We Need to talk About Kapitalism or Big or Just Because You’re Used To Something Doesn’t Mean You Like It..

updateTue Nov 19 2014    The Guardian is the latest to report on  an impending bottleneck in cocoa production resulting in sharply rising prices…


I was predicting exactly this development four years ago in commodity supply as a direct result of the democratisation of money. I even accurately predicted the excuses that economists would make to try to explain this bottleneck away!

‘The result of all this will be an increase in basic commodity inflation. Foodstuffs and other resource commodities will begin to exert a kind of internal ‘barter’ value irrespective of money value. When ‘Classic’ economists observe this effect they will claim it is a by-product of increased global scarcity’

July 12 2010 Effects of The Democratisation of Money.

NOBODY else correctly predicted this development and even the response that economists would make to it. Which is all the more remarkable given that I made this prediction four years ago. Which all goes to show that understanding The Democratisation of Money is the only way to really understand what is happening now and what will happen in the near future…




We Need To Talk About Kevin is a prize winning novel and a film. A mother reflects on the development of her son in light of a disaster: the boy has massacred students and staff at his high school but not before killing two other members of his family- his father and his sister. The boys mother is left to deal with the consequences of this mayhem and her part in it…


‘We Need To Talk…’ can be read as satire as much as anything else. From the privileged position of hindsight we are invited to watch the undermining and eventual collapse of the American dream- not just for one family but for everyone around it.


Ambiguity as to who is guilty and who is innocent is never far from the surface. The cartoonishly optimistic American dad refuses to see a dangerous pattern emerging in his son- even as it results in the loss of an eye for his daughter. The mother cannot see beyond her own neurosis in her dealings with her child. The cult of fame and celebrity works to magnify whatever poison is growing inside the boy.. All these factors lead us to question whether the oncoming catastrophe could have been avoided and if it could, who is at fault for not preventing it?


I have visited this idea before in ‘MAD or It Was Only A Matter Of Time…’ Posted on February 19, 2014. I drew attention to the character of Ely wandering through a hellish post apocalyptic world who says;


‘We knew this, or something like it, was going to happen’.


This is particularly poignant on the Centenary Anniversary of the 1st World (Germanic) War. Lots of people knew the War To End All Wars was coming without what exact shape it would take. And the same is true of the war that followed it. And the same is true now. You know something is going to happen. Its shadow looms but we cannot tell what the shape behind the shadow is.


Very, very few people are really stupid or completely blind to the truth, though lots of commentators like to imagine that the majority of the public is. It is a way of explaining the recurring disasters that plague human society. The truth is that like Kevin’s parents, people are emotionally invested in the beliefs and groups they are part of.


Our economic/political system and the society that supports it, did not come down from heaven, nor was it the result of a logical quest by the brightest minds on the planet to find the best system possible. It is the historical product of a specific society and its people at a certain time.


Like a child reflects its parents so this system reflects the people that created it. And they see themselves in it. In the same way that parents contemplate the end of their children, the creators of this system contemplate its end as the end of themselves. And they are right. The end of Capitalism will be the end of Germanic culture as a world force in human history. So they will NEVER willingly turn against this system. And they will ultimately always justify it, no matter what. Because their very identity depends upon it. This is the death grip embrace between a society and the people within it.


Which brings us to the myth of the changeling; the belief that a child has been substituted by another creature that looks and sounds the same, but is very different underneath. The name of the changeling in this case is Crony Capitalism; the product of Globalists and Neo Feudalism who smuggled this cuckoo into the Free Enterprise nest. The complaint of crony capitalism is the same as a parent complaining that he does not recognise the boy he sees rampaging through college on the six o’clock news.


Whatever our economic system was in the past, it is very clearly now unable to exist without abandoning the systems and controls of the past. Isn’t this what is really meant by ‘too big too fail’?- That the consequences of a free market can no longer be supported by the system? That we are committed to a system that can no longer support its own internal logic?


Since logic is no longer supportable, the parent invests in the myth of the idealised child was with ever greater determination. Libertarians tout a return to the golden youth of free enterprise in the midst of an unprecedented state control of the economy; like an accountant deciding to blow his retirement fund on a Harley Davidson and a set of leathers. And this would not matter so much, might even be funny in a way, if it were not for the tragedy that we can see approaching.


Can you see any way that state control of the economy can be replaced by a return to ‘free markets’?

Can you see any way that ordinary people will ‘freely’ agree to the mass impoverishment this would cause?


Can you see any way that the debts that have been run up by the advanced economies can be paid off without destroying the economy as we have known it?

Can you see any way that advanced economies can run a massive permanent debt, (openly acknowledging it will never be paid off), and still call themselves capitalist?


Can you see any way that China will agree to be managed FOREVER as a junior partner in its own sphere of influence by America ?

Can you see anyway that America can avoid trying to manage and retard China’s growth without its own interests being permanently, irrevocably damaged?


Can you see any way that NATO and Europe can continue to expand without impinging on Russia’s fundamental interests?

Can you see any way that Europe can avoid the expansion necessary to secure its economic interests in Europe and Eurasia?


And if you can’t face all that, you can perhaps face this one little truth:


Is the Quantitive Easing ‘allowance’ Anglo Saxon parents pay to this boy every week really a gift?

Or do they pay it because they fear what he will do if he doesn’t get it?…


Isn’t it really protection money?


Commentary 9 November 2014


update12 November 2014

They Will Have Blood



Ed Miliband is being slowly skinned alive by the press in England. Every day there is a fresh story detailing Millibands latest fall in the polls and  warning of the terminal damage he is doing to Labours chances of getting elected next time. It’s not only the press pack who are on Milibands tail. It seems that an ever larger group of his own MP’s are openly briefing against him as well. So what is the cause of all this dissension and hostility? What is so wrong with Ed Miliband that wave after wave of insults are to be  heaped upon his head?

In a word- decency.

Ed Miliband refused to go along with the stitch up on Syria last year. He refused, for whatever reason to sign off on the slaughter of Syrian men, women, and children and the installation of a Takfiri Pol Pot style regime in Damascus. And that makes him unreliable. That makes him downright dangerous. And so he either has to get in line or get lost. And that is what this is all about. Don’t be surprised if a new line of attack on Assad is unveiled over the next couple of weeks. The BBC is running a week of ‘Syrian themed’ coverage- I don’t need to tell you what the general tone of that coverage is. And you don’t have to have a degree in media studies to see where this is all leading. And Ed has got to decide just how badly he wants to be Prime Minister. The going cost is roughly about, one soul.

But they will have blood either way- Milibands or Assads.


update10 November 2014- The Sin of Wages

CBI calls for childcare subsidies and tax cuts for working families


Business lobby claims radical ideas are needed to raise the living standards for families and low-income workers

The Confederation British Business  -CBI,  is trying to call the Monetarist attack dogs off the people! Well, they are actually advising the dogs to bark more and bite a little less. Presumably they think that the mangled and torn victims of the past six years might just give up the ghost unless they get a little relief. You could argue that this is more about image control than real economics and no doubt there is an element of that  in these policy recommendations. But nevertheless, it’s hard to avoid the feeling that a substantial section of the real economy (which includes management and bosses) is getting seriously nervous about the deflationary effects of ongoing austerity and wage stagnation. (see the Yellen submarine below). So they are looking to the state to subsidise some kind of consumer revival through deficit spending.  Of course, the other option would be to remove some of the restrictions on trades union activity that would be GUARANTEED to get wages moving upwards again. But that is not something the CBI or the Monetarists are prepared to consider- is it.


starthere1.New World Disorder- The Secret Economy and Everybody Gets To Go To The Moon

Can you have a system of disorder – Or is that a contradiction in terms?

I was chatting to Dave Harrison @ tradewithdave.com  about transitioning to a new digi/crypto economic system and the implications for the global world order. Will national systems be superseded by a single global system that is even more controlling and oppressive? I argued that the new system would be based on disorder rather than order:

I remember a recent  item on BBC news covering Chinese exploration of the Moon and the way that this impacted ‘traditional’ national rivalries and the ‘Cold War’ etc.

The long and short of it was that the tide was inevitably running against ‘small state’ economies and in favour of ‘big state’ economies when it came to resource intensive projects like space exploration, mass transit systems etc. In other words all the things that will define progress in the future require complex, system wide integration to achieve them- the very antithesis of privatisation.

The interviewee observed that it would be in the interests of ‘small state’ societies (primarily the Anglo Saxon bloc) to promote the all out privatisation of moon exploration etc as this would level the playing field; Chinese private companies competing with American private companies. This is basically what is happening in the global economy, we are not transitioning to a NWO, we are transitioning to a New World Disorder.

To the extent that all national economies have been infected with Democratised Money (derivatives,financialisation etc), their respective national economies and political structures  have been weakened. The USA led the way into QE and is the first to end it. Other economies are being forced down the same route as a consequence of Americas actions. But the USA economy has not been repaired as a consequence of QE, it has been permanently restructured. This is supposed to happen to all world economies.

The upcoming Pacific and European trade agreements are meant to irrevocably destroy the power of national states and societies to regulate their internal affairs…. Imagine you could permanently tilt the chess board so the pieces kept sliding off. It would make it hard to know who was winning and losing wouldn’t it?

You can think of this as the difference between a naval battle fought between ships that float on the surface of the water and a naval battle fought between submarines

2. We All LIve in A Yellen Submarine- The Secret Economy 2



Q.E. purchases have been concluded in North America which of course immediately led to the argument over what this means in particular and what Q.E. means in general.

Almost immediately as USA called time on purchasing, Japan has started another round of  Q.E. and Europe has started QE-sort of. This leads some to conclude that a kind of international round robin is taking place with economic blocs taking up the slack and injecting liquidity into the global system as the USA wound down its buying operation. The argument is that all major nations cooperated in the aftermath of the credit crunch and this is just a continuation that co-operation by other means.

Others  see Japans QE as tantamount to economic warfare, lowering the value of the Yen and exporting deflation to its competitors. They see this as evidence of a breakdown in international co-operation.


Central banks taking on corporate and government paper is the same as a submarine taking on water to create negative buoyancy-which is really controlled sinking- (for understandable reasons not a phrase widely used by submariners!). The captain takes on enough water for the boat to safely sink to the level beneath the surface he or she wants. Of course this is done on the understanding that at some point the boat will expel the water and return to the surface. But there is always the unfortunate possibility that too much water is taken on board, in which case the only way the boat is going is down.

There are some real indications that the English and American boats have taken just about all the water on board they are able to. Commodity deflation is taking place and despite supposed rises in employment, wages are failing to grow. Worldwide deflationary tendencies. Genuine danger.

When the major economies agreed to drop interest rates as an immediate response to the Credit Crunch, it did not really mean that they were collaborating on an international plan. In essence they agreed to move from old fashioned naval warfare where each party could see the other vessels to clandestine submerged conflict now you have to guess there the other side is. A global game of ‘Battleships’ as it were.

3.Credit and Credit Crunch

Steve Keen appeared on a recent episode of Max Keiser . He is probably best known for arguing that at some point the revenue generated from credit fuelled growth will no longer be sufficient to pay the interest on that credit, resulting in a financial collapse. He has dubbed this inflection point a ‘Minsky moment’. Here is some of what I contributed to the discussion thread:

The broad thrust of Steve Keens argument is that Capitalist systems have been shown to be unable to achieve a self sustaining equilibrium, especially in regard to the production and valuation of credit. An emphasis on credit in this context is an important insight, especially in respect of the financialisation of Anglo Saxon economies since Milton Freakman.

But Steve Keen is wrong when he argues that the latest round of credit is the cause of renewed growth in certain economies, in particular the Saxon Axis economies. This credit growth is a symptom and not a cause. The cause of recent ‘growth’, (for what its worth), is the successful restructuring of the economy in line with Monetarist doctrine. Interestingly, this explains some of the anomalies we have seen in recent growth figures. We know that the Anglo Saxon economies have been growing; this would be expected as they are the most ‘flexible’ and open to labour market ‘reform’ (zero hour contracts). But we have also seen growth in both Spain and Ireland, both nominally outside the Anglo Saxon bloc. What these economies both do have in common with England and America is that their populations have taken a fearful hiding over the past couple of years and it is reasonable to suppose that they are now willing to go along with terms, any terms, that are offered.


Growth is essentially a measure of the level of economic interaction between the component parts of an economy. When the components, (you and I),of an economy refuse or fail to interact it is because either we don’t want to, (we don’t like the terms), or don’t need to,(we are self sufficient).

Keynesianism differs from Monetarism in that it sought to induce economic interaction as opposed to coercing it. The essence of Monetarism is the systematic destruction of any possibility of self sufficiency for the vast majority of the population, forcing interaction within the economy. They call this ‘supply side economics’. I call it the Participation Economy. You are forced to participate in the economy under the terms dictated by the Monetarists.

When Monetarists proclaim they will do ‘whatever it takes’ to maintain the system, what this means is that they are prepared to supply the means (QE),  to allow the finance sector to wait the real economy out, until the real economy is forced to participate (come crawling back) under Monetarist terms…In other words we will take the credit offered, as opposed to wages, because credit is all we can get.