‘Global finance: The Shylock model’

From RT,  01 March, 2012
By Adrian Salbuchi 

A Greek brainstorming session would sound something like this: Default! Downgrade! Bond Swap! ECB Bailout! Austerity Measures! IMF Recipes! Riots! Euro Collapse! Pay up!! Can anybody make any sense out of this??

Let’s try…  Because it’s a question of joining the dots… correctly!   

First and foremost, Sovereign Debt “Crises” explode, then collapse only to “resurrect” bigger and fatter according to a Model: let’s call it “The Shylock Model” after William Shakespeare’s despicable Usurer in

“The Merchant of Venice”: Shylock loaned money to Antonio, a Venetian Merchant, demanding he sign a bond pledging a pound of his flesh as collateral…  

Models are orderly, consistent and sequential representations of complex systems.  Like a Road Map, Models can guide us from point “A” to point “B” so that we don’t go astray.  When you understand how a Model works, the complex system it represents becomes predictable.

A Comedy of Errors

In my 23rd February article for RT on Greece, I stressed the Sovereign Debt Crises are not the result of bad luck, worse judgment or coincidence. For over a quarter century we’ve seen the same show staged again and again with little variation. Greece, Argentina, Spain, Italy, Portugal, Brazil, Mexico, Iceland, Ireland, Russia, Asian Tigers… all “stupidly” borrowed too much from private bankers only to  “discover” they couldn’t pay them back.  

Symmetrically, the same group of powerful global Mega-Banks lent too much to those countries only to “discover” they couldn’t recover those loans.

A Comedy of Errors in which governments and bankers are either very stupid or… are they discretely winking at each other as they carve out pound after pound of flesh?

Can somebody please clean our dirty sheets…

Bankers and politicians make strange bedfellows.  Invariably, their Comedies of Errors get their linen soiled.  When that happens, bankers know they cannot go banging on the doors of presidential palaces, ministries of finance and parliaments yelling “Pay up, or else!” 

The farce of “democracy” and “national sovereignty” must be maintained. That’s when banker-controlled “public multilateral agencies” come on stage – IMF, ECB, World Bank – to do the, er… banging!! 
After all Greece, you ARE a member of the ECB so you must obey their orders (even if written in German).  And you, Argentina, you ARE a member of the IMF so stop wailing and do your homework!!

Doctor, I’ve got a fever…

Market Analysts and Rating Agencies are today’s financial witch doctors telling us why stock markets go up and down like a patient’s fever.  Currencies rise, currencies fall in a casino-like roller-coaster; Sovereign Debt Bond Ratings are up-graded or down-graded, all to the tune of the Pied Pipers at SP, Finch’s and Moody’s, FT and The Wall Street Journal…  And, yes, these oracles of “good” and “bad” are on Mega-banker payrolls.  

Whatever they utter is Revealed Truth.  So what if in 2008 they rated AIG, Lehman, Merrill Lynch, Fannie Mae “AA”, even “AAA” until they dissolved into oblivion?

In perfect sync, they downgrade Greece and Argentina, Spain and Italy, Ireland and Iceland forcing them to pay higher interest to the Mega-bankers…

I’ll have my Bond!

When Shylock the Usurer got ready to cut a pound of flesh nearest Antonio’s heart, he parrots time and again, “I’ll have my bond!” waving his legal contract, formally enforceable under the laws of Venice.
One will never understand a Usurer’s mindset if you believe that Shylock loaned the money to Antonio in order to get it back.  Oh, no!!  Shylock was betting on NOT getting it back!!

You see, rich, sovereign creditors who cannot pay back loans are music to bankers’ ears!   What good is a sovereign creditor who CAN and will actually pay back a loan?  That undermines the very essence of usury!   It thwarts parasitism forcing usurer bankers to have to work to find new victims to loan all that money to…

Jesus!  Do you expect a banker to work!?!?  Banker Business thrives on refinancing debt, rolling it over year after year, exponentially ballooning it through compound interest…

When a country can’t pay its debts, then our modern Shylock Banksters demand their “pound of flesh”: full control of the country turning it into a Financial Colony of the Global Power Masters, who impose their Trilateral Commission brethren in key positions of power: Papademos, Monti, Cavallo, Geithner…

It was never Shylock’s goal to recover his 3.000 Ducats.  No, Sir!  He only wanted his pound of flesh.  The loan and the bond were just the mechanism to get to that flesh.  Shylock’s Model was to legally indebt Antonio under the laws of Venice, so that those laws would then enforce his immoral outrage of executing the collateral: a pound of flesh.

Bankers’ Worst Nightmare!

What’s the worst thing that could happen to Goldman Sachs, JP Morgan, Rockefeller, and Rothschild who manage the Shylock Model?  If any sovereign country – Argentina, Greece, Spain, Brazil, Italy – were to turn around and say: “Hey!  How much did you say I owed you? 200 billion?  No sweat! Come pick up your check Monday morning…”

If that ever happened, bankers would be confronted with two very serious problems:
Problem One (a Technical Hitch): Where would they find another group of ‘sheeple’ to impose unnecessary – even fictitious – 200 billion dollar debts at usury interest?

Problem Two (a Political Hitch): They would lose control over Greece, or Argentina, or Spain, or Ireland,or Italy just when they had them right under their thumb, controlling their resources and governments; running the show because if any government were to do something “stupid” like being Sovereign, then all the bankers needed to do was say, “No, no!!  Remember: you owe us Zillions in “sovereign debt” that you can’t pay back. 

If you do something foolish like prioritizing your people’s national interests, we will wipe you off the global financial map; our global media will destroy you; we’ll throw SP and Fitch downgrades at you!  Watch out: we can literally set your country on fire!!”.   

Yes, when a country finally owes nothing to the bankers then that country is truly FREE!   Make no mistake: true national sovereignty, independence and freedom are the greatest enemies of the Global Money Power Masters.  

Today’s Global Financial System functions according to “The Shylock Model”: it will go to great lengths to carve out its pound of flesh…

Good doctors say: proper Diagnosis is the first step to becoming cured.

 Adrian Salbuchi for RT

Adrian Salbuchi is a political analyst, author, speaker and radio/TV commentator in Argentina. www.asalbuchi.com.ar

The statements, views and opinions expressed in this article are solely those of the author and do not necessarily represent those of RT.

Readying the Greek Corpse for Burial

by Stephen Lendman, MARCH 01, 2012

Greece is being systematically raped, pillaged and destroyed. Bankers demand it. What they want, they get, no matter the human toll and economic ruin.

Standing armies pale by comparison. Financial oligarchs wage war by other means and take no prisoners. Greece is Exhibit A. More on it below.

Last July, Christine Lagarde became IMF managing director. She replaced Dominique Strauss-Kahn. Spurious attempted rape allegations forced him out. In fact, he was targeted for supporting more responsible IMF policies. Bankers wanted his head and got it.

Lagarde's mandate is making IMF policy meaner and tougher. Straightaway, she backed harsh austerity measures banks demand. They include debt peonage and forcing nations to place money master interests above sovereign ones.

Last November, Mario Draghi replaced Jean-Claude Trichet as ECB president. Like Largarde, his mandate also entails raping and pillaging nations to pay bankers.

In late February, he told Wall Street Journal interviewers that forced austerity is firm policy. Enforcing it he claims will return troubled economies to long-term prosperity. In other words, starving people fills bellies. Withholding treatment cures patients, and destroying villages save them.

Journal interviewers never asked him to explain:

• 
  
• what right have bankers to prioritize their demands over sovereign state needs;

• how can ritual sacrifice increase demand; and

• how can 17 dissimilar economies coexist under straightjacket Eurozone rules.

Instead, they unquestioningly accepted his assertions about needed austerity and ending Europe's "obsolete" social contract.

"There is no feasible trade-off" between social and labor related structural changes and fiscal belt-tightening, he claimed. Only banker demands matter. Draghi and Lagarge enforce them. Corrupt politicians go along.

In a recent talk, Michael Hudson said:

"Welcome to the post-industrial economy, financialized style. Industrial capitalism has passed (through) a series of stages of finance capitalism from the Bubble Economy to the Negative Equity stage, foreclosure time, debt deflation, austerity - and what looks like debt peonage in Europe, above all for the PIIGS: Portugal, Ireland, Italy, Greece and Spain."

Latvia, Estonia and Lithuania were also raped and pillaged. Debt bondage forced large numbers to leave or starve. EU nations perhaps await the same fate. Forced debt deflation, foreclosures, unemployment and poverty's driving them all toward eventual third world status.

Perhaps mighty Germany will succumb. With fewer customers to fuel exports and weaker domestic demand, it's economic miracle may melt and become mirage.

Look at Japan. Its post-bubble economy became rolling recessions, weak recoveries, decline, deflation, and stagnation for over two decades.

Europe's already in recession. Austerity and rising oil prices assure greater trouble. Yet consensus thinks EU nations will muddle through. Liquidity infusions prioritize speculation and market manipulation at the expense of economic needs.

Solutions, explained Hudson, require central banks to "monetize government budget deficits so as to spend money into (economies) to promote economic growth and full employment."

It's not rocket science. It's common sense and when done responsibly works as intended. Yet neoliberal policy makers and major media scoundrels suppress workable remedies to assure bankers, other corporate favorites and rich elites get paid, at the expense of the other 99%.

Western society schools teach junk, not responsible, economics. It prioritizes financial oligarchy demands over policies fostering sustainable economic growth. When ignored, economic decline, democratic and social erosion, unemployment, poverty, and debt peonage follow.

A Historic Analogue

Current policies assure the rich get richer. The rest suffer. In Western societies, where more deeply than Greece. It's banker occupied. Ordinary people have no say. They're burdened by multiple austerity rounds similar to crushing German Treaty of Versailles reparations.

Fascism under Hitler emerged. WW II followed. Versailles terms were outrageous. In May 1921, Germany got an ultimatum - accept terms in six days or face industrial Ruhr Valley military occupation. With no choice, it accepted.

Moreover, colonial possessions and raw material resources were seized. In the end, both sides lost out. Unmanageable debt overwhelmed world finance and monetary policy by 1929. Wall Street's crash followed.

An unsustainable pyramid was built on punitive war debts. Wall Street and other major banks enforced payments. They exceeded America's annual 1920s foreign trade. Rebuilding and modernizing war-torn Europe was sacrificed to pay bankers.

Germany got the worst of it. Its Reichsbank had to print enormous amounts of money to survive. Catastrophic hyperinflation followed. In January 1923, the mark dropped to 18,000 to the dollar. By July, it was 353,000, in August 4,620,000, and by November an astonishing 4,200,000,000,000.

It became worthless. German savings were destroyed, and calamitous events became inevitable.

Lost assets compounded economic misery. Germany's colonies became League of Nations Mandates. Alsace-Lorraine, West Prussia, Upper Silesia and other territories were ceded to Britain, France, Belgium, Czechoslovakia, and Poland.

Gone were agricultural resources, 75% of Germany's iron ore, 68% of zinc ore, 26% of coal, as well as Alsatian textile industries and potash mines. In addition, Germany's entire merchant fleet was taken, a portion of its transport and fishing fleet, plus locomotives, railroad cars and trucks to pay war debts.

Impossible terms demanded 132 billion gold marks at 6% annual interest. As a result, inflation soared. German industrial activity plunged. Reichsbank and other German bank assets were seized. Marks became worthless. Public anger grew. Communism and fascism vied for power.

In 1923, a so-called Dawes Plan (named for US banker Charles Dawes) was adopted. Paying bankers was prioritized. Looting was enforced. It continued until 1929 when the debt pyramid collapsed.

A banking crisis followed. So did capital flight. Germany's economy crashed. Depression emerged. Hard times empowered radical political elements.

The rest is history. WW II left 40 million dead and Europe in ruins. In other words, when public pain exceeds thresholds of no return, all bets are off. Often the unthinkable happens.

Europe in Crisis

Today, angry millions across Europe face destitution, neoserfdom, despair, and no futures. Greece is its epicenter. Multiple bailouts enforce banker pillage. Austerity assures they're paid at the expense of economic solvency and public need.

Even the neoliberal New York Times noted a "Greek Tragedy," saying:

It's "chok(ing) on Europe's conditions. (The) approach will not work." Greece can't possibly repay debt. The more added, the greater the burden, the less ability to service and repay.

"By forcing all Greeks to suffer with no real prospects of relief, Europe is uniting the country, now beset by strikes, against further reforms." Politicians face "political suicide in this spring's elections" if, in fact, they're held or unles populist candidates are excluded.

A Final Comment

Zombie Greece awaits burial. The latest bailout deal may be the last. Greece's debt burden already is double the reported amount.

Eventual default is certain. So is exiting the Eurozone. Expect it perhaps later this year. Markets already discounted it. Perhaps other countries will follow.

Progressive Radio New Hour regular Bob Chapman suggested even Germany may exit, saying:

"Germans are fed up with subsidizing others and want to go ahead on their own. They never wanted" Eurozone membership in the first place. Moreover, by boycotting Iranian oil, EU nations are shooting themselves in the foot. Long-term, disruptions may follow, intensifying economic disaster and public anger.

Already it's raging on and off in Greece, Spain, Italy, Britain, and elsewhere across Europe. Chapman thinks a military coup may follow. EU solidarity and confidence are gone. "Bureaucrats and politicians have let fraud go on far, far too long."

What can't go on forever, won't. No one knows when, but it's just a matter of time.

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

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

http://www.progressiveradionetwork.com/the-progressive-news-hour/.