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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

 
Best of Bill Buckler
May 2, 2012
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The IMF has been slapping patches on the bursting financial bubbles of a world of debt-based money ever since the last tenuous link between the US Dollar and Gold was summarily cut in August 1971. In all these instances, going back to the Latin American debt crises of the late 1970s - early 1980s, the pretense has been that the IMF is putting right the financial system of the nation or nations seeking its aid. In reality, however, the real beneficiaries of the IMF's "recovery programs" have been the banks which lent the money that caused the bubbles in the first place. Had the IMF not done this, then the global experiment in debt-based money which began in 1971 would not have survived its first decade.

The IMF's recipe for preventing the sovereign debt paper held by Western and in particular US banks from being exposed as wastepaper was always the same. In return for being bailed out with still more promises to pay, the afflicted nation or nations was given an unvarying set of rules. It had to erase or at least greatly lessen its budget deficits. It had to stop trying to prop up its currency on the markets. It had to give first priority to its international creditors. It had to tighten financial regulations. It had to accept IMF "supervision" to ensure it was following the rules. And there was one other iron-clad rule enforced more stringently than all the others. The use of a nation's foreign exchange reserves to meet its debts was FORBIDDEN. The Asian crisis of the late 1990s was a perfect example of this. Throughout that crisis, the message from the US, the lending banks and the IMF was the same: "We'll let you get away with almost anything. But don't even contemplate helping yourselves by selling your US Treasury debt". US Treasury debt was and still is sacrosanct. It is the foundation of the entire global system…

In 2010, the Merriam-Webster Dictionary - published in the US of course - picked "austerity" as its word of the year. "Austerity" had seldom cropped up before, but in 2010, the dictionary racked up more than 250,000 "hits" on its website seeking a definition of the term.
In "olden days", before the word became inextricably intertwined with the European debt crisis, austerity was a perfectly useful and reasonably innocuous term. It was defined by most dictionaries as: "The trait of practising self- discipline". That was before it was usurped by the political, economic and financial world. Today, the word "austerity" is hardly ever used by itself, it is invariably paired with the word "European". Here's how the Wikipedia defines austerity: "In economics, austerity is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided."

Type "austerity" into Google and you will be hard pressed to find a simple definition of the word amongst your search results. What you will find is an avalanche of "hits" covering all aspects of the present European debt dilemma. Read a few of them at random and the message will become very clear. One headline is all that is needed to sum them up. It appeared on April 28 in Bloomberg: "Austerity Measures Leading Europe to Suicide', Nobel Economist Says." No, the "Nobel Economist" in question is not Paul Krugman, although it might as well have been. In this instance, it is Joseph Stiglitz. Mr Stiglitz asserts that "there has never been a successful austerity program in any large country". Echoing a vast herd of political pundits and growing numbers of European politicians, Mr Stiglitz claims that austerity is toxic to "growth" - the holy grail of all mainstream economists - Nobel or otherwise.

 

What Is It That Is "Growing" Here?:

In current economics, "austerity" and "growth" have been set up as antonyms or opposites. If "austerity" is a program of government "self-discipline", of deficit cutting and lower spending, then what is "growth" and what is "growing" when government self-discipline is not being practised? It is difficult to see how the REAL message being imparted here could be made any clearer. If government self-discipline is leading an entire continent to "suicide" by choking off "growth", then the "growth" which everyone is imploring Europe to pursue must be a growth in the size of government. How could it be anything else?

Here lies the insoluble problem - for Europe and for the world. Again, Mr Stiglitz states it eloquently: "The problem is that with the Euro, you've separated out the government from the central bank and the printing presses and you've created a big problem." The peripheral (and now not so peripheral) European nations do NOT have direct access to the printing press. They cannot "grow" their way out of their present dilemma by printing their way out of it. This, according to Mr Stiglitz, is a suicidal position to be in. And so it is. It exposes the IOUs which governments everywhere use to disguise their own "growth" as the wastepaper which they are.
The rates being demanded for European sovereign debt on the secondary markets are eloquent evidence of this. So are the ongoing European downgrades by the US based ratings agencies. Spain is the latest recipient of this, having had its rating cut by two notches this week by S&P. The full court press by the rest of the world on Europe is reaching a climax. The most pressure is coming from those nations where the facade of "growth" is still standing between their economy and economic reality.

While the Germans still maintain (quite rightly) that the notion of "curing" a debt crisis by throwing more debt at it is absurd, they are becoming a very lonely voice in Europe. Governments all over Europe have either toppled or are losing their ability to govern. The latest victim here is the Dutch coalition government which collapsed this week. And on May 6, the chances are overwhelming that France will have a new President. The rest of the world does NOT want Europe to export "austerity".

 

 

 

.Ó 2009 – The Privateer

http://www.the-privateer.com

capt@the-privateer.com

(reproduced with permission)

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