Posts Tagged ‘Dollar’

Plutocracy’s Fascist, Europhobic Dream

July 20, 2015

Europe’s Impossible Dream” proclaims the New York Times’ Paul Krugman. What dream is that? The dream that Europe needs another currency, besides the dollar. All right American supremacists do not say this in so many words… Instead they use convoluted, illogical reasoning, as I will presently demonstrate.

Good propaganda starts with correct facts. Krugman:

“Greece is experiencing a slump worse than the Great Depression, and nothing happening now offers hope of recovery. Spain has been hailed as a success story, because its economy is finally growing — but it still has 22 percent unemployment. And there is an arc of stagnation across the continent’s top: Finland is experiencing a depression comparable to that in southern Europe, and Denmark and the Netherlands are also doing very badly.

How did things go so wrong? The answer is that this is what happens when self-indulgent politicians ignore arithmetic and the lessons of history. And no, I’m not talking about leftists in Greece or elsewhere; I’m talking about ultra-respectable men in Berlin, Paris, and Brussels, who have spent a quarter-century trying to run Europe on the basis of fantasy economics.”

Commodities Crashing Worldwide: Not A Euro Problem, Mr. Krugman!

Commodities Crashing Worldwide: Not A Euro Problem, Mr. Krugman!

Then Krugman operates his bait and switch:

“To someone who didn’t know much economics, or chose to ignore awkward questions establishing a unified European currency sounded like a great idea. It would make doing business across national borders easier, while serving as a powerful symbol of unity. Who could have foreseen the huge problems the euro would eventually cause?”

Several remarks here: first, for people like Krugman, apparently society and economics is reduced to “doing business”. In truth, having multiple currencies was a major hindrance, I have said this many times. Try a currency in New Jersey, one in New York, one in Connecticut, one in Massachusetts. It’s not just business which will be inconvenienced. Europe has as many states as the USA. Krugman can’t understand this: not smart enough, or with an agenda? You judge.

Commodity Deflation, In Dollars. Not A Euro Crisis, Mr. Krugman!

Commodity Deflation, In Dollars. Not A Euro Crisis, Mr. Krugman!

Good propaganda accuses the scapegoat with wild abandon. According to Nazis, everything was the fault of the Jews, and the French. According to Krugman the ills of the economic world can all be traced to the Euro. Bankers who feed him, are beyond any suspicion. The bait is to enounce correct facts, the switch is to accuse the innocent, in this case “Europe’s Impossible Dream” and the common currency, thus causing unfathomable distraction, away from the real culprits. Krugman:

“Who could have foreseen the huge problems the euro would eventually cause?

Actually, lots of people.”

Who are Krugman’s heroes? Eurosceptics, naturally. Krugman:

“The only big mistake of the euroskeptics [sic] was underestimating just how much damage the single currency would do.

The point is that it wasn’t at all hard to see, right from the beginning, that currency union without political union was a very dubious project. So why did Europe go ahead with it?”

The problem with someone as Krugman, is that he has no idea about European history, whatsoever, except the pro-Nazi propaganda of Lord Keynes. Krugman affects to think Europeans are idiots anxious to please plutocrats, and their obsequious servants:

“Mainly, I’d say, because the idea of the euro sounded so good. That is, it sounded forward-looking, European-minded, exactly the kind of thing that appeals to the kind of people who give speeches at Davos.”

***

Krugman, Or The Pseudo-Left: 

Who is Paul Krugman? Not only does he have a bully pulpit at the New York Times, and a Nobel, but he is, according to polls, the most trusted voice by the left… in Europe. Listening to him too uncritically can only lead to anti-Europeanism.

The domination of English is also the domination of the Financial Times, The Economist, The Wall Street Journal, and the ever more sneaky New York Times. The Anglosphere’s tendrils are definitively plutocratic in their outreach.

In his very anti-European article, Krugman says that the case for devaluing the Greece currency is overwhelming: I agree with this, the Euro ought to be devalued.

If Greece had its own currency, and devalued massively, it would not profit much economically: Greece’s main import-export activity is to buy petrol and then sells it refined: all these transactions are priced in dollars. Leaving the Euro would make Greece ready to become a satellite of the USA again (complete with colonels).

***

Why are we submitted to so much anti-Europeanism?

Because the plutocrats and their obnoxious servants have interest to say that the problem is the Euro, not banksters, and banksterism, the situation where bankers create money (as credit) and give it to they friends.

Then said friends run away with the money, banks turn around, and ask treasuries and central banks to allow them to make money again. (One way to do this is Quantitative Easing, something Krugman love as it feeds the banksters, who feed him.)

None of this giant financialo-economic drama has to do with the Euro. To imply that Denmark, the Netherlands and Finland have problems because of the Euro is inaccurate (to put it mildly). Switzerland is also pegged to the Euro, and does great, because of its diversified knowledge economy (where pharmaceuticals dominate).

Krugman is aware, but disingenuously denies, that loving the dollar is hating the euro:

“if you were an American expressing doubts you were invariably accused of ulterior motives — of being hostile to Europe, or wanting to preserve the dollar’s “exorbitant privilege.”

And the euro came. For a decade after its introduction a huge financial bubble masked its underlying problems. But now, as I said, all of the skeptics’ fears have been vindicated.”

***

Why the Euro?

Because France and Germany have had enough to fight each other. The two countries are roughly comparable in all ways, economically and financially. They are converging demographically. They used to be the same country for five centuries, a time during which a unified Germany, and a German language was created.

The re-creation of a unified Germany, after 1,000 years, without, led to near continuous war between France and Germany, for, fundamentally, philosophical reasons.

France won, both sides are now sister republics, ready for total reunification. Thus they need a common currency. Then the in-betweens (truly pieces of France which were torn away from France, to make France weaker) cannot survive without using that same currency. Then one has to add contiguous areas with the same socioeconomic level (Austria, Northern Italy, Catalogne; the latter two long part of French territory, especially if one defines France as more than just the so-called “kingdom of France“, which was often a very small, relevant territory  inasmuch as it was supposed to be the imperial seat). At this point one is well above 200 million people with the same currency, and a GDP only second to the USA.

This territory is the old Francia which founded Western Civilization. Western Civilization is not just Jerusalem, Athens plus Rome, as many have it. It’s also the Franks and the tolerant melting pot they imposed on the Germano-Gallo-Romans, with their home made, advanced, pseudo-Christian philosophy.

How can the rest of Europe be excluded?

The USA acquired its common currency during the Secession War. So far, the attempt to secede in Europe are rather meek. Let’s keep them this way.

Naturally, the USA’s patriots can only hate to have a second world reserve currency. The dollar as world currency was imposed on Keynes through the substitution of the crucial document for another one.

Paul Krugman never mentions the felony that gave rise, over Keynes’ obstinate resistance, to the dollar as world currency.

Europe is not an impossible dream. Should it become so, so will human civilization. Because Europe is a toy model of the global problem of nationalities.

More fundamentally, today’s civilization, all the way to China, Japan and Patagonia or South Africa, was invented mostly in Europe. Admitting it is impossible, is admitting a nice future is impossible.

Is all lost? Did American europhobic university professors win? Not sure. Hollande and Merkel are working on a Eurozone government, democratically anchored through a subset of the European Parliament. It’s high time. “Le nationalisme, c’est la guerre!” (nationalism is war) said French president Mitterrand in one of his last discourses. Ironically, Chancellor Kohl had proposed further political union when he signed on the Euro project, and Mitterrand, then hindered by a divided government, turned him down.

I am sure Frau Doktor Merkel remembers this, and will seize the opportunity.

Patrice Ayme’

Bring Euro Down, Save Germany’s Soul

August 29, 2014

Another day, another sneak remark of Krugman against the Euro which mars an otherwise well thought of train of ideas. However, our student the dear professor is learning. He just made an excellent editorial “The Fall of France” about which I commented, and that was published (whereas the Times censored my observations about Putin’s naked aggression in Ukraine: comparisons with Hitler, however scholastic, are not welcome!). More on this later.

Krugman’s tendency to fall into Euro bashing prevents him to see the (obvious) solution. Let alone mention it. The solution lays for all to see in history, when the Euro solved the German problem for the best:

History As A Sum Of Solutions

History As A Sum Of Solutions

Question: what did I exactly mean? See below, for those who do not see the blatant answer in the violent graph above. Here is part of Krugman’s “Germany’s Sin”.

“Simon Wren-Lewis has two very good posts about the European situation, first laying out the problem, then taking on those who don’t get it. I just want to add a bit to one of his key points: the impossibility of a resolution unless Germany accepts higher inflation.

In Germany, there’s a strong tendency to moralize, with appeals to the country’s own recent economic history. We pulled ourselves out of our late 90s doldrums, the Germans say, so why can’t Southern Europe do the same?

But a key part of the answer is that Southern Europe now faces a much less favorable environment than Germany did then — and Germany is the reason why.”

For a full decade, eurozone inflation was 2 percent, while inflation in Southern Europe was considerably higher. Germany could gain competitiveness simply by having low inflation — no need to deflate. But these days German inflation is only one percent, French inflation close to zero percent. Thus eurozone inflation is no more than one percent. Gaining competitiveness means that Southern Europe should deflate.

And Krugman to conclude:

…”deflation worsens the debt burden. Add onto this the fact that the eurozone as a whole remains depressed thanks to fiscal austerity and inadequate monetary expansion, and Germany is in effect demanding that Spain and others accomplish a task vastly harder than the Germans themselves had to achieve. 

And the worst of it is that there’s no sign that Berlin understands, or is willing to understand, this reality. And if the euro fails, that refusal to think clearly will be the fundamental cause.”

Right. And also wrong. “If the euro fails” is not really a possibility. It would cost so dearly, to so many people, that it would be akin to war, and Europeans have learned a few things that way. A lot of milder drastic changes can be effected before coming to blows.

Notice an obvious help Germany had when it was the sick economy of Europe: a Euro which was 40% lower. It’s curious, but no accident, that Krugman fails to notice this.

Bringing the euro to 83 dollar cents has happened before, and was there to help Germany, then. The good professor should mention this more. That would help the German miscreants to remember the past better. (Of course, the Euro at 83 Dollar cents would be a disaster for the USA, hence Krugman’s failure to notice the obvious!)

Instead, to brandish the “failure” of a currency directly used by so many people is not serious. More than 50 countries and 530 million people use the Euro (counting both the 340 million of the Eurozone, plus nearly 200 million pegged to the Euro, and unilateral users).

Even if the euro disintegrated, the nasty mood of some in Germany would not just persist, but prosper further. Ultimately that bad mood has to be crushed at close quarters.

Germany has become the world’s greatest produced of lignite, the dirtiest coal. It’s high time for some serious German bashing. Just slamming the door is not enough: historically Germans understand barking best (as Nietzsche may have said).

Bringing the euro down would help the suffering European countries a lot. Let’s remind the Germans of this. Remind them of their own past, and other previous pasts: German currency manipulations to gain advantage go all the way back to the early 1920s (thanks to Dr. Schacht, head of the central bank, and later one of Hitler’s main promoter!)

Bringing the euro 35% down: that would be a triumph, a real euro success. (That would just put the Euro where it’s supposed to be, in long term parity with

Hating the Euro is hating Europe. This being said, differently from the Federal Reserve Bank of the USA’s mandate, the ECB’s mandate makes the “value of the currency” the “principal object” of its activities (that’s article 127 of the European Constitution). By contrast the Fed has a DOUBLE mandate: insuring the value, and optimizing economic activity.

I had a fight with a French economist when I pointed out the flaw of the ECB mandate. She told me: ”No, the ECB’s mandate is like the Fed’s!”. Her own son, himself a high flying interest rate analyst in London, agreed with me. She erupted: “I have taught these things, for years!”. She brandished books. I told her to look it up in the Internet.

Article 127(1) of the Treaty defines the primary objective of the Eurosystem:

“The primary objective of the European System of Central Banks […] shall be to maintain price stability”.

Article 127 continues as follows: “Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union as laid down in Article 3 of the Treaty on European Union.”

Even as my friend, aghast, looked at the screen, and read those words, she could not understand what they meant. yet, it’s simple: it meant the destruction of the European economy.

Why? Because “price stability” is unsustainable, just as a plane cannot fly at ground level. In economics, the ground is zero percent inflation. Right now it’s only .3% in the Eurozone. For why inflation too close to zero is a disaster, see “Inflation Good, Stagnation Bad” or the older: “4% inflation best”.

We are led by imbeciles. Some are politicians, some are bankers, some are economists, some teach what they call economics, or politics. Many are greedy, and profiting from the stupidity they advocate.

Who gave them their drivers’ license? The license to drive entire economies, and even the biosphere, into the ground, while insulting common sense, let alone common science? Yesterday’s oligarchies?

Patrice Ayme’

France Versus Dollar Justice

June 4, 2014

WALL STREET JUSTICE: USA BANKS RULE, LET’S KILL OTHERS

In Brief: The attack of Manhattan “Justice” against French bank BNP is reminiscent of the sanctions of the USA against France in 1939… because France had declared war to Hitler. With “Justice” like that, no wonder Putin does “Justice” himself. Morality: If there is no Justice, but Wall Street Justice, it’s time to strike back at the empire.

***

The world is complex, so is human society, history, and explanations thereof. The Wall Street Journal condemned, once again, stridently, the sale of French Mistral ships to Russia. It forgot to mention that the USA has several times greater business with the Russian military-industrial complex. That’s propaganda, for you.

I sent a comment tying the sale of the Mistral up with the extravagant attack of Manhattan “justice” against the French bank BNP. It was censored immediately. As the sheep say, there are no conspiracies, just, stuff happens.

If Around The USA Beware About Who Is Lurking In Your Hotel Room

If Around The USA Beware About Who Is Lurking In Your Hotel Room

Thomas Piketty, a young French economy professor, made a devastating attack against the Wall Street plutocratic system in his book, “Capital in the 21 C”. The goons in Manhattan reply with calling for an 11 billion dollar fine to bankrupt BNP, just because they can (BNP violated no European or French laws, just the hatred the government of  the USA has for Iran and Cuba).

It’s time to arrest the respect those goons get. They are not any better than the clowns around Putin. I will actually that they are worse, since, as Putin himself would point out, they are more subtle. (Meanwhile Piketty ought to be careful when visiting the USA)

The presidency of Barack Obama has been characterized by a lack of punishment of the bankers that had organized the heist of 2008. How could Obama do anything? Supposed liberals such as Krugman have just been clamoring for more money for the banks: that’s how the left is defined in the USA. The rest of the USA, or at least, the USA’s Main Stream Media, is on the right of that. Giving money, ever more money, trillions of dollars in monetary base or bond buying (= Quantitative Easing, Twist), in the USA, defines the “left”.

Obama has been cracking on bankers, but only Swiss bankers. Switzerland’s banks destruction became a golden opportunity for the banks of the USA, which can now manage thousands, not to say hundreds of thousands, of new clients.

The USA is against tax havens: that’s the law. Overseas tax havens, that is. Slight problem: the USA is, by far, the world’s largest tax haven.  Delaware is, by itself, the world’s largest tax haven state, as USA Den Of Thieves pointed out. The USA legislative system is an enormous tax haven for the hyper rich.

So why so upset that BNP conducted some transaction overseas between overseas clients, using the world’s reserve currency? That’s just a pretext. BNP is one of the two largest European banks. It’s also one of the two largest banks in Europe, and one of the top five dollar clearing banks, worldwide. As the dollar is the world’s reserve currency, gigantic reserves of dollars are overseas, never to transact through regions directly controlled by the USA.

BNP had business in Iran for generations. But that’s the point. When the USA applied sanctions on Iran, it forced the rest of NATO to do the same. That devastated French industry. In particular the car maker Peugeot, the second car maker in Europe at the time. It devastated no American industry.

However, what is the difference between Iran and Saudi Arabia? Women cannot drive in Saudi Arabia. Yet, they can in Iran. Clearly a crime, in Washington’s eyes, if it’s done in a Peugeot. So Washington struck Iran, and thus Peugeot, with sanctions.

American economists such as Paul Krugman, hopefully lying through their teeth (the alternative, that they are really believing what they are saying, being worse), have claimed that the fact that the dollar is the world’s reserve currency presented no economic advantage to the USA.

Why this will to destroy France? Because, if France is on her knees, so is Europe: the European Union, re-instatement of the Imperium Francorum, is mostly a French multiplier, and is built around the principle of 1789, the FRENCH Republican Constitution of 1789 (Liberté, Égalité, Fraternité), not the Constitution of the USA of 1789 (We The People of the USA, whatever that is, friendly to all sorts of discrimination, extermination, exploitation and slavery).

OK, I am exaggerating a bit. The master does not want to destroy the slave. The Master just want the slave to abide by His law. The law of the strongest. Cyrus Vance, a francophobe in Manahattan, is the strongest. His Law is the best. Vance knows well that, this French spirit of 1789 is counter-attacking. He needs to fight back.

So he caged DSK, head of the IMF, who had the impertinence of raising hundreds of BILLIONs dollars of SDR. A word on this here, as it goes to the ugly heart of the USA centered global plutocracy.

Under Strauss-Kahn, a senior, famous economy professor, the IMF’s pursuit of financial stability called for a new world currency to replace the dollar as the world’s reserve currency. An IMF report from January 2011 called for a stronger role for special drawing rights (SDR), to stabilize the international monetary system. For most countries, there would be many serious advantages in switching the pricing of certain assets, such as oil and gold, from dollars to SDRs. The BNP affair is a case in point.

For Manhattan “Justice” gangsters, the call for SDRs was a call for the end of Manhattan, New York, Wall Street.

DSK had followed Keynes’ idea (Krugman is anti-Keynes about this, unsurprisingly). To foil Keynes, the head of the financial commission at Bretton Woods, the American goons substituted false documents at the last minute. This forgery is how the dollar became the world’s reserve currency.

And how Wall Street has now a weapon to destroy European banking.

Symbolically, only one man was criminally prosecuted for the 2008 financial heist. A lower employee of Goldman Sachs. A French citizen, of course. Tragedy is emphasized by comedy, to make it more blatant, that, whatever it is, it’s the fault of the French.

My advice? It was important to go all-out to blunt Putin’s Pluto grab. But one should remember one ought to crush infamy (“Écrasez l’Infâme”; Voltaire signed it: Ecr. L’Inf.)

This, this BNP affair, is even worse than Putin. In a way, it is the sort of mood and chronic conspiracy, that caused Putin to act the way he did.

The old Putin, say of 20 years ago, just as the old Yeltsin, was naïve: he really believed the free market propaganda oozing from Harvard, and other austere American institutions. Then Vlad found out how the sausage was made. He decided to make his own. (Hitler went down that road too, sort of.)

The Russian plutocracy, around Putin, is just a subset of the global plutocracy that individuals gravitating around Wall Street feel, and think that they direct and control.

Thus, it is even more important to smash the power grab of the USA’s plutocracy. Putin made an error, a grave error. He has to reverse it. However the system of exponentiating greed around Wall Street has been messing with the world, big time, for EXACTLY a century. (As I have explained, the White House excited the Kaiser to go to war against France in 1914, and then proceeded to make a fortune, feeding and arming the Kaiser.)

When I wrote “Mistral Blows Hard”, I argued that it was smarter to give Putin his amphibious, French made, aircraft carriers. Now, I would argue, it’s a necessity.

Be it only so that Putin can land his “little green men” in Manhattan, and go arrest the criminals there who call themselves proponents of “Justice”. When extirpating cancer, one has to exterminate its stem cells. This important, recent discovery in oncology has a morality of its own, that carries far, and wide.

Truth ought to look better than any of us. And that’s:

Ecr. L’Inf.

Patrice Aymé

Plutophiles’ “Grexit”.

June 7, 2013

“Grexit” is how Greece leaving the Eurozone is called. (Momentarily introducing a fake currency as California did with “IOU”s, when it had a severe deficit, would not be “Grexit”; California has now a surplus.)

The IMF just recognized having been bone-headed about Greece “Too much austerity” induced:… Notable failures.” 

The IMF enforces monetary orthodoxy, the Eurozone follows. What the IMF is now saying is that monetary orthodoxy is unbalanced. In other words, conventional economists, so far in command, are lunatics.

Presidenta Argentina: I Told You IMF Was Nuts

Presidenta Argentina: I Told You IMF Was Nuts

So what does Paul Krugman conclude? Yes, you guessed it right, the Euro is uglier than ugly. Here is what he said:

“you have to wonder whether it was worth trying to keep Greece in the euro at all. “Grexit” would have been ugly, and will still be ugly if it eventually happens. But compared with what has actually taken place?”

Paul knows a bone when he sees one. He does not like the idea of the Euro, as an equal to the Dollar, and rarely miss an opportunity to make his feelings known. OK, maybe if I had a cushy life because of the USA supremacy system as explicitly as he does, I would not like the Euro either. The more Euro, the less Dollar, looking forward. A serious thing. After all, Euro preference is why Saddam was eradicated. Saudis are paid in Dollars. If they were paid in Euros, Washington would break down (not true in the close future, because of USA fracking is changing everything!).

Let me make the honorable Paul notice this: the I in IMF is for:”International”, like in “International Monetary Fund“. The IMF is what dominates the debate here, not whether Greece is in the Eurozone or not.

Dear Paul, please go back to the Greek civil war (after World War Two). This happened, thanks, in part to heavy Anglo-American military intervention. Number of dead around 800,000. That is proportionally three times more than the American Civil War.

Next, please go back to the dictatorship of the Colonels in the 1960s, also propped by American interests plutocracy.

The Euro is a political answer to such horrors. These are the horrors one is really talking about.

Property rights are a huge problem in Greece: often nobody has any idea who owns what (this makes honest investors shrink at the possibilities). Plutocrats are a huge problem in Greece: they, be they rich ship magnates or the church, pay no taxes. Tax evasion is giant: Greek fortunes are sitting in Swiss bank accounts , etc.

These are huge problems, indeed. However, they were not caused by the Euro, quite the opposite.

The Greek problems having to do with plutocracy, kleptocracy, and a dearth of State of Law, can be traced back to the manu militari intervention of the USA on behalf of its natural allies there, the friendly plutocrats. Those friendly plutocrats, in exchange, just as with the Saudi family, took care of the interests of the USA. (One of them would even marry the widow of the president of the USA, just to show who was the boss.)

To enter the European Union, Greece was forced to democratize (democracy is a culture imposed on those who enter the EU). it was a gift. So was the well intentioned gift of letting Greece enter by overvaluing the Drachma by 100% (that, plus the Olympic Games, somehow backfired, as Greece, as a nation, splurged!).

In the rest of Europe, Greece has the huge and somewhat benevolent friend to help solve the problems left by 23 centuries of foreign, sometimes even alien, and definitively plutocratic, domination by the ugly.

The rest of Europe will help solve the Greek problems, all the more as it somewhat also has them. To put it crudely, Germans have interest that rich Greeks keep on buying Porsches (that means no revolution, but, also, no starvation). Greeks have to decide, democratically, to squeeze their hyper wealthy. Belgium just decided to tax its Royal family, after ludicrous excesses (except for the reigning queen and king).

Having European stakeholders helping out is better than having some autocrat propped by Washington doing so in his own special way (which is what “Grexit” would mean, in practice!).

Such autocrats are no view of the mind, looking at the past: the Egyptian military is an example, one of many. The Egyptian military is completely infeodated to Washington. Yet, plenty of foreign NGO officers got five years in jail in Cairo this week from proceedings started under… Mubarak. (Most of these professional do-gooders had already fled Egypt.)

Problem in Egypt? The Muslim Brotherhood. It had a long love-hate dependency upon both the Saudis, and Washington.
Why not to focus instead of the horror that is Saudi Arabia, and the little arrangements with Washington allowing it to be so (9/11, or the Mali invasion being details of that picture)? These arrangements are fundamentally economic and financial. They are not pretty. They are intrinsically entangled with the nature of the currency of the USA, and its financial potentates.

And how did the dollar start? As the greenback, to pay Federal troops during the Secession War. The central bank was created half a century later.

Ultimately, all state dependent currencies reflect the might of the state behind it. Or the might of a confederation of states: the Imperium Francorum, de facto behaved more as a confederacy as anything else, especially when, having been renamed the “Roman empire“, it got diluted in hundreds of states.

Speaking of that, where did the word “Dollar” come from? From the Thaler“. Or more exactly its Czech version: “Tolar”. The Americans are Czechs, and never knew it! The Thaler was a silver based currency used throughout much of Europe for 400 years. It replaced various coins whose real value was about 5% of their nominative value (inviting forgery). Notice that this transnational currency lasted three times longer than the Dollar.

 The questions of currency, debt, structural deficits, rogue bankers, politicians doing exactly what plutocrats told them to do (“rescue our banks, and let us do exactly what we did before!”) are not the same. By confusing all the issues in a conceptual soup, economists end up playing in the hands of the plutocrats.

It’s particularly telling that American economists obsess about Greece. What’s in it for them? Did Greece organize 9/11? No, Greece did not organize 9/11. 15 out of 19 highjackers in 9/11 were Saudis (and 2 from the UAE). It is the Saudi system, the system that allows a family to own a country, that instigated 9/11. And guess what? That has to do with economics. With the Wall Street induced economic system.

Now, that, is a perspective worth gaining. Instead of moaning of Greece and the Euro, lamenting, fundamentally, that Greece left the orbit of the binary system Washington-Wall Street.

So why do American economists lament about Greece? Because therein their daily bread, pleasing their masters, whether they realize it, or not . Lots of bread, as I explained in Euro Derangement Syndrome. Europe breaking in World War Two gave us the satisfaction of the American Century.

Now the American Century is breaking down, mostly because of the rise of China and Europe, and all the other critters using that tectonic opening (see the Argentinean president above, a butt of hostility for the IMF, for daring to discard the old IMF). Paradoxically global plutocracy is stronger than ever. But it is lacking in dictators anxious to please, and behind whom it could hide.

Thus it would be so much nicer, for Wall Street dependent economists, to see a financial and economic catastrophe in Greece. If “Grexit” happened, Greece would collapse, and, surely, a Washington supported dictator emerge, no doubt a great hope for all sorts of plutocrats and plutophiles.

However, I doubt Europe will not see the peril this time of succumbing to American sirens. Europeans are coming to slowly realize how alien the system in the USA is becoming. They observe, aghast, the great democratic hope Obama going to sleep within homes of countless billionaires, guns all over, millions incarcerated, the security state, spying all over, and, insult added to injuries, the USA being the only advanced country without any mandated paid vacation. Among other things.

And that’s why the right wing temptation has been resisted throughout Europe (even Hungary). So far. Differently from the 1930s, the sort of American plutocracy supported civil war that occurred in Germany in 1932 (10,000 dead, thanks to smuggled USA weapons such as those made by conspiring Browning) will not be tolerated this time. Nor should any ideological drift conducive to European break-up.

Japan itself is drawing the same conclusion: PM Abe, although he has perfect credentials as a right wing politician, broke with Washington diktat. He is devaluating the Yen massively, and engaged in an economic program, with massive structural investments, that true progressives approve. Damn the 240% debt/GDP. To save the world, please default!

***

Patrice Ayme

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.

ECONOMIC NIHILISM DECRIED.

August 10, 2008

DEVALUATING TO DEATH IS NO PANACEA.

Overview: The USA has used a devaluation of the US Dollar to help the US economy by increasing exports. This is an attempt to rob Jeanne (d’Arc) to feed (Uncle) Sam, and the exact sort of attempt to claw out some unfair advantage, that ignited the Great Depression that led to World War Two. This is not just injust and immoral, it’s grotesque, immoral, and very dangerous. Instead the USA should proceed with its long delayed drastic economic overhaul.

Currency devaluation to gain a short term economic advantage leads to political, social and moral devaluations. Ultimately it is the most guaranteed path to fascism and war, and defeat, history is very clear on that, all the way back to Rome. The USA cannot use its old devaluation trick to re-launch its economy anymore, because the rise of the rest of the world, and, in particular, of the colossal European Union, has deprived it of its special status. Obama is now talking about (part of) this, and it’s excellent news. Putting the US back on track involves first a rise of the Dollar, and since that’s done with the mouth, and a few clicks of the mouse, it can be done right away.
***

A lot of the rise of commodity prices, measured in dollars, has been caused by the devaluation of the US Dollar. In the last eight years, as oil went from 20 to 150 in US Dollars, the relative rise in Euros was only half of that.

As Barack Obama puts it:.”If we had a strengthening of the dollar, that would help” reduce fuel costs, (he said, according to Reuters). Instead, Fed Officials and the Bush administration blame high commodity prices on supply and demand, despite falling demand due to slower global growth. Meanwhile, they pursued what the Wall Street Journal calls “their destructive and all but explicit dollar devaluation strategy” (WSJ, August 8, 2008).

The recent lowering of the dollar was a competitive devaluation (ever since it breached parity with the Euro). In a competitive devaluation, a country (call it X) lowers its currency, to make its products cheaper. This is supposed to bring up the economic activity inside the country. There are several problems with this though:

1) In the very first stage, other countries get irritated because they then sell less of their own products, lowering their own activity, making them lose long term market share to X, etc.

2) Simultaneously, inflation of imports inside X is proportional to the lowering of the currency of X. This is what is happening to the US right now with oil and commodities. The lowering of the currency of X can lead foreigners to not invest in X as much as they should, because they wonder where it will stop (the USA is at this stage where foreigners are starting to pull away).

3) In the preceding stage, if the rise of exports’ worth does not keep pace with the rise of imports’ cost, the situation of X can get worse (this is not yet the case in the USA presently: the trade imbalance is going down). That stage is often facilitated if other countries take, in response to (1), corrective measures, not to say outright retorsion. Should the rise of exports not keep pace, other countries and investors lose trust in X’s currency, and, in a first stage, pull their investments out, making a bad situation way worse (the USA is approaching this stage: the big European countries receive much more Foreign Direct Investment than the USA, increasing the gap; the UK gets about three times more FDI, relative to its population).

4) In the final stage, X becomes so cheap, foreigners swoop in, and exert undue influence (this happened to imperial Rome, just before it transmogrified itself into a fascist “Catholic Orthodox” theocracy: it was easier to teach the rudiments of civilization to barbarians through a superstitious religion, than by sending them to school).

Competitive devaluations are therefore economically destabilizing and lead to civil unrest, fascism, and war. The textbook examples are the Weimar Republic and Argentina in the twentieth century. Britain, France, and many Mediterranean countries used competitive devaluations on a regular basis, creating havoc. Meanwhile Germany, (remembering that after using a massive devaluation to annoy France in the early twenties, she ended up with Nazism), became obsessed, come what may, to insure the value of the Deutsch Mark. The result was a flourishing economy, and that strategy was so good, it was even adopted by France within a generation, resulting ultimately in the creation of the Euro (after the Franc and the Mark got locked together for a decade, one may as well have called them the same, indeed).

This is not the first time the USA indulges in a competitive devaluation. In the past, though, the US Dollar was the world’s one and only reserve currency. So, when the US Dollar was going down, US exports would become cheaper, but payments of oil and commodities would not go higher (because they were all in US Dollars). The USA could engage in competitive devaluation without punishment, so it did. Now, for the first time, it’s being punished.

Indeed, the European Union’s sixteen trillion dollar economy has become much larger than that of the USA’s, and it has its own currency, the Euro (the British Pound , Swiss Franc, and various critters are more or less locked to it). Thus, the US Dollar should not be the world reserve currency anymore, and it is in the process of losing this status. Many countries are building reserves of Euros, and following Saddam, are asking for payments in Euros for oil and commodities. (As a confirmation of the economic, financial and increasing rise of Europe, world’s British Pound reserves are now larger than the reserves in the Japanese Yen… A telling forecast of what the world thinks of the future of open Britain and semi closed Japan.)

When Saddam Hussein decided unwisely to switch to oil payments in Euros, the USA replied by invading and destroying Iraq. That method, though, cannot be duplicated easily. Many countries are now switching to Euros, and when oil and commodities have prices in Euros, as the US Dollar goes down, their prices in Dollars go up. The USA is now approaching the sort of infernal descent into an inflationary spiral Argentina was destroyed with, nearly a century ago. The only saving grace is that the US debt to foreigners is, so far, in US Dollars (so it goes down with the Dollar; Argentina had a lot of its debt in foreign currency).

Barack Obama is right to call for a rise of the US Dollar. When the Euro was created, its value was found by looking at the long term average of the French Franc relative to the US Dollar over a century (around 6.66 Francs for a Dollar). That fixed the Euro-Dollar parity, and we are presently more than 50% above it. The present imbalance has been caused by deliberate short term neglect of the Dollar and US economy, and long term erroneous civilizational strategies. A correct US administration would point out that this is over, and that the US Dollar will regain its correct value right away. The turn around will be signaled by turning the Dollar around. This can be done tomorrow morning: the European Central Bank will be delighted to have an opportunity to ambush the speculators, it has been chomping at the bit, and is tired to intervene alone). This would bring capital in the USA immediately, helping to reverse the part of its economic decline which is caused by a dearth of modern investments.

Whereas, if the present situation perdures, it would do so because of the persistence of disastrous economic policies inside the USA, and the failure to even talk as if one wanted to turn things around. Ultimately, a catastrophic loss of control over the US currency could occur if a clear signal does not come that US authorities have decided to stop the decay of their country. Not a good way to go. Remember Argentina.

Patrice Ayme.