Footprints of the Banking Conspiracy

proofIf you need evidence that transnational finance demons use their money power to control the world, read on:

International credit rating agency Standard and Poor has downgraded Turkey’s “sovereign debt rating” from BB/B to BB/B-, sending a loud, clear message to finance moguls of the world to stop lending the country money.

The action is a little surprising given that S&P reviews its ratings at regular intervals, and this is an unscheduled one-off move.  On the other hand, it may not be so surprising, considering the fact that Turkey’s much-criticised president, Recep Tayyip Erdoğan, has chosen to put his own credibility and that of his governing party on the line by calling an early general election on 24 June.

It is no secret that Mr Erdoğan has seriously upset just about everyone in the corridors and hidey holes of global power since his newly-formed AK Party swept into power out of the political blue in 2003. He and his team put a stop to Turkey’s chronic triple-digit inflation almost overnight. They managed to keep their country out of George Dubya Bush’s dishonest and disastrous invasion of Iraq despite strong US pressure to add Muslim credibility to their Christian crusade. Mr Erdoğan has repeatedly called out the United States, Israel and European big-wheels for their shameless aggression and hypocrisy. In spite of all the chaos in neighbouring countries, Mr Erdoğan’s government has transformed Turkey from an economic basket-case to one of the world’s growing power-houses, where, as even nay-sayers have to admit, most of the people are now in the middle-income rather than the dirt-poor bracket.

grasping bankersWhile serving as mayor of Istanbul back in the 1990s, Mr Erdoğan was actually convicted and jailed by Turkey’s financial-military elite, allegedly for his radical Islamist agenda. Since his party became the government they have had fifteen years to drag the country back to a mythical nightmare past of fundamentalist Shariah law – and have not yet done so. On the contrary, alcohol is freely consumed in public parks and street cafes even during the fasting month of Ramazan, and the range of available alcoholic beverages, local and imported, has broadened remarkably. Other Muslim countries and even non-Muslim South America are avid consumers of Turkish TV series showcasing life in contemporary Turkey.

In spite of a record that would see leaders of less fortunate countries lionised, beatified, or even deified, Mr Erdoğan has had to deal with a relentless barrage of criticism and worse from a significant minority of his own fellow citizens. In the early years he was successful in pulling the teeth of Turkey’s virtually omnipotent military which had overthrown four democratically elected governments from 1960 to 1997. In doing so he enlisted the assistance of Fethullah Gülen’s Hizmet organisation, whose tentacles had extended into every area of government. Possibly the Gülenists were disappointed at not being sufficiently rewarded for their cooperation, because subsequently they turned against Erdoğan and threw their weight behind the forces seeking to oust him.

cause of warThe climax of their efforts was an attempted military coup on 15 July 2016, whose success many of AK Party’s vociferously “democratic” opponents would somewhat perversely have welcomed. Not surprisingly, there has been an ongoing state of emergency and a roundup of suspects involved in the failed coup. Call it a witch hunt if you will – but France lived in a state of emergency for two years with much less justification; and security measures within Turkey are remarkably low-key and minimally disruptive of everyday life. I am more nervous at airports in New Zealand, Australia and the USA than on the streets of Istanbul – despite the warnings I regularly receive from my embassy in Ankara to avoid this city.

So why have S&Ps downgraded Turkey’s credit rating to virtual junk status? Well, first of all we should consider just how much credibility Messrs Standard and Poor really have in terms of evaluating risky investments. There is powerful evidence to indicate that they and other “reputable” credit rating agencies played a major role in the global financial crisis of 2007-08.

According to Wikipedia: “Credit ratings of AAA (the highest rating available) were given to large portions of even the riskiest pools of loans in the collateralized debt obligation (CDO) market. When the real estate bubble burst in 2007, many loans went bad due to falling housing prices and the inability of bad creditors to refinance. Investors who had trusted the AAA rating to mean that CDO were low-risk had purchased large amounts that later experienced staggering drops in value or could not be sold at any price. For example, institutional investors lost $125 million on $340.7 million worth of CDOs issued by Credit Suisse Group, despite being rated AAA by S&P.

credit ratersCompanies pay S&P, Moody’s and Fitch to rate their debt issues. As a result, some critics have contended that the credit ratings agencies are beholden to these issuers and that their ratings are not as objective as they ought to be, due to this ‘pay to play’ model.

In 2015, Standard and Poor’s paid $1.5 billion to the U.S. Justice Department, various state governments, and the California Public Employees’ Retirement System to settle lawsuits asserting its inaccurate ratings defrauded investors.”

So maybe Mr Erdoğan and his people have fallen behind in the payment of their protection money. Or maybe (more likely, in my opinion) there is something far more sinister going on.

The S&P mafia claim: “The downgrade reflects our concerns over a deteriorating inflation outlook and the long-term depreciation and volatility of Turkey’s exchange rate. The rating action also reflects our concerns over Turkey’s deteriorating external position and rising distress in the externally leveraged private sector.”

henry fordThe exchange rate of the Turkish Lira is indeed dropping against the $US, the Euro and £ sterling – none of which feature among the list of growing economies in the world; and what growth they do have is largely attributable to consumer spending and real estate prices. And of course, it’s a self-fulfilling prophecy: downgrade a country’s credit rating and their currency will lose value in the “money markets”. When a country’s currency loses value against the $US, imports inevitably become more expensive, pushing up the internal inflation rate.

What is surprising is that, despite the plunging exchange rate of the Turkish Lira, the government has managed to keep internal inflation relatively low and continue economic growth.

Well, one of my readers rightly upbraided me recently for seeming to champion unbridled economic growth on a finite planet (thanks Dr Bramhall), and she was absolutely right. Unfortunately, it is the United States of America that set(s) the standard for the rest of the world to follow. They flaunt their lifestyle and inspire others to climb the same dizzying heights of consumer-driven wealth. Does it occur to them that the world’s limited resources will be exhausted long before three billion Chinese and Indians get anywhere near the average US household income?

to big to feelA sad fact of life in today’s world is, if you don’t have a nuclear arsenal (eg Israel, North Korea), the United States will bully you unmercifully. Surely that’s what is behind Zionist Netanyahu’s recent war-mongering publicity stunt against Iran. “There’s only room for one nuclear power in the Middle East – and we’ll obliterate anyone who disagrees.”

I do continue to ride my bicycle to work, recycle our rubbish and take re-usable shopping bags to the supermarket. I fear, however, that I am in a dwindling minority, and I don’t hold out much hope for the long-term future of Planet Earth.

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International currency exchange rates a bankers’ conspiracy

UK economy grinds to a halt as GDP growth falls to five-year low 

0382b5f5-1970-43e3-a858-daca93ca19a9Britain’s economy ground to a halt in the first three months of the year as bad weather piled woes on top of squeezed household finances and a troubled construction industry.

GDP growth plunged to just 0.1 per cent in the first quarter of this year compared to the last quarter of 2017.

By contrast, in the previous quarter, the economy grew by 0.4 per cent, according to the Daily Telegraph.

Mark Carney, Governor of the Bank of England, is now expected to keep interest rates on hold at the Bank’s meeting next month, cancelling a long-anticipated hike.

getty_174893467_157911“Our initial estimate shows the UK economy growing at its slowest pace in more than five years with weaker manufacturing growth, subdued consumer-facing industries and construction output falling significantly,” said Rob Kent-Smith at the Office for National Statistics.

 

Philip Hammond, the Chancellor, blamed the weather.

” However the ONS said the snow is a small part of the picture.

“While the snow had some impact on the economy, particularly in construction and some areas of retail, its overall effect was limited with the bad weather actually boosting energy supply and online sales,” said Mr Kent-Smith.

4834224E00000578-5274955-image-a-8_1516178024629GDP per head fell by 0.1 per cent quarter on quarter, the first drop in two years.

The construction sector’s output plunged by 3.3 per cent, dropping in every month – not just those with the worst weather.

Manufacturing slowed to grow by just 0.2 per cent.

Production industries rose by a more impressive 0.7 per cent, as the oil and gas sector rebounded from pipeline closures late last year, and families turned up the heating.

Economists hope for an improvement in growth in the coming months.

But now Mr Carney and his colleagues have to judge whether or not this more severe crunch will have a longer-term effect on the economy.

One factor harming growth has been the fall in household spending power, as inflation outstripped wage rises for much of the past year, largely because the weak pound pushed up import costs.

fuel-poverty-familiesBlame the weather! Dear God! It seems what little growth there was, was caused by Brits turning up their home heating! Is that the best UK economists can come up with?

By contrast, according to Trading Economics, “Turkey . . . is one of the world’s biggest producers of agricultural products; textiles; motor vehicles, ships and other transportation equipment; construction materials; consumer electronics and home appliances”. The Turkish economy grew 7.3% in the fourth quarter of 2017. The construction industry is booming!

The Economist noted that “In the third quarter of 2017 GDP surged by 11.1% year-on-year, outperforming all major countries”.

“The Organization for Economic Cooperation and Development (OECD) has revised up its estimate for Turkey’s economic growth in its global economic outlook.

In the interim OECD Economic Outlook, which was released on March 13, Turkey is estimated to have grown at 6.9 percent in 2017. In the organization’s previous report in November 2017, Turkey’s economic growth was estimated to exceed 6 percent in 2017, driven by strong fiscal stimulus and an export market recovery.

why-london-bankers-should-consider-moving-to-frankfurt-in-the-event-of-a-brexitTurkey’s GDP is expected to rise by 5.3 percent for 2018 and 5.1 percent for 2019, from 4.9 percent and 4.7 percent respectively.”

In spite of that, the Turkish Lira has plunged to 5.59 to the pound sterling. If you didn’t believe international “money markets” are a monumental racket – I’m telling you now!

Do as you’re told, or we’ll destroy your economy!

The Turkish Lira has been taking a battering in the “money markets” recently. Could there be a connection between that and Turkey’s defiance of US plans in Syria? (That’s a rhetorical question) And , surprise, surprise, the only currency doing worse is the Russian ruble! The sooner the world escapes from the hegemony of the Yankee dollar, the better for all of us!

Erdoğan blasts investors amid tumbling Turkish Lira

shadow bankers[Turkey’s] President Recep Tayyip Erdoğan hit out at international investors on April 12, saying “no one could bring Turkey to heel using exchange rates,” casting the recent sharp drop in the value of the Turkish Lira as a conspiracy by outside powers. 

“Don’t worry, Turkey is continuing on its path with determined steps. Nobody can bring us to heel using exchange rates,” Erdoğan said in a speech in Ankara.

“The rise in exchange rates has no reasonable, logical or regular explanation,” he added.

His comments came as the lira took a breather after plumbing record lows for five straight trading days. 

Jacob RothschildThe lira, which has been highly sensitive to developments in neighboring Syria, recovered slightly to trade at 4.1010 per dollar after hitting a record low of 4.1920 on April 11, with investors’ anxiety over a threatened clash between Western powers and Russia in Syria easing.

The lira is down 2 percent so far this week, also hit by concern about high inflation and the country’s current account deficit.

The lira was the second worst performing emergency currency over the last month after Russian ruble with a nearly 7 percent loss in its value.

http://www.hurriyetdailynews.com/erdogan-blasts-investors-amid-tumbling-turkish-lira-130212

Jeremy Corbyn threatens to make bankers ‘servants of industry’ in fresh attack on the City

I don’t like Labour’s chances of winning power in the UK – and even if they do, they have a history of changing their tune once they take the reins of power – but this guy’s analysis of the problem is accurate, as far as it goes:

jeremy corbyn

But, has he got the guts and the backing to do anything about it?

“[UK Labour Party leader] Jeremy Corbyn has launched a fresh attack on the City of London by promising to make financiers “the servants of industry” if he becomes prime minister. 

[He] claimed in a speech to manufacturing leaders in London that the finance sector’s “destructive” dominance over “the real economy” and “undemocratic” control over politics needed to be tackled so that the economy can be rebalanced. 

Mr Corbyn told the EEF conference: “We will take decisive action to make finance the servant of industry not the masters of us all.

“For a generation, instead of finance serving industry, politicians have served finance. We’ve seen where that ends.”

robber barons

Cartoon published in “Puck” in 1889

[In fact, the problem goes back far beyond the current generation!]

In a speech that will send shivers through the banking industry, Mr Corbyn vowed that the next Labour government would be “the first in 40 years to stand up for the real economy” and combat the “financial wizardry” running through the City.

Mr Corbyn said: “When private debt is twice the size of the real economy, when traders no longer understand the products they’re trading, and banks are funding their own speculation rather than productive investment, something has gone grossly and badly wrong.” 

We need a fundamental rethink of whom finance should serve and how it should be regulated,” he said. “There can be no rebalancing of our distorted, sluggish and unequal economy without taking on the unfettered power of finance.”

[Actually, we need “a fundamental rethink” of how new money enters the economy – and I’m not convinced that Labour party leaders anywhere know how to implement that!]

Response from the Money marketeers – totally predictable, of course:

city bankers

City parasites making hay while the sun shines

Brexiteer Tory MP and former hedge fund manager Jacob Rees-Mogg hit back at the “ill-informed” comments that he said would hit industry.

Nicky Morgan, the Remain-backing chair of the Treasury select committee, told The Daily Telegraph that Mr Corbyn’s comments were “barmy” and displayed a lack of understanding. 

The business community spoke out in defence of British bankers on Tuesday. The Institute of Directors said that while it was true that the hangover of the financial crisis still loomed large, the City contributed huge amounts to the UK’s growth through jobs and taxes.

Meanwhile the Confederation of British Industry (CBI) added that the [finance] sector was the “lifeblood of Britain’s economy, enabling all other sectors to deliver jobs, develop, innovate and grow”.

Stephen Jones, the chief executive of industry trade association UK Finance, said the sector has “undertaken significant reform in the last 10 years to ensure that the taxpayer should never need to bail out a bank again”.

Source: The Telegraph

More thoughts about transparency and corruption

transparency

Sounds good, doesn’t it?

Once again, I have cause to be proud of my homeland. New Zealand has finally overtaken Denmark to win the title of least corrupt country in the world, according to the organisation Transparency International.

Of course, I was keen to check out the full list of 180, and I have to tell you, I found some surprises. There was a certain predictability about the bottom placings: Iraq and Venezuela tied at 169, North Korea and Libya at 171, Yemen, Afghanistan and Syria ranking 175th, 177th and 178th respectively – which may be a true reflection of life in those countries, or a clear message that it doesn’t pay to rile up Uncle Sam. But I’m not here to debate that point.

Zimbabwe has risen to 157th=, after its armed forces staged a coup to overthrow dictator of 37 years, Robert Mugabe last year. Despite the country’s vast mineral wealth, including gold, diamonds and chromite, 80% of the population falls below the poverty line. Zimbabwe holds the world record for annual inflation, achieving the staggering rate of 89.7 sextillion percent in 2008 (I didn’t know there was such a number – but I learned that it’s 1 followed by 21 zeroes!), although the economic wizards in the military junta have reportedly reduced that to a relatively respectable 348%. So they must be pleased to find themselves climbing up the rankings.

Russia, on the other hand, won’t be proud of their placing at 135, especially since that puts them five spots behind Myanmar, currently making headlines around the world for ethnically cleansing their Muslim Rohingya citizens.

myanmar genocide

At least they’re open about it

“The U.N. special envoy on human rights in Myanmar said Thursday that the Myanmar military’s violent operations against Rohingya Muslims bear “the hallmarks of a genocide.” Nearly 700,000 Rohingya have fled their villages into Bangladesh since the Myanmar military’s crackdown following Aug. 25 attacks by Rohingya insurgents.” But I guess they’re being quite open about what they’re doing, so it doesn’t really count as corruption.

It’s not surprising, then, that the Maldive Islands, playground of the world’s glitterati, managed a ranking of 112, despite the ongoing state of emergency imposed by President Abdulla Yameen

“Yameen had cited threats to national security after the Supreme Court overturned criminal convictions against nine of his opponents and ordered their release.

He sent the army to storm the Supreme Court building and arrest the island nation’s chief justice and another judge on the top court’s bench. His estranged half-brother, former President Maumoon Abdul Gayoom, who has sided with the opposition, was also arrested. The three remaining judges on the Supreme Court then reversed part of their verdict on the release of Yameen’s opponents.”

At least Turkey managed to beat that lot – though President Erdoğan may feel his country deserves to be a little higher than 81st on the list; especially since China slotted in at 77, and South Africa at 71. Cape Town, as you may know, is currently getting unfavourable publicity, poised to become the first major world city to run out of water – although the crisis seems to be less of a problem for citizens with money.

Cuba was a surprise for me, coming in at 62, and Cyprus managed a commendable 42, my favourite number – though of course that’s “Greek” Cyprus, and needless to say, the Turkish enclave didn’t get a mention.

tax havens 2

And check their TI rankings!

By the time I’d got up to the 30s, my cynicism was starting to really kick in . . . so when I saw Costa Rica, tax-haven for the world’s mega-rich at No. 38, I wasn’t too surprised. Still, who’d have expected to see Botswana up there at 34, just behind Israel at 32, whose government has for years been ignoring UN requests to stop massacring Palestinians and invading their lands? Still, they’re pretty up-front about that too.

Which brought me to the 20s – and there was/were the United Arab Emirates, up with the elite of the world’s squeaky-clean at No 21!

“The UAE is the most densely migrant-populated country in the world. About 90 percent of the UAE’s 9 million people are foreign-born, most working on temporary employment contracts in a range of white-collar, blue-collar and service industry jobs. Only a handful of migrants have been granted citizenship since the country gained independence in 1971. Amnesty International and other humanitarian agencies have put a spotlight on the hardships migrant workers have faced, including exploitation of construction workers and unequal protection of women and domestic workers.”

Soooo . . . What do you make of all that? At the very least, you’d want to take a closer look at the criteria those “Transparency” people are using to make their assessments.

New Zealand was awarded No 1 spot, in spite of the following well-publicised facts:

  • * “Hundreds of drivers have had their licenses cancelled after a fraudulent licensing scam was uncovered; revealing [Ministry of Transport] staff had accepted bribes of up to $600 in exchange for a licence.”
  • A new plan has been put forward for the America’s Cup bases in Auckland by a company owned by some of the country’s richest businessmen who own 20 hectares of land at Wynyard Quarter and the Viaduct Harbour.” Some less wealthy citizens believe the plan will further develop Auckland’s downtown as an exclusive playground for the super-rich. I’ll be following that one with interest.
  • “Immigration NZ has completed an investigation [but not releasing their findings] into whether Kim Dotcom can be deported from New Zealand for failing to declare a dangerous driving conviction – but it’s refusing to say what the outcome is.

[Dotcom] entered the country on a special scheme intended to attract wealthy foreigners, giving three-years residency and a fast-track to citizenship to those who invested $10 million or more in New Zealand.

Documents obtained by the Herald through the Official Information Act showed NZSIS staff tried to block the residency application but dropped its objection after being told there was “political pressure” to let the tycoon into New Zealand.

At the time, the new residency scheme was having little success and – documents show – [Immigration Minister] Coleman was eager to get “high rollers” into the country.”

banks dotcom

ex-mayor Banks, Kim Dotcom and former PM John Key

Dotcom, as you may know, made wagonloads of money from various online businesses including his file-sharing website, Megaupload, arousing the ire of powerful figures in the United States. The US government then pressured their NZ counterparts to have him extradited, despite the fact that he is a citizen of Germany. Although known to have criminal convictions in Hong Kong and Germany, and to have served prison time in his own country, Dotcom was granted fast track residence in New Zealand in 2010. At the time of his application, he made several substantial “charitable” donations, one of which was a $50,000 contribution to the election campaign of former Auckland Mayor and Member of Parliament, John Banks.

Mr Banks faced criminal charges as a result, but claimed not to remember Dotcom’s financial assistance. Nevertheless, he was convicted in 2014 of filing a false electoral return. The conviction was subsequently overturned after Banks brought a witness from the USA to support his story (of amnesia?). However, it seems his righteous indignation went a little too far when he sought to get $190,000 legal costs awarded against Dotcom. In a recent Court of Appeal decision, the judge ruled that, although the original conviction had been reversed on a legal technicality, the court had stopped short of declaring Banks innocent – so no payment of costs was justifiable. Incidentally, after arriving in New Zealand, Dotcom had taken out a lease on one of the country’s most expensive houses, by coincidence no doubt, in the electorate of John Key, NZ’s Prime Minister at the time, and leader of the government which included John Banks.

  • The latest scandal rocking New Zealand’s ruling elite involves the venerable law firm, Russell McVeagh, among the country’s largest and most reputable. After some prevaricating, the partners have admitted that there had been shenanigans in the past involving some of their colleagues and young summer interns from the University of Auckland Law Faculty. There has been talk of interns selected for their physical attributes, required to sign confidentiality agreements, and engaging in sex acts on the boardroom table.

Complaints had apparently been laid by Auckland University on behalf of some of the students concerned, none of whom, however, want their names to be known for fear of retribution from their powerful assailants. Nothing corrupt about all that, of course. The interns were, after all, willing participants, I guess.

Nevertheless, it does make you wonder about Transparency International, and how they go about comparing and assessing levels of transparency and corruption in those 180 countries.

The TI organisation was apparently founded in Germany in 1993 by an interesting coterie of high-flyers including a former director of the World Bank, a lawyer for General Electric, a member of the US military intelligence establishment, and several high-ups in corporate banking and industry (Source: Wikipedia).

In spite of being clearly dependent on information from whistle-blowers, TI recently specifically refused support for Edward Snowden, one of the key informants for WikiLeaks. There has also been some discomfort expressed over how TI can maintain objectivity when it accepts large donations from large corporations (such as the $3 million paid over by Siemens Corp in 2008). The American chapter of Transparency International, TI-USA, was censured by its parent body after presenting Hilary Clinton with its Integrity Award in 2012. There has also apparently been some conflict with the TI people in New Zealand, though I haven’t been able to learn the exact details.

Well, ok, maybe the central powers at TI do seek to supervise the moral integrity of their branches abroad – but I read of another case involving a TI employee, Anna Buzzoni, having to leave the organisation after blowing the whistle on “questionable financial dealings” at TI’s Water Integrity Network.

standard_poor_2076208b

Settled out of court in a case accusing them of deceiving investors and contributing to the 2008 world financial crisis

Who can you trust these days?

Certainly not the rankings provided by the world’s major credit rating agencies. The latest list published by Standard and Poors assesses New Zealand, with no manufacturing industry to speak of, and a tiny population, as AA,  a “High Grade” investment; and Turkey, with its booming economy and large manufacturing sector, as BB, “non-investment grade, speculative”. Still, maybe you’re better off not getting a good grade from those crooks:

In the spring of 2013, Moody’s and Standard & Poor’s settled two “long-running” lawsuits “seeking to hold them responsible for misleading investors about the safety of risky debt vehicles that they had rated”. The suits were filed in 2008 and had sought more than $700 million of damages. Settlement terms were not disclosed in both cases, and the lawsuits were dismissed “with prejudice”, meaning they cannot be brought again.

In the end, S&P settled for $1.5 billion – possibly feeling it was worth the money to avoid further negative publicity. Now it seems they are back dispensing credit ratings, and investors are happy to trust them again. Really?

Where did the money go?

There will always be prophets of doom, I guess, forecasting the end of the world. The care-taker at the school where I work insists that the Koran tells of a war-to-end-all -wars in the Middle East, followed by the final Day of Judgment. Who knows? Turkey and the United States look to be on a collision course right now. Who’ll blink first, I wonder? Or will they actually come to blows?

But getting back to the economy, that is no doubt the biggest danger. Wars are generally a side effect of the uber-rich seeking new ways of grasping more of the world’s wealth to themselves and ensuring that the rest of us are kept in our place.

Dropped wallet

Bill Gates lost $2.25 billion!

Last Monday the US Dow Jones Industrial Average dropped more than 1,500 points, and I read that the fortunes of the world’s 500 richest people, including Warren Buffett, Mark Zuckerberg and Jeff Bezos, fell by $114 billion.

“Berkshire Hathaway Inc. chairman Warren Buffett, the world’s third-richest person, was hardest hit, losing $5.1 billion, according to the Bloomberg Billionaires Index.

“Facebook Inc. Chief executive officer Mark Zuckerberg’s fortune tumbled by $3.6 billion, the second-biggest decline.

“Even Amazon.com Inc. chief executive officer Jeff Bezos, the world’s richest person, wasn’t immune to the carnage. His fortune slipped $3.3 billion to $116.4 billion. Alphabet Inc.’s Larry Page and Sergey Brin each took hits of about $2.3 billion.”

pickpocket-barcelona

Sheldon Adelson lost $1.21 billion!

Time Magazine reported that nineteen people in the world managed to lose $1 billion or more each. See the list here.

Since, then, things seem to have settled down, and economist lackeys of the capitalist world are reassuring us that “what happened to the markets amounts to a correction rather than a crash.”

On the other hand, an aristocratic-sounding fellow writing in the UK’s Daily Telegraph, Ambrose Evans-Pritchard, says “The Fed and fellow central banks have stimulated a titanic expansion of debt over the last quarter century: an asymmetric policy of letting booms run their course while always intervening to prevent busts, culminating in the final throw of QE.

This has driven down the natural Wicksellian rate of interest and led to grievous intertemporal distortions. It has lifted the world debt ratio by 51 per cent of GDP to 327 per cent since the pre-Lehman peak, and led to a synchronised “everything bubble”, from bonds, equities, property, to art and Bitcoin.”

I confess I got lost with some of the jargon. The “natural Wicksellian rate of interest” and “intertemporal distortions” sound like things Douglas Adams might have invented, but Mr E-P does sound a little worried, doesn’t he! In fact, he began his analysis with the words, “Say your prayers”.

Well, I guess if you have $120 billion to start with, losing a paltry $3 billion is not going to worry you unduly. I’m wondering, however, if there weren’t a few people in the USA, outside the billionaire bracket, who took losses they couldn’t afford. I haven’t read anything about them, however, so I’m purely speculating.

But the real issue that concerns me here is not the small change of a few filthy rich planet-rapers, nor even ma and pa investor in homeland USA.

The question I want an answer to is: Where did that money go? It’s not as though young Mr Bezos left his wallet on the bus with $3.3 billion in it, and some lucky guy found it; or Warren B had an envelope stuffed with $5.1 billion in his back pocket, and someone snatched it. That I can understand. I lose money, you find it, lucky you.

Funny-Disney-Dollars-Picture

Just have faith, people, and everything will be fine!

But this money, as far as I understand, actually disappeared into thin air. No one is any better off as a result. How can this be? What does that say about what money actually is if it can just vanish without trace? And that, of course, begs the question, where did it come from in the first place?

Until we all start to focus on demanding answers to these questions, or maybe seeing the answer that is under our nose, instead of allowing ourselves to be distracted by red herring minority interest social issues, our world is surely on the road to Armageddon – and those uber-wealthy zillionaires and their lapdog economist experts are running out of Band-Aid solutions.

Thoughts on rioting

We had a work party last Friday evening. It was a fairly restrained affair, as festive season work parties go. We were a mixture of ages – but as the evening progressed, oldies began to dominate the music selection.  At one stage, we found ourselves listening to “House of the Rising Sun “a big hit in 1964 for the British band, The Animals.

Well, would you believe it? It emerged that one of our number had gone to school with Eric Burdon! And that her gran and Alan Price’s gran had been friends, in Newcastle, way back when! For those too young to know, Burdon became synonymous with The Animals, but Price had been the original founder, later leaving to start another band, more conventionally, if less modestly, named The Alan Price Set.

My memory of the latter band was limited to a couple of strangely memorable tracks, “Simon Smith and the Amazing Dancing Bear”, and “The House that Jack Built”. Our Geordie friends, however, were insistent that, in their part of the world, Price is better known for his 1974 ballad, “The Jarrow Song” – so I had to check it out.alan-price-jarrow-song-warner-bros-3

https://www.youtube.com/watch?v=198t_7lOjpg

It’s not great music, I’m sorry to say – but its cheery tune contrasts somewhat incongruously with its subject: an event that took place in October 1936 during the Great Depression, when two hundred men from Jarrow in the north-east of England, marched 500 km to London to draw attention to the plight of their families and fellow citizens in a town where unemployment had reached 70%.

Ellen Wilkinson, the local MP, later wrote that Jarrow at that time was:

“… utterly stagnant. There was no work. No one had a job except a few railwaymen, officials, the workers in the co-operative stores, and a few workmen who went out of the town… the plain fact [is] that if people have to live and bear and bring up their children in bad houses on too little food, their resistance to disease is lowered and they die before they should.’” (The Town that was Murdered, 1939)

The Jarrow marchers, in a gesture remarkably peaceful given the circumstances, presented a petition to the British Parliament – who more or less ignored it, possibly demonstrating that peaceful protests rarely achieve much in the way of meaningful change. Perhaps more surprisingly, the British Labour Party at the time refused to support the march for fear of being branded as Communist-sympathisers. Clearly, attempting to bring about change by working through the system has its limitations too.

BBC History writes that, “In Jarrow, a ship-breaking yard and engineering works were established in 1938 and the Consett Iron Company started a steelworks in 1939. However, in areas such as Jarrow the depression continued until World War Two, when industry prospered as a result of the country’s need for rearmament.”

Which exemplifies an important but often overlooked benefit of war in a capitalist economy.

Battle of Cable Street

London bobbies protecting pre-Fascist demonstrators, Cable Street, October, 1936

While doing a little background research on the Jarrow march, I came across a contemporaneous event: the Battle of Cable Street. Sir Oswald Mosley, a former Conservative MP in the British Parliament – later switching allegiance to the Labour Party – was an enthusiastic supporter of Benito Mussolini and Adolf Hitler, and apparently saw Fascism as the way forward for Britain. He founded and financially supported a para-military group, the Blackshirts, modelled on similar groups in Italy and Germany.

On October 4, 1936, he organised an event of his own, gathering 5,000 uniformed Blackshirts to march from the Tower of London to the poorer districts in the East End. Al-Jazeera writes that, On the day of the march, the response was the mobilisation of the immigrant communities of the East End, together with British trade unionists and leftists, to stand against Mosley with barricades, bottles, bricks and fists.”

They were met by “thousands of policemen, including many on horseback, swinging batons as they charged the crowds” since Mosley “had official permission to stage his demonstration.”

Daniel Tilles, a historian and specialist on British fascism in the 1930s, has written that “On the day itself, it was a great victory for the anti-fascists, who greatly outnumbered the Blackshirts and stopped them from marching through the East End of London.

“But Mosley’s deliberate aim had been to provoke counter-violence to what was a lawful demonstration. In a way, he got exactly what he wanted. It allowed him to portray what happened as immigrants, aliens, violent communists stopping British citizens from exercising their lawful right to demonstrate.

“In the months after Cable Street, British Jews suffered far greater violence, intimidation and abuse than they had beforehand, So Cable Street unleashed this wave of anti-Jewish violence and abuse and gave the fascists a boost in popularity.”

A well-tried technique of those in power: provoke a violent incident, then use it as a reason for forcefully suppressing groups expressing dissenting views.

Similar occurrences took place in New Zealand during the 1930s, although the Labour Government there, elected in 1935, still retained some remnants of a commitment to relieving the suffering of the poor and unemployed.

soup kitchen

A soup kitchen feeding unemployed men during the Great Depression in NZ

Predominantly a farming economy in those days, New Zealand was badly hit by the Great Depression, and its effects perhaps struck sooner than in industrialised countries. There were major riots in the main cities in 1932, the worst happening in April when a large crowd of unemployed relief workers joined Post and Telegraph Association members marching to a Town Hall meeting, swelling their numbers to around 15,000. Angry at being turned away from the overflowing hall, some demonstrators scuffled with the police barring the entrance. When a leader of the unemployed, Jim Edwards, rose to speak – apparently to urge calm – a policeman struck him down. The crowd erupted and surged down Queen St. Armed with fence palings and stones . . . they smashed hundreds of shop windows and looted jewellery, liquor, clothing and tobacco.“

Conventional reports of the incident tend to focus on the looting and window-smashing, while soft-pedalling on the poverty and misery caused by widespread unemployment; and implying that the felling of Jim Edwards may have been accidental. However, the presence of navy sailors and Territorial Army troops with rifles and bayonets, and a thousand mounted volunteer “special” constables” armed with clubs, suggest that the government was all-too-ready to meet protest with deterrent violence.

Several leading lights in New Zealand literature focused on the Depression and its attendant human suffering: among them, novelist John Mulgan, playwright Bruce Mason, and poets Denis Glover and ARD Fairburn. Glover’s poem, “The Magpies”, uses the call of the magpie to represent the heartlessness of an economic system that drives a hard-working couple to bankruptcy, insanity and death. Fairburn’s “Down on my Luck” pursues a similar theme of a man who loses job, woman and possessions as he struggles his way “to the end of his tether” and probably suicide.

social-credit-prognostications

Still going round in circles on the “tax, borrow and hope” road.

Unfortunately, attempts to perpetuate the memory of those days have been gradually forgotten, assisted on the road to oblivion by the capitalist propaganda machine that distorts and discredits their true significance.

Bruce Mason’s dramatic monologue, “The End of the Golden Weather”, was adapted to an award-winning film in 1991 – unfortunately omitting the act that described the Night of the Riots in Central Auckland. The financial strategy of CH Douglas, expounding a middle road between communism and capitalism, was undermined by JM Keynes’s legitimisation of deficit budgeting, and the financial “stimulus” of the Second World War.

As Alan Price sang, back in 1974:

“Well I can hear them an’ I can feel them
An’ it’s as just as if they were here today
I can see them, I can feel them
An’ I’m thinking nothing’s changed much today.”