Why the West needs war

In 2008 the RAND Corporation presented a report advocating war against a major power as a way to stimulate the U.S. economy. The report did not specify the target, but the main candidates were thought to be Iran, Russia, or China. RAND’s recommendations reflect a strategy favored by a part of western elites which is then subtly promoted through the mainstream media.

In October 2010, Washington Post published a column by David Broder suggesting that war with Iran could help solve the economic crisis in the U.S. In 2012, the all powerful Council on Foreign Relations called to give war a chance in an article by Matthew Kroenig, titled “Time to Attack Iran”. Plans to attack Iran have been shelved since then, but war hasn’t lost its appeal. In April 2014, historian Ian Morris penned a Washington Post article, “In the long run, wars make us safer and richer.” The article was featured on the Post’s web site with a picture of a nuclear bomb blast with the caption, “War is brutal. The alternative is worse.”

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The talking clowns of the U.S. State Department

It is almost embarrassing to watch the U.S. State Department’s hapeless spokeswomen Jen Psaki and Marie Harf conduct their press conferences. Two days ago, during the night of the 30th and 31st July, Israeli forces bombed a UN school in Gaza killing at least 15 and wounding over 200 Palestinian civilians who sought refuge there. Marie Harf was grilled about this incident but declined to issue her department’s unequivocal condemnation of the attack. You see, there were “conflicting reports,” they are working hard to collect all the evidence, it is still not clear what happened, etc, etc…

Foreign policy is delicate business, so I suppose it is reasonable to withhold any strong condemnation until all the evidence is available. However, barely two weeks earlier, when Malaysian flight MH17 dropped out of the skies over eastern Ukraine, the same Marie Harf didn’t need no stinkin’ evidence to accuse Russia and president Vladimir Putin for the tragedy.  A YouTube clip prepared the day before the incident by Ukrainian intelligence and a photo tweeted by the U.S. Ambassador Jeffrey Pyatt was more than enough. The rest, according to Harf was “common sense”: the Russians dunit, trust us, y’all know how bad Putin is, say no more…

Marie Harf grilled over Gaza (37 minutes): https://www.youtube.com/watch?v=bptVcurvsS8

Marie Harf on the crash of Malaysia Airlines over eastern Ukraine (7 minutes): https://www.youtube.com/watch?v=oQRvINebeok

The only way this could be more comical would be if Marie Harf, Jen Psaki, or their boss, John Kerry came out in front of journalists dressed in clown’s costumes. Either they don’t value their own credibility, or they really think that people’s IQ averages around 40.

Who is Vladimir Putin – an update

The concerted campaign of demonization of Vladimir Putin in western media compelled me to do a bit of digging to try to find out about him. Even though I’d started to doubt the demonization at least since Russia’s military intervention in Georgia (Putin completely pulled the troops out of Georgia within three months of having entirely crushed Georgian military), I still had lowish expectations: the man is a politician, after all. So I was rather surprised to come across an article by one Sharon Tennison who’d worked in Russia for some 30 years and met Putin personally through her work with US non-governmental organizations and diplomatic core. The portrait Tennison painted did not match that of a typical politician: young Putin was into martial arts, he stood up for other kids against school bullies, he was curteous and helpful as a state bureaucrat, he took no bribes, etc… This really did not match the image of a typical politician who is keen to rise to a position of power, and once there does everything possible to stay in power, ethical or not, legal or not… More recently, journalist and author Israel Shamir who spends time between Israel and Moscow offered another glimpse of Putin in his recent article, “Ukraine in Turmoil:”

So who is Vladimir Putin?

The further a society drifts from the truth, the more it will hate those who speak it. – George Orwell

Ukraine remains the topic of most discussions on global economy, and Russian president Vladimir Putin is an inevitable part of that subject. Although he is almost universally demonized by western leaders and media, more impartial observers increasingly concede that his administration’s conduct seems more rational and more constructive than that of his western counterparts. But even then, most people pad their comments with a kind of disclaimer:

• I don’t like Putin, but…
• Putin s a thug, but…
• Whatever you may think of Putin, …

I find that curious, so at some point I started asking people in such conversations to tell me why, specifically, they didn’t like Putin or thought that he was a thug? As I suspected, most people did not really have more than a vague answer reflecting the familiar mud slung daily by our mainstream media…

We must urgently rearm to defeat the New New Hitler from the East!!!

Any day now, Russia’s President Putin will give orders to his troops to invade Ukraine, after which he’ll gobble up the Baltic states, then Poland and then Finland and who knows what else – unless, of course, we spend a lot more money on defence. This statement is a caricature of the otherwise entirely serious campaign of warmongering hysteria and demonization that’s been saturating the Western media for weeks now. At times, the message is subtle and other times not so subtle, but the demonization seems effective. In discussing these issues, it is de rigeur for most western intellectuals to agree how Putin is a real bad fellow, the new Hitler even, although precious few can provide any concrete reasons why they know this to be so.

Let’s not war, shall we?

Global geopolitical situation appears to be deteriorating with crises multiplying from month to month. From the Western perspective, it looks as though one evil tyrant after another unleash violence against their own citizens or assault their human rights or sin against democracy or do something bad and we, the good guys just have to go and set things straight. Next thing you know, half the world is either in or on the verge of armed conflict. If only bad people could be removed from power and good guys installed there; if only we could make the world safe for democracy once and for all… Then all would be well.

Sadly, we’ve been here before. This year we “celebrate” the centennial of the outbreak of WWI which was fought to make the world safe for democracy.

Sandals

In 1893 Mahatma Gandhi went to South Africa, intending to stay there for only a few months. He ended up living there for 21 years as he took up the struggle to restore the dignity and rights to a subdued, disarmed, and enslaved Indian community.

During those years, his chief political opponent was General Ian Christian Smuts who, as the Colonial secretary and later the Secretary of the Interior was responsible for implementing some of the discriminatory laws against the Indians.

When Gandhi finally left South Africa in 1914, Smuts wrote, “The saint has left our shores,

Stimulating economic growth (QE2) didn’t work. Now what?

In December, I asserted that we’re inevitably heading into a prolonged period of high inflation. I also asserted that stimulus spending won’t reignite economic growth because we’ve simply passed the point where marginal productivity of debt has turned negative. Namely, each Dollar of new debt generates negative economic growth.

Five months and nearly $600 billion later, we’re nearing the end of the Federal Reserve’s second round of quantitative easing, and the results – even with various government agencies sloppy book cooking – are dismal:

Deflationary gap and the West’s march to war

(another long post, but it’s important, please bear with me…)

Although I studied economics at the university, I don’t recall coming across the subject of deflationary gap. The textbooks I still have don’t mention it, and a search on the internet yielded close to nothing on the subject. Wikipedia doesn’t even have an entry for deflationary gap. Answers.com provides a single vague sentence about it.

That’s strange, for we’re talking about a systemic flaw of the capitalist economic system that predictably corrodes the democratic framework of the society and leads to the rise of fascism and military conflagration. In his book “Tragedy and Hope,” (by far the most fascinating history book I’ve ever read – for an introduction, check this link) Carrol Quigley devotes much space to deflationary gap as he meticulously traces the events leading to last century’s two world wars. He considers the deflationary gap as “the key to twentieth century economic crisis and one of the three central cores of the whole tragedy of the twentieth century”.

About Bernanke’s 100% confidence…

On 5th December 2010, Fed Chairman Ben Bernanke gave an interview to 60 minutes. The whole thing seemed like a choreographed show, but this exchange with 60 minutes’ interviewer Scott Pelley took me aback:

Scott Pelley: “You have what degree of confidence in your ability to control this?”
Bernanke: “One hundred percent.”

Inflation might decimate your wealth

In February this year, we wrote that the sovereign debt crisis, pervasive in the developed world, was “certain to lead at some point to a prolonged period of inflation.” We are now in the early stages of that period and an acceleration of inflation is now virtually certain. Unless investors move aggressively to protect their wealth, they are likely to lose 50% or more of their wealth’s purchasing power in the coming years.

Sanctity of contract: for some, not for others

In spite of the overwhelming opposition of the majority of people, the French parliament just passed a reform that will increase the age of retirement in France from 60 to 62. Whatever happened to sanctity of contract?

Why financiers LOVE democracy (and why the 2010 Nobel Peace Prize went to Liu Xiaobo)

Financiers just love western-style democracies. They’re the absolute dream clients. Politicians who promise the most tend to be most popular with the electorate. Once in office, they need not worry about the cost of their promises; if there’s a shortfall in funding, they can always turn to the financiers to borrow the extra funds.

The more they can borrow and spend, the better. After all, spending money is fun and makes you feel all powerful and important. By contrast, repaying debts is no fun and you get to feel small and humble. But paying back debts is irrelevant – it’s a problem for future administrations (well, if they’re smart, they’ll pay the old debts with new debts).

Economy, market manipulation and inflation

Commodity and capital market behaviour seems to be diverging ever further from any notion of rationality. Increasingly, participants are suspecting foul play and manipulation by powerful interests as a possible explanation for this. Such allegations are nothing new, but of late, much evidence has surfaced substantiating the suspicions. The tricky bit is figuring out who is doing this and to what ends. While some hedge funds got caught manipulating prices, I believe that the chief culprits are the NY Federal Reserve and its too-big-to-fail owners. As to their objectives,