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All the Answers are Wrong
Off the keyboard of Steve Ludlum
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Published on the Economic Undertow on June 8, 2016
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Unknown photographer (Bundesarchiv): The central powerhouse of the IG Auschwitz 'Buna' chemical complex at Monowice, Poland, in 1944. This giant factory was built by the chemical firm IG Farben to produce synthetic rubber, motor fuels, styrene and other compounds for the Third Reich, using raw materials mined nearby. The plant was a monument to brutality, built largely by tens of thousands of Jews and other slaves press-ganged across Europe by the German SS and 'rented' to Farben. Unlike much of wartime German manufacturing, toiling under the lash of Allied bombing; set up in flimsy sheds, in caves or even out in the open, the Buna facility was built of permanent materials to the highest standard. The intention was to produce wartime supplies for the German military during the years of conquest, then commercial plastics after the war was won. It was also meant to put the German stamp on defeated Poland, a permanent landmark for a thousand-year empire.
Farben was a cartel created in 1925 by combining the firms BASF, Hoechst, Cassella and Chemische Fabrik Kalle, Bayer, Chemische Fabrik vorm. Weiler Ter Meer, Chemische Fabrik Griesheim-Elektron and Agfa. These firms were founded beginning in the mid- 19th century, to synthesize dyes and related compounds from coal tar, a toxic material left over from the manufacture of illuminating gas. By the time the combine was formalized, interests had expanded to fuel, fertilizer and pesticides, cosmetics, non-ferrous metals, explosives, pharmaceuticals, reagents; also construction, mining and materials. The leading firm within the Farben combine was BASF, which had become dominant by way of the high pressure hydrogenation processes it developed beginning in 1912.
During that year Fritz Haber and assistant Robert Le Rossignol learned how to produce ammonia by combining atmospheric nitrogen with hydrogen from methane in a pressure vessel at high temperature in the presence of a catalyst. Engineer Carl Bosch at BASF expanded the process to the industrial scale. Arguably one of humanity's significant inventions, synthesized ammonia represented a superabundance of fertilizer, allowing crop yields to increase geometrically without the need to increase the area of land under cultivation. The Haber process was soon combined with the Ostwald Process to synthesize nitric acid which together produces ammonium nitrate; this allowed for nearly unlimited supply of explosives and propellants. The timely adoption of nitrate synthesis at the industrial scale right before the beginning of World War One allowed Germany to wage war against its neighbors even as supplies of natural nitrates were cut off by British naval blockade.
In 1913, Friedrich Bergius patented a process for converting lignite coal to liquid fuel by hydrogenation under high pressure and temperature in the presence of a catalyst. Theodor Goldschmidt, a businessman and chemist with family background in the dye business built a facility utilizing the Bergius process to produce liquid hydrocarbons which became operational after the war. Ultimately, Bergius' patent was sold to BASF where Carl Bosch perfected- then expanded the process. Starting in 1934, Farben (as Brabag) constructed a dozen coal-to-liquids plants capable of producing at full capacity as much to four million tons of synthetic gasoline and other fuels per year. In 1925, Franz Fischer and Hans Tropsch developed a complimentary coal-to-liquids process that likewise involved passing feedstocks through a catalyst at high pressure and temperatures. The output of the two processes together was sufficient to meet the entire military requirement for gasoline with synthetic fuel until allied bombing destroyed most of the plants and fuel transport.
In 1929 Walter Bach (for Farben) developed a process to produce synthetic styrene-butadiene rubber (SBR) trade named as Buna-S. There were other formulations for synthetic rubber and to some degree Farben had a hand in all of them. including types developed in the US and the USSR by Sergey Lebedev; these were all places lacking a native source of natural rubber. Farben built several facilities to manufacture Buna in Germany and occupied lands including the plant at Monowice. Together these factories were able to meed the German military demand for rubber until they were, like the fuel plants, destroyed or rendered useless by Allied bombers.
Unknown photographer (Bundesarchiv), Compressor station in IG Auschwitz Buna hydrogenation facility in Monowice. The scale of these compressors can be seen by noting the figures on the far right and in the center.
In 1937, Otto Bayer (Farben) developed the chemistry to produce urethanes which today are ubiquitous in adhesives, coatings, paint, insulation and packaging. Farben chemists also developed polystyrene and epoxies, organophosphate pesticides; also photographic film, X-ray plates and developing chemicals; also pharmaceuticals including phenobarbitol and the first antibiotics; also solvents, synthetic fibers and dyes; reagents and chemicals for refining, also catalysts, lubricants and special materials for high temperature applications. One of the production centers within the sprawling Buna factory was intended to synthesize glycol compounds used for explosives, also chemical warfare agents including precursors for the nerve gas Tabun. Glycol is a component of anti-freeze.
The 1925 consolidation created Farben as Europe's largest company; it was also the world's largest chemical company; a top-four largest industrial firm after General Motors, US Steel and John D. Rockefeller's Standard Oil of New Jersey. Operating through hundreds of subsidiaries and merger agreements, the greatest proportion of the firm's business was outside of Germany. Until the war, Farben was the source of the bulk of pre-WWII Germany's foreign exchange.
Farben was extraordinarily inventive. A reason was the company did not skimp on critical investments: from The Official 1945 Report of U.S. Congress on IG Farben;
Vast sums were devoted to research. In the period between 1932 and 1943 I.G. spent slightly less than RM 1bn, averaging an expenditure of rather more than 4.1 percent of (war inflated) average annual gross sales. A significant percentage of these expenditures went into research on products not yet in commercial production, and constant attention was also paid to novel applications of products. Well over 1,000 highly qualified men and women were regularly engaged in research work. In addition, the firm financed research work in many universities and scientific institutions.
Unlike the current run of tech firms with little- or nothing to show but borrowed fortunes for executives and venture capitalists, Farben's top scientists and engineers were Nobel Prize winners … Haber, Bosch and Bergius; later Otto Diels for chemistry, Gerhard Domagk for medicine. Brilliant as the company was, Farben's crimes were appalling. Farben and its manufacturing counterparts Vereinigte Stahlwerke, Daimler, Krupp, BMW, Messerschmidt, Rheinmetall, M.A.N., Mauser and the rest were the 'Military Industrial Complex' before the term as such existed. The complex's war against Europe cost the lives of thirty-two millions or more, additional millions were wounded or left homeless. Instead of empire, the war left Germany divided and in ruins. The conventional narrative suggests Farben as an accomplice or pro-forma enabler of the Nazi Reich and its horrors but this is incorrect. Hitler and his gangster cronies were products of Farben no different from polystyrene and printing ink.
Technology is seductive. From the dawn of modernity in 1455, it has offered the chance for those who possess it to gain ascendancy over those who do not. The first public expressions of modernity were both revolutionary and aggressive. The printing press enabled Martin Luther's reaction against the Catholic Church, the three-masted sailing ship made possible the almost instantaneous conquest of much of the Western Hemisphere by Spain and a handful of adventurers. The press put paid to the Church's monopoly on information and by doing so ended Rome's position as mediator of public and private affairs across Europe. The sailing ship took rapacious Europeans to every corner of the world, to pillage what they could, to colonize and enslave as far as the oceans could carry them. The roots of technology are in war and revolution, its branches are crimes and misery, death and ruin; we obsess about the flowers while we choose to endure- or ignore the rest.
Like a wrench or a saw, technology offers leverage: the policies that spring from it are entirely self-referential and self-contained. A saw either cuts or it doesn't; what happens otherwise is never an issue, what matters is the 'efficiency' of the cut. Technology sets its own terms. To the saw everything looks like a piece of wood; analysis is reduced to these terms and none other. The observed purpose of technology to expand itself; it is both ends and means simultaneously, with one justifying and reinforcing the other. Spain's conquests and Luther's bid for reform set into motion social and economic events that culminated a century later with the Thirty Years War and the annihilation of a quarter of Europe's inhabitants. On its own terms, Auschwitz was a very good concentration camp, it was able to murder over a million harmless Europeans and provide industry with a million more as slaves at very low 'per unit' cost; with very little fuss. Objections were- and are nothing more than sentimentality; those Jews and Russians were all going to die, anyway.
By way of the internal logic of technology, the most outrageous crimes are nothing other than ordinary, predictable mechanical processes. Technology 'does' because it 'is', there is are no other reasons, in fact reasoning is never part of the industrial equation; here there is never a why. Like the genie and the bottle, technology cannot be 'un-invented', it can only be replaced by newer, more revolutionary and warlike versions, or forgotten or starved of the materials it needs to continue. The failure of technology is that while it offers reach and grasp it cannot provide things that are inherently peaceful and accommodating. It is the same with economics, which produces 'wealth' but cannot provide money that is impossible to steal.
Within the version of 'modern' that Farben conjured as it trundled along, the firm itself was an unexceptional component as were the materialist anti-philosophy and the baggage of self-driven rationalizations that went along with it. Like gravity in Einstein's universe, Farben 'bent' the space of modernity, adapting everything within it to itself. Whatever was in that space was Farben's property, to do with what it pleased. This included the humans who were victims of the company as well as the governments that victimized them for the company's profit. Outside the curve, the firm's products existed for no other reason other than they did not exist before, what was to be done with them after they were delivered and the warranty ran out was never the company's business … According to the internal logic of technology — not just Farben's — the product was- and is always neutral; guns don't kill people, neither do explosives, nerve gas, cars or atomic bombs, tanks, drones or air-to-surface missiles. Hannah Arendt observed of the blandly innocuous Standard Oil of New York employee Adolf Eichmann:
The trouble with Eichmann was precisely that so many were like him, and that the many were neither perverted nor sadistic, that they were and still are, terribly and terrifyingly normal. From the viewpoint of our legal institutions and of our moral standards of judgment this normality was much more terrifying than all the atrocities put together for it implied – as had been said at Nuremberg over and over again by the defendants and their counsels – that this new type of criminal, who is in actual act hostis generis humani, commits his crime – under circumstances that make it well-nigh impossible for him to know or to feel that he is doing wrong.
Eichmann, like Arendt's 'others', was a product … of what-ever branch of industrialization, it does not matter. He was more deadly than some, less so than others. Accompanying Eichmann in the dock was the banality of technology, the dumbest of all automatons; without comprehension or sense; a Golem made of nitrate and rubber hovering both in- and outside good and evil not quite one nor the other, all things being exactly the same. This is the logic and tyranny of the machine, the false idol we have decided it is best for us to live in the center of.
Gerhard Schrader aimed to end world hunger; in the process of developing pesticides he discovered the nerve agent Tabun, that was later produced in large quantities by Farben. The chemical turned out to be difficult to handle and for that reason and for others, it was never deployed. Haber's ammonia synthesis offered the same benign promise, to feed the hungry. In 1914, Haber without hesitation volunteered his expertise to the Kaiser government, to develop and deploy poison gas during the war, having a personal hand in the first use of chlorine during the Second Battle of Ypres in 1915. "During peacetime a scientist belongs to the world," said Haber, "during wartime he belongs to his country." Ammonia synthesis was the foundation of Imperial German firepower, without BASF's explosive compounds, the German assault on the rest of Europe would not have been possible. Hitler's war would have been stillborn without the ability of Farben to synthesize motor fuels and rubber — and to obtain essential compounds as well as intelligence from its American partner Standard Oil. The conventional narrative casts Hitler as the convenient villain; that the rest of the German government, its helpful industries and naive populace were dupes. That Hitler was a villain there is no doubt. The narrative one step further makes Farben the industrial villain and that its fleet of partners and lenders, including Brown Brothers Harriman, Standard Oil, Shell Oil, Morgan Bank and the Bank of England were dupes as well. Another step further and the German Schutzstaffel-SS were the evil actors that the Farben executives were taken advantage of; this narrative held longer and was very convenient as scores of Farben executives took high-level management positions within the firms that succeeded Farben: Agfa, BASF, Bayer AG and Hoechst (merged with other companies).
Technology pushes back limits, but cannot eliminate them. It only goes so far, providing some solutions but not all of them. Farben offers a window allowing technology to reveal its shortcomings, it also a means to understand Germany, which to a large degree was a product of the dye firms that were the parent of the IG Farben company.
– All the answers are wrong: the long shadow of Farben.
– Germany, like the United States, emerged from the crucible of war. They also emerged against the same adversary.
– The First and Second European wars were started for the same reason, Germany lost both wars for identical — but different — reasons. Technology gave Germany the chance at success in its wars but technology proved to be irrelevant at the end.
The Myth of Russian Aggression
Off the keyboard of Anthony Cartalucci
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Published on Land Destroyer on August 3, 2014
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August 3, 2014 (Tony Cartalucci – NEO) – The term "Russian aggression" has been inundating headlines across the Western media and even graces the title of a US Senate bill introduce this year – S.2277 – Russian Aggression Prevention Act of 2014. But what "aggression" is the West referring to? A cursory look at Russian history over the past 500 years compared to say, Britain, France, or even America and its "Manifest Destiny," portrays Russia as a nation preoccupied within and along its borders, not in hegemonic, global expansion. The idea of far-flung former colonies is one unique to the British, French, Dutch, and Spanish. Even today geopolitical, socioeconomic, and even outright military intervention in these former colonies is exclusively the pursuit of the United States and Europe.
The United States alone has hundreds of military bases around the world, has been permanently occupying Germany and Japan for a half century, Afghanistan for over a decade, and had invaded and occupied Iraq for nearly as long.
"Russian Aggression" is a Marketing Gimmick
Canadian PM Stephan Harper's "op-ed" in the Globe and Mail titled, "Our duty is to stand firm in the face of Russian aggression," fallaciously states:
The world is saddened and rightfully outraged by images of the charred remnants of Malaysia Airlines Flight MH17, and by the loss of almost 300 people from 11 countries, strewn across fields in eastern Ukraine. While the grim work of identifying victims' remains and tracking down the perpetrators of this appalling crime is just beginning, the world can be certain of one thing: There can be no weakening of our resolve to punish the Putin regime for threatening the peace and security of eastern and central Europe.
Harper's disingenuous attempt to link Russia to the MH17 disaster reveals the truth behind "Russian aggression," a marketing campaign implemented by the West to undermine an obstruction to its very real, very demonstrable global aggression. The fact that Harper presides over the nation of Canada, which is in no way threatened by "Russian aggression" real or imagined, further exposes the disingenuous nature of the narrative peddled by the West.
Aggressors Playing the Victim – From Hitler to NATO
From Libya, to Mali, to Syria, Egypt, Ukraine, and beyond – the West has engaged in direct and indirect geopolitical meddling and manipulation through various forms of force including covert military and intelligence operations to proxy terrorism, and even outright direct military intervention. As the West nears the boundaries of nations capable of defending themselves and a defense is in fact mounted, pundits and politicians have begun framing it as "aggression." The impediment of Western expansion across Europe, Africa, Asia, and South America is framed as "aggression" just as Adolf Hitler did in regards to nations chaffing against expanding Nazism during the 1930's.
Ultimately, legitimate claims of "aggression" and "expansionism" could easily be enumerated. A map for instance, of Europe over the past several decades showing the expansion of Russian territory would be such an indicator. However, such a map instead shows precisely the opposite – with NATO visibly encroaching upon Russia's very borders behind the overt pretense of "a Europe whole and free."
In fact, the Guardian would admit in its 2004 article, "US campaign behind the turmoil in Kiev," that (emphasis added):
…while the gains of the orange-bedecked "chestnut revolution" are Ukraine's, the campaign is an American creation, a sophisticated and brilliantly conceived exercise in western branding and mass marketing that, in four countries in four years, has been used to try to salvage rigged elections and topple unsavoury regimes.
Funded and organised by the US government, deploying US consultancies, pollsters, diplomats, the two big American parties and US non-government organisations, the campaign was first used in Europe in Belgrade in 2000 to beat Slobodan Milosevic at the ballot box.
Richard Miles, the US ambassador in Belgrade, played a key role. And by last year, as US ambassador in Tbilisi, he repeated the trick in Georgia, coaching Mikhail Saakashvili in how to bring down Eduard Shevardnadze.
Ten months after the success in Belgrade, the US ambassador in Minsk, Michael Kozak, a veteran of similar operations in central America, notably in Nicaragua, organised a near identical campaign to try to defeat the Belarus hardman, Alexander Lukashenko.
That one failed. "There will be no Kostunica in Belarus," the Belarus president declared, referring to the victory in Belgrade.
But experience gained in Serbia, Georgia and Belarus has been invaluable in plotting to beat the regime of Leonid Kuchma in Kiev.
The operation – engineering democracy through the ballot box and civil disobedience – is now so slick that the methods have matured into a template for winning other people's elections.
In other words, from Belarus, to Georgia, to Ukraine, and Serbia, the US has been insidiously overthrowing governments not through outright military aggression, but through covert military, political, and intelligence operations aimed at manipulating elections and overrunning regimes that refuse to accept the subsequently skewed results. Surely, then, regimes resulting from such a practice are not then "voluntarily" joining NATO – and NATO is surely expanding itself through a campaign of insidious, violent, lawless subversion of sovereign nations, one at a time with Ukraine once again in its sights.
Nazis At the Gates (Again)
The parallels between NATO and Nazi Germany are unfortunately more than merely academic. In Ukraine, the current regime in Kiev backed by NATO and the European Union are quite literally Nazis. From the "Fatherland Party" to the overtly Neo-Nazi Svoboda Party and their various militant wings including the now notorious Right Sector front, ultra-right fascism is once again the leading edge of expansionism into, not out of, Russian territory.
Current attempts by the West to portray Russia's concern over Ukraine and the Nazi menace festering on their doorstep to Soviet leader Josef Stalin's invasion of Poland aim to stir up anti-Communist, anti-Soviet fears and hysteria long programmed into the psyches of Western audiences – but incidentally provide a valuable historical parallel. While the invasion of Poland was a violation of Polish national sovereignty and an act of war – it was done to create a barrier between the Soviet Union and the rise of Nazi Germany under Adolf Hitler. Such a barrier was arguably one of several factors that allowed the Soviets to mobilize a counteroffensive to Hitler's Operation Barbarossa – the invasion of Russia, a counteroffensive that ultimately turned the tide against Hitler and led to the downfall of fascism in Europe.
Besides cause and effect, there are few other similarities between Stalin's invasion of Poland and the modern day Russian Federation's political support of eastern Ukrainians who have been fighting the regime in Kiev for months with increasing success. Besides the same variety of dubious accounts the West fabricated against nations like Iraq, Libya, and Syria as a pretext for war, little in terms of evidence has been produced by Washington, London, or Brussels to affirm accusations that Russia is "invading" eastern Ukraine. Russia has instead chosen restraint despite multiple attempts by the West to bait it into overt military intervention in Ukraine – and in this restraint, has secured a growing global consensus long driven weary by the West's attempts to dress up its own global aggression and expansionism as "democracy promotion" and "humanitarian interventions."
Trying to Stay Sane in an Insane World: Part 3
Off the keyboard of Jim Quinn
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Published on The Burning Platform on August 25, 2013
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In Part 1 of this article I documented the insane remedies prescribed by the mad banker scientists presiding over this preposterous fiat experiment since they blew up the lab in 2008. In Part 2 I tried to articulate why the country has allowed itself to be brought to the brink of catastrophe. There is no turning back time. The choices we've made and avoided making over the last one hundred years are going to come home to roost over the next fifteen years. We are in the midst of a great Crisis that will not be resolved until the mid-2020s. The propagandists supporting the vested interests continue to assure the voluntarily oblivious populace the economy is improving, jobs are plentiful, inflation is under control, and housing is recovering. Bernanke and his band of merry money manipulators, Obama and his gaggle of government apparatchiks, and their mendacious mainstream media mouthpieces have enacted radical measures in the last five years that reek of desperation in their effort to give the appearance of revival to a failing economic system. Stimulating the net worth of bankers and connected corporate cronies through engineered stock market gains has not trickled down to the peasants. Our owners try to convince us it's raining, but we know they're pissing down our backs. Our Crisis mood is congealing.
"But as the Crisis mood congeals, people will come to the jarring realization that they have grown helplessly dependent on a teetering edifice of anonymous transactions and paper guarantees. Many Americans won't know where their savings are, who their employer is, what their pension is, or how their government works. The era will have left the financial world arbitraged and tentacled: Debtors won't know who holds their notes, homeowners who owns their mortgages, and shareholders who runs their equities – and vice versa." – The Fourth Turning – Strauss & Howe – 1997
The core elements of this Crisis have been discernible for decades. The accumulation of private and public debt; the civic, moral, and intellectual decay of our society; the growing power of the corrupt corporate fascist surveillance state; growing wealth inequality created by crony capitalist skullduggery; the peak in cheap easily accessible oil; and global disorder caused by overpopulation, scarce resources, religious zealotry, and war; combine in a toxic brew of unimaginable pain, anguish and tragedy. The Crisis began in September 2008 and the sole purpose of the deceitful establishment has been to avert a catastrophe that is destined to extinguish the wealth, power and control they've treacherously procured over the last few decades.
The appearance of stability is illusory, as the civic fabric of the country continues to tear asunder. Record high stock markets do not trickle down. The debt engineered stock market gains enrich the .1% at the expense of the working class. Bernanke's "wealth effect" theory is a charade. He has backed the country into a corner with no escape for the prisoners of his QE prison (he'll escape to collect his Wall Street paycheck in January). He knows that without the combined $300 billion per month being pumped into the veins of zombie U.S., European and Japanese insolvent zombie banks by central bankers, the worldwide financial system will implode. He blathers on about tapering while awaiting the next government manufactured crisis to give him an excuse to continue or increase his money printing exercise. Control P is the only key on Bennie's laptop. To think dropping trillions of dollars into the laps of Wall Street will somehow stimulate Main Street is beyond laughable. Some ideas are so ridiculous that only intellectuals and academics could possibly believe them.
The masters of propaganda seem baffled that their standard operating procedures are not generating the expected response from the serfs. They have failed to take into account the generational mood changes that occur during Fourth Turnings. Propaganda loses its effectiveness in proportion to the pain and distress being experienced by the citizenry. Goebbels' propaganda enthused and motivated the German people during the 1930s as Hitler re-armed, scrapped the Versailles Treaty and took over countries, as well as when he was conquering Poland and France in the early phase of World War II. Propaganda didn't work so well when the U.S. Air Force was obliterating Dresden, Hitler was hunkered down in his bunker about to put a bullet in his skull, and the Russians were on the outskirts of a burning Berlin. Propaganda works when the people want to believe the falsehoods. When the cold harsh reality slaps them in the face, propaganda no longer works.
Propaganda Working Well Propaganda Not Working So Well
The American Empire propaganda machine continues to gyrate but the gears are getting clogged with the gunk of mistruths revealed. Even the willfully ignorant masses are beginning to realize they have been screwed by those running the show. After five years of debt bankrolled "no Wall Street banker left behind solutions" and Keynesian crony capitalist handouts, real median household income is 8% lower, there are 5 million less full-time jobs, there are 19 million more Americans on food stamps, gasoline prices hover near all-time high levels, health insurance premiums are skyrocketing, local, state and Federal taxes relentlessly rise, and the national debt has gone hyperbolic – up by $6.7 trillion in five years.
This 67% increase is more debt than the country accumulated in the 214 years from its founding in 1789 through 2003. The $6.7 trillion of new debt, along with Bernanke printing almost $3 trillion of new fiat dollars and handed to his puppet masters on Wall Street, have generated a pitiful $1.8 trillion of GDP growth. We know Main Street has not benefitted from this insane expansion of our empire of debt. But, someone benefitted.
Shockingly, those who profited from the actions of Bernanke, Obama, Congress, and the U.S. Treasury are the very same malevolent predators that created the financial disaster and prompted the emergency response in the first place. QE to infinity has not been a failure. It has done exactly what it was designed to do. In September 2008 every major Wall Street bank was insolvent. Orderly bankruptcy under existing law was the solution. The richest, most powerful men in the world would have seen vast amounts of their illicitly acquired wealth vaporized. Hundreds of billions in bad debt would have been written off, with no lasting impact on the average American. A brief violent depression would have ensued, but with the bad debt purged from the system and only prudent sensible bankers left, the economy would have rapidly recovered. Instead, a small cadre of financial elite hatched a plan to preserve their ill-gotten gains through accounting fraud, and manipulation of monetary and fiscal policy.
Bernanke and Paulson compelled the pocket protector wearing accounting weenies at the FASB to allow Wall Street banks to mark their assets to make believe rather than market. Bernanke then proceeded to buy up toxic assets from the Wall Street banks, providing a never ending flow of QE heroin injected directly into the veins of Wall Street bankers, and paying .25% on all deposits made by the Wall Street banks. Bernanke didn't do this so the banks could make loans to John and Susie Q Public and small time entrepreneurs with great business ideas. He did it so Wall Street could repair their insolvent balance sheets on the backs of American taxpayers. The $2 trillion of excess reserves parked at the Federal Reserve by Wall Street banks is "earning" $5 billion of risk free profits for the Too Big to Trust autocrats. Wall Street has generated billions of additional accounting entry "profits" by pretending their future losses on worthless loans will be minimal. Lastly, the "Bernanke Put" allows the Wall Street traders to use their HFT supercomputers and advanced notice of economic data to front run the muppets and syphon billions of risk free trading profits from the real economy. The chart below reveals all you need to know about the true purpose of Bernanke's QEfinity.
You'd have to be blind, deaf and dumb to not realize who Bernanke is really working for. But it seems the majority of people in this country don't care, don't understand or don't want to know the truth, as long as the ATM keeps spitting out twenty dollar bills, there are still Cool Ranch Doritos on the shelf at the Piggly Wiggly, and the EBT card gets recharged on the first of the month.
"The mischief springs from the power which the monied interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges which they have succeeded in obtaining…and unless you become more watchful in your states and check this spirit of monopoly and thirst for exclusive privileges you will in the end find that the most important powers of government have been given or bartered away…." ― Andrew Jackson
Parasite on a Parasite on a Parasite
"This is by no means a new idea, nor is it the least bit radical; it is deeply conservative and highly traditional. It was Aristotle who first defined the economy as an exchange of goods and services for money, commerce as a parasite on the economy (where those who create nothing extract a share by trading) and finance a parasite on commerce (which extracts a share by switching money from hand to hand – a parasite on a parasite). A typical US politician, such as the president, who counts financial companies such as Goldman Sachs among his top campaign donors, could be characterized as a parasite on a parasite on a parasite – a worm infesting the gut of a tick that is sucking blood from a vampire bat, if you like." – Dimitri Orlov – The Five Stages of Collapse
The bastardized form of capitalism that passes for our economic system today is based upon a parasitic relationship between Too Big To Trust Wall Street banks, powerful mega-corporations, connected wealthy cronies, and bloodsucking politicians, with the American people as the debt bloated host. The parasites have put the host on life support in critical condition. It took forty years, since Nixon unleashed immoral bankers and devious politicians by decoupling our currency from gold, but the financialization and gutting of America through the false promises of globalization is almost complete. The quaint days of the 1950s and 1960s, when the country was supported by an economy that produced goods, invested in productive assets and citizens who saved money to buy things they desired, are long gone. The insane concepts espoused in the mid-1960s that created our current day welfare/warfare state required Americans to stop using their brains and start using their credit cards. The degenerate Wall Street banking cabal were thrilled to oblige by providing vast sums of debt to the government and the masses. Constant war, uncontrolled materialism, and an ever expanding welfare state is the triple crown of profits for unscrupulous bankers and corporate CEOs. Once the inconveniant anchor of gold was cut loose by Nixon, the bankers and politicians were free to guide the U.S. Titanic towards its ultimate destination.
The decades long shift from a productive manufacturing society based on savings and investing in productive capital assets to a predatory consumption society based on borrowing and spending has enriched the Wall Street financial elite and destroyed the working middle class. An economy where 25% of its GDP was produced by manufacturing products allowed all boats to rise. A hard working middle class family had a chance to move up the social ladder. An economy where more than 20% of its GDP is dependent upon parasitical financial intermediaries that produce nothing and add no value creates the extreme wealth inequality we have in our society today. Only the yachts rise in such a society. The shift has been slow and methodical and we've crossed the point of no return. The propaganda being spewed by the mainstream corporate media and the connected crony capitalists like Jeffrey Immelt about a U.S. based manufacturing revival is designed to pacify the distracted masses. The pillaging by the FIRE sector will continue until the host is deceased.
The growth as a percentage of our GDP in business & professional services from 5% of GDP in 1970 to 12% today provides further evidence of a country in a downward spiral. The country wastes billions hiring "experts" (lawyers, accountants, consultants) to interpret the millions of pages of indecipherable laws, regulations and tax codes created by politicians used to control, monitor, tax and bilk the masses. The 3,300% increase in spending on healthcare and education since 1970 has created tens of millions of sickly functional illiterates. The corporate food conglomerates mass produce processed poison, Madison Avenue maggots peddle the poison to the masses through relentless Bernaysian propaganda marketing, creating nauseatingly obese human beings, and then the corporate healthcare conglomerates treat the dozens of diseases created by this insane process with their drugs, while corporate profits soar ever higher. We all know that superstar corporate CEOs like Jack Welch, Jamie Dimon, Angelo Mozillo, and Mark Zuckerberg deserve hundreds of millions in compensation for adding so much value to our everyday lives. How would we survive without a Best Buy credit card through GE Capital at 21% interest, or a JP Morgan created credit default swap sold to customers and then shorted, or a subprime negative amortization liar loan used to purchase a $750,000 McMansion, or having a place to post every inane thought we have so employers and the NSA can keep up to date on our status.
The corpulent populace have been so dumbed down by the public educational system run by social engineers and union teachers, along with the 24/7 corporate media propaganda inundating them since childhood, they are content to stare into their boob tubes, play with their iGadgets, or read what a friend of a distant relative ate for breakfast, on Facebook. The government provides enough welfare handouts to keep the increasingly larger lower classes from rioting by borrowing $1 trillion per year from future unborn generations. When the middle class shows signs of discontent regarding their declining wages and lack of jobs, the government and the military industrial complex use the bogeyman of impending terror threats and evil foreign dictators to wage undeclared wars and distract the willfully ignorant masses. Plus, there are always fantasy football leagues, paying $300 to take your family to watch drug enhanced millionaire baseball players not run out a ground ball at a $1 billion taxpayer financed stadium, shopping at a suburban ghost mall with one of your nine credit cards to dull the pain of a meaningless pathetic life, or watch eight year old Honey Boo Boo dress like whore and parade before adult judges on the Discovery Channel. Our choice to ignore the basic mathematics of our lives has resulted in creating a nation of sub-humans wandering through life like zombies in a bad horror movie.
"Anyone who cannot cope with mathematics is not fully human. At best, he is a tolerable subhuman who has learned to wear his shoes, bathe, and not make messes in the house." ― Robert A. Heinlein
And we owe it all to the bankers and politicians that have procured undue influence over the political, economic, and financial mechanisms that control the country. The 2008 financial collapse, systematically created by the pathologically egomaniacal financial elite who are programmed to thrust their vampire squid blood funnels into every potential pot of untapped wealth in the world, should have led the American people to tear down their criminal enterprise and throw the treacherous predators into prison. Instead, the fearful masses begged the Wall Street bankers and the pandering politician flunkies in Washington D.C. to steal more of their money. The bankers won again.
"They have been able to pay off politicians with political campaign funds and have been granted informal and unspoken yet complete immunity from prosecution, setting the scene for even bigger confiscations of investor capital. With the risk of legal repercussions so small and the temptation to steal so large, why would any of them not take advantage? What do they have to do to stop people from entrusting them with their savings? Put up neon signs that say, "We steal your money"?" – Dimitri Orlov – The Five Stages of Collapse
This capturing of unwarranted power by an unelected group of rich powerful men through deceitful means has left the country at the mercy of these psychopaths as their increasingly desperate measures insure the ultimate destruction of wealth across the planet. There are four central bankers (U.S., EU, Japan, China) who are the front men for the oligarchs. They are empowered with control over 70% of all the money on the planet. Do you think they have your best interests at heart? The financial crisis was caused by excessive levels of debt, created to benefit the issuers of the debt and the politicians who used the debt to promise voters more goodies than they could ever possibly deliver. Those politicians would be long gone before the IOUs came due, but the promises got them re-elected and made them rich. The "solutions" put forth by our owners since 2008 to solve our debt crisis have been to create debt at an even more rapid pace. Total credit market debt in the U.S. has surged by $6 trillion since 2007 to $57 trillion, 345% of GDP (it was 150% in 1970). The entire world is awash in un-payable levels of debt as reckless central bankers and gutless politicians know only one response to every crisis they cause – PRINT!!!
The decline in U.S. household debt has been solely due to write-offs, as the bad debt was shifted from reckless households and gluttonous bankers to the government books, where those who prudently abstained from the debt orgy are now on the hook for trillions of newly created unfunded obligations. Despite a moribund economy, with the lowest percentage of the population employed since 1983, consumer spending tanking, interest rates rising, gas prices near record highs, and poverty levels at all-time highs, corporate profits are off the charts. It seems the "solutions" implemented by the Ivy League MBA financial elite bankers and bureaucrats have had the desired result – enrichment of the criminal class who financialized the nation. The establishment and their media propaganda machine have somehow convinced a vast swath of Americans to believe that record profits accruing to the largest corporations in the world and stock market gains accruing to the 1% are beneficial to their lives. It's a testament to the power of propaganda that people can be convinced to cheer on their own downfall as they are dehumanized and enslaved by the plantation owners who run this country.
"Crime follows money like a shadow. The more money there is within a society, the greater are its social inequalities. Financialization dehumanizes human relationships by reducing them to a question of numbers printed on pieces of paper, and a blind calculus for manipulating these numbers mechanically; those who take part in this abstract dance of numbers dehumanizes others and, in turn, lose their own humanity and can go on to perform other dehumanizing acts. Money is, in short, a socially toxic substance." – Dimitri Orlov – The Five Stages of Collapse
There is no more revealing statistic than real median household income to gauge the winners and losers from the financialization and dehumanization of America. The real median household income of $52,100 is still 8% below the early 2008 level of $56,600. It is still 5% lower than it was in 1999, before the Federal Reserve/Wall Street bubble blowing wealth destruction machine really got going. In fact, real median household income has only risen 9% in the last 35 years. Prior to that, most families could live comfortably with only one spouse working. I'd be remiss if I didn't point out that these calculations are based on the fraudulently manipulated CPI figures which are understated by at least 3% per year. Using a true measure of inflation would reveal median household income to be lower today than it was in the mid-1960s. The bottom 80% have seen a decline in their standard of living since the mid-1960s as inflation has robbed them of purchasing power and the financial elite have skimmed the cream off the top of our economic system. The economic gains have accrued to the top 5%, with astronomical gains being amassed by the .1% ruling elite, who have rigged the game in their favor through laws written by their lobbyists, regulatory shenanigans, tax code manipulation, and buying off politicians. Thank you Bob Rubin, Larry Summers, and Phil Gramm for repealing Glass Steagall and stopping any regulation of financial derivatives. Where would the country be without those two courageous acts on your part?
Those in control of the system have succeeded beyond their wildest dreams as 72% of all the wealth in the US is held in the hands of 5% of the population, with 42% of this in the hands of the top 1%. The top 1% now "earn" over 20% of all the income in the U.S., a level exceeded only once before in the 1920s prior to the Great Crash of 1929 and ensuing Depression. During the heyday of middle class upward mobility, from 1950 through 1970, the top 1% earned 10% of all income. Today, the top 1% is dominated by debt peddling bankers creating derivatives of mass destruction, hedge fund egomaniacs in collusion with bankers to syphon capital away from productive ventures, mega-corporation job destroying executives, entertainment personalities, and shyster lawyers preying on the weak and feeble minded. Our insane society heaps accolades on these rich and famous narcissists, who add no value, produce nothing, create economic havoc, and drain the lifeblood from the dying carcass of a once great nation. The nearly extinct middle class owes their fate to the malevolent men that turned the country into a gambling casino of debt, derivatives, delusion and dreams of jackpots that will never materialize. The bankers and their cronies run the casino and the house always wins, as the chart below confirms.
It is mind boggling that we have allowed ourselves to be brainwashed by the ruling class about the tremendous benefits of globalization, efficiency, productivity, and profitability. When academia, the mass media, and government leaders use their power and influence to convince the masses that ever higher mega-corporation profits benefit the well-being of the country, you end up where we are today. Globalization was nothing more than a scheme by our biggest corporations to use labor arbitrage as a way to increase profits. As American jobs were disappeared overseas to countries that allow slave labor conditions and wages, median household income declined.
The banking cabal stepped to the plate and convinced the increasingly poorer middle class to replace that lost income with easily accessible debt. Just whip out that credit card and use your house as an ATM and you still give the appearance of increasing wealth. You might be in debt up to your eyeballs but, by God, at least the neighbors would think you were doing great. Until the foreclosure sign went up in front of your house in 2009. The marriage of corporations outsourcing American jobs to China with consumer debt peddled by the predator banks was a match made in heaven until the country ran out of decent paying jobs, one in six people was on food stamps, and the average middle class family was drowning in debt. People are beginning to wake up to the fact that corporate efficiency and productivity means firing American workers, cutting benefits, and bigger bonuses for corporate executives as their stock price is boosted by the announcement of more layoffs. The country has been gutted by the predator class in their unquenchable thirst for more. Human nature never changes. Greed, desire, avarice and stupidity will always rear their heads, leading to predictable outcomes.
"Indeed, it had not – not when the nation's most sophisticated corporate financiers and their accountants were constantly at work finding new instruments of deception barely within the law; not when supposedly cool-headed fund managers had become fanatical votaries at the altar of instant performance; not when brokers' devotion to their customers interest was constantly being compromised by private professional deals or the pressure to produce commissions; and not when the style-setting leaders of professional investing were plunging as greedily and recklessly as any amateur." – John Brooks
The psychopaths controlling this country have fashioned untenable financial conditions by further weakening an already structurally deficient economic structure that will result in an epic flood of financial destruction destined to destroy the lives of millions in the U.S. and around the globe. Those who put their faith in financialization and interconnected globalization will reap what they have sowed. We will all feast at a banquet of consequences. Encouraging central bankers across the world to print trillions of fiat currency out of thin air as the solution to our debt problem is the ultimate in idiocracy. The unsustainability of this scheme should be evident to even an Ivy League economist. But the dimwitted government apparatchiks, overeducated economists, greedy corporate executives, vacuous media talking heads, and intellectually dishonest journalists cheer on Ben Bernanke and his central banker brethren.
When you see a Bloomberg bimbo interviewing an Ivy League Wall Street economist about the tremendous merits of QE to infinity, you have a millionaire interviewing a multi-millionaire, with both working for corporations owned by billionaires. Their jobs depend upon the sustenance and further enrichment of the establishment. Therefore, they will lie, obfuscate and mislead their audience about the criminality of their bosses and the true consequences of these crimes against humanity. The existing hierarchy will not willingly surrender their control, power and illegitimately acquired wealth. Only the process of economic collapse, war and revolution will end their reign of terror.
We've seen it all before. The cycles of human history have provided us with centuries of proof that a few evil men can gain control over a civilization and procure an inordinate amount of wealth and power before ultimately relinquishing it due to their myopic pathological desire to acquire more. Powerful wealthy narcissists are never satisfied with what they have. Their arrogance and hubris will always be their downfall. Their foolish belief in their own omniscience reveals their true ignorance. Their enormous egos and confidence in the linearity of history blind them to their impending demise. Time is no longer on their side. A reckoning will happen within the next decade. Their gated communities and penthouse doormen will not keep them safe.
The American people cannot shirk their responsibility for this ongoing tragedy. The evil men could only pull off this bank heist with the silent consent of the governed. And that is exactly what has happened. The American people have been gradually persuaded through propaganda and fear to willingly give up freedom, liberty and self-responsibility for safety, security and government provided succor. Over the last forty years the Americans people have allowed themselves to be enslaved in debt by bankers, corporations and politicians, who realized all the riches, while binding the citizens in chains made of credit cards and mortgages. Now that the system has reached its breaking point and the further issuance of debt no longer generates the appearance of growth, the ruling class have resorted to more authoritarian measures, all done in the name of protecting us from phantom terrorists and evil dictators. It's for the children.
Decisions about our economy are made in secret meetings by unelected officials and with sparse details announced with great fanfare by the corporate media. The President, with the full support of the military industrial complex, chooses which dictators are evil and which are good, with each being interchangeable depending upon the circumstances. The iron fist of American democracy attacks countries at will, without a declaration of war as mandated by the U.S. Constitution. Twenty five hundred page laws, indecipherable reams of regulations, and 60,000 pages of tax code are rammed down the throats of Americans without the benefit of even a debate. Each crisis caused by the previous government solution is met with more laws and regulations, designed and written by the very entities they were supposed to control. The farce of party politics is used to give people the appearance of choice, when there is not an iota of policy difference when the opposing party assumes power.
The people are told every situation is too complicated for them to understand and they should let the "experts" solve the problems. Every authoritarian measure used to control dissent among those capable of thinking is done in the name of national security. Edward Snowden is declared a traitor for revealing the traitorous actions of our own government, and the people silently consent. The head of the NSA is caught lying to Congress, and no one cares. The Department of Homeland Security locks down one of the biggest cities in America looking for a teenager and the people cower and beg Big Brother for more protection. The NSA and other secretive government agencies treat the 4th Amendment like toilet paper, and the people feebly respond by breathlessly texting, twittering and facebooking about Anthony Weiner's cock. The U.S. military desensitizes the masses by conducting live fire exercises in American cities, and the people just change the channel to Bridezillas or I Didn't Know I Was Pregnant.
Each new economic "surprise"; each new foreign "threat"; each new government "solution" is met with secrecy, spin, and no avenue for the people to impact the decisions made by our owners. The people no longer matter. They can't change the course of the country through legal means or the ballot box because the system has been captured. It has happened before. The American people are under the mistaken impression we are free. That boat has sailed. Our economic, financial and political systems have been usurped by malicious men posing as gangsters in this saga. We have allowed this to happen. We mistakenly put our trust in bankers, academics and politicians and will suffer the consequences of our choices, just as the German people experienced during the last Fourth Turning.
"What happened here was the gradual habituation of the people, little by little, to being governed by surprise; to receiving decisions deliberated in secret; to believing that the situation was so complicated that the government had to act on information which the people could not understand, or so dangerous that, even if the people could not understand it, it could not be released because of national security.
Each step was so small, so inconsequential, so well explained or, on occasion, 'regretted,' that unless one understood what the whole thing was in principle, what all these 'little measures'… must someday lead to, one no more saw it developing from day to day than a farmer in his field sees the corn growing…. Each act… is worse than the last, but only a little worse. You wait for the next and the next. You wait for one great shocking occasion, thinking that others, when such a shock comes, will join you in resisting somehow." – Milton Mayer, They Thought They Were Free, The Germans 1933-45
In the fourth and final installment of this seemingly never ending treatise on a world gone insane, I'll address how the disintigration of trust will ultimately lead to a collapse of the worldwide Ponzi scheme and how the collapse could lead to a rebirth of a society built upon family, community, cooperation, local commerce, compassion, freedom and liberty. I can dream, can't I?
All I want for Christmas is the TRUTH
Off the keyboard of Jim Quinn
Published on The Burning Platform on December 3,2012
Discuss this article at the Epicurean Delights Smorgasbord inside the Diner
"Eyes blinded by the fog of things
cannot see truth.
Ears deafened by the din of things
cannot hear truth.
Brains bewildered by the whirl of things
cannot think truth.
Hearts deadened by the weight of things
cannot feel truth.
Throats choked by the dust of things
cannot speak truth."
― Harald Bell Wright – The Uncrowned King
I consider myself a seeker of truth. It isn't easy finding it in todays' world. In an alternate version of the famous scene from A Few Good Men, I picture myself telling Turbo Tax Timmy Geithner that I want the truth and his angry truthful response:
"Son, we live in a world that has Wall Street banks, and those banks have to be guarded by puppet politicians in Washington D.C. with lobbyist written laws and Madison Avenue PR maggots with media propaganda. Who's gonna do it? You? You, Representative Paul? I have a greater responsibility than you could possibly fathom. You weep for the average middle class American family, and you curse the ruling oligarchs. You have that luxury. You have the luxury of not knowing what I know. That the death of the American middle class, while tragic, probably saved the bonuses of thousands of Wall Street bankers. And my existence, while grotesque and incomprehensible to you, increases the wealth of these same bankers who destroyed the worldwide economic system in 2008. You don't want the truth because deep down in places you don't talk about in the food bank line, you want me on Wall Street, you need me on Wall Street. We use words like derivative, fiscal stimulus, quantitative easing. We use these words as the backbone of a life spent syphoning off the wealth of the nation. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very debt that I provide, and then questions the manner in which I provide it. I would rather you just said thank you, and went on your way, Otherwise, I suggest you pick up 1000 shares of Apple, and hope our high frequency trading supercomputers can ramp the market for a while longer. Either way, I don't give a damn what you think you are entitled to."
I find myself more amazed than ever at the ability of those in power to lie, misinform and obfuscate the truth, while millions of Americans willfully choose to be ignorant of the truth and yearn to be misled. It's a match made in heaven. Acknowledging the truth of our society's descent from a country of hard working, self-reliant, charitable, civic minded citizens into the abyss of entitled, dependent, greedy, materialistic consumers is unacceptable to the slave owners and the slaves. We can't handle the truth because that would require critical thought, hard choices, sacrifice, and dealing with the reality of an unsustainable economic and societal model. It's much easier to believe the big lies that allow us to sleep at night. The concept of lying to the masses and using propaganda techniques to manipulate and form public opinion really took hold in the 1920s and have been perfected by the powerful ruling elite that control the reins of finance, government and mass media.
Peddlers of Propaganda
"Great is truth, but still greater, from a practical point of view, is silence about truth." – Aldous Huxley – Brave New World
Adolf Hitler understood the power of the big lie over the ignorant masses who want to believe:
"All this was inspired by the principle–which is quite true within itself–that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying." – Adolf Hitler – Mein Kampf
We are all liars. We lie to friends, family and co-workers. We convince ourselves they are only small lies and just protect others from being hurt. We would rather be lied to than face the blunt truth about our deficiencies, shortcomings and failures. Willfully believing mistruths allows a person to become dependent upon those promulgating the mistruths. It relieves them of their responsibility to act upon the knowledge that something is wrong and must be fixed. It is a cowardly path to ultimate servitude and destruction. The German people chose this path in the 1930s and the American people have chosen a similar and ultimately destructive path today. The United States Office of Strategic Services prepared a psychological profile report during the war describing Adolf Hitler's method for controlling the minds of the German masses:
"His primary rules were: never allow the public to cool off; never admit a fault or wrong; never concede that there may be some good in your enemy; never leave room for alternatives; never accept blame; concentrate on one enemy at a time and blame him for everything that goes wrong; people will believe a big lie sooner than a little one; and if you repeat it frequently enough people will sooner or later believe it."
America's corruptible politicians, greedy corporate chieftains, criminal banking overlords, and despicable media manipulators all learned the sordid lessons of mass propaganda from the masters. Our willingness to lie and be lied to set us up to be manipulated by those who understood the mass psychology of a nation. Goebbels and Hitler were heavily influenced by the father of propaganda – Edward Bernays. He and his disciples are professional poisoners of the public mind, exploiters of public foolishness and ignorance, and never allow truth to interfere with a good story. What master manipulators realized is that it is easier to change the attitude of millions than the attitude of one man. By analyzing and understanding the process and motives of how the group mind works, the invisible government has been able to manipulate and regulate the masses according to their will without the masses knowing they are being managed. Bernays described this elitist view of the world in 1928:
"Those who manipulate the unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. In almost every act of our lives whether in the sphere of politics or business in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons who understand the mental processes and social patterns of the masses. It is they who pull the wires that control the public mind." – Edward Bernays – Propaganda
The super-rich elite believe they are more intelligent, more capable of managing the affairs of state, masters of the financial world, and chosen to decide what is best for the masses. In reality, they are egocentric, psychotic, power hungry, myopic, self-serving ravenous vultures, feasting upon the carcass of a once great nation. Truth is inconsequential and irritating to their plans for world domination and control. Therefore, no truth will be forthcoming from any organization or person that is associated with the existing political, economic, financial or social order. Every bit of information that is permitted into the public realm has been vetted, manipulated and spun for public consumption. The public does not like bad news. They do not like hard facts. They do not like to think or do math. They want to be spoon fed mindless sound bites and happy talk. The oligarchs need to keep the masses sedated and subservient while they continue to plunder and pillage, so all data is massaged to provide a happy ending.
This is where I deviate from the ideologue one-trick ponies that refuse to see both sides of the issue. The ruling oligarchs are wealthy, influential, psychotic, amoral, and few. The masses are relatively poor, easily influenced, willfully ignorant, and many. The ruling oligarchs are most certainly evil, but the masses are not the hard working, stoic, downtrodden portrayed by liberal ideologues. One just needs to walk down the street in one of our urban enclaves, saunter through a suburban mall, or click on People of Wal-Mart to witness the tattooed, pierced, butt crack showing, slovenly, obese, and ignorant, attached to their electronic iGadgets, to understand how far our society has deteriorated. Every individual born into this world has the capability to become educated, think critically, not follow the herd, live beneath their means, and not be influenced by propaganda. Aldous Huxley understood in 1931 that those in power could use material goods to invoke passivity and egotism among the populace. He feared that truth would be obscured by an avalanche of irrelevance (500 Reality TV shows), cultural trivialities (Lady Gaga, Lindsey Lohan), distractions (Professional sports), and pharmaceutical enhanced escape (Prozac). He saw the possibility that we would grow to love our servitude as the pleasures of life provided by our controllers overwhelmed any desire to think or question authority.
"There will be in the next generation or so a pharmacological method of making people love their servitude and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies so that people will in fact have their liberties taken away from them but will rather enjoy it." ― Aldous Huxley
By 1962 when Huxley wrote his last book, he was certain that his worst dystopian nightmares had been unleashed. His description of Western society fifty years ago could have been written today and accurately reflected our current economic paradigm. War, debt and consumption still make our world go round, but the end is nigh.
"Armaments, universal debt, and planned obsolescence – those are the three pillars of Western prosperity. If war, waste, and moneylenders were abolished, you'd collapse. And while you people are over-consuming the rest of the world sinks more and more deeply into chronic disaster." – Aldous Huxley – Island
The pillars are crumbling. The $1.4 trillion wasted on two worthless wars of choice in the Middle East, the trillions wasted and liberties sacrificed for the never ending unwinnable War on Terror, the Keynesian spending frenzy that has driven the National Debt from $9 trillion to $16.3 trillion in the last five years, the looting of the American taxpayer by Wall Street and their co-conspirators at the Federal Reserve and in Congress, and the belief that ramping up the debt driven consumption that drives 71% of our GDP is our path to prosperity is absolutely freaking nuts. The pillars will not be abolished willingly. The ruling class depends upon their continued existence and expansion. There is the rub. The math doesn't work. We've reached the point where continued expansion of debt and money printing no longer works. With a national debt to GDP ratio of 102% and a total credit market debt to GDP ratio of 350%, we have passed the Rogoff & Reinhart point of no return. This time is not different. A country cannot run trillion dollar deficits indefinitely and expect to not suffer the consequences. This is why those in power are increasingly resorting to propaganda, data manipulation, and outright lies to convince the masses of their omnipotence and brilliance in managing the fiscal affairs of the state.
"One believes things because one has been conditioned to believe them." – Aldous Huxley – Brave New World
Through decades of mass media messaging the masses have been conditioned to believe whatever those in power want them to believe. To our invisible government rulers we are nothing but rats to be manipulated through food pellets and shock therapy. Pleasure and fear of pain are the drivers of our warped society. The ruling oligarchs truly think they know what is best for the masses and believe any means is worthwhile as long as the ends support their agenda. This is blatantly obvious to anyone with their eyes open and their brain functioning. Sadly, the government run educational system produces mostly drones that are barely able to tie their own shoes, spell Cat, or make change from a one dollar bill. Only 20% of all high school seniors score high enough on the SAT test to get a B minus in college and most of these kids come from private and parochial schools. This is exactly what those in power prefer. They want non-critical thinking, mindless consumers, who don't understand the criminal nature of Federal Reserve created inflation or their enslavement in the chains of debt at the hands of their Wall Street slave owners. They certainly don't want the masses to understand that real median household net worth is lower today than it was in 1969. Luckily for the oligarchs, 95% of the public couldn't define the terms: real, median or net worth. Math is hard.
The average person is inundated on a 24/7 basis with pabulum from liberal network media talking heads, CNBC Wall Street shills regurgitating whatever their sponsors desire, Fox News blonde bimbos and neo-con war mongers programmed to spew Rupert Murdoch talking points, MSNBC tingling leg faux journalists, NYT intellectually corrupt Nobel prize winners, NAR nitwits repeating "best time to buy" on a daily basis for the last 12 years, and government agencies whose sole purpose is to manipulate data in a way that supports the agenda of those in power. The intellectually lazy and willfully ignorant masses are no match for those who control the message and the media. How else can you explain their ability to convince millions of drones to line up for hours in front of a store and stampede like crazed hyenas to grab a $5 crockpot, the Chinese produced gadget of the moment or a designer top made by slave labor in safety conscious Bangladesh factories? How else can you explain a population willing to be molested by government TSA dregs in the name of security from phantom terrorists, the passive acceptance of military exercises in US cities, unquestioning submissiveness as Presidential Executive Orders allow the government dictatorial powers based on their judgment, the monitoring of internet and voice correspondence of all citizens, and believing that FBI agents luring clueless teenage Muslim dupes into fake terrorist plots, providing the fake explosives, and then announcing with great fanfare how they saved us from another 9/11?
But, the prize for boldest, most outrageous, blatant use of propaganda and misinformation to cover-up their criminal looting of America goes to Ben Bernanke, his cronies at the Federal Reserve, and the Wall Street banks that own and control our Central Bank. Having the gall to portray themselves as the stabilizer of our economic system over the last 100 years is a putrid joke on the dying and broke middle class. Their mandate has been stable prices, full employment, and avoiding financial crisis. It is a tribute to Bernays and the rest of the public relations swine that the average American actually believes inflation is a good thing and it is under control despite the FACT that 96.2% of their purchasing power has disappeared since 1900, with the most rapid decline occurring since Nixon closed the gold window in 1971.
The average American actually believes Ben Bernanke saved us from a Great Depression when in actuality he saved the owners of the Federal Reserve from accepting the losses they generated through the greatest financial fraud in history. His "solutions" have zombified our economic system, just as the Japanese Central Bank did 20 years ago. He has destroyed the concept of saving, while rewarding the indebted and profligate with his QE to Infinity money printing policies. And the ignorant masses have been convinced by the corporate media and their corrupt government lackeys that Ben did this for them. Kyle Bass knows otherwise. He knows how the Fed and their backers have preyed upon the masses through their understanding of human psychology:
"Humans are optimistic by nature. People's lives are driven by hopes and dreams which are all second derivatives of their innate optimism. Humans also suffer from optimistic biases driven by the first inalienable right of human nature which is self-preservation. It is this reflex mechanism in our cognitive pathways that makes difficult situations hard to reflect and opine on. These biases are extended to economic choices and events. The primary difficulty with this train of thought is the bias that most investors have for the baseline facts: they tend to believe that the central bankers, politicians, and other governmental agencies are omnipotent due to their success in averting a financial meltdown in 2009.
Central banks have become the great enablers of fiscal profligacy. The overarching belief is that there will always be someone or something there to act as the safety net. The safety nets worked so well recently that investors now trust they will be underneath them ad-infinitum. Markets and economists alike now believe that quantitative easing ("QE") will always "work" by flooding the market with relatively costless capital. Unlimited QE and the zero lower bound ("ZLB") are likely to bankrupt pension funds whose expected returns happen to be a good 600 basis points (or more) higher than the 10?year "risk-free" rate. The ZLB has many unintended consequences that are impossible to ignore.
Our belief is that markets will eventually take these matters out of the hands of the central bankers. These events will happen with such rapidity that policy makers won't be able to react fast enough. The fallacy of the belief that countries that print their own currency are immune to sovereign crisis will be disproven in the coming months and years. Trillions of dollars of debts will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation." – Kyle Bass
What's Normal in a Profoundly Abnormal Society?
"The real hopeless victims of mental illness are to be found among those who appear to be most normal. Many of them are normal because they are so well adjusted to our mode of existence, because their human voice has been silenced so early in their lives, that they do not even struggle or suffer or develop symptoms as the neurotic does." They are normal not in what may be called the absolute sense of the word; they are normal only in relation to a profoundly abnormal society. Their perfect adjustment to that abnormal society is a measure of their mental sickness. These millions of abnormally normal people, living without fuss in a society to which, if they were fully human beings, they ought not to be adjusted." – Aldous Huxley – Brave New World Revisited
No sane person could honestly say that what has happened to our society over the last forty years, and particularly in the last five years, is normal. But somehow those in power have convinced the masses that $1.2 trillion deficits, 0% interest rates, declining real wages, the highest average gas prices in history, pre-emptive wars, policing the world and buying rubber dog shit produced in China with a credit card is normal and beneficial to our economy. It seems that I and a few million other people in this country are the abnormal ones. We choose not to be led to slaughter by our masters. The seekers of truth have turned to the alternative media and are able to connect with like-minded critical thinking individuals on websites like Zero Hedge, Jesse's Americain Café, Of Two Minds, Mish, Financial Sense, among many other truth seeking blogs. This is dangerous to the powers that be and they are using their political clout and extreme wealth to try and lock down and control free speech on the internet. If this is accomplished all hope at disseminating truth will be lost.
Abraham Lincoln once said that he believed in the people and that if you told them the truth and gave them the cold hard facts they would meet any crisis. That may have been true in 1860, but not today. The cold hard facts are available for all to see:
- A $16.3 trillion National Debt
- 47 million people on food stamps
- Over $222 trillion of unfunded Federal entitlement liabilities
- Over $5 trillion of unfunded State entitlement liabilities
- True unemployment above 20%.
- True inflation above 5%.
- A stock market at the same level as 1999, with a 10 year expected annual return of less than 4% – Stocks for the really, really long run. 10 year bond returns of 0% will be a miracle.
- A savings rate of 3.7% and with Bernanke's ZIRP, no incentive to save. Real hourly earnings continue to fall.
- Baby Boomers within 10 years of retirement have saved an average of only $78,000, and more than a third of them have less than $25,000. More than half of U.S. workers have no retirement plan at all.
- A crumbling, decaying infrastructure, with 150,000 structurally deficient bridges, bursting water mains, and an overstressed electrical grid.
- Horrific government public education producing millions of low functioning morons.
- Rotting social fabric, with 40% of children born out of wedlock (72% of black children) and a 50% divorce rate.
- An energy policy based upon unicorns farting rainbows and press releases about green energy and the miracle of shale fracking, as average gas prices in 2012 and 2011 were the highest in U.S. history.
As the pitiful excuses for statesmen in Washington D.C. pander and posture about the dreaded fiscal cliff which was purposely created by the oligarchs as a show for the masses, none of the true issues above are being addressed. The dramatic compromise that will ultimately be reached between the equally corrupt parties will be hailed by the corporate media and Wall Street shysters and an HFT supercomputer engineered stock market rally will ensue. The cowardice of these politicians is revolting. As Huxley knew in 1958, politicians and propagandists prefer nonsense and storylines to truth, knowledge and honesty.
"Human beings act in a great variety of irrational ways, but all of them seem to be capable, if given a fair chance, of making a reasonable choice in the light of available evidence. Democratic institutions can be made to work only if all concerned do their best to impart knowledge and to encourage rationality. But today, in the world's most powerful democracy, the politicians and the propagandists prefer to make nonsense of democratic procedures by appealing almost exclusively to the ignorance and irrationality of the electors." – Aldous Huxley – Brave New World Revisited
We want to be lied to because the truth is too painful. Hope and denial with a dash of delusion is the recipe the mindless masses prefer. The average person doesn't want to understand the chart below. They want to believe the U.S. will dominate economically and lead the world for decades to come. We are still the bright shining beacon of democracy on the mountaintop. Even though the facts unequivocally reveal a declining empire, the masses desperately grasp at straws in the wind. The United States share of world GDP will be vastly lower in 2021, as the hubris of declining empires never allows them to take the necessary steps to reverse the decline (Rome, Great Britain).
It is fitting that during this magical Christmas season of fantasy, delusion, debt fueled material over-consumption and fairy tales, we look at the biggest fairy tale of all – the great jobs recovery. I know from the two thousand Obama campaign commercials I was forced to watch in the last few months and 500 robo-calls at dinner every night that we've added 4 million jobs due to Obama's wise economic policies. The magical journey from a 10.3% unemployment rate to a 7.9% rate is a humdinger. I stumbled across a myriad of charts on those truth-telling websites that I had previously mentioned.
"You shall know the truth and the truth shall make you mad." ― Aldous Huxley
The first chart that grabbed my attention shows the historical relationship between the U3 unemployment rate reported to the masses versus the U6 truer picture of unemployment, along with the percentage of people unemployed for longer than 15 weeks. A funny thing happened shortly after the election of Barack Obama. From 1994 through 2008 the gap between the U3 and U6 rates consistently ranged between 3% and 4%. Suddenly, the gap surged to 7% and currently sits at almost 8%. The figure reported to the masses of 7.9% is so much easier to digest than the 15% to 17% that captures the truer level of unemployment. If the gap between these two figures had remained at the levels of the previous 14 years, the unemployment that should be reported to the masses would be 11%. That is unacceptable to those in power, so the data is massaged and the propaganda machine spins the storyline necessary to confuse and mislead the masses.
The next two charts from Mike Shedlock again reveal truths the existing social order doesn't want you to know. Even though the working age population has grown by 10 million people since 2008, the BLS expects critical thinking people to believe the labor force has only grown by 1.3 million people. You see, the unemployment rate is calculated using the labor force. If your economic policies don't create jobs, just adjust the labor force dramatically lower based on nothing. In desperate economic times, people do not voluntarily leave the workforce. Only a non-thinking drone would believe that 8.7 million Americans voluntarily left the workforce since 2008, when only 4 million left the workforce from 2003 through 2007. It is not a coincidence that student loan debt, which was taken over by the Obama administration in 2009 rose by $300 billion. Those in power have doled out these billions with no concern for credit risk or academic credentials in order to reduce the number of people in the labor force. Unemployed union Twinkie workers seeking a new career in lesbian studies can get a $20,000 loan from the American taxpayer to sit in their basement along with the 500,000 other University of Phoenix enrollees. The future $300 billion taxpayer bailout was worth it to keep the unemployment rate low enough to insure Obama's re-election.
The Obama PR machine never fails to expound upon the fact that the economy added 4.9 million jobs since January 2009. In the same timeframe, uncovered employment rose by 6.6 million. Inquiring minds might want to know what an "uncovered" job entails. Selling your accumulated Chinese crap on Ebay is an uncovered job. Calling yourself a consultant while sleeping until noon is an uncovered job. Day trading Facebook and Apple stock is an uncovered job. Trash picking is an uncovered job. The truth is that real jobs are 1.7 million lower than they were at the depths of the recession, while bullshit jobs paying virtually nothing and offering no benefits have surged by 6.6 million. These facts don't make a great campaign commercial. The number of employed Americans is at the same level as mid-2005, even though the working age population has grown by 18 million. Since 2008 there are 3 million less full-time jobs and 3 more part-time jobs. This trend is accelerating as small businesses react rationally to the oncoming Obamacare train, resulting in aggregate work hours declining and wage growth stagnating.
Zero Hedge reveals more truth about our glorious jobs recovery with the following two charts. They obliterate the false narrative spun by liberal ideologues that the reason for the increase of those not in the labor force is due to Baby Boomers retiring. The truth is that while those in the 55-69 age brackets have gained nearly 4 million jobs under President Obama, everyone else has lost just over 2.5 million jobs. Is this a positive development or a sign of extreme desperation among older Americans who have seen their interest income vaporized by Ben Bernanke and there food, energy, and healthcare expenses skyrocket?
Those in their prime earning years of 25 to 54 still have a net cumulative loss of 2.2 million jobs since 2009. Recent college graduates, with their billions of student loan debt, have nabbed 400,000 TGI Fridays jobs, singing happy birthday to 3 year olds, with their newly minted college degrees. This is the "normal" healthy jobs market sold to the American public by the propagandists and politicians.
The final jobs chart that portrays the truth of what has been a decades' long spiral downward paints a picture of a country that once created wealth through producing goods from the 1940s through 1970. Since 1970 we've degenerated into a debt creating country that consumes foreign produced goods and makes entitlement promises it can never keep. Selling houses to each other, peddling crap on Ebay, and eating out three times a week has shockingly failed to propel our economy. The jobs picture has deteriorated rapidly since 2008 and is not improving, despite the best propaganda money can buy. There is absolutely no chance of any substantive improvement over the next four years based on the policies in place and refusal to acknowledge the economic realities that we face.
The accumulation of material possessions through the use of consumer debt, peddled by bankers and reinforced through relentless corporate marketing propaganda has left the country's citizens weary, miserable, greedy, indebted and sick. Our obsession with technology has merely provided another means of distracting ourselves from confronting the dire challenges that must be addressed. We can ignore the facts but that doesn't mean they do not exist. The abnormality that grips this nation is breathtaking to behold, as the status quo cheer on and encourage consumers to buy more things with money they don't have in order to support an economic recovery that is dependent upon zero interest rates for Wall Street banks, QE to infinity, and the delusional desire for a miraculous return to the good old days when getting something for nothing was possible. We can no longer deny reality. If we want to add 30 million people to Medicaid, it must be paid for. If we want to wage never ending wars and police the world, it must be paid for. If we want a Federal government to spend $3.8 trillion per year, it must be paid for. Nothing is free in this world, but more than 50% of Americans seem to believe that to be true.
"Our economy is based on spending billions to persuade people that happiness is buying things, and then insisting that the only way to have a viable economy is to make things for people to buy so they'll have jobs and get enough money to buy things." – Philip Elliot Slater
We are seen by those in control as nothing more than common house flies caught in their web of lies. Your owners don't care about you. They only care about their own wealth and power. They want to control and manipulate you. They want to keep you enslaved in debt and running on the treadmill of consumption. They want passive, non-critical thinking drones to do the menial service jobs that remain in this country, while they use their control of our financial, political, tax, and legal systems to ransack and pillage the wealth of the dwindling middle class. The truth is the continuation of our current economic system is mathematically impossible. Your owners know this. This is why the use of propaganda, misinformation, fake data, and false storylines has taken on astronomical proportions. The time for passivity and accepting the deceitfulness of our leaders is coming to an end. While you're waiting in line this Christmas season at Wal-Mart to purchase a fabulously priced shirt that only required the deaths of 112 Bangladesh slave laborers, try to figure out how we got here. Your owners think they have you by the balls.
"They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I'll tell you what they don't want—they don't want a population of citizens capable of critical thinking. They don't want well informed, well educated people capable of critical thinking. They're not interested in that. That doesn't help them. That's against their interest. You know something, they don't want people that are smart enough to sit around their kitchen table and figure out how badly they're getting fucked by a system that threw them overboard 30 fucking years ago. Because the owners of this country know the truth, it's called the American Dream, because you have to be asleep to believe it." – George Carlin
How many Americans are awake enough to handle the truth?
All I want for Christmas is the truth.
Of Mad Men …
Off the keyboard of Steve from Virginia
Edvard Beneš was born into a peasant family in the small town of Kožlany, Bohemia, ca. 60 km west of Prague. … He spent much of his youth in Vinohrady district of Prague, where he attended a grammar school from 1896 to 1904. During this time he played football for Slavia Prague. After studies at the Faculty of Philosophy of the Charles University in Prague, he left for Paris and continued his studies at the Sorbonne and at the Independent School of Political and Social Studies (École Libre des Sciences Politiques). He completed his first degree in Dijon, where he received his Doctorate of Laws in 1908. Then he taught for three years at the Prague Academy of Commerce, and after his habilitation in the field of philosophy in 1912, he became a lecturer in sociology at Charles University.
During World War I, Beneš was one of the leading organizers of an independent Czechoslovakia abroad. He organized a Czech pro-independence anti-Austrian secret resistance movement called "Maffia". In September, 1915, he went into exile where in Paris he made intricate diplomatic efforts to gain recognition from France and the United Kingdom for the Czechoslovak independence movement, as he was from 1916–1918 a Secretary of the Czechoslovak National Council in Paris and Minister of the Interior and of Foreign Affairs within the Provisional Czechoslovak government.
From 1918–1935, Beneš was first and the longest serving Foreign Minister of Czechoslovakia, and from 1920–1925 and 1929–1935 a member of the Parliament. He represented Czechoslovakia in talks of the Treaty of Versailles. In 1921 he was a professor and also from 1921–1922 Prime Minister. Between 1923–1927 he was a member of the League of Nations Council (serving as president of its committee from 1927–1928). He was a renowned and influential figure at international conferences, such as Genoa 1922, Locarno 1925, The Hague 1930, and Lausanne in 1932.
Beneš was a member of the Czechoslovak National Socialist Party (until 1925 called Czechoslovak Socialist Party) and a strong Czechoslovakist – he did not consider Slovaks and Czechs to be separate ethnicities.
In 1935, Beneš succeeded Tomáš Garrigue Masaryk as President. He opposed Nazi Germany's claim to the German-speaking so-called Sudetenland in 1938. In October, the Sudeten Crisis brought Europe on the brink of war, which was averted only as France and Great Britain signed the Munich Agreement, which allowed for the immediate annexation and military occupation of the Sudetenland by Germany.
Neither Beneš nor any member of the Czecho-slovak government was permitted to attend the conference where the little country was sacrificed to Hitler and his mad men. The Euro-powers England and France were unprepared for war, they overestimated Hitler's readiness and demurred. Czecho-slovakia was sacrificed to buy goods that could not be had: peace or greater preparedness. Out of recession and deleveraging of the 1930s, no country had anything but a transient material advantage over the others.
What emerged instead was a contest of institutional restraints, or between restraints on one part versus their absence on the other. There was the high-minded rationalization on the part of the powers versus the total absence of same on the part of the Germans. The German strategic advantage was set in high relief in Munich by Germany's reasonable and well-intended adversaries. To outmaneuver whatever obstacles Germany might encounter on its path to geographic empire it had only to react to restraint as if it was acknowledgement of fatal weakness. The Germans would demand everything, to threaten annihilation otherwise, to exceed all limits, to put its army on wheels so that it might be turned loose in all directions, to massacre without conscience … to be unorthodox in all things or appear to be so. To be modern, in other words: restraint was prissy and old-fashioned, bourgeois and incompetent. According to German doctrine, there was to be no place in the modern world for anachronistic little duchies and principalities … Negotiations and conferences existed only to produce surrender documents.
After Munich, restraint was synonymous with cowardice and appeasement along with the word 'Munich' itself. Hitler was outraged that the appeasement had cost him a war that he was sure Germany would win.
Neville Chamberlain, British ambassador Neville Henderson, German foreign minister Ribbentrop and Hitler at Munich. By 1946 all of these men were dead, all of the European countries and their economies were destroyed.
Sudetenland was handed over immediately after the Munich Accord, announced with fanfare, the rest of the country was annexed by Germany and Hungary within six months. The accord offering 'Peace in our time' was not worth the paper it was written on, like so much else within modernity, it was a another false 'tomorrow promise'.
After Munich, Beneš fled into exile in Britain, after the war he was part of a brief independent Czech government that was eventually undermined by the Soviets in 1948.
Right now 'Munich 2.0′ spools out right under everyone's noses: the Spanish public is sold into the abyss by the feckless government seeking to buy a little time. Like the Czechs and Slovaks in 1938, the people have nothing to say about their own fate … which is determined in the shadows by unrestrained and unaccountable mad men (Telegraph):
Prime minister Mariano Rajoy explains the surrender of Spain to the Anglo-American banking cabal in front of the Spanish Parliament, admits draconian terms demanded by EU financiers. Photo: AFP
Debt crisis: Spain bows to EU ultimatum with drastic cuts
Spanish premier Mariano Rajoy has raised VAT sharply in a humiliating volte-face and pushed through €65bn (£51bn) of drastic austerity measures to comply with a European Union ultimatum, risking a downward spiral into full depression.
Ambrose Evans-Pritchard
In Churchillian tones of blood and toil – even as Asturian miners and their wives clashed violently with police after a three-week march on Madrid – Mr Rajoy called for yet another round of cuts, admitting that Spain was obliged to take "urgent" action under the terms of the latest EU summit deal.
"We Spanish no longer have the choice whether or not to make sacrifices. We no longer have such liberty," he said.
Hours before, the daily newspaper El Pais had stunned the nation by publishing the leaked "Memorandum" imposed by the eurozone's creditor bloc as the condition for Spain's €100bn bank rescue.
The draconian terms include an EU takeover of the Spanish financial system, with calls for haircuts on €67bn of junior and hybrid bank debt, a bad bank to wind down crippled lenders, "on-site" raids by inspectors, and intrusive demands across the gamut of fiscal policy.
The Washington Consensus succeeded brilliantly in Greece, the obvious reason to apply it with more vigor in Spain.
Chamberlain and Daladier 'understood' that Germans would not annex anything more than a small part of Czecho-slovakia. Rajoy understood that Spain would not be subject to severe austerity by the finance sector in return for what amounts to a trifling borrowed sum. Unlike the aggressive, militaristic Hitler, today's mad men are well mannered and abstract. The outcome for the victims is identical, bondage and pillage. Because no one else will lend to Spain, with no great power England or France — or United States — to rescue her, there is no choice for the unimaginative Rajoy but to sell his country down the river.
Like the hapless Beneš there is certain to be a place in the Spanish rump for the elder statesman Rajoy long after the country is a smoking ruin. Like Beneš, he looks good in a suit.
The Spanish establishment does not understand symmetry. There is nothing to compel Spain to borrow under duress, or to prevent Spain from repudiating the odious- and ill considered debts it has already taken on. If the country had a real government instead of a cowardly fake it would behave the same as the mad men, to stand up to them, to beat the bullies and put them in their place. The establishment fails to understand the economic dynamic that is underway. The cost of submission is no different from the cost of non-submission. Putting the costs of unrestricted capital back upon capital is where it belongs. Spain would abandon its costly 'prosperity' but would maintain its sovereignty and the freedom if its citizens to act for themselves. By surrendering, the prosperity is gone and so is the sovereignty. The citizens are free to be paupers or emigres. Spain becomes a colony of Wall Street.
The current tragedy in Europe is unfolding with the same sense of dishonor and inevitability as during 1938. History may rhyme as Mark Twain once said, but it clearly is repeating itself, now. The establishments around the world insist on sacrificing others to the mad men. This strategy fails, appeasement makes these men bolder, they cannot be satiated or even evaded. Their ambition and reach has become universal, they are monsters. They must be destroyed, annihilated and all memories of them done away with. Their tools of destruction which they promote as 'efficiency' must be hammered flat and repudiated. The steps leading to Munich failed to bring peace but led instead to a great war, the steps leading to Brussels follow the exact same path. It is the cowardice of the good people, the moral relativism of the disinterested who refuse to see it.
The Europeans and their economic ministers and economics do not understand what it underway. Europe is subject to an Anglo-American credit embargo similar to those implemented in Latin America in the 1980s and in S. Asia in the 1990s. The US gains more from Europe's bankruptcy than it can gain as return on new credit.
Because the establishment does recognize the energy component to their economic troubles they cannot see the potential gains to others … from Europe's collapse.
Europe consumes 15 million barrels of petroleum per day: by bankrupting the EU 10 millions of those barrels can be exported to the US instead. This is the equivalent to the production of Saudi Arabia, without all the drilling.
The 5% reduction in fuel availability in the West in 1973 resulted in what was the world's deepest post- WWII recession, excluding the current recession. At issue is a reduction of 70%.
Analysts blame the European problems on corrupt Greeks and others but these countries did not make the loans to themselves: it takes two corrupts to tango. The Eurozone was a pit of predatory lending under false pretenses (for fake, USA-style 'prosperity'). The euro was — and is — a defective credit instrument similar to a sub-prime mortgage.
No sovereign can repay finance-level debts, such a thing is impossible. Greece cannot repay, Spain cannot hope to begin to repay.
Not only cannot Greece repay, Germany in full flower of industrial output cannot repay Greek debts. The demand for repayment is a charade and anyone bothering to look for more than five minutes can see that this is true.
The rate of change in GDP year over year is the surplus carried forward over the previous year's expenses. It is this margin from which a country's debts might be serviced — not retired — the annual increase in German GDP might be sufficient to partially service Greek debts for that year. Anyone who believes that Germany could repay Greek debts believes in unicorns and fairies.
Keep in mind that GDP growth must also meet other expenses besides service of loans outstanding. Almost all debt service is financed along with principal roll-over.
The Germans object to the obligation to repay Greek debts, it is because such a thing is impossible regardless of intentions.
Greece is dependent upon external sources of (borrowed) capital: Germany genuflects in the direction of capital because Germany itself is just as dependent on external capital flows as is Greece.
If Germany cannot repay Greek debts how can Greece be expected to do so, in the face of a credit embargo?
The embargo is effective because there is no European lender of last resort: what passes for one appears to offer unsecured loans to banking clients which themselves are insolvent. A lender of last resort cannot at the same time be insolvent: the one concept excludes the other. When the central bank takes on the impaired loans of its clients it becomes insolvent, it loses credibility.
Because of system insolvency there are fatal bank runs. These are taking place this minute.
Debts are intractable: they must either be replaced/refinanced with more debts or they must be repudiated, there is no other way. When debts are repudiated, the country is de-industrialized as it cannot import fuel, its money is unacceptable.
The fantasy of industrialization and so-called 'progress' is what various 'leaderships' including Rajoy's are loathe to abandon. This is even as industrialization destroys the countries' economies and the countries themselves. Managements cling to the false promises that have been offered for 400 years, that have brought wealth to a handful of thieves in exchange for Napoleon, revolutions. Communism, Hitler, world wars and great depressions. This, then … is the dividend of concentration and economies of scale, leaving out the complete destruction of the very air, land and water upon which we as living creatures absolutely depend … for a few pieces of colored paper.
If the country does not repudiate its debts, its money is unacceptable anyway as the money is proxy for nothing but unserviceable debts.
This non-acceptance is the end of the road … the end of all the roads.
By repudiating the debts all of the associated wealth is annihilated: wealth = debt. The problem is the foolish Europeans want to get rid of the debt and keep the wealth. They do not accept that, a) this cannot be done, and b) there is really no such thing as money-wealth.
What comes this way is the contest between the few, the mad men with their machines and their blandishments, their constant readiness to do the world ill for their immediate gain. On the other side of the contest is the void, a bloated dependent (over)population: here is the reason for overpopulation in the first place! Dependents dare not agitate without risking starvation, homelessness or withholding of institutional 'benefits'. There is the loss of place, a generalized self-contempt, selfishness and institutionalized laziness. Not the stuff of revolutions or reform.
The mad men inch closer to self-immolation, to take the rest of the world with it. This is the end-game of industrialization, the promise of Valhalla the reality of a wasteland.
Keynes was wrong, in the short run we are all dead.