Right targets - wrong message

The Haze has been perusing the website of the good people at False Economy - a well presented web site that seeks to mobilise opposition to the cuts in government spending.


While we can sympathise deeply with the aim of the website and certainly agree that cuts will not help the british economy - but the analyis offered by the site is flawed and their solution deeply flawed.


Progress through the site is elegantly simple.


The first section is called: 'Why the cut's won't help the economy'


Lets examine the text in detail:

Cutting spending is not the same as cutting the deficit. The government says that its deep, rapid cuts cannot be avoided. Ministers claim that they are the only way to deal with the deficit. Anyone who doubts this is a "deficit denier". We disagree – and so do many expert economists. We don't deny the deficit. It was an inevitable result of the worldwide recession. Of course it has to come down.

Well we agree that cutting spending is not the same as cutting the deficit and agree that the term 'deficit denier' is a handy smokescreen for those committed to patching up our broken banking system and lurching on - but then it all starts to unravel.


By saying 'we don't deny the deficit' it buys into the smokescreen thrown up by bankers to conceal the real reason for the national debt - which as we monetary refromers know stems from borrowing our money supply from private banks at interest.


Worse still by saying that the deficit is the 'inevitable result of the world wide recession' is a bit like saying that The Titanic sank due to a loss of floatability! Yes there was a recession - but without explaining what lies behind the recession (2008 bank crisis anyone?) then it rather looks as though they either don't know or haven't thought about it.

But that does not mean that the government's way is the only way. Its decision to close the deficit in just four years, and to do so by cutting £4 in spending for every extra £1 it will raise in tax is not the only option. There are alternatives.

Well this paragraph implies that cutting governement spending into the economy is a viable option for reducing our budgetary defcit and our overall debt. Neither is true, as economies around the world have proved - following the IMF austerity mantra simply wrecks the economy. That's why it isn't working right now in Greece, Portugal, Ireland, and Spain and why it never worked in the past in Africa, Asia - indeed countries like Argentina and Hungary had the good sense to reject the bullying of the IMF and austerity altogether.


They go on to contradict what they have implied in their next paragraph.

Ministers want us to think that the only choice is between cutting spending and increasing tax rates (such as VAT). But there is another factor that they ignore: the amount of tax they collect depends on how strong the economy is.


If the economy does well, then that automatically helps close the deficit. If companies become more successful and more people are in work then they pay more tax.


But deep cuts will slow down the economy, and therefore reduce the tax take. This makes the deficit harder, or even impossible, to close. A longer time scale would give economic growth the chance to do much of the hard work of deficit reduction, rather than relying on cuts and tax increases.


That's why we say the cuts are a false economy.

This is a standard Keynes economic argument and positions the campaign firmly in the economic mainstream. The campaign is obviously unaware of the pivotal role of the money supply in creating our problems.

Our economic problems run deep, and experts argue about them in ways that most people do not understand.

Well the vast majority of economic 'experts' don't understand the problems either - brainwashed by the handicap of a university education in economics or blinded by a mixture of a consensus trance and vested interest.

But the basic issues at stake are not that difficult – and we do have choices about what to do.


Do we try and get rid of the deficit in four years, or let the extra tax that flows from economic growth do more work?


Do we want to see four pounds of cuts for every one pound of tax increase?


In a democracy we should all have a say – especially when neither governing party put such massive cuts to voters at the election.

While we agree that certainly the Lib Dems are guilty of breaking election pledges - but both the Conservatives and Labour were commited to budgetary cuts during the election, the only difference being the scale of the cuts - and there wasn't that much difference.

The aim of False Economy is not to put forward a detailed alternative, but to challenge the myth that there are no alternatives.


These deep and rapid cuts are not only damaging and unfair, but unnecessary.


But we do think that there are policy choices that can help.

• We want policies that will get the unemployed into work (and we don't mean cutting their benefits).
• We support a Robin Hood tax on financial transactions, and a crack-down on tax avoidance and evasion.
• We want to see support for investment in a low-carbon future that can help bring down unemployment and stimulate growth.

That's our approach in a nutshell. But if you'd like more detail, read on.

To take those points in turn -


(a) Its hard to get the 'unemployed into work' if the money to grow the economy does not exist.


(b) A Robin Hood tax on financial transactions puts the cart before the horse - why tax an industry that loans the nation its own money supply? Why not return the licence to print money to a duly elected government and simply keep the £30 billion annual subsidy that we currently hand over meekly to the banks?


(c) Yes well investment in worthy projects would be lovely - but since banks tend only to lend to people who promise a quick and handsome return and as private companies they are under no obligation to lend unless they want to...


The website then provides a page detailing why the cuts are unfair - rather ignoring the basic unfairness implicit in cuts required to keep a broken and unfair system of money going for a few more years (maybe)...


The next section is called 'What the experts say' and has contributions from various economic luminaries who back up the standard keynesian economic mantra laid out earlier.


We are then invited to 'explore the alternatives'

We do not set out a detailed policy mix, we simply want people to realise that there are alternatives so that they can work together to get the government to change its policies. But the alternatives do have some things in common.


They start by saying that we should not try to get rid of the whole deficit in four years. A longer timetable allows economic growth to do more of the work of deficit reduction

Oh dear. By declining to offer a 'detailed policy mix' they run the risk of scorn from people (like the government and its supporters) who are obliged to provide policy in detail (however daft the policies may be)


Arguing for a later timetable is simply another way of saying that we shall pay off our debts over a longer period - but we won't and can't pay off our debts as any monetary reformer knows - since the only money that we could use to pay off our debt is also borrowed from private banks - we cannot pay off our debt with debt money - no more than a drunk man can booze himself sober. The problem is the nature of money - how it is created, who creates it and how it gets into the economy (as debt) - until we change this then notions of 'paying off' the national debt are naive nonsense.

However we cannot pretend that the recession never happened. The banking crash showed that some of what was thought to be real economic growth was an illusion

This is as close as this website comes to the truth of the underlying situation - as this report fom brokers Tullet Prebon (and our analysis) explains a lot of the so called 'growth' created under the last government was simply a bubble built on debt money issued by banks - who preferred blowing up the great UK house price bubble and consumer credit - while starving UK industry of funds.


With tragic irony they then say:

As we have explained, part of the deficit is structural and won't disappear even when the economy is growing strongly again.

Their notion of a structural deficit is explained elsewhere on the site which basically re-states the Keynsian mantra of counter-cyclical investment to clear the 'structural deficit' while alluding mysteriously to :

But there is a second part of the deficit. The crash was caused when a finance bubble turned out to be an illusion. We thought it was real prosperity, but it was a mirage. This means that even when we get the economy working again, it won't be as productive as we once thought it to be.


This second part of the deficit is much smaller than the first, but it will hang around even when we get proper growth and the economy working efficiently again. This is why it is called the structural deficit. Dealing with this part does require difficult decisions that involve tax and spending. But no-one can know what the size of this structural deficit will be until we have got the economy working properly again.

I think the site is trying to offer some kind of Janet & John version of economics - but by doing so the whole excercise comes across as rather wooly and incomplete.


anyway - lets examine some of their proposals:

Policies that stimulate growth include:

• A new green investment bank that can help move the economy away from over-reliance on finance to generating growth and jobs in a low-carbon economy.
• Direct policies to create jobs, such as the Future Jobs Fund – which was one of the first things this government cut.
• Policies that get banks lending again to small and medium-sized businesses.
• A state investment bank based on the nationalised RBS and Lloyds banks.

So a new bank - a new fund - entreaties to get the banks to lending and erm a new bank. So in other words we need a better money supply that somehow keeps the existing broken one unexamined and unchanged. Oh dear.


Sadly the 'False Economy' website is a dreadful muddle - well intentioned and presented but perhaps we might even say that its an unhelpful campaign.


The rationale behind the cuts in the UK is a muddled and deluded attempt to patch a failed and broken system of money- but the opposition to the cuts is often equally muddled - presenting a keynsian utopia as a pancea for our debt crisis just allows the real problems to go unexamined.


I was surprised to find a link from the Positive Money Facebook page to this group. While they look like fellow campaigners - they are in fact presenting very different arguments and the Monetary reform movement must be careful who it stands alongside - lest its message gets muddled in the public mind with wooly left leaning tub thumping.


I am afraid to say that wooly left wing tub thumping is exactly what the 'false Economy' website is.


It takes more than a swish website to present a credible alternative to the current disastrous monetary systems that dominate our lives and False Economy is firmly in the mainstream.


If the urgent need for radical changes to our money supply is diverted into a pointless stand off between keynsians and monetarists or left vs right or the old tribal loyalties of Tory vs Labour - then the banks will escape scott free and all hope is lost.


The task of education for the Monetary Reform movement is immense and we are few in number - but we must convince campaigns and organisations like False Economy to look beyond the usual arguments and the usual suspects for the paths to social justice - even the banks aren't the real problem - our system of moeny supply is, and they must be made to understand that or all that (justified and healthy) anger and energy will be for nothing.

[This blog is now a mirror for the new and vastly improved Sodium Haze which lives here: www.sodiumhaze.org - come and see the shiny new Haze!]

Extreme weather – due to climate change?

This report in The Independent says that a group of scientists are now getting together to research whether extreme weather events in recent years are attributable to man-made climate change.
Peter Stott, a climate scientist with the Met Office Hadley Centre in Exeter said:

“We’ve certainly moved beyond the point of saying that we can’t say anything about attributing extreme weather events to climate change,”

“It’s very clear we’re in a changed climate now which means there’s more moisture in the atmosphere and the potential for stronger storms and heavier rainfall is clearly there.”

This was echoed by Kevin Trenberth from the US National Centre for Atmospheric Research (NCAR) in Boulder, Colorado:

“The environment in which all storms form has changed owing to human activities, in particular it is warmer and more moist than it was 30 or 40 years ago,” Dr Trenberth said.

“We have this extra water vapour lurking around waiting for storms to develop and then there is more moisture as well as heat that is available for these storms [to form]. The models suggest it is going to get drier in the subtropics, wetter in the monsoon trough and wetter at higher latitudes. This is the pattern we're already seeing.”.

The Met Office and NCAR and the US National Oceanic and Atmospheric Organisation are to carry out detailed investigations of extreme weather events.
Dr Stott said:

“There is strong evidence if you look across the world that we are seeing an increase in heatwaves and floods and droughts and extreme rainfall and extreme temperatures,”

“The evidence is clear from looking at the observational records globally that extreme temperatures and extreme rainfall are changing. But you can’t jump from that and say that a specific event is straightforwardly attributable because we know that natural variability could have played a part.

“We’ve been developing the science to be increasingly more quantitative about the links and make more definitive statements about how the risk has changed. You look sensibly about these things by talking about changing risk, or changing probability of these events.”

Dr Stott had his colleagues have already carried out studies of the 2003 heatwave in Europe and the UK floods in 2000.

In both cases, the scientists found that the contribution of man-made greenhouse gases to global warming substantially increased the risk of such extreme events occurring.

The group is also investigating the exceptional warm April in Britain this year, which was the warmest since central England records were kept in 1659 and 0.5C warmer on average than the previous warmest April.

The tornadoes across the southeastern US and the flooding of major rivers such as the Mississippi and Missouri led many people to question whether they were exacerbated by global warming. In the past scientists have been reluctant to link single weather events such as these with climate change, but Dr Trenberth believes this is wrong.
 

“I will not say that you cannot link one event to these things. I will say instead that the environment in which all of these storms are developing has changed,”

“It’s not so much the instantaneous result of the greenhouse effect, it’s the memory of the system and the main memory is in the oceans and the oceans have warmed up substantially, at depth, and we can measure that.

I will assert that every event has been changed by climate change and the main time we perceive it is when we find ourselves outside the realms of the previous natural variability, and because natural variability is so large this is why we don't notice it most of the time.

“When we have things that occur usually 4 per cent of the time start to occur 10 per cent of the time, that’s when we begin to notice. The main way we perceive climate change is in changes in the extremes? this is when we break records.”

The Haze thinks this is bound to cause controversy as the science involved in making these claims is young and still under development. However - we broadly welcome this development and anything that erodes the sway of climate change denial.

Betrayed. Greek nation sold to the banks.

The Haze is horrified to learn today that the Greek Parliament has abandoned its duty to its own people and paved the way for financial speculators and loan sharks to escape the Greek debt debacle unscathed - the losses on their reckless lending and gambling socialised to Greek and European taxpayers.

By accepting the latest round of austerity cuts and asset sales demanded by the IMF and the ECB in exchange for yet another loan they have sold their people into slavery.

What is euphemistically and dishonestly being called a 'bailout' for the Greek nation is nothing more than another huge debt - loaned by European taxpayers to a fiscally bankrupt nation that has no hope of repaying it through austerity.

The loan is illogical since it cannot succeed - but it has three clear aims and immense collateral damage.

(a) Most of the Greek debt bonds that are held in vast quantities by private banks all over Europe mature in 2015 and somehow the ECB & the IMF think that a way can be found to pay off the loans down the line.

(This is absurd because the terms of the loan demand a package of austerity measures that will destroy utterly the kind of economic growth needed to service the loans. This is of course exactly why we are in this position today as the last bailout was an utter failure - how could it not fail? - you can't fix debt with more debt!)

(b) It attempts to rescue the Eurozone banking system from a potential meltdown and save the embattled Euro itself. 

(c) It reinforces the absolute power and tyranny of the banking cartels - Greece has been bullied back into orthodoxy - by taking the loan it reinforces the notion that there is no alternative to accepting money as debt.

The collateral damage will be horrific. 

Greek assets like their national utilities will be sold off at knockdown prices - the imposed austerity will (at the very least) destroy the economic future of a generation of Greek people and may yet destroy the social fabric of an entire nation.

and it all simply keeps the global giant ponzi scheme of Fractional Reserve Banking going for a few more years.

As our friends @ Positive Money wisely reflected this morning:

Would it be possible for the banks to have lent so much if they had to actually find that money from savers, rather than simply creating it out of nothing through a clever accounting process?

For a bank (or another financial institution), it is one thing to lend money that they had to borrow and they have to return to their depositors with the interest, and it’s a completely different thing to lend money which they just created by typing numbers into a computer system.

There is something fundamentally wrong with fighting a debt crisis by offering yet more debt

   

The loan sharks and profiteers who have made a fortune from trading in Greek debt are being protected at all costs - and it will be ordinary hard working taxpayers all over Europe who will foot the bill for once again providing private companies with free insurance for reckless lending.

The Greek government had an historic opportunity to follow nations like Argentina and Hungary and defy the banking cartels and the IMF - and to stand up for their own people - but they lacked the courage - they lacked the vision and now the Greek people will pay the price.

The Greek people should now rise up and make it clear that they will not accept governance that betrays them on behalf of the banks.

Canadian Oil Sands shame - video

A sobering video about the deeply damaging practice of producing oil from the tar sands of Canada.

The Haze says this is ten minutes well spent.

UK exposure to Greece around £365 Billion

As the Haze strongly suspected - the UK exposure to a Greek 'credit event' would be more in the region of £365 billion and not the £2 billion quoted by the Government or the £8 billion ventured by the Bank of England.

All over Europe our rotten and creaking financial system is threatening to collapse - taking savings, pensions and jobs with it.

This is an extremely serious development - the true extent of the danger to economies all over Europe is only now emerging - and few people can consider themselves safe from the potential contagion. 

Why the huge discrepancy? Well in an order to avoid adding panic to an already fraught situation the government has failed to include UK exposure to those wonderful Credit Default Swaps.

The potential devastation of banks and other City institutions would be equal to 24% of UK annual national output, or £14,640 for every family in the UK.

Experts accused ministers of underestimating the true scale of the risk to the UK, as Channel 4 News revealed that estimates of potential exposure range as high as £366bn.

 

Danny Gabay, of Fathom Financial Consulting, which calculated the figure using data from the Department of Business, said:

 

'It's not the direct loan that's the problem, it's the derivatives of those loans which can go on to be multiples of the actual original size of the loan.

'London made a vast amount of money in the ten years before this crisis selling those loans. Those chickens may now be coming home to roost.'

Haze Comment:

Even IF BY SOME MIRACLE - the UK banks wriggle off the hook this time - we must demand as a nation an end to these incredibly dangerous financial gambling games.

Fractional Reserve Banking is bad enough but when you add the power of the 'casino economy' to magnify the damage many times over it is clear we must act.

The sale of these damn derivatives should end today. 

Join the Positive Money Campaign for a banking system that works in the public interest and not against it.

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Muddled Imperialism - Afghanistan

In days gone by, nations had empires that were acquired and retained through the use of military force.


In the modern age of globalisation, nuclear weapons, international terrorism and economic superpowers - surely the days of 'gunboat diplomacy' are gone forever...


...and yet the UK is fighting two wars at the moment. 


This morning Air Chief Marshal Sir Simon Bryant, the RAF's second-in-command, said "huge" demands were being placed on equipment and personnel by running operations in both Afghanistan and Libya. 


Quite aside from the cost to the UK taxpayer of these hugely expensive wars at a time of supposed 'Austerity' and budget cuts - just what is the rationale for our continued fighting in Afghanistan and Libya?


The Haze will look at Afghanistan today


AFGHANISTAN


A coalition including UK troops followed an American lead and deployed in Afghanistan as part of the oxy-moronic 'war on terror'.

Post 9/11 the idea was that this 'failed state', ran by the Taliban under Sharia law was a breeding ground for terrorists and it needed sorting out.


What was the criteria for success in Afghanistan? The right-wing Understanding War site has this criteria published on its website:

Success in Afghanistan is the establishment of a political order, security situation, and indigenous security force that is stable, viable, enduring, and able—with greatly reduced international support—to prevent Afghanistan from being a safe-haven for international terrorists. This objective is the most narrowly-constrained goal the United States and its allies could achieve in Afghanistan that would support our vital national security interests.

So has this been achieved? Given that the removal and defeat of  The Taliban in Afghanistan was obviously seen as a central component to this end -  then it doesn't look as if things are going well with violence in Afghanistan reaching record levels in 2010 with AlertNet reporting that

The Taliban are at their strongest since they were ousted...the insurgency has spread out of its traditional strongholds in the south and east over the past two years into once peaceful areas of the north and west. The north in particular has become a deadly new front in the war.

Clearly the Taliban are not vanquished -  215 coalition soldiers have lost their lives in Afghanistan in 2011 and the Taliban launched a spring offensive with another suicide bombing in which four people were killed.


Going through the August 2010 casualty statistics listed here on The Guardian website makes for sobering reading and even a quick glance reveals a security situation which is a long way from "stable, viable, enduring, and able"


This morning was typical of many others as another terrorist attack claimed another life.


Its obvious that preventing "Afghanistan from being a safe-haven for international terrorists" has been a miserable failure - but what of the government that was installed after the invasion of Afghanistan - how is that doing?


Well the two of the oft quoted reasons for invading Afghanistan were:


(a) That the Taliban refused to handover Osama Bin Laden.


(b)  The reprehensible treatment and oppression  of women by the Taliban.


Bin Laden was never handed over and as we now know was happily holed up in a luxury bunker next to a military base in Pakistan - but what of the women of Afghanistan, has their lot improved?


This is what Afghan Malalai Joya, teacher, peace activist, and women’s rights campaigner had to say about the situation facing Afghan women back in January last year.

“The situation of women was, without a doubt, the best excuse for the US government to occupy our country underthe banner of women’s rights… But they pushed us from the frying pan into the fire.”

hardly a ringing endorsement of the new deal for Afghan women but she has harsher words for the government of Hamid Karzai.

"The NATO-backed alliance is brandishing “criminals in suits” as moderates and as proponents of democracy. they have established a puppet regime,full of people who are photo-copies of the Taliban."

Refferring to a Human Rights Watch report she said that:

“since 2001 65,000 civilians have died in Afghanistan, while only 2,000 Taliban fghters have been killed. The daily lives of the people of Afghanistan are progressively being mired in corruption, poverty, injustice, violence and joblessness.”

and just in case  the point hadn't been made...

“My people have no faith in these puppets and their government.”

How about Anissa Haddadi writing in the International Business Times:

...after the Taliban were ousted, Hamid Karzai and his government were instated and since then, the same sharia (Islamic religious) laws remain, sometimes slightly modified.


A leading Afghan judge illustrated the current situation for women when he declared that "those convicted of adultery will still be stoned to death...but with smaller stones."


Women's rights marches are still prohibited and they remain subject to purdah, forcible seclusion in the home, they are still being executed and thanks to a bill passed by the Karzai government, they cannot seek work, education and have to agree to sexual intercourse with their husband a minimum of every four days.

How about Sarah Chayes quoted in this article by Michael Winship

...the United States and its NATO allies have had to convince themselves and public opinion in each of their countries that “this is a democratically elected representative government [in] Afghanistan in order to justify the sacrifices in money and troops. But the Afghans see it differently.”


What they see instead, she said, is a restoration to power under President Hamid Karzai of the gunslinging, crooked warlords who were repudiated when the Taliban first started taking over vast parts of the country a few years after the Soviet withdrawal in 1989.


The “appalling behavior” of officials in the current government, including rampant bribery, extortion and violence, is a serious factor in the Taliban resurgence

That was back in 2009 - but this was what US diplomats had to say about the Afghan government yesterday complaining of:

"....political interference, corruption and what one official called a “narrow skill layer” of trainable people"

It seems hard to find ANY evidence that would suggest that the foreign 'mission' in Afghanistan has been anything other than an unmitigated failure. Hugely costly in terms of military and civillian deaths, money and equipment - Afghanistan represents a total failure of old colonialist ideologies to adapt to a changing world.

The UN is finally catching up. On July 17th it acknowledged the obvious difference between the perpetrators of 9/11 - Al Queda and the hardline islamists of Afghanistan The Taliban. 

This childishly obvious fact makes the whole mis-adventure in Afghanistan even more baffling - since it was supposed to be a response to 9/11 whose operatives and funding were from - Saudi Arabia.

All that is left for the defeated coalition is to find some way to cover up this shambolic excercise in 21st century gunboat dipolmacy.

Negotiations have begun between the US Govt and the Taliban and President Obama wants to pull out troops and hand things over to the Afghan army and the aforementioned bunch of warlords and drug kings (the Afghan government)

Doubtless some version of the Vietnam 'peace with honour' PR spin will emerge over the coming months with the installed Afghan government comprising of "photo-copies of the Taliban" (but with better drug connections and able to embezzle foreign aid) being held up as the shining success of the whole endeavour.

If you see the press conferences, the medal ceremonies, the applause and the flag waving - just remember:


(a) The appaling loss of life (the majority Afghan civillians)


(b) The corrupt oppresive sham of a government that is left behind,


(c) A resurgent Taliban which stands victorious and unbowed


(d) A shattered country riven by a decade of war.


The Haze thinks that the only good thing that may yet emerge from this disaster is something that it took a 27 year old peace activist who has survived four attempts on her life to say - I leave the last words to Malalai Joya.

“These occupation forces, they are victims of the wrong policy of their own government that sent them to a bad, costly war. Democracy will never come by war, by cluster bomb or by the barrel of a gun"

Banking crisis - struggling families pay the price

The Haze was angry but unsurprised to read on the BBC website that the consumer group Which? is accusing banks and building societies of putting the squeeze on homeowners who have standard variable rate mortgages, painting a clear picture of unaccountable profiteering from the usual suspects.

More than 40% of mortgage borrowers are now on standard variable rates, which kick in after cheap introductory mortgage deals expire. The highest are around 6%, double the cost of the best value mortgages.

"They're just milking people," one homeowner from Peterborough, Mark Fellowes, complained.

He says the interest rate on his Egg mortgage dropped by just 1.5% when the Bank of England cut official rates by 4.5% after the financial crisis.

"I was very puzzled initially and then you just get angry," he says.

Quite. Regular Haze readers can probably guess what's coming next...

...yep its time for a media friendly euphemism!

Under the heading of 'Recapitalisation' the BBC article says:

"The Council of Mortgage Lenders argues that the standard variable rate, or SVR, is dependent on the cost of attracting deposits from savers, rather than the Bank of England.

But its director general, Michael Coogan, admitted to BBC News that lenders have been widening their profit margins after losing heavily during the crisis."

"I think what we have is the banks and the building societies trying to restabilise the system which was in shock in 2008," he explained.

"They are trying to recapitalise their organisations, deal with past losses, deal with the risk of future losses, and at the same time keep their customers as happy as possible through the economic cycle."

The Haze can put all that media spin into a plain English translation.

The 'Economic Cycle' is a media-friendly phrase to describe the inherent financial instability and impoverishment created by the financial services industry via the ponzi scheme of Fractional Reserve banking.

What this remarkably frank banker is telling us - is that they will try to soothe their customers while screwing them for money - in order to make up any losses incurred during the financial chaos THEY created.

He deeply patronises his customers by implying  via the slippery euphemism of 'the economic cycle' - that his customers don't really understand the complexities involved and that they should be grateful that the banks try to 'keep them as happy as possible' while simultaneously acknowledging that they are profiteering.

As long as we continue to allow private banks to lend us our money supply at interest they will continue to treat us all with contempt.

The banks are the unaccountable, unelected masters of our country - the political argument against them is just, rational and must prevail, if we are ever to put them in their place and re-assert our sovereignty in the public interest.

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Dunkirk rescue of Greek loan sharks underway

When former IMF head honcho Dominique Strauss Kahn was charged with raping a New York chambermaid...

...The Haze wasn't the only observer to think that he must have mistaken her for a developing nation.



Now the banking cartels and the IMF circus have rolled into Europe and they have their eye on a little Mediterranean number that looks suitably vulnerable and ripe for conquest.

Greece is drowning under a sea of debt and its people are losing jobs, homes, livelihoods and futures.

While the Greek people are far from blameless (some Greek politicians should be prosecuted for corruption and criminal negligence) - the real culprit, as ever, is the great ponzi scheme of Fractional Reserve Banking.   

True to form, the only concern of the IMF is that private bankers emerge unscathed and get to asset strip the nation as well.

Robert Peston on his BBC Blog offered his usual mix of insight and astonishing naivety when examining the wrigglings of the ECB and the bullying screams of the IMF.

It is perfectly obvious to The Haze why a wholly bankrupt nation is being asked to adopt austerity, take out another huge loan and sink further into unsustainable debt.

Or to put it another way - why would anyone give a bankrupt business a five year loan knowing full well that it will be just as bankrupt five years later and the loan will never come back?

Answer?

The whole process is nothing more than a Dunkirk operation ran by the IMF to rescue bankers and hedge funds.

Driven ever onwards by their own greed the bankers now stand waist deep in a sea of bad debt hoping that the IMF will (once again) send a few boats to pick them up.

and it looks like they might get away with it


If the IMF and the ECB can bully the German's into another pointless bailout - then by 2015 the bankers will be safely away with their profits and the cost of the Greek bankruptcy can be socialised to the Greek people and the European taxpayer.

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The Haze says:

(a) Greece should default today.
(b) Greece should leve the Euro
(c) No bailouts for hedge funds and banks

...and let the contagion fall where it must!

Only this way can we stop private profits from debt being wholly subsidised by the taxes of ordinary people - and the political process that will lead to radical monetary reform can begin.

Monetary Reform - Labour's missed opportunity

Pollsters often pose questions to the public that require a dualistic response - who is to be blamed /praised - The Conservatives or The Labour Party? Not surprisingly questions phrased in this way gain a dualistic response.

Liberal Conspiracy ran its own poll at the start of 2011 to see who the public blamed for the financial crisis - but removed the steer to blame one of the political parties - the results were very interesting.

Conservative voters blamed the exiting Labour government in the main but perhaps surprisingly 25% still blamed the banks. 

70% of Labour voters blamed the banks. 55% of Lib Dem voters did. In fact on average the majority of voters of all parties blamed the banks.

The voters correctly blame the banks for the financial crisis and as Liberal Conspiracy editor Sunny Hundal  pointed out
 

...a significant percentage of voters lost trust with Labour on the economy – not because it didn’t have a “tough” (as Alistair Darling called his) deficit-cutting plan. Many lost trust in Labour’s handling of the economy because it didn’t regulate banks properly, and let them take the economy down.

They blame the banks for the financial crisis, but Labour for letting the crisis happen in the first place.

These people are a significant majority of the voters. How will Labour respond to them? That should be the main question for the party now.

Absolutely.

What Labour needs now is a policy maker of vision and courage - one that can see the astonishing opportunity that embracing Monetary Reform would represent.

The challenge for Labour is not to waste time on trying to provide better 'supervision' for banks - they are beyond reform in their existing state -  instead Labour should get to the root of the problem, Fractional Reserve Banking.

Fractional Reserve Banking is the means by which the vast majority (97.5%) of money in the UK is created. Contrary to popular belief, the government does not create the money which drives the economy, private UK banks do - as debt.

The 1844 Bank of England Act prohibits anyone but the Bank of England printing notes and coins and this is still true today. Wise was that parliament that realised that if they allowed private banks to print their own notes that it would distort the British markets in all kinds of areas, create economic instability and undermine democracy.

The act, doesn't cover money created digitally as loans, digital transfers of money or chip and pin technology - how could they have imagined such things back then?

Digital money has grown to make up over 98% of the money in circulation - so its clear that the UK money supply is by in fact provided by the private sector in this form.

The problems with having a cartel of private banks create a sovereign nations money supply are not limited to making the purposes of the 1844 act redundant.

Bank credit can be issued many times over on the basis of holding a mere fraction of the sum issued on deposit - hence the name Fractional Reserve Banking. So it was that prior to the financial crash of 2008/9 UK banks had on average just £12.50 for every £1,000 they had lent.

Martin Wolf of the Financial Times described the modern reality of money thus:

"The essence of the contemporary monetary system is the creation of money, out of nothing, by private banks’ often foolish lending..."

The house price bubble, boom n bust, the credit crunch, the recession, unemployment and financial instability all have the same root cause - money created as debt.

The inherent and venal inequities, instability, graft and pernicious conflicts of interest that characterise Fractional Reserve Banking are well known to many people.

The current danger of a pan-European financial crash is no surprise at all to the Monetary Reform movement who knew of the problems of bank credit long before Irving Fischer wrote his seminal book on the solution - "100% Money" back in 1935.

The present series of bank bailouts, debt crises and financial disasters rightly provoke public anger and fear - but they also present Labour with a once in a generation opportunity to reform the banking system so that it works in the public interest and not against it.

How about a Labour manifesto that promised the following for the next election:

* A stable banking system

* An end to the estimated £30 billion hidden subsidy awarded to the banking industry every year.

* A realistic chance to start paying down the national debt

* A genuine end to 'boom n bust' economics

* A hefty tax cut.

* Money directed to projects of social and economic benefit - not to things that turn a fast buck for banks

* No more bank bail outs

* An end to banks using depositors money to gamble in the 'casino economy' of financial markets.

* No need for deposit insurance

All this and more would be achieved quite easily if the political will could be found to tackle the banks and our insane system of money supply.

Detailed proposals put forward to the Independent Commission on Banking by a group from the New Economics Foundation and the campaigners Positive Money could make everything listed above a reality quite easily - indeed their proposals are elegantly straightforward when matched against the chaotic muddle of the current system.

To reform our money supply may seem radical - but in fact its the opposite of radical, because the continuance of the current system looks increasingly impossible and vastly expensive.

If only the Labour leadership could see the potential that Monetary Reform represents.

It would have support from across the political spectrum, be socially just, solve economic problems including the national debt and would represent all that is good and right about the tradition and ethos of the party. As Liberal Conspiracy rightly said back on January 31st:

Labour cannot win back trust on the economy with voters until it admits (repeatedly) that it failed to regulate banks and financial institutions properly, and lays out a bold plan to prevent that happening in the future

Well the solution is out there - just waiting to be picked up - what on earth is Ed Milliband waiting for?

The time for Monetary Reform has come - the party which embraces it first will gain association to social and economic advantages that will serve them well politically for generations...

...and the party that doesn't will gain renown as the people who abandoned the nation to the banks and the IMF.

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