A New Financial Order Emerges
On the morning of Friday 22nd July 2011, following an extended fit of hyperactive political kabuki theatre, with great fan fare and back slapping, the EU circus was celebrating yet another in a lengthening list of sublimely pyhrric victories - the pathetic and completely temporary “rescue “of the Eurozone financial system from total collapse. But despite the all-too-typical dose of myopic self delusion, the spectre of death and chaos hangs in the air, menacing the proceedings and their political aftermath with the grim visage of calamities long since past and, amongst the semi literate progeny of decades of educational neglect, largely forgotten in Europe.
Global markets have reacted with typical knee-jerk predictability to the promise of yet more hot ink glistening tantalisingly on freshly pressed electronic bank notes, in a grotesque imitation of a snake chasing and eating its own rapidly disappearing tail. Leading the pack were the usual suspect criminal banking cartels, Barclays, RBS, Lloyds. Never was moral hazard on a galactic scale such good business than under the reigning lunacy of a political class whose arrogance and detachment from reality is accelerating at a rate that can only be compared to the monetary inflation that their idiocy and moral cowardice has now unleashed upon the world.
So what has actually been done, by our bungling misleaders? Well, according to media reports, which recent events in UK have demonstrated can hardly be trusted in these parlous and treacherous times, the EU has just instituted it’s very own Treasury Department, currently going by the unassuming and deceptively less grandiose name of the “European Financial Stability Fund”, or EFSF. The deal that was reached yesterday effectively empowers this “fund” to assume the public debts of the first EU member state to default on its national debt obligations to “private investors”, which as we should all know is code speak for the money power and its consortium of Imperial financial fondi, centred in the City of London and its more junior appendages in Wall St.
In the case of stricken Greece, the servicing of these debts is, temporarily we are told, now the sole competence of the EFSF, effectively creating a transfer union within the EU bureaucracy. In return for “reluctantly” assuming this onerous responsibility on behalf of her member states, the EU will hold Greek state assets as “collateral”. In practice this effectively means that Greece no longer exists as a sovereign nation, and has basically been wiped off the map, replaced with a line item in an EU accounting system. Naturally, it would be impolite to mention that the EU does not actually have an accounting system, or how else would they have been able to hide all of the fraud and corruption that has prevented their accounts from being signed off to the present day?
Constitution, What Constitution?
As if that were not enough to inspire you with an existential sense of horror and trepidation, the entire EFSF arrangement is in any case blatantly illegal under the terms of the Lisbon Treaty, at least in its current form, not to mention the original founding Treaty on European Union, which explicitly bars member states from assuming the responsibility for the debts of another member state.
In view of the potentially massive ramifications, as debt crises in Portugal, Ireland, Italy and Spain reach their own point of no return, it is difficult to speculate as to how such a proposal can be effected without ratification by all 27 member states.
In parallel with all this Machiavellian manoeuvring, the German constitutional court itself is due to rule on the subject of EU bailouts in September, following a Lawsuit by a prominent group of economists and Euroskeptics. Clearly, the developments around the EFSF have dramatically upped the stakes and the potential consequences of whatever decision is reached in this ruling.
With that said, where there is a megalomaniac, corrupt and venal will, there is always a way. A glimpse into the character and behaviour of just one of the de facto linchpins of the international financial oligarchy, Dominique Strauss Kahn, should be sufficient to disabuse us of any attempt to infer sensible or rational extrapolations of lawful and legitimate governance, at the top of the shining pyramid of misery that is being constructed on the backs of us all.
A Systemic Crisis
Meanwhile, across the pond, tempers continue to fray as the USA approaches its own deadline for raising the current government debt ceiling. Our readers will know that this crisis is the entirely lawful consequence of the first bailout, kicked off in 2007 following the collapse of Bear Stearns, and hence traces back to the same criminal banks and financial sharks that are behind the shenanigans around the EFSF.
At every step of the way since that tempestuous time, these same criminal banks have threatened, cajoled and stampeded their way to keeping the veins of the public purse open to the sucking of their endless black hole of collapsed and worthless financial paper. Yet still, the medicinal tune never changes, and each inevitable economic turn for the worse prompts no mea culpa, just more cries for easing the profligate bowels of the quantitative beast.
Can this really all just be an honest mistake, a case of fundamental economic illiteracy or simply a just a bad dose of Neanderthal stubbornness, on the part of the guardians of the central banking temples of our age?
Make no mistake, the EFSF and what it implies is no temporary solution, but rather a fait accompli, a coup de grace, long since in the planning by the ruling class, whose only requirement was for the “right existential crisis” to appear as if by magic, and panic entire governments and nations to abandon their freedoms and their birthright, all in the name of a fraudulent game of monetarism. We have now reached end game, the point at which civilisation as we have known it, the entire basis of legitimate democratic government, is on the edge of disappearance, with supranational economic governance, being rudely and violently imposed in its place.
On the flip side, none of this is by any means inevitable. The US Congress is currently weighing HR 1489: The Return to Prudent Banking Act, which would bring the banking system back under control of the government, and enforce a strict “Glass-Steagall” style separation of commercial and investment banking operations, an essential precursor to bankruptcy-reorganization and recapitalisation. Perhaps not co-incidentally, City AM reported this week that “Full Glass-Steagall is back on the agenda of the Independent Commission on Banking”. Will saner institutional forces intervene and pull us all back from the brink, and, more importantly what are we – you - going to do to make sure that they do?
What Next?
In 1349, Boccaccio began work on his magnum opus, The Decameron, a visceral description of the madness and depravity of a nation in the throes of an economic crisis of biblical proportions. In his time, the crash was brought about by the usurious lending practices of the houses of Bardi and Peruzzi, the Lombard Banks, which collapsed in 1343 following a default by King Edward III.
Against the backdrop of the Black Death as it rampaged through the City of Florence, Boccacio cast his actors, seven men and three women, who retreat from the carnage into the hills around the city to tell their bawdy and ribald tales of human folly and failing. All around them, death and disease ravage the landscape, killing 2/3 of the population of the city, as the European continent plunges head long into what later became known as the New Dark Age.
The circumstances in which we now find ourselves, in the closing days of July, with the claxons and emergency indicators of the global economic collapse shrieking their furious warnings in a mounting crescendo, are far more serious even than this. This time, in the world of electronic money and markets, there is no theoretical limitation to the rate of a hyperinflationary explosion of the global financial system, other than the mathematical constraint on the size of a 64 bit floating point number, which I can assure you is a very very large number indeed. If and when QE3 is implemented, the effect will be immediate, as we pass through an inflexion point, experiencing an economic shock front analogous to the sound barrier, as the rate of monetary expansion tends hyperbolic. An 18% increase in electricity bills will soon become a 118%, then 1118% and onwards until we starve or freeze to death, unable to meet the basic necessities of life.
This is before we even begin to consider the potential social and political maelstrom which the disintegration of the present financial and monetary system will create. The phone hacking scandal is just the tip of a very large iceberg of infighting and squabbling, within the ranks of the establishment that will soon spill over into outright violence in the form of assassinations, terrorism, coups and revolutions, if order and stability are not returned to the system in the very near future. The events in Norway cannot be treated in isolation, but as a harbinger of worse to come, if we fail to solve the crisis at its root cause.
And yet, despite this growing threat, the survival of Giovanni Boccacio’s work tells us that even in the darkest chapters of human history, great works and the ideas which inspired them persist, and even flourish, long after the authors and their troubled times have passed. Little good that this did the residents of Florence in their time, and we should also reflect on the point that medieval Italy was not exactly sitting on a hoard of nuclear and biological weapons…
Our Mission
The genius of a Boccacio, a Dante, or a Chaucer should serve as our guide in these darkening days. A society that is crumbling around us from neglect and the constant diet of dehumanising violence, sex and banality, cannot be saved by force of will alone. There is something deeper to which we must appeal if we are to conjure the spiritual power to dissolve the impenetrable mass of dark energy that is suffocating our people and their ability to respond in ways that do not perpetuate the downward spiral into which we are now at risk of tumbling forever.
In the closing summary of his “In Defence of Poetry”, Percy Shelley said that it was only in times of great existential struggle in which the body politic is capable of communicating and receiving profound ideas concerning man and nature. We should therefore rejoice in the fact that the oligarchy and their rotten system is collapsing under the weight of its own corruption and incompetence at managing the affairs of mankind. After all, is this not the moment that we, the unsung millions of suffering and downtrodden “serfs”, across the pages of history, have waited so patiently for? And is not their utter arrogance and refusal to contemplate defeat really a sign of weakness of the ruling classes, rather than one of strength?
But for all that, the crisis which now immediately menaces us will without any shadow of a doubt require reserves of discipline, resilience, and strength of purpose that we have yet to delve within ourselves. It therefore falls to us, we who truly understand the magnitude and gravity of the situation, to fight for the reforms which are now an existential matter of survival for our nation. At times, we will question our sanity, our courage to continue and resist the political, economic and social chaos engulfing us, but we must hold true to our mission, because our cause is just, and with our backs to wall, we have no other alternative. Let us not sit idly by, observing sagely from some distant philosophical hill, while our country and world disintegrate in an orgy of cannibalistic madness. Do not despair, and never give up, for we will be together in this fight until the bitter end, whatever fate awaits us all.