Posts Tagged ‘Merkel’

Outlaw Islamist Face Coverings

December 9, 2016

Islam is founded first on the Qur’an the word of God, as related by Archangel Gabriel to the Messenger, Muhammad. Islam is deeply anti-woman. Don’t insult me, you the ignorant ones: read the Qur’an, or then plenty of quotes from the Qur’an, in context, such as “Islam’s Shame: Lifting the Veil of Tears”. (Astoundingly, Muhammad’s prescriptions for girls and women, was progressive in Seventh Century central Arabia.)

Niqab in Arabic: نِقاب‎‎ niqāb , means “veil”.

The French Republic (Parliament, Senate, President) banned the integral Niqab (= Burqa, Hijab), on the ground of public safety (face coverings are unlawful in France, except for excellent secular reasons, such as bike riding, skiing, etc.) Islamist organizations went, screaming incoherently, to the French Constitutional Court, which approved the law. Other European countries are following France. Angela Merkel just suggested to ban the niqab.

The Economist, a plutocratic newspaper, plutocratically owned, complete with tax avoidance through Luxembourg, and other tax havens, pontificated that banning the niqab was a “mistake”. I agree that The Economist should say that: if you are a plutocratic entity or person, anything that decreases the rule of Pluto, decreases the plutocracy, and thus is an act adverse to the owners of The Economist, and, thus to the little scribes at The Economist who earn their lives by pleasing their wealthy masters. 

Covering Women With Drapse As If They Were Garbage Is A Terrible Thing For Children. It Tells Children A Woman's Face Is A Terrible Thing, & It Prevents Children To Learn The First Language Of Man, Facial Expression

Covering Women With Black Junk As If They Were Garbage Is A Terrible Thing, and Message, For Children. It Tells Children A Woman’s Face Is A Terrible Thing, & It Deprives Children From Learning The First Language Of Man, Facial Expression

Not only are faceless women terrible for children. A problem with Islam is that stupid women brought up stupid children, making for stupid adults we now have to try to make intelligent, a hopeless tasks, when the networks and synapses are plain not there…

What is The Economist going to suggest next? That those who want to be treated as slaves in public, chains, whips and al. be allowed to do so? That we conduct public auctions to sell people if some want to take part in these? Just because some people feel so “modest” that they don’t want to be free, anymore

Literal Islam as found in the Qur’an is sexist (women are worth half of men in court, etc.) Aisha, who married the middle age Prophet, when she was just six insisted that the version of the Qur’an which the Third Caliph, Uthman, imposed was sexist, and not at all what her husband, the Messenger of God had said the message of God was. From what we know of the life of Muhammad, she was right (she herself had great freedom, even by contemporary modern standards).

Uthman imposed a Qur’an which was so controversial, a Muslim religious war started, which is still going on, and explains why Islam is divided in 100 Islams keen to kill each other.

Uthman’s Qur’an, the one we have now, is actually full of lethal orders (read the Qur’an or:

Uthman’s Qur’an has to be outlawed, just as the Aztec or the Celtic religions were, and for the same overall reason: calls to murder of various categories of people cannot be tolerated. The god in Uthman’s Quran orders to kill unbelievers, apostates, pagans, homosexuals, those who disagree with “Allah” or his “Messengers”, and, in remote places of the book, even Christians and Jews (the Hadith says all Jews have to be killed so that the Last Judgment can happen).

The calls to murder of Literal Islam are insults and attacks against human ethology (that is, normal human behavior).

Not only the Qur’an says nothing about women being covered like pestilential garbage, but forbidding the showing of human female faces was explicitly forbidden by Muhammad!

Some Hadith clearly state that women must not veil (niqab) their face and hands/ It was taught by the Prophet Muhammad himself to his companion Abu Bakr’s daughter Asma’ bint Abu Bakr:

“O Asma’, when a woman reaches the age of puberty, nothing should be seen of her except for this and this; the hands and the face.” [ Prophet Muhammad, (Narrated by Sunan Abu Dawood]

Another Hadith which forbids (haraam) for women to veil (niqab) their face during Hajj and Umrah that was taught by the Prophet himself in accordance to his Sunnah: “It is forbidden for a woman who is in the state of Ihram to cover her face.”

— Prophet Muhammad, (Narrated by Sahih al-Bukhari)

So why has it become so important for the proponent of today’s Literal Islam? Because veiling the face of women is an attack against human ethology, thus civilization, and advantages the demonic side. Indeed, in normal human behavior, there is little difference between males and females (that’s called low sexual dimorphism).

By pretending that there is a huge difference between human females and males, a religious difference, the partisans of Literal Islam, including The Economist, are asserting that human nature is wrong, and that there is a religious reason for violating said nature.

Let me rephrase this slowly: partisans of Literal Islam are making a religion of violating human nature.

In a way, it makes sense: the dozens of categories of people which the Qur’an orders to murder occur naturally. Paganism, homosexuality, not believing in Islam, or not believing in Islam anymore, and all sorts of religions, some much older than Islam by dozens of centuries, all occur naturally. They are part of what humanity naturally is, or gravitates towards. Literal Islam orders to kill them all: that’s an extreme violation of human ethology. The fundamentals of human ethology are indeed love, care and solidarity (say, against wild beasts).

Murdering other people because of what they believe is not just un-natural to humans, it is an attack against the need, for humans, to think better. To think better, one has to tolerate different beliefs, and one has to tolerate debating these beliefs, that means, one has to tolerate, and even enjoy debate between contradictory beliefs.

However the dictators that Literal Islam enables with its Fascist Principle want to violate human nature. O YE WHO BELIEVE! Obey Allah, and obey the messenger and OBEY THOSE OF YOU WHO ARE IN POWER.” (Qur’an’s fascist principle, Sura 4; verse 59)

Civilization is itself a balance act between freedom, human creativity, and the sacrifices and duties that living in cities constrain us to enjoy.

Literal Islam is financed by dictators and plutocrats. They want to violate human nature. But they know they have to start small. So they start by covering women’s faces, as if women had to be modest, ashamed of themselves, and objects of revulsion so great, they have to be hidden.

Covering female faces is a foot in the door, or rather a foot in the face of civilization and the face of woman.

It looks innocent, to the unintelligent, but it is a Trojan horse against humanity.

Literal Islam has rendered what used to be the world’s richest area, the cradle of civilization, into one of the poorest, most conflict laden zones, where civilization goes backwards.

Let’s start by refusing its Trojan horses. I have called to outlaw Literal Islam completely: anybody preaching it, or defending it, should be condemned under anti-hatred laws.

All religions justify a particular self-elected elite’s evil ways. This is why 99.9% of religions are now outlawed. Civilizational progress is pretty much identical with outlawing obsolete systems of thought, including evil religions tied to ways that progress came to consider evil.

And why are so many in the West pushing on us this anti-human, anti-civilizational religion? Precisely because that is what it does: the Main Stream Media in the West are held by plutocrats who fear both civilization, and its bedrock, humanity.

Patrice Ayme’

P/S: 1) In other news, Hillary Clinton condemned “Fake News”. That’s amusing, as her and Obama claimed for years, that the companies which profited from TARP reimbursed all of it. Right. But also FAKE NEWS: the companies, mostly banks and their ilk, got much more money, from Quantitative Easing, courtesy of the Federal Reserve, another branch of the government. Those recipients of QE then used QE money to pay TARP. Fake news, yes, and important ones (only me has ever noticed that little detail, it seems…)

2) The South Korean president. Park, was impeached. Daughter of a Korean dictator, she was into Shamanism and corruption. When that came out, her popularity, once towering, collapsed to less than 5%… After the French president Hollande announced he will not be candidate to his succession, and Renzi, the Italian PM, a piece of establishment trash, was thrown out.

Euroskepticism’s Awakens Not

January 17, 2016

I have said it many times before, I will say it many times again: the Europe Union was set-up to avoid war. This is what Euroskeptics who claim to love Europe should be reminded of. Especially the British.

Of course there won’t be war, or even disagreements, between the French republic, and Britain. There is not the problem. The problem is in Eastern Europe.

A popular Polish magazine published a cover portraying five leading EU politicians – led by the German chancellor, Frau Angela Merkel – in Nazi uniforms beneath the headline “These People Want to Control Poland Again”.

Nice Uniforms. Poland & Hitler Became Allies In 1934. Poland Turned to France ONLY in 1939, After Spain Fell, and So Did Britain Agree to Follow France Against Hitler, After Poland Did, In 1939. Too Late.

Nice Uniforms. Poland & Hitler Became Allies In 1934. Poland Turned to France ONLY in 1939, After Spain Fell, and So Did Britain Agree to Follow France Against Hitler, After Poland Did, In 1939. Too Late.

The image on the front of the weekly Wprost showed Merkel, the European commission president, Jean-Claude Juncker, (Socialist, SPD) European parliament president Martin Schulz, EU commissioner Günther Oettinger, and Guy Verhofstadt, the former Belgian prime minister, leaning over a map, from a wartime photograph of Adolf Hitler and his generals. (By now there should be more pictures of Merkel in Nazi uniform than of Kanzler Adolf Hitler himself!)

Germany is paying vast amounts of money to support the sustained and astounding expansion of the Polish economy since 2008. Some Germans of influence are starting to grumble (and they should).

Verhofstadt, who leads the liberal Alde group in the European Parliament, called the image  “outrageous”, adding that the EU was a “community of values” and that it was “the duty of all of us – commissioners, chancellors or not, to raise our voice when a government is endangering these principles and attacking democratic institutions”.

The Germans Schulz and Oettinger, have been critical of the conservative, severely Catholic Law and Justice (PiS) party, in power since October. It strengthened government control over the constitutional court, civil service and Polish public radio and television. Other Europeans are not amused. This problem arose with Austria’s flirting with the extreme right and Hungary’s Orban before. Both became non-sequiturs (Orban took measures many other European states adopted since, so Orban is not that bad).

The Francophone Martin Schulz described the Polish government’s actions as a “dangerous Putinisation of European politics”, while Oettinger proposed that Poland should be put under rule of law supervision, a (new) legislation designed to deal with “systemic threats” to EU values.

Meanwhile the war against Islam goes on (yes, because that’s what it is, sorry to break the news…). The Islamists attacked in Istanbul, Djakarta, Ouagadougou. There, in the Burkina Fasso capital, two famous Swiss humanitarians were killed by the local subsidiary of Al Qaeda (the USA announced in the past, erroneously it turns out, that they had killed its leader, who had made an attack on an Algerian refinery… Among other things).

This shows, once again, that humanitarianism, while not being exactly nothing, is clearly minor relative to militarism: humanitarianism is possible only when an empire has been set-up. Humanitarianism is possible only when a modicum of law already rules.

The Islamist State lost 20% of its territory in Syria in a year. The Islamist State is losing ground to Kurdish forces. However the Islamist State still controls 60% of Syrian oil production.

The price of a woman on the slave market of the Islamist State was 150 Euros. Holy Islamist script sanctifies slavery, alleluia. Meanwhile, the price of oil is the lowest in 12 years.

If we want humanitarianism in Europe, we need an empire first. A republican, democratic empire. Extreme, aggressive localization, fragmentation, nationalism, closing of the borders, competitive devaluations a la Friedman-Krugman, can only lead to war.

The latest Star War movie, episode VII, “The Force Awakens” does not hit on that idea. Instead it represents a “New Order” rising to destroy “The Republic”. This was indeed the situation between the “New Order” of the Nazis and the Italian fascists, against the FRENCH REPUBLIC, in the 1930s. But, at the time, the fascists had the help of a deus ex machine, the Anglo-Saxon plutocracy. It’s only the latter, and the influence it exerted on the British and American governments, making their behaviors at best ambiguous (Britain, Belgium), if not downright treacherous (USA).

Many Euroskeptics affect to present the meek and weak and inchoating European Union Federal structures as a “New Order” full of strength and evil. But the exact opposite is true.

When the Huns in the Fourth Century and the Mongols, a millennium later, bore onto Europe, it is the division, confusion, multiplicity and weakness of the European political structures which made their assaults possible.

Earlier the German invasions into the Roman empire (fascist, but peaceful and rich inside) had also be made possible by confusion and weakness. Especially military weakness. The latter was made possible by a lack of means consecutive to plutocratization (the hyper rich refused to pay taxes, hoping that, somehow, weaker official armies would still be able to weaken the enemy enough to make their own private armies able to control the situation…).

We are in a similar situation: a raid with a 15,000 men armored thrust by the French, and, or the Americans, would get rid of the Islamist State capital of Raqqa.

But, of course, the real problem is Riyadh, the Saudi capital. Why should the West tolerate those outrageous deviants? Because we are led by deviants ourselves. Lesser deviants, maybe, but still deviant.

So what of this Star Wars’ The Force Awakens’? Well, I did not fall asleep, thanks to the special effects, which are better than ever (as they should). But, contrarily to the rave reviews I read, the story was boring, an already swallowed, now regurgitated food, we had been served before. Contrarily to the (much decried) “prequels” it did not break any philosophical new ground. The Islamist State writes much better, much more innovative scripts, which dig much deeper in the human condition.

What should France and Germany do? Keep on unifying with each other, and forget the noise of those out to distract them from the imperial task at hand…

Patrice Ayme’



Don’t Feed the Bear: All Putin Needs Is Comfy War

February 11, 2015


The French and German leaders are meeting again with Putin to make him recover reason: it reminds me of Munich, 1938, when the French and British leaders were trying to make Hitler reasonable.

France and Germany together have a slightly larger population than Russia, but three and a half time the GDP. (By the way, what happened to Britain? Well London is full of Russian plutocrats and banking institutions keen to make Assad and Putin possible; hence the British discretion.)

An Ukrainian in the street interviewed by German TV said it was out of the question to give territory to Putin: if one gives him a finger, he will take the entire arm.

Putin Wants "The Big Country" Back, & Its Prospect of Endless War

Putin Wants “The Big Country” Back, & Its Prospect of Endless War

In the West, cowardly pacifists say: do not provoke Putin, do as he says, he has nukes and will attack, if lethal defensive weapons are sent to Ukraine. That makes them collaborators of evil.

This is rather curious that pacifists use a fundamentally bellicose argument: don’t try to stop the mad man, he may get offended, and kill everybody.

Indeed, a mad man’s madness with criminal insanity overtones, makes the case for the greatest severity. So the essence of the pacifist whining call for the greatest severity to be applied on Putin, right away.

Because what are pacifists saying? Putin is the most dangerous Leader, ever. So let’s be nice to him.

It is now known that, had the USA and Britain be as firm as France against Hitler in the 1930s, Hitler’s own generals would have made a coup against him.

But, instead, Britain and the USA made concession after concession to Hitler. So Hitler flew from success to success, undermining any mood critical of him. How can one criticize a winner? Clearly, it was unpatriotic. It made the top German generals and marshals who thought that the dictator was completely crazy, and a danger to Germany look like traitors.

Something similar is developing with Putin. As he occupied and annexed territory in Georgia, Moldavia, and now Ukraine, and the West proved incapable to stop him, he looks ever more like a winner. Putin’s avowed goal is to bring back what he calls the “New Russia” (half of Ukraine) and the “Big Country” (the USSR). Pacifists say that the fundamental strategic interest of Russia is at play, so . di, Putin flies from success to success.

So where does Putin stop? This is what pacifists have to know, if they do not want to be simple collaborators of evil.

But of course, they don’t know.

Should we then keep our fingers cross, and hope for the best?


Because Putin killed only 100,000 in Chechnya? Because Catherine the Great stopped 80 kilometers from Berlin? Not a safe bet: Catherine did not have nukes.

Behaving now as nothing will stop Putin, but for the application of overwhelming force is not safe, but it is the safest strategy. If Putin is completely crazy, overwhelming force won’t stop him. But nothing will anyway, especially after he has fully armed himself, as he is presently doing, Hitler-like.

If Putin is not completely crazy, the threat of overwhelming force will stop him.

Not trying to stop him, if he is not completely crazy, will certainly make Putin completely crazy. Be it completely crazy with greed.

As I tried to explain, Putin, like Hitler before him, and Napoleon, and many (not all) conquerors before him, has discovered that war unites the People behind him, and make all the People think as one, and the name of that one, is Putin. This is what I call the fascist instinct. It is crucial to enable a (relatively) weak primate, far from any tree, to conquer the Savannah and Steppe, heretofore ruled by formidable predators.

Putin’s rule has been a disaster. Thus he needs to activate the fascist instinct in the Russian People. Thus he needs war.

Thus, if pacifists give him Ukraine, Putin will be deeply unhappy: he did not want Ukraine. He wanted war. War gives him fascism, thus the ability to rule. In this light, the reign of Louis XIV of France can be better understood.

After millions of Protestants had left France, and France has lost considerable territory in continuous wars, Louis XIV of France, the self-described “Sun-King” (“Roi-Soleil”) feebly bleated that his advisers had poorly advised him about Protestants: it had not been a good idea to have harassed, despoiled, and submit them to “Dragonades” (occupation of Protestant households by elite troops called “Dragons”).

However, Louis XIV, a dedicated fascist, hater of the “Republic”, lied (as fascists are wont to). Louis XIV had continual wars, and particularly against innocent civilians, because he needed continual wars, because that justified his fascist, personal rule.

Louis XIV was not afraid of war, he was afraid of peace, because peace meant the Parliament may want to re-establish the Republic again (which is what the “Fronde” was all about).

Napoleon faithfully executed the same scheme (because De Sade, one of the Revolution’s principals, had criticized the aggressive, expansionist war making, Napoleon put him in a mental asylum).

The same exact mechanism caused the First World War, with the Kaiser playing the role of Louis XIV. The Jews played the role of the Protestants under Louis XIV.

Soon Stalin would institute continual internal war, to justify the dictatorship of the Politburo which he headed. Hitler repeated the method.

So are we condemned to repeat history? Not so, if we learn how it works.

Putin got his 85% approval rating, from his activation of the fascist instinct.

However, the very latest polls show that the Russian People is getting wary of Putin’s protest of innocence about the war: 70 percent stated that Russia was assisting the breakaway rebels of Donetsk and Luhansk. Good. However, the same polling show that now most Russians think that establishing “Novorossia” (“New Russia”) is a good idea.

In other words, Russians are turning t the Dark Side: they know their dictator is making war in a foreign nation, but they are starting to approve the invasion of that nation, and its annexation.


Same story as what happened in the German collective psyche after Hitler annexed the Republic of Austria. Then the Germans became favorable to other annexations (Czechoslovakia, some Baltic states, much of Poland, etc.) Because Hitler had proven to be a winner.

As far as the Russians are concerned, Putin is a winner, so he has got to be right. Not right on the facts, but morally right: Ukraine, like Georgia or Moldova, is Russian property.

Want to turn Putin into a loser? Do it on the battlefield. And do like him: play dirty, send efficient weapons stealthily first.


Pacifist Disease: Kneeling To Evil

February 6, 2015

Merkel and Hollande went together to see the president of Ukraine and the Russian dictator, in a last ditch effort before Putin sends his tanks across southern Ukraine (after a barrage of Russian rockets killed scores of civilians in the large Ukrainian town of Mariopol).

The meeting with Putin was icy. Defeated by the Russians, the Ukrainians have to negotiate. Tens of thousands of Ukrainian refugees are evacuating. Putting requested a meeting with Merkel and Hollande alone. He wants the large city of Mariopol (so that, in a few months, he can dash towards Crimea, and then Odessa). Putin also wants twice the territory his agents control in Ukraine. We have seen this sort of methods in Munich, 1938.

OK, let’s be the devil’s advocate. Let’s talk in the name of peace. What does peace fear? War. The president of France just said there was war in Ukraine (the definition of a war is 1,000 killed; more than 6,000 were killed in the war in Ukraine, so far).

What Putin Wants: Russia, the Big Country. World War Would Be Even Better

What Putin Wants: Russia, the Big Country. World War Would Be Even Better

“Pacifists” pontificate that no French, German or American, should die for Ukraine: Putin wants Ukraine, let him have it. Who cares about Ukraine? Sounds good, elevated. Peace will follow. If it sounds good, peace ought to follow: that’s pacifying logic. Logic done with a pacifier.

Then “pacifists” preen, deeply self-satisfied with their own goodness, friendliness, generosity, and general standing as higher human beings. They look themselves in the mirror, they love what they see. They call themselves progressive, and view others as imperialists, hopeless colonialists, violent serial offenders. If only the rest of humanity could be so detached, as they, the pacifists, themselves are.

But then the job of the philosophers is to be critical. It is never to opt for the easy way out. Philosophers never follow the herd, stampeding towards happiness. Philosophers ask: why does Putin want Ukraine so much? Putin says Ukraine was always Russian, that Russia owned all of Ukraine, or, at least, half of Ukraine, etc.

These are enormous lies: Ukraine was highly civilized, a millennium ago, and owned Crimea then, when Moscow was not even on any map. Moscow literally did not exist then. Descendants of Ukrainians and Vikings had not gone that far to the east.

In truth, it’s the other way around: demographically, civilizationally, linguistically, historically Russia is a colony of Ukraine. Russia is a poorly educated brat.

And not just that: Russia is, arguably, a degenerate form. Ukraine resisted the Mongols, and got defeated and devastated by them. Moscow then made peace, and collaborated, with the Mongols, and became like them. Just look at Putin, and in particular his slanted eyes: obviously his ancestors were in the sack with Mongols. Maybe Putin is so anxious to show himself a Russian patriot, because, like Lenin, he has slanted eyes? Maybe he wants to show that he is of pure, Russian, white essence?

This mock racist argument is not funny anymore when Putin’s most savage behavior is contemplated. Annexing territory is exactly what Mongols did.

If pacifists want to give Ukraine to Putin, they have to answer this: why?

Just because he wants it? So when the next Mafioso comes along and wants to kill ten million people, just because he wants it, they are going to agree?

At this point, our friends the pacifists look rather criminal. Let’s press them on. Let’s ask: ‘Does Putin wants all this property for the same reason as Hitler wanted the property of the Jews in 1938?”

What, say our friends the pacifists: history is not their forte. Indeed, Hitler attacked the Jews because his massive militarization program had impoverished Germany. He needed wealth and to look victorious.

So Putin is stealing Ukraine, because he wants to look like the one who brings, gifts, the one who augments. This is so true, Octavian, Caesar grand nephew, and heir, was named “Augustus”, the one who augments.

Putin augmented Russia, already Earth’s largest country, by a very long shot, by annexing Crimea. That made him “Augustus”. And 85% Russians now love him, because Putin has augmented their tiny minds. In part thanks to relentless propaganda.

We have seen that before, when all Germans loved Hitler, the more he used his propaganda on them. And even after millions of Germans had been killed, thanks to Hitler.

To be loved more, maybe Putin should kill more people, and even more Russians.

What else? Putin is remaking his entire military, all the way to nuclear forces, as if he knew world war was coming. It cost a gigantic amount of resources. So Russia is getting impoverished, and Putin has to look as the “Augmenter” the hard way: through massive theft.

This is exactly the politico-psychological process Hitler went through.

“Pacifists” said: let Hitler have the Jews, that’s what he wants. No French, British, let alone American, should die for Jews.

Hitler wanted the Austrian Republic? Let him have it. After all, Austria spoke German. Austrian Jews such as Freud could always go live in England. Less fortunate ones could go to Italy, or France.

So hear this, pacifists: there was a matter of principle: can we let the leader of a great nation use massive lethal force to steal massive property? Can we tolerate crimes against humanity?

And think a bit, pacifists: if stealing other countries alleviate the pain the attacking dictator would otherwise suffer, where does it stop?

Putin is the first to annex territory in Eurasia, since Hitler.

Some warn: don’t make Putin mad, he is Hitler, with nukes. Those who give the mad man a reason to attack are maniacs, culprit of war mongering.

Such pacifists are not really even arguing they are pacifists, just that they are cowards, and that cowardice is a most admirable strategy. Those peace mongers are not just dumb and self-satisfied, as usual pacifists are, but they aggravate their case by being cowardly, to the point of unreason.

Not provoking a mad man is no strategy. The question is why is the mad man becoming ever more mad? As I said above, it’s because the economy of his militarizing dictatorship is going down. He has to militarize, to create the impression that Russia, by far the largest country on Earth, is under attack: that activates the fascist reflex. All the Russian baboons then gather behind their chief, and do exactly what their chief is telling them to do. This insures the power of the chief.

Putin is sick, he has to be cured.

Question: why was Putin not acting like Hitler before? Because, before, he was afraid. Afraid of the power of the West. Now he is not. (I explained it had to do with not eliminating the criminal Assad personally; that too, let to the rise of extreme Islam fanatics; but there are other factors, such as a diminution of the military capability of the West, greatly caused by USA stealth planes not working, and Europeans doing austerity on defense… Except for neutral Sweden, which noticed Putin’s madness).

Thus, to make Putin stop, one has to scare him.

Pacifism means to look scary. The Romans put it this way: Si Vis Pacem, Para Bellum.

Some will say it’s too scary to try to scare Putin.


Because, because, because, well, Putin behaves like Hitler, whine the “pacifists”.

Then the question is this: did appeasers not learn history? Trying to make friends with evil does not just endanger peace, it’s a crime.


Israel is a case in many ways opposite to Russia. Israel is tiny, Russia 70% larger than the three largest countries after it (Canada, USA, China). Israel was founded by people whose country (Israel) was stolen by the fascist Roman state, as punishment for rebellion… But then the Catholics, such as “Saint” Augustine made a morality from what was meant as non-permanent situation.

Netanyahu (nicknamed “Bibi”) is running for re-election, and may well win. With his reassuring baritone. His brother, a crack commando commander, was the only fatality in the hyper daring Entebbe raid he led. Bibi is sort of extreme, he tends to King David’s Israel, the Greater Israel, with all the pesky Palestinians somewhere else. If wars come long and thick enough, the Greater Israel may well become a reality.

Differently from Putin’s mad dream of reconstituting what he calls the “Big Country” makes survival sense. Israel, as it is, is 1,100 times smaller than the empire Putin dreams aloud of.

Bibi can be a baby, as long as Arabs stay even more infantile. As it is, this cannot end well, so the party of Armageddon may as well rule. As long as some participant(s) is(are) looking for a final solution, the others may as well. One cannot make peace alone. But one can make war alone. Bibi is occupying a vacuum.

As long as Israel has good reason to fear for its survival, Bibi and, or, his ideas, and moods will rule. It’s a matter of survival, the best reason there ever was, for most people, most of the time.

Jordan got seriously angry against Daesh (aka “Islamic state”) and conducted air raids against it, after its young F16 pilot with green eyes got burned alive.

Jordan’s anger is healthy. It’s a change of values. The Middle East will bloom, if it aligns its values on the best ones the West ever offered. Look at China: why does it do so well? Because China adopted the high performance aspect of learning long championed, and monopolized, by the West.

Ultimately, the Chinese effort will fail, or, as in Germany a century ago, will have horribly deviant consequences, if it does not embrace the learning of criticism, that is, the learning of going meta, relative to the knowledge we have.

In either case, the West has to remember history, and roll back an educational system where real data is shown, and absorbed (especially at the meta level).

Much of the rise of plutocrats (including increasingly crazed maniac as Putin) is caused by an overall lack of education and a decrease capability to ascertain causation.

When pacifists believe that burrowing their heads in the sand works best to remove threats, they just lack education. There cannot be moralization without education.

Patrice Ayme’

Direct Democracy: Crucial Counterbalance To Vital Security State

January 12, 2015

So Obama was too scared to go to Paris (that’s the charitable explanation; the non-charitable theory is that he listens to dimwits too much). What when the self-declared leader of the Free, is a scared rabbit? Here is one drawback of Representative Democracy, “democracy” through “representatives”, or so-called “leaders”. Have you see a rabbit lead? When I run in the mountains, I see dozens of rabbits leading straight to the bushes (as in George W. Bush).

Not everybody can be as courageous as Israel’s Netanyahu (the only leader with

Franco-Germania Faces Hard Philosophy Ahead

Franco-Germania Faces Hard Philosophy Ahead

a personal guard in Paris, at his side always), Abbas (Palestinian president), Angela Merkel, David Cameron, Renzi (Italia), Rajoy (Espana), the Malian, Ukrainian presidents, and tens of other heads of state, who were also demonstrating in Paris. Even Russia sent to the Paris demonstration its fiercest specimen (short, maybe, of Putin), the Siberian hard man, Putin’s mentor, Ukrainian thirsty Foreign Minister Lavrov. Hopefully, Lavrov’s heart learned something.

The attack against Charlie Hebdo was, philosophically speaking, worst than 9/11: bin Laden was surprised that the towers fell, and 9/11 was construed by some hearts of stone, as a counter-attack against big capital, Wall Street, and the exploitative system of the Middle East financiers had helped to set-up.

But clearly the attack against satire is a direct attack against intelligence, and cannot be construed as an attack against exploiters (or an anti-racist attack: several collaborators of Charlie Hebdo were “Muslim”, two got assassinated, two survived). And the attack was planned by a collaboration of Al Qaeda and the Islamist State: the terrorists themselves said it. A video shot by one of the criminals AFTER killing a black policewoman, and grievously wounding others, was edited by ISIS, and put on the Internet two days later… From the Middle East.

The Security State cannot be avoided: as technology keeps exponentiating (a good thing), more and more lethal power can come in the hands of lunatics (a bad thing).

Thus the need to prevent mighty weapons to get in bad hands, and even very bad ideas to get installed in otherwise innocent minds. Hence the need for THOUGHT CONTROL (this means that Islam has to be put on rails which are defined by the Republic; it also means Internet control; some countries, such as the UK, already have it, France will get there within 6 weeks).

“Thought Control” is, of course, a very delicate problem: imagination, irreverence, satire have to be allowed, but not systems of thought leading to lethal issues.

Who is going to watch the watchers?

Well, We The People, directly.

Some of the commenters on this site rolled out the usual objection to Direct Democracy: the so-called “Madness Of The Crowds”.

Wisdom Of Crowds: Paris, 01/11/15.

Wisdom Of Crowds: Paris, 01/11/15.

Hazxan from the UK said: “Patrice, what really is “Democracy”? All my life, every day, it was programmed into me that we had a “democracy” that it was a rare and special thing that meant we lived in the best of possible worlds. Even that those who didn’t have this Democracy should be bombed and crushed until they had this Democracy whether they chose it or not (we chose it for them – begin to see the paradox?)”

Agreed that seems a paradox, but, when people do not live in democracy, they live in plutocratic dictatorships. It starts with dictators, but dictatorship is not stable, if it does not use demonic means, hence the adjective “plutocratic”.

This is not just theory, but practical considerations: look at Egypt now. Chief of the Army All Sissi had to make a coup against the Islamists. He went from military dictator (bad, but necessary) to elected president (re-establishment of representative democracy).

If Al Sissi had stayed a dictator (instead of becoming an elected president), he would have had to use more demonic means (because all those who voted for him would have been more or less against him, thus they would have had to be repressed).

Another frequent commenter, EugenR Lowy: “I have to disagree with you about direct democracy. Direct democracy is possible only at the local level and not at the level of big states. More than that I do not believe in the wisdom of the masses, as some obscure decision making theories claim. The masses at the end have tendency to turn to certain authority to lead them, when the situation is becoming too unstable and insecure, and we are back in the worst form of political leadership. To make right political decisions, the decision making must be aware of existence of realities as long term processes and not a stand-still state, which can be immediately corrected. How many among the masses understand this? Even the educated ones not necessarily are aware of this.”

I deeply believe in knowledge and wisdom, but I am not sure even a highly professional scientist is aware of the problematics of political and historical processes, knowledge that is necessary to formulate right opinion in the major political issues.”

There is every reason to believe that scientists are no experts at politics. Several Nobel Prize level scientists became Nazi Party members before Adolf Hitler (at least one of these Nobels had worked closely with Einstein).

Eugen’s point of view does not just condemn Direct Democracy, but even Representative Democracy: after all, in Representative Democracy it’s We The People who elects the representatives, all the way to the head of state.

Hitler’s Nazi Party got enough votes to control the Second Reich (!) Parliament. President Hindenburg thought he had no choice but to select Hitler as Chancellor, in a coalition government. Then the Nazis were able, through their “Patriot Act” to mangle German society enough to acquire total control.

Another example is the nephew of Napoleon I. Elected president of France, he made a coup against himself and baptized himself “Emperor”. Hitler actually copied that method, which had been inaugurated by Napoleon I.

Thus, when Eugen says We The People can make bad choices, it’s true, but it condemns all Democracy, Direct or not. It’s easy to make the argument that “Representative Democracy” is more dangerous than the direct form. Indeed, bad legislation can be reversed, whereas really bad leaders can’t be, once they have seized the Security apparatus.

Socrates and Plato had disserted about the subject of leadership ad nauseam. And incompetently. Whereas Pericles, earlier, advised by better philosophers, including his wife, made a splendid exposition of the “Open Society”. So it’s not a question of times long gone: Pericles expressed the thoughts of Progressive philosophers, whereas Socrates, Plato, and Aristotle were of an increasingly fascist and plutocratic persuasion.

Plato’s solution was the Philosopher-King”. That’s an idiotic notion, because a real philosopher has neither the time, nor the inclination, to be king. Similarly a real king has no time, nor inclination, to be a philosopher.

There were many attempts in the Sixteenth, Seventeenth, Eighteenth and Nineteenth Century, to make philosopher-kings. Those who really contributed to civilization positively were few: mostly Henri III and Henri IV of France (and perhaps Francois I, or, paradoxically Louis XVI). Then, of course, Peter the Great.

Both Henri III and Peter were great because they did not hesitate to assassinate execute whom they viewed as the most potent enemies of the very progressive States they led… Against determined Salafists (The Catholic League for Henri III, the “Old Believers” for Peter).

Aristotle, a student of Plato, wrote quite a bit about politics. Differently from Plato who hypocritically brandished the concept of philosophy, Aristotle went all-out for monarchy. His students, friends, executors of his will, were the plutocrats who destroyed Greek democracies, and launched the “Hellenistic States” (which lost on the battlefield, but later won the battles of ideas with the Roman Republic). So Aristotle Destroyed Democracy.

Modern Solution: The Grand Democratic Synthesis:

Socrates bemoaned that Athens voted on anything, and elected everybody, including generals. That, he said, made people who did not know how to make shoes in charge of making shoes.

The solution to this was found by the Roman State, and blossomed during the Middle-Ages. It was what I called DEMOCRATIC INSTITUTIONS.

Those use the principles of representative democracy and meritocracy inside, while, outside, being strictly subordinated to the government. Guilds, Academic, Medical, Judicial, Engineering organizations are examples. And the Army and Police ought to be foremost.

Example: In the modern German army, soldiers are supposed not just to obey the Military Code, but the German Constitution. In general, all armies ought to take their oath to the Constitution first… Or even its spirit (hence Egypt’s Al Sissi was correct).

Modern Solution: We The People Ought To Legislate:

The model is very simple: Switzerland.

Whereas plutocrats need, with the present system, to just buy 2,000 “representatives” to control the entire planet, they cannot buy billions of people: that would defeat their motivation, which is to rule over We The People, not buy them (that’s the taxation we need to apply to them).

So Who Is The Government?

There, to some extent, Switzerland again comes to the fore: it has an executive council of seven, and the president is elected for a year. The Army has only colonels. Generals are elected in case of imminent war.

The historical model here is the Roman Republic. Its executive system ought to be greatly imitated: A Consul had full powers for just one month (on the following month the other Consul had the powers).

In truth, the Roman Republic worked pretty much as a Direct Democracy, although this system was immensely, and way too complicated.

Instead, we should imitate the Athenian Directly Democratic system. With the Internet, the main problem of Athens, namely that voters found very difficult to come speak, debate, and vote at the National Assembly, can be easily solved.

So what about the objection that We The People is dumb, ill-informed, fickle, prone to madness? As I said, this is Plato-Aristotle objection, and just an excuse for plutocracy (preferably with the “philosopher” on top, gorging himself, as Aristotle did).

Those who do not get educated, and are not motivated for education, stay, indeed, dumb, ill-informed, fickle, prone to madness. But what we see in Switzerland is that the Direct Democracy has made We The People ever more motivated to learn stuff, ever more knowledgeable and wise. One can see the Swiss electorate think and change: as a proposition goes to a “votation”, the polls show opinions changing wildly as the weeks go by, and the debate evolves.

We The People can be educated, learn, and grow in wisdom as children do. Given a chance. The 2,000 individuals who presently rule the world, and their sponsors, who telerobotize them, and increasingly own the planet, quite a bit as the Saudi family does, do not want We The People to be given that chance. So let’s grab it.

Patrice Ayme

Europe Trapped By Masochism, Intellectual Laziness?

January 5, 2015

Greece, Euro, Algerian FNL, Colonialism, Bullying, Whining and Depression.

Syriza, a Party in Greece, threatens to win elections on January 25. Its leader has announced Syriza was not a danger for Europe, but that Merkel was. His views are those I long held within these pages. “To Save The World, Devalue!”

Some Germans, claiming to have talked with officials, uttered that Greece could leave the Euro. Why don’t those Germans mind their business? The Euro is Greek money. Greeks want to keep their money.

Meanwhile Lithuania adopted the Euro. All European countries are supposed to adopt the Euro. Even the Swiss Frank is locked to it (and is going down accordingly).

If Germans want a clean Europe, they can accept the official French proposal to create a European Banking Union, the equivalent of the FDIC of the USA. Conservative Germans are not anxious to do this.

Indeed the German Landbanks, the local banks, crucial to finance the German “Mittelstand”, the middle companies, are bankrupt, and live on accommodations with the authorities. In other words; disguised subsidies.

“Austerity” in Europe means not enough money to operate the economy. Let Syriza bite Merkel’s well fed derriere!

Euro Still Way Too High:

Politics, when not totally democratic, can be absolutely Machiavellian. The Euro reached 1.45 dollars, a few years ago. Clearly it should rather be half that.

Based on the very long range equivalence of the French Franc with the Dollar, the Euro was made to be worth one Dollar. However, the economy of the USA has been much stronger, for years. Thus the Euro should be lower than its lowest level ever (when Germany was in trouble, a decade ago). That was 83 Dollar cents.

A way out of the European crisis is to boost the economy and lower the Debt/GDP by lowering the Euro. This has been zehr klar, for years. After the article in Der Spiegel saying Berlin wanted to expel Greece (which cannot be constitutionally done), Siebert, spokesman of Merkel, said policy had no changed.

However, the Der Spiegel article may have been planted, just to hasten the lowering of the Euro (which reached 1.18 Dollar, lowest in nine years). If so, it would be in agreement with France (which has to be pushing for a Euro at 80 cents, if still endowed with brains).

It will not escape conspiracy theorists that a collapse of the Euro would be painless, as oil, paid in Dollar, has seen its own price cut quickly by half. Hopefully, Putin is also been cut in half.

Maybe God is a conspiracy theorist?


Too Much Mushy Whining, No Action:

Women tears’ smell lower testosterone in human males. In other words, if women want some action, they better act as activists, or even aggressors (“bitchy”) and not as whiners.

Instead of whining about “colonialism”, Europeans ought to have found what was wrong about it, and how to correct it for the best.

Shrinking onto oneself, that’s called depression.


Colonialism: Very Bad, Indeed, But the Wrong Notion

What’s the difference between an immigrant, a migrant, a colon, an invader?

I was always a fanatic of cultural, and ethnical mixed background. Why? Because the more cultural ingredients around, the wealthier the minds.

Example. Although I vigorously attack both Bible and Qur’an, my dirty little secret is that I live very faithfully according of some of the elements of both I approve of… For example I don’t touch alcohol (being drunk on my own thoughts all day long, will cynics no doubt notice).

In the 1950s, it was fashionable for French intellectuals to be “anti-colonialist”. This, in turn was amplified worldwide, and became the credo of the left and progressives.

According to the theory, the French had conquered the world, and needed to go back to their barracks. They did, and were replaced worldwide, by American plutocrats, and their GIs. The same was extended to other European colonialists, of course.

Did French intellectuals realize they had been had?

Most died without being officially aware. But some who were the youngest, and most frantically anti-“colonialism” are changing their tune. Decades of history have instructed them forcefully.

Rene’ Vautier, a French movie maker joined the Algerian FNL (to the point he was implicated in factions struggles therein, and got imprisoned because of this). He just died at 86, and gave a final interview.

Interestingly, this FNL fanatic, changed his music in recent years (“before I get senile” he added).

Vautier fought as a teenager against the Nazis in the French resistance. A communist he was sent to Africa. At the age of twenty-one years old in 1949 the Ligue de l’enseignement en Afrique sent him to make a film about life in the French African colonies. It was filmed in the Ivory Coast.

Under French administration, Ivory Coast was peaceful.

(I was left free as a toddler on the beach there; my only fear, whom I had been instructed to have, was of a vicious, roguish wave that would appear from time to time; ever since I have a healthy fear of waves… That does prevent me to surf, occasionally, or even been swept in recent year by a rogue wave in California, and losing a camera, but when I am by the ocean, I worry.)

Since the French left, as with many European ex-“colonies”, from Pakistan to Fidji, Shri Lanka to Somalia, Nigeria, Rwanda, Congo, Cambodia, or the CAR, Ivory Coast was wrecked by a vicious civil war (about who was really an Ivorian).

In his last interview, Vautier, a worldwide icon of anti-“colonialism”, declared he wished the struggle against “colonialism” had not been all in vain.

But in vain it was. In many places, where imperial states had blocked plutocratic excess, now the worst of the worse were free to roam and feast.

In The Trap Again?

Krugman wrote a blog post “Europe’s Trap”. It’s entirely correct. However, Europe fell into the trap when the Kaiser and his generals listened to the songs of Colonel House, right arm of American president Wilson.

Sure that the USA would help, the Prussian (also known as German) army attacked the French Republic in an all-out attack, August 3, 1914, invading and declaring war to secondary countries in the process. A month later, after retreating for three weeks, the French army successfully counter-attacked.

American help to trade with the Kaiser’s dictatorship, through the “neutral” Netherlands, extended the First World War three years. But that was only the beginning of the involvement of the USA in European submission affairs.

However, nowadays, the USA has come to realize that it cannot rule the world alone. So the enlightened ones agree that the European Union is a precious ally, and it needs its own currency. As Keynes had pleaded in 1944, the Dollar cannot do it all.

It’s nicer to have a peaceful union under Franco-Germania, rather than a West fighting itself to death.

If we want peace, we need as little exploitation as possible, and it starts in the neighborhood. To have a strong Europe is in the USA’s best interest.

Example: the disastrous, trillion Dollar price F35 flounders. This is the worst fighter plane ever put into production, and is a threat to the security of the USA (but not to North Korea or Putin).

However Europe has two excellent canard fighter-bombers, the Eurofighter/Typhoon and the Rafale, both armed with the excellent Meteor ramjet missile (Mach 4, 100 miles range). Both have excellent Infrared vision, and can fire infrared long range missiles. The Rafale has active stealth, and that works, whereas passive stealth not only does not work, but cannot work.

An astute U.S. Air Force could ditch the dangerous F35, and build one of the Euro canards, under licence and renovated. Thus Euro strength would profit USA strength. An example of many. At the Las Vegas consumer electronic show, January 2015, the second largest delegation, with more than 100 companies, is… French.

Meanwhile French president Hollande declared that the rise of the Islamist State is directly attributable to the refusal to strike mass bloody dictator Assad (in the end, only the French wanted to attack). Indeed (as I said for years).

Colonialism? No. Where are the colons? And are immigrants replenishing Europe, colons?

Just administering the empire. The worldwide empire we need to run good enough to survive, civilizationally speaking.

… And which is already running, albeit in plutocratic form.

Patrice Ayme’

Depression’s Causes: Righteousness & Viciousness

October 14, 2014


Slowly rising consensus: in some important ways (evolution of relative GDP; employment rate; public investment; education’s relative performance), the economies of the leading countries are doing worse than during the “Great Depression” of the 1930s.

That’s why I prefer the expression “Greater Depression” to “Great Recession”.

And we have seen nothing yet: the cause of the “Greater Depression” of the 1930s was a chain of errors, which were easy to avoid.

(First a splurging in the 1920s, especially in the USA and Britain, and its unavoidable attending crash compounded by the American Senate’s arrogance that the international economy could be tweaked through tariffs, to profit only the USA, the whole thing followed by collapse of international trade and then by “liquidating everything” (as was said at the time).)

Thus, the roots of Depression of the 1930s were shallow, easy to avoid next time: avoid splurging, keep international trade going, use public money to avoid 9,000 bank failures (in the USA alone), and institute a FDIC (Federal Deposit Insurance Corporation: Europe’s “Banking Union” is trying to mimic that).

There are serious problems now, much more serious than in the 1930s. Including a lack of seriousness.

Serious reasons for collapse caused the long decline of the Roman Empire, or struck shortly after 1300 CE, when entangled ecological, climate, demographic, and plutocratic crises, with an attending plague, combined to kill half of Europe, and brought five centuries of war.

Indications are that the world economy, having not really recovered from the 2008 crisis, is stumbling. Especially Europe. Population: more than 750 million (EU + Russia, etc.).

Why? Why not?

In the 1930s, the government of the USA, first under Hoover, and then much more spectacularly under Roosevelt, starting in 1933, made Herculean efforts (in public spending, and legislation). Nowadays, it’s quite the opposite.

Paul Krugman suggests that righteousness is the cause of this decline: see the obstinate Merkel, and the refusal to do away with high debt levels.

In “Revenge of the Unforgiven. How Righteousness Killed the World Economy”, Krugman observes that:”…now [world] growth is stalling, and the specter of deflation looms.

If this story sounds familiar, it should; it has played out repeatedly since 2008. As in previous episodes, the worst news is coming from Europe, but this time there is also a clear slowdown in emerging markets — and there are even warning signs in the United States, despite pretty good job growth at the moment.

Why does this keep happening? After all, the events that brought on the Great Recession — the housing bust, the banking crisis — took place a long time ago. Why can’t we escape their legacy?

The proximate answer lies in a series of policy mistakes: Austerity when economies needed stimulus, paranoia about inflation when the real risk is deflation, and so on. But why do governments keep making these mistakes? In particular, why do they keep making the same mistakes, year after year?

The answer, I’d suggest, is an excess of virtue. Righteousness is killing the world economy.”

Notice that brandishing righteousness diverts attention away from full blown viciousness (which I believe is dominant). Then Krugman presents a small fraction of the problem, affecting to believe naively that high debt is the cause of everything:

“What, after all, is our fundamental economic problem? A simplified but broadly correct account of what went wrong goes like this: In the years leading up to the Great Recession, we had an explosion of credit (mainly to the private sector). Old notions of prudence, for both lenders and borrowers, were cast aside; debt levels that would once have been considered deeply unsound became the norm.

Then the music stopped, the money stopped flowing, and everyone began trying to “deleverage,” to reduce the level of debt. For each individual, this was prudent. But my spending is your income and your spending is my income, so when everyone tries to pay down debt at the same time, you get a depressed economy.

So what can be done? Historically, the solution to high levels of debt has often involved writing off and forgiving much of that debt.”

This is a solution I have advocated since 2008. See “Reforming World Finance”, from November 2008, when I naively still hoped my friend Obama would grab the bull by the horns, as if he were courageous, or something. None of these obvious reforms was implemented, but at least now an economy Nobel was given roughly in this direction (see yesterday’s essay).

The 2011 version is: “To Save The World, Please Default (And Grab Capital From the Conniving Plutocrats)

Iceland and Greece did write-off some debt. They had no choice.

However, debt forgiveness is only part of the problem (Oh, by the way, full disclosure: I have zero debt, so if I were biased, it would be the other way!)

The nature of the old debt, and the nature of the new debt are the core problems.

Debt because housing prices are through the roof comes from lack of building. Debt because of enormous leverage by public-private banks and companies involved in financial horror to steal We The People, is still something else.

The erroneous nature of the debt has misaligned the entire economy. We live in a world where there are master sommeliers. And where millions of people are tickled pink by the idea of being waited by a master sommelier, somebody who can look through a bottle thanks to the light of a candle, he expertly lighted, to stop exactly before the deposit at the bottom gets into the clear wine.

But then there was not enough money, or interest, to invent an ebola vaccine. Civilization is drunk, Bacchus is god, and Death invited to the party.

The entire debt machinery is stuck. Banks have lent to financial conspirators for decades, and are still doing it ever more. This sort of debt ought not to exist. (Bankers have been conspiring to steal on the currency markets, the administration of the USA claims to have just discovered, hinting that this time some bankers may be prosecuted personally. Maybe. Perhaps. We will see… But that sort of outright criminal activity is different from stealing by giving money only to one’s friends and co-conspirators.) What is needed for civilization to survive, is debt that brings new high Return On Investment for We The People. That could be new tech, or new housing, new, sustainable energy sources (my eye being on thermonuclear fusion, a field where power is growing according to its own “Moore Law”, that means, exponentially; to provide clean BASE energy). Plutocracy naturally is not interested by We The People flourishing. Just the opposite: Pluto thrives on misery. That’s the part of the economy which no one very serious, and part of the oligarchy, wants to see.

Even normal people do not want to see it: it’s too depressing, and they don’t know what to do.

Moreover plutocracy is entangled with a more far-out explanation of the present economic distress: the world is getting old, as the Romans used to say. The Romans needed to transit from the old economy, to a new one. As we do. Paralyzed, mesmerized and occupied by plutocracy, the Romans could not even conceive of the notion (all the more as some zones of the empire, especially in the Orient saw their GDP climbing all the way until the barbarians invaded, archeology shows). Roman mines got exhausted, regions which used to produce lots of food became poor, Return on Investment of many activities collapsed,. there were not enough slaves, nor small farmers to support production, or the army, the economy and security organized until then by the state faltered, from too small tax revenues, and finally the middle class and local government (the “curiales”) were destroyed by taxation, while plutocrats went on a rampage, grabbing most powers. Romans had to make transitions (new tech, no more slavery, less plutocracy!) They didn’t. We are in a similar crisis. ROI is collapsing, so is the biosphere. Robots are threatening to destroy much employment all together. The notion of productive activity, thus productive debt, has to change, forgiven or not.

Krugman himself concludes that the debt crisis will not abate. He does not say why. I will: it’s not just out of mental inertia, it’s out of viciousness.

Some will say I exaggerate. Not so. Look at Italy. The government debt is around 145% of GDP, and pays more than 3% interest. So it augments at the clip of around 5.5% a year. To diminish that debt, nominal Italian GDP ought to grow at more than 5.5% a year. But guess what? Not only is Italy not growing, but Italian GDP is smaller now than 14 years ago (with a larger population).

There is only one way out: default. That is tell the plutocrats that they can forget their money, or, more exactly, treating We The People as if we were indentured servants, or serfs. I rest my case.

Patrice Ayme’

Microbes Also Make History

July 1, 2012


Sarkozy Made Merkel Crucially Bad. Most Big Powers Despise The Biosphere Officially. Obama Loves Fire.


Abstract: Three Italians named Marios have put Merkel on the ropes. It turns out, as the head of the German Socialists pointed out in parliament, six weeks after the presidency went to a socialist in France, conservative Merkel changed her music completely. She signed on measures she had insisted were against the German constitution. Such as the mutualization of the cost of defaulting banks (why should that be will be made clear below).

Not just that, but, having fallen in a trap the French socialists set for her, Merkel has already modified the German CONSTITUTION, to please them. Overnight, literally. (As I had predicted would happen.)

Americans don’t even remember when their constitution was changed last. Actually the USA does not change its constitution, just details, by “amending” it. The lack of change is built-in as the USA has NO constitutional court (strictly speaking, thus explaining SCOTUS‘ fear to be seen playing with the constitution). France and Germany, having learned from the past, have constitutional courts, and that is helpful as European construction requires continual constitutional changes.

There are broader lessons in this. If just one man, a small man who ran all the time, after his own legs, the French Nicholas Sarkozy, could, all by himself, put Europe and even the world, in a huge financial crisis, how many of these dangerous mongrels are out there?

If one lover of private bankers, Sarkozy, arrogant in his rabid stupidity, could, all by himself, keep hundreds of millions oppressed throughout Europe, how come more people are not waking up to throw similar rascals out?

It is interesting to observe that the dividing line is not so much between left and right, but between those who think the state should serve the richest folks for all to see, and those who aspire to more subtlety. The fact that the French socialists conspired instantaneously with the conservatives in Spain and Italy shows this.

What Sarkozy and Merkel did, was to enable further ruin of national states in Europe. As there is no European Federal state, that came down to transferring ever more power to those who manage the globally corrupt financial system and those who profit from it, the global plutocracy and its servants.

Similarly, the contempt of the most influential leaders for the biosphere, evident from their absence at the Rio United Nations Conference On Sustainable Development, is exemplary of their contempt for life. So what do they admire? As my essay “Sage of Obama” demonstrated, they admire the creatures who have sustainable power, even if based on criminal practice, upon most of the People (see also PM Cameron below for insufferable hypocrisy). This is another drawback of representative “democracy”: it selects the leadership of those who crave for power, amutually admiring society. 



As long as one insists that mafiosi are good fellows, one will not get rid of the Mafia. So it was in the USA: the mafia was flourishing, until a  number of movies (Including the aptly named “The Godfather“, and “Good Fellows“) demonstrated to the vast public that mafiosi, although charming in many ways, and craving for honor, were not just pillars of society, but disgusting criminals perverting all of society.

That new found revulsion gave justice and law enforcement the necessary context and encouraging mood to treat the criminals, as the criminals they were.

The same job remains to be done in global finance. As long as one insists that global finance mafiosi are good fellows, one will not get rid of the global finance Mafia. Justice will come, only after a mood of revulsion will set in.

The criminal problem posed by global finance is of course not of the same order of magnitude as the Mafia. The Mafia never brought the entire world economy to a halt, and never threatened the biosphere as we know it, with extinction. Global finance and its allies do. The danger they present is immensely greater. (I have also argued forcefully that global plutocracy was behind the various fascisms of the 1930s, including Stalinism, as Lenin himself foresaw!)

Some have made the additions, and found that the 2008 banking crash (which is still unfolding) was 100 times greater than the Savings and Loans banking crash in the USA under Reagan and Bush I. However in the latter case, more than 10,000 prosecutions and 1,000 condemnations against bank managers were obtained.

Under Obama, so far, none. Where there is a will, there is a way. However, microbes don’t even need a will to find a way.

Just watch most of the global finance loving leaders: they did not even bother to go to the Rio de Janeiro world ecological summit. Of the important world leaders, only the French socialist president Hollande showed up. The other permanent members of the UN Security Council do not worry about the security threat presented by the rising of the seas. Germany’s Merkel, anxious to build another 26 new coal plants, of course did not show up either. Fossil fuel Merkel will be fondly remember when Hamburg fights the rising ocean.

Thousands of the most important men in global finance should not be lionized as Obama did with Warren Buffet, or Dimon, or Rubin, Summers (See “Sage of Obama”). The mood of blind admiration for financial pirates has to be changed. By the way, such  a change of mood happened with piracy, four or three centuries ago.

Piracy had started honorably (lettres de marque, corsairs). Francis Drake, who discovered the San Francisco Bay and beat off the Spanish Armada, was, with his colleagues, a corsair, a type of pirate. 150 years later the mood changed, because the pirates had gone too far, taking over entire island, making trade difficult for everybody. Then the states actively suppressed piracy. It did not take long, once Britain and France took the decision to do so: pirates were found, and hanged, from the Carribean, to the Indian ocean.

We are in a similar situation with financial piracy today: if the states cracked down, it would be over in a matter of weeks.

Actually, come to think of it, there was an even more spectacular precedent. Under the late Roman republic, preoccupied by civil war between the Populares and the plutocrats, piracy grew in the Mediterranean, to the point that there were pirate cities, pirate islands, and trade was being extinguished. When finally the distracted Roman government was forced to focus on the problem, it gave full powers to a young Pompeius Magnus to clean the Mediterranean of the pirates. It took him only three months, to everybody’s amazement.

Something similar happened in the Mediterranean, again, when France and Britain, shamed by the Navy of the USA, also took action against the pirates in Algiers and Tripoli. It is important to remember that what the naive and ignorant describe as simple colonial adventures did not start that way at all, but instead as military operations against imperialism (Napoleon in Egypt!), or against piracy (US Navy against Libya, then, decades later, Royal Navy against Algiers’pirates, followed, finally, another decade later, by French invasion… Or counter-invasion, as the French argued they represented Rome, which had been chased out by the Arab invasion of the late 7C). 

So mankind has to learn to view financial plutocrats as the criminals they are. Common people do not know that global finance has set-up a machine to divert all of the world money to itself. Instead, in their naivety, they attribute what is criminal to a form of genius. One is reminded of the Bible, where the people chose to save the king of the bandits rather than the righteous Christ.

Common folks are mystified by global finance, as practiced today. They cannot know that it is just organized crime, because the machine is hidden behind non linear mathematics, and common people don’t know mathematics, even much simpler than that.

The Godfather, as incarnated by Marlon Brando or Warren Buffet has undeniable charm, the fascist instinct in man wants such a grandfatherly leader, but that’s exactly what the state of law is not.

The huge and prestigious banks Barclays, which has its own skyscraper in London, was found to have manipulated interest rates to its own interest, illegally. It was condemned to a fine of more than 360 million Euros. But its chairman stayed in place.  

Curiously the daemons at the head of JP Morgan and Barclays, are named Dimon and Diamond. The former went to the USA House and Senate with giant presidential cuff links. The questions were polite: the senators and Congresspersons are on his payroll. And the other daemon, Diamond, in Britain, made sure to give to charity, for schools, millions.

They steal billions from taxpayers, and then give millions, and get to be called “philanthropists”. Singer Bono, for example, is a philanthropist; he makes billions from facebook, while singing about the poor, to enrich himself, and showing off with the president and other friendly plutocrats and their obsequious servants.



Meanwhile the plutophile Merkel suffered a heavy defeat at the hands of the coalition led by Socialist France. Let me explain.

Mario Draghi was for six years a partner at Goldman Sachs. Goldman Sachs has been in the habit of making partners in its lucrative organization Europeans with high responsibilities (such as EC commissioners, some German, or central bankers, such as Draghi). This way they can be paid, for their attention while serving Goldman as apparently independent agents. Goldman thus rewards those who had its interests at heart.

The drawback for global finance, is that such officials, should they betray the criminals, know the method of the global financial Mafia, and where some the bodies are buried.

Draghi is now head of the ECB, the European Central Bank, and he suggested in June 2012 that a European Banking Union was needed. As it is now, when a bank fails the state the bank nominally belongs to, is supposed to step in. This is unrealistic, as the banks in Europe straddle borders heavily.

For example Italian banks owe more than 310 billion euros to French banks. German banks owe more than 200 billions to French banks, about what British banks owe to French banks, and French banks owe more than 125 billion euros to German banks. meanwhile British banks owe nearly 400 billions euros to German banks. Those who want to amuse themselves with these numbers can consult the BBC website (with its apparently misleading title, “Eurozone debt“, or is it a Freudian slip that, after all, to tell the real truth, Britain is in the Eurozone?).

Financial markets responded favorably to the June 28-29 maneuver, with Irish borrowing costs for 10 years dropping to their lowest level since the month before the November 2010 EU-IMF bailout.

The maneuver consisted into creating, soon, a European equivalent of TARP. So in the future, when a bank will fail, a common European fund will europeanize it (in contrast with nationalizing it).

It is a first step to break the vicious circle between banks and sovereigns,” said European Council president Herman Van Rompuy.

Verily this circle is worldwide, even the Chinese Premier admitted that much… About supposedly communist China: he explained banks too big to fail, even in China, got their way, and that had to change.



The evening started badly for Merkel, who had hysterically celebrated the victory of Germany over Greece the week before (in the soccer cup). An Italian named Mario, black like charcoal, scored twice against Germany. Then he rushed to kiss his (white) mama, who had adopted him from Ghana at age two. Very touching.

Under Hitler, Germans whose fathers had been black French army soldiers, were forcibly sterilized to the German population’s rabid applause, characteristic of scared rodents. There were several thousands of those unfortunate mixed race Germans (as manly French soldiers occupied Germany a bit after the later refused to pay for its wanton and deliberate destruction of France and Belgium in 1914-1918).

Many Germans will say;”Oh, this was then, this is now, we Germans don’t revisit the past, and think guilt is passe'”. Well, now came from then. Some of what German officials said in recent weeks proved this again. Bundesbank official talked about the Greeks as if they were dogs. Just like then. Germans do not own the Greek currency anymore in 2012 than they did in 1941.

1941 was the year when Germany invaded Greece to extricate the army of the fascist Mussolini from its invasion of Greece in 1940, which had backfired. The Greeks were defeated by Hitler, but, just as the Battle of France a year earlier, the Battle of Greece caused enormous losses to the German armed forces. So, a few weeks later, it was a much diminished German army that attacked the USSR. For example the German paratroop corps was eliminated while taking over Crete, and would reappear, much diminished, only during the Vercors Battle of Spring 1944, the diversion insurrection that allowed D Day in Normandy to proceed (by diverting 20,000 elite German troops, including SS paratroopers).

There are human rights abuses in Germany now, some major ones, such as no minimum wage. One cannot claim to be superior when one uses slave labor, same as then. Does our children ever learn, as G.W. Bush, grandson of one of Hitler’s most famous collaborator, Prescott Bush, would say.

So back to Merkel. After the terrible black Mario had scored twice against the Mannschaft (“the team”), there she was meeting with the 26 other leaders of Europe. What an evening!

Suddenly, the conservatives in Spain and Italy made a united front. At 11pm, they said they were not signing the document they had in front of them. For all the talk of Germany’s crushing superiority, Spain’s Rajoy and Italy’s Mario Monti represent more than 100 million people, and more GDP than Germany.

At that point, unheard of in a European Union summit, ever, a leader rose and left. French president Hollande stepped out, in an implicit support to Spain and Italy. Merkel could not call on her mighty ally. She was all alone. where was Sarkozy the plutophile, when she needed him?

Several hours later, Merkel, and the plutocrats she represents, capitulated. Banks in need will henceforth be Europeanized, getting money directly from the ECB (thus not increasing the debts of states such as Italy or Spain anymore). Hollande came back, and signed. Merkel looked haggard. Two defeat at the hands of “super Marios” in 12 hours…

When Merkel went back to her Parliament to get the two thirds majority she needs to change the German Constitution, the (physically large) chief of the Socialists (she needed to sign on) ironically observed that what she declared, two weeks earlier, to be anti-Constitutional, now that the French socialist controlled the National Assembly, she pushed to make it into law.

Evil men can hide behind regulations, or lack thereof, but they can’t escape the justice of history.

To tell us there are no banksters does not help. One cannot stop the Mafia, if one call Mafiosi, good fellows.



If just Sarkozy could prevent progress on a banking union, what can a conspiracy of anti-ecological leaders do? At the Rio ecological summit, where the subject was saving the biosphere, none of the most major leaders were present, except, once again, France’s socialist president Hollande.

Dr. Merkel went back to Germany, busy, as she is, to build 26 new giant coal plants. Australian leaders did not show up: after all Australia lives off coal sold to Asia. Putin runs a petro-gas state. China breathes coal and the mercury vapor burning coal provides with, perfumes the atmosphere, forgive our mental retardation. Obama beams from fracking and the plutocrats he feeds, just as they feed him.

British PM Cameron is beyond any decent description: he now fights what he calls a “culture of entitlement“, by removing subsidies to those who cannot afford lodging. I guess, he fights himself, as he was born with ten gold spoon in his mouth. PM Cameron inherited a considerable entitlement, he is in the know. And see: he does not need help, this is the proper culture of entitlement.

Cameron’s father was a stock broker and then an off shore fund manager, presumably not to pay more taxes; an ancestor was king; the Sunday Times Rich List compiler Philip Beresford, said: “I put the combined family wealth of David and Samantha Cameron at £30 million plus. Both sides of the family are extremely wealthy.” Yes, let’s fight the entitled, Camie boy!

Meanwhile the USA is experiencing record high temperatures, fires are burning, Obama shows off with the muscular firefighters among the smoldering ruins. No need for a carbon tax, we are already burning. Pathogens make history. The Arctic icepack is tracking at record lows. The poles are melting, the plutocrats are reigning, what could go wrong?


Patrice Ayme

Boosted By Soros On Europe:

June 7, 2012


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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Germany used to be in the forefront of the effort.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

PA: Perfect analysis, nothing to add.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Patrice Ayme

Sorting Out Soros.

June 5, 2012


(With A Bit of Dissemblance Too.)


Abstract: George Soros, the major plutocrat, made Remarks at the Festival of Economics, Trento Italy, June 02, 2012. A lot of what he said is pretty good.

Soros eschews the deeper things such as: the divulgation of the injustice of the Fractional Reserve System, what it means to be a state, the Plutocratic effect, the Will To Evil, etc,. which are all major constituents of the deeper fundaments of the present crisis.

And of course, Soros made a billion dollars pushing Britain out of the European Monetary Union, so its compassion vis a vis Europe has got to remind us of that of the fox for the hens he killed. Indeed, the EMU would be stronger, with Britain in, as would have happened if no hedge fund manager such as Soros had ever existed. 

But still, his work is worth commenting upon, it’s much deeper than the usual platitudes.


A note on Soros: After living under Nazi occupation, and escaping those German monsters by the skin of his teeth, as a Hungarian Jewish child, Soros went to London to study economics (and the philosophy of Popper). Soros made a career as a major financial manipulator, first in the company of Jim Rogers. He was operator of the “Quantum Fund”, one of the earliest, largest and most successful hedge funds.

Soros played a very positive role in the opening of the Iron Curtain, financing Hungarian students.

Soros often talks as if nothing mattered more for him than being viewed as philosopher. He is obsessed by “reflexivity“, a notion he used in his trading. Reflexivity is nothing new for those who reflect reflexively. But Soros is right to insist on its importance. What he means by this, he explains below.

Finance and economics are riddled with non linear feedback loop, entangling subject and object, which often dominate, causing catastrophes. The same is true in politics, sociology, cultures… Such is the human, all too human factor.

As the present German loss of control about Europe demonstrates. Is that one of these famous Hitler’s rages again?

Below I put Soros in italics, my comments are in regular script. I took the freedom of underlining passages of Soros which I find particularly interesting. That generally indicates approbation (and reprobation will be duly expressed, if needed). I cut out one section of Soros’ discourse, for lack of punch. All the rest is there. Let Soros talk:


Soros: Ever since the Crash of 2008 there has been a widespread recognition, both among economists and the general public, that economic theory has failed. But there is no consensus on the causes and the extent of that failure.

I believe that the failure is more profound than generally recognized. It goes back to the foundations of economic theory. Economics tried to model itself on Newtonian physics. It sought to establish universally and timelessly valid laws governing reality. But economics is a social science and there is a fundamental difference between the natural and social sciences. Social phenomena have thinking participants who base their decisions on imperfect knowledge. That is what economic theory has tried to ignore.

Scientific method needs an independent criterion, by which the truth or validity of its theories can be judged. Natural phenomena constitute such a criterion; social phenomena do not. That is because natural phenomena consist of facts that unfold independently of any statements that relate to them. The facts then serve as objective evidence by which the validity of scientific theories can be judged. That has enabled natural science to produce amazing results.

PA: By the way, that is exactly what fails in Quantum physics: in Quantum physics, facts unfold in dependence with any statements that relate to them. Because the observing act affects the observed. That was Bohr’s great point, and it is the main difficulty with making a Quantum computer.

The Quantum computer can be made, as it is the way the natural world works. But to realize one, in full, I believe, our understanding of Quantum physics will have to progress.

Somehow, Quantum physics replaces local physics, made of points, by the integrated whole. In other words something where all participants participate, be they geometry, potentials, initial conditions, etc. That integrated whole approach is the engine at the heart of biology, and it is the one that allows to circumvent the Second Law of Thermodynamics (you will have heard it here first!). OK, back to Soros:

Soros: Social events, by contrast, have thinking participants who have a will of their own.  They are not detached observers but engaged decision makers whose decisions greatly influence the course of events. Therefore the events do not constitute an independent criterion by which participants can decide whether their views are valid. In the absence of an independent criterion people have to base their decisions not on knowledge but on an inherently biased and to greater or lesser extent distorted interpretation of reality. Their lack of perfect knowledge or fallibility introduces an element of indeterminacy into the course of events that is absent when the events relate to the behavior of inanimate objects. The resulting uncertainty hinders the social sciences in producing laws similar to Newton’s physics.

PA: Quantum computer, here we come!

Soros: Economics, which became the most influential of the social sciences, sought to remove this handicap by taking an axiomatic approach similar to Euclid’s geometry. But Euclid’s axioms closely resembled reality while the theory of rational expectations and the efficient market hypothesis became far removed from it. Up to a point the axiomatic approach worked. For instance, the theory of perfect competition postulated perfect knowledge. But the postulate worked only as long as it was applied to the exchange of physical goods. When it came to production, as distinct from exchange, or to the use of money and credit, the postulate became untenable because the participants’ decisions involved the future and the future cannot be known until it has actually occurred.

PA: By the way, Euclidean, and Non-Euclidean geometries, are COMMUTATIVE geometries. Instead…

Quantum physics uses NON COMMUTATIVE geometry (what it consists of exactly is a matter of debate among mathematicians). Basically, the order of events matter, just as the order of rotations in space matter, or just as the order in which what happens to social participants matter.

Soros: I am not well qualified to criticize the theory of rational expectations and the efficient market hypothesis because as a market participant I considered them so unrealistic that I never bothered to study them. That is an indictment in itself but I shall leave a detailed critique of these theories to others.

Instead, I should like to put before you a radically different approach to financial markets. It was inspired by Karl Popper who taught me that people’s interpretation of reality never quite corresponds to reality itself. This led me to study the relationship between the two. I found a two-way connection between the participants’ thinking and the situations in which they participate. On the one hand people seek to understand the situation; that is the cognitive function. On the other, they seek to make an impact on the situation; I call that the causative or manipulative function. The two functions connect the thinking agents and the situations in which they participate in opposite directions. In the cognitive function the situation is supposed to determine the participants’ views; in the causative function the participants’ views are supposed to determine the outcome. When both functions are at work at the same time they interfere with each other. The two functions form a circular relationship or feedback loop. I call that feedback loop reflexivity. In a reflexive situation the participants’ views cannot correspond to reality because reality is not something independently given; it is contingent on the participants’ views and decisions. The decisions, in turn, cannot be based on knowledge alone; they must contain some bias or guess work about the future because the future is contingent on the participants’ decisions.

[…] Bubbles are usually asymmetric in shape: booms develop slowly but the bust tends to be sudden and devastating. That is due to the use of leverage: price declines precipitate the forced liquidation of leveraged positions.

PA: Busts are also caused by panic. An animal generally approaches a threat with more caution that it puts in flight. Panic insures survival, the most important instinct, most of the time. Whereas greed is a luxury, and, if there is an instinct for it, it’s much less developed. Carnivores have been known to kill, for killing’s sake (a form of greed). But if they experience the slightest fear, they won’t engage in it, and will spend lots of energy putting lots of distance between them and the threat.

Soros: Well-formed financial bubbles always follow this pattern but the magnitude and duration of each phase is unpredictable. Moreover the process can be aborted at any stage so that well-formed financial bubbles occur rather infrequently.

At any moment of time there are myriads of feedback loops at work, some of which are positive, others negative. They interact with each other, producing the irregular price patterns that prevail most of the time; but on the rare occasions that bubbles develop to their full potential they tend to overshadow all other influences.

According to my theory financial markets may just as soon produce bubbles as tend toward equilibrium. Since bubbles disrupt financial markets, history has been punctuated by financial crises. Each crisis provoked a regulatory response. That is how central banking and financial regulations have evolved, in step with the markets themselves. Bubbles occur only intermittently but the interplay between markets and regulators is ongoing. Since both market participants and regulators act on the basis of imperfect knowledge the interplay between them is reflexive. Moreover reflexivity and fallibility are not confined to the financial markets; they also characterize other spheres of social life, particularly politics. Indeed, in light of the ongoing interaction between markets and regulators it is quite misleading to study financial markets in isolation. Behind the invisible hand of the market lies the visible hand of politics. Instead of pursuing timeless laws and models we ought to study events in their time bound context.

My interpretation of financial markets differs from the prevailing paradigm in many ways. I emphasize the role of misunderstandings and misconceptions in shaping the course of history. And I treat bubbles as largely unpredictable. The direction and its eventual reversal are predictable; the magnitude and duration of the various phases is not. I contend that taking fallibility as the starting point makes my conceptual framework more realistic. But at a price: the idea that laws or models of universal validity can predict the future must be abandoned.

Until recently, my interpretation of financial markets was either ignored or dismissed by academic economists. All this has changed since the crash of 2008. Reflexivity became recognized but, with the exception of Imperfect Knowledge Economics, the foundations of economic theory have not been subjected to the profound rethinking that I consider necessary. Reflexivity has been accommodated by speaking of multiple equilibria instead of a single one. But that is not enough. The fallibility of market participants, regulators, and economists must also be recognized.  A truly dynamic situation cannot be understood by studying multiple equilibria.  We need to study the process of change.

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

[To be continued in the next essay, “Boosting Soros On Europe“].


Patrice Ayme