Understanding the New Planned Economy

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I know you have heard the phrase ‘Planned Economy’ many times before, probably as a term of political abuse. ‘Planned economy’ as propaganda conjures up images of unaccountable faceless bureaucrats in anonymous offices malignly controlling the way ordinary people live their lives.

Most well known in this context would be the Five Year Plans which were implemented after the Slav takeover of the Russian state in 1917.

Communism and the Five Year Plan is associated in ‘western’ politics with wealth redistribution from rich to poor, deciding what can or cannot be made and most iconically deciding what consumer goodies will be available on the shelves.

Whether you agree with these policies or not, the point is that they are are planning objectives, rather than planning itself. In contradistinction to the Five Year Plan of the Russian Revolution, it is entirely possible to implement a planned for redistribution of wealth from poor to rich. This is what has been happening in the western economies for the last decade or so. But it is a more complex and subtle process than previous government supervised transfer of wealth.

MARXISM – MORALITY = MONETARISM

The basic idea of planning is far from alien to western capitalist economies. What do you think all those people in government offices are doing all day long? Government spending is usually a little less than half the total economy in the average advanced capitalist nation. What the government does affects everything. Given this state of affairs would you seriously want or expect the Government not to have a plan of some kind?

 And those who would would like to see the size and influence of the state shrink have to admit that since the Credit Crunch any idea of the permanently smaller state is something of a long shot. Since 2008 there has been a permanent ‘emergency’ regime of the lowest interest rates and forward guidance from central banks to make sure no nasty surprises pop up. Even if this control were to be dialed back, we would still be living in a control economy- after all you can’t reclaim your virginity once you have lost it…

But the truth is that it was not 2008 that brought this state of affairs about but the economic crises of the 1970′s four decades before. After systematic capitalist collapse, right wing thinkers conceded that it was untenable to support a Free Market any longer on any terms. As Karl Marx had predicted, capitalist economies had become increasingly reliant on their respective states to bail them out of the effects of periodic crises, resulting in a state of permanent crisis management.

Milton Friedman conceded this argument with the creation of Monetarism. Monetarism argued that from then on the state would have to permanently intervene to control the amount of money in the economy, instead of only intervening when there was an overt crisis. Permanent management and intervention was the end of so called free markets. Monetarism was only intellectually innovative in that it openly advocated a state run economy for the benefit of a minority.

 After Monetarism there could be no more economic solutions in the way they had been understood up to that point, because there was no independent economy in which to implement them. Everything would now be under control of the Monetarist state, including all political and intellectual activity. There are no mainstream political parties in the Saxon world that are not Monetarist parties. There are no mainstream economists that are not Monetarist economists.

Since the Western world had swapped a permanent economic problem for a permanent political one, it follows that it would have to define a permanent political solution. The possibility for this lay in the political definition of centralised planning

It is possible for Monetarists to argue that they are not really against a system of planning per se but rather against a centralised ‘politicised’ system of planning. (Commissars telling us what to do.) So Monetarism champions a specific decentralised system of planning. And that system is Planning Through Credit.

The groundwork for this planned credit economy began in the period immediately after the second Germanic war. As I have explained elsewhere, widespread support for western (Germanic), civilisation such as it is, was devastated by the spectacle of the death camps and the atomic bomb.

By the 1950′s this was reflected in the fact that most of the worlds territory was controlled by ideologies that openly repudiated capitalism (and Germanic culture!), in whole or in large part. Even in those areas capitalism was nominally the economic system it had become more of a political totem than an economic reality. Economies were still mobilised for the war effort. The idea that they could magically revert to a pre-war mode the moment peace was declared is obviously nonsense.

The ‘consumer society’ was ushered in to build support for a supposedly rehabilitated Germanic system. This was to be a cult of discretionary spending, where ordinary people were to enjoy the fruits of economic freedom to spend as opposed to an alien, ‘planned’ economy. Ironically, underpinning this post war ‘freedom to spend’ was the most comprehensive system of control there had ever been in the advanced economies. State supply of education and health underpinned the entire consumer society.

Now the period of discretionary spending; of ‘economic freedom’ for the mass of people, is coming to a close. This process is reaching its climax in end of the consumer society.

Because You’re worth it?

Over the past couple of decades the introduction of a Permanent Credit Economy has replaced the consumer society in the Anglo Saxon economies. This has occurred through a vast expansion of loans for higher education and for housing. A permanent credit economy is one where credit is required to provide not just discretionary commodities but the necessities of life.

It is important to understand that this permanent credit economy is not simply a matter of actual earning power. By way of illustration, customers are often required to produce a credit card as a ‘deposit’ for hotels or hiring a car etc. By doing this the customer agrees to an ongoing financial relationship over and above the actual hiring relationship. The relationship is more complex than a simple one time agreement to undertake a transaction as in cash payment.

Entering into ongoing relationships of this nature has a number of consequences both for individuals and for economies in general.

For individuals, the extent and size of loans required to purchase a house or an ‘advanced’ education has exploded. This increasing need for credit has been a fundamental plank of governmental policy in advanced economies for more than a couple of decades. The necessity for loans for housing and education is justified by the idea of personal investment, in the sense of investing in yourself and your family as a ongoing enterprise.(see ongoing financial arrangements)

The political project of making sure that the idea of ‘personal investment’ sticks, means it is necessary to create the conditions where this investment will pay off. In effect, it has become a political necessity to make houses more expensive and jobs more scarce to justify the time and effort necessary to get them. As a consequence it is becoming harder for the average citizen to move from one housing bracket to another and from one employment bracket to another. More accurately, orderly progression up the income and housing scale more is more difficult.

Think about the familiar routes from the bottom of society to fame and fortune – start a dot com company, win the lottery, become a financial trader, they all have in common that there is no orderly progression to the top. The mythology of modern wealth in the mass media actually celebrates this fact! There is increasingly less of a logical, orderly route to becoming rich, powerful and influential in society. We live in a planned economy defined and dominated and justified by the worship of chance. We are living in a hierarchy of chance.

General consequences of the permanent credit economy

The general consequences of of permanent credit economy can be seen most clearly in credit gearing.Money obtained as credit is worth less to the borrower than real money since you have to pay the principle and the interest on top. If you were to buy a washing machine worth £100 over a year with 10% interest then you would in fact, pay £110. If the participants an economy were to buy all the things they wanted and needed, (as in the Permanent Credit Economy) on credit what would the effect of this be?

A good analogy would be trying to start a car in third gear or a start off a bike on a hill. Since the Permanent Credit Economy is a planned economy it is by definition designed to be resistant to outside change (the brand name for this is ‘resilience’). This ‘resilience’ has the same effect that inertia does on the car in third gear or the bike on a hill. It requires that much extra effort just to get an initial start.

But this effect is then magnified by extra costs of credit, since a portion of what is paid for this or that service or commodity is siphoned off to pay interest, administration costs and credit insurance. This means that the direct effect of a transaction is diminished.

It is the difference between a strong jet of water from a hose or a fine spray. In a cash deal money and information is transferred directly from buyer to seller. The buyer gets the most efficient price (there is often a cash discount). The seller gets the money information- knows how much the buyer is willing to pay, in other words has the best information to decide whether to continue making the commodity). This is the equivalent of a forceful jet of water.

In a credit transaction the seller does not know how much the buyer is willing to pay- that information is now hidden within the ‘credit matrix’ which determines how much the buyer is willing to lend. In truth the seller does not even really know if he has sold the goods since they are now collateral for a loan and effectively in an intermediate state of ownership.This is the same as a fine spray of water that does not have the force of a jet.

The net effect of this is to weaken the force of the information that is transmitted and received in market transactions. The market becomes increasingly blind and deaf to its own information flows. This is a fundamental cause of the sluggish recovery, or lack of it, that has dogged so many economies.

 The recent discussion of ‘secular stagnation’ suggests that western economies are in for a prolonged period of slow growth and recovery from the Credit Crunch. The permanent credit economy explains why this is inevitable, since the majority of spending that will reinstate the economy will come from credit it will be subject exactly to ‘starting the car in third gear’ problems.

Conclusion: Selling the Soul of Capitalism

If capitalism had a soul it is inevitable that it would sell it.

The central idea behind capitalism, it’s soul, is supposed to be that anyone can become rich and correspondingly anyone can become poor. This risk factor is a benefit to the existing poor and a dis-benefit to the existing rich. The system is supposed to be fluid and opened to change. If however, the economy is planned and not open to change (‘resilient’/’sustainable’), this benefit to the poor goes. This is essence of the wealth transfer from poor to rich I mentioned at the beginning- Capitalism is closing the door behind itself. Capitalists don’t want anything to do with risk anymore.

As societies we can look forward to policy tailored to keeping things on an even keel and persuading the population of the dangers of anything like dynamic growth or change.

 As individuals we can look forward to increasingly being corralled within any particular social economic group with only the solace of the odd media celebrity who seemingly pops out of nowhere to become the latest billionaire to distract us from our lot in life.

John Lennon famously remarked that life is what happens when you are making other plans.

In this world, planning is what happens to you when you are trying to make a life…

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Are You Talking to Me?

 

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Why Bitcoin Really Does Represent the Democratization of Money
by Aaron van Wirdum on March 18, 2014 9

http://bitcoinmagazine.com/10724/bitcoin-really-represent-democratization-money/

In a recent bitcoinmagazine.com article referring to ‘the creation of Bitcoin and the like as the Democratization (sic) of Money’, Aaron van Wirdum attempts to address what he somewhat obliquely describes as:

‘…various explanations supporting this characterization.’

because, he says:

‘at least one of these interpretations have caused some to doubt whether Bitcoin does in fact still represent the democratization of money, or whether it has perhaps become susceptible to less democratic forces throughout the years since its inception. ‘

I suppose it must be an occupational hazard for an altcoin pumper to lean towards being cryptic! Still, it seems a little over the top to mount an argument against a ‘characterisation’ when you are not even willing to say what precisely this ‘characterisation’ is or where it comes from….

Since I was the first to use and define the phrase ‘The Democratisation of Money’ in relation to the production of altcoins and other forms of privately issued money, I can only presume this piece was written to address some of the points I started to raise in ‘The United States of Everywhere – The Home of Democratised Money’ blog four years ago and in my book ‘Crackernomics -The Democratisation of Money.’

I said in Crackernomics that the point in time would come when the advocates of privately issued money would be forced to openly (or not so openly), address key issues, first with regard to the definition of what money actually is and then the definition of ‘democracy’ and ‘democratisation’ itself.

The Democratisation of Money as I originally described it four years ago, is the process by which Anglo Saxon state institutions and financial organisations have worked to introduce privately issued money. It cites privately issued money as the cause of the Credit Crunch and the preferred Monetarist means of the financial breakdown’s resolution.

The democratisation of money is anchored in Monetarism. Impetus is given to the creation of privately issued money by the state abandoning its maintenance of the monetary commons.

Most importantly The Democratisation of Money points out that Bitcoin and Derivatives are two sides of the same coin. Bitcoin is the radical face of democratised money and derivatives its corporate face.

The Democratisation of Money analysis does not take the ‘radical’ perspective of seeing things from the point of view of altcoins and their producers. Quite the opposite; it argues that anything that does not address the wider economic and political context in which privately issued currency has come to exist is Crackernomics – which in the case of altcoins can only amount to an advert for, or a consumer review of, this or that particular coin.

Now that we are clear what the real definition of Democratisation of Money is, we can return to van Wirdum’s take on the relationship between ownership, democracy and capitalism in respect of Bitcoin.

Defining democracy in relation to Bitcoin, van Wirdum tells us.

‘it is helpful ( to who?), to recognize….two types of democracy, as distinguished by political theorists such as Cambridge professor John Dunn,….often attributed to Bitcoin,’

What are these two types of democracy identified by this distinguished Cambridge professor?

‘The first main form of democracy…..is ultimately a technical procedure, rather than a political value…….the formation of government through the ritual of elections.’

van Wirdum suggests this form of political democracy compares to:

‘Satoshi’s proposal for a proof-of-work system,’

which is analogous to a:

‘“one-CPU-one-vote” mechanism.’

You will probably know that the original Bitcoin sales pitch boasted that anyone who had a computer could ‘mine’ Bitcoin, a major attraction of the new digital currency. Bitcoin was not supposed to be a game for just the rich we were told. Unfortunately for the hopeful ‘miners’:

‘this democratic feature did not really hold up.’

Because only those who can afford large specialist computer systems, (the means of production of Bitcoin if you will), can mine the remaining Bitcoins. Anyone with an ordinary computer has long since been forced out of the game.

But not to worry because:

“one-CPU-one-vote” mechanism should hardly be regarded as a fundamental ideal bolstering Bitcoin in the first place.’

Bitcoin was ‘democratic’ in the sense that everyone could get a piece of the action, in theory. Only in reality, it turned out that only everyone who could afford it could get a piece of the action. So much for this version of democracy and by the way:

‘this characterization of “democracy” as “majority vote” is a quite limited interpretation of democracy’

anyway!

Since it turns out that ‘one man one vote’ and ‘majority rule’ etc are not really important parts of democracy, van Wirdum suggests we move onto:

‘the most important of the two (types of democracy), …the ideology of democracy, ..(which)….consists of various Enlightenment ideals.’

And these ideological enlightenment ideals would be?

Equality, popular sovereignty and self governance

Equality is defined by van Wirdum as:

‘equal rights under the law, freedom of speech and property rights.’

In this respect Bitcoin is superior to standard state money because:

‘no one person has more influence over the protocol than anybody else, nor can anyone bend its rules to his or her own advantage.’

To make it absolutely clear:

‘Not even the inventor, Satoshi Nakamoto, or huge stakeholders, such as the Winklevoss twins, are able to change the Bitcoin-code without reaching a consensus among users.’

Well that certainly sounds very reassuring on the surface. But on reflection what does this really guarantee the user of Bitcoin that state currency does not?

Currency markets are manipulated to create desired outcomes every day without affecting the basic ‘protocols’ of individual national currencies. That is why rich and powerful people are always very keen to promote what they call ‘free’ markets- because ‘free’ markets are the means to circumvent political control and exercise unfettered economic power. Currency manipulators don’t want the power to change the design of the five pound note or the way it is printed – what do they care so long as they have control of the markets the notes are traded in?

van Wirdum goes on to offer further bits of nonsense like:

‘arbitrary confiscations of wealth – as seen in Cyprus – are simply out of the question as long as bitcoins are stored securely.’

-the same is true of paper money- if you hide it under your mattress!

However, on a more disturbing note he suggests that the freedom to anonymously donate to a political organisation (through Bitcoin) is:

‘a pure and therefore very equal form of free speech if you will.’

This is explicitly the argument that was made in ‘ Citizens United v. Federal Election Commission’ the USA law that formally recognises corporations as people with the ‘rights’ to this kind free speech that actual people have. As a consequence the USA has secretive organisations funded by billionaires dominating whatever political discourse still remains..

Second on van Wirdum’s list of enlightenment ideologies is Popular Sovereignty defined by van Wirdum as:

‘ ..the legitimization of the rule of law by the consent of the governed.’

Contrary to what is implied by van Wirdum, this is ‘popularity’ in the sense of popular (Pop) music. ‘Pop’ music is not popular music because it is made by the population, it is music most often listened to by the the population. It is popular in the way it is consumed, not the way it is produced. The same thing is true of popular sovereignty. It is not power popularly exercised by the public, it is domination popularly accepted by the public:

‘And regardless of the legitimacy or desirability of this contract regarding present-day nation-states, central banks run their operations with questionable consent at best.’

‘they (are) purposely removed from the democratic political process’

This removal of the control of money from the democratic political process is a fundamental condition for the Democratisation of Money. Democratic politics justified the traditional monopoly of control that the state exercised of the issuance of money. It was therefore necessary to undermine the democratic state and its monopoly on money issuance to justify private money issuance.

This happened because there are no longer any ‘free’ markets outside of right-wing rhetoric. Since the state controls the economy, control of the state is control of everything. Based on this realisation Monetarists created ‘independent’ central banks across the western world. (That is independent from any truly oppositional political party that might get elected by accident).

The Monetarists have created an Independent Democratic Republic of Financial Institutions and Banks that no longer recognises the legitimacy of a nation state monopoly on issuing money.

This independence from political control was symbolised by the revocation of the Glass-Steagall Act in the USA, widely accepted as the legal doorway opened to the mass production of Derivatives- corporate democratised money.

And what of Bitcoin?

Bitcoin, on the far opposite side of the spectrum, quite literally exists because of the consent of its users; if they did not consent on the rules of the protocol they would not use it in the first place.

No more than the drug trade exists by virtue of the consent of junkies. The drug trade benefits pushers and they promote it. The need for drugs is a need of the desperate, in the same way that the need for your own currency is the need of desperate victims of corporate democratised money and Monetarism.

We come to the last and greatest gift of enlightenment ideology to civillisation: Self Governance which is:

‘the most important political value underpinning modern Western democracy’

Given its fundamental importance to modern western democracy it seems reasonable to ask where this principle has ever actually been practiced? This point is obliquely recognised by van Wirdum himself:

‘With Bitcoin, we now for the first time don’t need to delegate a small group of people to govern the rest, but we can instead transfer this power to universally verifiable open source code, written by and for the people. This is a truly revolutionary form of self-government.’

If ‘self governance’ is truly so fundamental to western democracy why would its introduction through Bitcoin be so ‘revoloutionary’?

Preferring not to dwell on contradictions like these van Virdum plows on:

‘the organizational structure of open source programming is, by far, the best way for common people to organize themselves ever invented.’

because, he tells us, people are:

‘free to contribute to the rules – the code – of the system,’

This is really like saying that members of the public are free to go out into the streets and work for nothing picking up litter for the good of the community. Sounds like a great idea, so how come nobody does it?

And after all this we finally come to the crux of the matter:

‘some of the smartest economists alive today have argued that ….money should be carefully managed by experts in order (to) (sic) stabilize the value, for instance, or to guarantee economic prosperity. According to these economists, if the people are supposed to have any say in this regard, it should be a very indirect influence at most.’

Well this observation at least is unarguable- So what should we do about it?

As I explained above Capitalism has reached the stage where it is completely dependent upon state support and regulation. This means that no ECONOMIC strategy is possible for managing capitalism in the future-only a POLITICAL one. If this is true then the altcoin movement is a political movement not an economic one. If this is true then it is subject to political forces and not economic ones. That the altcoin movement attempts to define itself in economic terms is simply a political strategy.

What are the consequences of this political strategy? It takes the victims of Monetarism and corporate democratised money (derivatives), away from the source of real power. It takes them away from the place where they can have a real affect on the powerful. In effect it concedes the hijacking of the state by Monetarist interests and suggests that the dispossessed should leave and try to start up a new system somewhere else. Does anyone seriously believe that these powerful interests will allow the altcoiners to develop an alternative system free from their control? It is the Monetarists who began the Democratised Money experiment in the eighties and nineties with the creation of Derivatives! The world we see before us today all of it, is a Monetarist project.

With a final flourish of his ‘radical’ credentials van Wirdum tells us that:

‘up until the 1800′s, the term “democracy” was actually a fringe word, only perpetuated by the “insouciant and incorrigible dissidents,” as John Dunn put it: “Those who chose to do so placed themselves far beyond the borders of political life, at the outer fringes of the intellectual lives of virtually all of their contemporaries.”

Whether the idea of ‘modern’,’ western’, democracy began life as the rhetoric of fringe radicals or not, ever since it was adopted by the elites of the Germanic Cult of Capitalism it has been used as a justification to steal, murder, subvert and oppress countless billions across the world. Not least among these victims of ‘modern, western, democracy’ have been the German/Anglo Saxon plebs who supported the ‘revoloution’ and who have since found themselves packed like animals into cities, reduced to selling their very selves to survive. And their children made to applaud the ‘freedom’ and ‘democracy’ that put them there as sheep and cattle grunting and hooting in praise of the butchers knife. And all in return for a chance to put a little cross next to the name of the master of their choice.

Two hundred years ago anyone with a shred of intelligence knew that the radicals and visionaries of ‘democratic capitalism’ that promised so much and delivered so little would either be in madhouses or palaces by the time everyone else realised the truth about what they offered..

As van Wirdum says:

‘Sounds remarkably familiar, doesn’t it?’

Yes it does.

 

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The Promised Land

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And did those feet in ancient time
Walk upon England’s mountains green:
And was the holy Lamb of God,
On England’s pleasant pastures seen!

And did the Countenance Divine,
Shine forth upon our clouded hills?
And was Jerusalem builded here,
Among these dark Satanic Mills?

Bring me my Bow of burning gold;
Bring me my Arrows of desire:
Bring me my Spear: O clouds unfold!
Bring me my Chariot of fire!

I will not cease from Mental Fight,
Nor shall my Sword sleep in my hand:
Till we have built Jerusalem,
In England’s green & pleasant Land

William Blake

As I have explained previously, a new bench mark Bank of England interest rate of 3-4% is required to service democratised money in the western developed economies. The savings and investment market in Britain is being structured around this new reality.
What this means in political terms is the ongoing implementation of a two state solution similar to the one we can see being undertaken in Israel/Palestine.

Israel/Palestine is one territory but the Two State Solution envisions two administrations controlling two different populations in two strikingly different ways:
The first state is the Occupying state. The enabling state. This state enables settlers and those who take over territory. It protects occupiers and attacks their enemies on their behalf.
The second state is the Occupied state. The repressing state. It represses those it claims to represent. It strips them of historical rights and makes their enemies case against them.

Whichever state appears to have the upper hand at any given moment does not really matter, since both serve the interests of the occupiers, one directly and the other one indirectly.

We can see clearly with the latest budget from Chancellor George Osborne how the two state solution (Financial Peace Process), is being enacted in Britain.

First the enabling state: Chancellor of the Exchequer George Osborne presided over the unveiling of a series of ‘sweetners’ for his core constituency including:

The promise of Government bonds to be issued at a relatively generous yield.
A loosening of restrictions on pensions and the annuities that investors were previously forced to buy to justify the generous tax benefits they received
And a relaxation of the conditions surrounding ISA’s – which are a government sponsored tax free saving scheme.

If there ever was a time to tie your colours to the mast of your core constituency then surely the budget settlement one year before an election is just such a time. The financial emergency is supposed to be over, presaging a return to business is usual, so return of interest rates to the long term trend average of around 5% is what we would expect Osborne to trumpet.

But as Osborne made his offer he explicitly reiterated that the economy is permanently subject to new conditions. Interest rates won’t be going up to historic levels EVER, if the the Monetarist state has anything to say about it.

We will return to interest rates in a moment but for now let us look at the second state; the occupied/repressive/welfare state:

In the budget for this state we had the standard threats against benefit recipients and the ongoing plan to shrink/abolish the welfare state – branded as ‘austerity’. Nothing much particularly new there, then.

Then comes the revelation that the territory of the second state is to be permanently limited for the first time. This means is that a cap is to be placed on welfare spending no matter what. If one area expands another must be correspondingly shrunk to maintain the overall level of expenditure. This builds a ‘peace wall’, ( just like the Kosher Kurtain in the occupied territories), around the second/welfare state.

http://www.bbc.co.uk/news/uk-politics-26743802

And then there is the news that a startling 96% of new mortgage buyers are fixing at somewhere around 3-4.5% – the new de facto interest rate. Here is the core of the Monetarist planned economy- planning through the allocation of credit. http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10721260/96pc-of-home-buyers-fix-mortgage-rate.html

The more people using credit, the more ‘planning’ is taking place. This is the consequence of Monetarist pressure for a move away from discretionary based spending to credit based spending- the end of the ‘consumer economy’; the end of freedom for citizens of the second state to spend not just on what you want, but when you want.

And it seems that 96% of new mortgage borrowers don’t need to be told to get in line, they are doing it already! Despite the fact that media outlets continually tout the Bank of England line that interest rates will not rise, borrowers are willing to pay a premium to avoid risk in the only way that has been left open to them, by Monetarist planning. Until relatively recently many British mortgage borrowers preferred to buy floating variable interest rate mortgages in preference to fixed rate mortgages. So this is evidence of a fundamental change in attitude

At the same time as a rise in fixed rate mortgages, we have the news that inflation has actually fallen below the governments target of 2%. A fall in the cost of energy is expressly cited as the main cause of this. What could have caused such a fall in the price of energy?

The USA recently made a surprise ‘test release’ of strategic oil reserves emphasising they will do anything they can to prevent sudden energy inflation, (caused by among other things the situation in Ukraine), getting out of hand.

http://www.reuters.com/article/2014/03/12/us-usa-energy-reserves-idUSBREA2B12V20140312

In Crackernomics I specifically cited manipulation like this as a feature of the monetarist planned economy.

However, resource staples like food that are not subject to direct government control continue to rise, apparently due to a number of unforeseen ‘one off’ factors. For instance a rise in the price of pork due to porcine epidemic diarrhea in America is an example of this.

http://www.foxnews.com/us/2014/01/11/widespread-pig-virus-threatens-to-bump-pork-prices/

It is the fall in the price of manufactured commodities (deflation), that is offset against this resource inflation producing the overall fall in inflation. This deflation in manufactured commodities is further evidence of the end of the consumer society as I have argued before

So lets get back to those extra low interest rates and the effect that these have on the interests of Osbornes core constituency. Surely low interest hurt the occupiers (Conservative voting pensioners with savings to invest), so why go ahead with it? Well we can see things a little more clearly if we refer again to the two state solution in Israel/Palestine

The ‘handing back’ of occupied land as part of the peace process (areas in the West Bank and the Gaza Strip), may upset some individual settlers but it will continue because it is fundamental to the construction of the final overall ‘peace’ settlement.
The dirty secret behind the Two State Solution trick is that the occupiers don’t actually have the physical power to overwhelm their victims outright. If they did you can bet they would have done it a long time ago. Instead their purpose is to wear down the people of the occupied state gradually until they accept their inevitable demise.

So how will they (and we), know when the Monetarist/occupiers have achieved their final objective and won?

In Britain the big prize is the NHS.

In the territory of Israel/Palestine it is the al Aqsa Mosque on the Temple Mount.

Just as the most fanatical Jews goes to pray by the Wailing Wall so the most right wing Monetarists came to pray at the Temple of the NHS (safe in our hands).

Just as the Zionists claim they want to share the Mount, so the Monetarists say they want to share the healthcare market.

Just as the Israeli ‘defense’ force make it increasingly difficult for Muslims to pray at the Dome of the Rock so it is harder and harder to get treatment at your NHS hospital.

Reducing the NHS to rubble is for the Monetarists like reducing the al Aqsa mosque to rubble for the Zionist Jews.

Proof that they have reached the promised land.

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Loki’s War or Long division or SchlaueKrieg or The Ethnic Bomb

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The chaos that has engulfed Russia/Ukraine was highly predictable. I know this because I predicted it two years ago. The covert German campaign to dominate the Slavic people (SchlaueKrieg) has been a constant theme in my writings on Whiteism.

Nearly five years ago I began to describe Whiteism, (’Forget Racism, Lets Talk About Whiteism’), the ideological framework which seeks to subjugate all ‘white’ people under Germanic law, economics and culture.

This ‘White’ identity is a key component of Germanic strategy to dominate and control the planet. Its purpose is to generalise and universalise the Germanic identity as much as possible, through the argument that all white people naturally live under and promote capitalism and ‘democracy’ etc. ALL Germans are engaged in this process of promoting Whiteism, especially the ‘progressive left wing’. The message of ‘universal brotherhood’ of the ‘working class’ is the Germanic soft cop to the hard cop of subversion, coup and military force.

Whiteism effectively turns non-German whites into cultural, political and economic, hostages; a human shield against the people of the rest of the world. Just as English WWI generals famously sent the lesser whites onto the German guns in preference to home grown troops, so we are expendable in the plan for domination.

A discussion about white racism is infinitely preferable to the continental German and Anglo Saxon elites than a discussion about Anglo Saxon/German domination.

I have written about the Germanic subjugation of the Gaelic people in the west of Europe.  As part of this ongoing subjugation, the territory of The Republic of Ireland was actually recently transferred in ownership like a plantation from the Anglo-Saxons to the Continental Germans! This was the so-called ‘peace process’.  It was inevitable to anyone with even a rudimentary knowledge of history that the Germans would botch the administration of their new territory and the result has been poverty and chaos.

After Ireland was partially pacified, France became the next target for Germanicisation. I have described the political necessity of this process for Whiteism in the USE blog over a number of years. French foreign policy is now openly dictated by Bonn and Washington. As a result France is now actively engaged in war and subversion in the Middle East and Africa. Its domestic economy is being systematically undermined and destroyed in preparation for privatisation along the neo liberal model. Once this is achieved NO POLITICAL OPPOSITION WILL BE POSSIBLE.

And so the white population of the west of Europe is for now completely under German control. Well not quite.

One small region holds out against the German forces. Scotland is to hold an Independence referendum later this year.

We now move to the Eastern Germania border and Ukraine. It seems that German sponsored Ukrainians have seized control of Kiev and the western territories of Ukraine. It is uncertain what government can be set up that will have the support of the Eastern Crimea. A number of pundits are becoming increasingly nervous about this as direct challenge to Russia on its borders. There can be no doubt of the German desire to fundamentally overthrow the leadership of Russia through a mixture of intimidation, economic pressure and so called soft power. Perhaps SchlaueKrieg (Sly war) can do what Blitzkrieg (lightning war) could not.

Perhaps Loki can triumph where Thor could not.

Which brings us to the meaning of Whiteism.

Increasingly we see ‘soft power’; subversion, propaganda, psychological warfare being used against the enemies of the Germanic Empire. Increasingly this SchlaueKrieg uses race and ethnic identity as the point of leverage for its attack. Ukraine, Syria and the two most recent examples of this. And yet, there is no corresponding counter attack form the non-white peoples of the world. The situation we are in closely resembles the period when America got the Atomic Bomb and no-one else had it.

What would have been the consequences if America had remained the sole possessor of this destructive power?

Thankfully we never had to find out.  We must put the secret of manufacturing an ethnic bomb in the hands of brown skinned people across the planet. We must show them the ethnic cultural and religious fault lines that run through the Germanic empire. We must help them to learn to exploit them. We must create a new balance of forces in the SchlaueKrieg world. Or we must, in the end, face global conflict.

If Russia falls under the control of Germanic power, all the ‘white’ races will be ‘unified’ for the first time in over a hundred years. If that happens the elite will launch an attack on China.

You will have to decide whether you and your children can live with that.

Literally.

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MAD or It Was Only A Matter Of Time…or I Wouldn’t Start From Here..or May The Road Rise Up To Meet You

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‘Oh my God. I’m back. I’m home. All the time, it was… We finally really did it.

[screaming]

 You Maniacs! You blew it up! Ah, damn you! God Damn you all to hell! ‘

The Destruction of Creative Destruction

The term Creative Destruction has come to be associated with neo-liberal economics but it comes from Karl Marx, the unacknowledged father of modern ‘right wing’ thought. Marx is sometimes accused in historical biography of fathering an illegitimate son. Whether this particular accusation stands up or not, the famous Germanic features of The Moor can clearly be seen in the lineage of Monetarism and Neo-Liberalism.

Marx coined the term ‘creative destruction’ to describe the ceaseless process whereby Capitalism consumes everything that it creates; previous methods, institutions and even capital itself are burned up to make way for a new cycle of expansion and growth.

The phrase was adopted by Austrian/American economist Joseph Schumpeter:

Capitalism [...] is by nature a form or method of economic change (…) that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.’

Schumpeter was forced to draw sombre conclusions about the future of capitalism as a result of his observations. Since like a frenzied shark, capitalism could and would eat even its own entrails when circumstances allowed it, how could even the most fundamental aspects of the system be guaranteed to stay in place?

This proved to be Marx’s irrefutable argument. If capitalism does indeed develop by a means of creative destruction, does that not make it inevitable that in the end it will consume the very fabric of the system itself by a process of destructive cycles?

After all, the observation that all societies finally collapse is a piece of accepted wisdom that far predates Marx. Marx’s achievement was simply to describe how collapse would happen this time around.

 It’s A Mad, Mad, Mad, Mad, World.

 Around the time that creative destruction was entering the modern lexicon another phrase was becoming popularised; M.A.D. or Mutually Assured Destruction based on the idea that the Soviet Union and America would never launch all out thermo nuclear war because it would result in both countries being effectively destroyed. In an incredible leap of something, it was widely accepted that this meant that balance had somehow been reached and that this balance somehow rested upon logic.

But this is not what MAD suggests at all. What MAD suggests is that Russia and USA WILL INEVITABLY destroy each other. What MAD suggests is that being diagnosed with a terminal condition puts your winter cold in perspective. MAD suggests is that there is some small comfort in knowing HOW you finally buy the farm before it actually happens. MAD is a form of, well, controlled madness.

The implications of MAD are that once Russia and America went down this path they sealed our fate. We are living in a bubble of time before inevitable destruction comes.

The threat of thermo-nuclear annihilation and recognition of the essentially destructive nature of capitalism give rise to a sense of profound foreboding in western thought and by extension, western popular culture. This foreboding finds popular expression in apocalyptic books and movies.

If not the last, then perhaps the next to last word in such literature is ‘The Road’ by Cormac McCarthy; a work that could as fairly be called ‘postal’, (in the modern American sense of the word), apocalyptic as opposed to post apocalyptic. The book, the audiobook and even the film can be found on the Internet and I would heartily recommend that you seek out all three, but with the gentle warning that this is ‘family’ entertainment in the sense it is about family, rather than the traditional Hollywooden sense of the phrase.

All dramatic constructions have an inflection point and in the film adaption of The Road, the crucial expository scene is carried by the considerable presence and acting skill of Robert Duvall. Duvall’s character is only onscreen for a relatively brief time, but his wonderfully understated dialogue lays the basis for the whole narrative. Staring through the flickering flames of a campfire with milky cataract occluded eyes ‘Ely’ tells us that: (I paraphrase)

‘We knew this, or something like it was coming for a long time’

Which links us in the here and now with the terrible twisted landscape we see before us. But even as we watch the screen and accept that we have this terrible foreknowledge, Ely tells us we are effectively powerless;

‘Even if you knew, what could you do to prepare for this?’

And it is true that destruction on the scale of ‘The Road’ would make even the most comprehensive of preparations look irrelevant. So is this Ely’s and our awful fate; to move towards disaster, fully conscious and yet be unable to do anything to change our destiny?

There is the old Irish joke of the tourist who is wandering round the roads out in the countryside and happens upon a local man. The tourist asks for directions:

‘Excuse me, can you tell me the way to Limerick?’ asks the tourist

The Irishman ponders for a short while and then says

‘Well, I wouldn’t have started from here’

This story bears a little scrutiny. First there is the simple joke that illustrates the Gaelic way of gently telling the man he is a fool, that he is lost and he should not even be out here. But as so often with Gaelic humour there is another deeper (blacker), joke wrapped up within a joke. The real, deep humour is that the tourist would never for a moment consider going back to where he came from and starting his journey again. Because that is his nature. That is why he got lost in the first place.

Which brings us back to the road we are presently travelling and creative destruction.

Risk we are told, is integral to the healthy functioning of the capitalist system. Without risk there would be ‘moral hazard’.  Destruction of your enterprise and the fear of destruction of your enterprise is what keeps you honest and efficient. However, by the same token, overcoming risk and its effects is integral to risk management. Risk management exists precisely to offset the effects of risk that is a constant threat to all capitalist enterprises.

With all the time and effort that has been expended on risk management in the past five decades, is it so unbelievable then that a method should finally be devised by these enterprises to remove risk from their day-to-day activities. ?

Isn’t this so? That effectively there is no meaningful risk involved in the operation of the biggest enterprises?

Creative destruction we are told is an integral part of the capitalist system and has been part of that system since it first ‘appeared’. But was it not inevitable, that since every aspect of capitalism is destroyed by its successor, that one day ‘creative destruction’ itself would be destroyed?

Isn’t that what has happened since financial institutions have been declared ‘Too Big To Fail’? And are these same institutions now not bigger and more concentrated forms of economic and political power than when the crisis started?

Crackernomics tells us that either

The system is basically sound and that what we are seeing is somehow the result of aberrant criminality

Or that what we are witnessing is somehow a natural phenomenon like a sandstorm or a tidal wave but that either way the system is sound and is the only viable option we have.

Crackernomics never invited the Crackers to consider whether they should not tear up the topsoil on the Great Plains, held in place by a delicate eco-system that had adapted for thousands of years to maintain the system in balance. It told them that this is the right and only thing to do. It told them to Stay On The Road they had set out on.

That we have come too far to go back now.

And when the great dust storm appeared on the horizon like the Wrath Of God the Crackers stood, although now blinded, finally able to see what had been staring them in the face all the time.

“Now I am become Death, the destroyer of worlds.”

Robert Oppenheimer

 May the road rise up to meet you….

 

 

 

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The Great Escape Or Moby Dick In Space

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http://www.telegraph.co.uk/finance/business-news-markets-live/10632550/Bank-of-England-Inflation-Report-live.html

http://www.theguardian.com/business/2014/feb/12/bank-england-interest-rates-hold-inflation-report

‘as they prepared for their journey and waved goodbye and “slipped the surly bonds of earth” to “touch the face of God.”

President Reagan’s remarks following the loss of the Space Shuttle Challenger and her crew. 06.07.04

Escape Velocity

You may have seen Sandra Bullock and George Clooney floating around in CGI space in the recently released film ‘Gravity’. This is a fascinating film for a number of reasons, but in the context of Mark Carney’s often-repeated‘ escape velocity’ it is particularly interesting.

Escape Velocity’ is an odd phrase to describe the economic conditions necessary for a reduction in the emergency measures that have been in place since 2009. A more orthodox approach to ‘perception management’ would employ images like  ‘laying the foundations’ of solid growth or ‘building’ on previous tough decisions, or even ‘husbanding the fragile buds’ of economic recovery. But here we are getting away from the mundane, even ‘surly’ realities of economics as we have known them. We seem to be:

‘Going boldly, where no economy has gone before.’

The first part of our journey to the stars, the escape bit, is something I have referred to only recently in ‘Great Expectations #1’:

(http://unitedstatesofeverywhere.wordpress.com/2014/01/28/great-expectations/0)

I described the new reality that the Bank of England, independent as it is from any concerns you or I might have, is now free to pursue inflationary or anti-inflationary policies as it chooses. As it has grown more comfortable with this overt expression of its freedom, it’s ‘coming out’ as it were, the Bank has felt less and less compelled to invent ‘reasons’ as to why it follows this policy or that policy.

In 2008, like the Captain of the Pequod, the Bank of England claimed a mandate, (From God? From Destiny? – like Ahab they never made it clear from whom) to hunt the Great White Whale of Monetarism; INFLATION. They spent the next four years following this semi-mythical beast around without making any real attempt to harpoon it; if anything the Bank seemed content to throw trillions of tons of krill into the water to keep Moby Dick around!

Despite these inducements, the whale seems to have submerged for some time now, and so it was briefly replaced by our Captain with employment as a target. But employment provided only poor sport as a metric and as I predicted we would soon be driven to set our sights and our harpooners on something new. That something called out of the depths turned out to be:

THE OUTPUT GAP

What is the OUTPUT GAP?

It is ‘something to do with productivity’ Captain Ahab/Carney says, which is something we have never fished for before..

Well, how big is THE OUTPUT GAP?

The Output gap is 1.5 %, or is it 6 %? -Nobody seems to know which, doesn’t really seem to matter… we will know it when we see it says our captain.

From the Telegraph:

Mr Carney is asked: How will households understand the Bank’s new focus on productivity?

 Carney says that firstly, the economy has been stronger than we thought and that the Bank had expected that productivity growth would pick up alongside the recovery, which hasn’t happened.

So an economy can be strong and yet not productive? Care to elaborate? No?

What we’ve done is we have been more cautious in our assessment of productivity growth. Productivity does not get back to pre crisis growth until three years from now. We‘ve given our assessment of spare capacity and we’re going to update that regularly.

So that means Ahab intends to take the ship around the Cape of Good Hope three or four more times before he has to answer to the Quakers back in New England

And that is when Ahab/Carney nails his gold doubloon to the mast..

 Interest rates will not reach the 5pc levels seen before the crash for some time, the Bank also suggested. It said the “new normal” for interest rates was likely to be between 2pc and 3pc.

There she blows! – Now we have finally got something we can sink our harpoons into! – the New Normal of between 2 and 3 % bank of England base rate.

So what does a semi permanent interest rate of 2-3% mean or more importantly, (as Ahab correctly observed), what does it represent? it represents a permanent reduction in the earning power of money issued by the British State e.g. the earning power of the currency to you. So where has this earning power gone? It has been allocated to derivatives. It has been allocated to privately issued Democratised money.

Think of a £5 note as a betting slip. The odds quoted on the slip are the risk of holding the slip- the risk of gambling.

They are nothing to do with the odds of the horse winning a race or a football team winning a match. The horse race, or the football match is simply a trigger point.

The odds are literally a reflection of how a bookie will pay off everyone who bets with him. They are not a reflection of anything else. The Bank of England base rate is simply a reflection of how viable the Bank of England is- nothing else.

We need to get this absolutely clear. Here is an example:

Let’s say you went to a bookie and said you wanted to make a £1 bet that the moon will be discovered to have been made out of green cheese within five years (or if you like, will turn out to be a hollow spaceship a la David Icke.)  Since this is patently going to not turn out to be the case, what is to stop the bookie offering you odds of a million to one against, just to get the business? After all there is no risk that he will have to pay out is there?

But the bookie cannot offer you odds of a million to one unless he has taken a million pounds worth of business in to pay you out in the event that you should win. But surely he doesn’t have to have a million pounds in the bank just to cover the possibility I win. I am not going to win. So why can’t he just take the chance?

 BECAUSE THEN THE BOOKIE WOULD BE GAMBLING AND BOOKIES DON’T GAMBLE,

 THAT’S THE WHOLE POINT.

 THEY LEAVE THE GAMBLING UP TO SUCKERS LIKE YOU!!!

Now lets apply this to the Pound gamble. The Bank of England traditionally pays odds of 5% on their British economy book. These odds are a reflection of the likelihood that the British pound will be able to pay out, that the British pound will be worth something in a year’s time etc. The viability of the British book rests on the amount of business that the British book is doing, just the same as the book on the moon being made of green cheese. The Bookie cannot offer 1 million to one unless he has the business in to cover the bet. The Bank of England can only offer 5% interest if it has the business in to cover the bet.

And the Bank of England has given some of its business away.

It has given that business to Derivatives- to Democratised Money privately issued by the financial institutions. So it cannot pay out at 5% any more- it simply does not have the business to cover the odds. Now it is going to pay at 2-3 %. The British book has been shrunk. The business has gone to privately issued, Democratised money.

Like Ahab on the Pequod, once the coast has disappeared from view, the crew is at the mercy of it’s captain. Of whatever fancies come into his head. And we know from the story, don’t we that this was always Ahab’s design, right from the very beginning…

Like a rocket launched into space we will soon be permanently living in a new low/zero gravity monetary environment, with thinning bones and weakening heart, but free from earth…

 Can you hear me Major Tom…?

‘Space Oddity’ -  David Bowie

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Whiteism: The Games People Play 1: Wheels on Fire

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I am not a fan of mass spectator sport. The best that can be said for TV sport is that it’s like trying to diet by watching someone else eat a salad. If I wanted to be a little more pointed I would say that mass spectator sport is in essence a lot of losers staring at a few winners. Like mass consumption, mass spectatorship is predicated on a trick- that you can buy something you don’t have.

And while we are on the subject, there is nothing more profoundly dishonest than the plea to keep politics out of mass spectator sport. Since before the days of Rome, sport has been used for to further the agenda of whoever is staging the games.

‘The Hunger Games’ satirises this to great effect with the story of a young girl from a loser background that reveals hidden depths in the public spotlight. For Catniss Everdeen, success or failure in America’s dystopic future hinges on whether she can overcome brutal, ruthless enemies and win over the crowd to defeat the dark forces that brought her to the public arena as a ritual sacrifice.

The Hunger Games in turn refers to Carrie -the 1970 novel about the ugly duckling girl who reveals hidden, devastating, destructive power over the brutal high school crowd that torments her.

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Girl on Fire

Well, it seems our dystopia hurtles nearer by the day, and if the Neo-Cons get their way, we will all be living in a global high school where the nerds sit at the back of the class in terror and the Anglo Saxon jocks rule the campus and the playing field. We have been offered front row seats at the spectacle of a middle-aged retreat into adolescent fantasy where ‘WE’ win game after game in an endless summer of rugged Anglo Saxon sport.

All of which brings me to the Winter Olympic Games.

Because if Russia is a kid in high school then she is Carrie, And if Russia is a place in our dystopic future then she is District 12

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Another girl on fire

Carrie has a ‘weird’ Christian mother, which means she does not participate in the social life of small town America. And since her difference marks out as the loser, the different one, she serves as a perfect vehicle for the ‘popular’ kinds to sharpen their corporate social claws on.

This never-ending hate campaign is orchestrated by a malignant WASP chick that uses persecution as a means of validating her own control of the group. Of course given half a chance, Carrie turns out to be really quite beautiful, which revelation drives the WASP contingent to an ever-greater frenzy of hatred. So too, with Catniss of the Hunger Games, whose beauty wins the heart of even the jaded bloodthirsty crowds and drives her arch enemy, the President, to vow her death.

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Julia Lipnitskaia Girl on ice….

 The climax of both stories brings us to a symbolic ‘coming out’. In Carrie it is the high school ball, her chance for social acceptability. Of course the WASP’s do not want this to happen and so they decide to ruin it for her. The plan is to pour pigs blood all over her-‘pigs blood for a pig’..  In the Hunger Games the final, dramatic, public contest is also rigged against our heroine, only this time she is fated to actually die at the hands of her classmates.

See the parallels?

Well let me make it clear for you

Liberal WASP society hates Russia, the international weirdos with the Christian mother, who just do not seem to get with the liberal programme, who just do not seem to ‘get’ who it is running things around here. And they intend to make sure that Catniss/Carrie/Russia does not get a chance to enjoy a day in the sun. ‘Oh no Sireee Bob, definitely not!’

So here they come dressed in rainbow flags, talking about gay rights and open drains and Chechnya , and so on, in an endless dreary parade of complaints and scarcely concealed insults all of which are supposed to take the shine off Russia’s day:

‘Why do you wear those funny clothes Carrie?  Do you have to go down on your knees and pray all night Carrie? – Oh that’s such a shame! Oh, we’re so glad we’re not you!’

‘Oh, Catniss you’re sure to die! Oh, but we’ll be sure to give you a wonderful burial!’

Falling over themselves to be the ones to tip the pigs blood on Carries prom dress. Falling over each other to be the one to put the blade through Catniss’s head.

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The original girl on fire

Зоя Анатольевна Космодемьянская; Zoya

But they should perhaps tread a little more carefully. In the end the WASPS pushed Carrie over the edge and…well I won’t spoil the story for you if you haven’t read it. And if you have, well you know what happens…

And in the Hunger Games, the malignant manipulative president finds that he had rather more on his hands than he bargained for.

Inside Mother Russia, as inside a Babushka doll, you may find a Catniss/Carrie/Zoya,

Slave driver, the table is turn; )
Catch a fire, so you can get burn, now.
Slave driver, the table is turn;
Catch a fire: gonna get burn.

Bob Marley, Catch A Fire

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