Posts Tagged ‘High Finance’

California Is Sovereign, Not Europe

July 8, 2015

A sovereign state ought to be able to decide what its currency is, and provide enough to employ its citizenry. California does, not so Europe.

In 2008, bankers told the government of the USA that ATMs and all banks would shut down immediately, if the government did not provide banks with the hundreds of billions of dollars to keep money in the banks. The government  obeyed, and now the total aid to the American economy is said to be of the order of 13 trillion dollars, not far from the entire GDP of the USA. The European “welfare” states instead plunged into austerity, making sure that the value of the money of the rich would only augment, even if it meant European youth would have to immigrate to the USA to find work.

The USA talks one way, through its plutocrats, and the Main Stream Media they own. The reality is often the opposite of what they depict. Although the USA criticizes Europe for being too socialist, the truth is the opposite.

The California Republic Is So Sovereign, That It Decides Whatever Its Currency Is

The California Republic Is So Sovereign, That It Decides Whatever Its Currency Is

The fact is Europe is not socialist enough to provide its banks with money for We The People. At least, We The Greek People: from lack of liquidity, Greek banks have been closed for two weeks and counting.

What kind of a sovereign is Europe?

Knowing what sovereign means help. It comes from the Old French soverain “highest, supreme, chief,” from the quite Vulgar Latin *super-anus ” (literally, superior inferior opening of the alimentary canal; as contemporary American urban linguo would have it, on face value, “sovereign” means super bad ass). An economist from India who has long contributed to this site, Partha, has made the following cogent observation:

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pshakkottai Says, July 7, 2015:

“Hi Patrice:

Extinguishing Greek debt is equivalent to Europe being monetary sovereign which is what regarding all Europe as one country means. Greece would not be subject to austerity, wouldn’t have large debt payments and can grow. The created money will save banks and the investors in those banks. There will be no panic. At this point many banks can be nationalized. Which nation owns what is a question to be decided.

As it is Greece which needs energy will go with Russia and its own currency and will do well in a few tears. Energy was the only thing Greece was short of. This is a plus for Putin and a minus to EU.”

Well, I will not focus on Partha’s second point, where my perspective is different: Grexit, like Brexit, would mean a diminution of European sovereignty (thus a greater influence of other superpowers).

Although Britain can take care of itself, not so for Greece, thus Grexit is, de facto, an impossibility: kick Greece out, it will still be at the door (same problem with deluded England).

It’s easier to help Greece inside the EU, than outside. Moreover, Western Europe did not fight for Greece independence against the Ottomans to replace them by worse. Finally Russian methane is putting in danger Russia itself, the latest Russian numbers reveal. Solar PhotoVoltaics will make Greece energy independent: as soon as massive investments are done, existing technology allows this.

More saillant is Partha’s first point. European and World (IMF) authorities decided to led bankers escape punishment. Thus hundreds of billions of bad loans from banksters to plutocrats were reimbursed by the Greek state, itself borrowing from the so-called “institutions” (EC, ECB, IMF, etc.) AS IF this were a public utility.

In practice it meant reimbursing gangsters for their expenses. Thus, the behavior of authorities is tantamount to demonstrating that they have been captured by outlaw bankers.

Instead, a sovereign ought to have enough authority to decide what We The People are going to use as currency. Californians did not bat an eyelash, when they were told the State of California

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Some say financial rectitude is everything. False:

Look at the USA. California is, by far the largest economy in the USA. The GDP of California in 2014, pulled by technology, was $2.3 trillion. The only states in the world with a higher GDP are Britain, France, Germany and Japan (in ascending order).

However, a few years back, California, which was bankrupt, was paying its employees with pieces of paper called IOUs. There was some grumbling, yet, so great is the awe of California in the minds of its 40 million denizens, that the Californian economy ploughed, right along. One of the reasons of California’s superiority is that it takes six hours, by jet plane to cross the continent, where some decisions centers are. Far away.

By a very long shot, the American state with the best finances is Alaska, giant in territory, tiny in population. What is its economy doing? It’s shrinking:

http://blogs.wsj.com/economics/2015/07/08/alaskas-got-a-great-balance-sheet-and-a-shrinking-economy/

So much for deficit spending being the end all, be all.

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True Speak Means Deeper Considerations:

Everybody speaks of the Greek debt, but not how it originated. Everybody speaks of the Euro and Greece, but not how the German government agreed to make Greece twice richer than it really was, by deliberately converting Drachmas into Euros at twice the real rate. Surely that does not have to do with some places in Greece having the highest concentration of German luxury cars, in the world.

One is never better served, than by oneself. Papandreou, a SOCIALIST Prime Minister of Greece, was asked to help clean up after Goldman-Sachs had cooked the books of Greece to underplay the amount of deficit Greece had. As if European “authorities” did not know that Goldman-Sachs had cooked the books (I could have told them; cooking and plotting, this is what Gold Men do).

But the truth is dire: Goldman-Sachs (largest private contributor to Obama 2008 presidential campaign), had “captured”: European decision making. Many European decision makers were connected to Goldman-Sachs and its ilk. All of them probably hope to be in the good graces of Goldman-Sachs, and its ilk.

Papandreou is from one of Greece’s top three plutocratic families. So most of the aid to “Greece” was actually an aid to private bankers, many of them, not Greek. That was accompanied by such propaganda that most Europeans think that common Greeks are “splurging” (yes Greek plutocrats, ship owners, Greek church and military are splurging… with the help of northern European banks; hopefully the Trotskyist PM Tsipras will fix that next week).

Iceland did not go that route, the route of welfare for bankers: Iceland jailed its banksters. France, instead, judged and jailed a trader. Wall Street was delighted to find its own French trader to accuse, judge and condemn. So two traders, both French were accused of everything, and the City of London also found some foreign born trader to accuse.

So what happened to the Peoples’ Sovereignty? It’s over: High Finance has captured not just democracy, but the mind of We The People, and is the real sovereign. At least, more so in Europe, than in California. Even though California is the America, of America.

Something got to give. (That may be why Tsipras caused a crisis, knowing full well only a crisis would provide the needed energy.)

Next we will study a bit “Germans and Their Lies” (to steal Luther’s title about Jews). I am happy to report that dear Krugman is finally catching up on that subject.

You want to change the world? Change the mood.

Patrice Ayme’

 

 

 

Bank Worship

May 20, 2015

BANK WORSHIP IS ALL WHAT MIGHTY ECONOMISTS KNOW:

I have fiercely condemned, for a decade, the policy of reducing the economy to interest rates. As I have said, and will say again below, this is identical to making (private) bankers into gods. “Liberal” (meaning “left” in the USA) economists love to say that low interest rates is all the socialism we need. Nobel laureate Paul Krugman is trying to make fun of the serious arguments found in scholarly critique of his “interest rate idolatry”. Says Paul:

I’m With Stupid.

No doubt, dear Paul, no doubt. Being stupid is more profitable, quite often, than being smart and moral.

Banksters Steal The World, And Prosper, Ever More

Banksters Steal The World, And Prosper, Ever More

Via FT Alphaville, James Montier has an interesting piece castigating economists for their “interest rate idolatry”, their belief that central bank-set interest rates matter a lot for the economy…” Montier writes down notions I used to brandish at the beginning of the Obama presidency. I stopped after I realized everybody (Very Serious People, Academia, High Finance, Politicians, Media) was on the con. That meant, in practice that, if one talked about it too much one was viewed as mentally imbalanced (just as pointing out that the Qur’an prescribes terrorism may one looks as a racist, according to the Politically Correct insects). Here is part of Montier’s well-thought essay:

A wider idolatry: the greatest con ever perpetuated

Lest you think I am being unduly harsh on the world’s poor central bankers, let me turn to the wider idolatry of interest rates that seems to characterise the world in which we live. There seems to be a perception that central bankers are gods (or at the very least minor deities in some twisted economic pantheon). Coupled with this deification of central bankers is a faith that interest rates are a panacea.

Whatever the problem, interest rates can solve it. Inflation too high, simply raise interest rates. Economy too weak, then lower interest rates. A bubble bursts, then slash interest rates, etc., etc. John Kenneth Galbraith poetically described this belief as “…our most prestigious form of fraud, our most elegant escape from reality… The difficulty is that this highly plausible, wholly agreeable process exists only in well-established economic belief and not in real life.”

This obsession with interest rates as a cure-all rests on some dubious views about the way the world works.”

Montier points out that the fundamental official argument for lowering interest rates down to zero is flawed: …”firms generally rely on internal financing to fund investment, rather than borrowing – witness Exhibit 6. Over 100% of gross investment is financed by internal funds.”

The obsession with interest rates has meant, in practice, that so-called liberal, self-described “progressive”, friends of “We The People” economists, have prescribed, implicitly, to lower taxes on the hyper-rich as much as possible. So they masquerade as left-wing, but, in truth, they are plutophiles. This is an old method, and why Polar Bears are white, instead of brown or black as their ancestors were. Montier:

“Just in case you were wondering about the much-lauded ability of the central bank to create inflation via helicopter drops of cash (or its modern-day equivalent), this is actually a form of fiscal policy, not monetary policy. As I noted above, monetary policy alters the distribution of net worth while fiscal policy alters the levels of net worth. Because helicopter drops effectively give everyone a boost of cash, this is clearly a change in net worth and thus is likely to be helpful in stimulating demand.

As you may have gathered from the preceding paragraph, the good news is that there is an alternative to monetary policy, and that is fiscal policy. These days fiscal policy is deeply out of vogue amongst policymakers and politicians. However, it has a much more direct link to growth than any of the channels suggested for monetary policy – it is part of the construction of GDP, and has a clear impact upon incomes.”

Krugman made a very feeble defense, which mostly consisted, weirdly, but tellingly enough, to laud Lawrence Summers, one of the architect of the dismantlement of the financial regulations under Clinton, to create a class of hyper-rich financiers. To his credit, Krugman published my comment:

In the USA, houses are started massively all the times. It’s a mark of unsustainability (presumably flimsy housing is replaced). Reducing the entire economy to this, is imbalanced. Why not consider infrastructure starts? Research? Health?

The fundamental question is: what is an economic activity which is profitable for the society?

The conventional answer is that banks know best. As the banks’ lending goes up as interest rates go down, bringing the latter down, improves the economy, say banks’ friends.

Let’s call that BANK WORSHIP.

Bank worship has enabled big banks’ heads and associated high financiers they collaborate with, to be so powerful and dishonest, that they changed the hearts & minds of all the power that be in society.

The latest case is the French Societe Generale: the police chief in charge of an inquiry on an eight billion dollar fraud therein, now admits, years later, that she was manipulated by the bank (a lower level employee, Jerome Kerviel, was sued, chased down, and condemned severely, although he claims he acted under orders). The fraud was reimbursed by taxpayers. This means that Societe Generale bosses, just in this particular case, of this particular fraud, stole around 50 dollars to each French citizens. Don’t worry for them: the thieves live big. An even bigger picture is that, in the leading countries, big bankers are banksters, and they corrupted institutions of the Republic (including politics, government, justice and police) thoroughly.

The problem is the same in Anglo-America: time after time, giant frauds of the biggest banks are exposed, and they are condemned to fines. In the end, a bank-too-big-to-fail condemned to a fine means nothing: in the worst possible cases, it’s tax payers who pay. It is the case where the criminals’ punishment is to make the victims suffer.

The latest such case is the LIBOR “punishment”, proclaimed today. In it, big banks in London manipulated the world’s leading interest rate (they call that the “market”). You would think that, after stealing billions the heads of banks such as JP Morgan would go to jail. No. Taxpayers go to jail.

Zero Interest Rates, To Serve High Finance Plutocracy:

Another problem is that zero interest rates have proven devastating for small savers, while providing the banks and their accomplices with quasi-unlimited funds for playing with each other the derivatives’ market, something that is not a real economic activity, except by making the richest ever richer.

One lends to the rich. By making lending ever easier, government policy has made the rich ever richer.

Correct economic activity would consist in the government encouraging activities which are profitable to the people at large, very long term.

The “market” is driven with what bankers think is profitable, short term.

Conventional wisdom by the economists in power is that we can trust the bankers to encourage the economic activity most suitable to the “market”, hence society.

Governments were told by the economists in power to make the job of bankers easier, to make for a better economy, hence better society. Trust bankers, give them all the lending capability, hence all the power they want, and We The People will become richer.

Thus the general strategy of bank worship assumes a trait that is true: a banker is a government official. A banker is a non-elected, uncontrolled government official, with unlimited funds, and inexistent oversight by the People’s representatives.

Bankers control the market, which controls the economy, which control society. Is that the society we want? Do we want to be controlled, financed, by an oligarchy of non-elected little Big Brothers who decide what activities the society will engage in?

Bankers are little Big Brothers who are free to finance the high financial class they belong to, as much as they want. That’s why derivative trading is more than ten times larger than real trade, worldwide. This is also why half of the world’s money is in Dark Pools. And so on.

The cause of this nightmarish world is bank worship. Bank worship is very smart for the Big Bankers. Krugman is NOT with stupid, as he disingenuously claim. He is with the winning crowd. To go interact with people such as Paul Krugman and Joe Stiglitz, the fact is, one needs to be seriously independently wealthy (then one can become a “student”, meaning a future co-conspirator, or mingle at parties).

It is very stupid for the rest of us to have become adulators of bank worship. Bank worship made society subject to a dictatorial oligarchy operating in the shadows.

What happened to the Enlightenment? It seems to have sunk in “Dark Pools”.

Patrice Ayme’

High Finance Mafia’s Ultimatum to Greece

February 17, 2015

Moods rule the world. When the mood was tolerant upon making fortunes from overseas slavery, fortunes were made in Europe and the USA.

George Washington inherited ten slaves at the age of ten, when his dad passed away. When he died he and his wife had hundreds of slaves. Washington spent a last few weeks of his life making great efforts to catch a slave of his wife, the 22 year old Ms. Judge, who had escaped to the north. Washington never freed one slave, in spite of the huge pressure from his friend Lafayette.

Lafayette to whom, after all, Washington owed his presidency: Lafayette persuaded Louis XVI to go to all-out war to create the USA; on the way, he disobeyed the King’s orders, and the monarch sent him to prison.

Enough Games With High Finance, Time For War

Enough Games With High Finance, Time For War

At Thermopylae, 300 Spartans blocked an army of several hundred thousand savage slaves of plutocracy for days, before being literally stabbed in the back. However, the Spartan delaying action allowed the Athenians to evacuate Athens and prepare for the battle of Salamis, where the giant Persian fleet (composed in great part of captive nations), was sent to the bottom of the sea.

That was in 480 BCE. A time when the Greek invented, and defended a new civilization, Direct Democracy. That time is with us again. The despicable suspects of the Eurogroup are the new savages. They have to be fought, and for that, the mood has to change. Enough tolerance for High Finance.

Lafayette was a mood changer. Later, given the order to fire on We The People, as commander of the National Guard, he refused, and made the Revolution of 1789 possible.

Slavery was a mood. A satanic mood.

What are today’s satanic moods?

Moods depend upon moods. Putin’s mood depends upon the fact he has seen Western plutocrats getting away with murder and ridiculous assertions.

The mood, in the world, is that those who create, and get to play with, money, rule the universe.

Unbelievably, the “Eurogroup” (all the finance ministers of the governments of the Eurozone) sent Greece an ultimatum.

“The Greek authorities committed to ensure appropriate primary fiscal surpluses and financing in order to guarantee debt sustainability in line with the targets agreed in the November 2012 Eurogroup statement. Moreover, any new measures should be funded, and not endanger financial stability.”

As Paul Krugman puts it: “Translation (if you look back at that Eurogroup statement): no give whatsoever on the primary surplus of 4.5 percent of GDP.

There was absolutely no way Tsipras and company could sign on to such a statement, which makes you wonder what the Eurogroup ministers think they’re doing.”

Krugman is right on that one.

What the Eurogroup ministers are thinking is that, if they want their careers and retirements to advance nicely, they better abide by the mood of High Finance.

Varoufakis replied with: ”No Time For Games In Europe.”

He starts this way: “ATHENS — I am writing this piece on the margins of a crucial negotiation with my country’s creditors — a negotiation the result of which may mark a generation, and even prove a turning point for Europe’s unfolding experiment with monetary union.

Game theorists analyze negotiations as if they were split-a-pie games involving selfish players. Because I spent many years during my previous life as an academic researching game theory, some commentators rushed to presume that as Greece’s new finance minister I was busily devising bluffs, stratagems and outside options, struggling to improve upon a weak hand.

Nothing could be further from the truth.

If anything, my game-theory background convinced me that it would be pure folly to think of the current deliberations between Greece and our partners as a bargaining game to be won or lost via bluffs and tactical subterfuge.

The trouble with game theory, as I used to tell my students, is that it takes for granted the players’ motives. In poker or blackjack this assumption is unproblematic. But in the current deliberations between our European partners and Greece’s new government, the whole point is to forge new motives. To fashion a fresh mind-set that transcends national divides, dissolves the creditor-debtor distinction in favor of a pan-European perspective, and places the common European good above petty politics, dogma that proves toxic if universalized, and an us-versus-them mind-set.”

I sent this letter to Varoufakis (the New York Times published an abridge version):

Dear Mr. Varoufakis, Finance Minister of Greece. Civilization is not a game, indeed. Game theory assumes selfish players (as you, an academic with a career in Game Theory says). Civilization is not about selfish players exclusively. High Finance is, though.

Civilization is just the amplification of human nature as it is meant to be, at its best, inside a tribe. However the peaceful life of a tribe depends upon the fundament of humanity, and that is love.

Without love, no human baby would ever survive more than a few days. We are born out of love. So is civilization. Sustainable civilization, that is.

In the past century, Germany had a pattern of atrocities that rested on the meta-principle of obeying orders from authority, no matter what.

That is in Kant, as Eichmann pointed out for his “defense”. Anything else was “Schuld” (debt, fault).

So Germany had a pattern of finding “right” only what fit its leadership. So far the banking crisis in Europe has brought Germany 40 billion Euros in profits it would not otherwise have made (as investors flocked to German sovereign debt). Something similar has happened with France (making lots of money from the crisis).

What authorities are German authorities now evoking, to act as robots anxious to keep Greece as a “debt colony”?

Obviously those who escaped after extending the loans that could not be repaid, private bankers from such nations as Britain, France and Germany.

The world is still under the order of High Finance. For High Finance, Greece is an example that needs to be made. For those who want to break High Finance, the new Greek government shows the way.

Because “right” has to be defined according to the Greek people, not a world of High Finance, which has long gone completely mad.

To check for madness, see the $800 trillions of financial “derivatives”, more than ten times world GDP. Contemplate also France, which has four banks that, should any of them fail, would bring down the world financial system.

You suggest to target “large-scale corruption” instead of the Greek middle-class with its privately owned pharmacies. However, the largest-scale corruption in this world is High Finance itself, the authorities German authorities abide to.

Greece saw worse, at Thermopylae and Salamis. Sometimes, it is right to fight, just because it’s right, no matter what.

If one is to die, one better die, standing up in defense of the right principles.

Patrice Ayme’