The Looming India/Pakistan Crisis – Who To Blame?

M Adil Khan

The short answer to the above question is, both!

Recent bout started with Uri, the Indian border post at the Kashmir front. 18 Indian soldiers were killed by across-the-border assailants. India blames Pakistan and Pakistan denies and says it is the work of the disaffected Kashmiri insurgents. In the ensuing row India is winning diplomatically, Pakistan is rambling madly and in between the losers are the repressed Kashmiris.

India, the largest democracy in the world, cannot deny the fact that over the years prolonged suppression and mistreatment of Kashmiris (the people of Kashmir valley) who are predominantly Muslims, have transformed these peace-loving protesting people.

In recent days violence in Kashmir has intensified to an unimaginable level and sadly, instead of doing something constructive, Indians are diverting attention of the international community to Baluchistan province of Pakistan where the ethnic Baluchis have been the victims of similar systematic persecution by the Pakistan state since 1947.

Indeed, like the Baluchis in Pakistan betrayal of the Kashmiris by the Indians also commenced right at the time of India-Pakistan partition in 1947 when Sheikh Abdullah, the then leader of Kashmir decided to join neither Pakistan nor India but wanted a separate independent state for the Kashmiris.At the time he famously said, “I have a religion in common with Jinnah, but a dream in common with Nehru”. Abdullah went with India and trusted Nehru to deliver his dream. Nehru responded by arresting the Sheikh.

This was the beginning that over the years has spiralled into a continuum of protest-violent reprisal-more protest- more repression- more violence that has since turned a tranquil Kashmir into a bloodied Kashmir.

In recent times, BJP’s ascendency to power and its Hindutva policy that is increasingly turning India into an ultra-right sectarian state is not exactly helping the cause of the Kashmiris. Its scripting of Kashmir’s freedom aspirations as a Hindu/Muslim issue is increasingly turning Kashmir into a veritable battleground of extremities of all shades – insurgents, Muslim fundamentalists, Hindu chauvinists, the military, the indomitable cross-border trouble mongers etc. etc.

Kashmir’s problem is also lack of genuine democracy and representation in the state. Even though India prides itself as the largest democracy in the world and this in large part is true where its citizens do enjoy reasonable measure of in political process, not in Kashmir. Kashmiris are governed through a form of military-political governing framework that many Kashmiris view as ‘Demon-Crazy’, democracy without freedom. An Indian human rights activist explains the situation poignantly, “For all these years the state has done everything it can to subvert, suppress, represent, misrepresent, discredit, interpret, intimidate, purchase—and simply snuff out the voice of the Kashmiri people” so much so that the “…military occupation of Kashmir [by the Indian State] makes monsters of us all.”

Ironically, in many ways India’s xenophobic sectarian politics and its apathy to its own people, the Kashmiris are increasing making it look more like Pakistan these days. This is unfortunate.

Indeed, the cycle of violence that goes on relentlessly in Kashmir is giving India’s arch enemy  Pakistan the perfect backdrop to fish in the muddy water and deepen the crisis. Prime Minister Narendra Modi’s response to the crisis is also quite baffling.  Instead of addressing the issue rationally and sensitively Modi is attempting to shift the battleground somewhere else, in Baluchistan province of Pakistan where he is focusing, not too incorrectly though irrelevantly, on Pakistan’s human rights abuses in the province and this has opened a Pandora’s Box thatnot unexpectedly is encouraging the separatist Baluchis to drag India to “do a Bangladesh” in Baluchistan. This is not only overly ambitious but also utterly delusional, for India knows that if it pushes the agenda too far it would fall on its own sword.

To start with separatist Baluchis in Baluchistan are a minority, whereas Bangladeshis were not and also that Baluchistan province does not border with India (a military advantage that made Indian intervention in Bangladesh – former East Pakistan – easy). On the contrary, Baluchistan borders with Punjab and North-West Frontier Province of Pakistan, the locations of its major military cantonments and its other border is with Iran who are not known for their affection for Baluchis. Furthermore, in recent years China has made significant investments in Baluchistan that are of strategic importance to them and therefore, any attempt to separate the province from Pakistan is bound to nudge the dragon to what end no one knows. Pakistan will also not sit idly, it will respond with more espionage in Kashmir and also in mainland India.

If anything the current crisis is hardly a cause for joy for either party. Both India and Pakistan should know by now that folly of one becomes asset of the other and vice versa and therefore it is in their best interest that neither perpetuates known mistakes. Instead both the countries must talk to each other, while Pakistan must abandon espionage and terrorism as its on-hire armoury to overcome its internal strife and India must also acknowledge that its new found role as imperialist’s deputy sheriff in the region that has given it few ounces of borrowed muscles has not actually made it as big as it likes to think. Instead it has only made India arrogant that in the long run may prove its undoing.

In summary, neither India nor Pakistan has much to gain from mutual bullying/bombing/blaming exercise, something that seems to characterize their bilateral relations at the present time. Instead both parties should devote their energies to fix mistakes that they are committing within and across their borders.

Both must know by now that there is not much joy in throwing stones at each other when the houses they live in are made of glass!

The Poisoned Chalice: From Eurozone to Dead Zone

Michael Hudson

James Galbraith’s articles and interviews collected in his book Welcome to the Poisoned Chalice trace his growing exasperation at the “troika” – the European Central Bank (ECB), IMF and EU bureaucracy – which refused to loosen their demand that Greece impoverish its economy to a degree worse than the Great Depression. The fight against Greece was, in a nutshell, a rejection of parliamentary democracy after the incoming Syriza coalition of left-wing parties won election in January 2015 on a platform of resisting austerity and privatization.

The world has seen the result: In contrast to the support given to countries with right-wing regimes, the ECB and IMF tightened their financial screws on Greece. The incoming finance minister, Yanis Varoufakis – who had been Galbraith’s faculty colleague at Austin, Texas – asked Galbraith to join him in February to help develop an alternative to the austerity being demanded. They were optimistic that reason would prevail: an awareness that the creditors’ program of “cutting wages and income without providing any relief from private debts (such as fixed mortgages) merely deepens debt burdens and forces people into bankruptcy and foreclosure.”

This book reflects Galbraith’s disappointment at how matters turned out so disastrously. In early June, a month before the July 5 referendum in which Greek voters rejected ECB-IMF demands by a heavy 61.5 percent, he thought that the government would fall if it capitulated. “So this option is not a high probability.” But that is just what did happen. Tsipras surrendered, prompting Varoufakis to resign the next day, on July 6.

A week earlier Galbraith had spelled out what seemed to be the inherent logic of the situation: Tsipras “could not yield to the conditions being demanded. So then the onus will be back on the creditors, and if they choose to destroy a European country, the crime will be on their hands to all to see.”

Tsipras did yield, and the Greece’s economy was destroyed by the Eurozone getting its way and imposing insolvency within the euro, not by forcing it out of the euro and leaving it bankrupt resorting to anti-Cuba or anti-Iran-type sanctions. Galbraith’s book presents the prosecutor’s case for what ensued. By May 3, he wrote to Varoufakis that he found “no prospect for development inside the current economic structures of the Eurozone.”

The essays in this book present Greece’s experience as an object lesson for other countries seeking to free themselves from right-wing financial control. The IMF and ECB do not even consider their destruction of Greece’s economy to be a failure. They continue to impose an austerity doctrine that was shown to be fallacious already in the 1920s.

The EU Constitution imposes debt deflation and austerity

Galbraith expressed his “epiphany” already in 2010 that a “market-based” solution was a euphemism for anti-labor austerity and a reversal of political democracy. “In a successful financial system, there must be a state larger than any market. That state must have monetary control – as the Federal Reserve does, without question, in the Untied States.” That was what many Europeans a generation ago expected – for the EU to sponsor a mixed public/private economy in the progressive 20^th-century tradition. But instead of an emerging “European superstate” run by elected representatives empowered to promote economic recovery and growth by writing down debts in order to revive employment, the Eurozone is being run by the troika on behalf of bondholders and banks. ECB and EU technocrats are serving these creditor interests, not those of the increasingly indebted population, business and governments. The only real integration has been financial, empowering the ECB to override national sovereignty to dictate public spending and tax policy. And what they dictate is austerity and economic shrinkage.

In addition to a writeoff of bad debts, an expansionary fiscal policy is needed to save the eurozone from becoming a dead zone. But the EU has no unified tax policy, and money creation to finance deficit spending is blocked by lack of a central bank to monetize government deficits under control of elected officials. Europe’s central bank does not finance deficit spending to revive employment and economic growth. “Europe has devoted enormous effort to create a ‘single market’ without enlarging any state, and while pretending that the Central Bank cannot provide new money to the system.” Without monetizing deficits, budgets must be cut and the public domain sold off, with banks and bondholders in charge of resource allocation.

As long as “the market” means keeping the high debt overhead in place, the economy will be sacrificed to creditors. Their debt claims will dominate the market and, under EU and ECB rules, will also dominate the state instead of the state controlling the financial system or even tax policy.

Galbraith calls this financial warfare totalitarian, and writes that while its philosophical father is Frederick Hayek, the political forbear of this market Bolshevism is Stalin. The result is a crisis that “will continue, until Europe changes its mind. It will continue until the forces that built the welfare state in the first place rise up to defend it.”

To prevent such a progressive policy revival, the troika promotes regime change in recalcitrant economies, such as it deemed Syriza to be for trying to resist creditor commitments to austerity. Crushing Greece’s Syriza coalition was openly discussed throughout Europe as a dress rehearsal for blocking the Left from supporting its arguments. “Governments from the Left, no matter how free from corruption, no matter how pro-European,” Galbraith concludes, “are not acceptable to the community of creditors and institutions that make up the European system.”

Opposing austerity is called “contagion,” as if prosperity and rising living standards are an economic disease, not national bankruptcy being enforced by the ECB and EU bureaucracy (and the IMF). To prevent Podemos in Spain and similar parties in Portugal and Italy from mounting a recovery from eurozone austerity, these financial institutions support right-wing governments while tightening the screws on Left governments. That is what happens when central banks are made “independent” of democratic electoral politics and parliamentary control.

Galbraith’s month-by-month narrative describes how the IMF and ECB overrode Greek democracy on behalf of creditors and privatizers. They sought to undermine the Syriza government from the outset, making Greece an object lesson to deter thoughts by Podemos in Spain and similar parties in Portugal and Italy that they could resist the creditor grab to extract payment by a privatization grab and at the cost of pension funds and social spending. By contrast, conciliatory favoritism has been shown to right-wing European parties in order to keep them in power against the left.

On the surface, the troika’s “solution” – paying creditors by bleeding the economy – seems obviously self-defeating. But this seeming failure appears to be their actual aim: foreclosure on the assets of the indebted economy’s public sector under the banner of its version of R2P: Responsibility to Privatize. For Greece this means its ports, islands and tourist centers, electricity and other public utilities.

The ECB and IMF accelerated Greece’s economic collapse by demanding a rise in the VAT from 23 percent, making tourism in the islands more expensive. “The plain object of the creditors’ program is therefore not reform,” Galbraith points out. Instead of helping the economy compete, “Pension cuts, wage cuts, tax increases, and fire sales are offered up on the magical thought that the economy will recover despite the burden of higher taxes, lower purchasing power, and external repatriation of profits from privatization.” Privatized public utilities are turned into “cash cows” to enable buyers to extract monopoly rents, increasing the economy’s cost of living and doing business.

The European Union’s pro-creditor policies are “written into every European treaty from Rome to Maastricht,” overriding “the vision of ‘sustainable growth’ and ‘social inclusion’” to which they pay lip service. Reinforcing the ECB’s monetary austerity is the German constitution, imposing fiscal austerity by blocking funding of other countries’ budget deficits (except for quantitative easing to save bankers).

The financial warfare being waged by the ECB and IMF

This is not how the EU was supposed to end up. Its ideal was to put an end to the millennium of internecine European military conflict. That was fairly easy, because warfare based on armed infantry occupation was already a thing of the past by the time the EU was formed. No industrial economy today is politically able to mount the military invasion needed to occupy another country – not Germany or France, Italy or Russia. Even in the United States, the Vietnam War protests ended the military draft. Warfare in today’s world can bomb and destroy – from a distance – but cannot occupy an adversary.

The second argument for joining the EU was that it would administer social democracy against corruption and any repeat of right-wing dictatorships. But that has not happened. Just the opposite: Although the European Union treaties pay lip service to democracy, they negate monetary sovereignty. The IMF, ECB and EU bureaucracy have acted together to collect the bad debt left over from their reckless 2010 bailout of French, German, Dutch and other bondholders. In behavior reminiscent of Allied demands for unpayably high German reparations in the 1920s, their demands for payment are based on predatory junk economic theory claiming that foreign debt of any magnitude can be paid by imposing deep enough austerity and privatization sell-offs.

So the arena of conflict and rivalry has shifted from the military to the financial battlefield. Along with the IMF and ECB, central banks across the world are notorious for opposing democratic authority to tax and regulate economies. The financial sector’s policy of leaving money and credit allocation to banks and bondholders calls for blocking public money creation. This leaves the financial sector as the economy’s central planner.

The euro’s creation can best be viewed as a legalistic coup d’état to replace national parliaments with a coterie of financial managers acting on behalf of creditors, drawn largely from the ranks of investment bankers. Tax policy, regulatory and pension policies are assigned to these unelected central planners. Empowered to override sovereign self-determination and national referendums on economic and social policy, their policy prescription is to impose austerity and force privatization selloffs that are basically foreclosures on indebted economies. Galbraith rightly calls this financial colonialism.

The asset grab promoted by the IMF and ECB is incompatible with reviving Greece or other southern European economies (not to speak of the Baltics and Ukraine). The theory is unchanged from that imposed on Germany after World War I – the theories of Jacques Rueff, Bertil Ohlin and the Austrians, controverted by Keynes, Harold Moulton and others at the time.[1] Their victorious role in this debate has been expurgated from today’s public discourse and even from academia. What passes for economic orthodoxy today is an unreformed (and incorrigible) austerity economics of the 1920s, pretending that an economy’s debts can all be paid simply by lowering wage levels, taxing consumers more, making workers (and ultimately, businesses and government) poorer, and selling off the public domain (mainly to foreigners from the creditor nations).

Galbraith contrasts economists to doctors, whose professional motto is “Do no harm.” Economists cannot avoid harming economies when their priority is to save bankers and bondholders from losses – by bleeding economies to pay creditors. What the IMF calls “stabilization programs” impose a downward spiral of debt deflation and widening fiscal deficits. This forces countries to sell off their land and mineral rights, public buildings, electric utilities, phone and communications systems, roads and highways at distress prices.

At first glance the repeated “failure” of austerity prescriptions to “help economies recover” seems to be insanity – defined as doing the same thing again and again, hoping that the result may be different. But what if the financial planners are not insane? What if they simply seek professional success by rationalizing politics favored by the vested interests that employ them, headed by the IMF, central bankers and the policy think tanks and business schools they sponsor? The effects of pro-creditor policies have become so constant over so many decades that it now must be seen as deliberate, not a mistake that can be fixed by pointing out a more realistic body of economics (which already was available in the 1920s).

Given the eurozone’s mindset, Galbraith asks whether Greece may be better off going it alone, away from the IMF/ECB “hospice” and its financial quack doctors. Saving the economy requires rejecting the body of creditor demands for austerity by central planners at the IMF, ECB and other international institutions.

Any sovereign nation has the right to avoid being impoverished by creditors who have lent sums far in excess of the amount that can be paid without being forced to engage in privatization selloffs at distress prices. Such demands are akin to military attack, having a similar objective: seizure of the indebted economy’s land, natural resources and public infrastructure, and control over its government.

These demands are at odds with parliamentary democracy and national self-determination. Yet they are written into the way the eurozone is constructed. That is why withdrawal from the current financial regime is a precondition for recovery of economic sovereignty. It must start with control over the money supply and the tax system, followed by control over public infrastructure and the pricing of its services.

The future of Europe’s Left

What led governments (although by no means all voters) to accept a supra-national pan-European authority was the trauma of World War II. It seemed that nation-states were prone to making war, but a United States of Europe would not fight – at least, not internally. But the authority that has been put in place is financial, pro-creditor and anti-labor, empowered to impose austerity and turn the public domain to into privatized monopolies.

The EU cannot be “fixed” by marginal reforms. Greece’s treatment shows that it must be recast – or else, countries will start leaving in order to restore parliamentary democracy and retain what remains of their sovereignty. The financial sector’s ideal is for economies centrally planned by bankers, leaving no public infrastructure unappropriated. Privatized economies are to be financialized into opportunities to extract monopoly rent.

The gauntlet has been thrown down, posing a question today much like that of the 1930s: Will the alternative to austerity, debt deflation and the resulting economic breakdown be resolved by a pro-labor socialist alternative, or will it lead to a victory by anti-European right-wing parties?

What makes the situation different today is the remarkable extent to which today’s European parties calling themselves Socialist, Social Democratic or Labour have accepted privatization and opposition to budget deficits. This shift reverses what they urged at their origins more than a century ago. So the problem is not only to resist the right wing of the political spectrum; it is to reconstruct a real European left.

Galbraith’s book has important implications for the policies needed to save the eurozone from being turned into a dead zone along the lines of Latvia’s disastrous oligarchic “success” story. (Drastic emigration and declining after-tax wages are the “Baltic Miracle” in a nutshell.)

If European Left does not succeed in creating an alternative to eurozone austerity, right-wing nationalists will lead a withdrawal campaign. Golden Dawn in Greece, France’s National Front, along with Hungarian, Austrian and Polish nationalist parties and Britain’s UKIP are moving to fill the vacuum left by the absence of a socialist alternative to financialization under ECB and IMF dirigisme.

Can Russia Learn From Brazil’s Fate?

Paul Craig Roberts & Michael Hudson

William Engdahl recently explained how Washington used the corrupt Brazilian elite, which answers to Washington, to remove the duly elected President of Brazil, Dilma Rousseff, for representing the Brazilian people rather than the interests of Washington. Unable to see through the propaganda of unproven charges, Brazilians acquiesced in the removal of their protector, thereby providing the world another example of the impotence of democracy.

Everyone should read Engdahl’s article. He reports that part of the attack on Rousseff stemmed from Brazil’s economic problems deliberately created by US credit rating agencies as part of Washington’s attack to down grade Brazilian debt, which set off an attack on the Brazilian currency, the real.

Brazil’s financial openness made Brazil an easy target to attack. One might hope that Vladimir Putin would take note of the cost of “economic openness.”  Putin is a careful and thoughtful leader of Russia,  but he is not an economist. He has confidence in neoliberal Elvira Nabiulina, Washington’s choice to head the Russian central bank.  Nabiulina is unfamiliar with Modern Monetary Theory, and her commitment to  “economic openness” leaves the Russian economy as exposed as Brazil’s to Washington destabilization. Nabiuina believes that the assault on the ruble is due to impersonal “global market forces,” not to Washington’s financial clout.

Nabiulina, an indoctrinated and propagandized neoliberal, is essentially a servant of Washington, not that she is aware of her role as “useful idiot.” She delights in the applause she receives from the Washington Consensus for leaving the Russian economy open to Washington’s manipulation. Being a neoliberal, she does not understand that Russia’s central bank can create at zero cost the money with which to finance productive projects in Russia.  Instead, she thinks that the money entering the economy from the central bank is inflationary, but the money entering the economy from foreign sources is not.

Money is money regardless of whether it is made available by the central bank or by foreign creditors.  As long as the money, whatever its source, is used productively, the money is not inflationary.

There is a huge difference between the money created by the central bank and the money created by foreign creditors.  Money lent by foreign banks in the form or US dollars or euros must be repaid with interest in the foreign exchange in which the money was lent.  Money created by the central bank to finance public infrastructure projects does not have to be repaid at all, much less with interest and in foreign exchange earned by exports.

Funds acquired from borrowing abroad bring many risks.  The money can be pulled out, collapsing a freely traded ruble.  The interest that must be paid is a drain on Russia’s foreign currency reserves. Foreign borrowing also brings a foreign exchange risk, which rises with economic sanctions. If the ruble drops in value or is driven down with an orchestrated attack, the ruble cost of the foreign loan can rise dramatically.

None of these risks and costs are present when the central bank is the source of money. The appropriate use of the Russian central bank is to create the money with which to finance public projects and to serve as lender of last resort to private Russian companies unable to obtain funding elsewhere. This use of the central bank insulates the Russian economy from orchestrated destabilization.

It is unfortunate for Russia that Nabiulina and prime minister Dmitry Medvedev believe that Russian debt financed by hostile foreigners is preferable to money created by Russia’s own central bank.  Glazyev, alone among Putin’s advisers, understands this.  We suspect that the Atlanticist Integrationists have a target on Glazyev’s back as they hope to integrate Russia with the West regardless of the costs to Russia. These Russian “America Worshipers” are Russia’s greatest problem.

For Washington, neoliberal austerity is for “export only” to countries that Washington intends to turn into dependent financial colonies. By accommodating Washington’s goal, Nabiulina is engaging in a charade.  The dollars and euros borrowed from abroad are not the money that goes to the Russian borrowers.  The borrowed foreign exchange is held by the central bank.  Nabiulina then creates the rubles that finance the projects.  There is no point whatsoever to borrowing foreign currencies as backing for domestically created rubles.  Regardless of whether Russia borrows abroad, the central bank must create rubles with which to finance the projects.  So there is no point to the foreign borrowing.

A Russian government that cannot understand this is in deep trouble.

The Biggest Heist in Human History

Mike Whitney

Here’s your economics quiz for the day:

Question 1– What do you think would happen if you put $3 trillion into the financial system?

a–Stock prices would rise

b–Stock prices would fall

c–Stock prices would stay the same

Question 2– What do you think would happen if you put $3 trillion into the economy? (Via fiscal stimulus for infrastructure projects, extended unemployment benefits, food stamps, etc)

a–Activity would increase and the economy would grow

b–Activity would slow and the economy would shrink

c–Activity would stay the same, so growth would remain unchanged

If you picked “a” for both questions, then pat yourself on the back because you got the right answers.

Now try to answer this one, last “bonus” question:

Question 3– If adding money to the financial system boosts asset prices, and adding money to the economy boosts growth, then why did the Fed add $3 trillion to the financial system expecting the economy to grow?

Is the Fed confused about how the economy works? Is the Fed confused about how the financial system works?

Probably not. There’s probably some other explanation altogether, after all, why would someone put gas in their radiator when the gas-tank is empty. That’s not going to provide fuel for the engine, is it? The same rule applies to stimulus.  The only way stimulus can work is if its put where it’s needed. And we can now say with 100 percent certainty, that the Fed’s stimulus wasn’t put where it was needed which is why it hasn’t worked.

How do we know that?

Just take a look at GDP. Second Quarter GDP came in at a dismal 1.2 percent even though interest rates are still locked at near-zero and the Fed is still recycling the cash from maturing bonds into more government debt.

Do you know what 1.2 percent GDP means?

It means that spending is weak, business investment is anemic, personal consumption is in the toilet and credit growth is kaput.  It means that the economy has basically stopped breathing, been taken off the respirator and is being rushed  to the morgue for embalming before rigor mortis sets in. It means that the people who are assigned the task of managing the system either don’t know how the system works or have an ulterior motive for the policies they’re using.

So, which is it? Is the Fed a moron or a liar?

Now we’ve all heard the expression, “The definition of insanity is doing the same thing over and over again, and expecting a different result”.

Well, the Fed has been doing the same thing for the last seven years — dumping money into the financial system while predicting stronger growth. That would seem to suggest that the Fed is insane, but is the Fed insane?

No, in fact, the members of the FOMC are extremely-bright, well-educated professionals who have a solid grasp of the economy and the many intricacies of the financial system. These are smart guys, real smart. So, maybe they have an ulterior motive. Maybe that’s why they’ve stuck with the same failed policies all these years.

But if they have an ulterior motive,  then what is it?  What are they trying to achieve?

The easiest way to answer that question is by simply following the money. We’ve already seen that QE and zero rates have done nothing for growth, so –the question is– where have these policies had the greatest impact?

Why, the stock market, of course!

Did you know that the Dow Jones Industrials (DJIA) bottomed on March 9, 2009 at 6,507.  As of Thursday (9-15-16), the Dow finished the day at 18,211 nearly three times higher.  The same goes for the S and P 500 which slipped to 676 in March 2009, but rebounded to 2,147 as of yesterday afternoon. Then there’s the Nasdaq which fared even better bouncing back from an abysmal 1,268 in 2009 to a lofty 5,249 yesterday.

Now if stocks rise due to fundamentals, then that’s just great because it means the underlying strength of the economy is driving prices higher.  But if stock prices rise because the people who are supposed to be the  referees (The Fed) are gaming the system by printing up trillions of dollars and sticking it in the financial markets so their crooked friends can send their kids to Ivy League schools and drive around in Lamborghinis, then it’s not so great.

When the Fed pumps liquidity directly into the financial system, that liquidity cannot accurately be called “monetary stimulus”.  It’s not stimulus anymore than if the Fed put a billion bucks into your fledgling-Podunk  landscape business.  It’s a subsidy, a gift, a handout.  Even so, $3 trillion is a lot of money, enough money to light a fire under stocks and send them into the stratosphere. Which it has.  But let’s not kid ourselves,   stocks didn’t triple because production, earnings and growth are all going great-guns. That’s not it at all, in fact, they’re all unusually weak.  Stocks are in record territory because the Fed’s relentless interventions have kept them elevated, which has propped up the insolvent banking system and generated gigantic profits for Wall Street.

And while rising stock prices don’t necessarily prove that the Fed has an ulterior motive; identifying the people who benefit from those inflated prices certainly does. After all, who owns stocks and bonds?

We can break these people up into three separate groups; The pretty rich, the very rich and the filthy rich.  These are the people who own stocks and who benefit from the Fed’s policies.

So what does this tell us about the Fed’s “full employment, price stability” mandate?

It tells us its baloney. It tells us its public relations-hype designed to bamboozle the sheeple who can’t see what’s going on right beneath their noses.. It tells us the Fed has a secret mandate to assist the profit-accumulation process for the Kleptocrat class of  ivy league moochers. (Wall Street) It tells us that the Fed’s real job is implement the policies that best facilitate the upward distribution of wealth.  It tells us that the Fed’s so called “independence” is a complete and utter fraud  and that if Janet Yellen or any of her meat-puppet-colleagues on the FOMC ever veered as much as a centimeter to the left of her corporate marching orders– they’d find themselves wrapped in plastic-sheeting and gasping for air at the bottom of the East River in a pair of cement booties.

The whole idea that the mousy Ms Yellen is calling the shots for the world’s most powerful financial institution is the most ridiculous thing I’ve ever heard. Does anyone actually believe that rubbish?

Yellen is a public relations invention, a small but critical part of a larger charade that is intended to conceal the manner by which the vast bulk of the nation’s wealth is transferred from one class to another. Let’s call it The Great Central Bank Policy Swindle, because that’s what it is. The Fed is merely an apparatchik agency that keeps its thumb on the scale to make sure all the loot goes to its bloodsucking constituents. That’s how the system works.  Here’s a little background from an article at the WSWS:

“A new report issued by the Swiss bank Credit Suisse finds that global wealth inequality continues to worsen and has reached a new milestone, with the top 1 percent owning more of the world’s assets than the bottom 99 percent combined.

Of the estimated $250 trillion in global assets, the top 1 percent owned almost exactly 50 percent, while the bottom 50 percent of humanity owned collectively less than 1 percent. The richest 10 percent owned 87.7 percent of the world’s wealth, leaving 12.3 percent for the bottom 90 percent of the population.” (“Top 1 percent own more than half of world’s wealth“, World Socialist Web Site)

But it’s not just the fact that half of everything is owned by a handful of obscenely-wealthy, money-grubbing loafers. This same voracious crew of miscreants is pulling down the lions-share of the yearly income too.  Check it out:

“The census data also reveals that income inequality in America remained virtually unchanged from 2014, with the wealthy in the top fifth of the population taking in about half of all household income, while the bottom fifth earned only 3.4 percent.”  (“Despite increase in 2015, US household income still lags behind pre-recession levels“, Kate Randall, World Socialist web Site)

So –not only do the plutocrats own half of everything on planet earth– their share of the booty is actually increasing every year. Nice, eh?

The point is,  none of this is accidental. These outcomes are the direct result of policy, the Fed’s policies.  And the Fed is not alone either. This greatly-accelerated class war is a now global phenom.  Just look at this tidbit I picked up  from an article at CNBC:

“Data from JPMorgan shows that the top 50 central banks around the world have cut rates 672 times since the collapse of Lehman Brothers, a figure that translates to an average of one interest rate cut every three trading days. This has also been combined with $24 trillion worth of asset purchases.” (“QE Infinity: Are we heading into the unknown?“, CNBC)

$24 trillion!

$24 trillion represents the biggest freaking bank heist in human history, and what do we have to show for it?

A big fat nothing, that’s what! All the data is sagging and global growth has slowed to a crawl. It’s like all the dough that was supposed to strengthen the fictitious recovery just vanished into thin air. Poof!

So why hasn’t that  $24 trillion had more of an impact?  Why isn’t their more inflation, more activity, more spending, more consumption and more growth???

It’s because everywhere the global bank cartel has its tentacles, the same policies of austerity and QE have been adopted. (Japan, UK, EU, US etc) Everywhere you look it’s caviar and Dom Perignon for the investor class and thin gruel and table scraps for everyone else. Everywhere economies are being gutted, looted, hollowed out by financial parasites who seek greater gain by holding down wages, slashing benefits and retirement, and eviscerating standards of living for ordinary working slobs while the big money honchos are living the life of Riley. Everywhere it’s starve the beast but gorge the rich.

This is political economy writ large. Trump is right, the Fed is the most political institution in government. It IS the government, and it has an absolute stranglehold on the economy.

Is it any wonder why owners of wealth are no longer using their money to invest in future production or growth or retooling or building factories or anything. Instead, they’re buying back their own shares, issuing fat dividends on droopy earnings, and shrinking their businesses in the relentless pursuit of short-term gain.

This type of destructive behavior didn’t just appear out of the ether. Heck, no. The Fed’s easy money policies created irresistible incentives for this reckless, suicidal behavior. That means the Fed is 100 percent responsible for the fragile condition of the financial system and the ginormous asset-price bubble that’s headed lickety-split for the powerlines.

But now it’s all coming to a head. Now all the bigtime global institutions (IMF, BIS, WTO, OECD) are warning that a “Hard Rain’s a-gonna Fall” and that the day of reckoning may be at hand. According to a recent report by the Organization for Economic Co-operation and Development (OECD), GDP-per-capita will grow only 1% in 2016, “which is half the average in the two decades preceding the crisis.”

As it happens, the OECD report is no more apocalyptic then the others, it’s just more explicit in what it expects to transpire.   Here’s more on the report from Wolf Street:

“Financial instability risks are rising, including from exceptionally low interest rates and their effects on financial assets and real estate prices.”…

Share prices have risen significantly in recent years in advanced economies, notably in the United States. By contrast, the growth of profits for non-financial companies has recently slowed to a modest pace, following a post-crisis recovery…

A reassessment in financial markets of interest rates could result in substantial re-pricing of assets and heighten financial volatility even if interest rates were to remain below long-term averages….”

(“OECD Warns Fed, BOJ, ECB of Asset Bubbles, “Risks to Financial Stability,” Pinpoints US Stocks & Real Estate “, Wolf Street)

Okay, let’s summarize: The global economy is slowing, corporate profits are tanking, monetary stimulus has lost its mojo, and financial instability risks are rising.

Oh, and did you catch the part about “a substantial re-pricing of assets”.  That’s financial jargon for “a crash”, a big, thundering, cataclysmic, earth-shattering CRASH.  The author is simply stating the obvious, that Central Banks have brought us to the brink of another gut-wrenching downward spiral followed by another excruciating financial crisis.

And it’s all by design, the unavoidable result of the Fed’s destabilizing, wealth-shifting policies.

How many times are we going to go through this drill before we disband the Fed and start from scratch?

Repudiate the “Doctrine of Discovery”: an Open Letter to Pope Francis

Joe Beasley

The “Doctrine of Discovery” of 1493, also known as the Papal Bull “Inter Caetera”, was issued by Pope Alexander VI on May 4, 1493. It is arguably the most damaging policy ever enacted in human history. In fact, the 1493 Papal Bull stated that land that was not inhabited by Christians could be claimed and exploited in order to expand and instill the Christian faith. Without doubt this was the justification for European/western expansion that resulted in pain, suffering, exploitation and mass extermination. The effects of this dreadful doctrine are felt to this day.

As a descendent of the Trans-Atlantic slave trade, I am one who can affirm the negativity of this Papal Bull being felt even until this present moment. Your Holiness, I am asking you in the name of Jesus Christ, that you repudiate this doctrine immediately to stop the hemorrhaging of people worldwide. In fact, “Peter opened (his) mouth, and said, of a truth I perceive that God is no respecter of persons” (Acts 10:34 – KJV) and therefore stating that God is not biased of individuals or of one group of people over another.

Your Holiness, over the past year I have visited the Democratic Republic of the Congo (DRC) three times. In 1921, Jesus Christ visited a deacon by the name of Simon Kimbangu in Nkamba, Congo. Deacon Kimbangu was commissioned by God into His service to renew their strength because they had fallen into apostasy. Consequently, Deacon Kimbangu was accused of inciting riots and convincing the people not to pay taxes. As a result, he was placed in prison and later on given a death sentence, which was commuted to life. After serving 30 years, he died in a Belgian controlled prison.

After the Berlin Conference of 1884-1885, the Papal Bull of 1493 helped further to enable King Leopold II to legitimize his claim of ownership of the DRC and unrepentantly to treat those in the Congo with devastating atrocities almost directed toward extermination – except that he wanted some of them as oppressed workers. Over the next 23 years, up to 10 million citizens of the DRC were murdered!

This edict, or doctrine, Your Holiness, declared by the Roman Catholic Church more than 600 years ago, was infiltrated and adopted into European Christian nations solely for the purpose of having a legal basis to confiscate properties that would be in their best interest at any time, and, according to its language, served to devalue and dehumanize peoples and societies of color. Non-compliance to this doctrine would result in various forms of persecution, including slavery and death.

In fact, the 1493 “The Doctrine of Discovery” Papal Bull was part of an on-going justification of this oppression as stated by Thomas Aquinas in 1271: “Unbelievers deserve not only to be separated from the church, but also to be exterminated from the world by death.”

Your Holiness, this position as expressed in the Papal Bull has led to several ills in this world, namely Slavery, Unjust Treatment, Poverty, Discrimination, Apartheid, Separate But Equal Laws, Jim Crow, Financial Ruin, Massacres and much more. To justify the cruelty of slavery and subjugation of Africans, the slaveholders, for one, claimed that Africans were not human and therefore could be used and abused in any way the slaveholders so desired. This cruelty was for, as you know, the financial gain of slaveholders at the expense of others and the slaveholders very own humanity. Many of the slaveholders also claimed to be Christian and obvisouly chose to accept the ongoing concepts of major doctrines, such as the Papal Bull of 1493, as a rationale for their behavior.

As mentioned, people of color throughout the world still suffer from these ills. Historically, and in the 20th and 21rst centuries alone, all of this has been importantly coupled with countless reactions to this oppression such as Sit-ins, Marches, Occupy Movements and many other collective actions in the United States and internationally. Yet, the oppression continues.

In 1776, the “Declaration of Independence” of the United States forthrightly declared, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

Your repudiation of the “The Doctrine of Discovery” would also help us in America to further enforce and enshrine the “Declaration of Independence” and to then help spread this compelling statement and sentiment throughout the world.

Your Holiness, in the name of Jesus Christ, I ask that you consider going to Nkamba in the Congo and address the Kimbanguist Church that numbers some 22 million adherents worldwide. The poverty that exists in that Nation is due directly and solely to this unjust “doctrine”, and, in my opinion, pains the very heart of God!

Upon repudiating the Bull of 1493, therefore, I pray you will also consider going to Belgium and entreat that government, including King Philippe Leopold Louis Marie, to begin the healing process for the people of the DRC.

You have declared 2016 as a year of Jubilee. Luke 4:18-19 states, “The spirit of the Lord is upon me, because he has anointed me to preach the gospel to the poor; he hath sent me to heal the broken hearted to preach deliverance to the captive, and the recovery of sight to the blind, to set at liberty them that are bruised, to preach the acceptable year of the Lord.” I cannot think of a better way to honor this declaration of 2016 as a year of Jubilee than by a Papal repudiation of the “Doctrine of Discovery.”

Your Holiness, the above concerns and issues are worldwide precepts, and we cannot be satisfied until we let “justice roll on like many waters, and righteousness like an ever-flowing river” (Amos 5:24).

I also respectively request to meet with you, along with a delegation of like-minded people, to discuss with you this significant matter.

With every good wish to your Holiness, I am,

Sincerely Yours,

Deacon Joe Beasley

Antioch Baptist Church North

Atlanta Georgia, USA

404 218 3997

joebeasley1@gmail.com

www.joebeasleyfoundation.org

Damned Nations, Cursed Arms Trade

David Swanson

Samantha Nutt has spent decades working on humanitarian aid in war zones. Her book, Damned Nations: Greed, Guns, Armies, and Aid, is rich in wisdom drawn from experience. But more powerful and pointed, and worth beginning and ending with, is her talk titled “The Real Harm of the Global Arms Trade.”

Nutt describes child armies across the global south including eight-year-olds who have never been to school but have fought and killed using automatic weapons. Yet, she says, war can be ended despite its being “as old as existence.” (I think part of the path to ending it may involve rejecting myths like the one that war is as old as existence, but never mind that.)

Nutt describes a root cause of war that the wealthy of the world could easily eliminate, because it’s not found in the “human nature” of Africans but in the financial records of educated, well-off, comfortable people typically not involved in war directly.

There are 800,000,000 small arms and light weapons in use in the world, Nutt says. There are places where you can get an AK47 for $10, and where you can get an automatic weapon more easily than a glass of clean water. (Of course it would cost a tiny fraction of military spending to provide the world with clean water — $11.3 billion per year, says the U.N.)

Nutt shows two maps of the world, one highlighting the locations of wars, the other the locations of the big weapons exporters. There’s no overlap. Like alcohol for Native Americans and opium for Chinese, weapons of war are products that the United States and Europe (and Russia and China) push on targeted populations. Eighty percent of all war weapons, Nutt says, come from the five permanent members of the U.N. Security Council plus Germany.

Nutt shows two other statistics. One is that small arms sales are up three-fold in the past 15 years. The other is that deaths caused by them are up over three-fold in the same time. Arms shipped to Iraq and Syria are in the hands of ISIS, she notes. Arms shipped to Libya are in the hands of Boko Haram. Weapons’ first stop is rarely their last.

So, Nutt concludes, what we need is “transparency” in arms sales. Ignore that bit. I know that even transparency is too much to ask of the U.S. government, but that doesn’t make it an appropriate demand. What we need is an end to weapons gifts and weapons sales. Everybody knows the U.S. is selling Saudi Arabia weapons with which to blow people up in Yemen, boost terrorism, and destabilize the region. Knowing it doesn’t help anything. And stopping it wouldn’t make a single other weapons sale or gift to a single other nation, or to Saudi Arabia next month, morally defensible. There’s no proper way to deal arms.

So, if you live in the United Kingdom, make Jeremy Corbin your prime minister. And if you live in any other wealthy northern country, bring nonviolent pressure to bear on your society and your rotten government to end the arms trade. If we can divest from Israeli war crimes and nukes, we can divest from the overarching evil, which is war. Nutt also suggests weapons divestment in her book, along with numerous suggestions for improving and expanding humanitarian aid.

Antiwar and pro-aid activists need to work more closely together. Antiwar groups need Nutt’s wisdom on where to best direct aid. Nutt, in my humble opinion, could use a bit more understanding of what’s wrong with war. That sounds ridiculous for me to say from the safety of my home as she travels from war zone to war zone, but citing six million Jews as the greatest killing ever done by war misses the problem. And I don’t mean by omitting the three million non-Jews killed in the camps (though why omit them?). I mean the 50 million or more killed in the war outside the camps, a war justified in U.S. mythology by the deaths of the Jews, despite the U.S. and U.K. governments’ refusals to evacuate them or accept them as refugees.

Perpetuating World War II myths in an antiwar book for Americans is as ill advised as any of the counterproductive amateur attempts at aid that Nutt critiques. (Never mind the reduction by ten fold of the number of Iraqis killed since 2003 in the statistic Nutt uses, or her repetition of the “erase the state of Israel from the map” line/lie, or her claim that arming Paul Kagame is an example of good weapons proliferation, or her claim that we couldn’t know Iraq had no nukes or chemical or biological weapons until years after 2003.)

Nutt’s focus is not on debunking propaganda for war but on providing aid. She claims that “the single greatest impediment to peace [is] the marginalization of women and girls.” Really? I don’t deny its significance. But the single greatest impediment? Just a few pages later, Nutt is recognizing NATO’s interest in pretending to have a reason to exist as a cause of the violence she’s discussing in Somalia — a place that does not manufacture the weapons used in it and still wouldn’t if it stopped marginalizing women. A few lines later, Nutt is describing how using militaries trained and armed for war to provide aid tends to produce, on the contrary, war. Not only does the U.S. invest many times more in war than in aid, but it ruins prospects for private aid organizations by destroying, as Nutt recounts in Somalia, the ability of aid groups to claim neutrality, and the ability of suffering people to trust the advice of foreign doctors.

Nutt writes as well as anyone on the topic of Western society’s deep financial investment in war:

“The New York State Teachers’ Retirement System, for example, has nearly $2 billion invested in weapons manufacture. When teachers start betting on a boom in weapons sales to see them through their golden years, it’s time to load the trunk of the car with flashlights and soup cans.”

Later, Nutt writes:

“Peace, development, and security will remain stubbornly out of reach for any civilian population choking on weapons fed to them by countries with eighty times their GDP.”

That strikes me as right, and as grounds for putting our efforts into ending arms dealing.