Feb 022021
 
 February 2, 2021  Posted by at 1:21 pm Finance Tagged with: , , , , , , , , , , ,  22 Responses »


Roy Lichtenstein Woman With Flowered Hat 1963

 

 

Well, Dr. D is back again. You might want to sit down for this one.

 

 

Dr. D: In my last article I wrote about cows and hay and unrealistic estimates of production of the land. But surely that is all academic. What could possibly force Americans to once again eat by the sweat of their brow?

Insider military think tank Deagel.com. The think tank that in 2015 estimated the death of 200M Americans by 2025.

Deagel – Forecast 2025

The Great Reset; like the climate change, extinction rebellion, planetary crisis, green revolution, shale oil (…) hoaxes promoted by the system; is another attempt to slow down dramatically the consumption of natural resources and therefore extend the lifetime of the current system. It can be effective for awhile but finally won’t address the bottom-line problem and will only delay the inevitable. The core ruling elites hope to stay in power which is in effect the only thing that really worries them.


The collapse of the Western financial system – and ultimately the Western civilization – has been the major driver in the forecast along with a confluence of crisis with a devastating outcome. As COVID has proven Western societies embracing multiculturalism and extreme liberalism are unable to deal with any real hardship. The Spanish flu one century ago represented the death of 40-50 million people.

Today the world’s population is four times greater with air travel in full swing which is by definition a super spreader. The death casualties in today’s World would represent 160 to 200 million in relative terms but more likely 300-400 million taking into consideration the air travel factor that did not exist one century ago. So far, COVID death toll is roughly 1 million people. It is quite likely that the economic crisis due to the lockdowns will cause more deaths than the virus worldwide.

The Soviet system was less able to deliver goodies to the people than the Western one. Nevertheless Soviet society was more compact and resilient under an authoritarian regime. That in mind, the collapse of the Soviet system wiped out 10 percent of the population. The stark reality of diverse and multicultural Western societies is that a collapse will have a toll of 50 to 80 percent depending on several factors but in general terms the most diverse, multicultural, indebted and wealthy (highest standard of living) will suffer the highest toll.

The only glue that keeps united such aberrant collage from falling apart is overconsumption with heavy doses of bottomless degeneracy disguised as virtue. Nevertheless the widespread censorship, hate laws and contradictory signals mean that even that glue is not working any more. Not everybody has to die migration can also play a positive role in this.


We expected this situation to unfold and actually is unfolding right now with the November election triggering a major bomb if Trump is re-elected. If Biden is elected there will very bad consequences as well. There is a lot of bad blood in the Western societies and the protests, demonstrations, rioting and looting are only the first symptoms of what is coming. However a new trend is taking place overshadowing this one…

Six years ago the likelihood of a major war was tiny. Since then it has grown steadily and dramatically and today is by far the most likely major event in the 2020s. The ultimate conflict can come from two ways. A conventional conflict involving at least two major powers that escalates into an open nuclear war. …

If there is not a dramatic change of course the world is going to witness the first nuclear war. The Western block collapse may come before, during or after the war. It does not matter. A nuclear war is a game with billions of casualties and the collapse plays in the hundreds of millions.” – Deagel, September 25, 2020

Now clearly this is ridiculous. Even these new, revised estimates have population drop in the U.S. to 99 Million in 4 years.

 

 

So what do we see here? A catastrophic event that hurts only very specific nations, leaving nearby neighbors untouched or even improved. That is, not a climate event or asteroid strike. It hurts a few nations most specifically, that is, Britain, U.S., Germany, Israel, France, Australia, Italy, S. Korea, Saudi Arabia.

What do these nations all have in common? They are the Western Allies, and under the Western fiat central banking system. While India and Asia prosper most, conspicuous in the list is China and Russia, presumably the Axis in any new war. China takes a massive numbers hit, but a unimportant percentage hit. Russia is unmoved. That would seem to rule out wars of food, wars of money, and wars with Russia or in Europe.

What type of singular event can kill several billion people in just 4 years, leaving some nations erased and some nations untouched? Not economic wars. Not conventional wars.

That leaves nuclear and biological war, almost certainly a first-strike surprise war. Clearly this will not be with Russia, which would take more injury in a counter attack, so a first strike surprise war from China, perhaps via close proxy North Korea, as they are the only two Axis countries that (presumably) take any damage. They are counter-attacked, but weakly. Their own allies, in SE Asia, are unharmed. Australia is depopulated and easy to conquer. As is the United States, but not Canada or Mexico. Note if they attacked India they would be nuked again and open second front in a land war in Asia against an equal power, and China leaves them alone for this round, the presumed Deagel scenario.

Now what did I just tell you a few weeks ago?

If China doesn’t conquer and colonize the United States, they die.

That seems true for Australia, or at least corollary. Here’s the same phrase: If China DOES conquer and colonize the United States, WE die.

Now why would they do that? Their people are rioting with dissent, of increased expectations that have been capped. There are more riots and protests in China than anywhere on earth, both in percentage, and sheer numbers, and riot of 250,000 is rightfully identified as a mortal threat. There are no longer any food exports worldwide. The U.S. and to some extent Australia are the only ones. China is the net food importer, having everything else. If they do not solve their food and space problem, they – or rather the CCP – are overthrown and die. If the CCP can solve the food and space problem, they are heroes, stay in power, and prosper for a generation.

Is there any reason to believe China would undertake such a unprecedented, violent act? Well, when we ask if they would murder 70% of all Americans, they are presently erasing 70% of all Uighers who are their own citizens, and in the most brutal, appalling, and mercantile ways. Taking their property. Selling their slave labor. Harvesting their live organs. Selling their women to a man-heavy population thanks to an earlier wave of murder and genocide. So if they are happy to kill 70% of their own people – who they consider inferior, not being Han, and are proud to the world about the fact – how much easier is it to kill 70% of your major rival and solve all your problems for 100 years?

It’s your Lebensraum for a Socialist State-Corporate entity, totalitarian, race-based, using the fascio of combining government, industrial, and corporate power into one. There could hardly be any difference, and are along the same timeline as 1938. They are imprisoning their own people by ethnic origin and social-credit cooperation scores, then killing them for efficiency, while the West denies this is happening and refuses to prepare or respond, or in fact gleefully cooperates with open concentration camps, buying and selling cheap misery.

Surely this is slander, from a military-complex site selling military hardware and predictions. There is nothing from the Chinese to substantiate such an attack.

“A senior Chinese general has warned that his country could destroy hundreds of American cities if the two nations clash over Taiwan.” –The Guardian This week clashing over Taiwan as China has escalated buzzing Taiwanese and American ships and airspace.

In 2005 “Major General Zhu Shin Hu, Dean of the National Defense University, Speaking at a lecture, he said “War logic dictates that a weaker power needs to use maximum effort to defeat a stronger rival. If the Americans draw their missiles and position guided ammunition on to the target zone on Chinese territory, I think we will have to respond with nuclear weapons.” And goes on to describe destroying hundreds of American cities in a nuclear war over Taiwan. 15 years ago.

=
Deputy Chief PLA Juang Won Kai, “ Americans should worry more about Los Angeles than Taipei. They will be using nuclear weapons in the Taiwan conflict.” Kai later was diplomat to the United States.

“20 years of the idyllic theme of ‘peace and development’ have come to an end, and concluded that modernization under the saber is the only option for China’s next phase. I also mention we have a vital stake overseas.”

More alarmingly, General Chi Houtian in a speech to the CCP before 2003, said, “in an online survey asking if Chinese would shoot at women, children, and prisoners of war, more than 80% answered in the affirmative. …The purpose of the survey is to…If China’s development will necessitate massive deaths in enemy countries, will our people endorse that scenario [and] be for…it?”

After highlighting the similar youth propaganda departments he says,

China is alarmingly similar to Germany back then. Both of them regard themselves as the most superior races; both of them have a history of being exploited by foreign powers and are therefore vindictive; both of them have the tradition of worshiping their own authorities; both of them feel they have seriously insufficient living space; both of them raise high the two banners of nationalism and socialism and label themselves as ‘national socialists’; both of them worship ‘one party, one state, one leader, one doctrine.’”


“We don’t have to worry about the labels of ‘totalitarianism’ or ‘dictatorship’. Whether we [the CCP] can forever represent the Chinese people depends on whether we can succeed in leading the Chinese people out of China. …Whether we can lead the Chinese people out of China is the most important determinant of the CCP”.

Lebensraum. Living space. Down the Silk Road. Expansion, conquest that – according to their own party and generals – is the only way the CCP leadership survives. Nationalist, hypermilitary expansion is the last hallmark of fascist regimes, a most grave one, as other nations therefore cannot entirely respect national boundaries and sovereignty.

How will they lead the Chinese out and conquer new lands?

“Once we open our doors, the profit-seeking western capitalists will invest capital and technology in China to assist our development so they can occupy the largest market in the world. …the most favorable environment for foreign capital, foreign technology, and advanced experience in China. …China’s economic expansion will inevitably come with significant development in our military forces, creating conditions for our expansion overseas. …China…is advancing into the world and has become unstoppable.”

“Solving the issue of America is key to solving all other issues. This makes it possible for us to have many people migrate there and establish another China under the CCP. …America was discovered by the yellow race [and] we are entitled to the possession of the land.

…The residents of the yellow race have a very low social status in the United States. We need to liberate them. After solving the ‘issue of America’, the western countries of Europe will bow to us , not to mention Japan, Taiwan…” – General Chi Haotain

Lebensraum. The master race. Liberating nations as a duty to their racial brothers. At the expense of inferior races.

“We must transcend conventions and restrictions. In history, [one] could not kill all the people in the conquered land because you could not kill people effectively [enough]. …Only by using special means to ‘clean up’ America will we be able to lead people there. This is the only choice left to us. It is not a matter of whether we are willing.


…What kind of special methods do we have to ‘clean up’ America? …We are not as foolish as to want to perish together with America by using nuclear weapons… There has been a rapid development in modern biological technology, and new bio-weapons have been developed one after the other. …We are capable of ‘cleaning up’ America all of a sudden. Lethal weapons that can eliminate mass populations of the enemy country.”

But it’s not all bad:

“From a humanitarian perspective, we should issue a warning to the American people and persuade them to leave America and leave the land to the Chinese people. Or they should at least leave half of America to be China’s colony…but if this strategy does not work, there is only one choice left…”

“That is, use decisive means to ‘clean up’ America in a moment. …Historical experience has been that as long as we make it happen, nobody in the world can do anything about us. Furthermore, if the United States as leader is gone, then our other enemies have to surrender to us.”

If the Americans do not die, then the Chinese have to die. If the Chinese are strapped to the land, a total societal collapse is bound to take place. …[Then] more than half the Chinese people will die, and that figure will be 800 million. …The Great Collapse will occur at any time and more than half the population will have to go. …The population can be reproduced. But if the Party falls, everything is gone, and forever gone.”

How very like our own Western leaders.

Cool story bro. I feel for your position. Now let me ask you a question: If you knew you were running out of food and space, why did you pave every rice paddy and poison every river? Wouldn’t you rather take 6 time zones of Russian lands which are lush, actually empty, and on your own border? And how ARE you out of space when the entire Gobi desert, or indeed much of north and western China, are as empty as the United States?

You might not have heard, but most of the United States was also considered a desert, a wasteland from Iowa to San Diego that would never be occupied by humankind, yet through hard work and imagination we created the innovation that has made our prosperity and our population possible. It only seems easy now, in hindsight, like some automatic miracle we didn’t deserve. Yet, in the most high-tech era ever recorded, I think no less of the power of men on the Silk Road or Mongolia.

So perhaps I’m asking: are you really sure you NEED to do this? Or is it just that America is big, rich, and shiny and you WANT to do this? You WANT to do to Americans what you do to the Uighurs. Because I strongly suspect the latter.

The specifics of their plan was revealed elsewhere, the “1, 3, 5, 7, 9 Plan”
1 Create a bioweapon
3 Make it available in three years (from 2017)
5 Insure effectiveness for 5 years.
7 Paralyze the 7 Western countries including Japan and India.
9 Release vaccines 9 months later to blackmail the world.

Now, is that the plan that was just attempted in 2019? Or was that a beta test for a real, upcoming attack? Was this genocide deflected, the payload of the “China Virus”, hollowed out, only narrowly missed? Or is that mere slander? Do we know? Can we tell?

The West of course would fight such an attack. In 1994, in a world conference in San Francisco’s Fairmont Hotel including H. Bush and M. Thatcher, Xin He reported, “The outstanding people of the world attendance thought that in the 21st century a mere 20% of the world’s population would be adequate to maintain the world’s economy and prosperity. The other 80% will be human garbage, unable to produce…high-tech means should be used to eliminate them gradually .”

That also sounds like our Western leaders.

Remember “Event 201”, promoted by these very same ‘outstanding people’? “ In the simulation, the virus infected the globe within six months, and killed 65 million people, triggering a global financial crisis. All of this took place just months before COVID-19 emerged.” Gee that sounds familiar. Good timing too. So good it almost defies credulity.

This goes along with the long-held rumor that the U.S. was planned and positioned to be in a war and to lose it. Many aspects, from causing unnecessary and unusual internal strife, to the complete erasure of our manufacturing and production – except for food – as well as our sale or loss of most military secrets to China, support such a hypothesis. Then there is the open exposure of Chinese agents with Feinstein for 20 years, and Swalwell, both of whom were on high-level committees.

Worse, when this was exposed, nothing was done, hinting at a much deeper level of capture, where some agents and proxies appear to be clearly covering and supporting other Chinese proxies against the interests of the people of the United States. They do not explain how they thought it remotely possible that with 20% of the population they could defend a rich, empty, unproductive West from complete, inevitable Chinese conquest. Perhaps China did not remind them.

The problem could be, it probably is, far deeper, harder, graver, and wider than we on the outside can contemplate. While I disagree – for in a democracy the people must be informed to make hard, informed decisions – we can see that many times the attempt has been made to inform people, and the facts are widely and regularly rebuffed and rejected. If you started here, where I have, the general population would say you were simply being political, ginning up for more war profits, or are simply lying and making it up simply because they haven’t heard it before. The truth has been intentionally withheld in favor of colored trinkets for 40 years. All attempts to prevent it have been shot down. That isn’t reversed in a day.

Now I’m not saying Deagel is right. Already they’ve had to update their 2015 prediction. However, we can infer from this that the present situation is far more complicated than cartoon. Far deeper and more grave than Twitter. It transcends one man, one party, or even one generation. And can help illuminate why certain positions, certain actions, certain reactions, and certain IN-actions, may have happened right now.

While I don’t personally feel this is our future, I do believe the situation as described is entirely true. There are such opinions and such plans and such weapons. Therefore it should be dealt with in our own lives, and in the actions of our country, in the firm, defensive preparations that Americans are known for. Regardless of such a war, which should naturally be avoided, a number of other responses are indicated:

1) Remove as much reliance on China as possible without crippling them either. We already learned we do not have medicines, masks, rare earths, or semiconductors here, as well as learning their steel and raw materials may be intentionally substandard and undermining. This especially includes communications infrastructure.

2) Our own nation needs much attention and support with the re-opening of our own parallel manufacturing that must also be dispersed so as not to be a single target for destruction or capture.

3) The U.S. Dollar and financial system is wholly established on financeering and imports. This comes from the too-high dollar and world reserve currency that necessitates the destruction of internal production and complete hollowing of business, culture, politics, psychology, society, and morality. Yet its reversal and replacement will be extremely disruptive, and the loss of the reserve currency will quite suddenly drop us from emperor to peer. Nevertheless, this can not be delayed or avoided.

4) The U.S. Military, with the loss of the reserve currency, must retreat home, and therefore needs to re-tool and re-position rapidly to a defensive role, while still maintaining the overwhelming deterrent effect on China, and helping allies – thus preventing China from taking over the world nation-by-nation. Defense is enormously cheaper and easier, and as an ally, not an empire, our position would be far easier and more supported. This published reality may cause other nations to take more action than we could alone. While at home we may follow the Swiss model of having every man capable of arms and the materials secretly cached and available in each town.

5) While we may not have to come back to God to have the internal sense of equality, justice, morality, and enthusiasm for self-denial and hardship this will require, historically nothing else has sufficed for the righting of the ship and return to a forgiving, cohesive unity, and not weakening, atomized discord.

6) Along with our own ports, canals, rivers, grids, and mines, we need to maintain our own food production and distribution, and counter-intuitively sell it to our own rival or enemy. First, cutting off food must cause a certain war just as the embargo of Japanese oil did in 1940. Second, and not innocently, food is a major export we already have when we are no longer an importer of exorbitant privilege. Not less, as equals, we can always promote ourselves as being a friend and thereby encourage our rivals to pass through where they are or what plans they may have in favor of a stable peace that advantages all. Or else, like Switzerland, we must be certain to communicate we will most assuredly make them wish they had for their plans will not succeed.

7) We must recognize that such weapons are a reality now that cannot be reversed but must be accounted for and avoided with new strategies and new consciousness that does not require gain at the expense of others. The experience of the U.S. in making deserts bloom with the simplest tools is a good example.

Now these are easily supported by all Americans, all except the very few who are profiting by the existing system. So should there be a war or no war, with China or no China, all these responses are good for the country, the individual, and the world.

They are also workable in our own lives. As we’ve seen recently with massive, unpredictable, and longstanding supply disruptions that are only cured with more local production, smaller businesses, and local food. We see how having far more preparation, far more resiliency, far more local support, are important, both in hardship, but in our daily lives as well. Producing more, with more meaning, and consuming less, but better, are the only ways we can exit both this peril, and our own national failings at home.

 

 

 

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Jan 042017
 
 January 4, 2017  Posted by at 10:29 am Finance Tagged with: , , , , , , , , ,  3 Responses »


Readers browse bomb-damaged library of Holland House, London 1940

The Wrong Things Are Being Forecast (Morgan)
China Calls US ‘A Shooting Star In The Ample Sky Of History’ (G.)
China’s New Year Currency Moves Won’t Make Donald Trump Happy (CNBC)
Banks Create Money From Nothing. And It Gets Worse (ND)
India Government Set To Endorse Universal Basic Income (BI)
US Banks Gear Up To Fight Dodd-Frank Act’s Volcker Rule (R.)
Wall Street Banks Have $2 Trillion European Exposure (Martens)
How to Make America Great Again with Other People’s Money (Orlov)
The Trump Effect Will Accentuate Unrest (Nomi Prins)
Anti-Surveillance Clothing Aims To Hide Wearers From Facial Recognition (G.)
Guardian Report On Ailing Greek Health System Sparks Ugly Row (Kath.)
The Necessity of Maintaining Borders (Kath.)

 

 

If all ‘growth’ is borrowed anyway, and then some, as in every dollar of ‘growth’ takes $10 of debt, maybe you should stop calling it growth?!

The Wrong Things Are Being Forecast (Morgan)

It is customary to use the start of the year to set out some forecasts. Though I’ve not previously done this, I’ve decided to make an exception this time – mainly because I’m convinced that the wrong things are being forecast. Central forecasts tend to focus on real GDP, but in so doing they miss at least three critical parameters. The first is the relationship between growth and borrowing. The second is the absolute scale of debt, and our ability to manage it. The third is the impact of a tightening resource set on the real value of global economic output. Most commentators produce projections for growth in GDP, and mine are for global real growth of around 2.3% between 2017 and 2020. I expect growth to slow, but to remain positive, in countries such as the United States, Britain and China.

It’s worth noting, in passing, that these growth numbers do not do much to boost the prosperity of the individual, since they correspond to very modest per capita improvements once population growth is taken into account. Moreover, the cost of household essentials is likely to grow more rapidly than general inflation through the forecast period. What is more intriguing than straightforward growth projections, and surely more important too, is the trajectory of indebtedness accompanying these growth estimates. Between 2000 and 2015, and expressed at constant 2015 dollar values, global real GDP expanded by $27 trillion – but this came at the expense of $87 trillion in additional indebtedness (a number which excludes the inter-bank or “financial” sector). This meant that, in inflation-adjusted terms, each growth dollar cost $3.25 in net new debt.

If anything, this borrowing-to-growth number may worsen as we look forward, my projection being that the world will add almost $3.60 of new debt for each $1 of reported real growth between now and 2020. On this basis, the world should be taking on about $5.8 trillion of net new debt annually, but preliminary indications are that net borrowing substantially exceeded this number in 2016. China has clearly caught the borrowing bug, whilst big business continues to take on cheap debt and use it to buy back stock. Incredible though it may seem, the shock of 2008-09 appears already to be receding from the collective memory, rebuilding pre-2008 attitudes to debt. On my forecast basis, global real “growth” of $8.2 trillion between now and 2020 is likely to come at a cost of $29 trillion in new debt. If correct, this would lift the global debt-to-GDP ratio to 235% in 2020, compared with 221% in 2015 and 155% in 2000.

Adding everything together, the world would be $116 trillion more indebted in 2020 than in 2000, whilst real GDP would have increased by $35 trillion. Altogether, what we are witnessing is a Ponzi-style financial economy heading for end-game, for four main reasons. First, we have made growth dependent on borrowing, which was never a sustainable model. Second, the ratio of efficiency with which we turn borrowing into growth is getting steadily worse. Third, the demands being made on us by the deterioration of the resource scarcity equation are worsening. Fourth, the ageing of the population is adding further strains to a system that is already nearing over-stretch. One thing seems certain – we cannot, for much longer, carry on as we are. y

Read more …

This calls for the poet in Trump to respond.

China Calls US ‘A Shooting Star In The Ample Sky Of History’ (G.)

Donald Trump has doubled down on his plans to transform US trade policy, picking a longtime China critic and protectionist to be America’s next chief trade negotiator. Robert Lighthizer, 69, has advocated for increasing tariffs and repeatedly criticised China for failing to adhere to international trade practices, saying tougher methods were needed to change the system. The move is likely to further alarm Beijing, where state-controlled media said on Wednesday “Trump is just fixated on trade” and warned the president elect “not try to boss China around” on economic and security issues. “May the arrogant Americans realise that the United States of America is perhaps just a shooting star in the ample sky of history,” said an editorial in the Communist party-affiliated Global Times newspaper.

It follows the selection by Trump last month of Peter Navarro to lead a new presidential office for US trade and industrial policy. Navarro has previously described China’s government as a “despicable, parasitic, brutal, brass-knuckled, crass, callous, amoral, ruthless and totally totalitarian imperialist power”. Trump has packed his cabinet with tycoons, vowed to renegotiate trade deals and crack down on what he says are China’s unfair policies. Lighthizer is a former Reagan-era trade official and had a previous stint in the Office of the US Trade Representative, where he travelled the world negotiating deals to curb steel imports. He then went on to a career as a trade lawyer, representing giants such as US Steel Corp working to fend off foreign imports.

In 2011, he wrote in an opinion piece for the Washington Times: “How does allowing China to constantly rig trade in its favour advance the core conservative goal of making markets more efficient? Markets do not run better when manufacturing shifts to China largely because of the actions of its government.” While less prone to bombast than Navarro, he and Lighthizer share the view that China’s economic policies are fundamentally flawed. Years of passivity and drift among US policymakers have allowed the US-China trade deficit to grow to the point where it is widely recognised as a major threat to our economy, Lighthizer wrote. Going forward, US policymakers should take these problems more seriously, and should take a much more aggressive approach in dealing with China.

Read more …

Excuse me? “China has put a new chip on the table to counter trade adventurism by the Trump administration.” Other than that, the new capital controls seem to work so far, to an extent.

China’s New Year Currency Moves Won’t Make Donald Trump Happy (CNBC)

Call it a New Year’s greeting from the Chinese government to the incoming administration of Donald Trump. As the president-elect rang in 2017 entertaining guests at his opulent Mar-a-Lago estate, China quietly ushered in a series of measures aimed at better controlling the value of its local currency, the yuan. Throughout his campaign, Trump accused China of “manipulating” the yuan to make Chinese exports more competitive in global markets. China’s latest announcement will likely add fuel to that debate. Unlike countries that mostly let markets determine the value of their currencies, Beijing tries to peg the yuan to a basket of other currencies. Starting Jan. 1, the Chinese State Administration of Foreign Exchange will use a new, broader basket of global currencies to benchmark the yuan’s value.

The change will have the effect of reducing the impact of the U.S. dollar on the official valuation. “This is unambiguously bad news for the United States,” High Frequency Economics Chief Economist Carl Weinberg said in a note to clients Tuesday. “China has put a new chip on the table to counter trade adventurism by the Trump administration.” While China has sought to dampen the value of its currency in the past, the People’s Bank of China has more recently been scrambling to support the yuan. Beijing is deeply concerned that the weakening yuan is encouraging Chinese to shift their wealth out of the country into stronger currencies or other, more stable holdings. China needs a lot of capital in the country in order to continue to fund its growth, which is very heavily reliant on borrowing.

Read more …

I was thinking about exactly this, the other day. That a basic income scheme may be a Trojan horse AND a wolf in sheep’s clothing if it comes entirely digitized.

Banks Create Money From Nothing. And It Gets Worse (ND)

Richard Werner, the German professor famous for inventing the term ‘quantitative easing’, says the world is finally waking up to the fact that “banks create money out of nothing” – but warns this realisation has given rise to a new “Orwellian” threat. In an exclusive interview with The New Daily, Professor Werner says the recent campaigns around the world, including in India and Australia, to get rid of cash are coordinated attempts by central bankers to monopolise money creation. “This sudden global talk by the usual suspects about the ‘need to get rid of cash’, ostensibly to fight tax evasion etc, has been so coordinated that it cannot but be part of another plan by central bankers, this time to stay in charge of any emerging reform agenda, by trying to control, and themselves run, the ‘opposition’,” he says.

“Essentially, the Bank of England and others are saying: okay, we admit it, you guys were right, banks create money out of nothing. So now we need to make sure that you guys will not be able to set the agenda of what happens in terms of reforms.” [..] The main point is that the banks do not lend existing money, but add to deposits and the money supply when they ‘lend’. And when those loans are repaid, money is removed from circulation. Thus, the supply of money is constantly being expanded and contracted by banks – which may explain why the ‘credit crunch’ of the global financial crisis was so devastating. Banks weren’t lending, so there was a shortage of money. By some estimates, the banks create upwards of 97% of money, in the form of electronic funds stored in online accounts. Banknotes and coins? They are just tokens of value, printed to represent the money already created by banks.

Professor Werner is pleased the world is waking up to the truth of how money is created, but is very displeased with what he sees as the central bankers’ reaction: the death of cash and the rise of central bank-controlled digital currency. This will further centralise what he describes as the “already excessive and unaccountable powers” of centrals banks, which he argues has been responsible for the bulk of the more than 100 banking crises and boom-bust cycles in the past half-century. “To appear active reformers, they will push the agenda to get rid of bank credit creation. This suits them anyway, as long as they can fix the policy recommendation of any such reform, to be … that the central banks should be the sole issuers of money.”

The professor also fears the global push for ‘basic income’, which is being trialled in parts of Europe and widely discussed in the media, will form part of the central bankers’ attempt to kill off cash. ‘Basic income’ is a popular idea that can be traced back to Sydney and Beatrice Webb, founders of the London School of Economics. It proposes we abolish all welfare payments and replace them with a single ‘basic income’ that everyone, from billionaires to unemployed single mothers, receives. Either we accept the digital currency issued by central banks, or we miss out on basic income payments. That is Professor Werner’s theory of what might happen. His solution to this “Orwellian” future is decentralisation, in the form of lots of non-profit community banks, as exist in his native Germany.

Read more …

That same basc income danger of course looms large in India.

India Government Set To Endorse Universal Basic Income (BI)

The Indian government is set to endorse Universal Basic Income, according to one of the leading advocates of the scheme. Professor Guy Standing, an economist who co-founded advocate group Basic Income Earth Network (BIEN) in 1986, told Business Insider that the Indian government will release a report in January which says the idea is “feasible” and “basically the way forward.” The idea behind universal basic income is simple: a regular state payment made to all citizens (one variation specifies adults), regardless of working status. Advocates say it would provide a vital safety net for all citizens and remove inefficient benefit systems currently in place; critics say it would remove the incentive for citizens to work and prove to be wildly expensive.

It has, however, attracted a growing amount of attention across the world, in both rich and developing countries. Standing, professor of development at the School for African and Oriental Studies, is considered one of the leading proponents of UBI. He has advised on numerous UBI pilot schemes, and recently returned from California, where he consulted on a $20 million trial set to launch in California this year. He was closely involved with three major pilot schemes in India — two in Madhya Pradesh, and a smaller one in West Delhi. The pilots in Madhya Pradesh launched in 2010, and provided every man, woman, and child across eight villages with a modest basic income for 18 months. Standing reports that welfare improved dramatically in the villages, “particularly in nutrition among the children, healthcare, sanitation, and school attendance and performance.”

He also says the scheme also turned out some unexpected results. “The most striking thing which we hadn’t actually anticipated is that the emancipatory effect was greater than the monetary effect. It enabled people to have a sense of control. They pooled some of the money to pay down their debts, they increased decisions on escaping from debt bondage. The women developed their own capacity to make their own decision about their own lives. The general tenor of all those communities has been remarkably positive,” he said. “As a consequence of this, the Indian government is coming out with a big report in January. As you can imagine that makes me very excited. It will basically say this is the way forward.”

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No, someone at Reuters really wrote this: “The Obama administration’s regulators and enforcement agencies have been tough on banks..” And then they printed it.

US Banks Gear Up To Fight Dodd-Frank Act’s Volcker Rule (R.)

Big U.S. banks are set on getting Congress this year to loosen or eliminate the Volcker rule against using depositors’ funds for speculative bets on the bank’s own account, a test case of whether Wall Street can flex its muscle in Washington again. In interviews over the past several weeks, half a dozen industry lobbyists said they began meeting with legislative staff after the U.S. election in November to discuss matters including a rollback of Volcker, part of the Dodd-Frank financial reform that Congress enacted after the financial crisis and bank bailouts. Lobbyists said they plan to present evidence to congressional leaders that the Volcker rule is actually bad for companies, investors and the U.S. economy. Big banks have been making such arguments for years, but the industry’s influence waned significantly in Washington after the financial crisis.

The Obama administration’s regulators and enforcement agencies have been tough on banks, while lawmakers from both parties have seized opportunities to slam Wall Street to score political points. Banks now see opportunities to unravel reforms under President-Elect Donald Trump’s administration and the incoming Republican-led Congress, which appear more business-friendly, lobbyists said. While an outright repeal of the Volcker rule may not be possible, small but meaningful changes tucked into other legislation would still be a big win, they said. “I don’t think there will be a big, ambitious rollback,” said one big-bank lobbyist who was not authorized to discuss strategy publicly. “There will be four years of regulatory evolution.” Proponents of the Volcker rule say lenders that benefit from government support like deposit insurance should not be gambling with their balance sheets. They also argue such proprietary bets worsened the crisis and drove greedy, unethical behavior across Wall Street.

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Darn Europeans. The US would be fine without them.

Wall Street Banks Have $2 Trillion European Exposure (Martens)

Just 17 days from today, Donald Trump will be sworn in as the nation’s 45th President and deliver his inaugural address. Trump is expected to announce priorities in the areas of education, infrastructure, border security, the economy and curtailing the outsourcing of jobs. But Trump’s agenda will be derailed on all fronts if the big Wall Street banks blow up again as they did in 2008, dragging the U.S. economy into the ditch and requiring another massive taxpayer bailout from a nation already deeply in debt from the last banking crisis. According to a report quietly released by the U.S. Treasury’s Office of Financial Research less than two weeks before Christmas, another financial implosion on Wall Street can’t be ruled out.The Office of Financial Research (OFR), a unit of the U.S. Treasury, was created under the Dodd-Frank financial reform legislation of 2010.

It says its role is to: “shine a light in the dark corners of the financial system to see where risks are going, assess how much of a threat they might pose, and provide policymakers with financial analysis, information, and evaluation of policy tools to mitigate them.” Its 2016 Financial Stability Report, released on December 13, indicates that Wall Street banks have been allowed by their “regulators” to take on unfathomable risks and that dark corners remain in the U.S. financial system that are impenetrable to even this Federal agency that has been tasked with peering into them. At a time when international business headlines are filled with reports of a massive banking bailout in Italy and the potential for systemic risks from Germany’s struggling giant, Deutsche Bank, the OFR report delivers this chilling statement:

“U.S. global systemically important banks (G-SIBs) have more than $2 trillion in total exposures to Europe. Roughly half of those exposures are off-balance-sheet…U.S. G-SIBs have sold more than $800 billion notional in credit derivatives referencing entities domiciled in the EU.”

When a Wall Street bank buys a credit derivative, it is buying protection against a default on its debts by the referenced entity like a European bank or European corporation. But when a Wall Street bank sells credit derivative protection, it is on the hook for the losses if the referenced entity defaults. Regulators will not release to the public the specifics on which Wall Street banks are selling protection on which European banks but just the idea that regulators would allow this buildup of systemic risk in banks holding trillions of dollars in insured deposits after the cataclysmic results of similar hubris in 2008 shows just how little has been accomplished in terms of meaningful U.S. financial reform.

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“What’s a poor bankrupt former superpower to do?” Lovely from Dmitry. Go after Saudi Arabia.

How to Make America Great Again with Other People’s Money (Orlov)

1. It all started when the US decided to leave the British Empire. This event is often portrayed as a tax revolt by rich landholders, but there is more to it than that: it allowed the former colonies to loot and plunder British holdings by funding and outfitting “privateers”—pirates, that is. This went on for quite some time.

2. Another major boost resulted from the Civil War, which destroyed the agrarian economy of the south and by so doing provided cheap labor and feedstocks to industries in the north. Plenty of people in the south are still in psychological recovery from this event, some 15 decades later. It was the first war to be fought on an industrial scale, and a fratricidal war at that. Clearly, Americans are not above turning on their own if there’s a buck or two to be made.

3. Early in the 20th century, World War I provided the US with a rich source of plunder in the form of German reparations. Not only did this fuel the so-called “roaring twenties,” but it also pushed Germany toward embracing fascism in furtherance of the long-term goal of creating a proxy to use against the USSR.

4. When in 1941 this plan came to fruition and Hitler invaded the USSR, the US hoped for a quick Soviet surrender, only joining the fray once it became clear that the Germans would be defeated. In the aftermath of that conflict, the US reaped a gigantic windfall in the form of Jewish money and gold, which fled Europe for the US. It was able to repurpose its wartime industrial production to make civilian products, which had little competition because many industrial centers of production outside of the US had been destroyed during the war.

5. After the USSR collapsed in late 1991, the US sent in consultants who organized a campaign of wholesale looting, with much of the wealth expropriated from the public and shipped overseas. This was the last time the Americans were able to run off with a fantastic amount of other people’s money, giving the US yet another temporary lease on life.

But after that the takings have thinned out. Still, the Americans have kept working at it. They destroyed Iraq, killed Saddam Hussein and ran off with quite a bit of Iraqi gold and treasure. They destroyed Libya, killed Muammar Qaddafy and ran off with Libya’s gold. After organizing the putsch in the Ukraine in 2014, shooting up a crowd using foreign snipers and forcing Viktor Yanukovich into exile, they loaded Ukrainian gold onto a plane under the cover of darkness and took that too. They hoped to do the same in Syria by training and equipping a plucky band of terrorists, but we all know how badly that has turned out for them. But these are all small fry, and the loot from them is too meager to fuel even a temporary, purely notional rekindling of erstwhile American greatness. What’s a poor bankrupt former superpower to do?

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Only point 10 of 10 in Nomi’s “My Political-Financial Road Map for 2017”. But it fits my format quite well. DO read the whole thing.

The Trump Effect Will Accentuate Unrest (Nomi Prins)

Trump is assembling the richest cabinet in the world to conduct the business of the United States, from a political position. The problem with that is several fold. First, there is a woeful lack of public office experience amongst his administration. His supporters may think that means the Washington swamp has been drained to make room for less bureaucratic decisions. But, the swamp has only been clogged. Instead of political elite, it continues business elite, equally ill-suited to put the needs of the everyday American before the needs of their private colleagues and portfolios.

Second, running the US is not like running a business. Other countries are free to do their business apart from the US. If Trump’s doctrine slaps tariffs on imports for instance, it burdens US companies that would need to pay more for required products or materials, putting a strain on the US economy. Playing hard ball with other nations spurs them to engage more closely with each other.That would make the dollar less attractive. This will likely happen during the second half of the year, once it becomes clear the Fed isn’t on a rate hike rampage and Trump isn’t as adept at the economy as he is prevalent on Twitter. Third, an overly aggressive Trump administration, combined with its ample conflicts of interest could render Trump’s and his cohorts’ businesses the target of more terrorism, and could unleash more violence and chaos globally.

Fourth, his doctrine is deregulatory, particularly for the banking sector. Consider that the biggest US banks remain bigger than before the financial crisis. Deregulating them by striking elements of the already tepid Dodd-Frank Act could fall hard on everyone. When the system crashes, it doesn’t care about Republican or Democrat politics. The last time a deregulation and protectionist businessmen filled the US presidential cabinet was in the 1920s. That led to the Crash of 1929 and Great Depression. Today, the only thing keeping a lid on financial calamity is epic amounts of artisanal money. Deregulating an inherently corrupt and coddled banking industry, already floating on said capital assistance, would inevitably cause another crisis during Trump’s first term.

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Nice.

Anti-Surveillance Clothing Aims To Hide Wearers From Facial Recognition (G.)

The use of facial recognition software for commercial purposes is becoming more common, but, as Amazon scans faces in its physical shop and Facebook searches photos of users to add tags to, those concerned about their privacy are fighting back. Berlin-based artist and technologist Adam Harvey aims to overwhelm and confuse these systems by presenting them with thousands of false hits so they can’t tell which faces are real. The Hyperface project involves printing patterns on to clothing or textiles, which then appear to have eyes, mouths and other features that a computer can interpret as a face. This is not the first time Harvey has tried to confuse facial recognition software. During a previous project, CV Dazzle, he attempted to create an aesthetic of makeup and hairstyling that would cause machines to be unable to detect a face.

Speaking at the Chaos Communications Congress hacking conference in Hamburg, Harvey said: “As I’ve looked at in an earlier project, you can change the way you appear, but, in camouflage you can think of the figure and the ground relationship. There’s also an opportunity to modify the ‘ground’, the things that appear next to you, around you, and that can also modify the computer vision confidence score.” Harvey’s Hyperface project aims to do just that, he says, “overloading an algorithm with what it wants, oversaturating an area with faces to divert the gaze of the computer vision algorithm.” The resultant patterns, which Harvey created in conjunction with international interaction studio Hyphen-Labs, can be worn or used to blanket an area. “It can be used to modify the environment around you, whether it’s someone next to you, whether you’re wearing it, maybe around your head or in a new way.”

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“The lives of patients that are lost are considered collateral damage in the conservation of power.”

Guardian Report On Ailing Greek Health System Sparks Ugly Row (Kath.)

A report by The Guardian on Sunday on the problems faced by Greece’s ailing public healthcare system has sparked an ugly war of words between Alternate Health Minister Pavlos Polakis and unionists. The row started with a social media post made by Polakis on Tuesday, in which he accuses the head of the Panhellenic Federation of Public Hospital Employees (POEDIN), Michalis Giannakos, who is extensively quoted in the report, of “despicable lies.” Polakis went on to say that Giannakos’s comments to Guardian reporter Helena Smith were “slandering to the country and the SYRIZA government, which cut off access to the chow trough and special favors,” and called the unionist a “louse.” In the same post, Polakis also suggested that local media quoting Giannakos’s “vomit-inspiring interview” were lashing out at the leftist-government for cutting advertising revenues from the Center of Disease Prevention and Control (KEELPNO).

“No one who works in a public hospital believes you anymore, just your posse of friends,” Polakis said in his comments, which were directed at Giannakos, adding that the data the unionist cited was from 2012 and no longer valid. “Your time has finished, your place is on history’s trash heap,” Polakis said. His comments prompted an equally vehement response from POEDIN on Tuesday, calling Polakis a “political miasma” and accusing Prime Minister Alexis Tsipras of appointing him “to do the dirty work.” “With his latest misspelt, badly written and delusional post on Facebook against the president of POEDIN, Mr. Polakis has once more confirmed that he is the political miasma of the country’s civil and social life,” the union said in its statement.

In the interview, Giannakos suggested that cutbacks are putting patients’ lives at risk by over-taxing dwindling staff and curbing hospitals’ access to basic necessities and equipment. “The interview in The Guardian underscores the collapse of the public health system and public hospitals. Why doesn’t the government use the publication as an opportunity in its negotiations with the lenders to exempt healthcare from the memorandums? It is clear from its reaction that the government intends to achieve high primary surpluses by the continued reduction of public healthcare spending,” POEDIN said. “The lives of patients that are lost are considered collateral damage in the conservation of power.” The union also said that it is planning to take legal action against Polakis, accusing the health official of using “degrading, insulting and wholly inappropriate” language in his post.

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Erdogan makes Greeks nervous. And mainatining your borders, like maintaining your culture, is not a bad thing. Nor will it lead to war. Quite the opposite.

The Necessity of Maintaining Borders (Kath.)

Since the failed coup in Turkey on July 15, I have been rather surprised by the silence of the country’s intellectuals, who up until recently had been very talkative. Whether they kept silent out of fear or discomfort, we should respect it. Nevertheless, Orhan Pamuk’s silence, for instance, cannot go unnoticed. The point is not to carry out direct political interventions, but to bare the essential transformations that Turkish society has gone through in the nearly 15 years that Recep Tayyip Erdogan’s Justice and Development Party (AKP) has been in power – changes that are obvious even to non-Turkish experts like myself. The mere presence (2002-17) of the same party in government for so long makes you wonder about the nature of our neighboring democracy.

I read in Monday’s Corriere della Sera that prior to the attack on Istanbul’s Reina nightclub, Turkey’s director for religious affairs, who represents the state, had accused those preparing to celebrate New Year’s Eve of being “infidels.” Meanwhile, author Burhan Sonmez told the same paper that similar complaints, regarding both Christmas and New Year’s Eve, were made by several leading AKP officials. While Turkey officially condemned the attack, on social media and elsewhere online, many defended the assassin in the name of religion. In a statement claiming responsibility for yet another mass murder, the slaughterers’ group referred to the “apostate Turkish government.” These are the same people Erdogan helped in the past but was forced to drop when he started reaching an understanding with Russia’s Vladimir Putin, abandoning the US, which is helping the Kurds and which forced him to move away from his friend Bashar al-Assad.

There is something wrong with the sultan of democracy. He now claims that Kurdish terrorism is equal to Islamic terrorism. The result of the equation is weekly massacres. How can social cohesion be maintained faced with weekly attacks on civilians from Diyarbakir to Istanbul? How much can you trust a leader who does not hide his autocratic tendencies, who has changed his country’s allies on numerous occasions in the last decade and who undermines his own military and secret service forces? Given that Greece and Europe have based their entire management of the refugee-migrant crisis on Erdogan’s word, should we start worrying? Instead of looking for frigates invading our islets, should we be looking out for dinghies flooding our cities with human despair? Until the world becomes paradise, you need borders, even those at sea.

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