Category Archives: Currency

BNP before a French Court

A court case is currently running in France that is of relevance to more than the French.

During two weeks to 29 November, Banque Nationale de Paris Paribas is being sued in the Tribunal correctionnel of Paris (a mid-level criminal court) by lawyers representing borrowers of loans denominated in foreign currency.

The issue is of broad relevance because Eastern European countries are bogged down in a quagmire of the stuff. Millions of naïve customers were sold loans in foreign currencies to finance housing, auto loans, etc. Welcome to the freedoms of the West. It was a bomb waiting to explode. Explode it has, with victim activists pressuring for acknowledgement of wrongdoing and compensation, and litigation in national courts and in the European Court of Justice. Media coverage outside of Eastern Europe of this financial catastrophe has been deplorable.

All this is déja vu in the antipodes. In a rush of blood immediately following financial deregulation in the early 1980s, Australian banks (replicated in New Zealand) flogged foreign currency loans to unsuspecting small businesspeople and family farmers. The Australian dollar plummeted in 1985 (it had only been floated in December 1983) – a disaster for the borrowers. Much litigation ensued, with only a small number of borrowers benefiting from favourable court judgments or out-of-court settlements. The ensuing conflict and litigation was well reported in the local media for over a decade but the news doesn’t appear to have travelled above the equator.

In March 2008. The French banking giant BNP Paribas (via its subsidiary Personal Finance) initiated the offering of housing loans in Swiss francs (CHF). The loan product, designated ‘Helvet Immo’ (immobilier, or real estate), was ultimately sold to over 4,600 borrowers until December 2009. The loans were sold through property consultant firms as advisory intermediaries.

The formal attraction to borrowers, as with foreign currency loans in general, was a lower interest rate than that available in the domestic currency. There was another reputed advantage. The loans were pushed for the purchase of rental properties to be constructed to add to the country’s ‘patrimony, and thus to be eligible for reduction of the borrower’s tax liability. They were pushed as the ideal safe investment for one’s retirement.

However, the monthly payments for these loans were to be in euros, as was ultimate repayment of the principal.

Apart from being rooted in a culture of consummate spivery, BNP’s introduction of Helvet Immo in early 2008 constituted very bad timing. During and after the GFC, the CHF climbed significantly against the euro. That the euro should suffer was in large part due to the excesses of European banks, not least BNP itself, that brought the GFC to the Continent.

When the initial borrowers subscribed to this facility, the euro bought 1.6 – 1.7 CHF. In the initial phase of the GFC, the Swiss Central Bank (BNS) allowed only a small revaluation. But when general banking debt was converted into a sovereign debt blowout in 2010 following governments’ support for the crippled banking sector, the BNS let the CHF float. After the float, the CHF rose to about 1.2 until the BNS stepped in again in September 2011. In January 2015, the BNS again floated the CHF, following which it soon rose to near parity with the euro (it has since retreated marginally to 1.1).

Euro / CHF 2003-2019. Source: fxtop.com

The euro thus experienced a long-term degradation vis-à-vis the CHF. As elsewhere, the borrowers faced a massive hike in their repayment of principal and a comparable hike in their monthly payments in euros.

Journalist Dan Israel, of French online journal Mediapart, covered the early BNP loan disclosures.1 In 2015 Israel reported that one couple had borrowed €120,000 and had already paid more than €60,000 in monthly payments but found themselves at that stage owing more than €140,000. Another client had borrowed more than €330,000, had paid €160,000 but remained indebted at €450,000.

Distressed BNP borrowers began taking BNP to court after 2011. Procedures have been in place in both civil and criminal (pénal) jurisdictions, but the wheels of justice turn excruciatingly slowly in France. The lawyers are seeking judgment and compensation for ‘misleading representation’ (practique commercial trompeuse).

The perennial question is whether the borrowers were given sufficient warning as to the embodied risk due to potential variation in debt principal linked to exchange rate variation – crucial as to the attribution of accountability for the subsequent losses.

BNP chose to market the product only through intermediaries, potentially reducing its responsibility at law. Discovered documents highlight that the bank knowingly minimised the risk to its intermediaries and thus to its borrowers. An early marketing document had a warning of exchange rate variation that disappeared in subsequent versions. Marketing documents consistently emphasised that the product offered ‘security’ and was ‘without risk’.

One Normandy couple was told, as part of their advisor’s aggressive spiel, that BNP was ‘the most powerful bank in Europe’ – ergo, the epitome of trustworthiness (competence, integrity, etc.).

In spite of this evidence, many individual cases heard in civil jurisdiction have been decided in favour of the bank (some on appeal), for reasons unclear. Of those decided for the borrower, compensation awarded has been feeble. There is more optimism emanating from the criminal court, and the bulk of borrower cases in the civil court have been deferred pending the outcome there.

In April 2013, the judge Claire Thépaut, after long studying the dossier, determined that BNP should be put under examination for potential misrepresentation. This was a first stage, not implying culpability. It involved two questions – was the information provided sufficient, and was it deceptive. On 16 April 2015, after questioning the then CEO of BNP PF, Thépaut indicted BNP for misleading representation.

The decisive evidence comes from a whistleblower. On 17 September 2015, Nathalie Chevallier was auditioned in the criminal court. Chevallier was then regional director of BNP PF in Paris. BNP PF was then stagnating and the CHF housing loan was suggested as a means of reviving the subsidiary’s revenue. She was put into a workgroup to work out details. She realised immediately that the proposed facility was dangerous. She wanted ‘crash tests’. She noted that even minor exchange rate variations would be disadvantageous for clients.

But Chevallier was rebuked by her superiors. Her superiors retorted (paraphrasing): ‘Do you think you’re smarter than those who developed this product? You have 15 days to change your mind, or we’ll have to think about your job’.

On 29 March 2017, the Cour de cassation (France’s highest court in commercial matters) ruled that BNP could have prevented the issuing of a dangerous facility. It also ruled that the civil courts of appeal could have examined, on their own initiative, the contract for misleading representation even if the borrowers had not so demanded.

The Cour de cassation also determined that the typical loan contract contained ‘unfair contract terms’ which strategically (and unconscionably) advantaged the bank lender. This ruling is consistent with (indeed mandated by) European Union consumer law – law that the Eastern European victims are hoping to leverage for their own pursuit of justice.

In early April 2017, BNP PF was belatedly arraigned before the Tribunal correctionnel for criminal prosecution. Two and a half years later …

Thus on the first day of the current hearing, 12 November, the courtroom was packed to the gills with borrowers and their legal representatives. On the other side, BNP masked its solitariness with its battalion of lawyers, etc.

BNP’s lawyers still insist that the FCL facility was a casualty of the CHF surge following the 2010 sovereign debt blowout, which was ‘unforeseeable.’ Buyer beware! In any case, claim the lawyers, BNP offered the borrowers conversion options.

Tell that to Guiseppe and Sonia, retirees from running a restaurant in Nice. Guiseppe has been recently reported as claiming, ‘We were deceived … When I asked what difference there was between borrowing in swiss francs or in euros, the financial advisor replied – there’s no difference’. They are in the same predicament as those cases cited above. They borrowed €115,000 in 2008, they have been paying off €745 a month over 10 years, but their debt stands at €145,000. In short, a nightmare.

One couple notes the humiliation associated with their loss. From the hope of being able to assist their children they are now dependent on them.

But back to 1980s Australia for a telling vignette. BNP then operated a subsidiary in Australia, promoting itself as a high class entity amongst local banking yokels. It cynically offered a FCL to small-scale property developers who were directed to BNP for informed advice. BNP proffered to the know-nothings sophisticated skills to handle this unique facility. Not atypically in small business Australia, the country having experienced a massive wave of immigrants from post-1945 Southern Europe, the borrowers were semi-literate in English and totally oblivious of the nuances of cowboy financial intermediation.

The borrowers took BNP to court. The judge (Foti v BNP, South Australian Supreme Court, 1989) granted negligence, duty of care on the part of the bank and causation (i.e., customer avoidable loss due to bank failure to advise). BNP, as did the Australian banks, abused its reputation as a reputedly trustworthy institution and its asymmetric power in the entrapment of financially ignorant customers.

Fortunately for BNP, the loss at litigation was only partial. The point here is that BNP was party to an environment in which the intrinsic technical flaw in FCL loans became transparent. The losses to thousands of hapless unsophisticated played out in the Australian courts, the media and public inquiries over fifteen years. In its extensive foray into lending in CHF in 2008, BNP chose to forget this previous experience and to hide the dysfunctionality of such a facility for borrowers.

The decisions of the criminal court to date and of the Cour de cassation represent a seismic shift in the balance between bank and borrowers – they constrain the civil courts in their determinations. The determinations of the Cour de cassation effectively damn intrinsically the foreign currency character of the Helvet Immo facility.

Two factors make the French litigation regarding this facility unique. The first is that the media consistently refer to such loans as ‘toxic’ – that is, not fit for purpose. It appears that the Cour de cassation confirms the accuracy of the appellation. The second is that litigation is proceeding in a criminal jurisdiction, in my understanding an unprecedented development.

Apart from the 4,600 French casualties of BNP’s chicanery, millions of Eastern European FCL borrowers will be awaiting expectantly the French court’s deliberations.

  1. Dan Israel, “Prêts toxiques de la BNP: un témoin clé veut parler [BNP’s toxic loans: a key witness ready to speak],” Mediapart, 17 September 2015.

Will the IMF, FED, Negative Interest and Digital Money Kill the Western Economy?

The IMF, has been instrumental in helping destroying the economy of a myriad of countries, notably, and to start with, the new Russia after the fall of the Soviet Union, Greece, Ukraine and lately Argentina, to mention just a few. Madame Christine Lagarde, as chief of the IMF had a heavy hand in the annihilation of at least the last three mentioned. She is now taking over the Presidency of the European Central Bank (ECB). There, she expects to complete the job that Mario Draghi had started but was not quite able to finish: Further bleeding the economy of Europe, especially southern Europe into anemia.

Let’s see what we may have in store to come.

Negative interest, we have it already. It’s the latest banking fraud stealing money from depositors to give to large borrowers. It’s a reverse cross-subsidy, the poor financing the rich. That’s the essence. It’s a new form of moving money from the bottom to the top. Now, a Danish bank has launched the world’s first negative interest rate mortgage. It provides mortgages to home owners for a negative rate of 0.5%. The bank pays borrowers to take some money off their books. Of course, as usual, only relatively well-off people can become home owners and benefit from this reverse cross-subsidy. It is a token gesture, duping the public at large into believing that they are benefitting from the new banking stint. The bulk of such operations serve large corporations.

The borrower pays back less than the full loan amount. Switzerland may soon go into the direction of Denmark. Bank deposits with central banks pay negative interest almost everywhere in the western world, except in the US – yet. It’s only a question of time until the average consumer will have to reimburse the banks for their central bank deposit expenses, meaning, the customers are getting negative interest on their deposits. That’s inflation camouflage. A sheer fraud, but all made legal by a system that runs amok, that does not follow any ethics or legal standards. A totally deregulated western private banking system, compliments of the 1990s Clinton Administration, and, of course, his handlers. As Professor Michael Hudson calls it, financial barbarism. We are haplessly enslaved in this aberrant ever more abusive private  fiat money banking shenaniganism.

RT’s Max Keiser recently interviewed Karl Denninger of Market-Ticker.org. Denninger told Keiser:

Negative yielding bond is forced inflationary instrument: you buy it, you’re guaranteed inflation in the amount of a negative yield.

He blasted the tool as plain “theft” by any government that issues these bonds, which is done in an effort to nominally expand a country’s GDP.

If the government is issuing more in sovereign debt their GDP is expanding in nominal terms. If you have negative interest rates on those government bonds, you’re creating excess space for the government to run the fiscal deficit […] in excess of GDP expansion. Nobody in any civilized nation should allow this to happen because it is theft, on the scale of that differential, from everybody in the economy,

To make sure the little saver doesn’t think about depositing his savings under his mattress or in a hole in the ground instead of bringing it to the bank, money will be digitized and cash will disappear. Madame Lagarde has already more than hinted at that, when she gave a pre-departure speech at the IMF – explaining on how she sees the future of monetary banking. The future, according to her, being no more than 15 to 20 years away, is a no-cash society. Just enough time for the elder generations, those that may still feel an instinct of rejection and have some consciousness about personal privacy, those that may resist money digitization, may have died out. The young, up-and-coming age groups may be brainwashed enough to find a cashless society so cool.

Since Madame Lagarde is moving to head the ECB in Frankfurt, it is fair to assume that Europe will be one of the largest test grounds for digitized money; i.e., towards a cashless society. In fact, it is already a test ground. Many department stores and other shops in Nordic countries — Sweden, Norway, Denmark, Finland — do no longer accept cash, only electronic money. In Denmark already up of 80% of all monetary transactions are made digitally.

Imagine, for your chewing gum wrapper, pack of cigarette, or candy bar, you swipe a card in front of an electronic eye, and bingo, you have paid, not touching any money – “that’s mega cool!”.  That’s what the young people may think, oblivious to leaving a trail of personal data behind, among them their bank account details, their GPS-geared location, what they are shopping, a pattern of data that is in ten years-time expected to amount to about 70,000 points of information about an individual’s characteristics, emotions, preferences, photos, personal contacts… what Cambridge Analytica in the superb documentary “The Great Hack” revealed as already today on average 5,000 points of data per citizen. The system will know you inside out better than you know yourself. And you will be exposed to algorithms that know exactly how to influence every action, every move of yours. Cool!

That, combined with face recognition which is advancing rapidly around the globe, will be super cool.

A horrendous trial on how an entire country, India, with the world’s second largest population, may react to demonization, was introduced in 2016 by President Modi, bending to the pressure of the western financial system, with support of the IMF and implementation funding by USAID. It amounted in a disastrous and cruel demonetization, invalidating almost over-night the most popular 100 Rupee (Rs) bank note, replacing it with a 200 Rs note which in most places, especially in rural towns, where banks are scarce, was not available. Never mind that less than half of the Indian population has a bank account, where the bank note exchange transactions had to be carried out.

The sudden disappearance of the most popular bank note – more than 80% of all monetary cash transactions in India took place in 100 Rs notes – was a proxy to digitization of money. Countless people starved to death especially in rural areas, because their 100 Rs were declared worthless and became unacceptable to buy food.

The 340,000 citizens of Iceland have already a fully digitized e-ID, now moving towards a mobile ID; i.e., accessible through your smart phone uniting every possible data that belongs to you, from medical records to insurance policies, all the way to dog, cat and car registrations. You name it. Most say they trust their government and are not unhappy with their divulging their most intimate data. Many have no or little idea, though, to what extent the private sector is involved in setting up such a hermetic countrywide data bank for the government. Even if the regulator is within the government and you trust your government, how much can you trust the profit-oriented private sector in protecting your data?

The surveillance state that you, among other clandestine intrusions into your privacy, will allow by willy-nilly accepting digitization of money, and eventually digitization of your entire private data, pales Orwell’s imagination of “1984”. Every citizen is registered in every western “security agency’s” electronic data bank, and, of course, those of the empire and Middle East affiliate, Israel, CIA, NSA, FBI, Mossad, and so on.  No escaping anymore.

It just so happens that you, dear citizen, are oblivious to all of what is going on behind your back, since your attention will be captured by massive marketing and directed towards the nefarious machinations of the corporate elite-ruled, globalized world, making you an eternal and ever-more intense consumer. You must spend the last penny of your income on trendy stuff, all those fashion things that will be pumped non-stop day-in-day-out into your brain, what’s left of it, by propaganda on television, radio, electronic cartoon-like billboards, internet, and that at every turn you take. And let’s not forget sports events.  They increase every year and are the most direct deviation tactic take-over from the Roman Empire.

The most aberrant trends will be cool, like shredded jeans, for which you pay a premium, body-paintings called tattoos, footballer hair styles, because they are fashionable and your looks are key to fit into a standardized, globalized society that has seized thinking for itself, no more interest in politics, in what your non-democratically elected representatives decide for you. It’s what Noam Chomsky calls the marginalization of the populace.

You are made to believe that you are living in a democracy where you can do what you want, shop what you want, watch what you want, and even when the elections or occasional referenda are offered to request your opinions, you are cheated into believing your choice is free. Of course, it is not. It is all programmed. Algorithms drawing on your profile of 70,000 points of information on emotions, desires and dreams, will clandestinely help the ‘system’ to enslave, cheat and master you, and you won’t even notice.

That’s where we are headed, largely thanks to digitalization of money – but not only, because surveillance will also follow all your steps on internet, on Facebook, Twitter, Instagram, Whatsapp – and many more of those especially created marketing tools, implanted in societies’ social media, that make life and communication so much easier.

And there is more to digital money. Much more. In 2014, the unelected European Commission (EC) has put on its books of regulations, following a similar decree in the US, the rule that an overextended bankrupt too-big-to-fail private bank will no longer be rescued by the state, by your tax money – which used to be called a “bail-out”. Instead, there will be “bail-ins”, meaning that the bank will seize your deposits, your savings and sanitize itself with money stolen from you. You have no choice. There will be no ‘run on the banks’  because there is no cash to withdraw. We have seen signs of this when Greece collapsed after 2010, and cash machines spitting out no more than 20 € per day, if at all. For many Greek citizens, especially the poorer class living from day to day, this meant often cruel starvation.

Bail-ins are little talked about, but they happen already today and ever more so. In 2014, the Austrian bank Hypo Alpe Adria – the Heta Asset Resolution AG, was given green light by the Austrian Banking Regulator, the Austrian Financial Market Authority (FMA), to refinance itself by a so-called “haircut” of an average 54%, meaning, stealing 54% of depositors’ money.

But the first and largest “haircut” test took place in Cyprus, when in 2013 the Bank of Cyprus depositors lost about 47.5% in a “haircut” to bail out their bank. Of course, the big sharks were forewarned, so they could withdraw their money in time and transfer it abroad.1

It could get worse. The state, tax authority, an institution, a corporation says you owe them money which you deny, possibly for a good reason, but they have access to your bank account and just seize the amount they pretend is their due. You are powerless against these tyrannical monsters and may have to hire expensive legal service to get your stolen money back if at all. Because the “system” is run by the “system”. And once that level has been reached, a form of Full Spectrum Dominance, a key target of the PNAC (Plan for a New American Century), there is hardly any escaping. That has all happened already, in front of our publicity-blinded eyes, little spoken about, the trend is growing and this even without necessarily a digitized world.

Is it that the kind of society you want?

Then there are the rather prominent gurus who bet on gold and bitcoins to replace the faltering dollar, like a last-ditch solution. None of them is any more viable than the fiat dollar. Gold is highly volatile due to its vulnerability for manipulation – as it is largely controlled by the BIS (Bank for International Settlement, in Basle, Switzerland, also called the central bank of all central banks, and yes, the same bank that helped the FED finance Hitler’s war against the Soviet Union.  (So you see where this bank is coming from.) It is entirely privately owned and largely controlled by the Rothschild clan. And as an associated side note — few people talk about it — there is in excess of 100 times more paper gold in circulation than you could ever cash in, if you needed it. It is another one of those bank-invented ‘derivative’ bubbles that will explode and serve to enrich them when the time is ripe.

Bitcoins, the most prominent of some 3,000 to 4,000 cryptocurrencies flooding the world, is totally unreliable. A year after it was created in 2008 allegedly by an unknown person or group of people using the name Satoshi Nakamoto, bitcoin’s value in 2009 was US$ 0.08, It gradually rose and eventually jumped in December 2017 briefly above US$ 20,000, but dropped within a year to about US$ 3,500. Today bitcoin is hovering around US$ 9,500 (August/September 2019). Bitcoin – along with other cryptocurrencies – is highly speculative, lends itself to Mafia-type money-laundering and other fraudulent transactions. It is about equivalent to fiat money and certainly inept to be the backing for a monetary system.

And let’s not forget, the latest Facebook initiative — a cryptocurrency, the Libra, to be launched in 2020 out of Geneva, Switzerland – is expected to dominate within a few years 70% to 80% of the international money market. You see, the same clan that has been manipulating and cheating you with the dollar, is now ‘banking’ on you falling for the Facebook currency  as it will be so easy to use your smart phone for any kind of monetary transaction, thus, avoiding traditional predatory banking. Looks like a good thing at the outside – right? – Nope! It’s entirely privately owned and run by an unscrupulous mafia that is being set up to continue milking the masses for the benefits of an ever-smaller elite.

There is ,however, a role for blockchain cryptocurrencies, to circumvent private banking, those that are government controlled and regulated. China and Russia are about to launch their government-controlled cryptocurrencies and others – Iran, Venezuela, India – are following in the same steps. But they all ban privately run cryptocurrencies in their countries and rightly so. A combination of government-regulated blockchain cryptos and public banking, where no private profits are in the fore, but rather the well being of the citizen and the country’s economy, may be a viable solution into a new monetary scheme, protected from the kleptocracy of western banking.

Desperation about the dollar losing its world hegemony is growing – and growing fast. To salvage the western fiat monetary system, Madame Lagarde and others are also talking about some kind of Special Drawing Rights (SDR) to replace the dollar as a reserve currency, since there is no escaping – the dollar as reserve currency is doomed. The current IMF SDR basket consists of five currencies, the US-dollar (weighing 41.73%), the British Pound (8.02%) the Euro (30.93%), the Japanese Yen (8.33%) and since 2017 the Chinese Yuan, the currency of the world’s largest economy compared by Purchasing Power GDP (10.92%).

At this point thinking of any reshuffling of the SDR basket’s contents is purely speculative. However, it can easily be assumed that the dollar would remain in a very prominent position within the basket, as it should remain the leading hegemon of world economy. Let’s not forget, the US Treasury controls the IMF with an absolute veto, in other words, 100%. It can also be assumed that the Chinese Yuan would either be kicked out altogether or would be given a minor weight in the basket so to diminish its role. If this was to become the chosen option by the US Treasury, it could and probably might prompt China to withdraw the Yuan from the SDR basket, as the Yuan does no longer need SDR recognition in the world to be considered a primary reserve currency.

Unless this is stealthily done — outside of public sight and in disguise of countries still holding major US-dollar reserves — the world would unlikely accept such an alternative, especially since it is widely known among treasurers of countries around the globe that the Chinese Yuan is rapidly raising to become the key world reserve currency.

As reported by William Engdahl’s analytical essay “Is the Fed Preparing to Topple the US Dollar?”, the outgoing Governor of the Bank of England, Mark Carney, delivered at the recent annual meeting of central bankers in Jackson Hole, Wyoming, a set of ideas that went into a similar direction, towards a shift away from the dominant role of the US dollar as a reserve currency. Similar to Mme. Lagarde’s earlier remarks about an SDR-type reserve currency, he made it understood that though the Chinese Yuan, the currency of the key trading nation, may have a role in the basket, it would – for now – not be an important one. He also was clear about the current disturbing and destabilizing imbalance where a faltering dollar still pretends to hold the hegemonic scepter over the world economy.

Keeping the dollar still in a leading role, while the US economy is declining, was no longer a viable option for an increasingly globalized world economy. Carney was hinting at a multipolar monetary and reserve system for a multipolar globalized world. Similar remarks came from former New York Federal Reserve Bank chief, Bill Dudley. However, Dudley, hinted that for the United States to give up her dollar dominance, the backbone for her world hegemony, may not come voluntarily. Might that lead to a major, maybe armed world conflict?

Much of this is speculation from the western perspective. It is, however, clear that there is a tremendous and mounting uneasiness about the western dollar-based fiat monetary system, backed by nothing, not even by the western economy. You compare this with the Chinese Yuan and the Russian Ruble, both backed by gold and – more importantly – by their own economy. It becomes increasingly clear that much of the speculation and efforts by influential central banking figures to save the western monetary Ponzi scheme maybe just propaganda to calm the minds of western financiers – holding them back from jumping ship.

• First published in New Eastern Outlook (NEO)

  1. See: Peter Koenig: “Infringing upon the Eurozone’s Sovereignty on behalf of Wall Street.  The EBC’s “Haircut” Measures, Undermining Trade and Investment with Russia and China“, Global Research, November 7, 2015; and Peter Koenig, “Retrenchment, Robotization and Crypto-Currencies: The Runaway Train Towards Full Digitization of Money and Labor“, Global Research, December 27, 2017.

Neoliberalism Has Met Its Match in China

Ellen Brown chairs the Public Banking Institute and has written thirteen books, including her latest, Banking on the People: Democratizing Money in the Digital Age.  She also co-hosts a radio program on PRN.FM called It’s Our Money.

When the Federal Reserve cut interest rates on July 31 for the first time in more than a decade, commentators were asking why. According to official data, the economy was rebounding, unemployment was below 4%, and GDP growth was above 3%. If anything, by the Fed’s own reasoning, it should have been raising rates.

The explanation of market pundits was that we’re in a trade war and a currency war. Other central banks were cutting their rates and the Fed had to follow suit, in order to prevent the dollar from becoming overvalued relative to other currencies. The theory is that a cheaper dollar will make American products more attractive on foreign markets, helping our manufacturing and labor bases.

Over the weekend, President Trump followed the rate cuts by threatening to impose a new 10% tariff on $300 billion worth of Chinese products effective September 1. China responded by suspending imports of U.S. agricultural products by state-owned companies and letting the value of the yuan drop. On Monday, August 5, the Dow Jones Industrial Average dropped nearly 770 points, its worst day in 2019. The war was on.

The problem with a currency war is that it is a war without winners. This was demonstrated in the beggar-thy-neighbor policies of the 1930s, which just prolonged the Great Depression. As economist Michael Hudson observed in a June 2019 interview with Bonnie Faulkner, making American products cheaper abroad will do little for the American economy, because we no longer have a competitive manufacturing base or products to sell. Today’s workers are largely in the service industries – cab drivers, hospital workers, insurance agents and the like. A cheaper dollar abroad just makes consumer goods at Walmart and imported raw materials for US businesses more expensive. What is mainly devalued when a currency is devalued, says Hudson, is the price of the country’s labor and the working conditions of its laborers. The reason American workers cannot compete with foreign workers is not that the dollar is overvalued. It is due to their higher costs of housing, education, medical services and transportation. In most competitor countries, these costs are subsidized by the government.

America’s chief competitor in the trade war is obviously China, which subsidizes not just worker costs but the costs of its businesses. The government owns 80% of the banks, which make loans on favorable terms to domestic businesses, especially state-owned businesses. Typically, if the businesses cannot repay the loans, neither the banks nor the businesses are put into bankruptcy, since that would mean losing jobs and factories. The non-performing loans are just carried on the books or written off. No private creditors are hurt, since the creditor is the government, and the loans were created on the banks’ books in the first place (following standard banking practice globally).

As observed by Jeff Spross in a May 2018 Reuters article titled “China’s Banks Are Big. Too Big?”:

[B]ecause the Chinese government owns most of the banks, and it prints the currency, it can technically keep those banks alive and lending forever.…

It may sound weird to say that China’s banks will never collapse, no matter how absurd their lending positions get. But banking systems are just about the flow of money.

Spross quoted former bank CEO Richard Vague, chair of The Governor’s Woods Foundation, who explained, “China has committed itself to a high level of growth. And growth, very simply, is contingent on financing.” Beijing will “come in and fix the profitability, fix the capital, fix the bad debt, of the state-owned banks … by any number of means that you and I would not see happen in the United States.”

To avoid political and labor unrest, Spross wrote, the government keeps everyone happy by keeping economic growth high and spreading the proceeds to the citizenry. About two-thirds of Chinese debt is owed just by the corporations, which are also largely state-owned. Corporate lending is thus a roundabout form of government-financed industrial policy – a policy financed not through taxes but through the unique privilege of banks to create money on their books.

China thinks this is a better banking model than the private Western system focused on short-term profits for private shareholders. But U.S. policymakers consider China’s subsidies to its businesses and workers to be “unfair trade practices.” They want China to forgo state subsidization an it’s d other protectionist policies in order to level the playing field. But Beijing contends that the demanded reforms amount to “economic regime change.” As Michael Hudson puts it:

This is the fight that Trump has against China.  He wants to tell it to let the banks run China and have a free market.  He says that China has grown rich over the last fifty years by unfair means, with government help and public enterprise.  In effect, he wants the Chinese to be as threatened and insecure as American workers.  They should get rid of their public transportation.  They should get rid of their subsidies.  They should let a lot of their companies go bankrupt so that Americans can buy them.  They should have the same kind of free market that has wrecked the US economy. [Emphasis added.]

Kurt Campbell and Jake Sullivan, writing on August 1 in Foreign Affairs (the journal of the Council on Foreign Relations), call it “an emerging contest of models.”

An Economic Cold War

In order to understand what is happening here, it is useful to review some history. The free market model hollowed out America’s manufacturing base beginning in the Thatcher/Reagan era of the 1970s, when neoliberal economic policies took hold. Meanwhile, emerging Asian economies, led by Japan, were exploding on the scene with a new economic model called “state-guided market capitalism.” The state determined the priorities and commissioned the work, then hired private enterprise to carry it out. The model overcame the defects of the communist system, which put ownership and control in the hands of the state.

The Japanese state-guided market system was effective and efficient – so effective that it was regarded as an existential threat to the neoliberal model of debt-based money and “free markets” promoted by the International Monetary Fund (IMF). According to William Engdahl in A Century of War, by the end of the 1980s Japan was considered the leading economic and banking power in the world. Its state-guided model was also proving to be highly successful in South Korea and the other “Asian Tiger” economies. When the Soviet Union collapsed at the end of the Cold War, Japan proposed its model for the former communist countries, and many began looking to it and to South Korea as viable alternatives to the U.S. free-market system. State-guided capitalism provided for the general welfare without destroying capitalist incentive. Engdahl wrote:

The Tiger economies were a major embarrassment to the IMF free-market model.  Their very success in blending private enterprise with a strong state economic role was a threat to the IMF free-market agenda.  So long as the Tigers appeared to succeed with a model based on a strong state role, the former communist states and others could argue against taking the extreme IMF course.  In east Asia during the 1980s, economic growth rates of 7-8 per cent per year, rising social security, universal education and a high worker productivity were all backed by state guidance and planning, albeit in a market economy – an Asian form of benevolent paternalism.

Just as the U.S. had engaged in a Cold War to destroy the Soviet communist model, so Western financial interests set out to destroy this emerging Asian threat. It was defused when Western neoliberal economists persuaded Japan and the Asian Tigers to adopt the free-market system and open their economies and their companies to foreign investors. Western speculators then took down the vulnerable countries one by one in the “Asian crisis” of 1997-98. China alone was left as an economic threat to the Western neoliberal model, and it is this existential threat that is the target of the trade and currency wars today.

If You Can’t Beat Them …

In their August 1 Foreign Affairs article, titled “Competition without Catastrophe,” Campbell and Sullivan write that the temptation is to compare these economic trade wars with the Cold War with Russia; but the analogy, they say, is inapt:

China today is a peer competitor that is more formidable economically, more sophisticated diplomatically, and more flexible ideologically than the Soviet Union ever was. And unlike the Soviet Union, China is deeply integrated into the world and intertwined with the U.S. economy.

Unlike the Soviet Communist system, the Chinese system cannot be expected to “crumble under its own weight.” The US should not expect or want to destroy China, say Campbell and Sullivan. Rather, we should aim for a state of “coexistence on terms favorable to U.S. interests and values.”

The implication is that China, being too strong to be knocked out of the game as the Soviet Union was, needs to be coerced or cajoled into adopting the neoliberal model. It needs to abandon state support of its industries and ownership of its banks. But the Chinese system, while obviously not perfect, has an impressive track record for sustaining long-term growth and development. While the U.S. manufacturing base was being hollowed out under the free-market model, China was systematically building up its own manufacturing base, investing heavily in infrastructure and emerging technologies; and it was doing this with credit generated by its state-owned banks. Rather than trying to destroy China’s economic system, it might be more “favorable to U.S. interests and values” for us to adopt its more effective industrial and banking practices.

We cannot win a currency war by competitive currency devaluations that trigger a “race to the bottom,” and we cannot win a trade war by competitive trade barriers that simply cut us off from the benefits of cooperative trade. More favorable to our interests and values than warring with our trading partners would be to cooperate in sharing solutions, including banking and credit solutions. The Chinese have proven the effectiveness of their public banking system in supporting their industries and their workers. Rather than seeing it as an existential threat, we could thank them for test-driving the model and take a spin in it ourselves.

Guns and Chips and Irony

I had Doctor Daniel Brown from Harvard spend 70 hours with Sirhan over almost three years [and] he comes away with this staggering, staggering evaluation. He says Sirhan was hypnoprogrammed ….. a technique of using chemicals as well as hypnosis ….. The program on him makes him forget everything within a certain time frame ….. He remembers when he gets a pinch on the neck [that] what he sees is not Senator Kennedy. It’s a paper target of a human being.

— William Pepper, 2013, speaking at Concordia University in Montreal, Quebec, Canada

Two issues made explicit in the U.S Constitution had to do with personal protection and the creation of money. Regarding the Second Amendment, its single sentence is blunt: “A well regulated Militia, being necessary to a free State, the right of the people to keep and bear Arms, shall not be infringed.” (Infringe: to limit or control) The authors, informed by history, knew that governments typically grow despotic, and that being armed provides a measure of protection for citizens against a government grown oppressive and unaccountable. In Thomas Jefferson’s words, “…. to protect themselves against tyranny in government.”

Yet there is a growing call for governmental control of guns in the hands of citizens, the call coming from within the citizenry itself, and the reason is evident: Every so often in recent years an apparently deranged individual goes on a shooting spree in a school or public space. With each shooting the chorus to rein in gun ownership grows ever louder, and ever more politicians, sniffing out prevailing public sentiment, make gun control a campaign issue. Ideas range from the registration of all firearms to the outlawing of weapons that might give citizens parity with, say, a militarized police force.

But here’s an interesting question: Might devious elements within a government, intent on disarming its populace, resort to the creation of false-flag scenarios designed to frighten and to produce justification for ever-tightening control? Might it be a question of “LIHOP” (let it happen on purpose) or “MIHOP” (make it happen on purpose), to use the lingo of what CIA-tutored media figures call “conspiracy theorists”? It’s just a question. I’m not so cynical as to imagine such intent, but the notion that such could be the case definitely exists among many who are inclined to ferret out details of certain events like the sinking of the Maine, the Lusitania, Operation Northwoods, Pearl Harbor, the Gulf of Tonkin. Things like that.

The fact that elements of the U.S. Government have developed and refined mind control techniques, such as those apparently applied to Sirhan Sirhan, is old news. The CIA’s Program MKUltra was born more than 60 years ago, and although it was reported as having been officially terminated in the 1970s, anyone who would accept that as fact resides in the kind of comfortable mental Happy Place that seems to be an American specialty.

Shootings themselves make excellent ‘news’, as they produce an uptick in public attention (and anxiety), which is important to those with a stake in maintaining narratives and crafting prevailing public opinion. And when poignant biographies of victims are aired as news items, with touching facial photos, evocative descriptions of their generosity and good works, and how they were so beloved, the victims are transformed for viewers into something akin to neighbors, and the shootings become a viewer’s neighborhood issues. Something must be done! And so public demand for gun control continues to grow.

Would central banks jump to the rescue and offer a fully anonymous digital currency? Certainly not. Doing so would be a bonanza for criminals.

— Christine Lagarde, IMF Director, 2018, speaking at the Singapore Fintech Festival

It is Congress that was granted the power “to coin money [and] establish the value thereof”, or at least that‘s how the U.S. Constitution would have it. But times changed, as did our governors, so in 1913 the Congress and President decided, despite multiple warnings from Jefferson to Lincoln (and others in between and since) to turn that process over to a private banking interest given the grossly misleading title “Federal Reserve”.

Those whom we allowed to become the masters of our money are now herding us toward an electronic global currency. The concept has been widely discussed since at least 1988 when a cover article in The Economist predicted a single world currency by 2018 along the lines of a theoretical “Phoenix”. The stepwise route described would be at first allowing — then later encouraging — the use of some form of private-sector money to be used in addition to existing national currencies. Thereafter, over time, the public would come to prefer it on the basis of its greater convenience. While the 2018 prediction was itself a miss, cryptocurrency had by that time become all the rage in some quarters, and the concept of cryptocurrency as a global reserve currency is now being discussed.

Meanwhile, the use of credit- and debit cards continues to rise, in some European countries virtually the sole means of making purchases. Banks and credit unions are now offering incentives for their use, even as powerful governmental forces are advocating the banning of cash altogether. Follow the threads and the world that emerges is one in which our every transaction is an electronic record. Consider, though, that a personal “chip”, that dreaded item of ultimate control in the worst of all dystopian futures, needn’t be a microscopic subcutaneous transmitter. A plastic card willingly (and, in a cashless society, necessarily) produced with every exchange works perfectly for recording the where and what of each individual’s every movement.

With cash a relic of the past, there would be no place to protect savings were The Economy to require negative interest rates and “bail-ins”; accounts would be docked automatically. Anyone deemed an irritant to the government would simply have his or her “chip” turned off (It happens!) leaving the offender absolutely disabled in a cashless world. With the loss of one’s card an ever-present possibility, instinct would naturally tend toward protective self editing, and the inevitable result would be a population rendered ideal from the standpoint of an oppressive and unaccountable government: obedient and submissive.

And the irony? If governmental and social forces now in motion continue unabated and unopposed, Americans, who proclaim themselves “lovers of freedom”, will have essentially disarmed and chipped ourselves. Having been made fearful, we don’t merely allow, we insist, on governmental control of personal arms. And through a process of multigenerational social engineering, our attachment to our plastic identifiers has been so reinforced and normalized that we have failed to realize what they represent and how they can be used against us.

Forgive them their debts as they forgive those…

It is “budget time” again!

That is the season when the persons displayed on television screens as representatives of those who have no representation engage in the theatrical display of subordination to those who actually own things, like the countries we happen to inhabit. Although there have been a few publicised investigations and even some occasional criminal charges against (usually septuagenarians) some conspicuous miscreants, there has been no action which could restore some health or sanity to what most of us consider the daily economy. In some countries, like where I live, people go on strike. There is little indication that the fundamental message of the strikers gets heard. Perhaps that is also why the television seems obsessed with the marketing of hearing aids. There is a hearing aid for every occasion, except sessions of the national assembly, where such technology might really help.

One way of dealing with the hearing impaired is repetition. In scientific terms this means increasing the rate of signal in proportion to noise in the hope that the essential message is received. Although I wrote a version of this paper in 2014, four years later I cannot help feeling some repetition would do no harm. If every budget season one has to listen to the same set of distortions, then it is only fair to reproduce the corrections.

Like the absurd climate debate, which never includes the “carbon footprint” of the largest military machines, the budget debates (essentially interchangeable) never discuss the cost of subsidising international banks and corporations to facilitate their extraction of wealth from the national economy. There is no intelligent, let alone honest, discussion of what is meant by “public debt”—or why the taxpayers must bear losses to guarantee tax-exempt profits for investors.

I always ask myself when someone says or writes “loss”, where did the money go? Even when a ship is lost at sea there is generally wreckage. Of course, the ocean is bigger than the economy and it is possible that a ship’s remains disappear beyond recovery. The price of abandoning the very modest social gains of the New Deal in the US and social democracy in Europe with the ascendancy of Margaret Thatcher and Ronald Reagan has been enormous, not only for US and European working people but, for the rest of the world. In fact, the meter is still running with no indication of when it will stop.

The crisis no one cares to talk about any more comprises trillions in losses. If these losses are real, then that means the value has been forfeited in favour of someone else. E.g. after the Great War France and Britain were essentially bankrupt: they owed nearly everything to US banks. Without economic manipulation, war and terror, India would probably have occupied the same status vis a vis Great Britain in 1945 that Brazil gained vis a vis Portugal after the Napoleonic Wars. The claims against the productive capacity and assets of Old Europe were held by identifiable third parties, representing, then as now, a tiny band of bankers. Of course, those claims were so great that no normal income streams from taxation could satisfy them. Control of Britain was effectively ceded to the US, while India was wracked by civil war rather than collecting the wartime debt Britain owed to her.

The other meaning of loss is the inability to sustain a certain valuation of an asset or income stream. The nature of the initial valuation is then the problem. The continuous attempts in the IFRS (international accounting standards) to skirt around the issue of essentially fraudulent valuation illustrates that even the private sector’s notion of “value”, whether book value or fair value, is the product of casuistry.

Since European “banking” was reorganised on the US Federal Reserve model by creation of the European Central Bank, it is instructive to consider how grand theft in the state-banking sector of the US functions. In other words, the “losses” hidden on the books of the USG banks, “Fannie” and “Freddie”, are either notional or they reflect claims that were satisfied in favour of third parties beyond the capacity of those institutions to generate income. Again we know who those third parties are. The “losses” are essentially sacrificed sovereignty.

Government institutions pledge to private persons (corporations and foreign exchange pirates) the State’s capacity to pay, derived from the ability to tax the working population, beyond any realistic possibility to extract that income. This was called “tax farming” in the bad old days of “colonialism”. Frequently punitive military force was sent into any country that was not delivering enough booty (aka interest on foreign debt). In fact, as retired general of US Marines infamously confessed that was his main job in the Corps—protecting corporate plunder.

This is essentially the same principle imposed through the ECB—except that some nominal account has to be taken of national political systems. Since in Europe the State was far more frequently the owner of capital infrastructure, absorbing the cost of its operation and regulating labour as civil servants, considerable ideological work had to be performed to cultivate the generation, which privatised most of the national capital assets held by European states. The fact that since 1945 the US has controlled the international payments system has reduced the need for military intervention. Decisions taken in New York, London, Frankfurt or Brussels can deprive a country of any affordable means to engage in the most basic financial transactions. The entities involved are privately owned and therefore cannot be coerced except by measures that would “threaten private property”.

Just as the railroads and banks obtained control over most of the continental US by defrauding the US government in the 19th century, the surviving banks have defrauded most of the American population of its home equity today. Although it was established that a conspiracy of UK-based clearing banks illegally fixed the LIBOR/ EURIBOR rates, this had no serious consequences. If one considers very carefully that nearly all mortgage and commercial financing agreements base their interest computations on one of these benchmarks, the true scope of the fraud becomes apparent. Everyone who made an interest rate agreement assuming the “free market” condition of the underlying rate was cheated. It could be argued that the interest rate clauses of innumerable contracts were void due to fraud. A perusal of public debt instruments would no doubt reveal even more catastrophic deception.

The endless wars, funded by plundering the public treasury and the wealth of other countries, are part of that income extraction, too. Now the US government and those of its vassals are little more than one large mercenary enterprise, together as NATO, the most heavily armed collection agency on behalf of third party creditors on the planet. It does not matter who occupies the mansion at 1600 Pennsylvania Avenue.

Of course, there is plausible denial for any of the beneficiaries of this plunder since populations weaned on soap operas and “crime drama” are incapable of examining, let alone comprehending, the most obvious operations of US corporations and their agents– who almost never appear as criminals on television. The “crime drama” narrative dominates almost every bandwidth on the critical spectrum and as a much younger US director, Michael Moore demonstrated in Bowling for Columbine, corporate crime does not make acceptable television. The most elemental sociological truths, plain to anyone who has ever belonged to a club or worked in middle management of a company, namely that “democratic” and “meritocratic” decisions are regularly subverted by scheming among the ambitious at the expense of the docile– become discredited when the insight is applied to the polity as a whole. People who do not think twice about making a phone call to a “friend” to influence a decision in their social club or place of employment, become incredulous at the suggestion that the chairman of a major investment bank would dictate policy to the head of state whose election he had financed.

In short, the debate about the current global economic “crisis” is obscenely counterintuitive and illogical to the point of incoherence. Who is willing to “follow the money”? This dictum, popularised in the Woodward and Bernstein fairy tale of US President Richard Nixon’s demise– All the President’s Men— appears utterly forgotten, despite recurring astronomic fraud perpetrated by US corporations since the so-called “S&L scandal”– crimes for which no more than a handful of people were indicted, let alone tried or sentenced. Only one corporation was deprived of its right to do business, Arthur Andersen, and this was patently done to spare all the politicians from the reigning US president, most of the US Congress, and untold state and local officials who had been bribed or otherwise influenced by Enron.

If the stories reported by Pete Brewton in 1992, the documented history of the OSS “China insurer” AIG, and the implications of the 2002 Powers Report on the Enron collapse are taken seriously, then Houston lies on a financial fault line more devastating than the San Andreas. That fault line runs from Texas through Virginia to the bedrock of Manhattan. The economic earthquakes that have persisted since 1980 are both literally and figuratively the result of deployment of the US atomic arsenal and the policies that gave rise to it. The US dollar’s continued, if fluctuating, strength as a reserve currency is based on drugs, weapons, and oil– all traded in US dollars. However, this material reality is also based on an ideological or dogmatic constitution. The seismic activity induced by US corporations created gaping holes in the global economy– holes which could only be breached by the financial instruments developed in the weapons laboratories of Wall Street based on the same conceptual models as the neutron bomb and today’s nano-munitions developed at Lawrence Livermore. Indeed, the theory has been almost universally accepted that people are always to blame for the problems of government and Business is the sole and universal solution to all problems. Hence tax monies will only be spent on weapons, war, and subsidies for corporations—the things Business needs.

A considerable obstacle to any change in the US, short of its destruction, is the fact that as Michael Hudson and former assistant Treasury secretary under Reagan, Paul Craig Roberts, write repeatedly, the US government has absolutely lost whatever legitimate function it may ever have had as an instrument of popular will. In other words, the efforts of working people, whether immigrant or ex-slave to remake the plutocratic regime of the 19th century into a State responsive to their needs were frustrated by the massive assaults on labour, combined with the ideological warfare of the “Progressive” movement. The latter, funded heavily by the newly created super-philanthropies, including those of Rockefeller, Sage, Peabody, and Carnegie, predated CIA-style front organizations and infiltration. They helped turn popular sovereignty movements into the kind of technocratic organisations which prevail today– dependent on corporate donations and led by the graduates of cadre schools like the Ivy League colleges, Oxford and the LSE. With few exceptions the only remnants of the “popular will” in the US are those that drive lynch mobs, reincarnated in “talk radio” today.

The main work of the USG and the corporations for which it stands has been to undermine any notion that the State is rightfully an expression of the popular will for the realisation of popular welfare. The State has been reduced to a protection racket. By the time Ronald Reagan, imitating Margaret Thatcher, pledged to “get government off the back of the people”, the only “people” who counted were corporations and those in thrall to them.

It is easy to forget that the US was actually founded on the basis of a kind of white (in that sense “enlightened”), oligarchic absolutism– the British parliamentary dictatorship minus hereditary monarch. Its moral vision predated the Thirty Years War and, until John Kennedy was elected president, its hypocrisy was that of Cromwellian fanatics. In revolutionary France and countries that were inspired by France, as opposed to the American independence war, struggle continued on the premises that the State is not the King (in whatever incarnation) but created by the citizens (not the possessive individual) for the maintenance of the common weal– including the nutrition, health, housing, education of its people. The opposition to destruction of the public sector or public services and the debate that continues in Greece, France, Italy, and to a lesser extent Germany, defies comprehension in North America and Great Britain because of some unfortunate residues of that revolutionary vision of the State so violently opposed by Britain and the US ever since 1789– except when the resulting instability provided business opportunities. (Thatcher did not restore the spirit of Churchill to power—but that of Wellington.)

Moreover as Coolidge once said, “the business of America is business”. If a policy or action of government cannot be expressed in terms of someone’s maximum private profit then it is indefensible in the US. The conditions of the Maastricht Treaty establishing the euro and the ECB are an attempt to impose those same ideological and political constraints on the European Union enforced by adoption of the Federal Reserve Act in the US. The Federal Reserve is essentially a technology for naturalising usury and endowing it with supernatural legitimacy. But just as it has been argued in some quarters that the US Federal Reserve triggered the Great Depression– for the benefit of the tiny bank of banking trusts– the European Central Bank, urged by the right-wing government in Berlin, is being pressured to follow the same rapine policies as the FED is pursuing today. Of course, there are other countries ruled by financial terrorism or where banking gangs have turned their entire arsenal against sovereign peoples.

The “Crisis” is not really about the “debt” or the heinous losses. It is a crisis of sovereignty. The failure of popular sovereignty means that a microscopic bacterial colony of the immeasurably rich can make war on the rest of the world, destroying the common weal and commerce at home and everything else abroad. Germany’s citizens have been bludgeoned since 1945 by Anglo-American propaganda and the occupation forces to persuade them that they– not the great banking and industrial cartels on both sides of the Atlantic– were responsible for Adolph Hitler’s rise to power. When in 1968, student leaders like Rudi Dutschke tried to remind Germans that their democracy was destroyed before Hitler’s putsch and that they had the right and opportunity to demand a democratic Germany after the war, those young people were harassed and even killed. (Dutschke was shot in the head by an unemployed labourer. That “lone” killer later died in prison with a plastic bag over his head.) Attempts to create a truly popular democratic government in Germany have been frustrated by foreign intervention since the French Revolution. Nevertheless people in Germany still believe that the State is there to provide services to the people– and not to fight wars to further foreign trade as suggested by Horst Köhler before he was relieved of his duties (ostensibly resigning) as German federal president.

There is no doubt in Germany that former Chancellor Schroeder’s refusal to follow the US into Iraq—whatever motivated it—enjoyed the widest support, even among those who tend to believe anything the US government says. The resignation of former IMF director and Federal President Köhler expressed the sensitivity of the situation then. On one occasion he referred to the great banking interests as “monsters” and then broke the silence on the German war efforts in Central Asia by explicitly articulating what had been Chancellor Merkel’s, silent but deadly policy of supporting US counter-terror in Afghanistan. Köhler was not opposed to the future escalation of German belligerence, but by his calling a spade a spade on national radio, the right-wing government in Berlin almost had to defend its unconstitutional deployment of German soldiers in public. Already that April Angela Merkel had been forced to sacrifice an army general and a cabinet minister when it became known that German combat aircraft were also bombing civilians like their US counterparts—and trying to keep the fact a secret.

In the midst of the financial crisis, that is the plunder and pillage of the accumulated reserves of Europe’s working population after those of the US are exhausted, it is impossible to ignore the restoration of Asian political and economic prominence. This process started in the 1960s when Britain and the US launched their wars to secure footholds and control of the vast resources of Indonesia and Indochina. Although only partly successful, the destruction of national independence movements throughout South Asia created the conditions for de-industrialising Europe and North America. Mistakenly much of the North American and European Left judged the losses in Korea and Vietnam as defeats for US power. Such judgments have been based on assessments of the official war aims and not on any analysis of the underlying corporate and financial policy objectives. The long-term results of those wars included creation of the massive debt system that is at the root of financial collapse for the majority of US Americans. Of course, China remains the great unconquerable threat to continuation of US hegemony. The balance of power in Asia may be very delicate indeed.

Continental Europe remained somewhat insulated from those seismic forces until 1989. The “velvet” invasion of Eastern Europe and the former Soviet Union led by US capital, aided as usual by the combined secret services and economic “consultants” of Shock Therapy, began the destruction of the economic base for European social democracy and “real socialism”. The debt machine created to exploit Eastern Europe was applied in Germany first– destroying the GDR and financing that destruction with EU-generated debt, culminating in the euro. Introduction of the euro effectively destroyed half of the purchasing power of working people in the Euro Zone overnight, creating the conditions for consumer borrowing which had prevailed in the US since the late 60s and eroding wages and benefits drastically.

The final loss of control over archaic legislative instruments (whether in the US or Europe) is not only assured by the system of bribery that turns those in office into indentured servants of corporations. Full investigation of the Enron scandal would have proven once and for all that there is almost no one in the US Congress not owned by some corporation. Similar conditions have come to prevail in European legislatures where for decades US academic and policy exchange programmes have trained the political class to work first and foremost for Business.

The loss is also assured by the now entrenched belief that the only legitimate human goal is individual personal profit. As Hudson has suggested, this is the “theology of the Chicago School”. Since Margaret Thatcher was appointed to convert Britain to that dogma, nearly the entire political, academic and “civil” culture has been saturated with people who cannot think in any other terms– even when they assert that they are still social democrats or democratic socialists. The latter insist that “social policy” is merely a palliative to prevent the poor and destitute from becoming unsightly spectres in urban entertainment centres. They all have become positivists– reifying the prevailing economic relations and worshipping quantitative methods– subordinating human agency to pseudo-science and thinly disguised opportunism. The only kindness this ethical standpoint can express is “charity”. Charity, however, has nothing to do with the common weal or the State as an embodiment of the popular will. In fact, it is just as parasitic as the belief from which it springs. If those whom John Pilger called “the new rulers of the world” consent to relieve us– that is to allow us anything resembling our dignity and subsistence wages– then it will scarcely exceed the infamous “dimes” with which John D. Rockefeller cloaked his cynicism in piety and charity. Nowhere is the cynicism more profound than in the expression “giving back”. Of course, the pennies “given back” are microscopic compared with the billions “taken” in the first place. But those shiny pennies and dimes are enough to keep embedded intellectuals loyal to Bill Gates or George Soros. For a few dollars more they will even protect the likes of Blankfein or Buffett.

“Charity” is the gratification a person finds when scratching a mosquito bite. One feels better while scratching– although this provides no relief. The cause of the itch is the substance injected by the mosquito while sucking the blood from its victim. Of course, some mosquitoes offer only token charity and the itch disappears. But there are mosquitoes that carry other parasites– the effects of their charity can last forever, or at least until the victim dies.

Trump’s Threat of New Tariffs on Chinese Imports and Possible Consequences

Introduction

The US Chamber of Commerce warns against the consequences of new tariffs on Chinese imports proposed by the administration of President Donald Trump.

The top business lobbying group said the tariffs dramatically expand the harm to American consumers, workers, businesses, and the US economy. It said the Trump administration lacks a coherent strategy to address QUOTE China’s theft of intellectual property and other harmful trade practices. The chamber also demanded that Washington hold serious discussions with Beijing. Trump has threatened 25 percent tariffs on 200 billion dollars of Chinese imports. He says this is in response to China’s retaliatory tariffs on 50 billion dollars-worth of US products.

PressTV: What is your take on this?

Peter Koeing: The key word is “threatened”. Trump has threatened an additional 25% import tariffs on 200 billion worth of Chinese imports to retaliate for China’s retaliation, so to speak. Chinese retaliation was to be expected and is fully justified. It is clear that China will not reverse their import tariffs for US goods. Why would they?

China is poised to negotiate a one-to-one even level, but not on the basis of the US dictating the rules. Trump and his “masters” must realize that.

Then the additional reason of “China’s theft of intellectual property…” is today more a joke than reality. In many areas of technology development – especially certain precision electronics and foremost alternative energy – China is worlds ahead of the United States. But nobody talks about it. China will soon be number one in alternative energy production, which China will be exporting to the world, to the detriment of the US-led petrol industry.

Maybe that’s what Trump is focusing on — attempting to detract from what is really threatening a big junk of the US economy, the notorious dependence on hydrocarbon energy, the number one polluter an environmental destructor today.

And there is another factor, perhaps the number ONE target of Trump’s ever-increasing tariffs for Chinese exports, or rather US imports of Chinese goods:

That’s the Chinese currency, the Yuan.

It is known since long to many treasuries of countries around the world, that the Chinese Yuan is a much safer investment or reserve currency than the US dollar which is based on hot air, or not even, while the Yuan is based on a solid Chinese economy and on gold.

Not only has the Yuan been admitted officially in the IMF’s basket of SDRs – Special Drawing Rights, which consists of the five key reserve currencies – US Dollar, UK pound, Japanese Yen, Euro – and now also the Chinese Yuan.

The yuan is not only for most countries around the globe a very interesting investment currency, not a bullying currency as is the US dollar, always with severe strings attached, but the yuan is also growing rapidly as a reserve currency replacing the dollar.

Levying tariffs to hurt China’s exports and economy and the Yuan’s strength, may be the key reason behind this deconstructive tariff game Trump is playing.

However, China has a strong market dominance in Asia and tariffs will do limited harm; besides, China has many other means to further retaliate, for example, devaluating the Yuan vis-à-vis the US dollar.

So, keep tuned. There will probably be more to come.

Bitcoin, Innovation of Money and Reinventing Activism

Bitcoin’s price explosion made news headlines this last year. Topics of digital assets entered onto dinner tables and friendly chats at work places. Fever of the digital gold rush that has swept mainstream finance became contagious. Institutional funds are now entering into cryptos, seemingly hedging their bets with their “sugar high” bubble economy. Jamie Dimon, the JPMorgan CEO who previously slammed Bitcoin as a fraud is said to be regretting his claim. He now praises the blockchain, the underlying technology of Bitcoin. Goldman Sachs recently acknowledged Bitcoin as money, comparable to gold. The firm is already setting up a trading desk for digital currencies.

While Bitcoin is gaining traction in financial circles, Naval Ravikant, the CEO and co-founder of Angel List saw this technology’s profound socio-political impact. He noted, “Bitcoin is a tool for freeing humanity from oligarchs and tyrants, dressed up as a get-rich-quick scheme.” WikiLeaks founder Julian Assange also recognized the revolutionary power of this money based on math. At the end of 2017, from the Ecuadorian embassy in London where he has been confined more than five years, Assange tweeted, “Bitcoin is a real Occupy Wall Street”.

What is this disruptive force of Bitcoin? The Occupy movement that had spread over dozens of US cities and across many countries created a wave of uprising. It inspired a new vision of politics outside of the electoral arena. Now, years after Occupy’s demise, this new innovation of decentralized digital currency could offer a way to reinvent activism, helping all around the world to organize and create radical social change.

The era of creditocracy

First, let’s look back at the rise of OccupyWallStreet protest. The movement kicked off in New York’s financial district in 2011, uniting people from all walks of life under the banner of the 99% against economic inequality and corporate greed. Occupy emerged within a cultural milieu of transparency, spearheaded by WikiLeaks’ disclosure of documents pertaining to government secrecy and corruption.

The insurgency in lower Manhattan marked a peak of disillusionment about the current state of democracy. People began to wake up to an invisible hand of the market – 1% global oligarchy, that was controlling resources through money based on debt. In the article “Student Debt Slavery: Bankrolling Financiers on the Backs of the Young”, attorney and author Ellen Brown described the advantage of “slavery by debt” over owned slavery, which was an idea argued in a document reportedly circulated during the American Civil War among British and American banking sectors. Brown showed that while slaves need to be housed and fed, “free men could be kept enslaved by debt, by paying wages insufficient to meet their costs of living”.

This debt-based financial system has become what professor and veteran of the Occupy movement Andrew Ross calls a “creditocracy”. In this, ordinary people with student loans, medical and credit card bills have become indentured servants. Ross explains how it is the Western version of a “debt trap”, where debts are piled up with monthly credit card balances or underwater mortgages that cannot be ever paid to ensure continuing revenue for the banks. He notes how this is similar to the developing countries that fell under IMF dependency in the course of the 1970s and 1980s.

In the era of creditocracy, ubiquitous anonymous corporations keep the force of control invisible, making people obey their rules. MasterCard tells their customers who the master is with exuberant charge-back fees and penalties. VISA maintains US hegemony of the world, denying access to finance for refugees and immigrants and assisting US government sanctions on countries like Russia and Iran that challenge dollar supremacy. This is a two-tiered financial patronage network that exempts fees and extends credit lines to the rich and privileged, while it exploits the poor by seizing their funds and engaging in predatory lending.

Creditocracy now expands around the globe and threatens civil liberties. Recently, PayPal came under scrutiny, with their failure to provide services in the West Bank and Gaza, while making its service available in Israel. This payment processing company was accused by pro-Palestinian activists as enacting “online apartheid” against Palestinians.

Vision of new democracy

It is people’s indignation against this systemic economic oppression that sparked revolt at the center of world finance seven years ago. Occupy was unprecedented in its scale and its unique style of no central coordination or formal leadership. It was a move away from electoral politics and top-down decision making to the principle of consensus and direct action, which activist scholar David Graeber described as “the defiant insistence on acting as if one is already free”.

During the early days of this movement, the mainstream media criticized demonstrators for not having a clear mandate. Yet this lack of demand was a strength and refusal to recognize the legitimacy of power structures that protesters were challenging. What unfolded then was a new form of activism that truly channels uncompromising power of ordinary people. It was an activism that doesn’t acknowledge external power or seek for permission. Instead it encourages people to change society by simply building new alternatives.

This was a seed for a real democracy that is horizontal and participatory. It was manifested through activists’ effort of creating people’s libraries, media hubs and kitchens and forming a new way of governance through mic check and General Assemblies. This vision of organizing society through mutual aid and voluntary association went viral, spreading with internet memes and Twitter hashtags, creating solidarity across borders.

Cypherpunks write code

Occupy’s permissionlessness, without a need to refer to central authority, is embodied at the core of Bitcoin. The idea of Bitcoin was introduced in a whitepaper published in the midst of the 2008 financial crisis. It is clear that the anonymous creator of Bitcoin was concerned about deep corruption of government and their mishandling of monetary policies. This was shown in the message embedded in the genesis block of the block-chain. It contained a headline of a newspaper that read “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”.

Richard Gendal Brown, chief technology officer at software firm R3, provides a summary of the invention of this open source software:

Bitcoin is the world’s first system of digital cash, which allows peer-to-peer value transfer over the internet with no reliance on third parties. It is built on a new invention, the decentralized global asset register. This global asset register is the world’s first decentralized consensus system.

What is behind the protocol of a truly peer-to-peer currency is a revolutionary mind that refuses to obey the command from above and declares independence from all that claim authority. This fierce autonomy is the moral value of cypherpunks, a group that emerged in the late 1980s, who saw a potential of cryptography as a tool to shift balance of power between the individual and the state.

Cryptographer and one of the notable cypherpunks Adam Back, who was cited in Bitcoin’s whitepaper for his invention of Hashcash described the ethos of cypherpunks as that of writing code. This is an idea of making changes by creating alternatives. Back noted how pressuring politicians and promoting issues through the press tends to be slow and create an uphill battle. He pointed out how instead of engaging in the political process through campaigns and appealing to authority for changes, people can simply “deploy technology and help people do what they consider to be their legal right”. Then society would later adjust itself to reflect these values.

Network of resistance

While the mainstream media is obsessed with Bitcoin’s price and investors speculating gains in their portfolios, this technology’s defining feature lies in censorship resistance. The integrity of Bitcoin relies on decentralization, which is a method to attain security by flattening the network and removing levers of control, rather than performing checks and balances of power that tends to concentrate through control points inherent within the system, seen in the existing model of governance. This unprecedented security creates a network of resistance resilient to any forces of control.

When governments that are meant to defend civil rights act against their own people, Bitcoin preserves the network value of public right to free association and speech and distributes this to all users. This right was claimed and exercised in real time. In facing the illegal financial blockades imposed by Bank of America, VISA, MasterCard, PayPal and Western Union, WikiLeaks showed ordinary people how they can circumvent and combat economic censorship with Bitcoin.

As the whistleblowing site continues to publish CIA Vault publications, political persecution intensifies. Now the Freedom of the Press Foundation, an organization that was founded to tackle attacks on free press, decided to terminate processing of donations for WikiLeaks. In response to this new political pressure, Assange urged supporters to continue making contributions with cryptocurrencies and unleash the power of free speech that belongs to all.

As trusted institutions and governments are failing, people around the world are finding their own path of self-determination. In Argentina, as the Peso has been steadily falling since the country’s 2002 economic collapse, Bitcoin adoption has been accelerating. Bitcoin historian and former tech banker who goes by Tweeter handle @_Kevin_Pham noted, “Bitcoin’s killer app can be found in Venezuela, it’s called: ‘not dying.’” As hyperinflation is rendering their national currency worthless, Venezuelans are flocking to Bitcoin as a safe haven to store their savings.

In Iran, the government came on full force, engaging in internet censorship and cracking down on protesters who revolted in response to the country’s long economic stagnation. It was reported that leading up to the civil unrest, the Bitcoin community has grown with more people entering into cryptocurrencies. In Afghanistan, a company that advocates Afghan women’s computer literacy empowered women with bitcoin, helping them gain financial sovereignty.

Permissionless activism

The Occupy movement ignited aspirations for the rule of the common people, verified and upheld by a network consensus created through people’s trust in one another. Yet the enthusiasm for real democracy that was mobilized through social media could not withstand state coordinated police crackdowns. With the eviction of encampments and squares, people’s power that had arisen then dissipated.

Now, with Bitcoin surging, a new stream of disruption is emerging. These old financial engineers aim to protect their dying fraudulent world of central banks by upending their speculative casino with this hyped crypto market. As incumbent banks geared with regulatory arms try to control the bubbling civic power, perhaps this technology calls people to rise once again to halt financial aristocracy by innovating the ‘activism without permission’ – this time with better security and robustness.

Knowledge of computer science empowered by the ethics of cypherpunks now provides a viable platform for people to occupy society with their heart’s imagining. Sovereign individuals can now defy the rule of creditors and create their own rules, ending financial apartheid and discrimination. They can coalesce to fund independent media they support with their money and defund wars that they oppose. Permissionless activism can bring a jubilee, making rapacious debt obsolete through each individual simply walking away from this erroneous system, uniting with those who share goals to create a new economy.

The imagination of this invention opened the potential for a radically different future. From Rosa Parks’ refusal to give up her seat on the bus in Montgomery Alabama to occupiers’ adamant refusal to make demands, Bitcoin’s networked consensus creates an autonomous currency that allows all to move struggles of the past forward.

The rise of Bitcoin is poised to disrupt the world of creditocracy, as we know it. As the price rally continues, many now proclaim the rise and rise of Bitcoin! The question that remains is: Can our imagination rise with the revolutionary force this technology brings? Bitcoin already unleashed a potent power within. The future is now in our hands. It is up to each person to claim this power and show the world what democracy really looks like.

 

Runaway Train Towards Full Digitization of Money and Labor

The other day I was in a shopping mall looking for an ATM to get some cash. There was no ATM. A week ago, there was still a branch office of a local bank – no more, gone. A Starbucks will replace the space left empty by the bank. I asked around – there will be no more cash automats in this mall – and this pattern is repeated over and over throughout Switzerland and throughout western Europe. Cash machines gradually but ever so faster disappear, not only from shopping malls, also from street corners. Will Switzerland become the first country fully running on digital money?

This new cashless money model is progressively but brutally introduced to the Swiss and Europeans at large as they are not told what’s really happening behind the scene. If anything, the populace is being told that paying will become much easier. You just swipe your card – and bingo. No more signatures, no more looking for cash machines. Your bank account is directly charged for whatever small or large amount you are spending. And naturally and gradually a ‘small fee’ will be introduced by the banks. And you are powerless, as a cash alternative will have been wiped out.

The upwards limit of how much you may charge onto your bank account is mainly set by yourself, as long as it doesn’t exceed the banks’ tolerance. But the banks’ tolerance is generous. If you exceed your credit, the balance on your account quietly slides into the red and at the end of the month you pay a hefty interest; or interest on unpaid interest and so on. And that even though interbank interest rates are at a historic low. The Swiss Central Bank’s interest to banks, for example, is even negative; one of the few central banks in the world with negative interest, others include Japan and Denmark.

When I talked recently to the manager of a Geneva bank, he said, it’s getting much worse. ‘We are already closing all bank tellers, and so are most of the other banks’. Which means staff layoffs which, of course, makes it only selectively to the news. Bank employees and managers must pass an exam with the Swiss banking commission, for which they must study hundreds of extra hours within a few months to pass a test usually planned for weekends, so as not to infringe on the banks’ business hours. You got two chances to pass. If you fail you are out, joining the ranks of the unemployed. The trend is similar throughout Europe. The manager didn’t reveal the topic and reason behind the ‘retraining’, but it became obvious from the ensuing conversation that it had to do with the ‘cashless overtake’ of people by the banks. These are my words, but he, an insider, was as concerned as I, if not more.

Surveillance is everywhere. Now, not only our phone calls and e-mails are spied on, but our bank accounts are too. And what’s worse, with a cashless economy, our accounts are vulnerable to be invaded and robbed by the state, by thieves, by the police, by the tax authority, by any kind of authority, and, of course, by the very banks that have had your trust for all your life. Remember the ‘bail-in’, the infamous “hair-cut”, first tested in early 2013 in Cyprus? Bail-ins will become common practice for any bank that has abused its greed for profit and would go belly-up, if there wouldn’t be all those deposits from customers. Even shareholders are not safe. This has been quietly decided some two years ago, both in the US and also by the non-elected white-collar mafia, the European Commission, EC.

The point is, ‘banks über alles’ (“banks above everything”, following Hitler-Nazis’ battle cry “Deutschland Über Alles”). And which country would be better suited to introduce ‘cashless living’ than Switzerland, the epicenter – along with Wall Street – of international Zion-banking. Banks will call the shots in the future, on your personal economy and that of the state. They are globalized, following the same principles of deregulation worldwide. They are in collusion with globalized corporations. They will decide whether you eat or become enslaved. They are one of the tree major weapons of the 0.1 % to beat the 99.9% into submission. The other two at the service of the master hegemon’s Full Spectrum Dominance drive, are the war- and security industry and the ever more brazen propaganda lie-machine. Banking deregulation has become another little-propagated rule of the World Trade Organization (WTO). Countries who want to join WTO, must deregulate their banking sector, prying it open for the globalized money-sharks, the Zion-controlled banking conglomerates.

Retrenchment of personnel in the banking employment market is increasing. The news only selectively reports on it, when there are large amounts of jobs being eliminated. Statistics lie everywhere, in the EU as well as in Washington. Why scare people? They will be scared enough, when they are offered jobs at salaries on which they can barely survive. That’s happening already. It used to be a tactic applied for developing countries: Keep them enslaved by debt and low pay, so they don’t have time and energy to take to the streets to protest.  They have to look for food and work, whatever menial jobs they can get, to feed their families. It’s now hitting Europe, the West in general. Some countries way more than Switzerland.

Cashless trials are going on elsewhere, especially in Nordic countries, where selected department stores and supermarkets do no longer take cash. Another monstrous trial has been carried out in India a year ago, in the last quarter of 2016, where from one day to another 80% of the most popular money bills were eliminated, and could only be exchanged for new bills by banks and through bank accounts. And this in an almost pure cash country, where half the population has no bank account, and where remote rural areas have no banks. People were lied to so that the sudden introduction had maximum effect.

It caused massive famine and thousands of people died, as they had suddenly no acceptable cash to buy food – all instigated by the USAID Project ‘Catalyst’, in connivance with the Indian rulers and central bank. It was a trial. It was a disaster. If it works in India with 1.3 billion people, two thirds of whom live in rural areas and most of them have no bank account, the scam could be applied in any developing country. See also India – India, Death by Demonetization: “Financial Genocide”, The Crime of The Century.

What is going on in Switzerland is a trial with the high end of populations. How is the upper crust taking to such radical changes in our daily monetary routine?  So far not many protests have been noticed. There is a weak referendum being launched by a group of people who want the Swiss Central Bank be the only institution that can make money, like in the ‘olden days’. Though a very respectable idea, the referendum has no chance in today’s banking and debt-finance environment, where youth is being indoctrinated with the idea that swiping your card in front of an electronic eye is cool. Today, most money is debt-money, made by private banks, like elsewhere in Europe and the US. Worldwide banking deregulation, initiated by the Clinton Administration in the 1990s – today a rule for any member of the World Trade Organization (WTO) – has made this all possible.

Digitization and robotization is just beginning. Staffed check-out counters in supermarkets are disappearing; most of them are converted into automatic check-outs – and that happened within the last year. Where are the employees gone?  I asked an attendant who helped the customers through the self-checkout. ‘They joined the ranks of unemployed’, she said with a sad face, having lost several of her colleagues. ‘It will hit me too, as soon as they don’t need me anymore to show the customers on how to auto-pay.’

Bitcoins

Digitization also includes the cryptocurrencies, the blockchain moneys floating around – of which the most famous one is Bitcoin. It brings digitization of money to an apex. The system is complex and seems to lend itself only to ‘experts’. Cryptocurrencies are fiat money, based on nothing, not even on gold. Cryptos are electronic, invisible and highly, but highly, speculative, an invitation for gangsters and fraudsters. It looks as if cryptocurrencies were designed for crooks and speculators.

Bitcoin was allegedly invented by Satoshi Nakamoto which could be a pseudonym of a man or a group of people, suspected to live in the US. “Nakamoto’s” identity is believed to be commonwealth origin, due to the vocabulary used in his writings. One of his close associates is purportedly a Swiss coder, who is also an active member of the cryptocurrency community. He is said to have graphed the time stamp of each of Nakamoto’s more than 500 bitcoin forum posts. Such ‘forum posts’ exist in the thousands, worldwide. They form an elaborate network based on algorithms.

Bitcoin was formally created in January 2009 with a fix amount of 21 million ‘coins’, of which more than half are already in circulation, or ‘mined’ as the jargon goes, and 1 million, or about 4.75% (of the total) can be traced to Nakamoto. This, based on the current market value, corresponds to close to US$15 billion. Today’s overall Bitcoin market cap is more than US$ 315 billion. The market is highly volatile. Drastic daily fluctuations are common, especially within the last 12 months. If one of the major Bitcoin holders, like Nakamoto, would capitalize his profit by selling a big portion of his holdings, the Bitcoin price would be in free fall, functioning pretty similar to the regular stock exchange.

On 24 August 2010, when Bitcoin was first traded, its value was US$ 0.06. On 26 December 2017, the coin was worth US$ 15,770, an increase of more than 250,000%. In the last twelve months, its value increased from about US$ 800 in December 2016 to a peak of close to US$ 20,000 in mid-December 2017, an increase of nearly 2,500 %. However, in the last 7 days, after several ups and downs, the price has dropped by about US$ 680; i.e., by more about 4%, and the trend is uncertain. Perhaps a sign of quick profit-taking? This all shows how instable this cryptocurrency is, apparently much more so than trading corporate shares on the stock market. And certainly not apt as a every-day currency base.

The number of cryptocurrencies available over the internet as of 27 November 2017 is above 1300 and growing. A new cryptocurrency can be created at any time and by anybody. By market capitalization, Bitcoin is presently the largest blockchain network (database network, storing data in different publicly verifiable places), followed by Ethereum, Bitcoin Cash, Ripple and Litecoin.

Bitcoin may be the next bubble, bringing down a parallel economy which has already its fingers clawing into our regular western economy. Cryptocurrencies are officially forbidden in Russia and China, though stopping cryptocurrency dealings by individuals is hardly possible. They do not touch the traditional banking system. That’s why major banks hate them. They circumvent the banking suckers, prevent them from making ever higher profits from horrendous commissions, against which the people at large are powerless.

Here is Bitcoin’s positive side. It escapes bank and state controls. If countries’ economies were run on Bitcoins or another cryptocurrency, they would escape US sanctions which function only because western currencies are foster-children of the US-dollar, hence, subject to the dollar hegemony; meaning all international transactions have to pass through a US bank. A typical case is ‘banking blockades’, when Washington decides to stop all international transactions of a country until it submits to the wishes of the empire. It is blackmail; totally illegal, but unless there is a monetary alternative, the (western) world is subject to this system.

Argentina is a case in point. Buenos Aires was forced by a New York judge in June 2014 to pay a New York based Vulture Fund US$1.6 billion, an illegal ruling according to a UN Resolution. Argentina refused to pay, so the judge, interfering in a sovereign nation, blocked more than US$500 million of Argentina’s debt payment to creditors, bringing the country to the brink of a second bankruptcy in 13 years. Eventually, neoliberal Macri negotiated a deal with the Vultures and made a payment in excess of US$ 400 million.

This US blackmail would not have been possible had Argentina been able to make its foreign transactions in Bitcoins or another cryptocurrency. Venezuela has created the “petro”, a hydrocarbon and gold based national cryptocurrency to escape dollar-caused inflation and for some of its foreign transactions, thereby also escaping the sanctions stranglehold of Washington. Had Greek and Cyprus citizens had a cryptocurrency alternative to the euro, they would not have been subject to the cash control imposed by the European Central Bank.

On the other hand, funding of terror organizations, like ISIS, cannot be disrupted, if the terror group deals in cryptocurrencies.  This shows, for good or for bad, Bitcoins, or cryptocurrencies are for now unique in resisting censure and blackmail, or any kind of authoritarian outside interference in electronic money transactions.

Cashless Living

If Switzerland accepts the change to digital money, a country where until relatively recently most people went to pay their monthly bills in cash to the nearest post office, then we, in the western world, are on a fast track to total enslavement by the financial institutions. It goes, of course, hand-in-hand with the rest of systematic and ever faster advancing oppression and robotization of the 99.9% by the 0.1%.

We are currently at cross-roads, where we still can either decide to follow the discourse of a new electronic monetary era, with ever less to say by “We, the People” about the product of our work, our money; or whether, We, the People, will resist a banking/finance system that has full control over our financial resources, and which can literally starve us into submission or death, if we don’t behave. In order to resist we need an alternative monetary system or monetary network, away from the dollar-euro hegemony, and cryptocurrencies, as structured today, are no alternative.

All the more important is the ascent of another economy, another payment and transfer scheme which already exists in the East, the Chinese International Paymen System (CIPS), effectively a replacement of SWIFT, totally privately run and linked to the US-dollar and US banks. The world needs a multipolar currency system, based on the real economic output of a country or society, as is the case in China and Russia, not one based on fiat money as is the current western economy.

Will Switzerland, the stronghold of world finance, along with New York, London and Hong Kong, resist the temptation of increased profit, power and control, offered by digital money? We, the People, have still the chance to decide either for continuing rotting in a fraud economy, based on wars and greed for which digital money, exacerbated by cryptocurrencies, is a new tool for a new maximizing profit bonanza on the back of the common people; or do we opt for an honest future and for a life that leaves us free to take sovereign political and monetary decisions in a full cash society. For the latter we must wake up to see the propaganda fraud going on before our eyes, and to resist the robot and electronic money onslaught being unleashed on us.

The Iran Dilemma: The Tyrant Has Spoken

The tyrant, of course, is Donald Trump. He launched tirade after tirade, and keeps launching them, insult after insult, lies after lies after miserable lies at the Government of Iran – about Iran not fulfilling the conditions of the Nuclear Deal. The typical mass indoctrination of the western world through the presstitute mainstream media. Goebbels might smile in his grave, how well the neolibs or neo-Nazis have learned from the Nazis of his time – and perfected this science of deceit in the last 50 years. Fortunately, the counter culture, the truth seekers have also become more sophisticated. More people are waking up to the truth every day.

This Nuclear Deal was an agreement reached after 9 years of meticulous, often perilous and at times for Iran demeaning and offending negotiations. But Iran endured, because Iran’s negotiators, notably the Foreign Minister Javad Zarif, knew what they were talking about, namely, that Iran had never any plans to develop nuclear weapons, but using the enrichment process for the production of nuclear power. This was, by the way, confirmed by all 16 US security agencies. To no avail. The media all but ignored it. The announcement received little coverage by the MSM and was soon shoved under the carpet by the massive western lie-propaganda.

Iran knew that justice was on her side – the agreement concluded in Vienna, Austria, on 14 July 2015 between the 5 + 1 (the five permanent members of the UN Security Council, China, France, Russia, UK, the United States plus German), as well as the European Union with the so called Joint Comprehensive Plan of Action (JCPOA). Of course, this was under Obama’s Presidency, and Obama was not as friendly to Netanyahu as is Trump, who is through his family closely interlinked with the Master Zionist of the Zionists, Mr. Bibi Netanyahu.

President Trump wants to cancel the Nuclear Deal. He has said this from the very beginning of his Presidency. And lately he started new outbursts of false accusations against Iran. Now that the entire world is against him, wanting to adhere to the nuclear agreement, including some Republican members of Congress – all of the five signatories, even the otherwise vassal EU, they all say that Iran is fully complying with the agreement, and they will stick to the deal. The International Atomic Energy Agency (IAEA) in Vienna has also confirmed that Iran is fully compliant with the rules of the terms of the accord.

Since it is now difficult for Mr. Trump or any of his handlers to pretend that Iran has failed the agreement, Trump has changed his language. He, and some of his most ridiculous stooges say now that Iran is infringing on the “spirit” of the agreement, as if Trump even knew what spirit and spirituality means.

He, the tyrant, keeps insulting and hammering down on the Government of Iran all the same – spreading lies which even Iran’s enemies know are lies: Iran is spreading and funding terrorism in the region, and the world, they are a [military] threat to the region – and they are even a ‘National Security Threat’ – 12,000 km away from Washington. Imagine, one of the most peaceful countries in the world. The only National Security Threat to virtually ALL the nations of the globe, minus Israel, is the only rogue state we know – the United States of America.

So, for now The Donald has retracted from his strong statement of canceling the Nuclear Deal and said simply he will not ‘certify’ it, whatever that means. Because “canceling” by the US alone is simply another outrageous arrogance of Washington’s. The US is a mere signatory among 5+1 and the EU. So, canceling is legally impossible. For now, he has relegated the “Issue” – the Trump problem, that is – to Congress to come up with a solution – i.e. more sanctions on Iran or – else?

Iran is beyond sanctions. Iran is already part of the new economic system – the one emanating from the Shanghai Cooperation Organization (SCO), led by China and Russia, and detached from the dollar hegemony. Therefore, slandering Iran, threatening Iran with war and sanctions or both, is one big bluff – and Trump, Netanyahu’s puddle, believe the world will go for it.

More likely, Trump’s handlers want the Donald to create more confusion, spread chaos. Since the Iran ‘issue’ was delegated to Congress to handle, Trump is again verbally firebombing North Korea, threats after threats. And dangerously provoking military games on DPRK’s sea and land borders. More sanctions are not enough, because by now everybody knows they don’t work. How can Washington impose sanctions on China and at the same time hope China will uphold the sanctions the US is imposing on the DPRK? North Korea’s economy is tied at the tune of 90% to China. Not to mention that ‘sanctions’ – by now the hearing or reading of the mere term is laughable – imposed on China and Russia are totally meaningless, useless, toothless.

Both countries are trading with the world since quite a while outside of the fiat dollar system, using instead yuans and rubles convertible into gold. That’s the new currency standard offered to the world. The west can take it or leave it. It’s like jumping on the fast train that has already left the Shanghai station, racing through Eurasia towards Europe, called the OBI – the One Belt Initiative, President Xi’s answer to the western economy of fraud, that will lay the tracks for a new and peaceful economy, possibly for the next few hundred years. I have said it many times before, and will keep repeating it, the future is in the east; the west is passé. It is committing suicide, greed, war and lie-driven auto-destruction. Iran, India, Pakistan are already members of the SCO, others, including NATO Turkey, are vying to join and be no longer vulnerable to US imposed sanctions and sledgehammer policies.

Even far-away Venezuela has decided to trade her hydrocarbon resources with China in gold-convertible yuans. Hence, Venezuela is detaching herself from the dollar economy, freeing herself from the financial and economic shackles of Wall street, the FED and the Bretton Woods Institutions. Venezuela is a beacon illuminating a new economy for South America, as well as an example of a solid democracy, as demonstrated by this past weekend’s regional fully transparent elections to elect governors and state legislators – a new path to follow by other Latin American countries, who are still enslaved and trampled by the dictate of Washington.

So – why is Trump letting off his steam, showing off in such ridiculous brinkmanship? A piece of theatre for a public that is afraid to see the light? – Outbreaks of aggressive rants against Iran, North Korea, Syria, Venezuela and lately again Cuba – who is next? It’s like a dance of death – a final ritual that may end up in total nuclear annihilation or implode by its own weight, because those deep dark forces behind The Trump love life too much to let it be destroyed by their overdose of thrill.