From Shanghai to San Francisco, the rent is too damn high

Posted on February 22, 2016 by Reid Mukai

By Jerome Roos

Capitalism is a strange beast. Though incredibly resilient in the face of systemic crises and remarkably adaptive to ever-changing conditions, it never truly overcomes its structural contradictions. As the Marxist geographer David Harvey often points out, it merely displaces them in space and time.

The global financial crisis of 2008-’09 has been no exception in this regard. In fact, the very response to that calamity has already laid the foundations for the next big crisis. And just like its immediate predecessor, it looks like this one will be centered, at least in part, on a massive speculative housing bubble.

Officials and investors may still be turning a blind eye, but the warning signs are flashing red everywhere. From Shanghai to San Francisco, from London to L.A., a wave of real-estate speculation is washing over the world, gentrifying popular neighborhoods, pushing housing prices and rents to historically unprecedented highs, and forcing low-income tenants out of their increasingly unaffordable homes. The result is widespread social displacement and deepening discontent.

Unlike the subprime mortgage crisis of 2007-’08, which was centered on the complex packaging of risky loans to low-income households across the U.S., the new housing crisis is a product of real-estate speculation in the world’s major metropolitan areas. Take London, which according to the Financial Times finds itself confronted with “its biggest housing challenge since the Victorian era.” Residential property prices in the British capital have risen 44 percent since 2008, and are now well above their pre-crisis highs.

According to an analysis by the UK charity Shelter, there are currently only 43 homes in Greater London that could still be considered affordable to the average first-time buyer, pushing everyone but the richest of the rich into the rental market, where landlords are known to exact more than a pound of flesh in return for a roof and running water. In the majority of London boroughs, the median rent for a one-bedroom apartment is now over £1,000 per month. On average, Londoners spend about 60 percent of their income on rent.

A similar picture has emerged in New York, where property prices — in the words of the BBC — “have gone turbo-ballistic, as global capital in search of a safe haven has rocketed in.” The average monthly rent in Manhattan now exceeds $3,800, even as half of New York’s urban population lives near or below the poverty line. As a gubernatorial candidate for New York once aptly pointed out, “the rent is too damn high.”

Again, the unsurprising result has been widespread social displacement. Al Jazeera recently reported that “evictions [in New York] have reached epidemic proportions and created a new homeless crisis born out of an affordable housing shortage.” Other major cities like Boston and Los Angeles are not doing much better, as gentrification proceeds apace from coast to coast. Today, even the downtown area of derelict Detroit is rapidly gentrifying, while much of the city still languishes in a state of post-industrial decline.

It is San Francisco, however, that has emerged in recent years as the most paradigmatic case of unbridled gentrification. With median monthly rent hitting $3,530, the city has become the most expensive in the U.S. Desperate to get rid of old tenants who still enjoy rent controls and attract high-income professionals from the tech industry in their place, landlords have gone on an eviction spree: in the past five years, the eviction rate has soared more than 50 percent. Immigrant and working class neighborhoods like the Mission have been reduced to multi-million dollar playgrounds for the “bohemian bourgeois”, complete with snazzy coffee places and expensive vegan restaurants.

The urban sociologist Saskia Sassen has encapsulated the nature of this violent process in strikingly succinct terms: the social reality of financialized capitalism, she argues in her book Expulsions, is all about “systemic complexity producing simple brutality.” And as usual, those feeling the brunt of this brutality are the urban poor and marginalized communities, especially immigrants and people of color, who — along with artists and precarious youths — are increasingly being displaced from city centers towards the periphery.

It is not just cities in the advanced capitalist countries that have been undergoing this turbulent process of urban stratification: the major metropolitan areas of the Global South are firing on all cylinders as well — with the notable difference being that the bubble in emerging markets already appears to be in the process of popping, raising fears of a new international financial crisis centered on China, Brazil and Turkey, among others.

In China’s biggest cities, property prices shot up 60 percent between 2008 and 2014, with residential prices in Shanghai and Beijing rapidly closing in on those of London, Paris and New York. According the consultancy firm McKinsey, some$9 trillion — almost half of China’s total debt, excluding financial sector debt — “is directly or indirectly tied to real estate.” Price increases have exceeded the rise in income by 30 percent in Shanghai and by 80 percent in Beijing.

Other major cities that have been experiencing similar real-estate booms include São Paulo and Rio de Janeiro in Brazil, where residential property prices in the most-desired neighborhoods doubled between 2008 and 2013, and Istanbul, along with the other big cities of Turkey, where a credit-fueled construction boom has accounted for 30 percent of GDP in the period since Erdogan’s AKP came to power on the heels of a previous financial crisis in 2002. Since 2007, property prices in Turkey have shot up 36 percent.

To be sure, the local specificities vary from place to place. In London, the housing crisis has been fueled at least in part by massive capital inflows from wealthy elites in countries like China, Saudi Arabia and the Gulf States, as well as the municipality’s failure to build adequate housing for the large influx of new inhabitants. In Barcelona, by contrast, it has been driven primarily by the tourism industry, while in San Francisco it is largely driven by the tech industry. In Rio, the process has been intensified by preparations for the FIFA World Cup and the Olympic Games, while widespread cronyism and corruption have been an important catalyst for the construction boom in Istanbul.

Yet for all differences between them, the gentrification processes and housing crises in each of these global cities share two crucial commonalities: first in their causes, and second in their consequences.

In terms of the underlying causes, the new housing crisis should be seen as a direct outcome of the response to the previous crisis, which was based on massive bank bailouts and central banks opening the floodgates of cheap credit. With the notable exception of the ECB, which only embarked on quantitative easing earlier this year, the world’s largest central banks dropped interest rates to historic lows, kept them there for years on end, and pumped trillions of dollars of fresh liquidity into the global financial system, effectively subsidizing private investors out of bankruptcy.

This unlimited flow of free money (for the 1% only, of course) produced a tide of surplus capital that had to be absorbed somewhere. With “secular stagnation” taking hold across the developed world, investors were still wary to direct this surplus towards the productive economy, where profit margins remained relatively low. And so, in their insatiable quest for yield, they turned to speculative investment in various asset classes instead: stocks, bonds — and, once again, real-estate. The profits were phenomenal. By 2012-’13, the resulting speculative boom had led U.S. corporate profits back to a new all-time high.

But now that the first signs of overheating have become apparent, we can already begin to identify the second crucial commonality between today’s urban housing crises; a commonality that sets the current crisis apart from the last one: in almost all of the major world cities today, ordinary citizens are already actively mobilizing and fighting back against processes of gentrification, dispossession and displacement, building innovative social movements and powerful political platforms in the process.

From urban insurrections to defend the last-remaining green space of Istanbul or the favelas and public transport system of Rio, to the local direct action of anti-gentrification activists targeting Google buses in the San Francisco Bay Area and reclaiming housing projects in London, it is already clear that the next major crisis, unlike the last one, will not go uncontested.

Of all the urban struggles that have ignited across the globe in recent years, the radically democratic municipal platforms of Spain are undoubtedly among the most advanced and the most promising. With the left-wing anti-eviction activist Ada Colau now holding the mayoralty of Barcelona, an important sign is being sent to the landlords, gentrifiers and real-estate speculators of the world: even in the deepest crises, there will be a limit to your capacity to evict us from our homes and destroy our cities — and that limit, ultimately, is us.

Jerome Roos is a PhD researcher in International Political Economy at the European University Institute, and founding editor of ROAR Magazine. Follow him on Twitter at @JeromeRoos.

The Fine Edge Between Comedy and Horror: The Millions Interviews Margaret Atwood

Posted on February 21, 2016 by Reid Mukai

By Claire Cameron

Source: The Millions

The Heart Goes Last — Margaret Atwood’s first standalone novel since The Blind Assassin, which won the Man Booker in 2000 — is a novel that teeters on the fine edge between comedy and horror. The writing is full of Atwood’s wry humor, but the dystopian world in which the characters live, whether they are a sleeping in a car and fleeing thugs or under surveillance in a tightly controlled community, is an alternate world that is full of horror.

The novel tells the story of Stan and Charmaine. After a great financial crash, their home is repossessed, their credit is frozen, and they are left to eek out a meager life living in their cramped Honda for shelter. Stan sleeps in the driver’s seat so they can flee quickly during the night if need be. With only Charmaine’s money from a bartending job, they dumpster dive, eat day old doughnuts, and have no viable prospects for their future. When Charmaine sees an ad on TV for Consilience, a suburban utopia and a ‘social experiment,’ she signs them up to take a look. Participants are given a home of their own in exchange for going to prison every other month.

The idea behind Consilience is that a full prison creates full employment and all prosper. While Charmaine and Stan do their month in jail, they swap places with an alternate couple who live their life, drive their scooters, and sleep in their bed until the month is up and they trade places again. In a set up that recalls a Midsummer’s Night Dream-like mix up, unknown to each other both Stan and Charmaine have chance encounters with their alternates. Confusion, obsession, and mistrust turn into revelations about the truth about Consilience.

The more I read, the more I questioned whether I could describe the community of Consilience and the chaos outside its gates as taking place in an alternate world. So much of what happens in this novel, from foreclosed houses to private prisons, is already part of our world. The world of The Heart Goes Last feels more like a twisted version of our current reality. Only small changes would be needed to make it all ‘true.’ Just as Charmaine and Stan’s lives contort when they seek out their alternates, utopian turns dystopian and comedy bends into horror with, as Atwood says, “one small turn of the wrench.”

I interviewed Atwood over the phone from her hotel room in New York. We spoke about not having sex with furniture, Pepper the greeting robot, themes in Victorian literature, and quotas in private prisons.

The Millions: The Heart Goes Last has your trademark humor, but the circumstances that Stan and Charmaine find themselves in are horrifying.

Margaret Atwood: A lot of things are funny to those watching them, but not to the person undergoing them. The person who slips on the banana peel doesn’t think it’s funny as a rule.

TM: Charmaine says near the beginning of the book that, “comedy is so cold and heartless, it makes fun of people’s sadness.”

MA: It does, unfortunately. Sometimes people make fun of themselves, but if you dig down there’s a bit of that too. On the other hand, where would we be if we couldn’t laugh? I think they’ve always been joined at the hip.

TM: At the beginning of the novel, you quote Ovid, William Shakespeare, and a blog post by writer Adam Frucci[1] — who sets out to test an ottoman with a fake vagina. I have to ask: Did you have sex with furniture to research this novel?

MA: I think that piece of furniture is intended only for men?

TM: Frucci warned that it was, “no Kleenex clean up, my friends.” Actually, what he endured to test the ottoman is a good example of something that is funny for the reader, but not so for the person going through the experience.

MA: One of the headlines of that post is “I did this so you don’t have to.” Frucci has probably woken to find himself strangely famous. A lot of people are reading that blog post.

The other thing that has to trouble your mind is — who had this idea for this piece of furniture? And would you have this in your living room? I have many questions.

TM: Maybe you’ve given the ottoman maker a little sales bump?

MA: I have a feeling that a piece of furniture with a sex thing built into it came and went fairly swiftly. If that blog post was written in 2009, the furniture has fairly quickly been superseded by the advances in robotics.

Do you know about Pepper the robot? Pepper is not a sex robot. In fact, Pepper comes with instructions that say explicitly that you are not supposed to use it for sex, though I don’t know how you could.

Pepper is a greeting robot, like one that Stan, the main character in The Heart Goes Last, is working on before he gets fired at Dimple Robotics. Except that Stan’s is a grocery bagging robot. It is supposed to smile at you.

Pepper is supposed to be able to read your emotions. They were installing Pepper as a greeting robot in Japan where greeting is a social custom. And then they put him/her on for private sale and he/she sold out very quickly. Apparently we want someone who can read our emotions.

TM: At Dimple Robotics, Stan’s job, before he looses it, was working on the empathy module of his robot.

MA: Personally, I don’t want someone who can read my emotions, because then you can’t dissimulate, can you? If somebody asks if you are having a nice day and you say yes, but you’re actually not…it spoils your act.

TM: It’s the white lies that get us through.

MA: I’m afraid that’s correct. They do. “That’s a lovely dress! You look wonderful!”

TM: The novel is filled with this kind of joke — your humor is always close to hand. I love a line on writing from Sheila Heti’s How Should a Person Be?: “You have to know where the funny is, and if you know where the funny is, you know everything.” Do you agree?

MA: No, but it’s a good hint. You don’t know everything if you know that, but you know some things. It’s true in a negative way. If something is unintentionally funny, you ought to know. If you intended it to be very serious and dramatic, but actually it’s funny, then you are in trouble.

There is a wonderful book called The Stuffed Owl. It’s an anthology of good, but bad, verse. It’s well worth reading. It is full of writers who were aiming for the heights and tripped on the banana peel.

TM: As I was reading The Heart Goes Last, I kept thinking back to Survival, your thematic guide to Canadian literature that was published in 1972. In it you said: “I read then primarily to be entertained.” Do you still?

MA: Go back to what the ancients used to say, that art should entertain and instruct. They didn’t say to what degree. If it doesn’t entertain, and by entertain I don’t mean just frivolous, I mean engage your attention and keep you going. If that doesn’t happen, you’re not going to turn the page. So there has to be something engaging enough to keep you reading.

That is why first chapters are so important. If you can’t get the reader through the first chapter, they are never going to get to your pithy piece of wisdom on page 85.

On the other hand, if there is nothing serious in it, you may be entertained on a superficial level and it’s a one time read. Or it’s what we call a “beach read.” Or what I sometimes call a “hotel room drawer read.” I leave them there for others to enjoy. I did that in Hong Kong once and they were so screamingly honest that they collected the books and mailed them back to me. I thought that was so sweet.

TM: The Heart Goes Last is about characters who give up their freedom for comfort. When Stan and Charmaine tour Consilience for the first time they both feel reason to worry about how it runs. However, after experiencing the discomfort and fright of life in a car, they opt for comfort, “the bath towels clinched the deal.”

MA: Yes. It’s also about how circumstances cause people to do things that they would otherwise not do. That is a human universal truth. Stan and Charmaine give up their freedom, but of what does their freedom consist? They don’t have a lot of money, they are living in their car, they are subject to every thug and criminal that stumbles across them, so that is maybe “freedom,” but of a very limited kind.

TM: Can we expect a scared or thirsty human to make good decisions?

MA: You can’t. Self-preservation kicks in. A person will make the decision that you think gives him or her the best chance of getting through.

TM: In that way, is The Heart Goes Last a survival story?

MA: A lot of people lived that, or something close to it, when the 2008 crash happened. They were thrown out onto their front lawn or living in their cars. That is ongoing.

There’s a movie that just came out that I must go and see called 99 Homes — it’s the story of a man who evicts people from their houses because they couldn’t pay their mortgages. As I said, the situation is ongoing.

I was listening to the radio in London, England, and there was a show about people who had moved back into their parents’ houses, or parents who have had their kids move back in, because they could not afford to either rent or buy in London. It was too expensive.

TM: The set up of your novel felt so real.

MA: It is real.

TM: But it’s not necessarily your reality. David Mitchell wrote about how he imagines the far past or the far future, that to get in the right mindset he thinks about the things that the characters might take for granted in life.

MA: We did a lot of car travel when I was a child. We also did a lot of camping out. So that wasn’t under duress, but I know what it’s like to sleep in a car.

TM: There are other parts of the book that could be taken as speculative fiction, but aren’t, like private prisons.

MA: There are private prisons in the U.S. The Atlantic just did a huge piece on this. There is nothing in the U.S. constitution that says you can’t make people do enforced labor if they are convicted criminals.

There’s a history of that kind of prison as enterprise. The Australian penal colony was one of them. They would send people to work off their sentence. Someone was making money out of it.

TM: I also read that in Arizona there are three private prisons that require 100 percent inmate occupancy.

MA: You have to keep them full to make them profitable and that is a recipe for creating more prisoners.

TM: In 2008, when you published Payback, a book of non-fiction about the nature of debt, it almost felt like the world of finance had collapsed at your feet. The timing was quite something. Tell me about your crystal ball?

MA: I don’t actually have a crystal ball, but I do read advertisements when I’m sitting on the subway. I was seeing a lot of them that said “let us help you get out of debt.” I thought, boy, if there are all these enterprises doing that, there must be an awful lot of people in debt.

The other thing is that, if you are a student of Victorian literature, as once I was, debt is a big theme. Not only with Dickens, but a number of other writers as well. So is the prison system.

TM: In Survival you wrote, “Literature is not only a mirror; it is also a map.” Can The Heart Goes Last be read as a map?

MA: Maybe a map, but also a door. Open the door and what’s inside? Stan and Charmaine are in a planned prison system, a for-profit enterprise. What they don’t know when they go in is how the enterprise is making its money. The thing to ask about private prisons is who is making the profit? And how much are they making. Maybe it’s time to rethink. What should we have instead?

[1] I contacted Adam Frucci, author of “I Had Sex with Furniture: The Shameful (NSFW) Fleshlight Motion Review,” to comment about the honor of becoming an Atwood epigraph: “I didn’t really believe it at first — Ovid, Shakespeare, and my goofy blog post from 2009. I can’t say that of all of the things I’ve ever written that this is the one I want people to remember and attach to my name, but what can you do? All I can really do is be honored and assume that Margaret Atwood is a huge fan of all of my work and looks to me for inspiration all the time. That’s about accurate, right?”

Should Taxpayers Be Subsidizing Obscene Salaries?

Posted on February 17, 2016 by Reid Mukai

By Adnan Al-Daini

Source: Dissident Voice

An article in the Guardian on bosses’ pay by the director of the High Pay Centre, Deborah Hargreaves, presents the disparity between bosses’ pay and the average wage in the UK thus:

“Chief executives in the FTSE 100 companies took home £4.96m in 2014 compared with average wages of £27,645. And, if anything, the pay gap is getting wider. A typical incentive award for a top boss increased by 50% of salary compared with the previous year, while workforce wages were up by £445. Bosses’ remuneration has risen from around 47 times average wages in the 1990s to around 180 times today.”

The pay gap shown by the above figures will be even wider if the salaries of bosses are expressed as a multiple of the median wage instead of the average wage. The average wage is skewed towards the top, thus most workers will earn below the average. The median wage is a better measure as it means half of the workers will earn below it and the other half above it.

Free-market ideologues would argue that salaries are fixed by market forces, and questioning such a disparity in income is tantamount to the politics of envy and interference in the freedom of markets. Such an argument is not really sustainable.

A company is a joint enterprise, and for it to be successful all its employees need to feel valued and justly rewarded. Such a disparity in income sends the wrong message to the many people who are working hard to make the company successful. It will lead to dissatisfaction and low morale amongst the workforce, and will eventually negatively impact the success of the company. A good boss will not accept such an obscene disparity in income between himself and his employees. Such salaries have become a virility symbol for bosses to compete with each other. It shouts – I am more important than you; just look at the size of my package!

If the wages paid by a company to its poorest employees are so low that it requires the state to top up their wages to provide them with the basics of life, then inflated salaries paid to the bosses are effectively being subsidized by the taxes we pay. It is a transfer of wealth from the many to the very few at the top. How can that be right? Where is the free-market in such practices?

If the income distribution is more equitable, the subsidy by the state to the low paid will be reduced, leaving more money for the government to spend on the NHS, infrastructure, police etc., things that are necessary for a civilized, functioning society.

Surely, then, that gives our elected government the right to enact laws and regulations to fix maximum salaries of bosses as a multiple of the lowest wage in that particular company. This will incentivize the bosses to increase the pay of their poorest employees to increase their own pay. The multiple should be certainly much lower than the figures quoted above.

Our taxation system needs to be overhauled to reflect the huge disparity in incomes; it is too narrowly set. Currently, we have a tax-free allowance of £10,600 and then a jump to 20% up to £42,385 then 40% up to income of £150,000, and a tax rate of 45% on income above £150,000.

A more progressive taxation system would start at a much lower rate and continue to rise incrementally well beyond the 45%. I am not a tax expert, so I leave it to those with the expertise to set the rates in such a way that we as a society ensure that the wealth of the nation is more equitably distributed.

Fairness and justice are the pillars on which successful, happy societies are built. The present system that siphons so much wealth to the top 1% to the impoverishment of the rest is neither fair, nor just. Failure to take action will result in the whole of society becoming the poorer; we will all suffer rich and poor.

Adnan Al-Daini (PhD, Birmingham University, UK) is a retired University Engineering lecturer. He is a British citizen born in Iraq. He writes regularly on issues of social justice and the Middle East. Read other articles by Adnan.

The Popular Myth of Democracy in America

Posted on February 16, 2016 by Reid Mukai

By Stephen Lendman

Source: SteveLendmanBlog

No nation in world history promised more and delivered less to its citizens and people worldwide. None more greatly threatens world peace – putting humanity’s survival up for grabs like never before.

None did more harm to more people globally over a longer duration. None matches the menace it represents – a presstitute media supported fascist gangster state willing to risk destroying planet earth to own it, run by a bipartisan criminal class.

From inception, America was always run by the people who own it, as first Supreme Court Chief Justice John Jay explained.

John Adams believed power belonged exclusively to the rich, well-born and able. Today it’s about monied interests in charge – deciding who holds all top positions in government, elected and appointed.

People have no say whatever. Ignore electoral politics, intended solely to deceive – manipulating people to believe new bums are more worthy than current ones.

Voting is a waste of time, accomplishing nothing. Duopoly power rules.

America is a one-party state with two wings, indistinguishable from each other on issues mattering most – militantly pro-war, pro-business, anti-populist no matter what names and faces hold top positions.

Police state laws enforced by powerful security forces at the federal, state and local levels assure wealth and privilege interests are exclusively served at the expense of public welfare.

Elections are farcical, exercises in theater, not democracy. Candidates for the nation’s top offices are cardboard cutouts of each other, distinguishable only by their disingenuous rhetoric – promises made, forgotten and broken once in office.

The public interest be damned. People are used, not served, deceived to believe politicians represent them.

Embedded power runs America, politicians serving entrenched interests exclusively, chosen for that reason. Ordinary people thinking their enfranchisement matters are living in a fantasy world.

Government of, by and for the people is the grandest of grand hoaxes. Media scoundrels perpetuate the myth with all the familiar slogans and high-minded posturing.

Jimmy Carter was right last summer calling America an “oligarchy with unlimited political bribery…a complete subversion of our political system as a payoff to major contributors.”

Republicans and Democrats operate by the same corrupted standards. “(U)nlimited) money” serves their interests at the expense of constituents they represent.

America’s system is too debauched to fix. It’s too late for tinkering around the edges.

A complete makeover is needed – a popular revolution, replacing oligarchy with grassroots democracy for the first time in the nation’s history, freed from money control.

Today is the most perilous time in world history. We have a choice.

Accept the status quo, its endless wars, oligarch control over the greater good, unprecedented wealth disparity between rich and all others, along with harsh crackdowns on nonbelievers and risk of potential humanity destroying nuclear war – or refuse any longer to tolerate a system responsible for so much harm and misery to so many people worldwide.

Survival depends on choosing wisely. What kind of world do you want to live in? What kind do you want your children to inherit?

Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net.

His new book as editor and contributor is titled “Flashpoint in Ukraine: US Drive for Hegemony Risks WW III.”

http://www.claritypress.com/LendmanIII.html

Visit his blog site at sjlendman.blogspot.com.

A Critical Update on the Failing Global Economy

Posted on February 14, 2016 by Reid Mukai

By Phillip J. Watt

Source: The Mind Unleashed

The matrix-media will have us believe that the global economy is only experiencing a temporary glitch and that everything will be fine, however that is simply an outright lie. After several decades of saturating the world with unbacked currency and mountains of debt, the can we’ve been kicking has finally run out of road.

As you would know, stocks are plummeting across the globe and since their peak in around mid 2015, individual regions have lost 10-40% in stock value. In total, on the 20th of January the MSCI global stock market index reflected that the world’s markets had officially entered a bear market, which is 20% or more. This is just the beginning, too.

The exceptionally poor start to stocks in 2016 has somewhat been driven by ‘fears’ about China’s economic troubles, but really it is because many of the fundamentals of the global economy are extremely weak. For example, oil, which sustains the financial health of many countries and industries, has crashed over 70% in the last 2 years, whilst the Baltic Dry Index, which measures the amount of raw materials being shipped around the planet, is at a record low of 298 (to put this into context, just before the great recession of 2008 is was over 11,000).

More examples are that in early 2016, North Atlantic cargo shipping almost came to a halt and the U.S. orders in the trucking industry “for Class 8 trucks – the big rigs that haul freight on North American highways – plunged 48% from a year ago”. Furthermore, the retail sector is falling apart, with tens of thousands of job cuts and shop doors closing at an alarming rate.

For a deeper analysis of the data which scream that we’re steam-rolling towards a long over-due debt reset, which might even end in a sustained global depression such as that of the 1930′s, read “22 Signs That The Global Economic Turmoil We Have Seen So Far In 2016 Is Just The Beginning”.

OFFICIAL REPORTING IS FALSE

Given the ‘faith’ that stakeholders need to have in this economic system to keep it from imploding, the governmental data and the mainstream media cannot be truthful in what they report to the world, otherwise news of doom would be a self-fulfilling prophecy. It’s ridiculous to design an economic model in this way, yet regardless of the epic failure of Keynesian economics and the Wall Street casino, any investor who doesn’t recognize this by now is unfortunately in line for some serious financial loss.

To solidify the point, all official numbers in the U.S. and elsewhere are manipulated; shadow stats have made that abundantly clear. For example, real unemployment in the U.S. is above 20% and many of those who are actually working are in low-paying, part-time jobs.

Further to the true state of the labor market in America, many university graduates are working in hospitality or an unrelated field. Something like half of all under 25 yr olds still live with their parents or grandparents. Labor participation rates are at the lowest level in 38 years. Over 45 million people are on food subsidies and poverty and homelessness is increasing not just in America, but all around the globe.

Brazil, Canada, Russia and other countries are already in recession, amplified by the collapse of oil and commodity prices. Unofficial figures suggest the US is too. Canada in particular has seen massive inflation in food and other necessities, so it is likely that we can expect that to emerge in other countries as well.

This shit is really getting serious.

WHO IS AT FAULT?

Unfortunately, the masses don’t yet understand that most central banks around the world are private companies owned by private families i.e. the oligarchs. Essentially, this and the other banking organisations that they own is a century-old scam that robs the people of their riches.

Simply, the U.S. Government has effectively been taken over by an oligarchy, as evidenced by this Princeton University study in 2014. It’s no surprise then that this small group of so-called elites benefited from the largest transfer of wealth in human history, which happened in the 2008 GFC.

The 1%, particularly the 0.1%, economically prospered from the illegal, unethical and unprecedented bank bailouts, whilst the 99% suffered with losses in superannuation, savings, homes and employment. Many also lost their lives due to overdose, suicide and other self-abuse, which was due to their loss of livelihood and economic independence brought about by the global monetary scam.

WHAT HAPPENS NEXT?

The recovery from the GFC of 2008 never occurred, particularly for the main street economy (the real economy, not the Wall street economy). It’s happening all over again because unlike Iceland, there were no incarcerations for the fraudulent bankers and no serious revolution to the banking and finance sector.

This time though, it appears the shadow order (who have monopolized the banking and corporate sectors and effectively control western foreign and domestic policy) are not quite ready for another recessionary/depressionary round because they don’t yet have all their mechanisms in place to offer ‘the solution’ (i.e. global currency, trade agreements and governance).

They’ve got processes such as High Frequency Trading that prop up stocks by buying them back with the money they manifest from nothing (Plunge Protection Teams). They’ve been in overdrive trying to keep it afloat, but to no avail, because the real economy is drying up. As mentioned, global trade is tanking and many businesses are either going into liquidation or laying off thousands of workers each, so it’s easy to imagine that we’re going to hear about a major corporation going bust any day now.

This might just be the black swan event that ‘officially’ triggers the next crisis.

History indicates what will likely happen next: war. When a superpower and their economic hegemony is in collapse (such as the end of petrodollar and the U.S. Dollar as the world’s reserve currency), going to war can distract the populace from the true reasons of an economic crash and the associated suffering that emerges as a result. Essentially, the blame can be shifted to foreign entities.

This is why a high probability exists for a massive false flag to occur over the coming weeks/months to convince the masses to go to war with Russia, China and/or Iran. Saudi Arabia and Iran’s tensions are high right now so they might use that platform; it may in fact be orchestrated for this aim.

In the very short term, however, expect more dramatic policy measures, such as more mass money creation (QE) and even negative interest rates by the Federal Reserve (just like they’ve recently done at Japan’s central bank). They might even attempt widespread bank bail-ins, as already implemented in Italy, Portugal and Cyprus.

As explained in this Reuters article:

“so-called bail-ins typically mean wiping out creditors’ investments, slashing their value or converting them into shares in the bank. Uninsured depositors could get caught along with professional investors”.

In other words, they’re once again planning to steal the hard-earned cash of the little guy, but instead of doing it via tax-funded bail-outs as they did in 2008, they’re going to do it directly by commandeering the financial assets that people house in banks.

Yet, no matter what they do in the short term, they cannot stop the massive bubbles in debt, derivatives (over 1.5 quadrillion dollars), real estate, stocks, and bonds from inevitably popping. It might happen tomorrow or it might hold off for another year, yet regardless of the exact timing, any one of these or other triggers could easily send the global economy into a severe and sustained global depression.

Preparing accordingly, therefore, is nothing short of wise.

WHAT TO DO NEXT?

The potential for it to get seriously ugly over the coming months and years is very real, so both individually and collectively, we should be taking this very seriously.

Whatever does happen though, I do feel it will be in our collective favor. Their matrix of control is crashing; so many more people are now aware of the agenda to create a global governance, as well as the propaganda narratives they convey through the mainstream media that they either own or control.

In other words, we need to accept that all ‘official truths’ are a farce and they’ve been unarguably exposed and documented for the world to see as clear as day. Excitingly, the mainstream ‘truths’ are even beginning to be viewed by the masses as the bullshit of a pathological liar.

To prepare financially, many alternative economists recommend to exit all high risk investments such as stocks. For example, do you know where your superannuation is invested? There will no doubt be massive swings in stocks in the coming weeks, but the risk is high that they will continue to decrease at the least, and dramatically crash at the worst.

Also, to prepare physically, have you secured food and water insurance? Just like we get insurance for our health, car, home contents etc., in these times we should do the same with our basic necessities. I’m sure those in Canada are wishing they stocked up on essential goods because now they’re spending all their hard earned cash on just surviving.

For a deeper discussion on how to prepare, read “70 Tips That Will Help You Survive What Is About To Happen To America”.

FINAL THOUGHTS

These are exciting times because the western world is waking up to the lies and deceptions they’ve been force-fed (much of it is of course common knowledge in places like Russia and parts of Europe etc.). The mainstream narrative in every way you could possibly imagine is a complete fabrication to elicit your consent, especially for war. Yet, even though all of this is driving the awakening needed for humanity’s evolution, there are real risks for all of us.

Organizing our lives in as many self-sufficient ways as possible is simply being street smart. Arming ourselves with the right information is not just for the benefit of ourselves, but our family, friends and community as a whole. And of course, don’t feed the fear machine; we’re electro-magnetic beings in an electro-magnetic universe and how we think and feel does ripple out into the waters.

Make sure it’s worthy energy.

And remember, the banking sector is the head of the snake. This is the fundamental control mechanism of the powers-that-will-no-longer-be that we need to disassemble, because everything else of importance will naturally follow suit. For further information on how to create a better world for our personal future, as well as the future of humanity, see the articles linked below.

ABOUT THE AUTHOR

Phillip J. Watt lives in Australia. His written work deals with topics from ideology to society, as well as self-development. Follow him on Facebook or visit his website.

Zika: Why Biotech is Imperative to National Security

Posted on February 12, 2016 by Reid Mukai

By Ulson Gunnar

Source: New Eastern Outlook

When we think of national security, we think of tanks, jets, missile defense systems and more recently, information space. But what about the realm of the microscopic, the biological or the genetic?

Whether you think biotechnology, genetics and microbes constitute another plane upon the modern battlefield or not is irrelevant. Someone else already does, and they have a head start on the rest of the world.

Genotype Specific Bioweapons

The Project for a New American Century or PNAC for short, penned a particularly unhinged policy paper in 2000 titled, “Rebuilding America’s Defenses: Strategy, Forces and Resources For a New Century.”

In it, among many other things, it specifically writes:

Although it may take several decades for the process of transformation to unfold, in time, the art of warfare on air, land, and sea will be vastly different than it is today, and “combat” likely will take place in new dimensions: in space, “cyber-space,” and perhaps the world of microbes.

…advanced forms of biological warfare that can “target” specific genotypes may transform biological warfare from the realm of terror to a politically useful tool.

Advanced forms of biological warfare that can “target” specific genotypes sound like the stuff of science fiction, and even if it were developed, it would be by the “bad guys,” right?

Wrong. As a matter of fact, the Western-backed apartheid government in South Africa in the 1980’s under Project Coast, attempted to create genotype specific bioweapons aimed at sterilizing the nation’s black women. PBS Frontline’s article, “What Happened in South Africa?” would recount:

In 1998 South Africa’s Truth and Reconciliation Commission held hearings investigating activities of the apartheid-era government. Toward the end of the hearings, the Commission looked into the apartheid regime’s Chemical and Biological Warfare (CBW) program and allegations that it developed a sterility vaccine to use on black South Africans, employed toxic and chemical poison weapons for political asssassination, and in the late 1970s provided anthrax and cholera to Rhodesian troops for use against guerrilla rebels in their war to overthrow Rhodesia’s white minority rule.

While South Africa’s entire CBW program was abhorrent, what is particularly frightening is the use of South Africa’s national vaccination program as a vector for infecting black women with viruses meant to sterilize them. Now that vaccination programs are being pushed globally, there lies the danger that such weapons could be used against entire regions of the planet.

PBS would elaborate further on the CBW program, stating that the South African government:

Developed lethal chemical and biological weapons that targeted ANC [African National Congress] political leaders and their supporters as well as populations living in the black townships. These weapons included an infertility toxin to secretly sterilize the black population; skin-absorbing poisons that could be applied to the clothing of targets; and poison concealed in products such as chocolates and cigarettes.

PNAC’s dream of genotype specific bioweapons then, is not some far-off science fiction future, it is something that has been pursued in earnest for decades, and apparently by interests aligned to the West, not enemies of it.

Zika and GM Mosquitoes

Though it is so far impossible to confirm a link between the two, it is troubling nonetheless to see the mosquito-transmitted Zika virus spreading in Brazil precisely from where GM (genetically modified) mosquitoes were released several years ago.

A 2012 entry in Nature titled, “Brazil tests GM mosquitoes to fight Dengue,” would report:

Scientists in Brazil say an experiment to reduce populations of the dengue-carrying Aedes aegyptimosquito, by releasing millions of genetically modified (GM) insects into the wild, is working.

More than ten million modified male mosquitoes were released in the city of Juazeiro, a city of 288,000 people, over a period of time starting a year ago.

The US CDC (Center for Disease Control) would report that Zika virus cases in northeast Brazil were first officially recognized in early 2015, with international hysteria finally reached early this year. The cases seem most concentrated in the Brazilian state of Pernambuco, upon the borders of which the city of Juazeiro lies.

What could have happened between 2011 and 2016 that might have led to this development? Could the GM mosquitoes designed to stamp out dengue have mutated in some unpredictable way? And could this experiment have caused the Zika virus itself to mutate in an unpredictable way? It already has mutated once, allowing it to spread among humans more prolifically.

Or what if GM mosquitoes supposedly meant to wipe out dengue were serving as a vector for something else entirely? We can only imagine the sort of stories, excuses and feigned ignorance the South African government would have conjured had its genotype specific bioweapons worked, and black women began turning up sterilized in huge numbers after receiving their “vaccines.”

Mosquitoes as a Vaccine Vector

Using mosquitoes as a vector to deliver engineered genetic material to humans as a sort of involuntary, inescapable “vaccine” is already a reality. The London Telegraph in its article, “Genetically modified mosquitos could be used to spread vaccine for malaria,” reported in 2010 that:

Experts believe “flying vaccinators” could eventually be a radical new way of tackling malaria.

The new approach targets the salivary gland of the Anopheles mosquito.

Scientists in Japan have engineered an insect producing a natural vaccine protein in its saliva which is injected into the bloodstream when it bites.

The “prototype” mosquito carries a vaccine against Leishmania, another potentially fatal parasite disease spread by sand flies.

And if mosquitoes can naturally deliver viruses, and scientists can alter what mosquitoes carry and infect hosts with, it is possible to engineer viruses to deliver virtually anything into targeted populations much in the same way viruses are re-engineered into vectors in labs today through a process called gene therapy. In the wrong hands, this technology and these techniques could become terrifying weapons.

For those in the middle of the Zika virus hysteria, perhaps it already has.

How Could They? Why Would They?

To answer “how could they possibly do something so diabolical?” we need only think back to 2003 and recall how the United States intentionally lied to the world, then between its initial invasion and subsequent occupation of Iraq, killed upward to a million people. This includes several thousand of its own soldiers and civilians, many of whom it appears were killed by militants armed and funneled into the country by the United States’ closest regional allies, with the US’ resolute backing.

To answer “why” American and European special interests seek to render any particular population sick, weak and they and/or their offspring incapable of perpetuating a viable civilization, PNAC itself sums it up quite clearly:

The United States is the world’s only superpower, combining preeminent military power, global technological leadership, and the world’s largest economy. Moreover, America stands at the head of a system of alliances which includes the world’s other leading democratic powers. At present the United States faces no global rival. America’s grand strategy should aim to preserve and extend this advantageous position as far into the future as possible.

A population racked with birth defects, diminishing health and IQs and a lack of physical vitality constitutes the enemy every hegemon throughout history has dreamt of facing both on the battlefield and upon the grand chessboard of geopolitics.

Whether the Zika outbreak is linked to some insidious biowarefare program, an experiment gone wrong or simply the forces of nature, it showcases the danger biology can pose and reminds us of what greater dangers may yet await us if we do not properly prepare and protect ourselves.

Domestic Biotech is Imperative to National Defense

It has been almost painful to watch the rest of the world attempt to catch up to the United States and Europe in the information war. For decades the West dominated information warfare without contest.

Only now have nations like Russia, China, Iran and others finally caught up and in some cases exceeded Western capabilities. Only now are nations finally investing seriously in information and cyber warfare capabilities. Only now does it seem that nations realize the folly of depending on others for both information, and information technology.

Russia recently decided to switch to local computer processor manufacturers to run on all computers used for official business. This is because foreign corporations making processors imported into the Russian Federation had been apparently compromised on the factory floor with the cooperation of these foreign corporations by US intelligence agencies.

We can easily imagine the danger of having US intelligence agencies getting into Russia’s IT infrastructure through these backdoor passes. It doesn’t take much imagination to think about the trouble US intelligence agencies could cause if they could get inside Russia’s human, natural and agricultural genomes.

Developing a viable domestic biotech industry is not only a matter of economic prosperity, but clearly also a matter of vital national security. Foreign corporations should no better be able to access a nation’s “genetic code and files” than it can its computer code and files. After all, genetic information is not entirely unlike digital information.
Brazil and other nations that have invited foreign biotech corporations to meddle with their human, natural and agricultural genomes are likened to those nations who hand their vital infrastructure over to foreign interests only to find out through Wikileaks years later the sort of invasive spying, abuses and other means of self-serving treachery this access has been exploited for.

Let’s not wait for Wikileaks to tell us 10 years from now just how bad the nations of the world had been infiltrated and exploited through biotechnology before we recognize this industry as absolutely vital to national security and begin investing in it domestically, rather than outsourcing it overseas.

Ulson Gunnar, a New York-based geopolitical analyst and writer especially for the online magazine “New Eastern Outlook”.

Related Video:

Financial turmoil and increasing risks of a severe worldwide economic recession in 2016-17

Posted on February 11, 2016 by Reid Mukai

By Rodrigue Tremblay

Source: Dissident Voice

“May you live in interesting times.”—Popular curse, purported to be a translation of a traditional Chinese curse

“The sources of deflation are not a mystery. Deflation is in almost all cases a side effect of a collapse of aggregate demand—a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers. Likewise, the economic effects of a deflationary episode, for the most part, are similar to those of any other sharp decline in aggregate spending—namely, recession, rising unemployment, and financial stress.”—Ben S. Bernanke (1953- ), on November 21, 2002

“I’m about to repeat what I said at this time last year and the year before . . . Sooner or later a crash is coming and it may be terrific. The vicious circle will get in full swing and the result will be a serious business depression. There may be a stampede for selling which will exceed anything that the Stock Exchange has ever witnessed. Wise are those investors who now get out of debt.”—Roger Babson (1875-1967), on September 5, 1929

The onset of 2016 has been most chaotic for global financial markets with, so far, a severe stock market correction. As a matter of fact, the first month of 2016 has witnessed the most severe drop in financial stocks ever, with the MSCI All-Country World Stock Index, which measures major developed and emerging stock markets, dropping more than 20 percent, as compared to early 2015. For sure, there will be oversold rallies in the coming weeks and months, but one can expect more trouble ahead.

Many commentators are saying that the epicentre of this unfolding financial and economic crisis is in China, with the Shanghai Composite Index beginning to plummet at the beginning of the year. In my view, reality is more complex and even though China’s financial and economic problems are contributing to the collapse in commodity prices, the epicenter of the crisis is still in Washington D.C.

That is because the current unfolding crisis is essentially a continuation of the 2007-08 financial crisis which has been temporarily suspended and pushed into the future by the U.S. central bank, the Fed, with its aggressive and unorthodox monetary policy of multiple rounds of quantitative easing (QE), i.e., buying huge quantities of financial assets from commercial mega-banks and other institutions, including mortgage-backed securities, with newly created money. As a consequence, the Fed’s balance sheet went from a little more than one trillion dollars in 2008 to some four and a half trillion dollars when the quantitative easing program was ended in October 2014. Other central banks have followed the Fed example, especially the central bank of Japan and the European central bank, which also adopted quantitative easing policies in monetizing large amounts of financial assets.

Why did the Bernanke Fed adopt such an aggressive monetary policy in 2008? Essentially for three reasons: First, the lame-duck Bush administration in 2008 was clueless about what to do with the financial crisis that had started with the de facto failure of Bear Stearns in the spring of 2008 and of Merrill Lynch in early September 2008, culminating on September 15, 2008, with the failure of the large global investment bank of Lehman Brothers. So the U.S. central bank felt that it had to step in. In fact, it financed the merger of the two first failed mega-banks with the JPMorgan Chase bank and the Bank of America respectively. (For different reasons, it did not intervene in the same way when the Lehman Brothers bank failed.)

Secondly, bankers who have a huge influence in the way the Fed is managed did not want the U.S. government to nationalize the American mega-banks in financial difficulties, as it had done in 1989 when the George H.W. Bush administration established the government-owned Resolution Trust Corporation (RTC) to take over some 747 insolvent savings and loans thrift banks.

Thirdly, the Bernanke Fed was very worried that the 2007-08 banking crisis would lead to a Japanese-style deflation that would wreak havoc with an overleveraged economy. The hope was to avoid a devastating debt-deflation economic depression like the one suffered in the 1930s.

By injecting so much liquidity in the system, the Bernanke Fed created a gigantic financial bubble in stocks and bonds, even though the real economy has grown at a somewhat languishing 2 percent growth rate. Stock prices went into the stratosphere while interest rates fell as bond prices rose. Last December 16, the Fed announced officially that it will no longer blow into the financial balloons and that it was raising short-term interest rates for the first time since the financial crisis, setting the target range for the federal funds rate to between 1/4 to 1/2 percent. This was a signal that the financial party was over. And what’s more, this means that the stock market and the bond market will once again go in different directions, as a reflection of the state of the real economy, no matter what the Fed does.

Since 2008, the U.S. Fed has painted itself into a financial corner from which I personally felt it would be difficult to extricate itself. Indeed, it would be extremely difficult to correct the financial bubbles it has created—as an unintended consequence of salvaging the mega-banks in creating trillions of free money—without damaging the real economy of production and employment. If global stock markets collapse and if price deflation accelerates, making it more difficult to service the debt of consumers, corporations, and government alike, a repeat on a larger scale of what has happened in Japan over the last twenty-five years can be feared. This, at the very least, could lead to a global economic recession in 2016-17. If we go back in history, it could also be a repeat of the 1937-38 crash and recession, eight years after the crash and financial crisis of 1929-32.

One thing can be made clear: The creation of the Fed in 1913, as a semi-public American central bank, has not prevented the occurrence of financial crises. It has, however, been a boon to large banks because it has served as an instrument to socialize their losses.

Stay tuned.

Dr. Rodrigue Tremblay is an international economist and author, whose last two books are The Code for Global Ethics, Prometheus Books, 2010; and The New American Empire, Infinity Publishing, 2003. He can be reached at: rodrigue.tremblay@yahoo.com.

Hang onto your wallets: Negative interest, the war on cash, and the $10 trillion bail-in

Posted on February 8, 2016 by Reid Mukai

By Ellen Brown

Source: Intrepid Report

Remember those old ads showing a senior couple lounging on a warm beach, captioned “Let your money work for you”? Or the scene in Mary Poppins where young Michael is being advised to put his tuppence in the bank, so that it can compound into “all manner of private enterprise,” including “bonds, chattels, dividends, shares, shipyards, amalgamations . . .”?

That may still work if you’re a Wall Street banker, but if you’re an ordinary saver with your money in the bank, you may soon be paying the bank to hold your funds rather than the reverse.

Four European central banks—the European Central Bank, the Swiss National Bank, Sweden’s Riksbank, and Denmark’s Nationalbank—have now imposed negative interest rates on the reserves they hold for commercial banks; and discussion has turned to whether it’s time to pass those costs on to consumers. The Bank of Japan and the Federal Reserve are still at ZIRP (Zero Interest Rate Policy), but several Fed officials have also begun calling for NIRP (negative rates) [update: Bank of Japan implemented a negative interest rate 1/29/16].

The stated justification for this move is to stimulate “demand” by forcing consumers to withdraw their money and go shopping with it. When an economy is struggling, it is standard practice for a central bank to cut interest rates, making saving less attractive. This is supposed to boost spending and kick-start an economic recovery.

That is the theory, but central banks have already pushed the prime rate to zero, and still their economies are languishing. To the uninitiated observer, that means the theory is wrong and needs to be scrapped. But not to our intrepid central bankers, who are now experimenting with pushing rates below zero.

Locking the door to bank runs: The cashless society

The problem with imposing negative interest on savers, as explained in the UK Telegraph, is that “there’s a limit, what economists called the ‘zero lower bound.’ Cut rates too deeply, and savers would end up facing negative returns. In that case, this could encourage people to take their savings out of the bank and hoard them in cash. This could slow, rather than boost, the economy.”

Again, to the ordinary observer, this would seem to signal that negative interest rates won’t work and the approach needs to be abandoned. But not to our undaunted central bankers, who have chosen instead to plug this hole in their leaky theory by moving to eliminate cash as an option. If your only choice is to keep your money in a digital account in a bank and spend it with a bank card or credit card or checks, negative interest can be imposed with impunity. This is already happening in Sweden, and other countries are close behind. As reported on Wolfstreet.com:

The War on Cash is advancing on all fronts. One region that has hogged the headlines with its war against physical currency is Scandinavia. Sweden became the first country to enlist its own citizens as largely willing guinea pigs in a dystopian economic experiment: negative interest rates in a cashless society. As Credit Suisse reports, no matter where you go or what you want to purchase, you will find a small ubiquitous sign saying “Vi hanterar ej kontanter” (“We don’t accept cash”) . . .

The lesson of Gesell’s decaying currency

Whether negative interests will actually stimulate an economic recovery, however, remains in doubt. Proponents of the theory cite Silvio Gesell and the Wörgl experiment of the 1930s. As explained by Charles Eisenstein in Sacred Economics:

The pioneering theoretician of negative-interest money was the German-Argentinean businessman Silvio Gesell, who called it “free-money” (Freigeld). . . . The system he proposed in his 1906 masterwork, The Natural Economic Order, was to use paper currency to which a stamp costing a small fraction of the note’s value had to be affixed periodically. This effectively attached a maintenance cost to monetary wealth.

. . . [In 1932], the depressed town of Wörgl, Austria, issued its own stamp scrip inspired by Gesell. . . . The Wörgl currency was by all accounts a huge success. Roads were paved, bridges built, and back taxes were paid. The unemployment rate plummeted and the economy thrived, attracting the attention of nearby towns. Mayors and officials from all over the world began to visit Wörgl until, as in Germany, the central government abolished the Wörgl currency and the town slipped back into depression.

. . . [T]he Wörgl currency bore a demurrage rate [a maintenance charge for carrying money] of 1 percent per month. Contemporary accounts attributed to this the very rapid velocity of the currencies’ circulation. Instead of generating interest and growing, accumulation of wealth became a burden, much like possessions are a burden to the nomadic hunter-gatherer. As theorized by Gesell, money afflicted with loss-inducing properties ceased to be preferred over any other commodity as a store of value.

There is a critical difference, however, between the Wörgl currency and the modern-day central bankers’ negative interest scheme. The Wörgl government first issued its new “free money,” getting it into the local economy and increasing purchasing power, before taxing a portion of it back. And the proceeds of the stamp tax went to the city, to be used for the benefit of the taxpayers. As Eisenstein observes:

It is impossible to prove . . . that the rejuvenating effects of these currencies came from demurrage and not from the increase in the money supply. . . .

Today’s central bankers are proposing to tax existing money, diminishing spending power without first building it up. And the interest will go to private bankers, not to the local government.

Consumers today already have very little discretionary money. Imposing negative interest without first adding new money into the economy means they will have even less money to spend. This would be more likely to prompt them to save their scarce funds than to go on a shopping spree.

People are not keeping their money in the bank today for the interest (which is already nearly non-existent). It is for the convenience of writing checks, issuing bank cards, and storing their money in a “safe” place. They would no doubt be willing to pay a modest negative interest for that convenience; but if the fee got too high, they might pull their money out and save it elsewhere. The fee itself, however, would not drive them to buy things they did not otherwise need.

Is there a bigger threat than a sluggish economy?

The scheme to impose negative interest and eliminate cash seems so unlikely to stimulate the economy that one wonders if that is the real motive. Stopping tax evaders and terrorists (real or presumed) are other proposed justifications for going cashless. Economist Martin Armstrong goes further and suggests that the goal is to gain totalitarian control over our money. In a cashless society, our savings can be taxed away by the banks; the threat of bank runs by worried savers can be eliminated; and the too-big-to-fail banks can be assured that ample deposits will be there when they need to confiscate them through bail-ins to stay afloat.

And that may be the real threat on the horizon: a major derivatives default that hits the largest banks, those that do the vast majority of derivatives trading. On November 10, 2015, the Wall Street Journal reported the results of a study requested by Senator Elizabeth Warren and Rep. Elijah Cummings, involving the cost to taxpayers of the rollback of the Dodd-Frank Act in the “cromnibus” spending bill last December. As Jessica Desvarieux put it on the Real News Network, “the rule reversal allows banks to keep $10 trillion in swaps trades on their books, which taxpayers could be on the hook for if the banks need another bailout.”

The promise of Dodd-Frank, however, was that there would be “no more taxpayer bailouts.” Instead, insolvent systemically-risky banks were supposed to “bail in” (confiscate) the money of their creditors, including their depositors (the largest class of creditor of any bank). That could explain the push to go cashless. By quietly eliminating the possibility of cash withdrawals, the central bank can make sure the deposits are there to be grabbed when disaster strikes.

If central bankers are seriously trying to stimulate the economy with negative interest rates, they need to repeat the Wörgl experiment in full. They need to first get some new money into the economy, money that goes directly to the consumers and local businessmen who will spend it. This could be achieved in a number of ways: with a national dividend; or by using quantitative easing for infrastructure or low-interest loans to states; or by funding free tuition for higher education. Consumers will hit the malls when they have some new discretionary income to spend.

Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 300+ blog articles are at EllenBrown.com. Listen to “It’s Our Money with Ellen Brown” on PRN.FM.

	You Don’t Have To Wa… on You Don’t Have To Wait For Hal…
	ALL OUT WAR ON THE L… on ALL OUT WAR ON THE LIFE F…
	Pacific.scoop.co.nz… on Killing the Biosphere to Fast-…
	Reid Mukai on Saturday Matinee: Wizards
	Lara/Trace on Saturday Matinee: Wizards

After the Crash

Dispatches From a Long Recovery (Est. 10/2024)

Category Archives: Corporate Crime