Monthly Archives: August 2015

Greece . . . A ‘Profit Machine’!

At last the media are beginning to accept that Alex Tsipras’s ‘infamous’ U-turn on July 13 2015 was a necessary and responsible action, faced with a Troika threatened collapse of the entire Greek financial system.

The ferocity of their assault was a calculated reaction to his democratic call for a referendum in the face of their threats to ignore democracy and bow to their demands. He is the loneliest person on this Planet as he tries to deal with the frustrations of his people and those in his party, who seem incapable of understanding the sheer power they are up against.

Greek debt is not the issue here. It is a relatively insignificant country, financially, which has found the courage to stand up to this dominant world force and their inhuman actions. This draconian power has had to be demonstrated to maintain their global position.

The consequences to the people is irrelevant with such actions, as they need to deter any thought of future challenges to their power by others, particularly given the rising tide of popularity for left wing politics in Spain, Italy and now in the UK.

Be under no illusion that the EU is a different place since July 13, as it witnessed the surrender of liberal democracy to the brutal forces of Neoliberal Authoritarianism. It is also a place of growing dissent to that surrender.

A recent opinion poll by Opinium showed that 62% of those polled, in seven EU countries, believed that Brussels handled the Greek tragedy badly, compared to just 12% who thought it was handled well. In Italy a whopping 76% of respondents believed Brussels had handled the issue badly and 56% likewise in Germany (one of Greece’s greatest critics!)

It also screams the question as to where Brussels was in all of this, with their burgeoning bureaucracy of overpaid bureaucrats and vast expense accounts, supposedly there to rid us of power politics and create a machinery of integration. Their silence on Greece has been deafening!

The EU has become a bloated power source that is trying to run dysfunctional countries by decree. History has shown that this, like fiat money printed out of thin air, is doomed to failure, whilst the people suffer untold abuse during the process.

This abuse continues unabated with a new bailout for Greece of a staggering 86 billion euros. Little if any of this money will reach the Greek people, or help restart the Greek economy, as its sole purpose is to service current Greek debt! And let’s not forget that interest is a banks PROFIT!

To generate 86 billion euros worth of loans probably costs the banks 50 euros (I would imagine) in hitting the correct keys on the computer keyboard. That is all it takes to place a set of digits in the necessary accounts pages, which Greece is then able to draw on.

So for 50 euros the Troika will be earning a reported 18% interest on this new money and all the other money they have printed out of thin air. Given the Federal Reserve is currently printing trillions of dollars at virtually zilch interest rate, Greece is a ‘nice little earner’ for global banking.

All they have to do is maintain the impossibility of debt repayment and they have a source of perpetual income from perpetual interest. Constantly paying such a staggering amount of interest on such a staggering amount of debt, has turned Greece into a ‘Profit Machine’.

If we then add to this the 50 billion euros of national assets that will be sold off at huge discounts to hedge funds, as additional recompense for such debt, we can see how apposite the term ‘Odious’ debt is.

Here we have the sum total of unregulated Capitalism. All concerned argue and rant over the impossibility of Greek debt repayment and yet nothing is even muted to hit at the very core of these problems, by bringing the banks back under proper control and regulation! They demand independence, whilst proving conclusively that they are quite incapable of the responsible management of that independence. If they are ‘Too Big to Fail’ break them up, DUH!

We may be in the infancy of Neoliberal Authoritarianism and rightly angered by it. However there is also a cautionary note. Brussels may be silent to this brutal abuse but we too are guilty of quickly pointing a finger at the overpowered and helpless victim.

If we are to resist this new authoritarianism we must remain united and not succumb to the historic ‘divide and conquer’ that has had us fighting amongst ourselves for centuries.

We have the means to unite, like at no other time in our history and could now be helping Alex Tsipras back on his feet. Should we not be urging him to keep going, confident that he and others who are equally determined to challenge the growth of ‘Profit Machines’ and fight for our freedom, are assured of our undying support in what will be a protracted battle?

Until the next time.

 

Thinking from his Book: Global Magna Carta. Returning Power to the 99% . . . If They Want It! By J T Coombes

£1 Is Worth £1 . . . Says Who?!

As I survey the global financial scene I become more bemused by the sheer lunacy of it all. Barnham and Bailey would have been quite envious of the antics I am sure. But let me start with a question:

Q. What is the difference between Willie Sutton, an ‘illegal withdrawals specialist’ and global banks, also ‘illegal withdrawals specialists’?

A. One robs banks and the other robs people!

Willie robbed banks because they had something of value and presumably banks rob us because our money is of value. But what is that value I find myself asking?

If we go shopping to buy food we buy by weight and so we know what we are buying. Before pre-packaging, weights and scales were used to assure us that we were getting a correct amount of goods for our payment.

The weights were of predetermined amounts, pounds, ounces etc. and they were regularly checked by government officials to ensure they had not been corrupted. This gave us confidence that what we were buying was authentic and that we were not being ripped off.

If we apply these ground rules to money, it really becomes quite scary to my simple mind. Originally money was assessed in terms of how much was needed to buy a piece of gold. You knew where you stood because you could trade your paper or coins for gold and be sure of its value.

Then in 1972 President Nixon took the dollar off the gold standard and the true value of money suddenly became very vague. For my part, I then began to value my money in what I could buy with it. As an example, in that year I bought my first house for £5,000. Today it would take £500,000 to buy that same house!

In 1971 there were 240 pennies to one pound and they were worth something. In that same year our currency ‘went metric’ and that gave us just 100 (pence) pennies to the pound . . . each of which is now quite worthless!

I’m no economist but rather than leaping for joy at how much my wealth has grown I am concerned at how much the purchasing power of my money has fallen. After all, if the house is how I measured my money in 1972, £5,000 was a good deal. Today the value of my money has reduced a hundred fold, because I now need 100 times as many pounds to buy that same house, which has not changed one iota.

It is still bricks and mortar, with a slate roof but in 1972 I could afford to buy it, whereas today a person of similar age to then cannot. The value of our assets have not gone up but rather the value of our money has plummeted! With a 100 fold reduction in the value of my 1972 pound it is now worth one penny which, as we all know is worthless.

The simple reason for this catastrophe is that when money was tied to something stable and secure, like gold, its supply was limited and so it restricted ‘economic growth’, which was a bad thing for banks and economists. The answer to ‘freeing it up’ was to disconnect its value from gold and for the banks themselves to guarantee the value of money. All we had to do was simply put our trust in bankers, (as we did with those government officials who checked the weights and scales).

A 100 fold drop in the value of the pound in my pocket tells me they are not doing a good job. What is even more lunatic is that we all have to work a lot harder now than I remember in 1972. We are getting stressed out because the value of what we are working for is falling through the floor and we have to borrow to make up the difference.

Is it any wonder we have a global banking system that is bankrupt and about to prove again that it is totally unfit for purpose as we face another imminent collapse, just 7 years after the last one? This is the prognosis of a growing number of eminent economists and clever money people who are now predicting the crash will happen next month or in October. (History shows that the 1929, 1987 and 2008 crashes all happened around this time of year!)

We now know that when it happens the banks will rob us of our money to cover themselves. The legislation is already in force. So it makes sense to take our money away from them and hoard it. Apparently they are wising up to this and there is now talk of legislation to outlaw the holding of cash.

This level of connivance and control, over something that is becoming ever more worthless by the day, is what led to the French Revolution. A subject I shall be returning to soon.

 

Until the next time

 

Thinking from his Book: Global Magna Carta. Returning Power to the 99% . . . If They Want It! By J T Coombes