaded such a return ever since Octavian became Augustus. In the end, the Revolution won: Europe is now covered with republics (even the so called monarchies are, de facto, republics). Even better: the whole planet is covered with French revolution style republic (with the notable exception of China’s PRC).

Meanwhile, fractional reserve has slowly eaten at democracy, and it’s time for an overall system reboot.

Rights of the Child, Convention On: the Convention On the Right of the Child is recognized by nearly all countries of the United Nations, but not by the USA, and its fellow soul, Somalia. what is the tie with plutocracy? No hand is small enough to work for a plutocrat. This also exemplifies the relationship between piracy on the high seas (practiced in Somalia) and financial piracy (practiced on Wall Street).

According to the Heritage Foundation and other similar ultra nationalistic organizations, American exceptionalism, can do no wrong, and thus stands way above the Rights of any Child.

The supine attitude of Americans about this scandal is another proof that there is no American left, and that, 60 years after McCarthyism, basic decency is still in short supply in the USA. Obama said he would review the Rights of the Child, but he has been too busy playing golf with Wall Street fat cats, a habit he acquired in 2007.   

Rubin Bob: Ex CEO of Goldman Sachs, Sec. of USA Treasury, founder of Citigroup. Told Clinton that he would be re-elected if, and only if, he pleased Wall Street. Clinton used the F word, but obeyed, making him a good boy, thus insuring his fortune and lasting influence as a marionette.

Savings & Loans: Thanks to Summers Larry, a type of banks, the Savings & Loans, which loaned to homeowners, were deregulated under Reagan. The S&Ls were soon the object of massive fraud (deregulation made fraud possible, as Summers himself recognized: no watching, no conscience!) The entire industry disappeared. By the early 1990s, under Reagan and Bush senior, about 2,000 (two thousands) were nationalized and then resold. There were about 1,000 convictions for criminal acts.

The present financial crisis involves fraud on an incomparably larger scale.  By professor Black’s estimate as the regulator he was, by his estimates there have been exactly zero convictions and zero indictments. So, when Obama riles against Wall Street, it may have to be taken with a grain of salt. In truth why would he feel the urge to bite the hand that fed him, right from the start? That would be antinomic to his credo of (self) “navigation” as the ultimate good.

Schools: After the 2008 financial crisis, 250,000 teachers were fired and not replaced in the USA, although the school age population is increasing rapidly. In 1960, attending the University of California was supposed to be open to all those qualified, and free. Now it costs $31,000, a year, for college (and it’s more expensive for graduate school). The money to have a superlative school system pales relative to the money spent helping banksters.

Slavery: Outlawed in Europe by the Franks in 660 CE, under the government of Bathilde, an ex English slave girl purchased by a rich Frankish merchant, who escaped, and was later bought, freed and married by the future king. Slavery was reintroduced in the Americas by its colonists, first in the Caribbean, and a century later, in the American English colony. In a notorious bulle, a Pope, to please the Portuguese monarchy, had declared that black Africans could be enslaved.

Summers Larry: Arrogant nephew of two American Nobels in economics. Reagan adviser for economics, greatest personal destroyer of president Roosevelt’s financial and economics architecture. Great partisan of unregulated derivative finance. Made millions given by a hedge fund. Dazzled the naïve Obama with his facile brilliance. Sexist, caused the loss of billions in Harvard endowment with fraught investment policy in… derivatives.

Parroting the great economist John Kenneth Galbraith, out of context, Summers’ motto is that ‘conscience is the knowledge that someone is watching.’ In other words, Summers has none, and wants even less, as he imposed secrecy, as Secretary of the Treasury, time and time again, say in the so called “derivatives” industry (an occasion for him to insult Sheila Bair).

Supreme Court USA: Thinks corporations are people and should be allowed to contribute secretly to fellow plutocrats. In other words, it wants people to have no conscience, even in summers’ restricted sense. The USSC takes itself for a Constitutional Court, although that function is not described in the American Constitution (while it is in, say, the French republic). Among other exploits, selected as president of the USA the one who has the fewer votes, but the higher plutocratic credentials. Now is allowing corporations, and plutocrats to give as much money as they want to influence the electoral process, in complete secrecy, in a desperate bid to establish feudalism before the otherwise unavoidable revolution.

TARP: Transferring Assets to Rich People. Astutely presented as the main give-away program for big banksters welfare, to detour attention from the much more massive help of Quantitative Easing. TARP was “reimbursed”, with massive publicity, from other gifts of the government, or other programs.

Teachers: 250,000 fired in the three years after 2008, in the USA alone.

Terrorism, Financial: Arguably worse than Muslim terrorism itself. Although, true a handful of Muslim terrorists killed thousands, financial terrorism, standing behind the mighty military-industrial complex of the West, killed millions (see Afghanistan; the wars involving Iraq, to a great extent contrived by the west, also killed millions, especially when one counts the children killed indirectly).

The Twist: As Quantitative Easing came to be perceived as outrageous no strings attached help to the banksters, presto, the Fed changed its name into “The Twist“.

“Too Big to Fail”: See below. The idea is that if big banks were allowed to fail, the economy will break. This is what happened in 1930s in the USA.however this forgets the point that individuals are insured up to $100,000 nowadays, by the FDIC. And similarly in Europe. The simplistic idea of “Too Big To Fail” also neglects the distinction between banks (the thing with deposits, ATMs, cashiers and advisors) and the bank holding corporations. One can fail the latter, while keeping the preceding intact. Actually the FDIC does this several times a week. With smaller, less political influential banks. 

Too Big To Jail: Also known as “Too Big to Fail”. The idea is that, when one has enough influence, and one has become part of the Connivance network, one is above the law. It’s important that this principle be respected at all times, so that the members of the connivance network can act boldly, decisively. For example by inventing banking losses the vulgum pecus is then asked to pay for.

Wall Street: As the Suskind’ book, “Confidence Men” reveals, Obama was Wall Street’s secret candidate. and financed him massively, allowing him, Obama, to beat Hillary Clinton through money attrition (although, full disclosure, the present author did help Obama relatively more, especially during Obama’s nadir of November 2007; however, had I known the massive support of Wall Street for Obama, I would have still supported him. However, within a year it became obvious that Obama wanted to join Wall Street, rather than exercising an independent judgment he may have been unable of, many of the issues being technical, he had to turn towards his closest advisers, creatures from the depths such as Summers, obsequious servants of Hades).

Xenophobia: would not help anybody, as plutocracy is a worldwide conspiracy, plot, network, and conniving connivence. Thus plutocrats help each other, in their brotherhood of evil. For example, Bush and his CIA cooperated with their brother in arms, Muammar Qaddafi. A less well known example is that the American plutocrats who had helped Hitler so much, kept on helping the Nazis during the entire war, and even after the war.

Confronted to a worldwide conspiring jet-set, those who the plutocracy oppresses have to stand united too, and help each other. The plutocracy knows this, and will try to evoke ever more xenophobia.

Welcome Estonia!

January 1, 2011

ESTONIA JOINS EUROPE, AMERICAN LEFT COMPLAINS.

***

Wonderful news for Europeans: the Baltic republic of Estonia is joining the Eurozone. The Eurozone is the set of 17 countries, where the Euro is officially authorized by the European Central Bank as currency (other countries have been using the Euro without official authorization). Many American economists, even some who are considered left wing, are enraged.

One could only expect Americans of the monetary type, to be exasperated. American monetarism is intrinsically nationalistic, just as European monetarism is intrinsically transnational.

The invasion of Estonia by the Euro is a further encroachment of Europe into Europe. This undermining of the American empire by the European imperialists invading Europe has got to stop! If American easy money (easy for American bankers that is: hard for others) cannot reign in Estonia anymore, what’s next? A European crack down on bank bonuses? Who is going to pay for American politicians’ souls?

The fascist hydra has many heads, and some in unexpected places, on the left. It is true that, as long as Estonia is in Euros, Americans can forget about buying there. And if the dollar eases further into nothingness, it will be only more so, thus undermining a cheap trick the USA has used a lot.

“Social Europe” journal readers found Paul Krugman the most influential left wing thinker. This is really pathetic. What is next? Will “socialist” Hitler’s nationalistic conceptions for Europe be celebrated?

Let me explain. I respect and appreciate Krugman. He is good to me personally, and I am grateful.

However, Krugman wants European countries to devaluate when they are in trouble, so that they can take advantage of other European countries, a stone’s throw away. Don’t ask on which neighbor the stone falls, it falls for thee, says Krugman, and he smirks, claiming to be unaware of the double meaning. Europeans fighting each other with competitive devaluations has been done hundreds of times before. Europeans know where it leads, because they have studied history.

Just ask the Germans. They can be lyrical on devaluation, since they saw it brought by Dr. Schacht, a friend of JP Morgan, the American super banker, who later brought that other gift of the cheap type, Hitler.

Krugman’s love for Europe is fundamentally not that much different from Stalin’s. The more independent little European countries there were, fighting each other, the happier Stalin was. And the happier Paul Krugman advocates one should be. This new trade theory Krugman is famous for is strangely reminiscent of the Nazis’ “New Order”. Let the strongest win over the jungle, by eating others.

To help Ireland, the way Krugman sees it, it would be best that Ireland devaluate its currency and declare war on Europe, economically speaking (and economic war is a preliminary for the real thing). Same for Spain, Portugal, Greece, Belgium… Let them all leave the Eurozone and cheapen their currencies, and soon the USA will come and tell them which leaders they should have, as in the old times. American order will have been re-established. Uncle Barack will be reigning again, and Krugman, his prophet, may become just as rich.

It is sad that Paul does not seem to understand why the terrible wars of the twentieth century happened, and killed about 100 million Europeans. That holocaust was caused by this exact same desire to find specious nationalistic solutions with the neighbors all around, to their detriment. Instead of finding the solutions inside, war outside was the way. The way to hell. And make no mistake: devaluation is war.

Krugman himself argues frantically that China is making war on the USA with its undervalued currency, but then he advocates that Spain ought to make war on France by devaluating its currency. War across the Pacific becomes salvation across the Pyrenees. Incoherence can be funny, but brings a question: who is Krugman really working for? The Comedy Channel or the War Department?

I am not making this up: many times Paul Krugman explained that it was easier and faster to stick it to the neighbors, through a devaluation. What about just nuking the neighbor, and taking over its territory? Would not that be even faster?

Krugman explained that the problem with internal re-adjustment (by opposition to an instantaneous devaluation) was the duration of the pain. By that obsessive krude-man measure, nothing would beat a French strategic nuclear submarine unleashing 50 thermonuclear warheads on Spain, and then there would be no more Spain, hence no more Spanish pain.

Would that devaluation make Spain more worthy? Or would it make Spain more worthy for American plutocrats, and then they could pay uncle Barack and professor Krugman even more? Worthy for whom, that is the question…

 Contrarily to the Spain of Krugman’s competitive nightmares, the real Spain just inaugurated still another very high speed (400km/h, 250 mph) train line, this one between Madrid and Valencia. Should Spain devaluate so that American plutocrats can buy that very high speed train line for pennies on the dollar? Is that what Krugman really wants? Is it not what was done in Argentina, buying a big part of Patagonia with dollars, when the natives’ currency had conveniently collapsed?

I know, I know, the busy Barack makes all his money writing children books while president, because he has time on his hands, since everybody attends on him, and he just has to read that teleprompter which was obligingly put in his line of sight. It’s not like the plutocrats give him money directly for all to see. He is just gifted, very smart, and if he gets the Nobel Prize in physics, and lots of money from lots of patents, that would prove my point even more.

All of us who do not support plutocracy can appreciate the errors of our ways, every day that Pluto makes, giving us a harder time, and we brought this on us, because we did not navigate well.

Krugman always insist upon the expediency of devaluations: it’s the economic equivalent of a bullet in the head, so it’s good. Once upon a time, Hitler was fond to explain that, thanks to the monarchy he had established (“Drittes Reich”), instantaneous decisions could be taken, including breaking contracts and reversing alliances. Hitler had just to decide what he wanted that day. And it could be done that day. The way Krugman claims to like it. Just like a devaluation.

Example: after running an electoral campaign foaming at the mouth about Poland occupying Germany, within a year Hitler had concluded a non aggression pact with Poland. Hitler’s Germany, in total violation of the spirit of his electoral campaigning recognized Poland’s borders and ended a decade old economically damaging customs war.

Having Hitler as “Guide” was very expedient. For a while. Fundamentally this is what Krugman also proposes, as he puts expediency above all and any other political principle.

Speaking of expediency, since the nationalistic spirit of Hitler is extolled once again in these political matters, let’s remember that Adolf found expedient to steal from the Jews, to create a Nazi economical miracle for his supporters.

This is not an obsolete example. Reaganomics is another example of Hitleronomics, just a bit more subtle, and much more patient. Reaganomics creates an economic miracle for its most ardent supporters, in the USA, and abroad, by redistributing riches to the hyper rich who then mesmerize the population into following them, thanks to their ownership of all and any media. In other words, Reagan do to most what Hitler did to the Jews… but Reagan and his followers, do it in all legality. (The extermination of civilians in the “Third Kingdom” was not legal, according to the laws of said kingdom: the Nazi leadership hid what they were doing… even to most Nazis.)

To given even more to their hyper rich supporters, the Reaganosaurs just borrow, in the name of the American People to their accomplices the Chinese. (Dangerous accomplices, sure, just as Hitler was, but it turned out well, for the American century.) They don’t have one very high speed train lines to show for it. They use the money strictly to make more billionaires (see note).

Krugman’s little proposal that every little tribe ought to go its little way is a long story gone stale. In May 1945, the perfidious Irish regime, still full of hatred for the Anglo-Saxons, sent condolences to the Third Reich for the death of its esteemed Chancellor and President, Adolf Hitler. Is this what Krugman wants to go back to? Should Auschwitz have its own currency, as we are at it? The free slave, as managed by Prescott Bush? Just asking.

The way to do modern politics in Europe was, instead to welcome Ireland. As it is to welcome Estonia.

After joining the European Union in 1973, Ireland (Éire), then a very poor country, transformed itself from a largely agricultural society into a modern, technologically advanced “Celtic Tiger” economy. But European Union help, direct or indirect, was the foremost factor in this transformation, as it was for Greece, Portugal, or Spain. Europe is an Union, and it is strong because it is an Union. It helps, but then it should be helped too.

Unsurprisingly the word “Union”, long proud and mighty, is not far from becoming a dirty word in the unfolding USA. Krugman says it would be better if Europe was a disunion. That is what the plutocrats say. Their banksters don’t like that Europe is now preventing them to get bonuses, the way they used to have them. You know, by ruining the companies they then ordered the states to pay for, so they can do it again. And again. That is what is ruining Ireland. Paying for the plutocrats. Ireland’s problems are not about the Euro, as Paul Krugman would like us to believe. As the plutocrats would like us to believe. That’s a red herring.

Since we now all know that Paul Krugman is revered in Europe, it is time for him to understand that somebody in the position of mental authority that he enjoys presently should not encourage the sort of nationalism, especially when combined with pop socialism, which brought such a terrible outcome as the war of 1914-1945.

What mood carried a lot of Europe from bad to worse, from 1918 to 1933? Nationalism. The thing Krugman wants more of, because it is so expedient.

In the post 1918 era, the deepest divide between nationalists and genuine internationalist Europeans. It was not between fascism and communism, as those two liked us to think. Even the French communists, as they sang the “Internationale” abided by it, since they took their orders from hyper nationalist Moscow. Their fellow fascists from Italy and Germany were even worse, as nationalism, they claimed, was their guiding light.

In truth, Western European fascists were taking their orders from plutocrats, the richest bankers and industrialists, many of them American. Those who think that Benito Mussolini was hung from an ESSO (= EXXON) gas station in Milan, for no good reason, should study history a bit more. The Italians knew well who owned that puppet, that Mussolini, and it was duly returned to its master. Uncle Barack will cry us a river about “Anti-Americanism“. Look: that river is so big, it can be sailed on.

Estonia is pulling away from its oppressor to the east. In the early onset of World War Two, the USSR, then allied with German national-socialists, invaded the Baltic republics. The Finns fought back, and very hard, mauling the Russian bear. That is why Finland is in the Eurozone. It is not about the context Krugman worries about.

Little known by those who remade history in a way that suits them, in 1940, the democracies, France and Britain, intended to crush the perfidious Nazi collaborating state, Sweden. Sweden, hiding behind “neutrality”, was busy arming Hitler in more ways than one.

Sweden is not presently in the Eurozone, although it is bound by law to integrate it at some point. After occupying Hitler’s loving and caring Sweden, France and Britain planned to cross the Baltic sea, and rescue Finland from Stalin’s monstrous USSR, Hitler’s ally. The war was going according to plans, when France suddenly fell (and the dispersion of the French Air Force was a factor in that fall, since only half of the French Air Force was in metropolitan France at the time).

Europeans have had enough of big powers manipulating small states, because they have small armies, small populations, small currencies. So now they are grouping together, overcoming their little differences, to resist the likes of the USA and the USSR (well, OK, maybe Uncle Vladimir will make nice now that he is confronted with irresistible force).

Giant banks which have harnessed the fractional reserve system to create as much money as they need to invest in derivatives, are the proximal problem the West is having at this point. We don’t hear too much on that subject from the esteemed Paul Krugman. Actually we don’t hear him at all on this subject. He prefers GDP, and stimulating by de-taxing..

The common currency of the common European People is not the problem of the west, at this point. It is just made to look so, by relentless propaganda. Time to grow up out of subjugation. At the same moment when the European Union cracked down on bank bonuses, all what Paul Krugman could do was to address condolences to poor Estonia, which he presents as a victim of those lying Europeans.

Although Krugman’s economic blog is number one in the USA, he has forgotten the big picture… except if one considers that the big picture is the USA, and everything else is a small and nasty critter.

It is actually telling that the European Union has cracked down on banks bonuses, whereas the USA has not. Even though the Congress, the Senate, and the presidency of the USA were controlled by supposedly progressive democrats. Clearly, they did not want to progress. Why? Because the truth is that they have a vested interest in the abusive financial system, as it is. So they made it so, that it would keep on going, same as it ever was.

This persistence in financially abusive behavior does not just say that the USA is subjugated to banksters. It also say that the American and international banking system as it presently exists, is an instrument of subjugation of American plutocracy on the rest of the world, and, in particular, Europe. And American leaders know that well. (But don’t wait with bated breath that they will tell you so: it is not on Barack’s teleprompter.)

Paul’s object of admiration, the British citizen known as Keynes, objected strongly to the dollar as world currency. Keynes was head of the relevant commission at Bretton Woods, in 1944, charged with setting up a world currency (first by pegging all currencies together within 1%, a system later used for construction of the Euro).

The Americans insisted that the US dollar ought to be the world reserve currency. Keynes blocked the world dollar take-over. But the Americans cheated on the documents to be signed, substituting what they wanted at the last moment, without Keynes knowing. Paul Krugman talks about Keynes all the times, in glowing terms. But he never mentions that story. That’s steering the context to calmer and misleading waters.

It may be time to stop cheating on the logic. Expediency in economics, apparently Krugman’s preferred tactic, is only advantageous to the plutocrats, because they can run away from the law, let alone ethics, and People’s economics. By the time stupor has been replaced by regulations and laws, the plutocrats have already move to greener pastures. This will go on, until no pastures are left, and they have stolen the entire world. This sort of things has happened before, that is how so called aristocracies arise.

Paul would say: no, it’s not like that, I am looking at GDP. Well, look, instead at what a devaluation does to GDP, in, well, dollars. And, as I said already with buying Spain on the cheap, that is the whole point. Just as Americans can still buy oil cheap, because of their world reserve currency, each time a new country joins the Eurozone, the time of reckoning comes closer, and American supremacists tremble ever more. Hence the rage about Estonia.

And what does GDP measure anyway? It should be called Gross Demonic Product, for all I know. GDP measures whatever American plutocracy thinks is important, because it makes a lot of money with it. Then it tries to persuade American sheep that they ought to buy more of whatever makes GDP shine.

With tremendous traffic jams and tremendously expensive health care, GDP can go to the moon in the USA, while common people go down to hell. GDP has just become an instrument to indoctrinate Americans. Seriously, if a doctor’s visit and the prescribed drugs cost nada in Europe, how much is contributed to European GDP? Nada. But the same purchases could easily contribute thousands of dollars to the USA’s GDP, before people crawl into a hole and die (USA life expectancy went down significantly in 2009).

Europeans don’t need to be as obsessed by GDP as American economists are: they have other, much higher values, and their societies and lack of noxious GDP shows it.

Estonian austerity is no fallacy, as many American left wing economists would like us to believe. The hydra of cheap imperial fascism shall be defeated by proper thinking, and gravitas, independently applied.

Congratulations Estonia, and welcome!

***

Patrice Ayme

***

Note on welfare for the rich, Reagan style: Obama taxes the hyper richest 400 incomes at a rate of (no more than) 17%. They make an average of 340 million dollars income. A normal European taxation rate on these critters would be 50%. Thus each critter saves 120 million dollars relative to its European equivalent. Cost: 50 billion dollars, borrowed directly to foreigners (who get paid in return by American jobs). And this is only part of the support for the hyper rich. The self serving  belief of American leadership in serving the rich has sucked the economy of the USA dry of much profitable investments: the money is created inside the USA by borrowing from abroad, and then sent back abroad.

Essence Of The Civilizational Crisis.

December 6, 2010

 

THE PRIVATIZATION OF MONEY CREATION IS THE ENGINE OF PLUTOCRACY.

To understand the present financial and economic crisis, we need the clarity of deep philosophy.

The situation is actually simple, in its grossest outline. To create public money, the money everybody uses (be it cash, electronic transfers, swaps, whatever) we use a private system, with proprietary money creating devices inside (say subprime, or derivatives). Civilization has never worked this way before, as the state was careful to stay the one and only money creator.

Thus society, worldwide, uses now a privately managed public money creating fractional reserve system. That puts huge power in the hands of underground private individuals we don’t even know the names of. Those cloaked powers in turn corrupt the visible political socio-economy, from below. The whole metastasis is not even described, because intellectuals would have to do so, but most are paid by institutions subservient to the present global corruption.

We saw a similar situation in the Roman empire, when the intellectual class was at its richest, but its critical ability had been corrupted.

The modern banking system is a Faustian bargain with the bankers; in exchange for the immense powers the private bankers were given with money creation, they were supposed to loan it back to society for its development. This worked reasonably well in the Nineteenth Century. But in the Twentieth Century, bankers observed they could support fascism regimes, and get away with it (only Dr. Schacht, one of the “Lords of Finance”, sat in Nuremberg tribunal, and he was exonerated). Now bankers think they can engineer a depression, and get even richer from it: just keep the profits, and make taxpayers pay for the losses.

***

Patrice Ayme

***

Note 1: Paul Krugman observes, with many others, that the crisis of the West needs "intellectual clarity" to be resolved, and, meanwhile we are "overmatched". I made preceding comment in answer to Krugman’s cogent remarks. (The New York Times had the kindness to publish what I wrote within two minutes! )

***

Note 2: HOW THE FINANCIAL CRISIS IS TURNING CIVILIZATIONAL:

China just established another train speed record for "unmodified’ train sets (481 km/h). OK, some will claim China stole a lot of Japanese and European technology. And some French engineers have sneered that the very high speed system in China is not as high performing as it looks (France has much higher average speeds, the highest in the world). However, this is not the point. The point is that China is trying very hard to progress and improve. Meanwhile some of the colossal technological edge of the West is eroding away quickly. The result will be world war, or global plutocratic peace (as plutocracy furthers its deal with China).

How does China improve so much and so fast? Because Chinese banks, the largest in the world, operate according the fiduciary duty, the Faustian bargain, that the fractional reserve system ought to impose, and used to impose in the West.

Top Chinese bankers know all too well that if they cheated, they may end up with a bullet in their skull. China is led by scientists and engineers who turned to politics, but know that they cannot make mistakes in their calculations. Mao made many mistakes, and dozens of millions died.

The history of China, in the 26 centuries before that, was spoiled by well meaning, but meek philosophy, which left too small a place to progress of the material, and intellectual kinds.

Civilization is not about "leaving it at that", the way Confucius mostly had it. Civilization is also about the dream, and implementing it. Indeed, civilization cannot stand still, anymore than a biker can stand still, because resources run out always (as Rome and the Mayas found out). Thus moving on is the price of sustainability. Progress is the price of sustainability.

***

Note 3: It may seem a curious thing that Karl Marx did not make a strident version of the preceding critique (instead he modestly accused tangentially bankers of “monopoly” powers).

But this Marxist discretion proves the point I alluded to above, namely that bankers were better behaved in the 19C. So Marx talked about other things.

Ironically, early American presidents had perfectly well seen the danger bankers posed, and worried more about them than Marx himself! And let no one call Andrew Jackson a communist: that would be serious mistake…

In the 21st Century, by capturing the states (USA, EU), and various institutions above them (IMF, World Bank, BIS), the bankers have established a monopoly of power early American presidents rightly feared (and Jackson, wounded at 13 by an English sword, later a proud carrier of several bullets, and a general in the field, feared very little). The wise know what to fear. The mentally simple just smile, thinking only about themselves, as they can’t think much further than that.

***


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Patterns of Meaning

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in truth, only atoms and the void

West Hunter

Omnes vulnerant, ultima necat

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Footnotes to Plato

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Patrice Ayme's Thoughts

Striving For Ever Better Thinking. Humanism Is Intelligence Unleashed. From Intelligence All Ways, Instincts & Values Flow, Even Happiness. History and Science Teach Us Not Just Humility, But Power, Smarts, And The Ways We Should Embrace. Naturam Primum Cognoscere Rerum

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Writer, Editor, Berliner

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Artificial Turf At French Bilingual School Berkeley

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Patterns of Meaning

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Sean Carroll

in truth, only atoms and the void

West Hunter

Omnes vulnerant, ultima necat

GrrrGraphics on WordPress

www.grrrgraphics.com

Skulls in the Stars

The intersection of physics, optics, history and pulp fiction

Footnotes to Plato

because all (Western) philosophy consists of a series of footnotes to Plato

Patrice Ayme's Thoughts

Striving For Ever Better Thinking. Humanism Is Intelligence Unleashed. From Intelligence All Ways, Instincts & Values Flow, Even Happiness. History and Science Teach Us Not Just Humility, But Power, Smarts, And The Ways We Should Embrace. Naturam Primum Cognoscere Rerum

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How to Be a Stoic

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Writer, Editor, Berliner

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