Posts Tagged ‘Default’

New York Vulture Justice

June 21, 2014

Courts in New York City keep with their hyperactive pursuit of USA domination (or is that simply, New York Financial District domination?) The latest was a decision, now supported by the Supreme Court of the USA (SCOTUS), to torpedo Argentina.

So it’s not just against the French (DSK, BNP, etc.). All too independent Argentina, a country which has the insolence of not accepting Wall Street colonial status, is in the crosshairs. As Argentina does not have the military power of France, it has, with the rest of Latin America, been invited to submit abjectedly.

Argentinian President Is Held Up By Gangster Justice

Argentinian President Is Held Up By Gangster Justice

And obdurate Cuba shall be punished all the way to Paris (the BNP, Banque Nationale de Paris, story: why are sanctions against Cuba “legal” in International Law?).

Thirteen years ago, Argentina, pierced through and through by American banks and machinations, some engineered by Stanford-Harvard-Chicago trained traitors/economists, supported by generals encouraged by USA secret services, defaulted.

That was a shrewd move, economically. And fully morally justified. It was a question of the Argentinian People against exploiting vultures and conspirators.

Argentina, 13 years ago, refused to pay back its debt as planned when it had been contracted (by the traitors trained in USA plutocratic universities… A situation similar to what happened to Russia in the 1990s, when Harvard devils engineered there a self interested plutocracy in which Harvard had a stake!).

Ultimately, 93% of Argentinian creditors accepted settlements with the country, which were less onerous for the country. However, 7% of the creditors refused to bargain. They were typically the richest (allowing them to hold-out), and the worst (they enforced dictatorial conspiracies, a matter of obvious principle for them, vultures keen to make predation rule).

That brought the Appellate Court in New York to decide these Vulture Funds were right (I am sure they pay well, and money is always right, when there is enough of it). The Court, unbelievably, ordered Argentina to stop all payments on its debt… less it pays the hold-outs in this 13 year battle.

The main vulture fund is NML Capital Ltd, owned by billionaire Paul Singer’s Elliott Management Corp, and Mark Brodsky’s Aurelius Capital Management. They specialize in junk debt investing. They used their deep pockets to pursue a 13-year legal battle that’s now coming to a conclusion (or so they hope).

NML’s position is between 45 and 50 percent of the payout ordered by U.S. Judge Griesa, and amounts up to a billion, or so.

The good judge does not care that the 2002 default was highly successful for Argentina, and the master work of president Isabella Fernandez (photo above) and her husband (an economic university professor who was elected president at the urging of his Senator wife, above; unfortunately he died of a heart attack).

Perhaps the good judge knows no history, and does not give a hoot, and only loves caviar and songs, as served by Mr. Singer.

Another example of connection between American “justice”, vultures, and force. New York, the world central financial center, is used as a way to advance the interest of USA plutocrats, at the risk of paralyzing the world financial system.

Meanwhile several strange facts surfaced: the evaluation of Greece by the IMF a few years back, when Paul Krugman wanted to dismantle the European Union, were unduly pessimistic, the IMF itself recently admitted.  Great. How many Greeks died because of this?

Remember when top American economists were howling for the end of the Euro? Not only the European currency did not collapse, but now the yield on Spanish long term bonds is lower than that of the USA.

Morality? The cris that cruxed in 2008 is far from over. It’s a war for world domination. It’s fought in American courtrooms (objective accomplices of their pet vultures, or, rather, vice versa), and it’s fought in the court of public opinion. To fight back, well, maybe, judge Bush. It’s not exactly a change of conversation.

If American judges condemn the president of Argentina for saving her country, and punish all of Argentina, maybe Europeans could help the unjustly struck, by condemning a few American master minds, for real international war crimes. With the wrath of real justice.

Oh, by the way, Argentinian bonds, thanks to their high yields, have made a lot of money for private investors. They returned +10% in 2012, while other bonds in the average lost 6%. The total market that the Courts of the USA are trying to torpedo total 100 billion dollars, the payments blocked as we speak are of half a billion. Thus, like Putin, Wall Street is ready to use maximum force to have its way.

Victims who don’t struck back become accomplices of their tormentors. Under president Cristina Fernandez, Argentina has superbly resisted. An example all the more edifying as she is from the supposedly “weaker” gender.  

Patrice Aymé

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Worse Than The 1930s

December 15, 2013

GREATER DEPRESSION II.

I have long argued that we are in a Greater Depression. See: https://patriceayme.wordpress.com/2011/07/23/greater-depression/

Europe is actually doing worse, GDP-wise, in the aftermath of the 2007 crisis than it did in the Great Depression shock of 1931. Actually these are the early stages of the greatest catastrophe ever known to have struck the genus Homo, I claim, and will so develop, lest drastically new thinking is applied. Krugman is slowly coming on board.

In the 1930s, the word “plutocrat” was well known, & an object of contempt. In the early 1930s, revolution was simmering; the governments had to do something. The USA & UK went into full, Soviet-like, command & control economy to rearm. FDR launched a program of construction of no less than 24 giant (“fleet“) aircraft carriers in 1933!

In “If Only It Were the 1930s” Krugman shows the latest graph of relevant GDPs.

Worse Than 1930s Great Depression

Worse Than 1930s Great Depression

[Germany, UK and USA were not in the Gold Bloc, but applied pretty much the Sterling method: default. France refused to default thus kick back on her armament program… When war against Hitler was already in full swing (1939-1940)]

Says Krugman:  the UK actually had a substantially higher ratio in the 1930s— and even more so after World War II. How did it deal with this debt? Not through the recipe currently being imposed in Europe, of fiscal austerity and internal devaluation. Instead, the UK relied on a cheap-money policy that produced low interest rates and moderate inflation — “financial repression” — with the central bank “subservient” not just to the government, but to government debt-management policies.

Amusingly, but tellingly, Krugman forgets to mention that the USA devalued in 1933 (devalued its debt, that is). That’s one of the first things Roosevelt did, hence the hatred of bankers.

Nowadays, erroneous policies boil down to who owns the world. The world has been colonized by the plutocrats. To service them, they impose slavery on all.

Little economists paid for sleek plutophile propaganda form a crucial, well rewarded, part of the scheme.

(Otto Rehn, by the way is thinking to run as a major extreme right wing politician in the coming European elections; thus the European Commission is led, in economic & financial matters, by a declared right wing extremist, and an ambitious one, indeed, not the cool technician he claims to be… hence his rage against socialist France.)

The radical solution is to default on the debt (I have advocated this long ago in: ”To Save The World, Please Default”). https://patriceayme.wordpress.com/2011/09/14/to-save-the-world-please-default/

Or at least default on interest payments. That could be done right away. Plutocrats would not be happy, they would plot.

To shut plutocrats down entirely, establish a worldwide register of property, and tax plutocracy accordingly.

Using force is not as utopic as it sounds: the Swiss Parliament just denounced a fiscal accord between France & Switzerland. What’s next? France will use force and impose whatever it has decided Switzerland will do fiscally. That involves, among other things, not just taxing French plutocrats hiding in Suisse, but also 190,000 Swiss citizens.

Some will say: “Is not force bad? If France uses force against Switzerland, surely, this is bad.” Well, no. First, force is already used. Plutocracy is satanic violence, the worst side of man, ruling. Second, force in the service of goodness is always good, just as weakness in the service of badness is always bad. The difference? Morality.

At that point the famous John from Hartford, who is paid to sound smart on the behalf of the plutocracy, intervened. Said he: “Default on the debt? Yes I can see that doing wonders for growth and employment when personal and corporate credit in the US economy totals around $60 trillion compared to the less than $3 trillion of cash in circulation.”

John meant to be sarcastic, but he is just idiotic instead. I politely replied: John, thanks for pointing out this misunderstanding. Please pay attention to the context. We are talking about government debt. This is in the name of what the austerity is done. First point. I would be glad if this got cleared up in your mind, all the more since you are probably not the only such case.

Second point: money is created through credit from private banks or dark pools, in normal circumstances. But, for example before and during WWII, this was thrown out of the window, when a command and control system was put in place.

That the USA required Great Britain to pay its war debt after 1945 was hostile to justice, decency, civilization, and highly detrimental to the British economy. That was made possible only by a British elite sold to Washington. That this is still going on today does not mean it will, tomorrow.

All governments’ fiscal problems would vanish if the hyper rich were taxed enough to kill the plutocratic phenomenon. This is a necessity, not to re-establish fiscal balance, but to re-establish civilizational balance.

Oh, by the way, John Hartford is grossly ignorant of what happened in the 1930s. Then all major governments (USA, UK, Germany) but for those on the gold standard (France) defaulted. The non-default of France was a disaster for the French economy.

Patrice Ayme

Constitutional Crisis

October 11, 2013

BEYOND THE DEBT CRISIS, A CONSTITUTIONAL CRISIS:

What’s the problem with the debt of the USA? Well, it can be viewed as worse than the debt of most European countries whose debt led to confidence crises (see the second paragraph below).

This debt crisis has become a government by the fools, for the fools, and it is starting to look foolish, even to the fools. It’s also bringing up constitutional questions, namely on the constitution of the USA, which is really very different from that of other democracies.

It’s no happenstance that no country has a constitution similar to that of the USA. A situation like the present one is simply impossible in other democracies, because new elections are automatically called when a budget cannot be passed. Generally it does not even get to this stage, because a no confidence vote is called well before that (as just happened in Italy).

It’s only normal that the legislative branch would be called to execute the law. However, in the USA, the legislature does not have to govern.

A legislature that does not have to govern does not have to be realistic.

Some will say: so what? The history of the USA show an incapacity to adapt to progress. The Civil War in the USA was, by far, the most deadly civil war in the West since the religious wars of the sixteenth and seventeenth centuries (it killed an order of magnitude more than the French revolution, relative to population). Adjustments could not be made in Congress, until a full blown war.

After the war, it took a century to get rid of institutionalized racism. And I have advocated the point of view that, for a century, plutocracy in the USA has been gathering steam. It leveraged World War Two, and related events leading to it, and following it, that it organized. Now global, the plutocracy installed the 2007 crisis, making the People pay for it, before, during and after.

Right now, sequestration is already a disaster (say on long term scientific and medical research). The evolution of employment, and of the median income, are also disasters. All what the plutocrats want is to starve the beasts, and the beasts are us, the Public.

For the plutocrats, the Republic, as long as it exists, is only a machine to make the richest thrive. And bonds, and Quantitative Easing, are crucial that way.

***

MORE DETAILS, & A DEEPER ANALYSIS:

USA debt: The total debt of the government of the USA is 16.7 trillion dollars (more than GDP; the number can look smaller when one looks only the debt “held by the public”, but that’s obviously not the important number).

The cash deficit, under Obama, reached 12.5% of GDP. Now it’s 5% and shrinking, thanks to unsustainable “sequestration”, a sort of amputation of the brain to make the patient lose weight. That, realized the bipartisan research arm of Congress, will actually augment the deficit. Very soon, considerably, and durably.

Many take for granted that a country like the USA cannot default, because its debt is in its own currency. That statement is so absurd, so anti-factual, it’s hard to answer. Countries which defaulted in their own currencies are legions. A recent major example is Argentina, which defaulted in 2001-2002. Notice:

1) the banks of the USA operating in Argentina made like bandits from that default.

2) Argentina is still trying to recover from that shock.

The reason why a damaging default for the USA is hard to imagine are the following;

1) The USA is completely self sufficient in nearly everything. The USA is the largest fossil fuel and gas producer in the world (with 22 million barrels a day). It also has the largest sea empire (slightly larger than France’s!), and resources therein.

2) The USA has by far the most powerful, most autarkic military, perfectly capable of protecting 1)… And more.

3) The dollar is the world’s reserve currency (although a second one has appeared: the euro!) The dollar is also low relative to the euro. Thus a serious down swing in the dollar is unlikely, and anyway, irrelevant, as planet USA is totally self sufficient (see 1))

But, precisely, that makes it possible for the USA to default!

It reminds me somewhat of the relationship between Spain and… China. China needed Bolivian silver (from Potosi), to strike a currency worth something (after disastrous paper inflation under the Yuan). China had silk and many other precious goods.

The interface between the co-dependent empires, was next to Manila. The Chinese established a powerful Chinatown. Way too powerful: the Spaniards at some point took umbrage, and annihilated it, killing all. What did the Chinese do? Well, they came back, and established another mighty Chinatown, crucial to the Spanish empire. And then the Spaniards had enough, and annihilated it, killing all. And the Chinese came back.  

There always will be USA bonds, they will always come back, as long as there is a Pentagon, and it’s mightiest. But there will not necessarily be a democracy in the USA.

Examples are plenty, in history, of republics that became plutocracies. It happened to Sparta. It happened to Athens. It happened to Rome. Even the European empire of the Franks, initially successful because it was less plutocratic than Rome, became riddled with plutocracy, seven centuries later. Florence, started as a republic, also evolved, after two centuries, into a plutocracy. The people loving, enlightened monarchy of Henri III and Henri IV, turned, within a generation, into the horrendous plutocracy of Louis XIV.

Progress can definitively go backwards. History clearly show that republics are the exception, and plutocracies, the rule.

***

Patrice Ayme

Euro Derangement Syndrome

March 29, 2013

Abstract: Paul Krugman’s campaign against the European currency is reaching new heights of absurdity. In his frenzy, he now advocates catastrophe, any catastrophe, “to exit from the euro“.

***

Paul Krugman passes in the USA for the “conscience of a liberal”. He is now recommending to invest in the future, insisting that debt for jobs or education is no sin, as I was doing several years ago.

However, Krugman has also Euro derangement syndrome. Paul Krugman wants Greece to become like Argentina. More specifically he recommends that Greece follow the disastrous sequence of events that started in 2001 in Argentina.

That, especially for an economist, is astounding. In 2002, Argentina defaulted and inflation reached 40%. Only during the month of April 2002, inflation in Argentina was in the double digits. In four weeks, prices officially augmented by more than 10%. This is what Krugman recommends for, would have liked to happen to, Greece, Cyprus… Anything, anybody, whatever, to break the Euro. Euro derangement syndrome.

As we will see, Argentina’s economic situation, upon a severe collapse of the financial system was much better than that of Greece, or Cyprus would be. Argentina has everything, including a giant, extremely fertile territory,  extending from the tropics to sub-polar Patagonia. Argentina was once the second richest country in the world, per capita.

However, Argentina is generally recognized by everybody, even economists, to have become a basket case. And that, for political reasons. Political mismanagement was so acute it extended to the economy.

Greece was also mismanaged: there was a civil war after World War Two, between Greek communists, and Anglo-American forces (who already knew what was best for Greece; that ugly war killed more than 158,000 officially, and was accompanied by the adoption/kidnapping of Greek children from internment camps to the USA).

Later a dictatorship of colonels, generaly viewed as put in place by the American secret services (following the orders of Wall Street, a place located few miles from Krugman’s mansion).

Greece was admitted to the European Union, as long as it became a democracy, first. Thus it escaped direct USA management (and tyranny, I avoided the pleonasm). It was a great success. Probably left many an American plutocrat frustrated.

But Wall Street did not forget its old Hellenistic dominion. Goldman-Sacks cooked up the numbers used for the admission of Greece to the Eurozone.  Goldman’s cooked numbers were believed at the Eurostat (the statistic arm of the EU). Maybe because Wall Street has agents throughout the European machinery (Mario Monti, ex Italian PM, and Mario draghi, head of the ECB were partners at Goldman-Sacks).

Of course Wall Street has agents, or should we say brains? all over the (plutocratic) universities of the USA. Such as Princeton, Harvard… Here is Krugman in the integrality of a March 28, 2013, blog post of his:

What’s the Greek for Corralito?

It’s now three years since I suggested a possible route to Greek exit from the euro: a banking crisis, followed by sharp limits on bank withdrawals similar to Argentina’s 2001 corralito, and then — with the panic argument against exit removed — reintroduction of a domestic currency.

Obviously, that hasn’t happened. Despite intense suffering, the Greek political elite’s commitment to the euro has proved incredibly strong. My analysis of the economics wasn’t wrong, but my political guesstimates were off.

Still, Cyprus is now following the first part of the script. And let me ask again: what, exactly, is the point of remaining on the euro? The convenience and efficiency of a single currency is gone; meanwhile, the future for Cyprus on the euro is one of years of grinding deflation and catastrophic austerity. Is the hope of someday, somehow restoring the status quo ante enough to justify all of this?”

Corralito meant to corral Argentines, as if they were hoofed animals to be domesticated. After being corraled, those fierce stallions, the Argentines, rioted violently. As I said, inflation was 40% in 2002, and GDP per head fell 20% in the three years following the corralito. But that’s what Krugman;s professional advice is. Why? A hint:

Amazingly, the corralito ended up being good business for some American banks. They negotiated with their accomplices in the Argentine government to receive compensation bonds for the “missing” money, which had never really left their banks, only moving from one branch to another. These American banks made richer by the corralito have their world headquarters a few miles from Krugman’s mansion.

Krugman does not seem to have noticed that banks in Cyprus were bankrupt. The situation was exactly that defined by the word: bankrupt. The banks were ruptured. They had to close. They closed for 12 days.

Why, how did the banks reopen on March 28, 2013, on the same day Krugman wrote the note above? Obviously, Krugman does not know. He shows no inkling that he knows, or understand, what happens. In Krugman’s mind, Europe is only a malevolent force.

Banks reopened in Cyprus, because the European Central Bank sent to Cyprus huge shipping containers full of Euro bank notes. That was ONE point of remaining on the Euro: having a currency. Krugman cannot know this, because he sees no point at being on the euro, that’s his metaprinciple, his fundamental emotion that rules over all his logic and data gathering.

Curiously, Krugman seems to be unaware of this basic fact. That the money was shipped by the ECB. Maybe he is unaware that in a free market economy, one needs a currency?

If Cyprus switched suddenly to its own currency, Cypriot debt would explode, the worth of Cyprus would be cut by half, or more, inflation on food and fuel would reach instantaneously 50%. The catastrophe would be immense.

As other texts of Krugman reveal, the Princeton Nobel Laureate is only aware of the first fact, the debt explosion thing, and it thoroughly confuses him. The other facts, which are much more important, although they are more fundamentally economic, he has no idea of, nor does he seem to care.

Krugman does not seem to realize that one can default on debt, but not on fuel, and, one cannot, a fortiori, default on food!

Krugman wants Cyprus to be like Argentina, but does not realize Cyprus imports French wheat, whereas Argentina’s economy turned around after 2002, greatly thanks to massive exportation of extremely expensive soybean to the People’s Republic of China. Details, details untended, and before you know it, the devil is attendance. Argentina is not only completely self sufficient on food, but it’s one of the world’s greatest agricultural exporter. Cyprus is not self sufficient in any of the economics fundamentals, by a long shot.

I will follow quickly with an in depth essay to justify what I just wrote, in more excruciating details, and explore why it is that Krugman has… What, gone crazy? Or is it simply ugly American imperialism, Wall Street style, at its best? Is it simply because, bottom line, Krugman lives richly off a system that has Wall Street as its skeletton?

A system of imperialism and exploitation, so thorough that it pervades the heart, so much so, that the mind goes crazy?

***

Patrice Ayme

***

Note 1: Is Argentina doing well now? Officially, Argentina has now 10% inflation (but non-governmental evaluations puts it at 25%). The evidence that Argentina is not doing well economically extends to the mental. Argentina is deeply disturbed. So deeply disturbed that it does not mind to flaunt its threatening obsession by islands initially settled by the French (“Malouines” from Saint Malo), 500 kilometers away from the closest Argentinean coast.

 Paul Krugman, does not seem anymore afraid to flaunt his nationalistic obsession than Argentinean leaders are. I like and approve many of the economic policies of president Cristina Fernández de Kirchner. But one has to understand she had to put them in place after generations of mismanagement in Argentina. To have similar policies in Europe could only be the consequence of disasters that have not happened. And will not, because the economic disasters in Argentina were the product of dictatorship. And also of the influence of the Chicago Boys. Are the Princeton Boys any better?

Note 2: There was actually a campaign out there, probably orchestrated by the likes of Goldman-Sacks, complete with doctored graphs, that present “Krugman’s” ideas above.  See the article in “Capital.gr” in 2011. Shall we see Krugman as part of this campaign? Tell us it’s not true, Paul…