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Times were ‘the economy’ was the totality of activities based on; extraction, production (material/services), distribution, consumption (including destructive ones like wars, etc.,) as well as conveniently devised currencies/money to facilitate exchanges/transactions between the above undertakings. Also times were, various operators (private sector, organized labor, petty traders, small farmers, etc., states and other entities) made up the collective ‘movers and shakers’ of the above activities. Currently, however, the exchange medium/finance or the ‘the universal pimp’ as the radical thinker/economist called it, (Karl Marx) has become the manipulator supremo (mover and shaker) of all things, not only economics!
Since the recent global ‘financial crisis’ (2007) the finance sector, instead of receding to the background (because of the havoc it created) actually became even more powerful and took center stage in devising adjustment policies to overcome the on going crisis. The status quo preaches; the crisis is only financial and by appropriate tinkering around the edges, things will go back to their old normal selves. We beg to differ. We believe the crisis is emphatically structural, despite the propaganda of dominant interest, which grandiosely leverages its in-house institutions of deceptions. In this category we can easily include the private Ivy League Universities of the US. For example, the heads of the central banks of the two largest world economies (EU & US) are now run by individuals whose sole apprenticeship span the Ivy League and the likes of Goldman Sachs!
Bernanke was trained at MIT and later taught at Princeton, before becoming the honcho at the US central bank. Mr. Mario Draghi also went to MIT and served ‘Goldman Sachs’ before heading EU’s central bank. As we repeatedly say the 1% of the 1% that are effectively running the global show hail (mostly) from the private Ivy institutions and the notorious investment banks. Talk about incestuous learning and doing! This is how our friend Bill Bonner put it; ‘By 2007, most of the major states of Europe-and quite a few minor ones-used the same currency (the euro)…paid the same interest rates (low)…worshipped the same god (mammon)…and spoke a common commercial language (mid-Atlantic English.) Almost the entire world embraced modern credit-enhancing capitalism as taught in the leading business school. Mario Draghi went to MIT and worked for Goldman Sachs. Mario Monti went to Yale and worked for Goldman Sachs. Lucas Papademos (Greece’s prime minister) went to MIT and worked at the Federal Reserve Bank of Boston. They are interchangeable parts of the same machine.’ Unfortunately it is this voodoo economics of the narrow minded the rest of us have to take in without gurgitation, because it is presumed, (wrongly of course) those brainy ones in the ivory towers & marble clad casinos (investment banks) know better! Again we beg to differ!
The EU, USA and Japan make up the largest economic entities in the world, (the Chinese economy superseded the Japanese one recently.) The economy of the triad or what nonconventional analysts collectively call ‘empire’ is in serious trouble. We reiterate; the prevailing financial crisis is only a symptom of a more protracted/dangerous global imbalances that operate behind the scene. We will not go into the details of these imbalances today, suffice is to say the remedies/palliatives currently subscribed by global dominant interests or what we might also call the incestuous economics of the Ivy Leaguers, is doomed! The new Japanese prime minister vowed to take Japan out of its deflationary doldrums by igniting what the Japanese long forgotten- inflation. True to his campaign promise, his government started to print money in earnest. Currently the Japanese government is printing/dumping the equivalent of $70 billion a month into the whole economy. The US has been at it longer. Its central bank (Federal Reserve Bank) is printing $85 billion a month and is channeling the phony money into the economy via so-called intermediaries, financial institutions (banks, etc.) Not to be outdone, Mr. Draghi of the EU central bank is now flirting with creating a negative interest rate to spark economic growth or frankly speaking, to avoid (desperately) Japanese-like deflationary situation from taking hold of the whole European economy. We wish him luck! He has already reduced interest rate further, which doesn’t make much sense, as interest rates are already almost zero, anyway! To those who are not easily intimidated by technical analysis, adequately explaining the situation.
At the end of the day, the phony money that is printed into existence by ‘incestuous economics’ of the global financial cabal goes directly to cronies closely connected to high finance. As far as the beast (human mass) is concerned, its fate is tied only to wishful outcomes of ‘trickle down’ economics. Don’t hold your breath though! If truth be told; so far not much has trickled down to the bottom of the heap and it is very unlikely things will change any time soon, establishment rhetoric notwithstanding. The net result of printing (as if there is no tomorrow) is; financial assets have bubbled beyond recognition (vis-a-vis economic fundamentals), stock markets, junk bonds, etc. This process, which we rather call ‘cynical economics’, (compliment of Ivy leaguers & investment bankers) materially transfers real wealth from the beast to the top dogs of the world system. Last year, the boss of Goldman Sachs said; what he/bank were doing is only ‘God’s work.’ Hallelujah! May be we have now entered the eighth’s millennium! According to Ethiopian folklore (‘sementegnaw shih’) the eighth’s millennium is an era when absurdity becomes the norm, just before the second coming/parousia!
Here is what the former US congressman says about the whole system of phony money: “A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank. It is no coincidence that the century of total war coincided with the century of central banking.” Ron Paul. Good Day!