My unpublished (100,000 word) book “The Financial Jigsaw”, is being serialised here weekly in 100 Issues by Peter J Underwood, author
Quote of the Week: “It is a popular delusion that the government wastes vast amounts of money through inefficiency and sloth. Enormous effort and elaborate planning are required to waste this much money.” – PJ O’Rourke
National Economies might be coming back into fashion. With popularism on the rise especially throughout Europe, and Brexit remaining uncertain, expect some strong responses to government manipulations in the coming months. And with the markets very fragile the problems for the ruling elite are doubling up. Here is the link to last week: Issue 51
And the trade war is hotting up as the US imposes 25% tariffs and China retaliates:
“China understands that the U.S. consumer is heavily indebted and small changes to interest rates have an exponential impact on consumption in the U.S. For example, in 2018 interest rates rose to 3.3% and mortgages and auto loans came to a screeching halt. More importantly, debt delinquency rates showed a sharp uptick. Consumers have very little “wiggle room” to adjust for higher borrowing costs, higher product costs, or a slowing economy that accelerates job losses. However, it isn’t just the consumer that will take the hit. It is the stock market due to lower earnings.” Read more at:
Now that Brexit is not be coming to a conclusion yet, after almost three years, I will continue to provide weekly updates as events progress:
Brexit Update – 17th May 2019
The Brexit deadline remains 31st October 2019 and stays in place unless the PM can get Parliament to agree an exit plan beforehand. Theresa May (‘MayBot’ to her friends who think she is a robot) has announced that she will try again for a fourth meaningful vote in Parliament on 3rd June. And Jeremy Corbyn has called off talks with the Tory party after six fruitless weeks; no agreement suggests that the meaningful vote is unlikely to succeed.
MayBot also said that Parliament will be in recess for the first 11 days after the EU elections on 23rd May 2019 presumably for the Tories to lick their wounds and regroup (27th May is a bank holiday in UK so the politicians are taking an extended spring holiday – as usual – no haste then.)
https://www.zerohedge.com/news/2019-05-15/theresa-may-bring-back-brexit-deal-4th-vote-next-month
This article contains some good stats and is predicting a 32-36 seat gain (out of 73 on offer) for the Brexit Party in the coming election. This may well increase as arguments intensify and the Remainer vote stays generally fragmented: http://www.marketoracle.co.uk/Article64865.html
“The British people today [can] put up with a much smaller loss in living standards to get rid of a genuinely tyrannical, oppressive and foreign rule from Brussels. The cause of Brexit is thus a worthwhile one, and should never be abandoned, however long it takes.”
And ‘Mish’ confirms that the Tory Party and Labour are in self-destruct mode:
Details of Parliament’s deliberations can be found here:
CHAPTER 10
NATIONAL ECONOMIES
“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed, lest Rome will become bankrupt. People must again learn to work instead of living on public assistance.” – Cicero, 55 BCE
The internet offers a unique insight into the global corporations’ agenda
This process of extracting resources by exploiting the weaker nations solely for the benefit of the developed nations is not sustainable. There will come a time when the Western World will have to face the inevitable and recognise that the limited wealth of planet earth will have to be more equitably shared between all nations and not only for those in a position of temporary power at the time.
Improved communications and the internet offer an increasing awareness for peoples around the world of how our global economic system works which will invoke changes that will not necessarily be welcomed by those in command today. Indeed, we have already seen in previous Chapters how the global financial system itself is flawed and unlikely to remain stable in the foreseeable future; this will have serious implications for nation states to varying degrees.
The UK is especially vulnerable as an isolated nation state; more so if it chooses to leave the European Union because its negotiating power within a global conference setting is diminished. However, the advantage of leaving the overly bureaucratic and tyrannical regime of the EU more than offsets the short term economic and fiscal costs to be suffered when going it alone.
As the American empire declines Britain will fall further behind in the global pecking order because the erosion of the dollar will also impact sterling enough to seriously reduce the national wealth in the years to come. The key dynamic here is that Britain has been relying on its prowess in the financial world to support what would otherwise be a much lower standard of living.
Britain has little enough in the way of natural resources that might allow it to avoid importing most of its needs; it could never survive alone in a globalised world. UK has to trade exports for imports and much of its export earnings are financial in nature; once trading through London is distributed to centres around the world its political influence and national earnings will suffer.
The choice for all nations is not a happy one so far as having things the way they have always been. For example, Britain is not a member of the Eurozone and is unlikely to be so given how the EU is dealing with its economic woes. Nevertheless in the future, as the pound sterling comes under pressure from foreign investors, the option to join a currency union may not be avoided even if the euro fails.
The IMF as a stalwart of western economic ideology
The global system of international finance is embodied in the International Monetary Fund (IMF) structure, having some 188 member nations which almost cover the world and is a truly global organisation. It works to facilitate international trade and sustainable economic growth by monitoring economies and enabling preferential loans to individual states; its headquarters are in Washington, D.C., USA.
I suppose this is so because America has been responsible for fostering this type of international agency to its own advantage since World War II. My view is supported by Prof. Joseph E. Stiglitz, economist and a former senior president at the World Bank, who criticizes the IMF in his book: “Globalization and Its Discontents”; he argues that the IMF is reflecting the interests and ideology of the Western financial elites rather than the interests of the nation under scrutiny. I tend to agree with him since the evidence is not sparse as we have witnessed in previous Chapters.
The IMF interactions are not always beneficial as national frontiers crumble
IMF loan conditions are not the only producer of change; they are often partnered with other economic reforms but need to go further if whole continents are to make steady progress towards improving the welfare and living standards of their populations.
Terms of trade are at the heart of the problem because it is only when developed nations are prepared to implement fairer trading terms that the distortions of labour cost differentials can be corrected. We hear all too often of the use of cheap labour in the production of clothing in Asian factories using that unpleasant but colourful description of ‘sweat shops’.
I acknowledge that economics and finance recognise no humanitarian barriers but it will be the task of future generations, in a globalised world, to find appropriate answers before the deprived masses organise and rise up in opposition, a risk the globalists already fear.
The world today comprises global financial markets, multinational corporations and national governments linked together in economic and military alliances led by America. It was only after the total devastation of Europe following World War II that many institutions such as World Trade Organization (WTO), IMF, United Nations and World Bank have formed a kind of global government to address the concept of a New World Order (NWO).
Take notice that these activities are both global and financial in nature and logic dictates that the controlling powers are thus embedded in the economic and financial fabric of the world. It is not by accident that our future will be determined by how successful these partnerships become and thus should be examined in the context of the survival of national economies and the globalisation of sovereignty.
Britain claims sovereignty over its currency, national budget and national institutions rooted in its monarchy. It cannot envision being party to a politically and financially unified Europe although the very survival of the EU requires progress towards some form of federation.
The USA has the ‘North American Free Trade Agreement’ (NAFTA) and Russia itself is a developing federation having arisen from the ashes of a failed socialist state. National barriers are crumbling on all fronts, even though a sense of national pride remains extant in most nations’ historical awareness, through the undeniable onslaught of global governance.
Globalisation as a force for good as well as exacerbating wealth inequality
Globalisation brings many benefits to individual nations as technological innovations spread rapidly around the world increasing productivity and general standards of living but these benefits are not spread evenly.
The ever-widening chasm between the wealthy 10% and the remaining 90%, who hold only 7% of the global financial wealth, has generated many explanations for this worrying phenomenon. The nature of our distorted capitalist system, reviewed in the next chapter, is closely associated with national economies in their relationship to movement of resources from emerging economies to those of the developed world.
Capitalism in its true form is based on competition for money, innovations, processes, markets, labour, capital and assets. The winners will collect more profit and accumulate more money, leaving less for those who don’t have this privilege or retain the skills that carry high rewards in the new global economic model.
This fundamental source of inequality does not explain why wealth and income inequality was considerably lower in previous eras of economic expansion. Some point to the causes being the capture of national regulatory bodies by multinational corporations, especially bankers, and the transition from industrial economies with plentiful low-skill, high-wage jobs to post-industrial, knowledge-based, service economies.
To be continued next Saturday
The Elite got rich “farming” dollars (ie, printing , loaning, buying corporations and politicians etc). Life will get tough for them when their profligate Welfare/Warfare/Crony Society and dollar collapses. Didn’t Louie and Marie disguise themselves as peasants and try to haul ass out of Paris to Austria in a carriage one night?
So right Robert, thank you, and in the final solution the elites will certainly lose their heads at least figuritively if not physically. There is going to be blood on the streets when the system finally closes down. I hope that the righteous will survive long enough to repopulate the earth! (sarc).
The state of American economics. remember, there is NO inflation!!
https://www.zerohedge.com/news/2019-05-17/edge-disaster-59-americans-are-living-paycheck-paycheck
Excellent article, ursel doran, thank you for the link. And the wisdom is clearly embedded in the penultimate paragraph:
“If your paycheck goes up, that doesn’t mean that you should start spending more money. Instead, you should look at it as an opportunity to start saving more money.”
The old ones are always the best!
BREXIT is certainty given debt-to-gdp accumulated within Eurodollar liability shared in the network of sovereign nations. When the EU was formed each nation saw their chance to grab the golden ring of credit in their unbridled lust for power. As soon as it came time to pay the bills after each nation decided to join the union, and trade credit cards before going out to dinner, the jig was up.
BREXIT is just the Queen excusing herself to go to the washroom when the waiter brings the bill to the table.
The Queen of England may have a Net Worth of $700 million USD but she sure as Hell ain’t paying for dinner when all the grubby relatives swoop in for a meal.
The Queen of England may be an ugly old wench with a rotten empire sitting beneath her but she is not an ignorant uneducated serf that is willing to get suckered with the dinner tab when she can just excuse herself and BREXIT the exchange entirely.
If the British fail to exit they will suffer the debilitating fate of all out bankruptcy at the hands of the Mafia in Brussels. Autonomy culturally & financially is their only pragmatic logical outcome if they still have a brain in their head and it has not atrophied too much from the drunken sot lifestyles they enjoy.
MOU
Nicely put MOU, thank you, and you are so right that UK must get out on a No Deal as a clean break. Not sure how far our queen is involved though, but she must be acting behind closed doors as you say, we will never know because the British system is the most secretive in the world.
The elite are manoeuvering to keep us in and there are others hoping for an 2nd referendum but the majority are with Nigel Farage and I am expecting at least 40+ seats for his party next week. It’s going to be an interesting experience in the coming days.