Posts Tagged ‘Eurozone’

Brexit Idiocy In One Picture

July 11, 2016

Hard core Brexit idiots pontificate that they will renew their ties with the British Commonwealth and the USA. As if the quaint British monarchy imported from the Netherlands had anything in common with the hyper violent, domineering American republic, a country of immigrants, a world country, the world’s hyper power, which can purchase anything… but a soul, and a past it is ready to admit it had. The proud British are, relatively speaking, Europeans, and they don’t even know it.

Here is the European situation, the web of relationships, with the spider in the center, depicted with the most basic mathematics, set theory. I present to you the spider and the fly:

The Situation Is Even More Complicated Than That: Switzerland, For Example, Has More Than 600 "Bilateral" Treaties With The European Union, And Has To Respect Free Circulation Of European Citizens.

The Situation Is Even More Complicated Than That: Switzerland, For Example, Has More Than 600 “Bilateral” Treaties With The European Union, And Has To Respect Free Circulation Of European Citizens.

[Nota Bene: the GDP numbers above, due to the tremendous immigration of people and capital into the United Kingdom, the UK, due to the laxity of France and Germany, brought an extreme overvaluation of the British Pound, and a swelling of all things British. This house of cards is collapsing: British GDP has now shrunk below French GDP, in barely more than two weeks…]

Switzerland voted against the Free Circulation Of European Citizens, including Croatians, in winter 2014. Some sanctions were applied by the EU on an aghast Switzerland, the next day. However, Switzerland still has to accept everybody. Should it change that requirement, Italy, France and Germany would block the borders, and let Switzerland die. Really, not kidding: Switzerland has only one refinery, producing 25% of Swiss fossil fuels, and it gets all its raw petroleum through a pipeline, from Marseilles, France… Thus, Switzerland will have to vote again. Or learn to ride horses again.

Why is such ferocity welcome in enforcing European unity and free circulation? Simple: Enforcing cogent, fully informed reason upon, and by, We The People, is the best way to avoid war. Thus war tends to happen when unexpected.

Europeans have bent over backwards frantically for twenty years to accommodate increasingly crazed, selfish, grotesque, hypernationalist British demands.  The British thanked the rest of Europe by an insulting vote. (Remark: the Swiss referendum was just about refusing the diktat of free circulation of any EU citizen; it was NOT about rejecting the 666 treaties with Europe… Although of course, it could have this consequence… Nor, a fortiori, the European Union )

Right now Europe is suffering from three mentalities:

  1. The first problematic mentality was English sabotage. The English entered the “ever closer Union” and decided it was just a free trade “club”. Basically NAFTA. That was a lie, a breach of trust, and a betrayal. No wonder so many European leaders are keen to get Brexit done. For twenty years, English governments have prevented the built-up, in-depth of European laws and institutions. Instead of electing the head of the European Administration (“Commission”)  directly, by the People’s vote, one still uses the ancient system of nomination by the heads of governments. That sort of undemocratic blockage was the work of English Europhobes, mostly.

Fanatic Brexiters insist they never voted for a European “Superstate”. That is not just a total lie, but it means they want Europeans, and their ex-colonies and present allies, to be ruled by Superstates (USA, Russia, India, China).

2. The second problematic mentality is the fact that the European defense system is mostly operated by the French Republic, which is supposed to pay for it, while leaving its deficit below 3%. Logically, French tanks should first roll through Brussels, Luxembourg, Belgium, Lichtenstein, while addressing an ultimatum to Eurozone member Ireland, and force all these miscreants to pay taxes. (Since Germany has the same problem as its sister republic, France, it would rather applaud the usage of force… which is exactly what both of them did, with the help of Italy, to pressure Switzerland that way… It helped that the latter was not a founding member of the EU, and a rather small fish.)

What about the refugee crisis? Well, go back 17 centuries: the Goths, fleeing the Huns, invaded the Roman empire. Initially, the Goths came as refugees, and were allowed in. Later, even more Goths, now fully armed, came in, and thew Roman Empire said no. The solution? Have an army strong enough to kill the Huns. This was finally done in France, 80 years alter. First the inhabitants of Orleans inflicted a defeat on the Huns, inside the city itself. Then the Franks shadowed and harassed the retreating giant host of the Huns. That gave enough time for the Roman Field army headed by Aetius and to the Visigothic army to join the fray. Then the Huns got crushed in the titanic battle of the Catalaunian Plain. Having suffered tens of thousands of dead, if not hundreds of thousands (the number 300,000 has been advanced by sources), the spirit of the Huns was broken. Just as that of the Nazis in May 1945.

That was how to handle Assad: destroy him and his family, occupy Syria, re-establish secular, republican order. And it was not to the Russians or the Americans to do that, but to the Europeans. But there is no European army, no European will. Just European wealth for the world to steal. And for this, the ectoplasmic Britons are much to blame.: did they not learn anything from the Kaiser and his spiritual son Hitler?

As a result of formidable austerity imposed on France, the French defense system is woefully insufficient, although not quite as moribund as the British one. This is a grave situation in several ways: first it weakens the West enormously. Secondly it makes the USA more dominant than ever in defense. And thus, it augments the aura and diplomatic might of the USA in all matters, including the economic one… which pays for defense.

3. The third problematic mentality is indeed austerity itself. It was imposed by a coalition of conservatives and the evil influence of the ruling plutocracy. Great Britain saw less of it, thanks to the plutocratically owned tabloids, and the fact that plutocracy has made the wealthiest in Britain so much wealthier. Austerity is no less than a complete plutocratic plot, and a direct consequence of not taxing the wealthiest enough to spare us being in their debt.

So deep has the propaganda been for the plutocrats whom have made us in their debt, that only now the German SPD seems to realize that austerity is a plot of the wealthy. The “S” in SPD is for “Social”: Sozialdemokratische Partei Deutschlands, SPD… The SPD is in coalition with the German Conservatives, who are white-hot, foaming at the mouth demanding ever more austerity (especially from other Europeans… It’s understandable as Germany is in a virtuous circle presently…)

Brexit can potentially break that logjam. First, British sabotage of the “Ever Closer Union” will stop. Appropriate superstate structures could now be erected, as needed… Secondly, the austerity party in the EU, right now led by Britain and Germany, is going to be halved. Thus one can hope that the French, these austerity specialists since 1932, will snap out of their madness, and lead a revolt against the austerity party. Simple: the European Union has just do what the USA has done under Obama. The Federal deficits amounts to something around 100% of US GDP (if one adds Quantitative Easing, an unusual addition, not usually made for obvious, vicious reasons, to the official deficits).

Will Europeans understand this?

Meanwhile, it’s fun to see the Brexiters struggle with the spider web above. Good luck coming out, to sink in the ocean…

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’

The Fiscal-Military Anglo-Saxon Model

November 11, 2011

SO CALLED LIBERALISM IS AS LIBERAL AS AN OCCUPATION ARMY

***

Abstract: The meat of the so called Anglo-Saxon liberalism was actually a leveraged war machine that entangled finance and military. Forget misleading plutocratic propaganda. The invisible hand was more about war than it was about commerce. When Napoleon assimilated Britain  to a nation of shopkeepers, he did not know what he was talking about, as he found out soon enough.

The Anglo-Saxon “liberal” model, is, first of all, a war machine of the few against the many. It worked, against France, from the eighteenth century, until the twentieth century, as I show, by evoking major historical facts which are generally superbly ignored.

Happenstance does not a logic make. Especially when the happenstance is military (England was lucky to defeat France), and the logic economical (there were other European economic models; that plutocratic leveraging defeated France at that particular moment of military history proves nothing in matters economic: if Louis XIV’s mighty army had invaded England, as Louis was begged to do, by the king of England, himself, none of this would have happened!)

The plutocrats’ greatest enemy is the socializing European Union. The EU is also turning into the plutocrats’ greatest source of profit, as they dismantle it. It is time for the Europeans to understand that they were naïve and self contradictory to build peaceful altruistic Europe as a servant of an economic model which rested on war and exploitation.

***

CELEBRATING THE ANGLO-SAXON LEVERAGE DEBT PLUTOCRACY IS CELEBRATING MILITARY VICTORIES:

What has the Anglo-Saxon economic model been successful at? How did it arise?

It’s a long story. It goes all the way back to when Julius Caesar and his generals were astounded by the immense Celtic, ocean going fleets which opposed them as they conquered “Long Haired Gaul” (“Gallia Comida”). These were the three quarters of present day France which were not part (yet!) of the Roman republic. The Romans invented technology to topple the tall Celtic ships, and won that war. Nevertheless, Ireland and Scotland escaped the Roman grasp… in a very long war.

Having the ability to navigate throughout and off the British archipelago stayed a must, though. Who dominated the seas, dominated the isles. The sea was how to invade, and how one got invaded. The Vikings demonstrated this, by eradicating many places, including much of Ireland.

It was nicer to make war on the continent than in the isles, if one were an islander. Thus, the nearly five centuries long “100 year war” was fought on said continent. By 1600, Elizabeth I had been seduced by the West Country Men, immensely nasty plutocrats who, after conquering Ireland, turned to North America.

Full leveraged, all-market, all plutocratic “Anglo-Saxon” finance is four centuries old (for the Plutocratic aspect) and three centuries old (for the leveraging aspect). It was devised not as a “free market“, because no market was ever free from the state. West Country Men used to line up their lawns with skulls, this is what they meant by “market“: abject terror. Neither was it “liberal”, because there is nothing very “liberal” at conquering half of the planet in 100 years.

In truth the Anglo-Saxon economic model’s military aspect was no accident. It was designed as a fiscal-military system. As I will explain, Europe, which has neither fiscal, nor military aspects, copied that system, apparently not knowing what it was for.

Elizabeth’s successor, King James I, closely tied to his co-investors, the West Country Men,  hated the “vile custome of tobacco, personally, and wrote scathingly about it. Although, all well considered, he lowered the tax rate on it, so as to maximize the tax revenue that tobacco brought. Tobacco made the American colony profitable. We all have to negotiate with evil, it seems, when profits loom.

***

NO WEST COUNTRY PLUTOCRATS IN JAPAN, ALTHOUGH THEY TRIED:

Ireland, North America, made the difference of Britain with, say, Japan. Japan tried the West Country Men trick, and shogun Hideyoshi invaded Korea with enormous armies comprising 200,000 Samurais. However, Korea, especially backed up by Ming China, was no push over. The Korean Navy was able to isolate and starve the Japanese into ignominious retreat, although the Korean population suffered enormous losses.

There was 8,000 years of civilizational progress between American Indians and East Asians. So the two tremendously expensive Japanese invasions failed. Japan stayed bottled up in Japan.

The “virtuous” inferno of building a blue sea Navy to serve transoceanic plutocracy never developed in Asia, because Asia was all too developed everywhere and invading neighbors was unprofitable.

It would take three more centuries of breakneck techno-military “progress” for Europe to be able to dominate Asia by sheer force, easily and profitably (and that lasted only a few days with Japan in the 19C, when the American “Black Ships” showed up in Tokyo’s harbor).

Japan tried the West Country trick again in the late 19C, with Korea again, and Formosa. First it worked grandiosely. By the 20C Japan extended the method to Russia, then China, and French Indochina. It all ended in the terrible defeat of 1945, when the very spirit of Japan got so crushed that its population is now collapsing (like that of fellow fascist countries, Germany and Italy, but worse, as Japanese racism and isolationism are greater, thus offering no compensation through immigration; funny how the worms of defeated psychology multiply in time).

To serve the plutocrats, a strong Navy was a must, and the Bank of England was created to serve it: its profits were used to finance the Royal Navy. Thus a tight seal was created between the military and finance. That, in turn, allowed to use tremendous leverage in finance. Because there is nothing like an invasion to demolish markets.

The markets were secure, because of the Navy was there to repeal invasions, and the state of emergencies that the threat of such would bring, say in France (the plutocrats had conspired to double the Dutch invasion of England of 1688, with a coup, so that is the exception that reinforces the rule). Also, because the Bank of England, the lender of last resort, was, actually, the Navy, in a sense, top plutocrats had nothing much to fear. And it was clear who was giving the orders; admirals could be hanged, pour encourager les autres, as Voltaire noticed.

***

INVADING WITH LEVERAGE, SUCCEEDING WITH GUSTO:

When leverage succeeds, it succeeds like nothing else. After being injected the Dutch mania for leverage, the Anglo-Saxon liberal system became operative in Great Britain in the Eighteenth century. Plutocratic propagandists have hypnotized much into believing that it is economically superior. Militarily, certainly superior. As it turned out.

Military superiority makes an empire economically superior, if the military superiority is translated into ownership. The Anglo-Saxons, circa 1900 CE, and its extension, the American empire, circa 1950, owned, or controlled, more than half the planet, insuring wealth, in a way which has nothing to do with intrinsic economic superiority.

Within 150 years, a giant Anglo-American empire came to cover the planet. North America, Australia, among others, became Neo-Europes of the Anglo persuasion. At some point South Asia and other parts belonged to the British empire. The USA defeated Spain in the Philippines, and replaced it, to a great extent in Latin America, And so on.

Those empires were actually military empires, carefully financed. Careful financing is how Britain had, generally, a better, bigger Navy than bigger, better France. So the Anglo-Saxon financial system was actually a fiscal-military system. (Fiscal comes from Franco-Latin for “treasury”.)

That British system blossomed as a weapon against France, and then the world, both of them, much bigger, to start with. Hence the necessity of using leverage.

Ironically enough, it was rather curious that French socialists would adopt the Dutch-British financial-military system to found Europe in peace, union and prosperity. Even more curious, maybe out of abysmal ignorance, the makers of Europe adopted only part of the Anglo-saxon model. They forgot both one of its head, the fiscal part (the present European Union and Eurozone do not have a treasury, just a central bank). They also forgot its other head, the military one. What was left, it seems increasingly, was a spastic, decerebrated corpse.

So let’s recap a bit.

In the mid Eighteenth Century, Europe’s greatest power was France. France had more people than Russia, and three times the population of Britain. It was the most solid economic block in Europe, and the most developed in the world, with roads and canals all over.

(Unfortunately for French demographics, in a village called Condom, an artisan discovered a better realization of a new device; Condom denies it, although it is located on the river “Baise” (“kiss”, as an euphemism); what is sure is that the French population stopped towering because of contraception, and Napoleon’s devastation; all the growth came from immigration.)

Mighty Spain had been defeated by France, after 150 years of war. That 150 year war gave birth to the Netherlands, during the Eighty Years War of Independence of the Netherlands. Each time Spain had to repress its unruly province, it found itself at war with next door France. The Netherlands, ancestral homeland  of the Franks, was too big to fail, as far as France was concerned.

And, of course, the Dutch came to understand that they were too big to fail, as far as France was concerned, and developed great taste for speculation and leverage. Thus the Low Countries, and independent part of France (the ex “Germania Inferior” of the Romans) learned to take great risks.

This may have created a moral hazard; the Dutch may have believed they could get away with anything, as long as they used massive leverage. Since big daddy France was always coming to their rescue, and they attributed that to their genius.

Finally France crushed the Spanish Squares, the elite Iberian army formations, starting with the battle of Rocroi.

Then the Dutch William Of Orange, unable to become king in his republican homeland, made an arrangement with bankers to put together a 20 miles long fleet and a highly professional army, and, after two Dutch-English sea wars, invaded England (November 1688 CE).

The main reason of state for the invasion was to prevent further alliance between England and France. After grabbing power, the Dutch proceeded to make a coalition, including England, to attack France. The Dutch bankers who had financed the army came with it. By 1700, the top two powers in the world were the Netherlands and France. That’s how the present British monarchy arose: Francophobic Dutch poodles. (Dutch politics had long been divided between a very Francophile faction, as, fundamentally, the Netherlands were a piece of Francia, and, of course, a faction opposed to that; the Anglo-French “100 year war” started there.)

The general coalition led to a succession of wars to prevent French hegemony. However, by 1714, the war of the Spanish succession, although it expelled France from the Netherlands, Bavaria, and Italy, ended curiously. As the late Spanish monarch had wished it, Spain, and her gigantic world empire, was ruled by a Bourbon. France was ruled by Bourbon too: Louis XIV. Philippe de France, grandson of Louis XIV, and second in succession for the French throne, became Felipe V, king of Spain.

In North America, French territory, from Louisiana, through Colorado, Canada to Quebec, a Franco-Indian alliance, completely surrounded the 13 white English colonies, and blocked their invasion of Indian lands.

The Anglo-Saxon, Bible inspired model of negotiations with the Indians was for government to offer money for their scalps.

In the second half of the eighteenth century something strange happened. Britain defeated France and Spain. It was a bit as if nowadays France defeated the USA and China, in a few decades. How were France and Spain thoroughly defeated by smallish England, within a few years? (Trafalgar in 1805, where the combined French and Spanish were sunk and Waterloo in 1815, were the final nails in the coffin of Franco-Spanish supremacy).

Great Britain was able to defeat France through financial engineering, extensive leveraging, a private-public devotion of the state to war.

The Seven Year War, a world war, was fought from India to the Canada. It is known in the USA as the French and Indian Wars (1754-1763). It was started by an officer in the British army, who doubled as a land speculator, George Washington.

Britain spent (the equivalent of) trillions to pay for her superlative Royal Navy, and for paying countries such as Prussia to attack France from behind. This was all financed by leveraged bankers who thought they would inherit the world, if they financed massively the upstart British. And they did.

By the time of the so called Napoleonic wars, the house of Rothschild financed both sides, a familial system that was duplicated by many other plutocratic families, many of them Jewish (gentiles did not care where the money came from, and the position of wealthy Jews, both in and out of the system, made them natural conspirators; from these incontrovertible facts the extravagant racist ranting of Adolf Hitler, his predecessors, and friendly non Jewish plutocrats originated, according to the false and misleading equation: Plutocracy = Judaism)… the same familial system of covering both sides was followed by Nazi supporters (example: the Thyssen family).

As Frederick the Great, king of Prussia, pointed out: “A financial system… constantly improved can change a government’s position. From being originally poor it can make a government so rich that it can throw its grain into the scales of the balance between the great European powers.”

He should have known: he was financed by Britain, and by various exactions against Poles and Jews. Following Frederick upside down, one may deduce that a financial system, constantly worsening, can change a government’s position, from being originally rich to so poor that it become a grain of sand in history. This is where we are at.

In the Seven Year war, France lost Canada, part of West Indies, (rich sugar exporters), India…

The vengeful French counter-strike against Britain was thoroughly counter-productive: France, under the incoherent leadership of Louis XVI, created what would become for France an all too often fair weather friend, the somewhat ingrate USA.

Moreover something strange happened: France was ruined by EXACTLY THE SAME FINANCIAL MECHANISM which is ruining country after country nowadays. France had to roll her long term debt with short term borrowing. The War of Independence of America had cost (the equivalent of) trillions. If France had spent as much during the Seven Year War, she would have kept Canada.

By 1789, half of the French budget was going to paying interest on the national debt. In other words, what threatens to happen now to many powers, including the USA, happened then to the world’s greatest power.

Louis XVI ought to have refused to pay the plutocrats one more cent. Instead he wobbled, as usual, and convoked the General Estates, in the hope that the latter could somehow persuade the hyper wealthy to pay more taxes. The hyper wealthy had blocked for years attempts at fiscal reform by enlightened ministers of Louis XVI such as Necker (Adam Smith’s professor) or Turgot… They did it again, but the Third Estate had long lost patience, and now that it was all together in Paris, it could raise hell.

The Third Estate renamed itself the “Commons” (“Commune”) and proclaimed itself a Constituent Assembly (with the aim of writing an advanced constitution and defaulting on the debt). The incorrigible Sade, a victim of Lettre de Cachet, a resident in an apartment at the Bastille, screamed from his window that people were being murdered at his jail. Sade was believed by the rabble. It was a lie, but the Bastille was taken, and occupied by the outraged People. Louis XVI ordered the army to crack down. La Fayette, of American fame, prestigious head of the army, and a strong enemy of slavery, refused to fire on the People.

Three years later, Britain, Prussia, Austria, Russia and their fellow plutocrats invaded France, which reacted by proclaiming herself a republic, one man, one vote. The British invasion was repelled in Toulon, Provence, by a brilliant plan from an artillery captain, Napoleon. The Prussian were repelled by new, state of the art guns and explosives at Valmy, invented for the occasion (these innovative gunnery would help Napoleon’s victories).  

Great Britain became a global hegemony in the 19C, with France playing second fiddle.

Thus an important paradigm was created, even among the victims and opponents of the leveraged financial system that Britain profited from: the rule of leveraged plutocracy and its fractional reserve system had brought economic supremacy. They forgot the important detail that this happened through the rule of empire imposed by maximum force, and the most vicious morality imaginable, that of the “Devil” (Pluto) unrestrained.

Tellingly, early American presidents knew how the sausage was made: after all German troops paid by Britain had fought against the Colonists. And after all, those colonists who opposed independence were the richest ones. American revolutionaries proposed to establish the “Order of the Leech” for them, or to honor them with titles such as “Their Rapaciousness”. The American rebellion is called a Revolution, because it was fundamentally anti-plutocratic.

The first American presidents were highly hostile to central banking and other plutocratic conspiracies of Rothschildian inspiration. To destroy central banking was viewed by Jackson, on his deathbed, as his greatest achievement, (although he had doubled USA controlled territory under his presidency).

This mighty aura of the invisible hand of financial leverage had infused the superficially learned minds of a core component of mostly French socialists. When they pushed for the European integration, they integrated in their model the very same system which had made Great Britain so powerful, thinking they would get powerful, like those savages who get strong by eating the brains of their enemies. Instead, they got kuru.

Indeed, so doing, though, they made the same mistake as the Islamists did in the Ninth and Tenth centuries. Islam had been conceived as a war machine against the Roman empire (Muhammad himself said). It was highly successful that way. But an ideology of conquest is not an ideology of peaceful progress.

Many times in history an ideology of conquest was unable to switch to a sustainable state. The Mongols presented with an obvious example, and not just in China, but all over. As the Yuan, they were able to hold onto China for just a century (1271 to 1368 CE).

Islam was a perfect war ideology tuned to defeat the Greco-Romans, and time was of the essence,  Muhammad explained. In a few decades, Islam conquered most of Greco-Roman territory (before being stopped on the sea by Constantinople advanced technology, and on land, by excellent Frankish steel).

Once installed, Islam turned to increasing fascism and theocracy (the Qur’an and the “Sharia”, were invented twenty years, and a full century, respectively, after Muhammad’s death; it’s probable that Muhammad would not have been amused).

As centuries passed, the countries Islam had subjugated, converted increasingly to the Muslim faith, and senseless Sharia. Left to its own instruments, Islamist civilization stagnated ever more (this happened in several distinct, unrelated places, demonstrating the limitation of overwhelming theocracy).

In total contrast, the Franks who took power in Gaul around 480 CE, were able to marry an ideology of conquest with one of bon vivant (the good life). In the end, they proved the successful nemesis of military Islam.

Similarly the great Anglo Saxon financial machine was conceived, under Dutch influence, as a war machine against France (ironically, as France saved repeatedly the Netherlands from Spanish occupation, as I said, creating a massive moral hazard, which adversely affected France in the 18 C).

The French socialist builders of Europe, which is extended France, used, to build Europe, the so called free market. It is a free market, because it is free for plutocrats. On the free market, the European states were also supposed to shop for money, as if states had become housewives. Now they are desperate housewives.

A system which had been built for war, against, well, not just the world, but, first of all, France, was adopted enthusiastically by somewhat demented, and certainly deluded… French socialists, probably self congratulating about their own openmindedness of borrowing tenets of “capitalism”.

And those forward looking Europeans did on the ruins of Europe, destroyed, well, by fascist regimes financed and organized by Wall Street in the 1920s and 1930s. (I include in the concept of “Wall Street” corporations such as Texaco, and Standard Oil, IBM, Ford, GM, etc.; I conflate finance, the CEO class, and corporations)

In other words, from lack of historical knowledge, or outright corruption, the builders of Europe established their house for the hens to be guarded by the foxes.

Why? Because, naturally, the states leveraged themselves as much as they could. That came to mean that they would borrow more to pay interest on the preceding debt. This could be survivable only if that debt shrank, relatively speaking. That can happen with high growth and high inflation, as the debt would become small relative to (nominal) GDP.

But the European Central Bank got the mandate of little (2%) inflation. And high growth became impossible as the population aged. All the more since the initial debt was used for current spending, by the… states (which acted like crazed  consumers with many credit cards, using the latest to pay the oldest, a Ponzi scheme onto themselves).

Debt is a good strategy if, and only if, the capital it brings allows to indulge in some activity that brings in much more revenue than the interest on the debt one has to service. Spending debt on welfare is not so, except if the money is spent on potentially revenue enhancing research, and, or on revenue enhancing education (of the young).

The small croc is eaten by the big one. This is where we are at. A naïve attempt at beating them by joining them, and only ruin to show for it!

***

EUROPE’S ORIGINAL SIN: KNEELING AT THE FOOT OF THE GOLDEN CALF:

It is traditional among Anglo-Saxon historians and economists to celebrate the Anglo-Saxon economic model. They do not realize that they are congratulating themselves about a piece of military history rather than a piece of economics.

What came to be identified (unfairly) as the Anglo-Saxon financial system has been much admired, because it has been so successful. This is said, again and again, and taken for granted.

So successful that model was considered to be that French socialists, such as Delors, and other forward looking Europeans, adopted it for the whole of Europe. The “free market” could do no wrong. And they made the free market the enabler of the European currency union. Namely they decided that European countries would purchase money on the free market… of money.

That was, of course, a total surrender of sovereignty. Indeed, the number one prerogative of the state, since times immemorial, has been to strike coinage. That had the distinct advantage to make the adoption of their European integration project more savory to wealthy supporters and banks.

And indeed, the later can celebrate: not only they have the Greeks on their knees, but now even the French and the German taxpayers.

***

LATEST MISLEADING IDEA FROM SOPHISTICATED PLUTOCRATIC PROPAGANDA:

Paul Krugman, who hates the idea of European Union in general, and the euro in particular, now is trying to extract himself out of his own contradictions in Original Sin And The Euro Crisis by claiming that:

“how can I reconcile my scorn for warnings about bond vigilantes with what is happening to Italy?… developing countries were especially vulnerable to financial crises because they borrowed in foreign currency…. The key point is that by joining the euro, Italy took a bite of the apple — it converted its advanced-country status, as a nation issuing debt in its own currency, into original sin, with debts in someone else’s currency (Europe’s in principle, Germany’s in practice). That is the root of its new vulnerability.”

Well, this is silly. The only reason why German GDP is larger than French GDP is that the German population is larger (a bit more than 80 million, against France’s 66 millions). But, at this point, the German population is sort of shrinking, whereas France has the highest birthrate in Europe, enough to grow, even without a legal immigration of 200,000 a year. Relatively soon France ought to be larger than Germany. Now if one adds the population of Italy (60 million), and Spain (40 million), one clearly sees that Germany is no giant of the euro zone.

There is a problem with the price of bonds, true. But who controls this? Well, not Germany. The “bond vigilantes” Krugman claims to scorn, most of them capitalists operating from their Anglo-Saxon dens, in other words the leveraged plutocrats, control the price of bonds.

So Krugman’s latest blast against the euro is another devious viewpoint. Krugman is paid for his nationalistic, plutocratic serving stance. This is how he started his career, as an extreme leftist serving Marxist president Reagan, hand in hand with democrat Summers, as twenty year old geniuses who brought us the economy and finance we have now (Marxist by today’s standards, of course).

The worse part is that Krugman has achieved the status of Very Serious Person. He goes to europe and injects his venom. Last he talked in Mainz, next to Frankfurt. In Frankfurt sits the European Central Bank, the ECB, which refuses to use Quantitative Easing (which means that it leaves that monopoly to the American central bank, the Fed, and leaves total freedom for derivatives armed speculators manipulating bond prices). Who heads the ECB? Or, more exactly, what?

Not too hard a question. Of course. A ex senior partner at Goldman Sachs, Draghi,  now heads the ECB. Draghi: what a drag, what a lousy joke. Draghi will drag Europe under Goldman Sachs.

In truth, those who hate always find a reason to hate. All the more when they have interest to do so. In all this, we are very far from the anti-plutocratic roots of the French and American revolutions of 1789 (when the constitutions were written).

The Dark Side is how humanity has moderated its own worse demographic and ecological excesses, as it evolved, over millions of years.

Except, nowadays, with high technology, everything has changed. We need new wisdom, not to go back to an economic model equipping the few with immense wrath, and whose greatest gift has been the extermination of entire continents’ populations.

Europe was supposed to introduce new wisdom after the disaster of fascism unleashed in the period which one hoped had ended in 1945.

Instead, Europe embraced the very ideology and financial system that caused the terrible wars between 1754 and 1815 CE. And caused the repeat of roughly the same, between the 1860s (when the  wealthy landowner, the plutocrat Bismarck, guide of Prussia, went on a rampage, starting with Denmark) and 1945 CE. Stupid.

A leveraged fund, MF Global, founded by an ex governor of New Jersey, Corzine, who used to head Goldman Sachs (strange that name is all over, from Greece to the white house) just failed. Its leverage was 100. Its real assets were 1/100 of what it theoretically “managed”. With leverage like that, the debts of countries such as Greece or Italy are easily manipulated. Don’t expect Krugman to focus on that anytime soon, he is supposed to divert attention towards other things.

Leveraged finance, pushed to its extreme, leads to leveraged war. Time for a re-think.

***

Patrice Ayme

To SAVE The WORLD, Please DEFAULT!

September 14, 2011

GRAB CAPITAL & RENT BACK FROM THE CONNIVING PLUTOCRATS!

[Sep. 14, 2011.]

***

Abstract: The Greater Depression keeps unfolding, propelled by the deliberate stupidity of the best leadership plutocracy could buy.

In constant dollars, the income of men in the USA has fallen to the level of 1978, shortly after the USA started its covert, but massive attack against the republic of Afghanistan. This is not a coincidence: the unconscionable instrumentalization of Muslim fanatics to destabilize a progressive republic so as to grab its resources demonstrates that various plutocrats had seized control of the USA to an extravagant extent by the mid 1970s (under the democratic administration of Saint Jimmy Carter, worthy follower of the morally insane crusader Saint Louis).

This stagnation of income lasting 33 years is unrivaled in any 33 year period ever since the American English colony was born. Thus, it’s a new phenomenon.

There were never three decades of stagnating incomes in English America, including in any period straddling the so called French & Indian Wars, the Independence War, the Secession War, and the Great Depressions of the late 19th century and that of the 1930s.

This remarkable stagnation confirms that the present Greater Depression is worse than the one of the 1930s. Indeed the GDP graph is now doing worse in Britain than it did during the 1930s. And we are just getting started. Why? Why just getting started? Because the leaders of the West have adresseds none of the gathering causes of the depression, yet. (By contrast, FDR, ordered a flurry of astounding decisions in the first few days of his presidency in 1933.)

Can we get out of the unfolding disaster? Yes, with judiciously implemented inflation (as Turkey, Argentina or China have decided to do, so far successfully) or with default made so carefully that it will defang the plutocracy (the occasion presented itself in 2008 and 2009, but Bush and Obama declined to do so, although it was their fiduciary duty to do so). Once plutocracy is defanged, some of its contrived connivances, such as plutocratic globalization enabled by plutocratically friendly localized laws in tiny places, the tax havens, could be easily addressed.

A good place to start to dismantle plutocracy is Greece. The only reasonable resolution to the Greek sovereign debt crisis, is actually to default in a well organized, carefully measured manner (I have long advocated strategic default as a panacea since at least 2008).

Letting Greece out of the Euro, as dollar supremacy propagandists insist Greece should do, would be an utter catastrophe, for all concerned, except for U.S. supremacists. A Eurozone exit would be especially a disaster for the Greeks, contrarily to what Paul Krugman pretends, and the reasoning is so elementary, that Krugman ought to be ashamed of himself. Massive devaluation would solve nothing for Greece. True Greece lives off tourism, and that would improve, but Greece has to buy everything outside…

And especially Greece has to buy all its energy from outside sources. Energy is something the economy is fundamentally about (a notion which eludes most professionals paid for telling economic lies, and quite deliberately so).

Greece’s situation is completely different from that of demographically tiny, resource wealthy Iceland, the terrible financial crisis of which is still unresolved, especially in the matter of outstanding bills and criminal activities still unrevealed, and unpunished.

Iceland is often brandished by the enemies of the euro as a demonstration that countries which have their own currency do better. However Krugman and other europhobes always forget the few facts I just mentioned, when they laud Iceland and its brazen, 100% default (so far), which caused a major, still unfinished crisis.

There are many types of default, indeed. The sort of default which happened in Iceland was very peculiar, quite terrible, it is not duplicable, and I do not recommend it (and, as I said, it’s not over!) When I say that Greece ought to default, I speak of a completely different sort of default. Quite different from the grand theft which occured in Iceland. (A theft which will be fixed someday, a detail Krugman does not seem to be aware of: there are actually assets in Iceland set aside to reimburse the European governments which paid for Iceland.)

Why so much hateful hysteria on the part of the plutocratically connected Americans against European institutions? Because American plutocracy is collapsing the USA, and it is trashing around to keep controlling the world reserve currency, just as the one who drowns grabs whatever and whoever.

Paying fossil fuel in euros would be the end for the USA, as it would find itself in a similar situation to that Argentina found itself in, a century ago. However, and paradoxically, it’s in the interest of the USA to keep the euro high enough to make the European Union industrially uncompetitive. The goals are opposed, so the situation is unstable.

Default here and there would precipitate instability, overall. However, that would be a good thing, after the fright. It would allow to put banksters where they belong: if not in jail, then at least to pasture, after repossessing the property they connived to steal. In other words, high time to do what was not done in 2008!

The real truth is that Greek debt is only 300 billion dollars, a fifth of the subprime debt in the USA in 2008. So what’s the real problem? Well, Spain, Italy, and, soon, France. Of course a French default of some sort would be a world cataclysm. But a cataclysm is what is needed to get rid of the predator on our back, the world plutocracy.   

So let’s bring it on! Better this than Greater Depression forever.

***

***

GREECE IS EVERYWHERE, WE ARE ALL GREEKS:

Some will say: “Europe again? Who cares? Is not that the OLD continent?” Well, as I will show, we, all of us, who own anything, own some of Greece. Even Americans, all Americans, own French and German banks, and, thus, Greece.

Second, Europe in the biggest socio-economic sense is nearly one billion people. Yes, some lunatics, like the Swiss, speak delusionally as if they were not in Europe. In some metaphysical sense, obviously, because Switzerland occupies a third of the Alps, a mountain range installed in the exact geographical center of Western Europe. As I predicted in the past, last week the Swiss National Bank pegged itself to the euro. The SNB promised to buy “unlimited amounts” of Euros each time it takes less than 1.20 Francs to buy a Euro. In other words, now Switzerland has jumped in the Eurozone.

Is Suisse not getting its orders from Washington anymore? Is Krugman going to cry a river? And Polanski is going to receive a prize in Zurich next week! Only the naive would feel all of this to be unconnected.

Little known to the rabid anti-Europeans, countries such as Norway, Ukraine and Iceland are already part of various European unions. There are, inside Europe, unions of free travel, unions of free commerce, even unions of usage of the euro while NOT being in the Eurozone, plus an union of countries economically assimilated to the EU, while not being in the EU, and even other countries admitted to candidacy to the European Union.

Those unions are far ranging. For example the economic might of Turkey is greatly explained by this republic being an associate member of the European Union and its predecessors since 1963. By the way, many a European problem would be lessened if Turkey joined the EU much more. Why not include Turkey in the Eurozone? (That could help Eurozone financing.)

At the center of Europe is the Eurozone, and its core is bicephalic Franco-Germania (however it may hurt all the nostalgic of francophobic Keynes and Hitler).

Not forgetting the rich Franco-Germanoid fragments of the Benelux, which are in between, and inseparable from France and Germany, one contemplates in Franco-Germania a super power with 180 million people, and the most advanced technology. OK, French and German private banks have lent a lot to Greece, and now they are threatened by a Greek default, because they lent so much to the Greeks, that the Greeks cannot possibly pay back. Right. So?

Same with Spain, or Italy? So? Are not the Germans happy that Spain bought from Siemens, that is, from them Germans, very high speed trains? Would they have preferred Spaniards to buy trains from French Alsthom instead?

Many cautious Americans will scoff that they have their money in American money markets, so they have nothing to do with Greece. However, the truth is, all large banks, especially including all large banks of the USA, have a piece in Greece, and a fortiori Spain or Italy. Even the Chinese are deep in the Greek picture. Hence the (well justified) dressing down of the Chinese Premier to the most advanced countries: “We have been concerned about the difficulties faced by the European economy for a long time and we have repeated our willingness to extend a helping hand and increase our investment,” Wen said. In exchange China wants WTO membership.

Americans who think they are out of Greece do NOT know how money markets work. What is a money market? Well, a market of very short term bonds. Some of these bonds are Greek bonds, some of these bonds are bonds of banks which have lent money to Greece, or bonds of institutions which lend money to companies which invested in Greece, or have “swaps” with such. And so on. Thus all Americans, and actually the entire planet, are entangled with Greece and company. If a black hole develops in the middle of that system, much will be swallowed.

Third, and more importantly, a terrible paradigm is created in Greece; the innocent are made to pay for the crimes of criminals, as these criminals still have access to all the levers of power. As long as this is not addressed, the crimes, and the crisis, will keep on rolling.

***

UNREAL BANK RESERVES, REAL AMERICAN WAR:

How the banks are threatened by lenders unwilling to pay back the whole gamut of what they owe is a bit convoluted. Banks are supposed to have some capital reserve requirements, and are supposed to stop operating if they don’t. European regulators are fiercer on this than American ones. Oh, yes, because American banks would already to have to stop functioning if correct financial requirements were applied to them. So the funny thing is that the panic is about French and German banks having fewer reserves, but still much more than their American competitors. (But of course, perception becomes realization; so the hysteria has real effects, positive for the hysterics!)

In truth, the bottom line of the whole problem is that the USA is trying its best to keep its supremacy. So Americans are running around in a panic screaming that Europe is sinking. Whereas the truth is that European banks are still in much better shape than the banking-Federal Reserve-U.S. government complex in the USA.

Right now, the one year Greek Treasury Bond carries an interest of 111%: an investor in that vehicle will double her/his money in 5 months. Such an investor will bet that other European states will keep on forking money over to keep the Greek state afloat.

So why am I for a Greek default, as I have suggested forever? Actually I was also for the default of the Too-Big-To-Fail banks in the USA. Within a month of the election of Obama, I was enraged that Obama had decided to send to the banksters all the money in the world, no questions asked (TARP was just a small portion of the money lent, or given to the banksters). I saw the criminality of it all, very clearly. See: https://patriceayme.wordpress.com/2009/02/24/time-for-rico/.

I was for the nationalization of the Too Big To Fail banks. Instead of just giving them the money, many times over what they were worth, as Bushama did. If nationalizations had been done, the economy of the USA would have restarted by now, and the future, even of the deficit, would be rosy. By the way, nationalization of banks is what Iceland did.

Much later, the Tea Party was created, and adopted the same line that the Too-Big-To-Fail banks ought to have been allowed to fail. Whether its partisans understood that meant nationalization of a big chunk of the financial system of the USA is another matter entirely (they are too busy being mystified by the theory of evolution, having dinosaurs galloping all over their little minds…) A dreadful possibility is always that Chinese (say) banks would swoop and acquire all the failed banks in sight. Nationalization avoids that.

So, yes, I am for the Greek default. For the same reason. That will allow to avoid in the Europe Union, the treacherous, unjust slope into the abyss, of using most available public finances to support the very men who have caused the crisis, and the very exact systems they have created and lead, and brought us all to the pauper house, where we will be to stay in residence if, and only if, we become slaves to the Chinese dictatorship (yes, I am not insulting China, it’s officially a dictatorship).

***

THERE ARE MANY SORTS OF EUROPEAN UNIONS:

Is Turkey in or out of Europe? Those who say out, know nothing. Why to talk about Turkey? Because, actually Turkey has very different strategies and capabilities which have not been tapped. And, by the way, the unaffordable Greek military budget is naively aimed at Turkey, an unacceptable situation both economically and between NATO members.

The question of Greece leaving the European Union has nothing to do with a financial crisis, even a sovereign financial crisis. Even leaving the Eurozone and having a sovereign debt default are completely different notions.

Anti-Europeans, strong and strident in the USA, deliberately confuse all these notions: they are paid to do so, making them what they are. Sexual prostitutes provide a service, and, if everybody comes ahead, it’s all for the best and a legitimate business. But when famous economists use the bully pulpits they are paid to bellow from, to tell complete lies, they are definitively turning into public enemies. What do they want, besides money? What do they do besides spewing hatred?  Do they want war with Europe? Well, that’s what they are doing.

Even the head of the bosses’ union in France said so. She said there was a deliberate, organized, orchestrated effort by “the Americans” to destroy the European Union. And the confusion of all the notions is part of it. I would not be surprised that Stark, the chief economist of the ECB who left in a huff 5 days ago, were to be found, someday soon, to have been paid by “the Americans”. Watch carefully who his next employer will be. Mr. Orszag, the Obama budget director, helped send 60 billion to Citigroup, and is now employed there, earning giant amounts of money in compensation for his gracious service.

Suppose California were bankrupt: would it leave the Union? No. And guess what: when California paid with “IOUs” (“I Owe You”), do you think California did that just for fun? IOUs are little pieces of paper supposed to replace the Federally official little pieces of paper known as dollar bills. Guess what? It happened, because California had literally run out of money of that currency union, the USA!

And no American suggested that California ought to leave the Union. Where was Krugman when Anti-Americans needed him? Anti-Americans would have loved hearing that California had to leave the Union, as straightforward Krugmania would have it. Did I misunderstand something? No, Krugman’s reasoning for Greece somehow does not apply to California (although California is endowed by a massive indigeneous energy production, from oil to hydro).

Some fear that Greece may sink that low in next few months, if Sarkozy and Merkel can’t figure it out. As low as California: a terrible thing, that would be, indeed, for the land of the Parthenon!

But then, if Greece were to sink as low as California, pro-Europeans will not fail to notice that Greece does not have anymore reason to leave her Unions than California had to leave the USA.

Thus the hysteria of Paul Krugman and his unfortunate kind against Europe and the Euro is painful to watch: is this the best the USA can produce in the way of deep thought? Merkel, and several French politicians seems thoughtful relative to Paul losing his marbles about the euro. Krugman does not realize that a fast driver can go in five hours or so, from Spain to Italy, through France. And when the Very High Speed lines presently in construction will be finished, one speaks of less than 2 hours. The time to go from London to Paris, by rail, center to center. Why does not Krugman propose a currency in Washington, and one in Boston, another in Chicago, and one in Detroit. Would not that help Detroit’s depressed economy, according to full blown Krugmania?

***

FRANCO-GERMAN UNIFICATION MEANS MONETARY UNION OF ALL: 

True some German loud mouths seem to have understood nothing since Hitler was consumed by gasoline next to the Reichstag. Hitler started his career hating France and her Versailles Treaty (still hated by many a Nazi nostalgic to this day). He ended it, defended by SS and their officers, who were native French speakers SS. The irony ought not to be lost on europhobes.

The loud mouths dream to reconstitute a larger, Aryan version of the Deutschemark. But those fools have not understood the first two things:

a) Germany has surpluses to a great extend because the south has deficits. Germany can leave the euro, fine. The Greeks will buy Peugeots and Renaults instead of VWs and Mercedeses.

b) The euro union is about unifying France and Germany. Right now France has extracted herself from the demographic black hole she was in for two centuries, and especially around 1870. French demographic growth is now strong and internal. It does not rest, as in the USA on demented immigration and the growth of non integrated recent migrants (a large part of the population of California has, technically passports from the USA, but is truly Mexican; I know some, they are charming, and I prefer them to white, racist, narrow minded Americans, but they are no such thing, precisely; in particular their value system is different, and access to higher education is barred to them, by price, as much of the public education system in the southern USA is being privatized, so their children will also be Mexican!)

To come back to France and Germany: France is, in many important ways, the superior partner. It is the result of a determination of France to never find herself in the situation on 1940, when it was defeated by the unholy union of the plutocratic USA with the USSR and Nazi Germany.

The French have carefully made themselves world masters of all the superior technologies. Germany’s superiority rests on high tech Mittelstand, family enterprises which master the middle, but not the highest. France is the spider at the center of Europe’s highest technology: look at EADS and Arianespace, etc. Giants such as MBDA, the world’s largest nasty missile company are not even on the radar of the close minded, rabidly anti-euro, such as Paul Krugman.   

Of course French spending in ultimate high tech costs a lot: look at the inertial fusion facility built in Bordeaux, which will be the world’s most modern and powerful when it comes on line within two years. It has only one equivalent, worldwide: the National Ignition Facility at Livermore, California (with which France cooperates semi secretly; NIF has made 300 shots so far; an inertial thermonuclear fusion plant will have to make 300 shots every minute to become a productive power plant…)

France gave, and is giving, herself the means: total government budget is more than 56% of GDP. As a French politician quipped in the 1990s: “France is a USSR that has succeeded”.

Germany’s government is 47% of GDP (already basically 50% more than the USA). But Germany is not building its own massive thermonuclear project, and does not make its personal supremacy stealth fighter, and personal strategic nuclear submarines, with personal city pulverizing rockets, capable of taking out 50 million people. True, France is much less efficient with its goverment: she would save a lot if she were as efficent as Germany, with much fewer civil servants.

Not that renewable energy is neglected in France: there are a lot of problems with wind, so France is late in developing that. However, the giant utility EDF has started to install giant “hydrauliennes” to capture tidal power at the bottom of the sea. A world first. If those work, France will have basically resolved its energy problem. OK, it’s a big IF…

***

KEYNES WAS A FRANCOPHOBIC PROTO NAZI:

It’s not just Murdoch’ media machine. Even the American economic left has a strange anti-French bend. This is of no small consequence, because it has made Americans incapable to point at France, and similar socio-economies in Europe, which is pretty much all of Europe, as positive examples for American politicians. The result is that economic ignoramuses such as Obama come to power, and they are advised by dedicated servants and members of the plutocracy, such as Larry Summers, somebody who should have actually been prosecuted for visiting socio-economic hardship on billions of people. As he was the dismantler of FDR’s work, and one of the main agents of the reinstauration of a worldwide plutocratic order, same as before, just worse.

Obama thinks that if forces NASA to give billions to his plutocratic pals, or to whoever wants to make something renewable, he has caught the future. All he has caught is the hope for a shinier toy in the playground. It’s infantile. Also, completely corrupt: what’s the meaning of forking public money, through NASA to a guy who is not an engineer, and laughs as a goat bleats? Or to a non engineer such as Musk, just because he looks good. Musk, like Murdoch is not really an American, just a plutocrat hitching a hike on the back of American taxpayers. 

The Europeans, in striking contrast, have given a lot of very deep, professional thought to improving their socio-economy. They did not just become fascinated by proto or pseudo Nazis telling them, a few generations ago, what they wanted to hear. (Allusion to Keynes and the so called “Austrian school of economics”.)

Where does that American francophobia comes from? Well, the key is that left, “democratic” economists in the USA admire Keynes, and therein, a contradiction. Germans who dream they can do it without France, are just pursuing a dream that KEYNES started, and Hitler implemented. OK, a Keynesian nightmare that Hitler tried to implement.

Yes Keynes, Nazi in disguise. Keynes: Nazism’s own professor of anti-French science. I just read “The Economic Consequences Of Peace” Keynes is famous for. What a piece of Nazi trash! Keynes calls the re-creation of Poland, Romania and other occupied nations in the east “scatter brain”. Why? because it would deprive Germany of economic power! Is teaching Keynes teaching hate speech?

The glorious Keynes whined that it was “victorious France” who wanted to impose what he viewed as a monstrosity, the independence of those previously subjugated nations, the freedom of Germany’s former slaves. And the great man moans. Soon Hitler would foam just the same. Did Hitler read Keynes? Many of his criminal co-conspirators certainly did.

Keynes was afraid that France, having, according to him, unlawfully, unwisely, unjustly recovered Alsace and Loraine, occupies German land which have been German for more than 1048 years, he says. What an idiot! Imperial Germany was founded in Versailles in January 1871, 48 years before Keynes put his Nazi ideas on paper.

No wonder that, after being instructed with such trash, Hitler was completely surprised that, after all, Great Britain joined France in declaring war to him in 1939! Did not his advisers read Keynes?

If one wants to go legally technical, and constitutional, “Germania” was certainly part of “Francia” by 800 CE. The Carolingians even invented German (and not just the Carolingian minuscule which even Keynes used, making him another victim of “victorious France“).

The division of the Frankish empire in three pieces was viewed as another case of the standard way to handle inheritance among the Franks. Something they had done for 5 centuries. It was not viewed as definitive. It was made explicit, at the time, that the Western Franks were to stay prominent (they were supposed to elect the eastern king, or emperor, something which soon bored them to death!)

Having many kings was also standard among the Franks: kings were elected, in theory, and having many kings was like having many presidents. However, it was viewed that the king of the western part was “emperor (in his kingdom)”, due to the fact the Franks in Francia (“Salian Franks”, or salty Franks) had fought hard for 4 centuries to unify all of Germania to Francia (Julius Caesar’s old project) .

***

NATIONALIZATIONS A EURO SOLUTION, PLUTO THE WAY OF THE USA:

To come back to Greece; a Greek default has nothing to do with Greece exiting the Eurozone.  True, the Drachma was converted at too high a rate, because of misplaced national pride: one has to live with it. True, the Americans want to break the European Union, and they may as well start with the Eurozone.

A Greek default may leave some major French and German banks with insufficient “tier one capital” to operate according to international regulations, and the markets indicate that they will be unwilling to provide them with it. So what? If it cost little to buy BNP, the French government can find what it takes, before China does, as the German government was able to find enough money to buy Hypo Real Estate. Hypo Real Estate was among the 30 largest companies in Germany. It was fully nationalized in 2009.

Great Britain and Belgium also chose to nationalize banks consecutively to the 2008 crisis. The friends of plutocracy, Bush and Obama, the greedy Bushama, instead offered to their banksters friends as much public money as they needed, without taking possession of their banks in the name of the American public they were so generously offering all the money of. But that is the problem of the USA: no more money for anything else. Bush and Obama, real friends of the Tea Party have not followed down the Marxist, government friendly path traced by those far left liberals known as presidents Reagan and Bush Senior.

Now Dimon, head of JP Morgan Chase, who Obama called repeatedly “my friend”, in his pro plutocratic penis envy, says that the bank of international settlements is “anti-American”. So not only Paul Krugman is going on a pseudo hyper nationalistic pro American rampage. They should be reminded that there is nothing nationalistic at going crazy. Hitler, too, posed as a nationalistic, but he was anything but. In truth he turned into the destroyer of Germany. Anti Hitlerian French were better German nationalist than all of Hitler’s supporters.

BNP is as big as the biggest American banks, but the French republic will nationalize it in a flash, if needed. France, as a state, will also make a lot of money that way (nationalizing very big banks is always profitable, it seems). And then what?

A nationalized BNP will be directed to lend more to people and projects which can pay for themselves, not just to cheating plutocrats they are conniving with. The connivance between banksters, plutocrats, and their servants in government (Obama) is ongoing in the USA, so the economy is falling apart there. Does Europe want to join the USA on the plutocratic road down to hell?

In the 2008 banking crash, banks, and not just in the USA, but also in Europe, got money from the states. Instead of replenishing their cash reserves, as required by International regulations, they paid their managers fortunes, paid large dividends to fellow plutocrats, etc. Now the cash reserves of American banks are 3%, just a bit more than what Lehman Brothers had in 2008 before it failed. They should have 8%, according to regulations, and common sense. And they are supposed to go to 10%. Swiss banks have 20% in reserves (explaining a lot the rush to Alpine gold!)

In other words, the banksters were treated with immense generosity last time, even in Europe.

So will Europe force the People to give money to the rich, so that they can become even richer as in the USA?No. Enough is enough: been there, done that. Thus Greece has to default. The Greek people ought not to pay while its plutocrats, and untaxed, wealthy church, keep on cheating.

***

NOT ENOUGH EUROPE YET TO AVOID A GREEK DEFAULT:

How could Greece avoid a default? Well, Greece could avoid a default only with the help of not-yet-in-existence European structures.

An example of such a structure would be treasury bonds for the European Union, or, at least, the Eurozone. But they do not exist: there is no European Treasury, no European Treasury Bonds, no European Federal debt. Of course, there is no Federal Europe. At least fiscally speaking.

France has 1.6 trillion euros of French treasury debt, Germany 2 trillion euros of the German equivalent. The USA has around 14.5 trillion dollars of U.S. federal treasury debt (but that does not count more local debt).   

It is because there is a U.S. Treasury and U.S. Treasury Bonds, and a transfer system, that California, and several other states, have avoided default. So far. But, of course, at the rate of augmentation of the deficits in the USA, it should not take much longer…

Some Germans, stuck in the Prussian-Hitlerian model, may want to build a greater Germany. They would not end up exactly like before, because Germany’s power is not what it used to be. In France, however, more than ever, the political class knows that salvation lays in Union. France has basically a discrete union with many African states, Francafrique, and it should be boosted. This is the deep reason for the Libyan adventure, as the oil propelled Khadaffi dictatorship messed up much of Francafrique: whereas he spent not much on Libya, Ghadafi was lavish with those in other countries who he wanted to influence.

Another obvious French idea is the Mediterranean Union. Here, Libya again is an obvious centerpiece. Right now France is pushing hard on dictator Assad, while writing the Palestinian state proposal. The Americans are going to be all astonished when they find themselves pushed out of the entire Middle East… which will happen if they don’t cooperate with France (because French leadership on the question is gathering lots of followers).

To come back to Greece, the concept of “Greek bail-out” is misleading. if one wants Greece to be bailed out, Greece has to pay less in interest on the money plutocrats lent it. The so called “bail-out of Greece” is actually a bail-out of the existing plutocratic structure in Europe, or, even, in the world. But plutocracy is not as strong in the EU as in the USA, as the British, Belgian, Icelandic, and German bank nationalizations after 2008 showed. So let’s nationalize some more.

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EUROPE INTO THE ABYSS, INSPIRED, & ASPIRED BY THE FREE FALL OF THE USA?

I did not even watch the Obama speech. Sometimes a human being has seen enough. How many times does one need to go at the zoo, and see the chimp throwing excrements at the public? Ok, nowadays, most zoos are better designed, and just as there are teleprompters, and human beings can be selected, who make excellent robots, chimpanzees are behind bullet proof glass.

Obama and his handlers have got crafty. They sent early versions of Obama’s teleprompted speech to a number of people, who went all pink and warm inside from receiving the favor of what they feel is a great man. So Krugman admitted that was the case for him, and, flattered to no end, in spite of himself, he fell into celebrating Obama’s speech. In a colossal flourish of naivety unbound. Thus the pundits are also prompted at a distance (tele), for all to see.

Colossal naivety? Indeed, Obama is the bipartisan president, so, in particular, the president of the Tea Party, which is the one controlling Congress. His ridiculous propositions do not impress me except as more of what is burying the USA. As usual most of what Obama proposes is tax cuts. This time he is busy undermining the financing of Medicare and social security, to give a bit more money to those already employed now, so that they will have diminished Social Security and Medicare tomorrow.

How does that help the unemployed? Where are the jobs? Oh yes, president Tea Party will ask the Tea Party to raise taxes to pay for a little bit of needed construction. Obama is intelligent enough (I hope!) to understand that will never happen. So, by suggesting to do something he knows very well will never happen, he is lying to the People. OK, pundits are paid to not notice this so loudly, that it gets reinforced.

On the other hand, he should be able to spend many happy vacations in Bali again in the future, with many domestics. Obama is not, and never was, an average American. I used to think I lived like an aristocrat in Africa, because we employed a cook and a house helper. Then I read Obama’s books, and I was left with a weird feeling: something did not add up. He presented himself as poor, but he did not think poor. Interviewing plenty of people who knew him when he was 10 confirmed the weirdness. Young Obama behaved more like young Bush than young me.

Then the New York Times finally did his job and enquired about Obama’s childhood. In Indonesia, his mother was married to a millionaire, a well paid Indonesian front man for big American corporations to hide behind. According to the NYT, Obama lived in a mansion with four lived in domestics in  secondary housing on the premises. That explains a lot, especially in the conjunction of posing as a victim of the system in one’s fictional biographies.

So, as even Maureen Dodd of the NYT asserted, Obama’s motivation is to join the highest plutocracy. He does not mind if he betrays all his supporters: for him, they are just suckers, too bad for them that they sucked the wrong tit. As he said in his books, and in unguarded speeches, it’s all about navigating.

Those who play to the “adult in the room” have always reminded me of chimpanzees playing with tuxedos with utmost seriousness.

In truth, the wise know that navigating is about a journey, and the journey to a destination, and those who eat part of the crew are unwise. All of this escapes the small men.

In the district of the (republican) speaker of the house, Mr. Boehner, there are 89 “structurally deficient bridges“. Ryan, leader of the republicans in Congress, has 95 “structurally deficient bridges” A virulent blonde republican has 192 structurally deficient bridges. And she is still hysterical against public spending. She cannot even understand that the private sector does not own these bridges.

Some of these bridges carry more than 50,000 cars a day. It has already happened that one even larger bridge with a giant interstate freeway on top collapsed. More is to come. Obama says: let the banks play with each other, faking profits with their electronic casino, so they can keep their mansion, yachts, private jets, tax heavens. Boehner says:”We should not spend.“But the banks do spend, to, and with, each other, in their derivative universe.

***

TIME TO RESIST, AND REBEL: “INDIGNEZ VOUS!”

In France last year an Auschwitz survivor, Stéphane Hessel, published “Indignez Vous!“, a small book advocating that it was high time for common people to rebel against the plutocracy. Mr. Hessel is 94 years old, full of life and youth. Many of those who are young today are, instead mental dead wood, as they confuse feeling good inside and having a moral system. See David Brooks’ editorial in the NYT, “If It Feels Right…” Says Brooks: The rise of moral individualism has produced a generation unable to speak intelligibly about the virtuous life.”

“Indignez Vous!” has become the banner of the indignant ones who demonstrate throughout Europe.

Here is Stéphane Hesselin his own words, last year:

“Ninety-three years. I’m nearing the last stage. The end cannot be far off. How lucky I am to be able to draw on the foundation of my political life: the Resistance and the National Council of the Resistance’s program from sixty-six years ago…

The motivation that underlay the Resistance was outrage. We, the veterans of the Resistance movements and fighting forces of Free France, call on the younger generations to revive and carry forward the tradition of the Resistance and its ideas. We say to you: take over, keep going, get angry! Those in positions of political responsibility, economic power and intellectual authority, in fact our whole society, must not give up or let ourselves be overwhelmed by the current international dictatorship of the financial markets, which is such a threat to peace and democracy….

We must realize that violence turns its back on hope. We have to choose hope over violence—choose the hope of nonviolence. That is the path we must learn to follow. The oppressors no less than the oppressed have to negotiate to remove the oppression: that is what will eliminate terrorist violence. That is why we cannot let too much hate accumulate….

To you who will create the twenty-first century, we say, from the bottom of our hearts, TO CREATE IS TO RESIST.

TO RESIST IS TO CREATE.”

Hessel is generous to speak of the “financial markets”. In truth the plutocratic class is more like it. There is an important difference between retirement funds and those manager-owners managing them, and conniving banksters of the financial system. Much more, if it is really much more, is completely different.

***

GREEKS ARE NOT LAZY, BUT AMERICAN TAXPAYERS ARE NAÏVE:

The Greeks work much more than the Germans, so why should they work even more while being admonished that they are lazy spendthrifts?

According to OECD.org, in 2008, Germans worked in the average 27 hours a week, 1492 hours per year, while the Greeks worked 41 hours, 2120 hours per year (French work 30 hours a week, 1542 hours per year, Americans USA: 35 hours per week, 1792 hours per year. The British work 32 hours per week, South Koreans, 44 hours per week; philosophers work all the time, 140 hours per week!)

Greek GDP was down 5%, two years in a row, increasing the relative size of the Greek debt. So austerity, per se, is not working. The same will happen in all countries which try that “austerity as prosperity” trick, worthy of lost chimps.

G20, G7, G whatever, have not done anything about banksters: after the bankruptcy of Lehman Brother, American plutocracy saved itself by harnessing American taxpayers, and the entire American money creation machine.

Multiple rounds of deliberately obscurely and misleadingly named “Quantitative Easing” directed trillion of dollars towards the very bankers, and the very banking system which had created the crisis. Banks got short term money for free then turned around, and  invested it long at a higher interest rate, with the government, generating fake profits. Armed with those, they could keep on playing the derivative markets, and fake some more profits. Indeed, as they play with each other, it’s a zero sum game, no economic value is created, as money is just a symbol, not a reality.

There is a lot of misinformation going on. As a rule, American economists, even of the leftist, pro-government sort, are hostile to the European construction, even when they are esteemed advisors in Europe (Krugman has advised Spain), or teach there (Stiglitz, another economy Nobel, teaches in Paris). They always say that they love Europe, and want it to succeed, but then hates the fact Europeans want to have just one currency. What’s next? Just one flag? Are not only Americans allowed to have flag and currency, as the Very Serious Country it is?

There again, they follow Keynes, who used to rage that so many nations had been freed from German imperial subjugation in 1919. How can these American economists be received nicely in Eastern Europe, knowing that, following their racist master, they would like it subjugated?

***

ICELAND VERSUS GREECE:

Could Greece exit the Eurozone? Sure, that is what the USA want. And the USA is doing its best to make it so, having unleashed its plutocracy (why have the Europeans not yet brought warrant of arrest against Goldman Sachs’ executives?) And its wolves howl that way.

Paul Krugman, disingenuously claim that all Europeans are different and they should all have their own currency from Malta (population: 400,000) to Germany: population 83 million. Does Krugman know how many nations there are in Europe? Or all luxury hotels feel the same? Does Krugman know that poor Europeans, now that they have the euro, male comparison shopping among countries, to buy, say, a cheaper car? I don’t think the plutocracy cannot even imagine how the commons live.

Krugman lauds the default of Iceland, and its massive devaluation. He forgets, or rather, refuse to consider that, after Iceland basically stole billions to millions of EU citizens, their governments stepped in, and that those powerful governments are still determined to recover the money. In case Krugman does not know, Great Britain is 200 time larger than Iceland, and, ironically is (partly) in charge of the… defense of Iceland. 

In the second quarter 2008, Iceland’s external debt was 9.553 trillion Icelandic krónur (€50 billion), more than 80% of which was held by the banking sector, mostly in 3 more or less private banks. By comparison, Iceland’s 2007 gross domestic product was1.293 trillion krónur (€8.5 billion).

Krugman is always saying that the fact Iceland has its own currency and so was able to solve the crisis by devaluing its currency. This is deeply dishonest. A glance at the Wikipedia article shows that Krugman’s view of the situation is an affabulation. That is Iceland has improved, but not because of the currency dropping. Actually, Iceland was so desperate that its currency was going to the bottom of the ocean, that it went on its knees to enter the Eurozone.  It was told it had to enter the EU first. Since, arguments have blossomed about whale killing, and the negotiations are ongoing.

And, by the way, fixing the root of the crisis was just differed. Countries such as Great Britain, who reimbursed her 300,000 stolen depositors (as many as Iceland has inhabitants), have evoked the anti-terrorist act against Iceland, and are still determined to recover their losses. Other aggrieved  countries are the Netherlands and Germany, or Norway. French veteran magistrate (and presidential candidate) Eva Joly was named by Iceland to head a serious economic crime unit of 20 detectives to find out the causality (hence culpability chain) of the whole thing.

If Greece had its own currency, it will have one positive consequence: tourists would flood to Greece, because that currency would be worth very little. Krugman would say:”I told you so”.

However Krugie boy forgets that Greece basically makes nothing, so Greece would still have to buy everything outside, and that would be very expensive. then Krugie boy will jump up and down, and squeak:”How did Iceland do it, then? Nananana!”  

Well Iceland has giant geothermal resources, and also mountains, with a very wet climate. Over 80% of Icelandic electricity is generated by hydro power. Whereas Greek energy has to be fully imported. And with a collapsed currency, that would be ruinous. So there would be tremendous inflation, and the Greek central bank would have to raise interest rates very very high.

In other words, Krugman panacea is just an absurdity. Hopefully the Europeans will be able to resist the American plutocratic conspiracy, its siren songs of the mentally undeveloped, and not fall into the abyss.

***

WHEN THE USA FIGHTS FOR ITS LIFE:

A default for Greece would not mean that, as Iceland did until now, and Krugman always fail to mention, Greece would run away with all the money. Far from it. Wiping out 50% or so of the Greek debt ought to be fine. Next time the banksters will have to be more careful, or more brazenly conniving.

It is clear to me that huge banks and their bankers try to become more influential, more Too-Big-To-Fail, by lending more. That was clear with the subprime madness in the USA. Madness for the victims, crafty for the biggest bankers, the banksters.

How do plutocrats operate, when they have achieved plutocratic sustainability?  They extract a rent from the multitude. Such individuals are who, historically, the French called “rentiers“. Tellingly, the meaning of the word “renter” in English is the exact opposite (inverting meaning is a good way to confuse). Paying rent of own’s life is close to the idea of serfdom: one does not own anything, and one spends all of one’s life paying rent to the overlord. This is basically how Americans live. And then they have been imprinted to feel proud, insuring they don’t understand a thing about what ails them.

American propaganda says most Americans “own” their homes. Instead Americans actually rent their homes to banks. The average American homeowner now has 38 percent equity, down from 61 percent a decade ago. Thus in truth, American own only 24% of their housing market: they rent at most than 75%, and most of it at a totally overvalued rate. The money is sent to the friends of Obama such as the daemon Dimon, who then live in mansions, and buy the president (who loves to be bought so he can live in mansions too! Even “The Economist” has started to make fun of Obama’s luxury bed!)

Well, it’s high time to stop paying rent to the plutocracy.

As I write this, hordes of armor clad American sharp shooters are fighting on roof tops inside Kabul, killing Afghans who are stupid enough to believe American propaganda and feel they own their country. I have live access to both foreign and United States media. It was amazing how much the attack was downplayed and misleadingly represented in the media of the USA, which said things one could see were blatantly not true: non American TV showed clearly hordes of Americans fighting, contrarily to what was said in the USA, where it was falsely claimed most of the fighting was made by Afghans, and giant American helicopters turning around the battle were just sightseeing.

Well worth spending lots of money, treasure, lives, and brains on it, indeed, this little adventure in Afghanistan, designed to show that, like Carter, Obama deserved his Nobel Peace Prize, because, like Carter, he attacked Afghanistan much more. Thus the dollar has to stay both strong and weak, and the euro better disappear from sight, as its rise could mean that other countries could follow Saddam Hussein’s Iraq, and switch to the euro for oil payments.

For the same reason that switching to its own currency would be ruinous energetically for Greece, for the dollar to lose its solitary reserve currency role would be energetically ruinous for the USA. Hence it would be ruinous for Paul Krugman. The energy budget for heating and cooling the mansion in which he lives would become considerable. Let alone the fact that his sponsors would be disappointed that he did not deliver a demolished European currency. Funny how it all makes sense.  

“Indignez Vous!”

***

Patrice Ayme