Kentucky Fried Crackernomics Or Would You Like A Breast Or A Leg? Or The Mark To Market Of The Beast Or When the S**t Hits The Fan

o-UNIVERSITY-OF-KENTUCKY-570

‘Since 1971, U.S. citizens have been able to utilize Federal Reserve Notes as the only form of money that for the first time had no currency with any gold or silver backing.

This is where you get the saying that U.S. dollars are backed by the “full faith and credit” of the U.S. Government. In other words, Nixon implied; take our paper dollars or don’t’.

http://buygoldandsilversafely.com/gold/what-really-backs-the-us-dollar/

 

It can’t be often that a concise and illuminating illustration of the nature of money pops up in the nexus between tattoos and professional sports. Once in a blue moon perhaps. Nevertheless….

 

Here are three important characteristics of money:

 

  1. Money is a contract- a set of words and images that embodies a decree. (This is the decree gold and silver bugs get confused about when they refer to fiat money). This decree element is a vital component of a money contract. It decrees the economic environment for the life of the money contract. This decree is expressed in the central bank interest rate in respect of that specific contract.

 

  1. This contract is mounted on a transferable medium. Something that can be securely transferred from one owner to another.

 

 

  1. The contract is issued by the relevant legal authority- which is the body authorised to mount that specific proclamation upon that specific transferable medium.

 

From the above we can go on to say:

 

  1. The validity of a money contract depends on the extent to which it decrees the nature of the real economy. The ‘value’ of that money contract is an expression of its validity.

 

In other words: The money contract is valid to the extent that it decrees the nature of the real economy. Not ‘reflects’ the nature of the economy, decrees it. It is valuable to the extent it is valid. This comprehensively defines the value of money.

 

5. A money decree is valid to the extent that everyone complies with the terms of the decree it embodies. It follows from this that a money decree is valuable to the extent that everyone complies with it.

 

6. A money decree is complied with to the extent that the money contracts issued compare with the amount of economic activity undertaken for the same territory and time span.

 

Which brings us to Kentucky Wildcats fan Rock Wright and his tattooed leg.

 

What is fascinating about Rock’s tattoo (and his leg to a lesser extent..) is that it functions more or less the same way as money. In fact, Rock has sort of turned himself into a piece of money!

 

Lets compare Rock and his leg tattoo to my three important characteristics of money:

 

  1. Money is a contract- a set of words and images that embodies a decree. (This is the decree ‘insurgents’ get confused about when they refer to fiat money).This decree element is a vital component of a money contract. It decrees the economic environment for the life of the money contract. This decree is expressed in the central bank interest rate in respect of that specific contract.

 

Rock, (the legal issuing authority*) has created a tattoo that makes a clear decree about what the future sports environment (economy,)will be. The subject of the decree is the activity of the Kentucky wildcats. The environment,(economy), the Wildcats are operating in is the Championship league. The term of the decree is up until the championship concludes with one winner which will be the Wildcats at which time Rocks money/tattoo will be retired as a decree and become a record.

 

  1. This contract is mounted on a transferable medium. Something that can be securely transferred from one owner to another.

 

Rock can transfer his allegiance from the Kentucky Wildcats to the Cincinnati Dipsticks (I’m grasping ), any time he wishes. Rock is not exactly a transferable medium, but in many societies tattoos were used as marks of ownership and allegiance. And marks like this may be used as such again…

 

  1. The contract is issued by the relevant legal authority- which is the body authorised to mount that specific proclamation upon that specific transferable medium.

 

*Rock is both the medium and the issuing authority as he owns his own body and can do with it what he likes.. Since this is the case, he has control over his body and what gets tattooed on it -at least for now….

 

From the above we can go on to say:

 

4.The validity of a money contract depends on the extent to which it is corresponds to the real economy. The value of that contract is an expression of its validity. It is valid to the extent that it corresponds to reality. It is valuable to the extent it is valid.

 

The validity of Rocks tattoo should be fairly obvious. If the Wildcats get spayed in the championships neither the tattoo or Rock himself is going to look too smart to anyone who sees them. If Rocks decree comes off he looks like a pretty cool, smart guy (at least to some people),  if it goes wrong, well Rock has got a plan for that too. Rock has got ‘faith’ in the Wildats and gives them ‘full credit’.

 

  1. A money decree is valid to the extent that everyone complies it.A money is decree is complied with to the extent of the amount of contracts issued compared with the amount of economic activity undertaken.

 

Because only Rock has got a Wildcat tattoo decreeing 40-0, the tattoo and the decree don’t look too good to most people right now- faith is medium to low. But if every fan in the league as well as every member of every team (including the Wildcats opponents!!) had a tattoo like Rock, a Wildcat Championship victory would be a shoe in. A self fulfilling prophecy. The decree would be ubiquitous and in full force.  Just like successful, valuable money is in any given territory.

 

There is something more we can say about tattoo money. The article refers to ‘Tyler Black’ who also had a decree tattoo just like Rocks.:

‘We still like Wright’s odds more than Tyler Black’s.

Black, also a Kentucky diehard, had a 2014 Kentucky national championship tattoo branded on his leg before last year’s SEC tournament, even though the Wildcats lost 9 regular season games.’

 

Now that we have more than one money decree tattoo, we can start to build up a history of ‘Wildcat Tattoo Money’. Comparing the relative validity of each tattoo while at the same time taking them in their totality means we can build up a picture of this currency over time. Just like we can with ordinary currency. And if everyone in Kentucky had a tattoo for every season….

 

New International Version

‘There is a time for everything, and a season for every activity under the heavens:’

 

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Parade or Crying In The Rain

 http://www.theguardian.com/business/2015/mar/18/federal-reserve-expected-end-zero-interest-rate-era

 

I have argued (in a different context), that the second world war ended not with the declaration of VE day or VJ day, but with the fall of the Berlin Wall forty or so years later. Challenging the date of victory challenges an entire perspective on the meaning of the Second World War.

 

Your perspective on the Second World War rests on understanding the objectives of each side and to what extent each side achieved those objectives. In other words understanding objectives is a necessary part of understanding what constitutes victory.

 

The Victors in the second world war did not achieve all their objectives on VE day or VJ day, that only happened with the re-emergence of a reunified Germany. The Saxon elite fought a long, silent war to achieve the reunification of Germany for forty years after the official cessation of hostilities. This might lead you to ask who the real enemy was….

 

The same is true with the Battle Of The Credit Crunch. We are coming closer to a declaration of victory and the announcement of a victory parade. As far as the mainstream economic data coming out of America and Britain goes, the Saxon team is on the home straight.

 

We are informed that unemployment is falling. Economic growth is (sort of), gaining traction. Compared to the basket case that is the rest of the world economy, things are not too bad, Saxon elites lay claim to some kind of normalisation in Britain and the USA. And so it is reliably reported, interest rates are going to move upward towards the ‘new normal’.

 

Note that ‘new normal'; it is important.

 

But first, take a quick look at the crowd behind the barriers as the great and good prepare for their triumphant circuit. Hoots of derision and catcalls greet the declaration that Fed interest rates will rise- after all haven’t we heard this over and over the past decade? Why will now be any different?

These catcalls are at least in part, justified. The hoi polloi have noted that whenever one of the floats breaks down or a bit player falls over while executing a tumble, a rain of digital ticker tape money descends from the skies distracting the attention..

 

This parade still isn’t really going anywhere they argue, so how can they do without the free Federal Reserve supplied ticker tape?

 

Lets see.

 

There are differing positions regarding interest rates –they are either going up, or down, or staying the same. The three possible options for the future of the economy are:

 

  1. That an economic collapse will come. There are not many still pushing this line outside a dedicated few on the libertarian wing of economics. And when a collapse of some kind is predicted, it tends to be focused on an outside factor such as war with Russia.

 

  1. That interest rates will stay low or even fall further because the financial system cannot afford to see them rise- this is because modern finance is in essence a Ponzi scheme that needs a constant influx of free money from the government. Increasingly there is a new twist in the discussion on low interest, the international blowback element. The argument here is that raising interest rates in the USA will screw the world economy and therefore America will come under increasing pressure will stop this happening.

 

3.Interest rates will rise to a new normal interest rate (see Guardian article).

 

Discounting the possibility of outright collapse, I would argue that the stay low or go lower faction is missing an important trick. Since they don’t believe interest rises are possible, they don’t analyse the proposed extent of any possible rise. This is a major error because insight into the specific target rate that central banks are seeking to achieve gives real insight into their thinking.

 

The new figure for a target interest rate is given in the Guardian article as 2.75%-3 %. What would an achieved rate of 2.75% or 3% actually mean for the Saxon elite?

It would mean that they had achieved the real objective of the Credit Crunch war; to secure a permanent, secure position for Democratised privately issued money in the form of derivatives in the world economy.

Long term interest rates since the post WWII period have averaged around 5%. The significance of this figure is that it represents the total ‘book’ value on state issued money as I explain here:

https://unitedstatesofeverywhere.wordpress.com/2014/02/13/the-great-escape-or-moby-dick-in-space/

Since the interest rate is an expression of the total state money economy, it follows from this that 2.5%, half the long term average rate,would represent half the traditional post war American economy given over to democratised money.

 

3%, which is 60% of the long term interest rate average, would represent 60% of American economic activity denominated by the American state and 40% given over to democratised money.

 

By way of comparison what would it mean if central bank interest rates in Eurozone or Japan stay low? This would reflect the extent to which these respective economies have been supplanted by derivatives. The lower the interest rate, the higher the proprtion of your economy that has been leached to derivatives.

 

The derivatives/state money balance is expressed through the ‘health’ or otherwise of the banks. One of the key mistakes the economic ‘insurgents’ make is to confuse the defence of democratised money with the defence of banks and bankers. Since the banks and financial institutions are the purveyors of democratised money, they are inevitably saved alongside the democratised money they produce. But this does not mean that this was the prime intention of Monetarist politicians in implementing QE. This is a perfect example of needing to understand the real objectives in a war before you can understand the meaning of defeat or victory.

 

The specific crisis that sparked the Credit Crunch was a failure in interbank lending. Financial institutions did not want to make temporary loans of state money to each other because they feared the massive and unknown amounts of derivatives that they all carried on their books. This was effectively admitting that there was a possibility that the value of these derivatives was heading towards zero..

 

But this was never a liquidity problem. This was an exchange rate problem between the value of state issued money and privately issued democratised money. The problem was that democratised money was effectively worth nothing compared to state issued money.

 

Quantitive Easing firstly:

 

Bought these derivatives at their maximum possible denominated value using state money. This is exactly the same as a central bank intervening in currency markets to lower the value of your own currency while propping up the value of another currency (democratised money).

 

At the same time QE lowered interest rates effectively to zero. Opening up a channel of ‘sabotaged’ money to the banks. This effectively declared the ongoing state denominated economy to be dead. (see previous two articles) because money issuance effectively acts as an economic proclamation about what the nature of the economy will be so long as that particular example of money is around…

 

On the surface (remember the difference between real objectives and stated objectives) this QE money was supposed to go into the real national economy through the banks to stimulate economic activity. It other words it was advertised as being standard state issued money. But what it actually did was go into international speculation or was just recycled to the central banks. In other words it was actually sabotaged or denuded state money. (see previous articles)

 

I do believe that there were a number of politicians who genuinely believed that there was a possibility that this sabotaged money could have gone into the national economy. And of course when it became clear that this was not happening they asked the question: Why not?

 

And the answer they got was this:

 

‘It is far more profitable for us to invest overseas. The more profit we make the sooner we will repair our balance sheets. The sooner we repair our balance sheets the sooner the crisis will be over. So what is it to be: repair the Credit Crunch or national investment?’

 

Faced with this question the useful fools folded and chose repair the credit crunch.

 

So what did this mean?

 

It meant that wealth extracting opportunities in Britain and America were competing with wealth extracting opportunities anywhere in the world for this QE money. The Monetarists has succeeded beyond their wildest dreams. They had ripped off the cover from Anglo Saxon economic society and exposed it completely to the winds of international competition!

 

And when did Anglo Saxon society begin to ‘recover’?

 

When it began to compete with the terms and conditions and profitability of the most exploited parts of the world. So you have a recovery for the monetary system but no recovery for you….

 

A hyper victory for Globalisation.

 

And how can Japan and Europe recover?

By doing exactly the same thing.

And why haven’t they ‘recovered’ yet?

Because they are still trying to hang on to the shreds of their respective societies.

But we have got Abenomics and we have got ECB QE so it won’t be long….

 

I can’t write much more because the thought of this is making me sick to my stomach, nevertheless;

 

So the Saxon economies become more profitable in comparison to the global economy so the QE cash returns ‘home’. So the overseas economies enter a period of crisis because of the withdrawal of QE liquidity, so their terms and conditions have to fall, which draws the hot cash back to their economies, which means our economies are less competitive by comparison, which means another attack on our terms and conditions.

 

And they expect you to stand there in the rain clapping and cheering as they march past…..

New International Version
For it seems to me that God has put us apostles on display at the end of the procession, like those condemned to die in the arena. We have been made a spectacle to the whole universe, to angels as well as to human beings.

1 Corinthians 4:9

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Lest Ye be Vexed……..

Subsequent to my post: ‘If I had A Hammer’ some of the main points I made were discussed on a Maidsafe.org thread

 

(https://www.maidsafe.org/t/negative-interest-rates-and-when-robots-will-set-monetary-policy/3262/14)

 

probably via Dave Harrison @ TradeWIth Dave who contributes significantly to our overall understanding of new forms of money as they appear and evolve.

 

Despite the wise injunction not to ‘Listen at doors…’ I nevertheless proceeded to absorb and then respond to the comments I found there.

I am always keen to discuss my analysis since this is the best way I know to develop and deepen my own understanding of the Democratisation Of Money. Furthermore I am always in favour of the most robust kind of discussion on the basis of the premise that it is impossible to edge a knife on a block of butter. If you really want to sharpen your understanding sparks must fly!

 

The whole thread became increasingly unwieldy so I am anable to reproduce it in any kind of coherent order here. Obviously, you can see it all at the address above.

 

I have dealt with the points I think are most illuminating. I have put the points in bulleted quotation marks and my answers in italics.

 

From Janitor

 

  • ‘Duh… Worthless paper has no intrinsic value. That wasn’t too hard!’

 

Money is not paper or gold or anything else, it is a legal instrument recorded on a transferable object. Nothing is money until it is designated as such by the relevant legal authority. The mortgage on you house is written on paper, does that mean it is worthless because the paper is worthless? What nonsense! The value comes from what is printed on the piece of paper, not the paper itself.

  • ‘A real money is always worth something because even copper or iron money can’t ever be cheaper than the material it’s made from.’

 

I’m pretty sure this sentence doesn’t actually make sense; nevertheless refer to Greshams Law:

http://en.wikipedia.org/wiki/Gresham%27s_law

 

  • ‘I don’t know where he got the idea that money produces wealth. Money is wealth which produces nothing. That’s exactly what it’s supposed to do – be a medium of exchange and store of value. Money doesn’t “extract” anything, no clue where that Perry guy got those nonsensical ideas.’
  • ‘I don’t know where he got the idea that money produces wealth.’
  • ‘A currency of course doesn’t produce wealth’,

Capitalist economics claims that money produces wealth. If they do not:

What do Capitalists claim Capital is then?

What do Capitalists Capitalism is then?

What do Capitalists claim mean by ’ investment’?

What do Capitalists mean by ‘return on investment’?

 

  • ‘…it just helps it circulate. It doesn’t extract wealth,’

 

Even in its simplest terms, this statement is plainly self contradictory.

How can wealth ‘circulate’ unless it is extracted from one place so it can be ‘circulated’ to another?

In what form can wealth ‘circulate’ if not in the form of money?

What do you understand by the term ‘accountancy’?

What do you think accounts are for?

 

 

  • Because this post is about the nature of money, I think you should define “money” (it seems you mean “currency” rather than “money”?)

 

noun

noun: currency; plural noun: currencies

a system of money in general use in a particular country.

 

 

What do you imagine the difference is between ‘currency’ and ‘money’? Define this difference. If you know of any valid legal difference in the definition of currency and money please explain it. I used the term money specifically and advisedly.

 

  • Money (such as gold) has inherent value. You can coat airplane windows with it, enhance conductivity of connectors in your iPhone, etc. A currency can be intrinsically worthless, but then you could make it clear which one you are referring to to.(sic)

 

Gold can be used as money, but so can shells, pieces of paper etc. Money is a legal instrument. (see above). Aeroplane windows are irrelevant.

 

  • “It is a license, a legal permit, to extract value from within the society.”

But in a free society there’s no way to limit that. I don’t have to accept your money, I can pick any of several private currencies or forms of money that circulate around.

 

I also can (sic)

 

-(?) For some reason you have been unable to finish this sentence- were you confused? What did you mean to say?

 

Janitor says:’ I don’t have to accept your money’

This is simply wrong: You do have to accept my money in settlement of debt, legally ordered payments, in payment of taxes etc etc . Look up the meaning of ‘legal tender’. The government has mandated this. Your statement is evidence of painful ignorance.

  • “If there were an infinite number of possible profitable ways to utilise money what would the effect be on interest rates? Despite the fact that there would be little or no risk, interest rates would be high.  They’d be high because there’s more demand relative to supply. Money is supposed to be scarce, otherwise it’d be worthless or close to worthless and people would not want to hold on to it (or denominate their labour or products/services in it).

 

This does not in any way refute the point that interest rates are a product of demand, not risk; in fact you simply restate the first part of my point, albeit in a somewhat less elegant way.

 

Then you make the strange generalisation: ‘money is supposed to be scarce’. Based on what theory? Can you provide a definition of scarce? You suggest that people would not want to denominate goods and services in any particular money if it were not scarce. People within a given territory have no choice as to whether they have to hold the currency of that territory. They are required to hold that currency-in order to pay taxes for example, as I explained above. You either repeat what I say, in which case you are sort of on the right track, or else you deviate from my description and go into a ditch…

 

  • “And what would be the effect of an opposite environment of high risk and few profitable ways to utilise money? Then interest rates would be low because there would be little or no demand for money.I’m not sure this dual (high risk + few profitable ways to utilize it) hypothetical setup is valid.

 

Really? Because that is the setup we are in right now!

 

 

  • If risk is high, interest will be high. That’s regardless of how one wants to utilize money. If there are few investing opportunities, interest rates would be low because of a relative lack of demand.

 

You try to characterise ‘risk’ as some invisible abstract force of nature that cannot be located within concrete tangible reality. By conflating risk and interest you hope to glide past their supposed relationship: ‘If risk is high, interest will be high’. is a statement of religious faith dressed up as economics. There is no risk outside of investment opportunitiesor the lack of them. If there is, show me where it is!

 

  • Currently in the world there is too much capacity in most industries worldwide, so consequently although risk is small, there’s no demand for money (actually individual currencies, but since you didn’t make this distinction I’m playing along) simply because building another steel mill is likely to make that debt bad (i.e. you won’t make money from it).

 

‘Currently in the world there is too much capacity in most industries worldwide’ Another meaningless generalisation! Raw material producing industries and finished commodity industries to say nothing of services, cannot be lumped together in this way.

 

From Seneca

 

  • Interesting, but he doesn’t address the effect of inflation and deflation. In a deflationary period the value of money increases, so despite ZIRP/NIRP, which doesn’t increase the nominal value of a particular amount of money, the “real” value still increases over time through deflation. I think that undermines his entire argument? At least, if the deflation fully compensates the decrease in interest rate, then it does.

 

This goes right to the heart of my argument, which I am afraid you haven’t really understood. You cite the beneficial effects of deflation on the value of money as a way of offsetting the non-beneficial effects of ZIRP. You argue that in theory at least, deflation and ZIRP could effectively’ net-out’, meaning that there would be no losers in a system which would be in your terms, self regulating.

 

The first and most obvious problem with this is that it is highly unlikely that the people who are disadvantaged by ZIRP are the people who would be advantaged TO EXACTLY THE SAME EXTENT by deflation. When I put it in these terms I am sure you can see what I mean. In other words, if you are getting no interest on your savings, you are told you must take the money out of the bank and buy a boat with it, why?- because you will save a lot of money! But what happens if you don’t want to buy a boat?

 

From this it should be clear that even if ZIRP/Deflation could by some stretch of the imagination be described as OVERALL neutral, it has to be admitted that it causes massive wealth transfers from individuals within the system. Because it effects different MONEY FUNCTIONS differently.

 

The second problem with your suggestion flows directly from this:

Deflation and Inflation are in no sense ‘real, they are estimations based on aggregated information produced by governments. They are primarily political tools. I am sure you are aware that the methodology for calculating inflation/deflation figures has been regularly amended in every major economy, usually to suit the political requirements of the time. There is no clear, real and genuine way to calculate deflation, so the idea that this misty, indeterminate figure from the future can be used to offset the very real concrete lack of interest from today is a bit of a stretch….

 

The third problem is the main one I was trying to describe and it flows from the above two points I have made. You are describing monetary policy as a totality which is to say, you are concerned with the TOTAL amount of money netted out. But money is not like that. It is not a single contract that comes to maturity and is then paid out. Money is constantly being issued and retired, there is never a time when it is accounted for in totality. The amount of money and the ‘real’ value it represents is a constantly moving target. So there will never be a time when it will be possible to say what the discrete outcome of any action will be. The only way to understand money is as a series of ‘waves’ of contracts and the effect that these contracts have IMMEDIATELY. The effect of the money issued during the credit crunch was to save the lives of the banks. It does not matter what the ‘real’ value of this money was, in terms of the banks or the overall economy, without it the banks would have died. Just like a billionaire would die in the desert without a single bottle of water to keep him alive.

 

Money is not a totality- it is a collection of functions.

 

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If I Had A Hammer Or A Sailor Went To Sea, Sea, Sea…

 

Money can most usefully be understood as a collection of functions.

 

Functions are the possible uses that something can be put to if you should so choose. You can use a knife to cut cheese or spread butter, they are two different uses of the same implement.

 

The design of an object determines what its possible functions are. It is possible for the creator of an object to enhance or limit the functionality of any given object by altering the design of that object. If you were to make a hammer out of glass instead of hardened steel it would considerably limit its function to hammer nails!

 

At the same time it is possible for users of an object to take advantage of, or modify the functionality of an object in ways that were not approved of or foreseen by the creators of that object. A car can be used to carry out a bank robbery or to knock down a tree, neither of which was it expressly designed for.

 

It follows from this that the total functionality of an object is the nexus of purposes between the creators of that object and the users of that object. Money is no different from any other manufactured object in this respect.

 

The creator of any given piece of money is in the last resort, the government. This is specifically because any piece of money is a legal instrument. Money is nothing other than a legal instrument, nor can it ever be anything else. It follows from this that the functions prescribed for a piece of money by its creators are limited and defined by law.

 

Money has no significance outside of these legal limitations. So for example you cannot use money to legally buy another human being. It does not matter even if somebody freely wants to sell himself to you, such a function of money is not permissible. No such agreement would be legally enforceable.

 

Further, this invalidity is not limited by the amount of money involved in such a transaction. There is no amount of money you can offer for a person that would make such a deal a ‘fair exchange’. This is a simple legal limitation of money.

 

But money is not only defined by the limitations on its use, but by the positive functionality it offers to its users. This positive functionality means that in some real sense, the use of money is entirely voluntary. If any given government cannot provide a legal framework of functionality that serves the interests of the users of that money, then they rapidly turn to alternatives.

 

Money is a way of channeling and controlling trade, but where any particular instance of money fails, trade finds a way. Trade (as human interaction) is ubiquitous, like air and light.

 

Which brings us to interest rates. Earning interest is – was, a positive function of modern money, that is to say it is a positive reason why people wanted the kind of money that is available now.

 

Interest is validated as an expression of the contemporary social value of money in terms of itself. In other words, interest on money is paid in money to express its value at that specific time. This additional money that accrues to owners of money by virtue of possession expresses the fact that money is valuable. Interest proclaims that all things being equal, anyone within society should/will be able to use money to extract value.

 

It is a license, a legal permit, to extract value from within the society. ‘Extract’ value is important, as you will see in a minute.

 

This definition of interest is of central importance because it contains within it a model of the society into which the created money will go. It makes plain that there WILL be opportunities to use money profitably (in a way which can extract value), within the given society.

 

It follows from this that the interest function is in essence a statement about a given society. And it is fundamental to the way that modern capitalist societies differ from pre capitalist (‘feudal’) ones. Modern capitalist societies will offer opportunities for wealth extraction/ transfer, non capitalist societies do not guarantee this. This is the fundamental rhetoric and ideology of capitalism.

 

From this positive functionality of opportunity an apparent negative functionality is implied: That it is possible that there might be limited or no opportunity of profitable use that can be made of a given amount of money. This possibility is defined as ‘risk’.

 

But this can be shown to be a demonstrably false argument by means of a simple illustration:

 

If there were an infinite number of possible profitable ways to utilise money what would the effect be on interest rates? Despite the fact that there would be little or no risk, interest rates would be high. Because there would be high demand for money After all, what would incentivise the lending out money when there were countless easy ways to directly invest it at high returns?

 

And what would be the effect of an opposite environment of high risk and few profitable ways to utilise money? Then interest rates would be low because there would be little or no demand for money. In this environment, investment opportunities as opposed to money would be at a premium.

 

This directly refutes the idea that interest is an expression of risk. It is precisely the opposite. The amount of interest charged is NOT a reflection of risk it is a reflection of the lack of risk.

 

Further it directly refutes the idea that money produces wealth. Money extracts wealth from profitable opportunities. Without these profitable opportunities money is worthless.

 

As I argued above, interest is a statement about a society. So what does the MONETARIST refusal to obtain interest from the money they issue- ‘ZIRP’, say about society now?

 

It says that there will be no ways to profitably extract wealth. It is effectively the end of a capitalist society.

 

It is worth unravelling this.

 

I argued that money is a designed artefact.

I argued that money is a legal instrument. It follows from this that the production of money is a legal process.

The charging of interest by central banks when money is issued is part of this legal production process.

Money that is designed to be produced without this initial interest charging process is designed to be different from money that is produced with interest charging.

It is designed to be a different kind of money.

It is a different kind of money.

It has effectively been sabotaged, in the same way that a hammer that has not been sufficiently hardened has been sabotaged.

A sabotaged hammer can be called a ‘semi- hammer’

Sabotaged state money can be called ‘semi state money.’

This sabotage is deliberately carried out by Monetarists

 

To return to the hammer analogy, the total number of hammers being produced might be the same or even increased. But the quality of the hammers being produced has been diminished. The overall stock of hammers is being progressively corrupted as useful hammers are retired and replaced with ‘semi hammers’.

 

What this means is that it becomes progressively harder to find a useful hammer to knock nails in with.

 

Doesn’t this correspond to what you have seen in the real economy? Despite the fact that there has been a record production of money, activity in the real economy is actually shrinking- how else can the deflation we have seen be explained?

 

How else to explain phenomena like stock ‘buy-backs’ where management use cheap ‘money’ to buy back their own company shares and boost value by increasing the earnings ratio. This is effectively turning shares into a kind of money surrogate.

 

The explanation for this is that when there are no useful hammers to be found, you are forced to improvise an alternative, (the back of an axe head for example) to knock a nail in. This would be a surrogate hammer, and now since there is less and less useful money around, shares are being used as surrogate money.

 

The saying goes:

‘To a man with a hammer, everything starts to look like a nail’.

But to a man with a nail to knock in, quite a few things can start to look like a hammer.

 

To put it another way:

 

The sea exists over space and time. But the sea is not a totality. The action of the sea is a collection of waves over time. The waves vary in size, shape and force over time. You are encouraged to see money as a totality, but in fact it is a series of legal instruments, that differ in design over time. The interest rate is one of the characteristics that can vary.

 

Monetarism has built a series of wave breaks and artificial reefs that systematically change the size and shape of the waves that break upon the shoreline. And these modified waves of money issuance are being used to smash up the coastline you have known.

 

It is not nature.

 

It is deliberate systematic human intervention.

 

Breton Fisherman’s Prayer (Anonymous)

 Dear God, be good to me;
The sea is so wide,
And my boat is so small.

 

‘I do not know what I may appear to the world, but to myself I seem to have been only like a boy playing on the seashore, and diverting myself in now and then finding a smoother pebble or a prettier shell than ordinary, whilst the great ocean of truth lay all undiscovered before me.’

Isaac Newton

Read more at http://www.brainyquote.com/quotes/quotes/i/isaacnewto387031.html#OzXCS8TfgJEApOs2.99

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SYRIZA Is A Cultural Constituency

syriza1

European Commission President Jean-Claude Juncker stated, “there can be no democratic choice against the European treaties.”

In 2014/15 Year of Culture I described SYRIZA as a ‘cultural constituency’, as opposed to a traditional political movement whose raison d’etre is economic rationale. This means that SYRIZA and movements like it are not motivated by economic objectives in the traditional sense. This is a consequence of the fact that in the developed economies economics is no longer a central driving factor in the creation of policy by authority. Since policy is no longer oriented around economics the response to authority can no longer be oriented around economics. Cultural constituencies are evolving to fill this hole left where economics once was.

My analysis was made was before SYRIZA actually came to power. Since then they have been duly elected and have carried out the first in a series of negotiations with the EU and the Troika with regard to the Greek debt.

The outcome of these negotiations have caused massive confusion on all sides of the so called ‘left’ and ‘right’. Even the Germans, who appear to have scored a substantial victory, are somewhat baffled by the ease with which they achieved this outcome. The result of the negotiations just does not seem to make sense. What can account for SYRIZA’s apparent total capitulation?

If you try to understand what SYRIZA seeks to achieve in terms of economic rationale you will never be able to understand their approach and motivation. You have to compare SYRIZA to my definition of a cultural constituency to understand what this movement really is and what it will do:

  1. I said that SYRIZA as a cultural constituency would be:

Condemned by the post war establishment; Pundits and politicians of the post WWII order are not going to like these groups. And they are going to act against them.

From ‘Zero Hedge’

‘Let us begin with what should be indisputable: the Eurogroup agreement that the Greek government was dragged into on Friday amounts to a headlong retreat….

Such a thorough failure is not, and cannot be, a matter of chance, or the product of an ill-devised tactical manoeuvre. It represents the defeat of a specific political line that has underlain the government’s current approach.’1

 

From ‘The World Socialist Website’

 

‘It has taken less than one month for the Syriza government in Greece, led by Prime Minister Alexis Tsipras, to repudiate its anti-austerity election program and betray, totally and utterly, the impoverished working people whose votes placed it in power.’2

It is fairly clear from these two examples that the insurgent ‘left’ is firmly against SYRIZA from the get go. And I don’t have to try very hard to find examples on the European right that are as at least as negative. The left more than anything, is a product of the post WWII political order. The left is the direct product of economic rationale- the belief that economic interests dominate all other considerations, to the extent that the class of people who have the same interests can consider themselves international socialist ‘brothers’! It is no wonder then, that this left would be in the forefront of the move to attack a new configuration like SYRIZA since it represents a direct and mortal threat to the ‘socialist’ project.

So who, if anyone, will have a good, (or at least not very bad), word to say about SYRIZA?

The answer to that would be the Monetarists in the Anglo Saxon bloc. Here The World Socialist Website finds evidence of collaboration:

‘A comment by Financial Times columnist Wolfgang Münchau, published on the eve of today’s meeting of the euro zone group of finance ministers, points to significant differences over German-led insistence that the demand of the Syriza-led Greek government for debt restructuring should not be met.’3

 

‘The publication of such a vigorous comment in one of the world’s major financial dailies points both to the considerable opposition in financial centres to the policies of the German government and to the fact that the Syriza program, far from representing some far-left agenda, is a thoroughly bourgeois program enjoying some measure of support in ruling political and financial circles’. 3

‘Münchau’s comment is significant from a number of standpoints. It underscores the opposition to the austerity agenda, at least in its present form, emanating from sections of the US, British economic establishments, with support in some parts of Europe’. 3

  1. I said that for SYRIZA as a cultural constituency that:

Economic demands (are) secondary or irrelevant.

 

As regards the debt, the text mentions that “the Greek authorities reiterate their unequivocal commitment to honour their financial obligations to all their creditors fully and timely.” In other words forget any discussion of “haircuts,” “debt reduction,” let alone “writing off of the greater part of the debt,” as is Syriza’s programmatic commitment.1

 

Virtually everybody is at a loss to explain the totality of SYRIZAs economic climbdown. In order to try to explain what has happened, all parties have tried to portray SYRIZAs actions as the consequence of ‘losing’ the negotiations.

‘It is clear from the above that in the course of the “negotiations,” with the revolver of the ECB up against its head and resultant panic in the banks, the Greek positions underwent near-total collapse. This helps to explain the verbal innovations (“institutions” instead of “troika,” “current arrangements” instead of “current program,” “Master Financial Assistance Facility Agreement” instead of “Memorandum,” etc.). Symbolic consolation or further trickery, depending on how you look at it.’1

The trouble with this explanation is that the outcomes we have seen don’t come from an unsuccessful confrontation with the EU because there has not been any confrontation with the EU!

At no time has the EU and its interests been directly threatened nor will it be. Search as you might you will not find ANY evidence of a single concrete threat made by SYRIZA’s Tspiras or Varoufakis against the EU because there isn’t one. Not one. Is it seriously possible that SYRIZA could not think of a single thing to threaten the EU with? Because I could think of about ten serious threats they could make in less than a minute

So it is clear that SYRIZA has not climbed down because it never climbed up in the first place. Once you understand this it becomes obvious SYRIZA never intended to confront EU on economic matters. In fact, SYRIZA has used the negotiations with the EU to buy time to launch its attack on those it perceives to be its real enemies and the real reason it came into existence. Which leads us to:

 

3. I said that SYRIZA would be

 

Willing to compromise on periphery, completely unwilling to compromise on core; creating new spheres and forums for co-operation, even international organisations that encompass Cultural Constituencies. But less and less willing to negotiate with their own national governments.

  

 

What is the periphery and what is the core?

The periphery, by definition is the EU and from this it follows that compromise with the EU was always going to be inevitable for a cultural constituency. The CORE with which SYRIZA will not compromise is the deep Greek state, by which is meant the oligarchs and those who have been in power since the end of the post WWII emergency including PASOK and the parties of the right.

This brings us back to the post WWII order and brings SYRIZA and movements like it into sharper focus. The post WII order in its totality rests on left/ right and economic rationale. But these things have been increasingly undermined and it was always only a matter of time before this was reflected in politics. But the details were always going to be unclear up until the time that they weren’t- that time is now. SYRIZA is going to war with the post WWII order.

 

4. From this it follows

They make permanent rather than transitory demands; the removal of American military bases from Japan instead of a change in interest rates.

  

Permanent demands are ones which which will be difficult or impossible to overturn. To overturn austerity is by definition transitory since austerity is an emergency temporary measure. To disenfranchise the Greek oligarchs would be permanent.

 

  1. And finally and most importantly:

Profound realignment of politics within constituencies; Less and less will traditional areas of contention and politics operate within cultural constituencies. The members will tend to see what they have in common over what they have in difference.

 

This will prove to be the acid test of my analysis- specifically what will be the future of SYRIZA over the next couple of years or so.

The standard analysis will predict a breakup of the SYRIZA alignment under the pressure of dealing with the demands of the negotiations and failure to achieve economic concessions from the EU.

Under my analysis these traditional areas of contention based on economic rationale will become less and less important and will be replaced by a new network of agreements and understanding. What this means is that SYRIZA will not come under pressure to implode as is expected.

Instead we will see a period of bloody trench warfare between the post war establishment in Greece and SYRIZA. The establishment will do everything it can to cause strife between Europe and SYRIZA to distract SYRIZA from its core objective of attacking the oligarchy. SYRIZA in turn will do everything it can to promote peace with Europe so it can focus on the Greek elite.

  

 

1. Revolt In Athens: Syriza Central Committee Member Says “Leadership Strategy Has Failed Miserably” 02/24/2015 12:28 -0500

http://www.zerohedge.com/news/2015-02-24/mutiny-athens-central-committee-member-slams-syriza-leadership-strategy-which-failed

 

2. The capitulation of Syriza and the lessons for the working class 23 February 2015

http://www.wsws.org/en/articles/2015/02/23/pers-f23.html

 

  1. A revealing Financial Times comment on the Greek debt crisis

By Nick Beams 16 February 2015

http://www.wsws.org/en/articles/2015/02/16/munc-f16.html

 

 

 

 

 

 

 

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Q Everything and Q Everywhere

One

 

About forty years ago, a hard line group of Anglo Saxon economists, politicians and financiers put into action a plan to build an alternative economic and political system within the framework of the developed western economies. This group was generally referred to as ‘Monetarists’.

 

First the Monetarists manoeuvered a committed core of extremists into key positions in academia and politics who prepared the way for the new regime by vociferously agitating for change. The Monetarists and their spokespeople influenced media and opinion formers to change the general tone and nature of public attitudes towards their project.

 

Through the systematic use of media the Monetarists coalesced a hard line grouping within the population who were disaffected with the existing order and were now prepared to countenance extreme methods to forward the agenda to which they had been persuaded to give their allegiance. This group would be the shock troops of the new order.

 

Having successfully placed loyal supporters in key positions and having created a core of committed, even fanatical, support within the general population, Monetarists then were in a position to overthrow the existing financial and political order and replace it with their own. The legal and the democratic validity of this coup was questionable to say the least.

 

Throughout this process, Monetarists relied on international support against resistance within the native populations they were disowning. They explicitly used the economic and political power of their international network of supporters as a threat to cow the domestic population and to claim legitimacy for their project.

 

Monetarists were broadly successful in their first phase of introducing a new regime. But perhaps inevitably they came up against increasing resistance from sections of the public when it became clear what the consequences of their project would be.

 

Then came the Credit Crunch; the point where the new regime began to collapse under the effects of its own inherent weaknesses. At this moment of maximum weakness and vulnerability, owners of major banks and their Monetarist advocates confronted the very government they claimed to be implacably opposed to and said: ‘We want another chance to implement our project and you have to give it to us. Because if you don’t we will cause chaos’. They again referred to their international supporters as an explicit threat and a legitimation.

 

They said: ‘although we have claimed to have acted in the cause of the free market we now want you to suspend the free market’. And: ‘if you give us this second chance we will use it to repair the damage caused by the Credit Crunch and to rebuild our common society in a way that takes into account oppositional points of view’.

 

The Monetarists were given the funds they needed to prevent their political economic project from collapsing in the form of Quantitive Easing. This completely changed the nature of the legal and financial system.

 

However, once they had succeeded in gaining the required breathing space the monetarists did not attempt to repair the damage they had caused. Quite the opposite. In fact, they increased their onslaught in a frenzied attack on what remained of the old system.

 

They had relied for survival on a massive bluff.  They upped the ante. The bluff succeeded.

 

Two

 

About five years ago a hard line Anglo Saxon group of economists, politicians and financiers put into action their plan to build a pro NATO regime within the framework of Ukraine. The name given to this group was The Maidan.

 

First they put a committed group of extremists into key positions in academia and politics who prepared the way for this project by vociferously agitating for this change in Ukraine .The Maidan did this by spending something around five billion dollars to create and promote what are referred to pro democracy NGO’s or ‘activist’ organisations. These ‘pro democracy’ NGO’s influenced media and opinion formers to change the general tone and nature of public attitudes towards their project.

 

Through the use of the media the Maidan formed a hard line right wing group of thugs within the population who were disaffected with the existing order and which were prepared to use extreme methods to forward the agenda to which they had been persuaded to give their allegiance. This group would be the shock troops of the new order on the streets.

 

Having put supporters in key positions and having established a fanatical core within the general population, the Maidan then overthrew the existing financial and political order and replaced it with their own. The legality and democratic validity of this overthrow was at least questionable.

 

Throughout this process the Maidan relied on international support against the native populations they were disowning. They explicitly used the threat of economic and political power of their international supporters to cow their opposition within the domestic population.

 

The Maidan were successful in their first phase. Then, perhaps inevitably they came up against ever increasing resistance when it became clear what the consequences of their project would be.

 

Then came the military offensive in the East of Ukraine, when the new regime began to collapse under the weight of its own limitations. After the stalling of their offensive, at their moment of maximum weakness and vulnerability, the Maidan went to their opposition and said: ‘We want another chance to complete our project and you have to give it to us. Because if you don’t we will destroy this country and any chance of peace in the region. They again referred to their network of international supporters who loudly proclaimed that they would support the Maidan. They upped the ante

 

They also said :‘if you give us this ceasefire we will use it to repair the damage caused by the civil war and to rebuild our common society in a way that takes into account oppositional points of view’.

 

The Maidan were given the space they needed to prevent their political economic project from collapsing in the form of a ceasefire.

 

However, once they had succeeded in gaining the required breathing space the Maidan did not attempt to repair the damage they had caused. Quite the opposite. In fact, they used the ceasefire to reorganise their army units and facist millitias and then increased their onslaught on the remnents of the Ukrainian state in a frenzied attack on what remained of the old system.

 

They had relied for survival on a massive bluff. But unlike the Monetarist bluff, the Maidan bluff failed. Because the East Ukrainian resistance has so far successfully fought back to the extent that a signifcant number of Maidan millitias and soldiers are surrounded and trapped in East Ukrainian territory.

 

So now the Maidan have sent Merkel of Germany and Hollande of France back to ask the East Ukrainians for a second ceasefire!

 

So why did the Monetarist bluff succeed and the the Maidan bluff fail?

 

Because the Anglo Saxon governments and populations that the Monetarists faced in their negotiations were from the same cultural group as the Monetarists. They were dealing with their own kind. This was the power they had. They had a commonality they could bargain over.

 

The Anglo Saxon Maidan are dealing with governments and populations that come from different cultural group. They are dealing with people who are not of their own kind. They have no power of commonality with their opponents. They have no commonality they can bargain over.

 

And this is the fundamental flaw running through the Anglo Saxon neo liberal United States of Everywhere. It has no concept of mutuality.

 

It has no concept of Mutually Assured Destruction.

 

It has no conception of anything outside of itself.

 

Because the United States of Everywhere believes that deep down everybody wants to be exactly like ‘us’. And when ‘they’ hate us they only really ‘hate us for our freedoms’. Which is another way of saying that really they love us.

 

And they won’t really, can’t ever really bring the hammer down on us, because EVERYBODY knows deep down that we are the good guys. And fate and destiny and progress have put us in our natural position at the top of the heap.

 

There can’t be anyone who will not bend the knee to us.

 

There can’t be.

 

Because that would be wrong.

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PURPLE HAZE OR DOWN THE RABBIT HOLE

 

 

http://tradewithdave.com/

 

Foreword:

 In correspondence with Dave Harrison (‘Trade With Dave’) on the subject of cultural constituencies, Dave raises the important point:

On what basis do different cultural constituencies constitute themselves?

Where are they coming from?

 

 

Fans of SUPERB IRONY have been treated to the recent spectacle of Germany launching a frontal assault on The Democracy Brand right on its home turf. The German message to Greek population and Syriza government alike is : ‘Elect who you want, it makes no difference!’. Newly appointed Greek leader Alexis Tsipras has responded by visiting the war graves of communist resistance activists murdered by the Nazis and referring more than once to the favourable 1953 debt settlement offered to the emergent West German state by the victors of WWII.. ironic it might be, subtle it ‘aint.

 

All of which diplomatic slapstick would be almost comical if it were not for firm support for the German position across Northern Europe. It is clear that national democratic government as we have understood it for a century or more, is being invalidated by the political realities of the EU.

 

The ‘left’ and ‘progressives’ are powerless to analyse, much less remedy this crisis of democracy. The left continually refers to this democratic crisis, but offers no contemporary analysis of it. Nor will they ever be in a position to do so. This would require an insight into the relationship between ‘Economic Rationale’ and ‘Germanic Land Democracy’ – not something the Germanic left can ever take on. If it ever did, it would invalidate itself immediately and permanently.

 

First of all, there is no point trying to discuss this or any other crisis of democracy in abstract general terms. All attempts to do so inevitably descend into a slanging match of the most simplistic and pointless kind: eg. ‘I am more democratic than you’ or ‘the West is more democratic than the East’ etc. This is simply more rhetorical slapstick.

 

We need a workable definition of democracy that is free from such rhetoric.

 

We can define Democracy as a group of individuals agreeing to exploit a free resource as equals in respect of that exploitation. For example, in ancient Greece slaves fulfilled the role of a ‘free’ resource. That is to say all Greeks were equal in relation to slaves (they owned them and exploited them etc) even if citizens were not equal to each other in different respects. If one ‘citizen’ went out and kidnapped a foreign person to be used as a slave there was no cost imposed on any other citizen as a result of this. This is why ‘classic’ Greek slave owning democracy is fundamentally different from all contemporary nations holding slaves. Greek democracy was slave democracy.

 

The modern democracy we have is different from ancient Greek democracy. Not just in its surface forms of government but in its fundamental construction. Greek democracy was based on the ‘free’ resource of slaves, Germanic democracy is based on the ‘free’ resource of land.

 

Germanic land democracy is based on freedom to buy and sell land within the constraints of the system. What this means is that it is permissible for anyone to buy land anywhere within the designated territory, so long as they can afford it. This form of ownership of land places no cost on another citizen. What happens to, and on, any given piece of land is primarily an economic consideration only marginally mitigated by any other considerations. This is the defining characteristic of the Germanic cult of Capitalism.

 

Freedom to trade land in this way locates Germanic Land Democracy, its origins (and even its eventual demise!), in time and place. ‘Modern’ (Germanic Land Democracy) has nothing to do with ‘Classic’ (Greek Slave democracy), never had, never will have. Any claim that they have anything in common is purely rhetorical.

 

Germanic democratic land ‘freedom’ never existed before it was created by the Germanic peoples of NW Europe. The modern nation state developed as a direct extension of this Germanic right to create and trade ‘private’ land. From the nation state came the modern relationship between the citizen and the nation. It is a particular political relationship.

 

The political relationship of the citizen to the modern state is based not on culture or history but on an economic relationship- the economic relationship encapsulated in Germanic Land Democracy. In a modern developed capitalist state, the questions of free movement, freedom of access, ownership and culture are all supposed to be settled. Now economic ‘classes’ will come to the fore under the auspices of economic rationale. In other words economics will be the focus and purpose of economics and by extension, politics. (see previous post)

 

However, it turned out that the land and culture battles were not exactly over. Since modern Germanic states began to expand outwards from NW Europe periodic conflicts between local cultural groups and the Germanic form of state have occurred. But half way through the last century, a full blown culture/state crisis exploded in Germany. Fascism pitched Germanic race, and culture directly against Germanic land democracy. And Germanic land democracy was overthrown. What followed was the rise and ‘defeat’ of fascism.

 

This next bit is particularly important:

 

Was democracy reconfigured in Germany after the war? No. The democratic German ruling elite had been overthrown by the Nazis. It had proved itself incapable of controlling its geographic and political territory. At the end of the war the German elite was put on an extended period of probation under the tutelage of its Anglo Saxon cousins. It follows from this that the German state is not a real democratic state. For instance, it has only relatively recently been unified. The German ruling class still cannot operate independently. It is constrained within a set of international political chains.

 

Again, Germany is not really a modern national democracy.

 

The damage caused to Germanic culture in general and Germanic land democracy by two World Wars was massive. I have described aspects of the strategy employed by the Anglo Saxon powers to rehabilitate Germanic culture and politics elsewhere. But here I want to focus on the implementation of mercantile nationalism.

 

Mercantile nationalism- is a form of nationalism based on the ‘free movement’ of individuals and mass immigration. In other words it is the most intense form of Germanic Land Democracy that it is possible to have. The brand name for this type of ‘international’ nationalism is Globalisation.

 

Mercantile nationalism was adopted as the antidote to the ‘poison’ that caused fascism. It was supposed to be an overwhelming dose of what had caused the problem in the first place, whose purpose was literally to swamp the ‘enemy’, (those who hang on to a troublesome cultural identity) and finally sweep them away.

 

Because of this, modern Germanic Mercantile nationalism naturally and inevitably causes conflict with expressions of culture and location, since these are deep human needs. Global modern politics has come to be about managing this conflict of interest. Broadly speaking management of the mercantile/culture conflict was going reasonably well (at least in mainland Europe), until the crisis in the relationship between globalisation, monetarism and financialisation caused by the Credit Crunch.

 

Monetarism is the end of economics. This is why I use the term ‘Crackernomics’ to describe the centralised political response to the Credit Crunch. Just as Germanic land democracy was supposed to have resolved the question of land and culture, so Monetarism is supposed to resolve the economic struggle- permanently. Monetarism is the end of economic rationale; the end of economic classes based on income.

 

Monetarism says there are no economic problems, there are only financial/liquidity problems and is only one way to deal with financial/liquidity problems – through money issuance. In other words, there are no economic problems any more, only political problems to be solved by central authority.

 

There is a horrible logic here:

 

  1. The purpose of politics is supposed to be to resolve conflict.

 

  1. Germanic Land democracy is supposed to resolve the conflict between culture, identity and territory and replace it with economic rationale.

 

  1. Monetarism is supposed to solve economic rationale and replace it with………?

 

  1. Culture and politics.

 

Oh dear.

 

Which brings us back to Greece. Monetarism inevitably makes the economic problem caused by the Credit Crunch back into a cultural political problem.   Germany, previously forced to abandon its culture and adopt mercantile nationalism is now forced to promote mercantile nationalism against Greek culture! Germany was caught on the wrong side of the road going one way in 1945 and now it is caught on the wrong side of the road coming back in 2015. That is just plain unlucky…

 

Which brings us to the blue pill and the red pill and the choice that faces the Germanic world.

 

The credit crunch has brought us to a bottle neck.

 

Monetarism has destroyed economic rationale which inevitably means a return to cultural constituencies. But cultural constituencies were what forced the creation of economic rationale in the first place.

 

The entire Germanic world has to choose between the red pill and the blue pill Monetarism or Mercantile nationalism. What the Germanic world wants is half of one and half of the other; a purple pill if you will. But there is no such thing.

 

And time is running out.

P.S.

Both the British Chancellor of the Exchequer George Osborne and Barack Obama have been yanking the German neck chain recently. Both have told the Angela of Debt that she had better pull her horns in and cut a deal with Greece to save Europe. She will have to comply, the Saxons are still the bosses. But this will cause a  festering resentment in the German population and the German political class. Its not just Greece v Germany on the table, its Germany v the Saxon Axis…

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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