Feb 092015
 February 9, 2015  Posted by at 8:07 pm Finance Tagged with: , , , , , , ,

Arthur Rothstein Going to church to pray for rain, Grassy Butte, North Dakota Jul 1936

Greek PM Alexis Tsipras yesterday laid out Syriza’s stance, and from what I saw he didn’t pull even one punch. Despite all the suggestions from the financial press throughout the past week that Tsipras and Varoufakis reneged on campaign promises to seek debt write-downs, they didn’t, and never have – other than perhaps in semantics.

Which I don’t find the slightest bit surprising. I would have been very surprised if they had. The misinterpretation, and the faulty expectations, are easily explained through the fact that – most of – these guys are not politicians, which they very deliberately expressed in the way they dressed for their meetings with ‘Europe’s finest’.

They don’t see the ‘space’ career politicians see to negotiate away the mandate their voters have given them. For them it’s simple: we were elected on our program – which in this case happens to be to end the misery forced upon Greece by the European and Troika schemes -, and we’re not going to move away from that just because ‘the other side’ starts threatening us, or (a crucial difference in politics) because our voters may not vote for us again in a next election.

In their view, trying to scare Greece into even more submission, which is the overlying message emanating from Brussels and beyond, is entirely null and void because Greece can’t – and shouldn’t – sink any lower than it has. Very and refreshingly simple. No surprise there, but, at least on my part, just support and admiration. Syriza is fighting the fight many others don’t have the intellect, the chutzpah and/or the courage for.

The first thing they did, apart from hiring back the government offices’ cleaning ladies the Troika got fired, was to say they wanted nothing to do with that same Troika. That to me is the most important statement so far by Yanis Varoufakis and his crew. Because that goes to the heart of why Greece is where it is, and why the entire world is.

I saw a headline last night that said something like ‘Greece doesn’t want to talk to the EU’. But that’s not true. Syriza merely wants the IMF out of the picture. And then it would prefer to talk to separate EU nations and offices, rather than top down Brussels bureaucrats. Not just because of the Colonel Blotto game theory I talked about before, but because they recognize how insidious and ruthless the IMF is. I’ll get back to that in a minute.

The most remarkable ‘news item’ for me yesterday came not from Tsipras (or Greenspan), but from former French President Nicolas Sarkozy, who did something he would never have when he was in office. Sarkozy went against the grain of the official western narrative vis à vis Ukraine and Russia. He said what no acting French president could possibly say (including himself), because as president he would have been beholden to the US and NATO dictated doctrine, that Putin is evil, and Ukraine should be ‘liberated’.

Sarkozy: Crimea Cannot Be Blamed For Joining Russia

Crimea cannot be blamed for seceding from Ukraine – a country in turmoil – and choosing to join Russia, said former president of France, Nicolas Sarkozy. He also added that Ukraine “is not destined to join the EU.” “We are part of a common civilization with Russia,” said Sarkozy [..]. “The interests of the Americans with the Russians are not the interests of Europe and Russia,” he said adding that “we do not want the revival of a Cold War between Europe and Russia.”

Regarding Crimea’s choice to secede from Ukraine when the country was in the midst of political turmoil, Sarkozy noted that the residents of the peninsula cannot be accused of doing so. “Crimea has chosen Russia, and we cannot blame it [for doing so],” he said pointing out that “we must find the means to create a peacekeeping force to protect Russian speakers in Ukraine.” In March 2014 over 96% of Crimea’s residents – the majority of whom are ethnic Russians – voted to secede from Ukraine to reunify with Russia.

That is pretty close to 180º different from what the official western position is. Putin has taken note. Because it destroys everything the West, as represented by Germany’s Merkel and France’s Hollande, brought to the talks in Moscow this weekend (and Minsk today). More importantly, it throws out what NATO wants and prepares for. In the exact same way that Greece seeks to throw out the IMF.

And that is no coincidence. Sarkozy reveals his dismay at being told what to do, when he was in office, by the supranational NATO. Tsipras and Varoufakis refuse being told what to do by the supranational IMF. Same difference. Well, to an extent: Sarkozy did the NATO and IMF’s bidding when he was in office, Syriza never has.

Merkel, meanwhile, ceased resisting Mario Draghi’s mad €1 trillion+ QE program recently, and along that same vein she may today, as she’s talking to Obama in Washington, give up her resistance to the west arming Kiev. Which would be equal to a declaration of war against Russia. The pressure on her is obviously huge and increasing, but Angela should be smart enough to know that it’s impossible for Russia to stop looking out for the Donbass.

Because just about every Russian citizen has family connections in the region, who’ve been shelled by their own government for close to a year now. And if Russia were to retreat, chances are these people will be obliterated in very ugly ways. What Merkel should be demanding at the ‘peace’ talks is for not-so-very-democratically-elected PM Yatsenyuk and his shady government to step down, and nationwide fair elections to be held that include the Donbass. But she won’t.

And then Greenspan came, in what will probably be noted as one of his final lucid moments. The man who did so much damage seeks to atone for that while he still can. And do note that the Oracle was in charge of the Fed during the entire set-up and launch of the euro (yeah, yeah, he was a long term ‘critic’ – but not while it made his Wall Street banks a lot of dough off the project, just remember Goldman in Athens).

Greenspan Predicts Greece Exit From Euro Inevitable

The former head of the US central bank, Alan Greenspan, has predicted that Greece will have to leave the eurozone. He told the BBC he could not see who would be willing to put up more loans to bolster Greece’s struggling economy. Greece wants to re-negotiate its bailout, but Mr Greenspan said “I don’t think it will be resolved without Greece leaving the eurozone”. Mr Greenspan, chairman of the Federal Reserve from 1987 to 2006, said: “I believe [Greece] will eventually leave. I don’t think it helps them or the rest of the eurozone – it is just a matter of time before everyone recognises that parting is the best strategy.

Alan Greenspan has long been a critic of the European single currency. Now, the 88-year-old former chairman of the US Fed has repeated a claim that nothing short of full political union – a United States of Europe – can save the euro from extinction. Given that few (if any) of the current 19 sovereign governments which make up the eurozone would choose to create such an entity at this time, that means – for Greenspan at least – the euro is doomed. Before all that, though, he foresees Greece quitting the single currency, but the euro surviving intact.

Greenspan turns against what the Troika – IMF – wants the same way Sarkozy turns against NATO. Once you get them out of their official roles, turns out they’re not as stupid as they pretend to be when they were ‘in function’. That says something about the capture the ‘leaders’ are in, and also about the extent to which they actually represent their voters. Which is not a lot. And that’s the core of the issue.

The entire system has been pre-empted by, first, the wrong kind of organizations, second, the wrong kind of people, and third, the wrong kind of multinational corporations. As in, Wall Street banks, Big Oil, Big Ag -including Monsanto and Sygenta – and a few handfuls of the likes of GE, Boeing, a bunch of carmakers, plus Halliburton etc. They control the planet, they send us to war, they decide what does and does not go. And we’re not going to get rid of them until and unless we realize, loudly and screamingly, that they must go or else.

To illustrate this, please allow me to quote myself a few times from last year:

Oct 7 2014

Germany’s Bad Numbers Are Great News For All Of Us

Nobody in Europe has anything to lose from the demise of the eurozone, at least nothing that they wouldn’t lose anyway, but every single European save for a cabal of power brokers and narcissists has a ton and a half of happiness and self-fulfillment and independence to lose from the continuation of the failed project. [..] What’s wrong with the EU is the same as what’s wrong with NATO, the IMF, the World Bank.

They are institutions that start with noble ideals, but soon start to gobble up ever more power, and with no-one to hold them to account. That kind of structure in turn attracts a certain kind of people, the ones who don’t like to be held to account. And though I’m a little hesitant to include the US in all this, since its so much older, I certainly wouldn’t discard Washington offhand as a place where the wrong kind of people have gathered far too much power.

Oct 18 2014

Wealth Inequality Is Not A Problem, It’s A Symptom

.. the IMF, the World Bank, UN, NATO and the EU absolutely all fit the picture of organizations that have – happily – grown beyond our range of view, and that exhibit the exact same inverted pyramid characteristics we see on wealth inequality, only for these organizations it’s not wealth that floats and concentrates increasingly from the bottom to the top, it’s power. Wealth comes after that. And one shouldn’t confuse that order. Because power buys wealth infinitely faster than wealth buys power.

..but then we forgot, ignored, to check on them, and they accumulated ever more power when we weren’t watching.. And what we see now is that any effort, any at all, to break up the IMF, World Bank, UN, NATO and EU would be met with the same derision that an effort to break up the USA would be met with. We have built, in true sorcerer’s apprentice or Frankenstein fashion, entities that we cannot control. And they have taken over our lives. They serve the interests of elites, not of the people. So why do we let them continue to exist?.

Nov 8 2014

The Broken Model Of The Eurozone

I stumbled upon these few words in an Ambrose Evans Pritchard article the other day, and they hit me almost like some sort of epiphany, which in turn made me feel a little stupid, because it’s all so obvious. What Ambrose wrote (and this time I’m not making fun of him), was about the eurozone (EMU), of which he said:

The North is competitive. The South is 20% overvalued.

And I realized that’s all you need to know about the eurozone, and about why it will fail. Or has already failed, to put it more accurately. [..] Northern Europeans see their lifestyles being cramped from many sides in the ongoing crisis, and they would not accept more being taken from them to be handed to Greece. Even if 50%+ of young Greeks have no jobs, and over 40% of Greek children grow up in poverty. That’s not how the union was explained to them. And they would not have agreed if it had been.

The fact that Brussels has attracted a highly dubious breed of politician and bureaucrat certainly hasn’t helped, and still doesn’t. But it’s not the core problem. The core problem is that there never was a mechanism to reconcile the 20% differences, which means we’re fast on our way to 30% and more. Nothing anybody can do about that other than to leave the union.

Nov 10 2014

A World Run On Broken Economic Models

Leaders of entities like the US, the EU or China have little in common with the people they supposedly represent, and they don’t have to, nobody expects them to. The US midterms were mostly a a battle of the bulge, as in candidates’ bulging wallets. And on top large scale national politics we have created yet another, even more anonymous layer of power. UN, World Bank, IMF, NATO, there’s an ever growing collection of supra-national organizations that keep on guzzling up more power and more money every single day.

Like ‘smaller’ entities such as the US and EU, only more, the supra-nationals attract a certain kind of people, those that like to assert power without being held directly accountable. In structures that far exceed the human scale, they are like fish in water. And that’s why we should never accept having them in those positions. IMF and World Bank have a history of at best disputable and at worst very bloody interventions in nations across the globe.

We should have today celebrated the end of NATO along with that of the Berlin Wall 25 years ago. But it’s still there, and playing an active role in the flaring up of the Ukraine civil war. As for the UN, there should be a place for an organization like it, but not with the money gobbling corporate structure, serving shady interests, that it has today.

Our political systems don’t work. Our economic systems don’t work. We live on a steady – but hardly nutritious – diet of debt and propaganda. Our societies are no longer productive enough to allow for the numbers of intermediaries they have given birth to. But it’s the intermediaries who have more often than not taken up the most powerful positions in our societies. So they will fight, and initially often successfully, to keep their positions, at the cost of the more productive segments. It’s a mechanism that’s much easier to understand than it is to fight.

We, as in mankind, the human species, didn’t develop to have just a few of us take decisions for hundreds of millions of us. It is simply too much for our brains to comprehend, and that is true for both the brains of the rulers and of the ruled. For some of us, though, the brains developed in such a way that they are geared towards seeking maximum power over others. Those people are called sociopaths or psychopaths, depending on the case.

We’re not going to solve this the way we are. We need a much deeper and more comprehensive change to how we’ve organized our societies. Syriza understand this, and they’re acting on it, but they can’t do it alone, and besides their priority must be the Greek population, not the systems that are strangling the world, because that’s what they were voted into office for. We need to support them much more than we have so far, or both their fight and ours will end in defeat.

Supranational organizations will all tend towards developing dictatorial traits, both because of their very structures, and because of the type of people they attract to rise in their ranks.

I’m by no means the only one to say that NATO should be disbanded, Ron Paul made a passionate speech about it in 2008. The problem is that if NATO is not disbanded, it will run amok (it already has). NATO’s purpose was to defend Europe from the Soviet Union’s communist threat. When Russia was no longer a threat, some 25 years ago, the whole apparatus was still left intact, albeit with a few budget cuts, and so NATO went looking for a purpose. I give you: Ukraine.

Whether it’s NATO, or the IMF, or the EU, they’re all part of the same problem. A problem that won’t be solved as long as these institutions are in place. That is not possible. They are organizations that find their purpose in NOT solving problems, because once they’re solves, they no longer have a reason to exist. And they’re not going to volunteer to become obsolete. They’re going to find a reason to find relevance, even if that hurts whoever it is they’re supposed to represent.

We’re never ever going to find a solution to problems like Ukraine or the Eurozone, because we’ve – all over the world – allowed an alphabet soup of institutions to build up that we have no control over, and that we claim can and will solve the issues for us.

We have put the sociopaths in charge, in an international and largely anonymous dictatorship. Who really pulls the levers in the IMF, or NATO etc? We have no way of knowing. And that’s the problem. And that is what Syriza, and precious few besides them, are set to fight. And why they deserve – and need – our support. Because if they don’t win, we don’t.

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  • #19051

    Arthur Rothstein Going to church to pray for rain, Grassy Butte, North Dakota Jul 1936 Greek PM Alexis Tsipras yesterday laid out Syriza’s stance, and
    [See the full post at: Behind The Global – Game Of – Thrones]


    Sarkozy is the one who reintegrated France into NATO after 43 years and Lagarde was his former economic minister. Sarkozy is just following Marine Lepen’s line, I wouldn’t put too much faith in what he says.


    Show me a man or woman who will speak as Sarkozy just did here, while in power and, , well it’s impossible. It just doesn’t happen. Those in power are in power by the fact that they will never never ever ‘talk out of school’ as the old US saying goes. There are many significant former leaders in the military/national security and financial worlds who speak out only after they leave. There can be no exception or hasn’t been until now. Not at any high level. I suppose it pertains to their personal and family economic security, in comfort.

    As to Ron Paul, the go to hero of the alt economics and foreign policy worlds. Paul is what we in the US call a neo Confederate. In earlier days Paul traveled with and supported the overt racists whose lives are filled with dreams of a return to the proper social order that black chattel slavery institutionalized. For all Paul’s true Libertarian-ism one has to come to grips with what such means in regard to government power. It means if a majority of those in power in some local level in theory anyway want slavery or any other thing you can think of, then so be it.

    It’s a complicated world.

    I suppose in one way or another that is the world to which we are headed but disabuse yourself of any notion it will be more free.


    You are addressing the psychological factors that lead to the dysfunction of large powerful organizations. As these dysfunctions not only affect the individual, but by the nature of the dysfunction, ie the need or desire for power, they affect the greater arena that these dysfunctions manifest in. In other words, were a dysfunction might normally affect a family or personal relationships, these particular dysfunctions affect the much larger family of nations and nation systems.

    How can this be avoided is a relevant question. I would answer bluntly that just as the criminal justice system will order a psychiatric evaluation to determine whether the subject holds enough sanity to be charged in court for an offence, we should institute a psychological evaluation of those who are given positions of power and influence within our society.

    These evaluations should become as common as an IQ test we are often asked to take we when we apply for certain types of employment. Due to the nature of the results of this testing, it should be done by a triad of mental health professionals that not only interview the individual but gather information of past decisions and behaviours that will also contribute to the final evaluations. Leaders of political parties, members of parliament, senior bureaucrats, individuals that are called on to make decisions affecting others etc. I think it should be a fundamental principle of society they we have the right to have sane and wise people in positions of power.

    In fact, in terms of organizations such as the IMF or Nato, they should be analyzed to determine whether there actions would pass definitions of insanity or dysfunction that harms the greater society.


    My senior high school Social Studies teacher maintained that most any organization that lasts into the 2nd generation becomes useless and if it survives the 3rd generation becomes corrupt and typically has no relation to its reason for being born. Makes a lot more sense now than it did 40 years ago.

    John Day

    @ Swineherder,
    Now, who is to bell the cat?


    Sarkozy is probably flying a flag for Hollande. The current president could not be the first to say it, so he asked Sarkozy to do him the favour. Doubtless, Sarkozy will get favours in return – e.g. the abandonment of court proceedings against him and so on. He never does anything without a good personal reason.

    “Accusations ‘Grotesque,’ Nicolas Sarkozy Says of Inquiry”

    Let’s not forget that the French political class is highly incestuous. For many years, the main political parties – supposedly political enemies – shared in the wealth extracted from African tyrants. They did not share it with the Communist party.


    V. Arnold

    Prof Richard Werner, the inventor of quantitative easing (QE), was on Boom/Bust and said QE was never intended to be paid for by taxing citizens.
    What the IMF, WB, and WTO have done is to weaponize the financial’s to steal assets from the public.
    The Mafia pales by comparison, mere pikers. Varoufakis and Tsipris are the first Europeans to stand up to the criminals. I hope this will be followed shortly by Italy, Spain, Portugal, and maybe even France.
    Follow that with the breakup of NATO and leave Ukraine the hell alone.


    How do w support them? What helps?

    Formerly T-Bear

    @ V. Arnold, reply # 19061

    The current IMF, WB and WTO are not your grandfather’s IMF, WB and WTO. Your grandfather who instigated those organizations would not recognise those institutions as they presently are. The change came as a result of opening the use of credit from strictly a source of economic production to that of amplifying consumption – look at the period when credit cards first came into widespread use, about mid to late nineteen-sixties. This opening of credit for consumption was not alloyed with a corresponding requirement to service the debts credit created. The miasma of that debt so created has not since cleared. That same scheme was applied to the IMF, WB and WTO by administrators installed by those under the influence of neoliberal thought collective mindset, who replaced the New Deal originators. The Nixon administration politicised not only the administration of jurisprudence but initiated the politicisation of the monetary/financial system as well. Both were necessary to begin the disassembly of the New Deal institutions and constraints on business. The Reagan administration marked the takeover coup by acolytes of neoliberal theology.

    The probability of the European Monetary Union surviving the Greek challenge is becoming vanishingly small given the obduracy of the vested interests involved. The EMU edifice, fragile in its concept, will be in full disarray as the crisis moves to the other PIIGS and possibly France as well (PFIIGS?). By austerity they ruled, by austerity they fail. It will be fun to watch Turkey put their gas terminal on the Greek border, and Piraeus will make a fine warm-water port for the Russian Navy to occupy. Two of the find hand of cards dealt the new Greek administration. Not to overlook the milch cow that remaining in NATO could turn into.

    V. Arnold

    @ T-Bear reply #19064

    What a great post and spot on.
    Your closing paragraph nicely summarises an eventuality I see as well.
    You also detail the politicising of the economics, which is purely a form of corruption/theft.
    With Varoufakis and Tsipris (some very smart guys it seems) I sense some important things are afoot.
    What I worry are the unseen, unrecognised, future consequences…


    How do we support them? What helps?

    Call – or write to – your Congress(wo)man, or someone like him/her in other countries, and tell them you don’t want Greece to be sacrificed in your name on the Troika altar. Tell them if they don’t stop US/EU aggression in Ukraine, you will never vote for them again. Better yet: launch a campaign to this effect, and get thousands of people to do the same.


    “Call – or write to – your Congress(wo)man”

    Sorry. It will take something like the economic crisis in Greece for a citizen-responsive political system to be brought to power in the US and, for that matter, in any other so-called representative democracy in the world:

    2014 Princeton Study
    Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens



    Multivariate analysis indicates that economic elites and organised groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence.

    When a majority of citizens disagrees with economic elites and/or with organised interests, they generally lose. Moreover, because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favour policy change, they generally do not get it.

    The Lesson of Greece: Only Collapse Makes Real Change Possible (February 5, 2015)



    OK, so you do nothing.

    Formerly T-Bear

    @ Raúl Ilargi Meijer, reply # 19084

    Armed as TPTB are, that may be the optimal position to take. And since these institutions have lost the run of themselves, they become vulnerable, not only to a growing failure of public support but also to the ability to self correct. That combination of factors become the cancer that ends empires; it only takes a little patience, wisdom and courage (none of which is controlled by a monopoly), a widespread withdrawal of consent has earthshaking power.


    Raul, in the last 45 or so years I have written, phoned, voted , marched with 10’s of thousands of like minded people countless times, organized, demonstrated, been maced and arrested.
    I have in the last dozen or so years seen civil rights, voting rights, labor law, health and safety standards, reproductive rights, environmental and resource standards, banking/ fiduciary standards decimated and eliminated…oh, yeah how many illegal, immoral and treasure sucking wars??? I forget now.
    Let us not forget the NYPD, our Municipal Police force, who has just announced the formation of an “elite” trained group who will be equiped with machine guns to fight terrorist threats…and protesters. Yay!!!!!
    Pardon me if I am a tad skeptical of our 99% abilities to make any direct impression, having been in demonstrations of phenomenal size which mass media deemed too unimportant to mention at all on the news..well, except a passing mention of the old hippies and anarchists who were socialistscommunistsnazislazyparasites, who hate the baby Jesus.
    While I will continue to tilt at windmills, I can no longer take a face full of mace or pepper spray so I also have concluded that we need a second front to fight on.
    I am not a consumer of stuff or any of the mass illusions pedaled by TPTB and have organized for local food security and sovereignty, barter groups and all forms of what used to be called counter culture living etc etc etc
    I believe that the system will have to crash totally for any of what we have been saying and doing to have the slightest national or global effect.
    Meanwhile I keep on, tired and mighty pissed off at the idea that we have all just been sitting on our hands.


    The first calf of the season is due tomorrow on our dairy ranch in western NY. In
    Greece they have goats, and sheep, and cattle, pigs and whatnot. The biblical father directed the slaughter of the fatted calf to celebrate the return of his prodigal son. Let us do the same for those of our number who have squandered their substance on ephemeral tokens of dubious value, thinking all the while theirs was the greater prize.


    @ Raúl Ilargi Meijer, reply # 19084 – OK, so you do nothing.

    Well, for a start you don’t waste your time emailing your Congressman – he is your enemy and will ignore you, obviously.

    For another, don’t waste your time on non-violent demonstrations – they will be ignored.

    And you know what will happen if you try violent demonstrations – you will be met with greater violence – mace, tear gas, flash grenades, water cannons, sonic cannons, baton charges, trained dog attacks, bean bags and rubber bullets.

    Don’t even think of being even more violent back – you will be declared a terrorist and then attacked with everything you see in Ukraine, Iraq, Syria and Yemen – Hellfire drones included.

    TPTB will do THAT to YOU, make no mistake about it.

    I know, start a new political party! But be prepared for being infiltrated by spies, sowing discord and splits, having all your communications read and perhaps modified, ridiculed in the MSM, character assassination of leaders, jailing and if all else fails actual assassinations. I wouldn’t be at all surprised if Syriza gets a plane crash in the coming weeks. Or the “Greek Nazis” start a bombing campaign of destabilization and never seem to get caught. Or both.

    In the end though, their system will crash, due to Peak Oil if nothing else. And then you will see a cascading implosion so massive that all the transport fuels will dry up, the electricity will go off for good, the water won’t come out the taps, the toilets won’t flush, no food in the shops and no money to buy it anyway, no internet, no phones, no TV and no radio. And everyone will be saying “WTF?”

    Keep your powder dry until then, because THEN things will be ready for change.

    V. Arnold

    …or, just leave…

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