Despite the happy talk coming out of Washington and New York about the supposed economic recovery, the present economic and political order remains on course toward self-destruction. I’ve said it over and over again that the fundamental flaw is the compound interest that is built into the global debt-money regime. The fact that virtually all money is created by banks that “lend” it into circulation at interest causes debts to grow faster and faster with the passage of time. A quick glance at the timeline for public and private debt makes this obvious.
Prof. Richard Wolff, in the video below, does not mention this debt-growth imperative, but he does a good job of explaining how the governments and the central banks managed to temporarily forestall total collapse following the 2008 financial crisis, and why their actions are failing to solve the basic problem of slack demand.
We need to look beyond economic ideologies to find ways of defusing the debt bomb which grows bigger and more deadly with every passing day. A shift toward innovative, interest-free, approaches to the exchange of value and the financing of enterprise development provides the most promising route toward a soft landing. See The End of Money and the Future of Civilization.
It’s very difficult to know what the tactics and specific manipulations of the global elite might be from day to day. The Brexit vote surprised almost everyone, including me. But it’s hard for me to imagine that Brexit might be something the elite want because they have engineered the terms of European union to concentrate ever more power in their own hands, which is what they’ve been up to for decades, if not centuries.
Therefore, I expect a lot of foot dragging and I do not expect the referendum to be acted on with any haste. Instead, terms of union will be renegotiated with the apparent, but not real, return of some sovereignty to the Brits. Then “stay” will be sold to them and another referendum held to legitimize remaining in the union.
In the meantime, the ongoing financial crisis is approaching another tipping point which may throw the banking system into a chaotic state with which governments will be unable to cope.[i] It may then be a case of “every nation for itself” as people demand that their respective governments “do something” to prevent breakdown of their domestic economies, and to hell with EU regulations. That will mark the de facto disintegration of the European Union.
Of course, I may be completely wrong, but it will more likely be an error of timing, as I see the breakup of the UE and the demise of the global money and financial regime as inevitable. –t.h.g.
[i] According to a recent IMF report, “…Germany’s contribution to ensuring the success of the new European financial stability architecture is crucial for fostering its domestic financial stability and the success of the European reform agenda.” (IMF Country Report No. 16/189. GERMANY FINANCIAL SECTOR ASSESSMENT PROGRAM, FINANCIAL SYSTEM STABILITY ASSESSMENT). But an analysis of that same IMF report by Tyler Durden, (http://www.zerohedge.com/news/2016-06-29/imf-deutsche-bank-poses-greatest-risk-global-financial-system) concludes that “Deutsche Bank poses the greatest systemic risk to the global financial system.”
Responding to charges of treason leveled against him by his “self-styled persecutors,” former Greek Finance Minister, Yanis Varoufakis, on his personal blog, has laid down the gauntlet, accusing “Greece’s oligarchic establishment” as being “troika-friendly.”
In his post of July 28, Varoufakis defended his “defiant negotiating stance” saying:
My dastardly ‘crime’ was that, expressing the collective will of our government, I personified the sins of:
• Facing down the Eurogroup’s leaders as an equal that has the right to say ‘NO’ and to present powerful analytical reasons for rebuffing the catastrophic illogicality of huge loans to an insolvent state in condition of self-defeating austerity
• Demonstrating that one can be a committed Europeanist, strive to keep one’s nation in the Eurozone, and, at the very same time, reject Eurogroup policies which damage Europe, deconstruct the euro and, crucially, trap one’s country in austerity-driven debt-bondage
• Planning for contingencies that leading Eurogroup colleagues, and high ranking troika officials, were threatening me with in face-to-face discussions
• Unveiling how previous Greek governments turned crucial government departments, such as the General Secretariat of Public Revenues and the Hellenic Statistical Office, into departments effectively controlled by the troika and reliably pressed into the service of undermining the elected government.
Varoufakis also claimed a moral victory, arguing that “The debate about the democratic deficit afflicting the Eurozone is now unstoppable.”
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After almost six months of “negotiations,” the Greek government has surrendered to the demands of the powers-that-be. In an interview that was conducted shortly after his resignation but prior to the deal just concluded between the Greek government and the European “institutions,” former Greek Finance Minister, Yanis Varoufakis, indicated that the outcome was determined from the very beginning. Pointing to a “complete lack of any democratic scruples, on behalf of the supposed defenders of Europe’s democracy,” he said, “At some point it was put to me very unequivocally: ‘This is a horse and either you get on it or it is dead.’”
Regarding contingency plans, Varoufakis commented that “if they dared shut our banks down,” strong action would need to be taken “..but without crossing the point of no return.” He said, “We should issue our own IOUs, or even at least announce that we’re going to issue our own euro-denominated liquidity; we should haircut the Greek 2012 bonds that the ECB held, or announce we were going to do it; and we should take control of the Bank of Greece. This was the triptych, the three things, which I thought we should respond with if the ECB shut down our banks.” But his recommendations were voted down by his colleagues.
Some further excerpts:
“Nothing shocks me these days – our Eurozone is a very inhospitable place for decent people. It wouldn’t shock me either [for Prime Minister Tsipras] to stay on and accept a very bad deal. Because I can understand he feels he has an obligation to the people that support him, support us, not to let this country become a failed state.
But I’m not going to betray my own view, that I honed back in 2010, that this country must stop extending and pretending, we must stop taking on new loans pretending that we’ve solved the problem, when we haven’t; when we have made our debt even less sustainable on condition of further austerity that even further shrinks the economy; and shifts the burden further onto the have-nots, creating a humanitarian crisis. It’s something I’m not going to accept. I’m not going to be party to.”
You can read the full interview here.
Here’s a portion of the latest informational brief about the upcoming conference. You’re invited:
Don’t stay away!
(I mean, really, when is the next time you’ll be able to get together with hundreds and hundreds of people rethinking civilization from the ground up?)
Seizing an Alternative: Toward an Ecological Civilization June 4-7, Pomona College, Claremont, CA
ATTEND FREE PLENARY SESSIONS at Bridges Auditorium, Pomona College, Claremont, CA:
THURSDAY, June 4
Bill McKibben: 7:00 p.m. Opening Night
FRIDAY, June 5
John B. Cobb, Jr.: 9:00 a.m.
Vandana Shiva: 7:00 p.m.
SATURDAY, June 6
Herman Daly-John B. Cobb, Jr. discussion moderated by PRI’s Warren Olney (recorded): 9:00 a.m.
Sheri Liao: 7:00 p.m.
SUNDAY, June 7
Wes Jackson: 9:00 a.m.
Southern California Edison makes ADDITIONAL STUDENT SCHOLARSHIPS (limited) available. To apply, write to info@PandoPopulus.com.
In the video below, Bill Still reports on a recent court ruling that could, if it is upheld, stagger the global banking cartel.
A recent article, Evo Morales: A Bolivian idol, posted on the Aljazeera website, quotes the Bolivian president as saying,
“I have no regrets – in fact, I am pleased to have expelled the US ambassador, the Drug Enforcement Administration (DEA) and to have closed the US military base in Bolivia. Now, without a US ambassador, there is less conspiracy, and more political stability and social stability. Without the International Monetary Fund, we are better off economically.”
Bold action, indeed. Read the full article here.