Although stock markets initially rose, they inevitably fell again just as quickly as Spain's borrowing costs began to spike again.
Hell's Gate
The UK column has been warning for years that unless very concrete steps are taken, the thoroughly corrupt financial cartel that rules this planet will lead us into a hyperinflationary hell. And now we have arrived at its gates. And it is not heaven.
All this is unnecessary. Financial and economic problems could be solved so easily if it weren’t for the sheer cowardice of our elected representatives to stand up against the few who run the country at the behest of those who hold the purse strings.
As the Eurozone collapses under the weight of a never-ending cycle of bailouts, austerity and asset stripping, at a dinner here in the UK last week at Mansion House, Mervyn King and George Osborne unveiled their latest “failed before it even began” plan to save the UK economy.
Perhaps we should be grateful for our little blessings. Mervyn King at least acknowledged that bank failures were the main problem here. In a speech at the Mansion House he said:
Where there are debtors who cannot repay, there are also creditors who will not be repaid…The current problems will be prolonged until the losses are recognised and reflected on the balance sheets. An honest recognition of these losses would require a massive recapitalisation of the European banking system.
surely.
King finally acknowledged how serious the situation was: “The authorities in developed countries have tried everything they could to address this problem,” but nothing has worked.
His answer? “Be bolder.”
And here is where it all starts to feel like Groundhog Day. Amazingly, the bolder action is more “de-monetization” – printing money, which creates hyperinflation, as if debt can be paid off by just printing more and more.
King also said: “Given the prospect of further turbulence, I want to be clear that the Bank of England will provide banks with all the liquidity they need through the discount window and other facilities.”
So while King is now clearly acknowledging facts that we in the UK column have been reporting and commenting on for years, he clearly has no intention of taking any action to remedy the situation – quite the opposite.
Funds for loans
Another thread in the King and Osborne puppet show was the widely publicised announcement of a bank lending scheme to provide funds to banks solely for the purpose of lending to British businesses.
It always amazes me how they announce the same policy over and over again, giving it a different name each time, and getting rave reviews from so-called economists and journalists. What is the difference, really, between this policy and so-called “credit easing”?
First of all, what is the point of lending taxpayer money to a declining company in a declining economy? Is this even a rational thing to do?
The Labour Party may have the answer.
Let's not expect the Labour Party to have the answers. Bilderberger Bowles is in the pocket of the bankers, just like Bilderberger Osborne. Sadly there are no solutions coming from our frontbench MPs and, at least for now, no backbencher has the courage to form a pressure group.
But it's not just politicians who are living in fantasy: last week the BBC was again “wowed” by figures from the real economy, and as always, manufacturing.
Why is the BBC surprised that UK manufacturing is in a state of collapse when the Government is doing absolutely nothing to revive it, with eminent “experts” like Robert Peston giving us clues? After all, the policy of successive UK Governments over the last 40-50 years has been to systematically destroy the manufacturing base and replace it with shopping centres.
50 years later
I've been speaking out about this economic collapse, both online and offline, for nearly 15 years now, and the response from people has usually been, “Well, of course it will happen, if you wait long enough.”
This is one of those “I don't want to think about it, so I'm going to dismiss it straight away” type reactions, akin to calling anyone who criticizes Israeli policies an “anti-Semite” or calling anyone who dares to question many historical events a “conspiracy theorist.”
But it was clear to me that nearly everyone had forgotten the most basic principles of real economics and had become obsessed with the god of money.
It was clear that the government had forgotten the word “progeny” as the country's infrastructure was systematically sold off to private companies fixated on creating “shareholder value” and ignoring future investment.
But it was worse than that. Margaret Thatcher's government deliberately persuaded people to abandon any notion of the general welfare or future of the nation, and to think only of themselves, of their pleasures today.”Roadsamanagement!”
I love reading James Fenimore Cooper. Besides his great novels like “Spies” and “Bravo,” Cooper writes a lot about the American colonies before the Revolution. What's absolutely clear about the early colonists is that they were thinking first and foremost about the future.
Everything they did was for the future, for their children and grandchildren to know fully, just as the man who plants an acorn will never see the fruits of his labor himself.
We have forgotten to think in these terms, which is why, as the BBC keeps telling us, “no one expected it.”
What is the answer?
It's hard to imagine, isn't it? We are constantly bombarded with pessimism through relentless politics and the mainstream media. The recessions are not something we tell ourselves, but something we can only describe as kleptocrats. The artificial “boom and bust” cycles are superimposed on another cycle where, once every 100 years, “they” strip the assets of the general public.
It is possible to make money in a recession, if you are in the right place at the right time and have a reptilian sense of morality.
But the answer is actually quite simple: put the banks in the right position and build a way out of it.
You can't do that?
Just ask Iceland.
It all started with the Glass-Steagall Act.
I'm probably as tired of saying this as you are of reading it, but I'm going to keep saying it until it's done.
Glass-Steagall is the most efficient way to put the banks in place. It protects people's assets — their savings, their pensions, their homes — by forcing banks to split up into separate businesses rather than continually bailing out a failed banking system.
We will protect the retail banks that hold our savings, pensions and home deeds.
Investment banks are the banking equivalent of Paddy Power and we will leave them to fend for themselves.
Massive reinvestment in basic economic infrastructure
Every economy needs infrastructure. Electricity, water, transportation, communications. For the last 40 years we have not invested in our infrastructure. We have sold everything and allowed new owners to asset strip it.
As a result, water pipes leaked, power stations reached the end of their life, and trains became so expensive that it was now cheaper to fly from London to Warsaw than to take a train from London to Plymouth.
But this should be seen as an opportunity, not a disaster. There are millions of jobs out there — high-quality, high-tech, high-skill jobs that will give the next generation of us a reason to get up in the morning.
But it's not enough to just replace what we have today with what we have today. We need to look 50 to 100 years into the future.
So we should replace our aging trains with magnetic levitation. We should not just fix leaky water pipes, but also figure out how to develop our water systems so that no part of the country runs out of water just because of changing weather patterns. We should develop the most energy dense power generation possible. What economic benefit is there in turning over hundreds of acres of land to a 9th century technology that is at best 30% efficient and cannot be used when we need it most? We should invest in nuclear fusion.
But I don't have any money!
It will be interesting to see how much money they can find to continue bailing out the banks. It is time to discard, once and for all, the idea that there is no money.
As we all know by now, money isn't real, it's a convenience, and whether or not there is money depends entirely on who creates it.
Remember these words from The Times quoted by Justin Walker in his article, “The Case for Greenback Pond,” published in a previous issue of this newspaper:
If that pernicious financial policy which has its origins in the North American Republic take hold, that government will finance itself free of charge; it will pay its debts and be debt-free; it will have all the capital it needs to carry out its commerce; and it will prosper to a degree never before seen in the history of the civilized nations of the world.
The “harmful monetary policy” in question is the National Credit System, or “greenback” pound.
Optimism
The situation seems dire, and it is. We are literally standing at the gates of hell, and it is only fear and pessimism that have brought us there.
Isn’t it time we put our politicians and bankers in their place and find the optimism within ourselves to imagine a brighter future?
