Everyone with any degree of intelligence must sooner or later come to question a fixed view they have. New information comes to hand, so if you’re Harriet Harman you completely ignore it, and if you’re Boris Johnson you bend the results….but the rest of us with an objective brain think, “Hmm.”
For nearly five years now, I have held the unshakeable view that nothing can stop Crash2: that the loons at the top will keep trying to push the tide back with lawnmowers, but in the end events will overtake them. I still think this is the most likely outcome, but since last weekend I’ve begun to wonder if – by taking opportunistic advantage of this gathering storm – the sociopaths just might be able to keep the plates spinning almost indefinitely…and thus inflate away the debt as well as using wage-cutting to make the West far more competitive.
Once again here, there is a lesson from history. Although Hitler laid out a clear plan of his ambitions in Mein Kampf, he too was at heart an opportunistic genius who took full advantage of changing conditions. Although determined to re-occupy the Rhineland in 1935, he fully accepted that the covert German army was a sham, and that if the Allies resisted his move, he would be forced into a humiliating withdrawal. But no such resistance happened, and so the Führer went on gambling that Western appeasement would play into his hands.
It became a ballsy game of brag, in which the Allies held all the cards, but only Adolf Hitler had the will to keep up the pretence. We have precisely the same appeasement and apathy in the current econo-cultural crisis today. The smokescreen put up by Obama, Cameron, and Draghi is performing exceptionally well: the electorate barely even notice it going on, the MSM are complicit in the smokey mirrors, and the financial community has everything to gain. As nobody queries the bollocks, and every Bastille remains firmly unstormed, so like the Nazis, the conductors of this fisco-economic cacophony grow in brazen confidence.
I’ve written before about Indeflation (a phrase I thought I’d coined, but someone else got there first) in which what one gets is wage deflation alongside an inflation in the price of services: that is to say, medical, banking, legal, dental, insurance, pension, policing and local government ‘prices’ inflate. Thus more and more people decide they can do without quite a lot of this stuff, but as they can’t do without food, the retailers in that sector see no way they can up prices and survive. So food prices and wage costs deflate, being interdependent….but to save politicians and bureaucrats, most government responsibilities they have to their citizens are offloaded onto a rapacious and incompetent private sector; while to save the banks, the price of having money with them goes up, interest rates remain at near zero – and massive insurance is demanded if they want to avoid a haircut at the hands of the banker-Central Bank-legislator coven.
In the case of the UK, for example, I have suggested strongly since last April that new BoE Governor Mark Carney will chuck more taxpayer monies at the economy (aka bank balance sheets) and this will devalue the Pound massively.
The long-term strategy of this warped idea is to make Britain’s exports far cheaper by devaluation of both the currency and wages: an export boom will develop, and this alongside Zirp, falling bond yields, and global price inflation will together allow the debt to stop rising and become cheaper to repay.
The most important factor in the achievement of this objective, however, is the direct and secret printing of money to keep some kind of socio-economic programme credibly on the road in Britain. The rationale behind would presumably to avoid any kind of social eruption: £’s will still be “invested” in infrastructure, while Help to Buy and other schemes will help bribe electors: and in the domestic bubble, nobody will notice that Sterling is worth half as much as it was – because most of them can’t afford foreign holidays any more anyway.
The traditional argument – that imports and raw materials for abroad will simply become more expensive – is countered with the suggestion that everyone else will be doing this as well. This isn’t quite as daft as it at first sounds: Mario Draghi briefed the EU FinMins on that very strategy for the eurozone at the last major summit six weeks ago.
Now in the light of all this, one could stop seeing imminent bank failures as a disaster…and start seeing them in some ways as a lucky bounce. The Bank of England simply gets the printing presses scorching the hands of those silly enough to touch them – and ploughs the inflated money into ‘rebuilding’ the balance sheets of wobbly banks. In turn, a gold price manipulated downwards is bought with this same printed curency, to bolster the bank’s good assets still further. This seemingly nips the failure in the bud, and further erodes the value of the currency…and so the envisaged ‘virtuous circle’ continues on its merry way: more spending, more printing, more export sales, more jobs, fewer hours, less money per hour, smaller deficits.
In theory, one could simply carry on doing this forever. The fact the US, UK and EU are exporting nothing anybody wants that much wouldn’t matter at all: Obama and Cameron will continue to dish out fiction about job creation (ignoring hours and salaries) and real loss of earning power will not be apparent for a while. In fact, it will be like slowly boiling the lobster: your average Wayne and Waynetta could take years to realise that they’ve been boiled alive.
If you think this a mad fiction, look at the latest US payroll data. Fully 73% of all the jobs created are directly related to Obamacare: unproductive in deficit terms, and on part-time hours at vastly reduced rates of pay. And this is a Black Democrat President we’re talking about here.
The one set of people with whom it won’t work, of course, is the Beijing Politburo….and its vast population. As Western debt is ‘repaid’ via inflation, Beijing should quite rightly see they’ve been cheated, and kick up a fuss. You’d think. But not necessarily: if they decide to join in, then the madness could continue indefinitely. China simply takes the money piling in from debt repayment, and launches FDR-style New Deal infrastructural investment that creates massive employment, devalues the Ruan, calms the populace into a new belief in its Government……and in turn helps its exports start to undercut the West again.
In the longer run, of course, what one gets is worldwide hyperinflation and everyone working on the basis of the 1923 Reichsmark. But given the electronic nature of most transactions these days, there will not be any repeat of German people turning up with a wheelbarrow full of Marks in order to buy a newspaper. A discreet but deadly combo of high technology, low voter interest, and even lower Sovereign/banker morals will combine to keep everything ticking over-te-boo.
One might envisage a situation in, say 2035, where worldwide television broadcasts can show the emergence of a near-equally destitute middle and working class world population. One can almost hear the narrator of this Sky Television documentary showing how – far from fulfilling the doom-laden prophecies of the naysayers in 2013 – what neoliberal policies have produced is the equalisation of mass wealth without a single drop of blood being spilt.
In this odd Huxleyesque future, a carrot might cost a million quid at 9 am and two million by 4 pm, but it won’t matter. A new global electronic currency unit would be invented – backed by gold – which became so trusted, nobody ever asked for the gold….rather like the Pound some time around 1860. We would be ‘paid’ in this currency, the ‘money’ loaded onto plastic smartcards…and the number of units value updated electronically every twenty minutes. Nobody gets rich, but nobody starves, nobody fears inflation because the elites tell everyone there is no inflation any more: anxiety about money has been banished by the wonders of neoliberalism.
This miracle improves SME, consumer and investor confidence. And as interest payments have also been abolished, economies start to grow again, world trade picks up, and the West trades on a competitive par with Asia. Every Sovereign is in the same boat, so sooner or later the ‘value’ of the global currency units are manipulated up or down to ensure that global mercantilism stays perfectly in balance.
Manipulation is now easy to achieve, because every outspoken internet site has been silenced, and ‘politics’ have been replaced by ‘civic debate’ – there being a clear consensus for the new global economic safety plan. Much of this was achieved after 2020, when draconian new surveillance and security laws were passed to stem the new Tsunami of Islamist and ecological terrorists. The notorious fundamentalist mass murderer Abu Ben N’evis is still sought – and vast rewards are offered for his capture – but nobody knows where he is or what he looks like. This is because he doesn’t exist.
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I’m not saying this is The Plan and everyone’s working to it, because it’s palpably obvious most ‘leaders’ at the moment are running about like so many headless chickens on amphetamines. I’m saying that, in the minds of pillocks like Carney, Draghi and all the other former Goldman Sachs senior bods, this may well be the sort of outcome they’re hoping for: to them, it seems like a feasible plan. In other words, they’re saying to each other at various summits and conferences,”The problem is that we have huge debts, expensive citizens and a truculent China. So we work hard at repayment, wage deflation, and inclusiveness with Beijing…and then the infinite global growth paradigm can start again – only this time, all comment about it is favourable, because we and our allies – the ISPs, Newscorp, China Media and so on – control all the information received.”
The scheme has roughly the same chance of being achieved as the first transatlantic crossing by three elephants in a sieve (they escaped from the room). Countless factors like non-netted derivatives, ClubMed rebellion, Russian instability in an energy slump, Japanese madness, South American demands on the IMF, genuine Islamist chaos in black Africa, regime instability in Arabia, interest rate renegades, riots when further monies are removed from bank deposits and hundreds of other unforeseen events will, in all probability, still derail the MoUs.
But two things will make it much easier for the mad folks to continue on their road to perceived material Nirvana. First, more electorate apathy. And second, endless splinters and schisms in the liberal spectrum of resistance. Even if the Brave New World envisaged is never reached, those schisms and apathy will silence all serious opposition by 2030 at the latest. The abandonment of Net Neutrality – and the emergence of politicians with seemingly good rationales for closing sites – are both massive first steps in this process. But 90% of the voting public don’t understand it…and aren’t remotely interested in finding out; while the main Opposition Parties right across the West are far too busy with their personal ambitions and focus groups to concern themselves with the Big Picture.
You might say this is a three-dimensional race against time. The Goldmans and the censors need to manipulate their way through to the new post-2008 regime before any social eruption occurs; the decent folks want to alert the dopey Waynes and the anal Leninsparts to what’s going on before it’s too late; and the key banking firms like JP Morgan hope to in turn use real-terms hyperinflation to make non-netted derivatives more of a sideshow. My most-favoured view remains that an unpredicted event will trigger panic the élites cannot control, and that in the ensuing confusion social backlash will start, the Leftist Parties will engage less and less with anyone else….and will then find themselves repressed as States fight back.
The main thing the Resistance must try to save now is the liberty, Rule of Law, and right to Free Speech that might crash the system so quickly, the agents of it will be swept away. That, I have to say, is looking less likely as each month passes.