Germany

All the Answers are Wrong

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Published on the Economic Undertow on June 8, 2016

07 ‹bersicht Kraftwerk

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Unknown photographer (Bundesarchiv): The central powerhouse of the IG Auschwitz ‘Buna’ chemical complex at Monowice, Poland, in 1944. This giant factory was built by the chemical firm IG Farben to produce synthetic rubber, motor fuels, styrene and other compounds for the Third Reich, using raw materials mined nearby. The plant was a monument to brutality, built largely by tens of thousands of Jews and other slaves press-ganged across Europe by the German SS and ‘rented’ to Farben. Unlike much of wartime German manufacturing, toiling under the lash of Allied bombing; set up in flimsy sheds, in caves or even out in the open, the Buna facility was built of permanent materials to the highest standard. The intention was to produce wartime supplies for the German military during the years of conquest, then commercial plastics after the war was won. It was also meant to put the German stamp on defeated Poland, a permanent landmark for a thousand-year empire.

Farben was a cartel created in 1925 by combining the firms BASF, Hoechst, Cassella and Chemische Fabrik Kalle, Bayer, Chemische Fabrik vorm. Weiler Ter Meer, Chemische Fabrik Griesheim-Elektron and Agfa. These firms were founded beginning in the mid- 19th century, to synthesize dyes and related compounds from coal tar, a toxic material left over from the manufacture of illuminating gas. By the time the combine was formalized, interests had expanded to fuel, fertilizer and pesticides, cosmetics, non-ferrous metals, explosives, pharmaceuticals, reagents; also construction, mining and materials. The leading firm within the Farben combine was BASF, which had become dominant by way of the high pressure hydrogenation processes it developed beginning in 1912.

During that year Fritz Haber and assistant Robert Le Rossignol learned how to produce ammonia by combining atmospheric nitrogen with hydrogen from methane in a pressure vessel at high temperature in the presence of a catalyst. Engineer Carl Bosch at BASF expanded the process to the industrial scale. Arguably one of humanity’s significant inventions, synthesized ammonia represented a superabundance of fertilizer, allowing crop yields to increase geometrically without the need to increase the area of land under cultivation. The Haber process was soon combined with the Ostwald Process to synthesize nitric acid which together produces ammonium nitrate; this allowed for nearly unlimited supply of explosives and propellants. The timely adoption of nitrate synthesis at the industrial scale right before the beginning of World War One allowed Germany to wage war against its neighbors even as supplies of natural nitrates were cut off by British naval blockade.

In 1913, Friedrich Bergius patented a process for converting lignite coal to liquid fuel by hydrogenation under high pressure and temperature in the presence of a catalyst. Theodor Goldschmidt, a businessman and chemist with family background in the dye business built a facility utilizing the Bergius process to produce liquid hydrocarbons which became operational after the war. Ultimately, Bergius’ patent was sold to BASF where Carl Bosch perfected- then expanded the process. Starting in 1934, Farben (as Brabag) constructed a dozen coal-to-liquids plants capable of producing at full capacity as much to four million tons of synthetic gasoline and other fuels per year. In 1925, Franz Fischer and Hans Tropsch developed a complimentary coal-to-liquids process that likewise involved passing feedstocks through a catalyst at high pressure and temperatures. The output of the two processes together was sufficient to meet the entire military requirement for gasoline with synthetic fuel until allied bombing destroyed most of the plants and fuel transport.

In 1929 Walter Bach (for Farben) developed a process to produce synthetic styrene-butadiene rubber (SBR) trade named as Buna-S. There were other formulations for synthetic rubber and to some degree Farben had a hand in all of them. including types developed in the US and the USSR by Sergey Lebedev; these were all places lacking a native source of natural rubber. Farben built several facilities to manufacture Buna in Germany and occupied lands including the plant at Monowice. Together these factories were able to meed the German military demand for rubber until they were, like the fuel plants, destroyed or rendered useless by Allied bombers.

11 Kompressorenbau

Unknown photographer (Bundesarchiv), Compressor station in IG Auschwitz Buna hydrogenation facility in Monowice. The scale of these compressors can be seen by noting the figures on the far right and in the center.

In 1937, Otto Bayer (Farben) developed the chemistry to produce urethanes which today are ubiquitous in adhesives, coatings, paint, insulation and packaging. Farben chemists also developed polystyrene and epoxies, organophosphate pesticides; also photographic film, X-ray plates and developing chemicals; also pharmaceuticals including phenobarbitol and the first antibiotics; also solvents, synthetic fibers and dyes; reagents and chemicals for refining, also catalysts, lubricants and special materials for high temperature applications. One of the production centers within the sprawling Buna factory was intended to synthesize glycol compounds used for explosives, also chemical warfare agents including precursors for the nerve gas Tabun. Glycol is a component of anti-freeze.

The 1925 consolidation created Farben as Europe’s largest company; it was also the world’s largest chemical company; a top-four largest industrial firm after General Motors, US Steel and John D. Rockefeller’s Standard Oil of New Jersey. Operating through hundreds of subsidiaries and merger agreements, the greatest proportion of the firm’s business was outside of Germany. Until the war, Farben was the source of the bulk of pre-WWII Germany’s foreign exchange.

Farben was extraordinarily inventive. A reason was the company did not skimp on critical investments: from The Official 1945 Report of U.S. Congress on IG Farben;

Vast sums were devoted to research. In the period between 1932 and 1943 I.G. spent slightly less than RM 1bn, averaging an expenditure of rather more than 4.1 percent of (war inflated) average annual gross sales. A significant percentage of these expenditures went into research on products not yet in commercial production, and constant attention was also paid to novel applications of products. Well over 1,000 highly qualified men and women were regularly engaged in research work. In addition, the firm financed research work in many universities and scientific institutions.

Unlike the current run of tech firms with little- or nothing to show but borrowed fortunes for executives and venture capitalists, Farben’s top scientists and engineers were Nobel Prize winners … Haber, Bosch and Bergius; later Otto Diels for chemistry, Gerhard Domagk for medicine. Brilliant as the company was, Farben’s crimes were appalling. Farben and its manufacturing counterparts Vereinigte Stahlwerke, Daimler, Krupp, BMW, Messerschmidt, Rheinmetall, M.A.N., Mauser and the rest were the ‘Military Industrial Complex’ before the term as such existed. The complex’s war against Europe cost the lives of thirty-two millions or more, additional millions were wounded or left homeless. Instead of empire, the war left Germany divided and in ruins. The conventional narrative suggests Farben as an accomplice or pro-forma enabler of the Nazi Reich and its horrors but this is incorrect. Hitler and his gangster cronies were products of Farben no different from polystyrene and printing ink.

Technology is seductive. From the dawn of modernity in 1455, it has offered the chance for those who possess it to gain ascendancy over those who do not. The first public expressions of modernity were both revolutionary and aggressive. The printing press enabled Martin Luther’s reaction against the Catholic Church, the three-masted sailing ship made possible the almost instantaneous conquest of much of the Western Hemisphere by Spain and a handful of adventurers. The press put paid to the Church’s monopoly on information and by doing so ended Rome’s position as mediator of public and private affairs across Europe. The sailing ship took rapacious Europeans to every corner of the world, to pillage what they could, to colonize and enslave as far as the oceans could carry them. The roots of technology are in war and revolution, its branches are crimes and misery, death and ruin; we obsess about the flowers while we choose to endure- or ignore the rest.

Like a wrench or a saw, technology offers leverage: the policies that spring from it are entirely self-referential and self-contained. A saw either cuts or it doesn’t; what happens otherwise is never an issue, what matters is the ‘efficiency’ of the cut. Technology sets its own terms. To the saw everything looks like a piece of wood; analysis is reduced to these terms and none other. The observed purpose of technology to expand itself; it is both ends and means simultaneously, with one justifying and reinforcing the other. Spain’s conquests and Luther’s bid for reform set into motion social and economic events that culminated a century later with the Thirty Years War and the annihilation of a quarter of Europe’s inhabitants. On its own terms, Auschwitz was a very good concentration camp, it was able to murder over a million harmless Europeans and provide industry with a million more as slaves at very low ‘per unit’ cost; with very little fuss. Objections were- and are nothing more than sentimentality; those Jews and Russians were all going to die, anyway.

By way of the internal logic of technology, the most outrageous crimes are nothing other than ordinary, predictable mechanical processes. Technology ‘does’ because it ‘is’, there is are no other reasons, in fact reasoning is never part of the industrial equation; here there is never a why. Like the genie and the bottle, technology cannot be ‘un-invented’, it can only be replaced by newer, more revolutionary and warlike versions, or forgotten or starved of the materials it needs to continue. The failure of technology is that while it offers reach and grasp it cannot provide things that are inherently peaceful and accommodating. It is the same with economics, which produces ‘wealth’ but cannot provide money that is impossible to steal.

Within the version of ‘modern’ that Farben conjured as it trundled along, the firm itself was an unexceptional component as were the materialist anti-philosophy and the baggage of self-driven rationalizations that went along with it. Like gravity in Einstein’s universe, Farben ‘bent’ the space of modernity, adapting everything within it to itself. Whatever was in that space was Farben’s property, to do with what it pleased. This included the humans who were victims of the company as well as the governments that victimized them for the company’s profit. Outside the curve, the firm’s products existed for no other reason other than they did not exist before, what was to be done with them after they were delivered and the warranty ran out was never the company’s business … According to the internal logic of technology — not just Farben’s — the product was- and is always neutral; guns don’t kill people, neither do explosives, nerve gas, cars or atomic bombs, tanks, drones or air-to-surface missiles. Hannah Arendt observed of the blandly innocuous Standard Oil of New York employee Adolf Eichmann:

The trouble with Eichmann was precisely that so many were like him, and that the many were neither perverted nor sadistic, that they were and still are, terribly and terrifyingly normal. From the viewpoint of our legal institutions and of our moral standards of judgment this normality was much more terrifying than all the atrocities put together for it implied – as had been said at Nuremberg over and over again by the defendants and their counsels – that this new type of criminal, who is in actual act hostis generis humani, commits his crime – under circumstances that make it well-nigh impossible for him to know or to feel that he is doing wrong.

Eichmann, like Arendt’s ‘others’, was a product … of what-ever branch of industrialization, it does not matter. He was more deadly than some, less so than others. Accompanying Eichmann in the dock was the banality of technology, the dumbest of all automatons; without comprehension or sense; a Golem made of nitrate and rubber hovering both in- and outside good and evil not quite one nor the other, all things being exactly the same. This is the logic and tyranny of the machine, the false idol we have decided it is best for us to live in the center of.

Gerhard Schrader aimed to end world hunger; in the process of developing pesticides he discovered the nerve agent Tabun, that was later produced in large quantities by Farben. The chemical turned out to be difficult to handle and for that reason and for others, it was never deployed. Haber’s ammonia synthesis offered the same benign promise, to feed the hungry. In 1914, Haber without hesitation volunteered his expertise to the Kaiser government, to develop and deploy poison gas during the war, having a personal hand in the first use of chlorine during the Second Battle of Ypres in 1915. “During peacetime a scientist belongs to the world,” said Haber, “during wartime he belongs to his country.” Ammonia synthesis was the foundation of Imperial German firepower, without BASF’s explosive compounds, the German assault on the rest of Europe would not have been possible. Hitler’s war would have been stillborn without the ability of Farben to synthesize motor fuels and rubber — and to obtain essential compounds as well as intelligence from its American partner Standard Oil. The conventional narrative casts Hitler as the convenient villain; that the rest of the German government, its helpful industries and naive populace were dupes. That Hitler was a villain there is no doubt. The narrative one step further makes Farben the industrial villain and that its fleet of partners and lenders, including Brown Brothers Harriman, Standard Oil, Shell Oil, Morgan Bank and the Bank of England were dupes as well. Another step further and the German Schutzstaffel-SS were the evil actors that the Farben executives were taken advantage of; this narrative held longer and was very convenient as scores of Farben executives took high-level management positions within the firms that succeeded Farben: Agfa, BASF, Bayer AG and Hoechst (merged with other companies).

Technology pushes back limits, but cannot eliminate them. It only goes so far, providing some solutions but not all of them. Farben offers a window allowing technology to reveal its shortcomings, it also a means to understand Germany, which to a large degree was a product of the dye firms that were the parent of the IG Farben company.

– All the answers are wrong: the long shadow of Farben.

– Germany, like the United States, emerged from the crucible of war. They also emerged against the same adversary.

– The First and Second European wars were started for the same reason, Germany lost both wars for identical — but different — reasons. Technology gave Germany the chance at success in its wars but technology proved to be irrelevant at the end.

The Dimming Bulb 2: Peak Electricity

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Published on the Doomstead Diner on October 18, 2015

City Lights 2012 - Flat mapComposite Night Image of the Earth taken by the NASA Suomi NPP Satellite in April-October 2012

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LAST CHANCE TO TAKE THE ENERGY SURVEY BEFORE THE COUNT!

A few days ago, doing my usual Web Surfing for Collapse articles to link to on the Diner and our new r/globalcollapse Reddit sub, I ran into an article on the Greanville Post titled WHAT IS EUROPE. CONTINENT OR PENINSULA?

europe-map-of-europe-nightlights-satellite-woodleywonderworksThe article featured as its Header Pic a NASA image of Europe taken at night from Space.  The image is actually just a crop of the much larger composite night time map of the world assembled from data acquired by the Suomi NPP satellite from April through October 2012, which I reduced in size and heads this article.   The full size pic in all its glory can be accessed by hitting the link under the header photo to the NASA website.

What that article was meant to show was how Europe really isn't a "Continent", although it is defined as such in most of your Geography Textbooks, but really just a Peninsula of the much larger Eurasian land mass.  However, that is not what really struck me when I looked at the Header Pic, what struck me was the vast difference between the Brightness of the Eurozone versus the Darkness of the African continent below, at least the portion of it visible in that cropping.  Africa is the "Dark Continent" in more ways than one here.

During the middle of the 19th century, Africa was referred to as the "Dark Continent," because little was known about the mysterious land itself. The term "Dark Continent" was most likely used for the first time by United States explorer and journalist Henry Stanley.

Obviously, with that thin band of lights on the Northern end of Africa, it's pretty obvious they're burning a whole lot less energy there than is going on nightly on the European Peninsula.  Although most often conversation amongst Energy Kollapsniks TM revolves around the availability of Liquid Fossil Fuels for powering the transportation systems we use, in reality it is the Electricity that defines the culture and lifestyle of Homo Industrialis.  When you look at the whole Map of the Globe lit up like a Suburban McMansion at Christmas, you can actually track the progression of Industrialization; you can see why the countries that are in control of Industrial culture are who they are and why everybody else out there is not particularly happy these days.  I have discussed this aspect of Industrial Civilization and Electricity before in The Dimming Bulb, in this installment I want to look at it from the Historical and Geopolitical perspectives.

You can easily tell where the Industrial lifestyle began, and you can trace it's march around the Globe as well.  The Brightness of the lighting tells the whole story if you know just a little history, and it tells you a lot about where things are going in the future too.  Before we go Back to the Future though, let's do a little review of how this all got started.

Practical application of Electricity began in the mid 1800s, and by the late 1800s the frst central power stations came online in Jolly Old England and in the Northeast of the FSoA.

Central power stations and isolated systems

The first central station providing public power is believed to be one at Godalming, Surrey, U.K. autumn 1881. The system was proposed after the town failed to reach an agreement on the rate charged by the gas company, so the town council decided to use electricity. The system lit up arc lamps on the main streets and incandescent lamps on a few side streets with hydroelectric power. By 1882 between 8 and 10 households were connected, with a total of 57 lights. The system was not a commercial success and the town reverted to gas.[16]

The first large scale central distribution supply plant was opened at Holborn Viaduct in London in 1882[17] Equipped with 1000 incandescent lightbulbs that replaced the older gas lighting, the station lit up Holborn Circus including the offices of the General Post Office and the famous City Temple church. The supply was a direct current at 110V; due to power loss in the copper wires, this amounted to 100V for the customer.

Within weeks, a parliamentary committee recommended passage of the landmark 1882 Electric Lighting Act, which allowed the licensing of persons, companies or local authorities to supply electricity for any public or private purposes.

The first large scale central power station in America was Edison's Pearl Street Station in New York, which began operating in September, 1882. The station had six 200 horsepower Edison dynamos, each powered by a separate steam engine. It was located in a business and commercial district and supplied 110 volt direct current to 85 customers with 400 lamps. By 1884 Pearl Street was supplying 508 customers with 10,164 lamps.[18]

By the mid-1880s, other electric companies were establishing central power stations and distributing electricity, including Crompton & Co. and the Swan Electric Light Company in the UK, Thomson-Houston Electric Company and Westinghouse in the US and Siemens in Germany. By 1890 there were 1000 central stations in operation.[7] The 1902 census listed 3,620 central stations. By 1925 half of power was provided by central stations.[19]

City Lights 2012 - Flat map Lights UK April-October 2012

City Lights 2012 - Flat mapLights NE USA April-October 2012


The wiring spread outward from there, and India got wired up pretty well.

City Lights 2012 - Flat mapIndia Lights April-October 2012

South America a bit less wired.

south-america-space-nightLights South America April-October 2012

Africa barely got wired at all.

Africa_Space_NightLights Africa April-October 2012

So how come India got wired up but Africa did not?  Ask yourself who was running the show in India in the 1800s?  It was the main colony of the declining British Empire, the one the Sun Never Set On because they were running all those new Lightbulbs!  LOL.  The Brits were not at the time in charge of Africa, really nobody was far as Westerners were concerned, that's why it got called the Dark Continent, besides the fact it was populated by dark skinned natives.

As time went by into the early 1900s, a couple of other places got decently wired up, Japan & China.

City Lights 2012 - Flat mapLights China & Japan April-October 2012

In the mid to late 1800s, the Anglo-Amerikan Industrial Empire was in an Expansionary Phase, and the Gunboats of Cmdr. Matthew Perry "opened" Japan forcibly in the 1850s to join the expanding Industrial Empire, as I covered some time back in the Mr. Peabody Visits Japan article. Still in the Coal fired period at this time, the Gunboats weren't using Oil yet.  The Brits were bizzy trying to make China the same kind of colony that India was, but unfortunately had some Boxers willing to fight them on this.

By the end of the 19th century, the Western powers and Japan had forced China’s ruling Qing dynasty to accept wide foreign control over the country’s economic affairs. In the Opium Wars (1839-42, 1856-60), popular rebellions and the Sino-Japanese War (1894-95), China had fought to resist the foreigners, but it lacked a modernized military and suffered millions of casualties.

The Chinese weren't happy Kowtowing to the Japanese, and the Japanese weren't happy Kowtowing to the Gaijin Imperialists either, so everybody got in a big ass fight over this eventually.  The fight was called WWII, which got ended with this:

https://awesometalks.files.wordpress.com/2008/08/ng30.jpg

The Nips were outclassed with Industrial Killing and their well wired Island was turned into an Industrial Factory for Carz and Electronic toys, starting with Transistor Radios moving through Walkmans up to the latest in Smartphones, though of course in recent years have had serious competition on this stuff from the other slaves on the Asian Continent from Korea to Thailand to China.

However, at this point in the post-WWII years the further Wiring of the World began to slow, if not come to a complete halt.  With the Victory over Japan and Germany, why was further electrification of Africa and South America not undertaken?  SA is a little more wired than Africa, but not by much.

south-america-space-nightLights South America April-October 2012

As with most places that have been wired up post WWII, it's mostly along the coastline not much going into the interior.  There are a few reasons for this.

First one is that by and large, most population centers and Big Shities lie along the coastlines.  Reasons for this?

1- It's easiest to do trade with many places via boats.  You can put a lot of cargo on a boat and move it around the world over the oceans without using a whole heck of a lot of energy to do it.  In fact in the Sailing Era, that energy was all Renewable.

http://www.portmellon.net/uploads/1/0/0/7/10078822/5846457_orig.jpg

Even in the modern Container Ship era utilizing Fossil Fuels, this is relatively low energy consumption.  The ships can run on "Bunker Fuel", which is basically unrefined Oil.

http://www.transinfo.am/img/services/big/1392130262-7142.jpeg

2- Coastline areas are usually pretty flat land condusive to large scale Agriculture.  The fresh water flows down from higher elevations to these neighborhoods, so you have a continuous source of water if you are at the mouth of a decent size river, long as nobody upstream is using it all or contaminating it.  New York Shity at the terminus of the Hudson River or London at the terminus of the Thames river are typical examples of this.

http://oceanservice.noaa.gov/education/kits/estuaries/media/est01c_600.jpg

http://media-2.web.britannica.com/eb-media/14/78514-004-9E98EDAD.jpg

3- It's relatively EZ to get rid of all your WASTE if you are right on the coast.  The Sewage goes into the Big Sink of the Ocean.

https://www.sydneywater.com.au/Publications/Reports/AnnualReport/2007/images/WollongongSTP_above.jpg

Woolongong Sewage Treatment Plant in Oz

So the vast increase in global population since the Industrial Era began has occurred mostly at the coastlines, which of course is not Good Newz with Sea Level rising.  Just ask Miami.

http://www.rsmas.miami.edu/blog/wp-content/uploads/2014/10/miami-flooding.jpg

For the most part, the Build Out phase stopped in the early 1970s at the latest, and the last 40 years has been all about continuing to bring in the necessary energy to all the places already built out to keep running them.  In some of the older industrial Big Shities like Detroit, that has already failed/collapsed.

http://opencityprojects.com/wp-content/uploads/2013/09/7499108236_7fd417857d_c.jpg

So your next question is just how does all the energy flow INTO the places it still goes to?  This is a pipeline and transport question mainly, although there are many geopolitical conseqences of trying to take energy stores from one location and move them to another one.  Let's look at the current pipeline networks for Oil and NG in North Amerika and Eurotrashland.

http://www.refinerlink.com/userfiles/RL%20MAD%20Pipeline%20Map.jpg

http://3.bp.blogspot.com/-YDdCkW9AqmY/UT31FYeVCDI/AAAAAAAABdc/1239kdVouUc/s1600/pipeline+accidents+final+animation1-2.gif


As you can see the greatest density of pipeline networks is in the TX/LA/OK neighborhood, and then filtering up from there to the North East and Upper Midwest.  This of course because in the early days, all the BIG FINDS of EZ to extract low EROEI oil in the FSoA came in these locations, and then that oil needed transport to the Industrial centers of the Midwest and to the Northeast trading ports with Europe.

As the amount of oil that could be extracted at a cheap price inside FSoA borders began to decline, those same networks were used to ship around Oil accessed/stolen from other big repositories on earth, most notably Saudi Arabia of course.  The Louisiana Offshore Oil Port (LOOP) was built to be able to offload oil from VLCCs (Very Large Crude Carriers), more commonly referred to as Super Tankers.

http://wwwsp.dotd.la.gov/Inside_LaDOTD/Divisions/Multimodal/LOOP/Loop%20Images/clove.gifhttp://wwwsp.dotd.la.gov/Inside_LaDOTD/Divisions/Multimodal/LOOP/Loop%20Images/loop.gif

A few more large pipelines were built as time went by to move the oil out of the ground to the places that were burning it, most notably the Alaska Pipeline:

The Trans-Alaska Pipeline System (TAPS) includes the trans-Alaska crude-oil pipeline, 12 pump stations, several hundred miles of feeder pipelines, and the Valdez Marine Terminal. TAPS is one of the world's largest pipeline systems. It is commonly called the Alaska pipeline, trans-Alaska pipeline, or Alyeska pipeline, (or the pipeline as referred to in Alaska), but those terms technically apply only to the 800 miles (1,287 km) of the pipeline with the diameter of 48 inches (122 cm) that conveys oil from Prudhoe Bay, to Valdez, Alaska. The crude oil pipeline is privately owned by the Alyeska Pipeline Service Company.

The pipeline was built between 1974 and 1977 after the 1973 oil crisis caused a sharp rise in oil prices in the United States. This rise made exploration of the Prudhoe Bay oil field economically feasible. Environmental, legal, and political debates followed the discovery of oil at Prudhoe Bay in 1968, and the pipeline was built only after the oil crisis provoked the passage of legislation designed to remove legal challenges to the project.

https://upload.wikimedia.org/wikipedia/commons/3/36/Trans_alaska_international.jpg

http://assets.enuygun.com/media/lib/750x525/uploads/image/2880.jpeg

As the Wiki article indicates, it only became economical to build this behemoth of a pipeline after the Arab Oil embargo of the 1970s drove up the price of Oil.  Lately there has been talk about building a natural gas (NG) pipeline out of there, either going across into Canada to join up with the current system of NG pipelines down there, or along the same route as the Oil pipeline down through Alaska, to be shipped out by liquifying the gas and dropping it onto specialized Liquified Natural Gas (LNG) ships, for sale then to the Japanese and Chinese slaves.

The problem with either of these pipelines being built is that the price you can get for NG doesn't justify the CapEx for building it.  You'll never even pay off building the pipeline, much less make a profit off of it at the current prices.  You would have to bet the price the consumer will pay for it will rise substantially, but how can that happen with fewer people working all the time at ever downward spiralling wages?  So both projects have stalled, although the Alaska Goobernator is still pushing for it because something is necessary to keep the economy running around here as the Oil in the Prudhoe Bay fields depletes and gets lower prices all the time.  He's got a huge hole in the state budget these days, and things are getting desperate down in Juneau.

Stalling also is the drive for further Oil exploration either in the Arctic Ocean or the Arctic National Wildlife Refuge (ANWR).  Shell Oil recently stopped their exploration there after sinking around $9B into that White Elephant, and this week Da Goobermint decided not to offer up any leases for the oil companies to even bid on.  Why not?  Because they will get the same result that the Brazilians got a couple of weeks ago when they offered up leases for sale in the supposed Giant Oil Reservoirs in Deep Water off their shores.  They got no bidders practically speaking.  Same as the NG pipeline for Alaska, with the price of Oil as low as it is, the CapEx involved in accessing and drilling up this Oil is huge, and you can't pay it off at the prices the consumers of the oil can afford to pay.  Although Environmentalists are gladdened by this decision and hope some Polar Bears will be saved, this decision has nothing to do with Environmental consciousness on the part of Da Goobermint or the Oil Companies.  It's strictly an economic decision.

Now let's move over to Europe, where you see a similar history and similar economic issues as far as continuing to move the Oil from under the ground where it still remains to the places that have been burning it since Oil replaced Coal as the main energy driver for their industrial economy.  First, let's look at the Pipeline Maps for Europe:

http://static1.squarespace.com/static/546f7732e4b095d2722abd0f/t/5499bde8e4b0439c6133934f/1419361773962/?format=750w

http://www.mappery.com/maps/Proposed-European-Crude-Oil-Pipelines-Map.mediumthumb.gif

As you can see, similar to the build out of Oil Pipelines in North America from where the Oil was found down in TX and OK to where it was burned in places like Detroit and Cleveland in the early part of the 20th Century, pipelines were built to take Oil from where it was found in the Middle East and North Africa (MENA) and bring it to the Industrial Factories  where it was being burned, primarily in Britain and Germany in the early 20th Century.  While the Boxers were fighting in China, you had a similar battle going on in Europe over who would get to control the Oil coming from MENA, and the first big battle was fought for this, that was WWI.

http://i.kinja-img.com/gawker-media/image/upload/n3mzmahboqu4lhmtgqkp.jpg

The Brits won this war against the Krauts, with the assistance of their then still flush with oil former colony of the Amurkans.  They carved up MENA into a bunch of random countries from the old Ottoman Empire with the Sykes-Picot Agreement to insure the flow of energy would come their way after the war.

The Sykes–Picot Agreement, officially known as the Asia Minor Agreement, was a secret agreement between the governments of the United Kingdom and France,[1] with the assent of Russia, defining their proposed spheres of influence and control in the Middle East should the Triple Entente succeed in defeating the Ottoman Empire during World War I. The negotiation of the treaty occurred between November 1915 and March 1916.[2] The agreement was concluded on 16 May 1916.[3]

The agreement effectively divided the Arab provinces of the Ottoman Empire outside the Arabian peninsula into areas of future British and French control or influence.[4] An "international administration" was proposed for Palestine.[5] The terms were negotiated by the French diplomat François Georges-Picot and Briton Sir Mark Sykes. The Russian Tsarist government was a minor party to the Sykes–Picot agreement, and when, following the Russian Revolution of October 1917, the Bolsheviks exposed the agreement, "the British were embarrassed, the Arabs dismayed and the Turks delighted."[6]

As you can see here, even prior to WWII and the Holocaust, there was an "agreement" about Palestine, later to become Israel.  Essentially, Israel was designed to be the Military Base from which to maintain control over all of MENA Oil assets.  Endless Military Aid has been furnished to the Israelis since WWII as a means to maintain this control, and the warfare down there between the Israelis and all the Arab states which surround them has been virtually continuous since WWII.

Despite the ongoing wars down there through the time period, overall the Oil was successfully transported through the pipeline system to the factories in Northern Europe, and even the Krauts who lost both WWI and WWII actually did fine here, since the same banksters financed both sides in the battle and after the war was finished, refinanced rebuilding of all the factories in both Britain and Germany that had been destroyed in the war to begin with!  LOL.

Like North America with the building of the Alaska Pipeline, the Northern Europeans also got a fresh infusion of Juice with the discovery of North Sea Oil, and both Britain and Norway got a big bonus from this over the last 40 years, but this bonanza is starting to run thin now, and there are no new good sources of local Oil to be accessed at anything within a reasonable price range to justify the CapEx.  So the Western European Nations are getting desperate for Oil and NG, and their last, best hope for this is…the RUSKIES!

Mother Russia still has a decent supply of Oil left, not just in the Arctic Ocean but out there in the vast land mass of Siberia too!  What's the problem?  PIPELINES!  Getting the Oil from where it still is in Mother Russia to where the Eurotrash would like to burn it will take extensive construction of new pipelines, which in some cases are even longer than the fucking Alaska Pipeline!  Besides that, the Eurotrash are competing against the Chinese, who would like to have new pipelines for this treasure trove of still remaining Fossil Fuel Energy piped in THEIR direction.  Who if either will the Banksters finance for contstruction of said new pipelines?  Just like Alaska, they won't fund either one of them, because there is no Return on Investment (ROI).  in no place left on Earth is it possible to sell the energy at a price the consumer can afford to pay for it.

Knowing all of this, it is now possible to predict where the Lights will go off first and how the Powerdown off Industrial Civilization will proceed.

You have two Legacy Infrastructure Projects here, built out from the beginning of the 20th Century to move the energy around, the Electrical Grid and the Pipeline Network.  Both systems are decaying, and the ROI for either fixing and maintaining what has already been built or for building new ones simply is not there anymore.  It just costs too much to drag the energy out of the ground and move it over to places where fewer and fewer people all the time can afford to burn it.  The persistent GROWTH necessary to finance such a system has come to a halt now.  The population of Homo Sap across the whole planet has exceeded the capacity of the planet to support that population on an Environmental and Resource level, and so that population must and will contract.  The easily accessed Fossil Fuel Energy that allowed for the exponential growth of this population is now all gone, it exists now as CO2 up in the atmosphere.

The population of Homo Sap will begin its decline first in the Peripheral countries, better known as the "3rd World".  Similarly, the Lights will start going off first in these countries, and the Legacy Pipeline and Electrical Grid systems that deliver the Energy to the 1st World Nations will continue to function a while longer, but become ever more difficult to maintain and to continue to input new Energy to ever more impoverished consumers of the Energy, and they too will then begin to shut down one by one at first perhaps, but at some point the whole system will crash.  This may occur in tandem with or shortly after the crash of the monetary system controlling this distribution of Energy.

The Last Big Shities to still have Lights On from central grid power?  In all probability, Berlin,the City of London and New York Shity on Wall Street, the centers of the Finance that built the whole system to begin with.  When the Lights Go Out on Broadway, you can say that TEOTWAWKI has arrived.  It may take a little while yet, but you can watch the progress inward, you can see it happening in real time.  It's not a conjecture anymore, it's reality.

More Econ & Energy Blogs & Rants off the keyboard & microphone of the Rogue Economist, AKA Reverse Engineer

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Exclusive: Refugee Tent Cities in Kos

gc2smOff the keyboard of RE

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Published on the Doomstead Diner on September 13, 2015

http://i2.cdn.turner.com/cnnnext/dam/assets/150813131952-10-kos-migrants-0810-super-169.jpg

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TAKE THE REFUGEE SURVEY HERE

SURVEY CLOSES MONDAY!  GET COUNTED!

Where's Kos?  It's not a place too many folks on this side of the Pond are familiar with.

Kos is one of the plethora of Greek Islands sprinkled around the Greek mainland, which is part of the European Continent.  It's been part of Greece for at least 3 millenia, but it actually sits much closer to Turkey than continental Greece, where the capital of Athens is located..

http://www.kosisland.gr/images/stories/maps/1.jpg

http://www.progc.co.uk/property-abroad/kos-island/kos-map.gif

It's a place many Europeans are familiar with though, because like many of those islands, Kos has beautiful beaches and is a great spot for German touristas to spend their Euros.  Well, at least it used to be.

http://media.afar.com/uploads/images/post_images/images/LedC1fgy3n/post_display_cropped_open-uri20130623-29913-1ifq2rb?1383816767

http://newmedia.thomson.co.uk/live/vol/0/fbd9ec250f9bf48a8f674a0822797ef336c6c36d/1080x608/web/EUROPE__MEDITERRANEAN_GREECE_KOSDES000899_KOS_TOWNRES000907_ATLANTIS_HOTEL.JPG

The nightlife for the Tourista is also fabulous!  Retsina and Ouzo by the Amphora full!

http://www.kosrehberi.com/wp-content/uploads/kos-gece-hayati.jpg

Not only do they have gorgeous beaches for the touristas to frolic on, they also have Clasical Greek ruins you can take the kids to and get them excited about History and Western Civilization!  At least if mom & dad are not too hung over from the Ouzo and Retsina anyhow.

http://file2.answcdn.com/answ-cld/image/upload/w_760,c_fill,g_faces:center,q_60/v1400915207/s8yqpbcxeaavamy4phxa.jpg

Kos is even great for the Doomer Tourista!  You can charter a yacht for a week (captained or bareboat, depending on your sailing prowess) and imagine yourself a Sea Gypsy escaping doom in your trusty sailboat, living off Dates and Fish!

http://lh3.googleusercontent.com/-iM-BSPNZ6tw/Tqqd-x8CC8I/AAAAAAAAAtY/vtGYW5_VTkw/s720/at%252520anchor.jpg

One small problem with all of these things these days in Kos, that is the proximity to Turkey.  Turkey is a main transit station for Syrian and Afghani Refugees seeking to make their way to the Promised Lands  of Germany & Sweden.  Unless they are positively loaded and can afford a Chartered Jet flying straight from Istanbul to Stockholm, they first gotta make it into Europe, and the shortest way with the least risk at the cheapest price  is via water transport into Greece.

Where's the closest and easiest Greek island to get to?  You guessed it, KOS!  It's so close any old rowboat or canoe can make this trip, about 2.5 miles.  Hell, good swimmers can swim that one, or you could paddle a surfboard or use a Windsurfer to make the crossing!

https://upload.wikimedia.org/wikipedia/commons/thumb/0/03/Wales_Windsurfer.jpg/640px-Wales_Windsurfer.jpg

Not that I really think most of the refugees are escaping on Windsurfers or Swimming it, I'm just demonstrating a point.  The boats they really do travel on are mostly old fishing boats of various sizes and capacities, or various categories of inflatables.  I'm not joking, this is an actual photo of refugees arriving at Kos in an Inflatable.

http://d.ibtimes.co.uk/en/full/1441076/kos-greece-island-refugees-migrants.jpg

They're Comin' to Kos in Greece!  They're Comin' to Kos in Greece!  TODAY!

OK, so now they are IN EUROPE! FREEDOM!  In principal anyhow.  Unfortunately, in physical miles and water miles and cash outlays to get to the mainland, they still have a long way to go, and once hitting Kos, they are kinda stuck there until they get Registered as a Refugee and get some kind of permission to move onward to the Promised Land of Germany, where they will all surely own Mercedes and drive the Autobahn at 100 Km/H!  Refugees have dreams too!

So what you have here is a classic Bottleneck situation, and the Refugees are stacking up in Kos, which is not so good for their regular Tourista Trade. It might not be too bad for the overall Kos economy though, as long as the recent arrivals come into shore with a bagful of Euros.

These folks can't spend those Euros TOO FAST though, because if they burn through what they have on Kos, they won't have spare Euros to buy passage on the next, hopefully bigger and somewhat sturdier boat that will bring them over to Athens for the next leg of the Journey.  So they are not wasting the precious Euros on luxury hotels on the scenic beaches.  Rather, they are setting up cheaper accommodations, TENTS.  A small city of tents already.

Recently, the Diner received Boots on the Ground footage from this week in Kos from our informant, Deep Kos.  Here's the latest from the streets of Kos:

Note: If you have Boots on the Ground Video or Pics from the front lines (Greece, Hungary, Italy et al) you wish to share with the world at large, CONTACT us on the Diner.  We have means and methods to get them up securely, with the best Hackers, Encryption Junkies and Code Jockies on the Net.  Do NOT upload or attach to emails prior to talking with us if your material is sensitive and you are concerned for your safety.  AKA, everything you put forth across the net or your cell phone can be tracked.  Always remember that fact of internet life.  It can be made DIFFICULT TO TRACK though, and we will make it as hard as possible for the Enemy.  CYPHER IS THE LAST FREEDOM.

Hopefully next time Deep Kos will video in Landscape instead of Portrait format.  LOL.

More from Deep Kos:

Things are taking a turn for the worse in the homeland… :-[. Golden Dawn (GD) is currying support from desperate islanders who are in fear of being overrun by waves of refugees.

"The issue of illegal migrants is becoming critical & is reaching a fateful crossroads, says GD member"
"The situation here on Kos is unbelievable says the member. The government is doing nothing, just managing PR."
"Save us, plead Kos locals."
"Vote for Us (Golden Dawn) and we'll Send in the Army to deal With this Riff-Raff."
"Otherwise, Greece will become Pakistan, says member."

Video link: http://bit.ly/1MLXKoG
Video translation, courtesy of me…

Numbers are around 7000 at present. Most of the late arrivals have been Syrian. They are particularly well to do as they can afford luxury hotel accomodation whilst awaiting processing by Greek authorities. The ferry boat that was relocating them to the mainland, the Venizelos, hasn't been seen for some time though, so unsure what that will mean for the  Syrians, although they do receive priority passage. The other refugees are roughing it in awful conditions mainly near the Police station and on along the foreshore, none have ventured out towards the villages. Business in town is dreadful, despite the hotel bookings as both locals and tourists alike are shunning the zone. Aid is being distributed by a Greek agency akin to UNICEF…

Anyhow, at least so far these vids look reasonably peaceful, and it actually does not look that much different than the early days of Occupy Wall Street.

http://www.3quarksdaily.com/.a/6a00d8341c562c53ef0154387ca0fb970c-800wi

OK, the weather was chillier in Zucchini Park in November, but otherwise quite similar.

While it remains peaceful for now, one suspects that the locals in Kos will get tired of all the tents and migrants cruising in pretty quickly.  No doubt laws will be passed regarding setting up tents on the street.  Then of course they have to enforce those laws, in the case of Occupy, the NYPD got the job of this.

https://d3n8a8pro7vhmx.cloudfront.net/luisjrodriguez/pages/351/attachments/original/1412788138/ows_nov15_3.jpg?1412788138http://animalnewyork.com/wp-content/uploads/mynypd-nationwide-600x337.jpg

Sadly for Kos though, unlike NY Shity, they don't have a Standing Army of 35,000 Thugs to Protect & Defend the Rights of Wall Street Pigmen to Loot the World.  If Kos has a police force of 100 I would be surprised.  This of course is no match for the 1000s of refugees rolling in there each week.

So at some point they bring in the Army on this, and Deep Kos has mentioned that they have Army Bases on the Island equipped with Tanks and other essential crowd control hardware.

http://infossible.com/infosdata/wp-content/uploads/2015/09/Infossible_Egyptian-billionaire-buy-an-island1-700x442.jpgAll this does not bode well for the Tourista trade though, nor for the local residents either, who would be well advised at this point to GTFO of Kos!  Sell the island to the Eyptian Wannabee Pharoah, split the cash amongst the current resident, take the money and RUN!  Run Away!  Run Away FAST!  RUN AWAY NOW!

As long as Kos remains a part of Greece and then by extension part of Europe, it's going to be a Magnet for every refugee trying to GTFO of the War Zones and climate ravaged countries of MENA.  There is no way to stop the flow short of mining all the waters, which will not be conducive to running a yacht charter biz there.

One small problem for Pharoah, the current infrastructure on the island houses a population of around 30.000.  After they leave, he's gonna have a heck of a time doing upgrades to squeeze even the current 100K on the move in there.  For the 30,000 current residents of Kos though, it's a great deal.  If they sell him the island for $1B, they'll each get $33.3K, plenty of money to get to Germany or Sweden and make a new start!  Plus they already have papers!  It's Win-Win for everybody! Refugees get a new home, Kosians get out of harms way! Well, except Pharoah, who will have to keep bleeding his account building more infraastructure as the population swells.

At some point here, the countries in Europe who are being shamed into accepting refugees will stop accepting more of them.  The pool of potential refugees as we move forward here is simply too large.  At some point there will be a backlash, and when that occurs Kos is not a place you want to be, whether you are Resident, Tourista or Refugee.

If you can, GTFO of Kos.

TODAY.

Rant Regarding Refugee Relief

logopodcastOff the Microphone of RE

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Published on the Doomstead Diner on September 10, 2015

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TAKE THE REFUGEE SURVEY HERE

gc2The Refugee Crisis has been "Topic of the Week" in the Collapse Doom-o-sphere.  Everybody's Talkin' about what to DO about this growing problem, with few plausible solutions being offered up anywhere, be it on the Blogs or from the Political class running the show here.  From Zero Hedge to Donald Trump, from Jim Kunstler to Nazis in Hungary and the Czech Republic, EVERYBODY'S TALKIN'.

To add more grist to the mill, I ranted on this topic last night, detailing some of the complete STUPIDITY that is ongoing here as the crisis escalates.  Sad to say, the discourse is unlikely to get any smarter as time goes by here.

We also have up a new Collapse Survey TM for readers to drop down their opinions on how to handle the Refugee Clusterfuck.   Below, I'll also include a few of the current Text Responses to the Survey.  Also another LINK to the Survey of course.  Did I remind you enough times to TAKE THE FUCKING SURVEY?  lol.

It's a Wicked Problem.  How would you handle it?

Snippet:

https://pbs.twimg.com/media/CJZV9EnVEAM7v6a.jpg…However, there is a rapidly escalating issue worth Ranting on, the Refugee issue. I wrote my first article on this issue a couple of weeks ago, and this week I published a new Collapse survey to find out what the Kollapsniks think we can or should do about this problem. Here you get all sorts of apocalyptic ideas which come up in the commentariat of the blogs, along the lines of shooting anyone who tries to cross a border. Even our own leading POTUS Candidate The Donald has come out in favor of Deporting everyone who doesn't have their papers in order.

https://upload.wikimedia.org/wikipedia/commons/thumb/c/c2/Buchenwald-bei-Weimar-am-24-April-1945.jpg/260px-Buchenwald-bei-Weimar-am-24-April-1945.jpgHowever, while we have a long standing issue with illegal immigration along the border with Mexico, these days the main focus for the Western Industrialized Nations is on Europe, where refugees from all over MENA are trying to escape escalating warfare and ever depleting supplies of water and food at ever higher prices they can't afford to try and make it to the “promised land” of Germany, of all places. You do know I am sure that when the Jews got kicked out of Russia during the Pogroms in the 1800s, where they ended up migrating to were places like Germany and Poland, and you also are aware what happened to 6M of them in the 1930s. Uncle Adolf handed them all a First Class Ticket to the Great Beyond TM, that's what happened. Do you really think the Germans of today will behave any differently than the Germans of the 1930s when Depression hits in full force?…

For the rest, LISTEN TO THE RANT!

This story came out on Zero Hedge after I recorded the Rant, but before I published.

It escalates rapidly…

Following Hungarian cameramen kicking 10-year-old girl refugees, and Czech police hauling immigrants of trains and writing numbers on their arms, it appears the horrors of the past are quickly forgotten when it comes to 'solutions' for the present. As The Jerusalem Post reports, the leader of the Czech 'nationalist' National Democracy Party, has called for refugees to be placed in Terezin – a former Nazi concentration camp"Why build tent camps for the aliens? We have the beautiful fortress town of Terezin where the aliens could concentrate before they are taken home by trains." Police are investigating whether his comments constitute a criminal act and Czech Jewish leaders have refused to comment on the incident.

As The Jerusalem Post reports, police in the Czech Republic are investigating comments made on Facebook by an extremist politician calling for refugees to be placed in Terezin, the former Nazi concentration camp.

Adam Bartos, the leader of the fringe yet vocal far-right nationalist National Democracy Party, published the comments about the site, located in the central European country, on Monday.

Reacting to the establishment of a refugee camp near the country’s border with Slovakia, Bartos wrote, “Why build tent camps for the aliens? We have the beautiful fortress town of Terezin where the aliens could concentrate before they are taken home by trains.”

TAKE THE REFUGEE SURVEY HERE

The FULL TEXT of the Rant will be available HERE in a few days

A Selection of  Early Responses to one of the survey text questions:

If you were in charge, what policies would you put in place now to try and stem the tide of refugees all over the world? (text response)

Educating women seems to be the best way to lower the birth rate. I'd try to educate and empower women in 3rd world countries. Too little too late, though.
As King of the World. Migration is a fact. It will happen as climate change begins to bite. Develop soft population growth controls and alter national boundaries/resource consumption to accomodate as many people as possible while working to decreace total population to a sustainable number through natural reductions. (Like this ever has a chance in hell of happening).
There effectively is no way to stop people from trying to get to places that seem better than where they come from. The only thing that can be done is resolve some of the military conflicts; its the only thing about which we have any control (climate change is probably no longer in out control for the short term, anyway). Unfortunately, the conflicts continue to multiply without any end in sight. The last round of interventionist policies of the early 2000s caused even more instability than the previous round of interventions in the mid 1990s. Is there anyone that seriously thinks more intervention is going to solve the conflicts.

The Syndicate takes over Greece

Off the keyboard of Yanis Varoufakis

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Published on Yanis Varoufakis Blog on July 22, 2015

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godfather

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Europe’s Vindictive Privatization Plan for Greece – Project Syndicate

For the Project Syndicate site click here. Or…

ATHENS – On July 12, the summit of eurozone leaders dictated its terms of surrender to Greek Prime Minister Alexis Tsipras, who, terrified by the alternatives, accepted all of them. One of those terms concerned the disposition of Greece’s remaining public assets.

Eurozone leaders demanded that Greek public assets be transferred to a Treuhand-like fund – a fire-sale vehicle similar to the one used after the fall of the Berlin Wall to privatize quickly, at great financial loss, and with devastating effects on employment all of the vanishing East German state’s public property.

This Greek Treuhand would be based in – wait for it – Luxembourg, and would be run by an outfit overseen by Germany’s finance minister, Wolfgang Schäuble, the author of the scheme. It would complete the fire sales within three years. But, whereas the work of the original Treuhand was accompanied by massive West German investment in infrastructure and large-scale social transfers to the East German population, the people of Greece would receive no corresponding benefit of any sort.
Euclid Tsakalotos, who succeeded me as Greece’s finance minister two weeks ago, did his best to ameliorate the worst aspects of the Greek Treuhand plan. He managed to have the fund domiciled in Athens, and he extracted from Greece’s creditors (the so-called troika of the European Commission, the European Central Bank, and the International Monetary Fund) the important concession that the sales could extend to 30 years, rather than a mere three. This was crucial, for it will permit the Greek state to hold undervalued assets until their price recovers from the current recession-induced lows.
Alas, the Greek Treuhand remains an abomination, and it should be a stigma on Europe’s conscience. Worse, it is a wasted opportunity.

The plan is politically toxic, because the fund, though domiciled in Greece, will effectively be managed by the troika. It is also financially noxious, because the proceeds will go toward servicing what even the IMF now admits is an unpayable debt. And it fails economically, because it wastes a wonderful opportunity to create homegrown investments to help counter the recessionary impact of the punitive fiscal consolidation that is also part of the July 12 summit’s “terms.”
It did not have to be this way. On June 19, I communicated to the German government and to the troika an alternative proposal, as part of a document entitled “Ending the Greek Crisis”:

“The Greek government proposes to bundle public assets (excluding those pertinent to the country’s security, public amenities, and cultural heritage) into a central holding company to be separated from the government administration and to be managed as a private entity, under the aegis of the Greek Parliament, with the goal of maximizing the value of its underlying assets and creating a homegrown investment stream. The Greek state will be the sole shareholder, but will not guarantee its liabilities or debt.”

The holding company would play an active role readying the assets for sale. It would “issue a fully collateralized bond on the international capital markets” to raise €30-40 billion ($32-43 billion), which, “taking into account the present value of assets,” would “be invested in modernizing and restructuring the assets under its management.”
The plan envisaged an investment program of 3-4 years, resulting in “additional spending of 5% of GDP per annum,” with current macroeconomic conditions implying “a positive growth multiplier above 1.5,” which “should boost nominal GDP growth to a level above 5% for several years.” This, in turn, would induce “proportional increases in tax revenues,” thereby “contributing to fiscal sustainability, while enabling the Greek government to exercise spending discipline without further shrinking the social economy.”

In this scenario, the primary surplus (which excludes interest payments) would “achieve ‘escape velocity’ magnitudes in absolute as well as percentage terms over time.” As a result, the holding company would “be granted a banking license” within a year or two, “thus turning itself into a full-fledged Development Bank capable of crowding in private investment to Greece and of entering into collaborative projects with the European Investment Bank.”

The Development Bank that we proposed would “allow the government to choose which assets are to be privatized and which not, while guaranteeing a greater impact on debt reduction from the selected privatizations.” After all, “asset values should increase by more than the actual amount spent on modernization and restructuring, aided by a program of public-private partnerships whose value is boosted according to the probability of future privatization.”

Our proposal was greeted with deafening silence. More precisely, the Eurogroup of eurozone finance ministers and the troika continued to leak to the global media that the Greek authorities had no credible, innovative proposals on offer – their standard refrain. A few days later, once the powers-that-be realized that the Greek government was about to capitulate fully to the troika’s demands, they saw fit to impose upon Greece their demeaning, unimaginative, and pernicious Treuhand model.
At a turning point in European history, our innovative alternative was thrown into the dustbin. It remains there for others to retrieve.

Read more at http://www.project-syndicate.org/commentary/greece-privatization-plan-public-assets-by-yanis-varoufakis-2015-07#HHZZL9E3voHpScF5.99

Greece: No Plan B

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Aired on the Doomstead Diner on July 15, 2015

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Euro_collapse

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Snippet:

…I took a break from the Greek Souvlaki Kabuki Theater last week, after being thoroughly saturated with this nonsense for the last month, beginning about the time that Souvlakis stormed out of negotiations with the Euroclowns and the Tsipras called for an impromptu referendum on the terms being offered to them in order to get fresh input of Funny Money they would never see, but merely go to pay interest on old loans that are steadily accumulating over time here.

In what should have been a fairly predictable outcome, the Greek population soundly reected the proposals in a 61-39% majority, but according to Brit Prep School Butt Boy Ambrose Evans-Prtchard Alex the Less than Great did not predict that, but rather thought they would lose this referendum and then Syriza could go ahead and sign the slavery contract with the approval of the slaves. Unfortunately for Alex his pollsters got this wrong, leaving him in the unenviable position of having to go back to the bargaining table once again, this time himself without Souvlakis running interference…

For the rest, LISTEN TO THE RANT!!!

Greece Votes NO – Let The Chaos Begin…

Off the keyboard of Michael Snyder

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Published on The Economic Collapse on July 5, 2015

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No - Public Domain

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The result of the referendum in Greece is a great victory for freedom, but it is also threatens to unleash unprecedented economic chaos all across Europe.  With almost all of the votes counted, it is being reported that approximately 61 percent of Greeks have voted “no” and only about 39 percent of Greeks have voted “yes”.  This is a much larger margin of victory for the “no” side than almost everyone was anticipating, and it represents a stunning rejection of European austerity.  Massive celebrations have erupted on the streets of Athens and other major Greek cities, but the euphoria may not last long.  Greek Prime Minister Alexis Tsipras is promising that Greece will be able to stay in the euro, but that gives EU bureaucrats and the IMF a tremendous amount of power, because at this point the Greek government is flat broke.  Without more money from the EU and the IMF, the Greek government will not be able to pay its bills and virtually all Greek banks will inevitably collapse.  Meanwhile, the rest of Europe is about to experience a tremendous amount of pain as financial markets respond to the results of this referendum.  The euro is already plummeting, and most analysts expect European bond yields to soar and European stocks to drop substantially when trading opens on Monday morning.

Personally, I love the fact that the Greek people decided not to buckle under the pressure being imposed on them by the EU and the IMF.  But amidst all of the celebration, the cold, hard reality of the matter is that your options are extremely limited when you are out of money.

How is the Greek government going to pay its bills without any money?

How are the insolvent Greek banks going to operate without any money?

How is the Greek economy going to function without any money?

Now that the Greek people have overwhelmingly rejected the demands of the creditors, it will be very interesting to see what the EU and the IMF do.  Prior to the referendum, European leaders were insisting that a “no” vote would put an end to negotiations and would force Greece to leave the euro.

Now that the results are in, are they going to change their tune?  Because the ball is definitely in their court

“This does two things: it legitimises the stance of the Greek government and it leaves the ball in Europe’s court,” ANZ Bank analysts said in a note.

Europe either folds or Greece goes bankrupt; over to you Merkel.”

So would they actually let Greece go bankrupt?

It is going to be fascinating to watch what happens over the next few days.  Right now, Greek banks are on life support.  If the European Central Bank decides to pull the plug, they would essentially destroy the entire Greek banking system.  The only thing that can keep Greek banks alive and kicking is more intervention from the ECB.  The following comes from the New York Times

Now that Greek voters have said no to the economic demands of its international creditors, the fate of the country’s struggling banks is in the hands of the European Central Bank.

Greece’s banks, closed since last Monday because they are perilously low on cash, have been kept alive in recent weeks by emergency loans from the European Central Bank. On Monday, the central bank’s policy makers plan to convene to determine how much longer they are willing to prop up the Greek banks, now that the country has essentially said no to the unpopular dictates of the other eurozone countries.

Of much greater concern to the rest of the world is how financial markets are going to respond to all of this.  As I write this article, things already appear to be unraveling.  The following comes from CNBC

Germany’s Dax is indicated sharply lower from Friday’s close at around 4 percent, while the euro was down 2 percent against the yen as the news emerged. U.S. stocks are expected to open around 1 percent lower Monday, according to recent stock futures data.

What could be most important for those worried about contagion from the Greek crisis is how Portuguese, Spanish and Italian government bonds perform in Monday morning trade.

If these peripheral euro zone countries, often lumped in with Greece, suffer a sharp spike in yields, this could cause alarm about whether Greece leaving the currency might cause further contagion to other weaker euro zone economies.

This could potentially become a “trigger event” that unleashes a wave of financial panic all over Europe.  And once financial panic begins, it is very difficult to end.

If the EU and the IMF want to avoid a crisis, they could just give in to the new Greek government.  But that would be politically risky for certain high profile European leaders.  For instance, Angela Merkel would face a huge backlash back home if she conceded to the new Greek government now.  And other German leaders are already calling the referendum result a “disaster”

German politicians branded the result a ‘disaster’, with the country’s economy minister Sigmar Gabriel Sigmar accusing Tsipras of ‘tearing down the last bridges on which Greece and Europe could have moved towards a compromise’.

He added: ‘Tsipras and his government are leading the Greek people on a path of bitter abandonment and hopelessness.’

And the president of the European Parliament, a German, told a German radio station over the weekend that a “no” vote would almost certainly mean that the Greeks will be forced out of the euro

If after the referendum, the majority is a ‘no,’ they will have to introduce another currency because the euro will no longer be available for a means of payment,” Martin Schulz, European Parliament president, said on German radio.

That is pretty strong language, eh?

Here is yet another quote from Schulz

Without new money, salaries won’t be paid, the health system will stop functioning, the power network and public transport will break down, and they won’t be able to import vital goods because nobody can pay,” he said.

So at this point it is all up to the EU and the IMF, and in particular the focus will be on the Germans.

What will they decide to do?

Will they give in, or will they force the Greeks to leave the euro?

If the Greeks do transition from the euro to a new currency, it will be a process that takes months (if not longer).  You just can’t change ATMs, computer systems, cash registers, etc. overnight.  So a move to the drachma  would not be as simple as many are suggesting…

British firms like De La Rue, which prints 150 currencies worldwide, are believed to have been contacted with a view to providing such services.

It’s done in great secrecy to prevent currency speculation. The other big problem is the logistical challenges of switching a currency. All ATMs, computers and other machinery of commerce that bears the euro symbol will have to be adjusted. It could, and would, take months.

And if Greece does leave, it will be a massive shock for global financial markets.  Faith in the European project will be shattered, the euro will drop like a rock, bond yields all over the continent will rise to unsustainable levels and major banks all over Europe will fail.

I think that the following quote from Romano Prodi sums things up quite well

Romano Prodi, former chief of the European Commission and Italy’s ex-premier, said it is the EU’s own survival that is now at stake as the botched handling of the Greek crisis escalates into a catastrophe. “If the EU cannot resolve a small problem the size of Greece, what is the point of Europe?

Meanwhile, we should all keep in mind that a financial crisis has already erupted over in Asia as well.  Chinese stocks have lost 30 percent of their value in just the last three weeks.  In fact, the amount of “paper wealth” wiped out in China over the past three weeks is approximately equivalent to “10 times Greece’s gross domestic product”

A dizzying three-week plunge in Chinese equities has wiped out $2.36 trillion in market value — equivalent to about 10 times Greece’s gross domestic product last year.

The great financial collapse of 2015 is well underway, and it should be a very interesting week for global markets.

But no matter what happens this week, we all need to keep in mind that this is just the tip of the iceberg.

A “perfect storm” is on the way, and we all need to get prepared for it while we still can.

 

Euro Margin Call

Off the keyboard of Steve Ludlum

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Published on Economic Undertow on July 5, 2015

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Figure 1: Triangle of you-know-what, continuous WTI futures contracts, chart by TFC Charts, (click for big). Petroleum price decline is just one piece of evidence for credit distress; another is the steady increase in bond yields which reflects the anxiety on the part of lenders that they might not be repaid.

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It is difficult to make heads-or-tails out of the Greek melodrama playing out at this moment. To default or not default, in the eurozone or out. Who knows? Observers are confused and so are the participants, what is clear is that the stakes are very high. The group designated to absorb the hardest blows cling to the bottom of the economic mast; workers, pensioners, students and suckers lured into investing in countries like Greece … then again, maybe not. There is the chance of contagion, anything is possible including the chance that some tycoons might lose their fortunes.

Regardless of outcome, the politicians are winners. Even as their follies multiply they meet nothing in the way of discomfort. Walking on gilded splinters, they spend every moment within settings as extravagant as Hollywood sets, fawned over by hordes of lackeys. Stuffed like geese for foix-gras on mysterious ‘luxury food’, their greatest hazard is that they might get too fat … or that they might be revealed as libertines. When their crimes and blunders have ripened they retire with their fortunes; enormous (borrowed) pensions, favorable (borrowed) business arrangements, excessive (borrowed) speaking fees and … (borrowed) … consulting jobs even as their constituents are hounded into penury so as to make the interest payments.

Other winners include the ordinary ‘Brand X’ criminals who take advantage of the vacuum that is the natural outcome of their betters’ ineptitude. Misery multiplies … none of this is new. The die for the current round of crises was cast long before the turn of the millennium … there has been that long to do something about it.

One thing is clear; that the brouhaha in credit markets is a symptom, not the disease. Analysts must observe carefully the larger trends and connect the dots. The problem is not a matter of adjusting the model but with the model itself. Industrial enterprise does not offer a return. Capital and value — and purchasing power — are converted into waste, what stands for ‘wealth’ is a measurement of the wasting process. Our economy has bloated into a monstrous organism that consumes everything and puts nothing back. The disease is the reaching of planetary limits; access to water, fuel, minerals, soil fertility, waste-carrying capacity and credit. Capital resources are being allocated by rationing access to loans. No credit = no resources, taking place under everyone’s nose is ‘Conservation by Other MeansTM‘.

This is a nasty and unpredictable process, what connects the dots together is the common outcome: ‘less’.

The one fact about parties is that they all end. The cocaine runs out. Everyone has to go home.

 

In the Eurozone and elsewhere, the cocaine — cheap credit — is running out. What remains is the hangover and daunting task of sobriety. Along with the credit, going is the gasoline. Things will never be the same.

‘Never be the same’ are fighting words for the Establishment which entrenches itself more deeply into the present even as both it and establishment become less relevant. Because it has lost the ability to reform itself, the establishment lashes out in a reflexive attempt to preserve its vanishing prerogatives. This is self-evident: if reform was possible it would have already taken place, the reforms would have prevented the crises.

Managers do not grasp the currency risk that emerges from both continued austerity programs or default. Economies are containers of social- and political values, shared understanding built upon edifices of trust. Within economies a collective suspension of disbelief takes place that insists bits of colored paper or electronic data are worth something. The trust emerges as more people share the same ‘worth’ idea and gain benefits from it.

Germany is Europe’s responsible party, it is EU’s paymaster and the long-time primary beneficiary of the Euro-economic activity. Mercantile Germany sits at the center of Continental trade; German euro surpluses are the consequence of its partners’ deficits. Ironically, German currency risk is no different from Greek risk, because both countries do business in what amounts to a foreign currency. Germany holds a borrowing advantage at the moment but both are built with the same financial armature, the defects of one country are the defects of all the others. The idea that Germany can integrate Europe around its economy … then somehow pull up the ladder when convenient is a hallucination.

Presently, managers carelessly discount one group’s sense of worth then another’s. Today is Greece, tomorrow is another country. Trust wavers then evaporates, at that point the economy is junk and the money is worthless, even if ‘the numbers’ indicate otherwise.

Reckless Germany gambles with euro risk even as it cannot afford to do so. It holds trillions of EU liabilities both in the form of currency and credits in its banking system along with ongoing business relationships with companies outside of Germany and the Eurozone. German wealth is nothing other than the trust earned over the entire post-WWII period. The ideal is that each European will engage profitably with others; not as slaves, some paying while others collect. Germany pretends it controls its destiny but this is something it cannot guarantee. Trust cannot be directly inserted into the minds of others: what Germany has cultivated carefully with one hand it casually undermines with the other.

Right now Germany plays the part of enforcer for Europe’s criminal banks. The blows it levels against its neighbors rebound against itself; the outcome of this is slow suicide. The impaired assets on European balance sheets outweigh investor equity and bondholder credit together. Europe is insolvent, liabilities are looking for a place to hide. The logical destination is Germany whether there is a euro or not. Within the euro, Germany cannot escape the full weight of its neighbors’ liabilities. Consequently, it has no choice but to succeed at its unification endeavor … otherwise, the worthlessness of the others’ balance sheets will be marked up against its own.

German banks and industry are right now stuffed with euros but this is momentary. There is no way possible for the current conditions within German finance to survive the demise of the currency. Germany cannot simply pick up its luggage and move itself away from Europe taking its ‘wealth’ with it. There is no road map for Germany to get from the euro to a substitute currency space The Germans and other creditor countries frozen to the spot: any sign that the Germans might abandon the euro would be the alarm for the others to do the same, to the instant ruin of German creditors, who are owed tens of trillions of euros.

The end of the euro anywhere within the Eurozone would also cast into doubt the security of Germany’s bank deposits. Uncertainty would trigger a run on German banks just as there is a run on Greek banks today. Germany would find itself bound by domestic politics to defend the euro to the bitter end, to protect its depositors. By doing so, Germany would become the fool of the market, the dumping ground for all European liabilities. This is a fate it cannot avoid, because of its long-running success it is the only European country with money!

The alternative strategy would have Germany racing Greece and Italy out the door. The survivor would be the first to grab a lifeboat on the Titanic. This is the nature of unraveling Ponzi schemes where the few winners get out early.

Add the currency trap to Keynes’ liquidity trap amplified by the political expediency trap. In its desire to party forever Europe is confronted with the persistence of liabilities that are generated along the way. These liabilities pitch Germany’s tent on the lip of the abyss. With the passage of time and accumulating mis-management, holders question whether euros are ‘worth the hassle’ and ‘worth the risk’ or not. This is not the proper sort of inner dialog to have about any currency.

With a non-euro currency, Germany’s option would be to depreciate. Doing so at a scale that would ‘manage’ liabilities would be default by another name with the costs falling on German depositors. To choose otherwise and not depreciate would leave Germany facing the same ruin as Greece faces right now; it would ‘become’ Greece, with massive and unsupportable demands for repayments in a foreign currency, a shortage of money, the absence of liquidity and a breakdown of export trade.

The only way for Germany to manage EU-legacy repayment claims would be to re-denominate them from euro to d-mark and then somehow inflate them away against a background of economic growth. However, jettisoning the euro would cut Germany off from its now-captive European markets. This would eliminate the growth potential; Germany would be crushed by its debts in a deflationary environment.

As bad as conditions would be for Germany, they would be worse for the other European countries. There would be a scramble for hard currency: everyone for themselves. If this is to be a hard German currency there would be a shortage much worse than there is today. The Europeans would be faced with the task of cobbling together a monetary system while the rubble of the current regime collapses on its head. Constructing a new model would require enormous investment of funds and good will that the Continent does not now possess; a breakdown would remove any possibility of either, there would be insufficient capital with which to (re)build anything.

The euro monetary union has had obvious structural defects from the get-go as admitted to by the Euromasters themselves. Now there is resolute refusal to address these defects even as the entire European enterprise accelerates to destruction. If not now, when? Does Angela Merkel or Wolfgang Schäuble honestly believe the Greeks will ever trust the Germans again after such rough treatment at the hands of faceless Troika functionaries? What good can this portend for German business? How do German businessmen expect their enterprises to succeed, on what alternative planet?

Dire times are when political instincts abandon professional politicians at a moment when these instincts are necessary. The Germans refuse to share any of the hardships their policies inflict upon their neighbors. Germans whine but their finance industry underwrote the bad loans, with eyes wide open, for the benefit of German manufacturers … whose ‘goods’ cannibalize the trading partners’ capital. German finance ignored the risks as it ignores currency risk today.

There are depositors run from Greek- and other banks into Northern Europe. The run itself is a part of the long-standing flow of funds from the rest of Europe into Germany’s national account. The ‘First Law’ states that as surpluses increase, the cost of managing them becomes greater than the surpluses’ worth. This can be seen in Europe where cost of Germany’s current account surplus is a shortage of liquidity and broken markets. Germany must unwind its surpluses, reducing the costs to both its customers and itself. It can unwind its smug sense of institutional superiority at the same time.

 

The world falls apart, nobody has an idea what to do about it.

 

Europe has been in a finance crisis for years, there has been plenty of time to ‘innovate’ solutions. Sadly for the Euros, all of the real solutions require giving up something … which nobody wants to do. Instead there is punishment for those tied to the mast; the workers, pensioners, students and suckers lured into investing in countries like Greece. The best the bosses have come up with so far is bailouts for giant banks, ‘appropriation’ of depositor funds and (incoherent) public relations.

Europe needs debt relief and stringent energy conservation. Finance collapse turns out to be the implement of conservation as bankrupt Europeans cannot drive, small countries with nothing to offer but their own worthless currencies cannot import fuel. Finance dares not risk relief to Greece because it cannot withstand the losses. Relief to Greece means granting relief to other Euro-deadbeats France and Italy (Germany). What is taking place right now is a margin call against the euro. The absence of relief insures the collapse of the entire finance edifice as defaults proliferate and distrust propagates.

In Part II we will look at some of the steps that can be taken including The Greek government issuing non-liability fiat euros — Greenbacks — and use them to retire euro denominated obligations on a fixed schedule.

Yanis Varoufakis Intervention

Off the keyboard of Yanis Varoufakis

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Published on Yanis Varoufakis Blog on June 28, 2015

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As it happened – Yanis Varoufakis’ intervention during the 27th June 2015 Eurogroup Meeting

The Eurogroup Meeting of 27th June 2015 will not go down as a proud moment in Europe’s history. Ministers turned down the Greek government’s request that the Greek people should be granted a single week during which to deliver a Yes or No answer to the institutions’ proposals – proposals crucial for Greece’s future in the Eurozone. The very idea that a government would consult its people on a problematic proposal put to it by the institutions was treated with incomprehension and often with disdain bordering on contempt. I was even asked: “How do you expect common people to understand such complex issues?”. Indeed, democracy did not have a good day in yesterday’s Eurogroup meeting! But nor did European institutions. After our request was rejected, the Eurogroup President broke with the convention of unanimity (issuing a statement without my consent) and even took the dubious decision to convene a follow up meeting without the Greek minister, ostensibly to discuss the “next steps”. 

Can democracy and a monetary union coexist? Or must one give way? This is the pivotal question that the Eurogroup has decided to answer by placing democracy in the too-hard basket. So far, one hopes.

 

Intervention by Yanis Varoufakis, 27th June 2015 Eurogroup Meeting

Colleagues,

In our last meeting (25th June) the institutions tabled their final offer to the Greek authorities, in response to our proposal for a Staff Level Agreement (SLA) as tabled on 22nd June (and signed by Prime Minister Tsipras). After long, careful examination, our government decided that, unfortunately, the institutions’ proposal could not be accepted. In view of how close we have come to the 30th June deadline, the date when the current loan agreement expires, this impasse of grave concern to us all and its causes must be thoroughly examined.

We rejected the institutions’ 25th June proposals because of a variety of powerful reasons. The first reason is the combination of austerity and social injustice they would impose upon a population devastated already by… austerity and social injustice. Even our own SLA proposal (22nd June) is austerian, in a bid to placate the institutions and thus come closer to an agreement. Only our SLA attempted to shift the burden of this renewed austerian onslaught to those more able to afford it – e.g. by concentrating on increasing employer contributions to pension funds rather than on reducing the lowest of pensions. Nonetheless, even our SLA contains many parts that Greek society rejects.

So, having pushed us hard to accept substantial new austerity, in the form of absurdly large primary surpluses (3.5% of GDP over the medium term, albeit somewhat lower than the unfathomable number agreed to by previous Greek governments – i.e. 4.5%), we ended up having to make recessionary trade-offs between, on the one hand, higher taxes/charges in an economy where those who pay their dues pay through the nose and, on the other, reductions in pensions/benefits in a society already devastated by massive cuts in basic income support for the multiplying needy.

Let me say colleagues what we had already conveyed to the institutions on 22nd June, as we were tabling our own proposals: Even this SLA, the one we were proposing, would be extremely onerous to pass through Parliament, given the level of recessionary measures and austerity it entailed. Unfortunately, the institutions’ response was to insist on even more recessionary (aka parametric) measures (e.g. increasing VAT on hotels from 6% to 23%!) and, worse still, on shifting the burden massively from business to the weakest members of society (e.g. to reduce the lowest of pensions, to remove support for farmers, to postpone ad infinitum legislation that offers some protection to badly exploited workers).

The institutions new proposals, as expressed in their 25th June SLA/Prior Actions document, would make a politically problematic package – from the perspective of our Parliament – into a package that would extremely difficult to push through our Parliamentary caucus. But this is not all. It gets worse much worse than that once we take a look at the proposed financing package.

What makes it impossible to pass the institutions’ proposal through Parliament is the lack of an answer to the question: Will these painful measures at least give us a period of tranquillity during which to carry out the agreed reforms and measures? Will a shock of optimism counter the recessionary effect of the extra fiscal consolidation that is being imposed on a country that has been in recession for 21 consecutive quarters? The answer is clear: No, the institutions’ proposal is offering no such prospect.

This is why: The proposed funding for the next 5 months (see below for a breakdown) is problematic in a variety of ways:

First, it makes no provision for the state’s arrears, caused by five months of making payments without disbursements and of falling tax revenues as a result of the constant threat of Grexit that has been wafting in the air, so to speak.

Secondly, the idea of cannibalising the HFSF in order to repay the ECB’s SMP-era bonds constitutes a clear and present danger: These monies were earmarked, correctly, for strengthening Greece’s fragile banks, possibly through an operation that deals with their mountainous NPLs that eat into their capitalisation. The answer I have been given by senior ECB officials, whose name will remain unsaid, is that, if need be, the HFSF will be replenished to cope with the banks’ capitalisation needs. And who will do the replenishing? The ESM, is the answer I was given. But, and this is a gigantic but, this is not part of the proposed deal and, moreover, it could not be part of the deal as the institutions have no mandate to commit the ESM in this manner – as I am sure Wolfgang will remind us all. And, moreover, if such a new arrangement could be made, why then is our sensible, moderate, proposal of a new ESM facility for Greece that helps shift SMP liability from the ECB to the ESM not discussed? The answer “we will not discuss it because we will not discuss it” will be very hard for me to convey to my Parliament, together with another package of austerity.

Thirdly, the proposed disbursements’ schedule is a minefield of reviews – one per month – that will ensure two things. First, that the Greek government will be immersed every day, every week in the review process for five long months. And well before these five months expire, we shall enter into another tedious negotiation over the next program – since there is nothing in the institutions’ proposal capable of inspiring even the faintest of hopes that at the end of this new extension Greece can stand on its own two feet.

Fourthly, given that it is abundantly clear that our debt will remain unsustainable by the end of the year, and that market access will remain as distant then as it is now, the IMF cannot be counted upon to disburse its share, the 3.5 billion that the institutions are counting as part of the funding package on the table.

These are solid reasons why our government does not consider it has a mandate to accept the institutions’ proposal or to use its majority in Parliament in order to push it through and onto the statutes.

At the same time, we do not have a mandate to turn down the institutions’ proposals either, cognizant of the critical moment in history we find ourselves in. Our party received 36% of the vote and the government as a whole commanded a little more than 40%. Fully aware of how weighty our decision is, we feel obliged to put the institutions’ proposal to the people of Greece. We shall endeavour to spell out to them fully what a Yes to the Institutions’ Proposal means, to do the same regarding a No vote, and then let them decide. For our part we shall accept the people’s verdict and will do whatever it takes to implement it – one way or another.

Some worry that a Yes vote would be a vote of no confidence in our government (as we shall be recommending a No vote), in which case we cannot promise to the Eurogroup that we shall be in a position to sign and implement the agreement with the institutions. This is not so. We are committed democrats. If the people gives us a clear instruction to sign up on the institutions’ proposals, we shall do whatever it takes to do so – even if it means a reconfigured government.

Colleagues, the referendum solution is optimal for all, given the constraints we face.

  • If our government were to accept the institutions’ offer today, promising to push it through Parliament tomorrow, we would be defeated in Parliament with the result of a new election being called within a very long month – then, the delay, the uncertainty and the prospects of a successful resolution would be much, much diminished
  • But even if we managed to pass the institutions’ proposal through Parliament, we would be facing a major problem of ownership and implementation. Put simply, just as in the past the governments that pushed through policies dictated by the institutions could not carry the people with them, we too would fail to do so.

On the question that will be put to the Greek people, much has been said about what it should be. Many of you tell us, advise us, instruct us even, that we should make it a Yes or No question on the euro. Let me be clear on this. First, the question was formulated by the Cabinet and has just been passed through Parliament – and it is “Do you accept the institutions’ proposal as it was presented to us on 25th June in the Eurogroup?” This is the only pertinent question. If we had accepted that proposal two days ago, we would have had a deal. The Greek government is now asking the electorate to answer the question you put it to me Jeroen – especially when you said, and I quote, “you can consider this, if you wish, a take or leave it proposal”. Well, this is how we took it and we are now honouring the institutions and the Greek people by asking the latter to deliver a clear answer on the institutions’ proposal.

To those who say that, effectively, this is a referendum on the euro, my answer is: You may very well say this but I shall not comment. This is your judgement, your opinion, your interpretation. Not ours! There is a logic to your view but only if there is an implicit threat that a No from the Greek people to the institutions’ proposal will be followed up by moves to eject Greece, illegally, out of the euro. Such a threat would not be consistent with basic principles of European democratic governance and European Law.

To those who instruct us to phrase the referendum question as a euro-drachma dilemma, my answer is crystal clear: European Treaties make provisions for an exit from the EU. They do not make any provisions for an exit from the Eurozone. With good reason, of course, as the indivisibility of our Monetary Union is part of its raison d’ etre. To ask us to phrase the referendum question as a choice involving exit from the Eurozone is to ask us to violate EU Treaties and EU Law. I suggest to anyone who wants us, or anyone else, to hold a referendum on EMU membership to recommend a change in the Treaties.

Colleagues,

It is time to take stock. The reason we find ourselves in the present conundrum is one: Our government’s primary proposal to you and the institutions, which I articulated here in the Eurogroup in my first ever intervention, was never taken seriously. It was the suggestion that common ground be created between the prevailing MoU and our new government’s program. For a fleeting moment, the 20th February Eurogroup statement raised the prospect of such common ground – as it made no reference to the MoU and concentrated on a new reform list by our government that would be put to the institutions.

Regrettably, immediately after the 20th of February the institutions, and most of colleagues in this room, sought to bring the MoU back to the centre, and to reduce our role in marginal changes within the MoU. It is as if we were told, to paraphrase Henry Ford, that we could have any reform list, any agreement, as long as it was the MoU. Common ground was thus sacrificed in favour of imposing upon our government a humiliating retreat. This is my view. But it is not important now. Now it is up to the Greek people to decide.

Our task, in today’s Eurogroup, ought to be to pave the ground for a smooth passage to the referendum of 5th July. This means one thing: that our loan agreement be extended by a few weeks so that the referendum takes place in conditions of tranquillity. Immediately after 5th July, if the people have voted Yes, the institutions’ proposal will be signed. Until then, during the next week, as the referendum approaches, any deviation from normality, especially in the banking sector, will be invariably interpreted as an attempt to coerce Greek voters. Greek society has paid a hefty price, through huge fiscal contraction, in order to be part of our monetary union. But a democratic monetary union that threatens a people about to deliver their verdict with capital controls and bank closures is a contradiction in terms. I would like to think that the Eurogroup will respect this principle. As for the ECB, the custodian on our monetary stability and of the Union itself, I have no doubt that, if the Eurogroup takes a responsible decision today to accept the request for an extension of our loan agreement that I am now tabling, it will do what it takes to give the Greek people a few more days to express their opinion.

Colleagues, these are critical moments and the decisions we make are momentous. In years to come we may well be asked “Where were you on the 27th of June? And what did you do to avert what happened? At the very least we should be able to say that: We gave the people who live under the worst depression a chance to consider their options. We tried democracy as a means of breaking a deadlock. And we did what it took to give them a few days to do so.

POSTSCRIPT – The day the Eurogroup President broke with the tradition of unanimity and excluded Greece from a Eurogroup gathering at will

Following my intervention (see above) the Eurogroup President rejected our request for an extension, with the support of the rest of the members, and announced that the Eurogroup would be issuing a statement placing the burden of this impasse on Greece and suggesting that the 18 ministers (that is the 19 Eurozone finance ministers except the Greek minister) reconvene later to discuss ways and means of protecting themselves from the fallout.

At that point I asked for legal advice, from the secretariat, on whether a Eurogroup statement can be issued without the conventional unanimity and whether the President of the Eurogroup can convene a meeting without inviting the finance minister of a Eurozone member-state. I received the following extraordinary answer: “The Eurogroup is an informal group. Thus it is not bound by Treaties or written regulations. While unanimity is conventionally adhered to, the Eurogroup President is not bound to explicit rules.” I let the reader comment on this remarkable statement.

For my part, I concluded as follows:

Colleagues, refusing to extend the loan agreement for a few weeks, and for the purpose of giving the Greek people an opportunity to deliberate in peace and quiet on the institutions’ proposal, especially given the high probability that they will accept these proposals (contrary to our government’s advice), will damage permanently the credibility of the Eurogroup as a democratic decision making body comprising partner states sharing not only a common currency but also common values.

 

PRESS CONFERENCE PRESENTATION IMMEDIATELY AFTER THE 27th JUNE 2015 EUROGROUP MEETING

The German question

Off the keyboard of Pepe Escobar
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Originally published in Ron May 8, 2015

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Seventy years after the end of World War II, and twenty-five years after the fall of the Berlin Wall, Germany is once again under the grip of ‘sturm und drang’, but this time barely registered in either East or West.

Without a serious attempt at myth busting, it’s impossible to discern what could be interpreted as a new, discreet German attempt at hegemony.

Contrary to a myth currently propagated by US ‘Think Tankland’, political Berlin under Chancellor Merkel is not a mediator between a still hegemonic US and an “aggressive” Russia.

The reality is Berlin, at least for the moment, would rather give the impression of singing Washington’s tune – with minor variations – while chastising Russia. That’s the case even when we consider the solid energy/trade/business ties with Moscow, as in Germany importing a third of its natural gas, and German industry/companies/corporations hugely invested in Russia.

Contrary to a second myth, political Berlin does not seek “stability” in Europe’s eastern borderlands, but rather outright vassalage. The relentless Eastern European integration to the EU, led by Berlin, was as much a strategy to open new markets for German exports as to erect a buffer between Germany and Russia. As for the Baltic States, they are already vassals; Germany is the largest trading partner for all three.

Yet another myth is that Berlin cannot lift – counterproductive – sanctions against Moscow as long as “security” of Central and Eastern Europe is not assured. The reality is that Germany would rather exert total political/economic control over the periphery of the former USSR.

As for the EU itself, now mired in a post-democratic, un-egalitarian, austerity-ravaged toxic environment, with no discernible way out, Germany already rules, politically and economically.

Deutschland under control?
Amidst the current EU intellectual quagmire where, to quote Yeats, “the best lack all conviction, while the worst are full of passionate intensity” – think puny neoliberal ideologues scurrying under their sinecures in that Kafkaesque temple of mediocrity, Brussels – a modern Diogenes would be hard pressed to find an informed observer capable of seizing up Germany’s game.

Thus the glaring exception of historian and anthropologist Emmanuel Todd, author of the seminal 2002 essay After the Empire which showed no mercy in its cartography of American decline. In a long 2014 www.les-crises.fr interview, centered on Germany, Todd hits the geopolitical ball out of the park.

Todd deeply worries about the West’s dysfunction – manifested at its prime in Europe being “virtually at war with Russia”. He sees the anxious, sick West’s “fixation” on Russia as the search for a scapegoat, or better, “the creation of an enemy, necessary to maintain a minimal coherence of the West. The European Union was created against the USSR; it cannot do without Russia as an adversary.”

And yet, behind the EU, there’s the real deal; the German project, which Todd identifies as a project of power, driven “to compress demand in Germany, to enslave the debt-ridden countries of the South, to put to work the Eastern Europeans, to throw some peanuts to the French banking system.” And that project of power could not but open the ominous door to Germany’s “immense potential for political irrationality” – a theme very much prominent now with all those rehashes of the fall of the Reich.

Todd identifies what Lacan would dub the great European non-dit (“not enunciated”); “The key to the control of Europe by the United States, which is the inheritance of the victory of 1945, is the control of Germany.”

German Chancellor Angela Merkel (Reuters/Hannibal Hanschke)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yet now the control is dissolving, albeit chaotically, and that means “the beginning of the dissolution of the American imperium.” And imperial decline – visible in myriad declinations – leads Todd to a bombshell; the real threat to the US, much more dangerous than Russia – “which is external to the empire” – is Germany.

And what about the threat to Russia from Germany? Todd strongly implies the populations of Russian language, culture and identity are being attacked in Eastern Ukraine with "the approval and support" of the European Union – which is a fact. At the same time, he interprets the Russian "silence" about it not "as in the French and the American case, a refusal to see reality,” but as good diplomacy; "They need time. Their self-control, their professionalism, compels admiration." Try finding this kind of analysis in CIA-infested European corporate media.

“Europe” out, Germany in
So what Todd is essentially gaming here is “the emergence of a new face-to-face between two great systems: the American continent-nation, and this new German empire, a political-economic empire which people continue to call ‘Europe’ out of habit.” And yes, he’s got a compelling case.

Using a political science concept coined by Belgian anthropologist Pierre van den Berghe, Todd qualifies the German system as “un-egalitarian domination”; whatever equality is left concerns only the dominant, as in German citizens. Welcome, then, to Herrenvolk democracy – the “democracy of the master people.”

Todd bolsters his case by pointing to the dynamism of the German economy as based in the former USSR satellites; “Part of the success of our German neighbors stems from the fact that the communists were much interested in education. They left behind them, not only obsolete industrial systems, but also populations that were remarkably well educated.”

So “annexing” the populations of Poland, Czech Republic, Slovakia, Hungary, etc, meant Germany reorganizing its industrial base using low-cost labor. But then there’s a major “if”; Todd believes Germany might also “annex” an active population of 45 million in Ukraine, “with its good level of training inherited from the Soviet period.”

Not only that’s extremely unlikely; Moscow has been explicit this is a red line. Moreover, “Ukraine” is a failed state in terminal disintegration, now a lowly, de facto, IMF colony, whose only interest for the “West” is rich agricultural land to be plundered by Monsanto and cohorts.

“He hasn’t seen Germany coming”
The fun really starts when Todd examines the mess “classical American geopoliticians of the ‘European’ tradition,” are in. He had to be talking mostly about notorious Dr. Zbig “Grand Chessboard” Brzezinski; “Obsessed by Russia, he hasn’t seen Germany coming.”

Todd correctly notes how Dr. Zbig “has not seen that the American military might, by extending NATO all the way to the Baltic States, to Poland… was in fact cutting out an empire for Germany, at first economic, but at present already political.” And in parallel to what I have been examining for years now, he hints that “the extension of NATO to the East could in the end bring about a version B of Brzezinski’s nightmare: a reunification of Eurasia independently of the United States.”

The clincher is to be savored like the best Armagnac; “Faithful to his Polish origins, he feared a Eurasia under Russian control. He is now running the risk to go down in History as another one of these absurd Poles who, out of hatred of Russia, have insured the greatness of Germany.”

For the moment, political Germany – but not its industrialists – has chosen to continue to be subjugated to the US/NATO as Chancellor Merkel appears to be enforcing the encircling of Russia.

The Reichstag building, the seat of the German lower house of parliament Bundestag (Reuters/Fabrizio Bensch)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As Todd nailed it, Germany painstakingly organized its EU hegemony on the basis this disparate basket of nations would provide Berlin with the economy of scale to win against its main industrial competitor, the US. Yet Germany lacks energy – oil and gas. Supply from Africa and the Middle East is inherently unstable.

So this is how we come to another scenario circulating among what Bauman called “nomad elites of liquid modernity”; not think tanks or Western intel agencies.

According to this scenario, instead of a EU trying to work with Russia, we have Berlin trying to undermine Moscow to ultimately seize financial control of Russia’s immense resources; back to those good old disaster capitalism Yeltsin days, when everything was collapsing other than Russia’s natural resource production.

After all the ‘New Great Game’ is mostly about control of the natural gas, oil and resources of Russia and Central Asia. Will they be controlled by oligarch fronts supervised by their masters in London and New York, or by the Russian state? And once Russia had been subdued, then the Central Asian “stans”, especially gas republic Turkmenistan, would also be free to do Germany’s bidding.

But for the moment, it’s all shadow play. Merkel utters platitudes about the Minsk ceasefire – when every serious player knows Kiev breaks it on an everyday basis. Berlin works backstage to keep the proverbial “reluctant players” – Italy, Greece, Hungary – on board with sanctions on Russia while spinning it’s doing its best to contain hysterical Poland and Lithuania.

Merkel is very much aware the US prosecutes much of its drone war out of Germany while the BND – German intel – spies for the NSA on the French, the European Commission (EC) and even German industry.

So she will never directly antagonize Washington – as she in fact mostly fears German Atlanticists, while posing about Putin and the Kremlin living “in a different world.” Berlin and Moscow continue to talk diplomatically, but the mood tends to the tone deaf.

The new exceptionalism
Todd is one of the few who at least are setting alarm bells ringing. As in this formulation: “German culture is un-egalitarian: it makes difficult the acceptance of a world of equals. When they are feeling that they are the strongest, the Germans will take very badly the refusal of the weaker to obey, a refusal which they perceive as unnatural, unreasonable.”

Once again, we’re in the realm of exceptionalism, but now with the added, historically troubling German penchant for political irrationality. The new, remixed lebensraum may revolve around an ever-expanding export powerhouse – adding on global trade by using educated, low-cost labor. While the Reich disintegrated in a larger than life folly seventy years ago, the new deal accomplished a dream; as Todd characterizes it, there are two great “developed industrial worlds” today, America and “this new German empire.”

He sees Russia as a “secondary question” and he has not examined China’s long game; thus he’s not focused – as in my own case – on myriad moves toward Eurasia integration. But what he’s concentrating on is no less than a thriller for the ages, a “completely different future for the twenty years to come, other than the East-West conflict;” Germany rising – and the US and Germany inevitably clashing, all over again. History may yet repeat itself as (lethal) farce after all.


Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

Why NATO Is Terrified of Russia

Off the keyboard of Pepe Escobar
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Originally published in RT on May 1, 2015

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The twin-pronged attack – oil price war/raid on the ruble – aimed at destroying the Russian economy and place it into a form of Western natural resource vassalage has failed.

Natural resources were also essentially the reason for reducing Iran to a Western vassalage. That never had anything to do with Tehran developing a nuclear weapon, which was banned by both the leader of the Islamic revolution, Ayatollah Khomeini, and Supreme Leader Ayatollah Khamenei.

The ‘New Great Game’ in Eurasia was always about control of the Eurasian land mass. Minor setbacks to the American elite project do not mean the game will be restricted to a mere “war of attrition”. Rather the contrary.

All about PGS

In Ukraine, the Kremlin has been more than explicit there are two definitive red lines. Ukraine won’t join NATO. And Moscow won’t allow the popular republics of Donetsk and Lugansk to be crushed.

We are coming closer to a potentially explosive deadline – when EU sanctions expire in July. An EU in turmoil but still enslaved to NATO – see the pathetic “Dragoon Ride” convoy from the Baltics to Poland or the “Atlantic Resolve” NATO show-off exercise – may decide to expand them, and even try to exclude Russia from SWIFT.

Only fools believe Washington is going to risk American lives over Ukraine or even Poland. Yet let’s plan a few steps ahead. If it ever comes to the unthinkable – a war between NATO and Russia in Ukraine – Russian defense circles are sure of conventional and nuclear superiority on sea and land. And the Pentagon knows it. Russia would reduce NATO forces to smithereens in a matter of hours. And then would come Washington’s stark choice: accept ignominious defeat or escalate to tactical nuclear weapons.

The Pentagon knows that Russia has the air and missile defense capabilities to counter anything embedded in the US Prompt Global Strike (PGS). Simultaneously though, Moscow is saying it would rather not use these capabilities.

Major General Kirill Makarov, Russia’s Aerospace Defense Forces’ deputy chief, has been very clear about the PGS threat. Moscow’s December 2014 new military doctrine qualifies PGS as well as NATO’s current military buildup as the top two security threats to Russia.

Unlike non-stop Pentagon/NATO bragging/demonizing, what Russian defense circles don’t need to advertise is how they are now a couple of generations ahead of the US in their advanced weaponry.

The bottom line is that while the Pentagon was mired in the Afghanistan and Iraq quagmires, they completely missed Russia’s technological jump ahead. The same applies to China’s ability to hit US satellites and thus pulverize American ICBM satellite guidance systems.

The current privileged scenario is Russia playing for time until it has totally sealed Russia’s air space to American ICBMs, stealth aircraft and cruise missiles – via the S-500 system.

This has not escaped the attention of the British Joint Intelligence Committee (JIC) – as it gamed sometime ago whether Washington might launch a first strike against Russia.According to the JIC, Washington might go rogue if “a) an extreme government were to take over in the United States, b) and there was increased lack of confidence by the United States in some if not all of her Western allies owing to political developments in their countries, c) and there was some sudden advance in the USA in the sphere of weapons, etc. that the counsels of impatience may get the upper hand.”

US ‘Think Tankland’ spinning that Russian military planners should take advantage of their superiority to launch a first strike nuclear attack against the US is bogus; the Russian doctrine is eminently defensive.

Yet that does not exclude Washington doing the unthinkable the next time the Pentagon thinks of itself to be in the position Russia is now in.

SWIFT changes

The whole game used to be about who ruled the waves – the geopolitical gift the US inherited from Great Britain. Control of the seas meant the US inheriting five empires; Japan, Germany, Great Britain, France, the Netherlands. All those massive US carrier task forces patrolling the oceans to guarantee “free trade” – as the hegemonic propaganda machine goes – could be turned against China in a flash. It’s a mechanism similar to the carefully choreographed “leading from behind” financial op to simultaneously crash the ruble/launch an oil war and thus smash Russia into submission.

Washington’s master plan remains deceptively simple; to “neutralize” China by Japan, and Russia by Germany, with the US backing its two anchors, Germany and Japan. Russia is the de facto only BRICS nation blocking the master plan.

This was the case until Beijing launched the New Silk Road(s), which essentially mean the linking of all Eurasia into a “win-win” trade/commerce bonanza on high-speed rail, and in the process diverting freight tonnage overland and away from the seas.

So NATO’s non-stop Russia demonizing is in fact quaint. Think about NATO picking a fight against the constantly evolving, complex Russia-China strategic partnership. And in a not so remote future, as I indicated here, Germany, Russia and China have what it takes to be the essential pillars of a fully integrated Eurasia.

As it stands, the key shadow play is Moscow and Beijing silently preparing their own SWIFT system while Russia prepares to seal its air space with S-500s. Western Ukraine is doomed; leave it to the austerity-ravaged EU – which, by the way, doesn’t want it. And all this while the same EU tries to handicap the US commercially with a rigged euro that still doesn’t allow it to penetrate more US markets.

As for an irrelevant NATO, all it can do is cry, cry, cry.


Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

Greek Deadline Fatigue

Off the keyboard of John Ward

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Published on The Slog on April 24, 2015

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Greece: Deadline fatigue is in danger of boring us all to death

I went for a long lie down in a cool room this afternoon after a morning full of chores, followed by a lunchtime laying gravel, and then bordering it with rocks the size of Earth-threatening asteroids.

All of this, I’m here to tell you, was less tiring than Deadline Fatigue – a new board-game for all the family invented by the Eurogroupe-Varoufakis-IMF Toy Company.

I’m up and about again now, preparing dinner while lighting the fire-pit outside because the weather’s gone a little grey and chilly here. Things also seem to have gone a little chilly in the ‘tough’ negotiations between sound economics on the one hand, and Jeroboam Drivelclown on the other. Tough or not, this ridiculous paint-drying championship could have been predicted from Day One.

I shrink, as always, from the limelight; but as it happens, The Slog did piss off just about everyone at the outset by suggesting there were no grounds at all for optimism on the subject of compromise.

I posted this gentle mickey-take on the chances of building bridges between Frankfurt and Athens last January 28th. What followed was obduracy after obduracy: the Draghi/Schauble ambush of Yanis Varoufakis in late February, and the rise and rise of their Dutch bumboy Dieselbang…with Pristine Lowgrade joining the ‘non’ tendency despite a Varoufakis attempt to charm the charmless.

The timeline, as one looks back now, really is almost funny: Greece must default on February 26th, then March 11th, then March24th, then April 14th. Reuters might just as well have had a daily column called ‘Another day, another deadline’.

All this week we’ve been fed with spin about ‘rapid progress being made’, but today’s free-for-all presser was nothing more than a statement of the obvious: the two sides are no nearer a compromise today than they were almost three months ago to the day.

The following realities need to be borne in mind in this poker marathon:

1. The weak card in the Syriza hand is without doubt that they have a mandate to tell Brussels to piss off, but not to take Greece out of the euro.

2. Over 50% of all Greeks believe they could be kicked out of the euro, although legally this is an impossibility.

3. The weak card in the Troika2 hand is that – despite what the markets might suggest now – the reality of a Greek default within the eurozone is that discontent contagion will swiftly follow….and whether or not that’s reflected immediately in bond yield spikes is neither here nor there. The markets would have to be deficient in all the primary senses not to spot that rebellion on such a scale spelt the end of the euro.

4. If Troika2 really was comfortable with the idea of Greek default, they would’ve engineered it by now: you are a boxer and you have the other guy on the ropes….do you just tickle him under the armpits and spin things out until the bell goes for the end of the round? I think not. Bear in mind that twice now, Draghi has continued to drip feed ELA funds to Greek banks. It is a very odd general indeed who plays to keep his enemies in the game.

5. Far away to the West, we are a little over 12 days away from the UK General Election. Nigel Farage is very excited because a new poll in the constituency he’s fighting – Thanet – puts him nine points clear…when just two weeks ago he looked in danger of losing. This is Nigel looking very excited:

nigelexcited24415Nigel gets excited by almost anything…a media crew, a flood, a camel hair coat, a pint of Old Scrotum and so on. But if there really is a Ukip surge about to take off, while it is highly unlikely to deliver more than four seats in total, this will nevertheless represent a third front opening against beleaguered Brussels-am-Berlin: not only an austerity rebellion in Greece and euro rebellions in Italy and Spain, but suddenly an EU rebellion in Britain. Marine Le Pen in France may very well intensify in the nightmare in two years time.

I do think now that the time is long past when anyone can credibly raise an argument to say that Master Tactician Yanis Varoufakis knows exactly what he’s up to, and every step is carefully planned: as I have written before, Yanis overestimated the leverage available to produce a compromise, and Troika2 drastically underestimated the unwillingness of the Greek electorate to buy into any more “serves you right” bollocks.

I still believe that in late February Varoufakis should have revealed the Eurogroupe perfidy and walked away from the ambush. But all this is now water under the bridge. The reality is that if a deal were to be reached now, it would have zero credibility in the markets, and a Syriza having done that deal would have zero electoral credibility at home.

Yanis thought it necessary to prove beyond any reasonable doubt that Syriza was holding an olive branch, whereas the Troikanauts were wielding baseball bats. I suspect this was the truth: but it’s not the way the Western MSM have portrayed it.

The only honourable path ahead for Tsipras and Varoufakis now is to say, “Right – do your worst: we are not going to accept your neoliberal crap thinly disguised as “reform”. We will default inside the eurozone: let’s see how you like them apples”.

Exposing the Euro Clowns

Off the keyboard of John Ward

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Published on The Slog on April 10, 2015

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EXPOSED: The reason why none of us can be sure what’s going on in the EU v Greece yawn

merkmario1pt

When there is only cacophony, nobody can follow the tune

I’ve posted many times before about why a neolib minority constantly dissembles to confuse: there is so little ‘truth’ behind their ridiculous socio-economic and fiscal theories, they have no choice but to do what they do.

The same thing applies to the European Union, the ideas behind which – non-sovereign federalisation and yet a single currency ambition – make no anthropological, banking, libertarian or Bond market sense at all.

But there is another reason why second-guessing what comes next in the EU has been an impossible task in recent years: the people allegedly running it (another Slog hobby-horse this) are split along several crucial dimensions. So apart from the banking lies and the let’s-rewrite-history school of mogul-lapdog tabloid journalism, we have this factor added to the witch’s brew: if they don’t know what’s going to happen next, how the hell are we supposed to speculate with any accuracy?

We are now, little by little, beginning to see the odd glimpse of holey stocking beneath the holy, long skirts of sanctimony pumped out by the various power points in Berlin, Frankfurt, Paris and Brussels. Even better, we can catch these glimpses…..and view them alongside what the BSDs – preparing for what they think is to come – put out their agenda in the media they own and/or influence.

This morning offers a classic example of this. The Americo-Austropathicus threat Rupert Murdoch puts out this version of the immediate future in his Times newspaper this morning:

‘….Eurozone countries are secretly drawing up plans to expel Greece from the European Union’s single currency as they prepare for the country to be declared bankrupt next month.

A memo drawn up by the finance ministry in Finland, which is closely allied to Germany, has revealed preparations for a Greek exit from the euro.

The document warns of “very difficult political decisions” this spring amid predictions that Greece will be bankrupt next month unless the eurozone agrees the next tranche of aid for it within the next three weeks.

Greece has been given until next Friday to come up with…..’

Here the message ends, the rest of it hidden behind Roop’s paywall – which continues not to get many people paying to climb over the wall. This is slightly different to the Telegraph, where the Barclay Twins peddle their corporate bias completely free, but both readers and journos are climbing a Berlin Wall in a desperate bid to get out.

But the tone is clear: Greece is a disaster area, they’re all scrounging mongrels, so like dogs they shall be kicked out of the house. Except of course this can’t happen legally without treaty change….so here we see more Turdcock readying the ground for something illegal that will be accepted by the Sleeple because they, er, read it in a quality newspaper recently or something and what should we download from Netflix tonight?

Here, Murdoch is doing the will of ECB boss Mario Draghi….because he agrees with what Mario and the Goldin Sacks lads see as the future.

But this is just one power centre. Wolf Street pointed out yesterday in another smart piece that the Jean-Claude Drunker view of the world is quite different, because he leads the EC – an unelected bedlam of corruption which is seeing its power rapidly eroded by the ECB and Berlin, plus the odd Weidbombe thrown in by Frankfurt.

This time, the road being followed conjures up an entirely different future…one in which the FuhrerJuncker’s Luxembourg will be left alone to pull every tax-evading bank stunt in the book, but those in the commercial sector will be asked to return to some vague version of recognised value.

We’ve been here before, but the subhead is ‘Clubmed banks no longer able to disguise loan made in 2002 to Tartan Paint Co Venezuela sa as an asset’. This is going to cause all kinds of mayhem in Greece, Italy, Portugal and especially Spain – where the practice has been used to suggest the banks are still solvent, when of course we all know they’re broke.

More importantly, although the ECB pays lip-service to reforming ezone banking accountancy, the EC policy will put it on a collision course with Mario Draghi.

But we don’t want to leave it like that, good God no – get a grip dear reader: this is the EU, where disaster must be meticulously planned to ensure that it moves from probable outcome to racing certainty.

And so we move on to Wolfgang Schauble the Secret Wheelchair Weapon…and Jens Weidmann, the Bundesbank’s Big Banana. While they share the ECB-Eurogroupe-Troika’s general approach – “Let’s blame Greece and show the markets we’re safe” – the Dutch Donkey Dijessilbloem is hated by the ECB because he’s a threat to their power….and despised by Weidmann as a fiscal lightweight. Dieselboom also has a tendency to blab, a trait which doesn’t endear him to Wolfie.

Where the two Germans chiefly differ from the rest of the pack is that they believe in fiscal and currency discipline – and of course, the ulltimate right of Berlin to run the Fiskalunion. Also their heads are stuck in 1923.

Two days ago, Weidmann went public again to say he did not think Greece should issue any more Treasury Bills – to help stave off the bankruptcy forced upon Greece by a Berlin-exaggerated problem and a Wall Street/Troika inspired infinite slavery repayment ‘programme’ – and he did not think QE was necessary. In short, real monetarism rules, OK.

I’m sorry to labour this point, but these are thus the three ‘strategies’ being proposed by ‘A United Europe’:

1. Greece should be kicked out (ECB)

2. Banks should be telling the truth about their balance sheet fraud (EC)

3. We should stop QE now and get Greece back in the programme at all costs (Germany)

Now, what we are not going to get is a debate followed by a decision, because this is The Fourth Reich, and we don’t do discussion…we do divide and rule. Also we have a crypto-Queen in Berlin who never makes any decisions until one eventuality or another is crystal clear. (The real sign to watch for is Frau Doktor Merkel moving her Chancellery fridge down into the bunker. Or Moscow. Or Frankfurt. Or Washington. Those wanting to have it all must “get on their bikes”).

What we will get is all three being followed at the same time. And this must involve a continuing QE blast alongside Greek forced exit from the eurozone (breaking the Lisbon Treaty on at least five counts) but still in the EU plus a contagion outwards towards Italy and Spain accelerated by the EC’s search for Beyond Basel III to come into force plus the German financial and fiscal power centres trying to effect the exact opposite on all fronts.

There are thus in turn three potential (ie, realistic) outcomes:

1. Chaos

2. Draghi & the Eurogroup cut off the EC’s balls, leaving Juncker as a very loose but fully-loaded cannon, and with a very high voice.

3. Merkel sides with the 1923 Tendency, and leaves the eurozone.

Many other related events will of course follow – and the above trio of troubles aren’t mutually exclusive. But my view remains the same as it was by the end of 2010: the euro is dead, and the EU is eating itself. Only Mario Draghi launching a putsch to get himself declared Supreme Emperor of Europe could stop the process.

That isn’t going to happen. Draghi’s view of chaos is “bring it on”….because down that road lies US domination of all european transactions. For in this, the epoch of Western decline, that is what the Looney Tunes on Wall Street, inside the State Department/CIA axis and in Texas want.

The bottom line: anything could happen, and nothing will change on the road to global corporatocracy.

Yet.

But eventually, top-down will collapse…as all flawed administrative processes do. And after the chaos, things will very slowly get better.

I end where I started. With too many factions wanting different things from the Greece deadlock – external and internal – the reason no clear interpretation of outcome is possible swings on the surreal 3D hinge of there being no united Sovereign, and little or no commonality of aims between the factions.

A320: Controlled Flight Into Terrain?

Off the keyboard of John Ward

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Published on The Slog on Mar 27-28, 2015

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A320 LUBITZ CRASH EXCLUSIVE: The A320’s history of unexplained descents into terrain.

a320PTThe tabloidisation of the A320 Lubitz crash should at least be questioned more closely. Either through media incompetence or other motives, Andreas Lubitz is being misrepresented…and so is the Airbus family history.

This is not The Slog suddenly going wacky: it seems to me very likely that Andreas Lubitz flew his plane into a mountain by locking the pilot out of the cockpit. From the outset, this tragedy looked odd, but these days I have learned to let the dust settle before asking pertinent questions. Perhaps now is the time, however, to question just how open and shut the case is:

1. The A320 itself is billed as ‘an exceptionally safe aeroplane’. But the family of A319/320 does in fact have 60 crashes behind it. And some of them bear similarities:

* On 3 May 2006, Armavia Flight 967, using an Airbus A320-211, crashed into the Black Sea while attempting to conduct a go-around following its first approach to Sochi Airport, Russia. All 113 passengers and crew on board lost their lives.

*On 28 July 2010, Airblue Flight 202, an Airbus A321 flying from Karachi to Islamabad, crashed in Margalla Hills in Islamabad, Pakistan. The weather was poor with low visibility. During a non-standard self-created approach procedure below Minimum Descent Altitude the aircraft collided with terrain after the captain ignored a total of 21 cockpit warnings to pull-up. 146 passengers and six crew were on board the aircraft. There were no survivors.[26] The commander, Pervez Iqbal Chaudry, was one of Airblue’s most senior pilots with more than 35 years’ experience.

* On 5 November 2014, Lufthansa Flight 1829, an Airbus A321 was flying from Bilbao to Munich when the aircraft, on autopilot, unexpectedly lowered the nose and entered a descent reaching 4000 fpm rate of descent. The loss of altitude had been caused by two angle of attack sensors having frozen in their positions during climb at an angle, causing the fly by wire protection to assume the aircraft entered a stall while it climbed through FL310.

* On 28 December 2014, Indonesia AirAsia Flight 8501 crashed into the Java Sea between the islands of Belitung and Borneo, killing all 162 on board. The cause is under investigation…but I’m sure we all remember that one.

* On 24 March 2015, Germanwings Flight 9525, using an Airbus A320-211, flying between Barcelona and Düsseldorf crashed near Digne in the Southern French Alps, killing all 150 on board.

All these incidents involved what Boeing first coined as Controlled flight into terrain (CFIT) in the late 1970s. CFIT describes an accident in which an airworthy aircraft, under pilot control, is unintentionally flown into the ground, a mountain, water, or an obstacle. The pilots are generally unaware of the danger until it is too late. The term was coined by engineers at Boeing.

2. If Lubitz was really that depressed, why was he allowed to fly? The truth is, he wasn’t. “He flew into a mountain because he was depressed/had split up with his partner” simply doesn’t hold water: follow the timeline back, and you will see that Lubitz had made a full recovery from his depression. He took a break from training six years ago because he was responsible enough to realise he needed to get his head straight.

3. When I retreated to bed at 10.30 pm CET last night, several news sites were claiming that he was ‘a recent convert to Islam’. Those reports have abruptly disappeared. Who raised that allegation? Again, it isn’t true. Germany’s Christian press claimed yesterday ‘All evidence indicates that the copilot of the Airbus 320, in his six-months break during training as a pilot with Germanwings, converted to Islam and subsequently of his own accord decided to carry out this mass murder. A radical mosque in Bremen is in the center of the investigation, in which the convert often stayed…’. Really? Lubitz took a six-month break to get treated for depression some time ago during his training. All Germanwings pilots are trained in Bremen. As far as I can ascertain, the Mosque there is not at the centre of the A320 investigation, and Lubitz never went there.

4. Yahoo, CNN and the Independent are now stating as a fact that ‘Lubitz deliberately crashed the plane’. The evidence looks strong, but why prejudice the enquiry? Most extreme in this reporting, of course, is Bild, the German tabloid which acts as a sort of German Sun written by failed cryogenic monkey experiments. This morning it labels the co-pilot a mass-murderer: another monster created, tomorrow’s Saturday, lets find a stock shot of a fat Greek.

bildThis is very much the German way at a tabloid level: write off anyone German who seems to have done something awful as an abhorrent exception. Herr A. Hitler from Linz has been similarly written out of history in the two-dimensional manner, with the added “And anyway, he was Austrian”.

The day before yesterday, CNN treated us to an hour of Merkel, Rajoy and Hollande united in photo-op sorry, grief. The big-hair anchor-lady noted with counterfeit sincerity that it was “truly good of these three leaders to come personally to the scene”. It takes a special kind of cynicism or naivety to come up with a line like that.

*  *  *  *  *

My point here is not to kick off yet another conspiracy theory. It is rather to log once more that the mass media obsession with reporting without interpretation has in recent years crossed two lines:

First, their irresponsible rush to judgement condemns and demonises people about they know almost nothing, acting as a kangaroo Court of Opinion before the legal process has even started. Jimmy Savile was the worst example of that to date.

Second, by so doing they also create healthy suspicion about ulterior motives for blaming the corpse. Dead men, as they say, tell no tales. But Newscorp had a clear motive for starting the All DJs are Perverts mania of 2013/14: who we wonder, might have a motive for trying to wrap this one up in four days flat?

Media superficiality in assessing the psychographics of Andreas Lubitz simply muddies the waters further:

“He was one of the best,” the report quotes a retired Lufthansa pilot identified only as Dieter, “He was someone very reliable, he was one of the best pilots we had. I am 100 per cent sure they did the best they could. That’s what I think because I knew him very well, he was one of the best, he had a lot of experience, he had more than 6,000 flight hours behind him.”

However: only 350 of those hours were as a pilot…the rest he was just cabin crewing. And almost without exception, odd brainstorms and mass shootings are accompanied by lots of neighbours saying how quiet, polite and normal the killer was.

I’m just concerned (as an occasional depressive myself) that an attempt has been made by both the media and Lufthansa to make his depression seem contemporaneous with the A320 crash: it clearly wasn’t.

Now overnight, the ‘clue’ found at the Lubitz apartment has morphed into a significant clue. The Dusseldorf Polizei confirmed this morning that they had found “something which will now be taken for tests. We cannot say what it is at the moment but it may be very significant clue to what has happened. We hope it may give some explanations.”

The cops actually took away three large removal packs of material. I understand a line of enquiry unrelated to terrorism is now being followed up. But perhaps fearing a pc backlash, the media seem to be ignoring the likelihood that Andreas was gay: a number of German sources are suggesting this today. He had worked his way up to co-pilot from having been a cabin steward – and he had a housemate, who left the Lubitz flat with police last night, and has not as yet been identified:

lubitzhome It was the French prosecutor Brice Robin who has right from the off described Lubitz as having been “on a suicide mission”. The evidence for this is indeed strong: an analysis of transponder data by air tracker Flightradar24 showed that the plane’s autopilot had been manually reset from 38,000 to below 100 feet, immediately following which Lubitz began a steady descent at high speed.

But the A320 family history makes that less compelling than it at first looked. In order to dramatise the ‘pilot lockout’. the media latched on quickly to ‘the fact’ that the pilot, on trying to get back into the cockpit, resorted to an axe. The only evidence offered for this is that “there was an axe on the plane”.

*  *  *  *  *

This is just another incident in the long history of newspaper journalism in which conclusions are multivariately jumped upon, but no conclusions can then be reached because the conclusions are too disfigured to be identified. Also, nobody seems to be pursuing the issue of who was on the flight. After a suitable time for condolence and funerals, I think the media should have a look in detail at the passenger list. Germanwings is a budget airline and therefore this is unlikely to reveal much in the way of powerful folks flying incognito. But the time has long gone when a Sovereign prosecutor’s word can be taken as read – either between the lines, or otherwise.

On balance, I think Andreas Lubitz had a coup de foudre. But for me, the jury’s out until others more technical than I can say yea or nay to the A320 family’s history of Controlled Flight Into Terrain.

AIRBUS CONTRARIAN VIEW: DID ANDREAS LUBITZ HAVE DOUBTS ABOUT THE A320’S AIRWORTHINESS?

LUBITZa320As the Lubitz thing sounds increasingly conclusive, the evidence behind the conclusion looks increasingly flakey.

His girlfriend says he was planning something massive by which he’d be remembered. But she isn’t identified, her name ‘Maria’ is a not her real one….and the story’s in Bild. “It didn’t make much sense at the time, but now it does” she claims. Her boyfriend was a pilot and planning something horrific…but it didn’t make sense? Well, right then. But hold this thought: she told Bild, “He would wake in the night screaming ‘we’re going down, we’re going down’”.

The sick note looks odder and odder. While the German prosecutor followed his French colleague by mouthing off to the media yesterday about Lubitz “hiding his depression from his employer and colleagues”, the Dusseldorf Polizei contradicted their employer by refusing to say what the sick notes were about (or why Andreas had been to a hospital) but that they were “nothing to do with the decision [Lubitz] took”. Well if they aren’t germaine to the case, then why not tell us what they were for?

The Wall Street Journal takes a leap and asserts that the sick notes were from a psychiatrist; but the source is ‘a person familiar with the investigation’, which means it could be the A320’s designer, or Leutnant Schmidt from the Bremen vice squad. In the same piece, the Journal says ‘another person familiar with the investigation’ thinks Andreas didn’t have a terminal illness, while the Daily Mail says the notes were from doctors not psychiatrists, and although he was teased about being a gay former-steward, he shared his flat with the girlfriend who two days ago was a boyfriend, and if it was the girlfriend with whom he’d split up, why was she still at the flat?

A senior Lufthansa Director meanwhile says Lubitz had “slipped through the net with devastating consequences” – an odd thing to say for two reasons. First, all his co-workers said he was “happy and enjoying his career”; and second, the Director just landed Lufhansa squarely in the Dock to face 149 suits for causing the death of loved ones by negligence.

I’m trying to retain a balance here, but the sheer weight of contradictory information makes it almost a full-time job. This sort of thing often surrounds “media management” these days when very fat men in large boardrooms have things to hide. I still believe that by far the most likely solution is that Lubitz had lost his mental balance (it now seems he was taking medication, but we don’t know what for) and had made up his mind that the minute his colleague slipped out for a pee, he’d do the deed. But exactly why? And what deed?

I suspect what’s required here, for the time being, is to examine some of the motives behind the announcements:

1. Airbus is primarily a Franco-German-Spanish co-production. This might help explain the early appearance of the French, German and Spanish leaders at the scene. Its exports make a massive contribution to the eurozone economy, and it employs some 58,000 people. Significantly, Airbus pioneered fly-by-wire on its A320, and the A380 is the largest fbw aircraft in the world. Fbw basically means replacing the conventional manual flight controls of an aircraft with an electronic interface. In the light of this week’s disaster – and the 320 family’s history of controlled flight into terrain (see yesterday’s Slogpost) – this might explain why aircraft manufacturers – and airlines who bought large fleets off them – would rather face 149 lawsuits than doubts about the fbw auto systems that are now wired into Airbus planes’ DNA.

2. The rush to blame Lubitz is equalled only by the unwillingness to take into account the obvious motives for blaming pilot error. In December 1997, a Silk Air Boeing 737 flying from Jakarta, Indonesia, to Singapore suddenly dived vertically for more than 30,000 feet into a river and 97 people were killed. America’ National Transportation Safety Board investigated, concluding that the crash resulted from deliberate action by one of the pilots. The Indonesian Transportation Safety Committee said the evidence was inconclusive, and a private legal action in California tried to reverse the NTSB’s ruling – claiming that a mechanical flaw, inherent in the 737’s design, had caused the crash.

The crash of EgyptAir Flight 990 in October 1999 on a flight from New York to Cairo neared its desired cruise level, but then inexplicably dived vertically into the Atlantic near Nantucket Island, killing 217 people. The NTSB determined that the Egyptian captain had deliberately pointed the nose down and killed everyone on board. The NTSB’s verdict was disputed by the Egyptians, who also blamed a design flaw had been responsible.

In perhaps the most infamous case of all, the 1958 Munich air disaster that killed nine Manchester United players was persistently blamed on Captain Thain, a man later proven posthumously to be entirely innocent. The owners of Munich Airport had been clearly negligent in sweeping ice from the runway, but lied throughout five enquiries until eventually the evidence came to light.

3. Why would Andreas Lubitz – a man for whom flying had been everything since the age of seven – have nightmares about “going down”…unless he thought there was something wrong with the 320 series fbw system? And why – if his sole intent was the world’s most selfish suicide – would the radar track show he tried to level out towards the end of the dive? Far from trying to kill himself, was he trying to demonstrate something?

Without repeating myself too much, I think he meant to do what he did, but the why part remains a puzzle. The police, Luthansa and the Sovereign authorities have made strenuous efforts to be judge, jury and executioner in this case, laying the blame on depression and deceit by Andreas Lubitz. But they do seem somewhat vague when the questions get more probing. The greater likelihood is that the co-pilot coup de foudre verdict will emerge as the most likely: but the evidence is far from conclusive. Were I a young newshound on this one, I’d be asking whether Herr Lubitz had raised any doubt about the A320 fbw systems. On the outside possibility that he might have been a whistleblower, not a murderous suicide.

EuroSoap

Off the keyboard of John Ward

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Published on The Slog on March 20, 2015

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TSIPRAS/MERKEL SUMMIT: You thought Greek politics complicated? Wait until you tot up the seismic splits in the EU

Take a close look at the timeline since Thursday night’s mini-summit marathon between Alexis Tsipras and Angela Merkel.

After a 3am Friday finish, German Chancellor Angela Merkel described the meeting as “good and constructive,” but warned that the Greek government will have to meet commitments before it can access EU money. She gave Syriza exactly seven days to offer fully detailed “reform” proposals to Troika2, and then left clutching several haunches of Venison and 683 sausages for her beloved fridge.

A few hours later, however, Jean-Claude Juncker – the President of the European Commission (EC) – announced a completely unconditional 2 billion euro contribution immediately available to Greece to boost growth, tackle youth unemployment and help with the “humanitarian crisis”. Juncker said the cash for this would come from “unused EU development funds”.

When I called the EC press office this afternoon and asked how this circle might be squared, there was much scurrying about and promises of getting back to me…none of which materialised.

Those EU schisms in full

This is what’s really going on here: pissed off by the degree to which Germany and the Troikanauts are increasingly adopting the Führerprinzip in relation to EU affairs, the EC as led by J-CJ is doing everything in its power to be good-cop to Greece in general, and Tsipras in particular. This is a good old-fashioned Nazi Party power struggle, and there is every opportunity for Athens to exploit it.

But equally, we must remember that on another level entirely, Francois Hollande of France got away almost scot-free last week on deficit failures that far outweigh those of Greece….but was forced to bring in Troika-demanded laws about tax evasion…and ECB diktats about bank liquidity. This has not gone down well in his Party.

The Parti Socialiste de France doesn’t like this crap because (like many of us) they foresee the wholesale handing over of millions of votes to Marine Le Pen’s Front Nationale.

So then: we have the EC at war with Berlin and Troika2, plus France at war with Frankfurt. But just when you thought you had it sussed, more fractures appear.

For Wolfgang Schäuble is at war with Merkel over his single-minded obsession to become Supreme Leader of the as yet unformed Fiskalunion…and fighting a second front against Mario Draghi’s ECB, which in turn is fighting on another front entirely with Jens Weidemann and the German Central Bank…who rightly think that Draghula is working not for the euro, but a planned eurodollar spookily approaching parity with, um, the euro. And Merkel too distrusts the ECB boss’s motives….preferring as she does to keep her options open on the subject of which way to jump in the Dollar v Rublenimbi chasm.

Confused? You will be after this latest episode of Eurosoap. But there are far more plot lines and faultlines to develop before your confusion is comprehensively constructed.

There is the coming UK election, and the increasing likelihood of the ‘biggest’ Party needing to do a deal with EU-secessionists. There is the growing secessionist and europhobic tendency in Italy. There is Podemos support in Spain growing with every act of defiance from Greece. There is the Austro-German bank collapse epidemiology threatening everyone from Santander to Deutsche. And there remains the implacable unwillingness of Viktor Orban in Hungary to have anything to do with globalism in general, or the euro in particular.

Face facts: the EU is imploding.

 

Germany’s future lies East

Off the keyboard of Pepe Escobar
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THE ROVING EYE

Reuters / Ueslei Marcelino

Reuters / Ueslei Marcelino 

Originally published in Asia Times on March 3, 2015
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What the BRICS plus Germany are really up to?

Winston Churchill once said, “I feel lonely without a war.” He also badly missed the loss of empire. Churchill’s successor – the ‘Empire of Chaos’ – now faces the same quandary. Some wars – as in Ukraine, by proxy – are not going so well.

And the loss of empire increasingly manifests itself in myriad moves by selected players aiming towards a multipolar world.

So no wonder US ‘Think Tankland’ is going bonkers, releasing wacky CIA-tinted “forecasts” where Russia is bound to disintegrate, and China is turning into a communist dictatorship. So much (imperial) wishful thinking, so little time to prolong hegemony.

The acronym that all these “forecasts” dare not reveal is BRICS (Brazil, Russia, India, China, and South Africa). BRICS is worse than the plague as far as the ‘Masters of the Universe’ that really control the current – rigged – world system are concerned. True, the BRICS are facing multiple problems. Brazil at the moment is totally paralyzed; a long, complex, self-defeating process, now coupled with intimations of regime change by local ‘Empire of Chaos’ minions. It will take time, but Brazil will rebound.

That leaves the “RIC” – Russia, India and China – in BRICS as the key drivers of change. For all their interlocking discrepancies, they all agree they don’t need to challenge the hegemon directly while aiming for a new multipolar order.

The BRICS New Development Bank (NDB) – a key alternative to the IMF enabling developing nations to get rid of the US dollar as a reserve currency – will be operative by the end of this year. The NDB will finance infrastructure and sustainable development projects not only in the BRICS nations but other developing nations. Forget about the Western-controlled World Bank, whose capital and lending capacity are never increased by the so-called Western “powers.” The NDB will be an open institution. BRICS nations will keep 55 percent of the voting power, and outside their domain no country will be allowed more than 7 percent of votes. But crucially, developing nations may also become partners and receive loans.

Russia's President Vladimir Putin delivers a speech as he attends the VI BRICS Summit in Fortaleza July 15, 2014.(Reuters / Paulo Whitaker )

Russia’s President Vladimir Putin delivers a speech as he attends the VI BRICS Summit in Fortaleza July 15, 2014.(Reuters / Paulo Whitaker )

Damn those communists

A tripartite entente cordiale is also in the making. Indian Prime Minister Narendra Modi will be in China next May – and ‘Chindia’ will certainly engage in a breakthrough concerning their bitter territorial disputes. As much as Delhi has a lot to benefit from China’s massive capital investment and exports, Beijing wants to profit from India’s vast market and technology savvy. In parallel, Beijing has already volunteered economic help to Russia – if Moscow asks for it – on top of their evolving strategic partnership.

The US “pivoting to Asia” – launched at the Pentagon – is all dressed up with no place to go. Bullying Southeast Asia, South Asia and, for that matter, East Asia as a whole into becoming mere ‘Empire of Chaos’ vassals – and on top of it confronting China – was always a non-starter. Not to mention believing in the fairy tale of a remilitarized Japan able to “contain” China.

Isolating the “communist dictatorship” won’t fly. Just watch, for instance, the imminent high-speed rail link between Kunming, in Yunnan province, and Singapore, traversing a key chunk of a Southeast Asia which for Washington would never qualify to be more than a bunch of client states. The emerging 21st century Asia is all about interconnection; and the inexorable sun in this galaxy is China.

As China has embarked in an extremely complex tweaking of its economic development model, as I outlined here, China’s monopoly of low-end manufacturing – its previous industrial base – is migrating across the developing world, especially around the Indian Ocean basin. Good news for the Global South – and that includes everyone from African nations such as Kenya and Tanzania to parts of Southeast Asia and Latin America.

Of course the ‘Empire of Chaos’, business-wise, won’t be thrown out of Asia. But its days as an Asian hegemon, or a geopolitical Mob offering “protection”, are over.

The Chinese remix of Go West, Young Man – in fact go everywhere – started as early as 1999. Of the top 10 biggest container ports in the world, no less than 7 are in China (the others are Singapore, Rotterdam, and Pusan in South Korea). As far as the 12th Chinese 5-year plan – whose last year is 2015 – is concerned, most of the goals of the seven technology areas China wanted to be in the leading positions have been achieved, and in some cases even superseded.

The Bank of China will increasingly let the yuan move more freely against the US dollar. It will be dumping a lot of US dollars every once in a while. The 20-year old US dollar peg will gradually fade. The biggest trading nation on the planet, and the second largest economy simply cannot be anchored to a single currency. And Beijing knows very well how a dollar peg magnifies any external shocks to the Chinese economy.

Sykes-Picot is us

A parallel process in Southwest Asia will also be developing; the dismantling of the nation-state in the Middle East – as in remixing the Sykes-Picot agreement of a hundred years ago. What a stark contrast to the return of the nation-state in Europe.

There have been rumblings that the remixed Sykes is Obama and the remixed Picot is Putin. Not really. It’s the ‘Empire of Chaos’ that is actually acting as the new Sykes-Picot, directly and indirectly reconfiguring the “Greater Middle East.” Former NATO capo Gen. Wesley Clark has recently “revealed” what everyone already knew; the ISIS/ISIL/Daesh fake Caliphate is financed by “close allies of the United States,” as in Saudi Arabia, Qatar, Turkey and Israel. Compare that with Israeli Defense Minister Moshe Yaalon admitting that ISIS “does not represent a threat to Israeli interests.” Daesh does the unraveling of Sykes-Picot for the US.

The ‘Empire of Chaos’ actively sought the disintegration of Iraq, Syria and especially Libya. And now, leading the House of Saud, “our” bastard in charge King Salman is none other than the former, choice jihad recruiter for Abdul Rasul Sayyaf, the Afghan Salafist who was the brains behind both Osama bin Laden and alleged 9/11 mastermind Khalid Sheikh Mohammad.

This is classic ‘Empire of Chaos’ in motion (exceptionalists don’t do nation building, just nation splintering). And there will be plenty of nasty, nation-shattering sequels, from the Central Asian stans to Xinjiang in China, not to mention festering, Ukraine, a.k.a Nulandistan.

Parts of Af-Pak could well turn into a branch of ISIS/ISIL/Daesh right on the borders of Russia, India, China, and Iran. From an ‘Empire of Chaos’ perspective, this potential bloodbath in the “Eurasian Balkans” – to quote eminent Russophobe Dr. Zbig “Grand Chessboard” Brzezinski – is the famous “offer you can’t refuse.”

Russia and China, meanwhile, will keep betting on Eurasian integration; strengthening the Shanghai Cooperation Organization (SCO) and their own internal coordination inside the BRICS; and using plenty of intel resources to go after The Caliph’s goons.

And as much as the Obama administration may be desperate for a final nuclear deal with Iran, Russia and China got to Tehran first. China’s Foreign Minister Wang Yi was in Tehran two weeks ago; stressing Iran is one of China’s “foreign policy priorities” and of great “strategic importance.” Sooner rather than later Iran will be a member of the SCO. China already does plenty of roaring trade with Iran, and so does Russia, selling weapons and building nuclear plants.

Germany's Chancellor Angela Merkel.(Reuters / Eric Vidal)

Germany’s Chancellor Angela Merkel.(Reuters / Eric Vidal)

Berlin-Moscow-Beijing?

And then there’s the German question.

Germany now exports 50 percent of its GDP. It used to be only 24 percent in 1990. For the past 10 years, half of German growth depended on exports. Translation: this is a giant economy that badly needs global markets to keep expanding. An ailing EU, by definition, does not fit the bill.

German exports are changing their recipient address. Only 40 percent – and going down – now goes to the EU; the real growth is in Asia. So Germany, in practice, is moving away from the eurozone. That does not entail Germany breaking up the euro; that would be interpreted as a nasty betrayal of the much-lauded “European project.”

What the trade picture unveils is the reason for Germany’s hardball with Greece: either you surrender, completely, or you leave the euro. What Germany wants is to keep a partnership with France and dominate Eastern Europe as an economic satellite, relying on Poland. So expect Greece, Spain, Portugal and Italy to face a German wall of intransigence. So much for European “integration,” it works as long as Germany dictates all the rules.

The spanner in the works is that the double fiasco Greece + Ukraine has been exposing. Berlin as an extremely flawed European hegemon – and that’s quite an understatement. Berlin suddenly woke up to the real, nightmarish possibility of a full blown, American-instigated war in Europe’s eastern borderlands against Russia. No wonder Angela Merkel had to fly to Moscow in a hurry.

Moscow – diplomatically – was the winner. And Russia won again when Turkey – fed up with trying to join the EU and being constantly blocked by, who else, Germany and France – decided to pivot to Eurasia for good, ignoring NATO and amplifying relations with both Russia and China.

That happened in the framework of a major ‘Pipelineistan’ game-changer. After Moscow cleverly negotiated the realignment of South Stream towards Turk Stream, right up to the Greek border, Putin and Greek Prime Minister Tsipras also agreed to a pipeline extension from the Turkish border across Greece to southern Europe. So Gazprom will be firmly implanted not only in Turkey but also Greece, which in itself will become mightily strategic in European ‘Pipelineistan’.

So Germany, sooner or later, must answer a categorical imperative – how to keep running massive trade surpluses while dumping their euro trade partners. The only possible answer is more trade with Russia, China and East Asia. It will take quite a while, and there will be many bumps on the road, but a Berlin-Moscow-Beijing trade/commercial axis – or the “RC” in BRICS meet Germany – is all but inevitable.

And no, you won’t read that in any wacky US ‘Think Tankland’ “forecast.”

 

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

Slog Tri-fecta

Off the Keyboard of John Ward

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Published on The Slog on February 27-28, 2015

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RE Note: Slogger JW has been especially prolific of late with quite a bit of good stuff, so I am compiling a few at a time now instead of posting them individually.

GREECE LATEST: HUGE GREEK BANK OUTFLOWS, EURO FALLING AGAINST THE £, BUNDESTAG BACKS GREECE MEMORANDUM

ChambptIf the Varoufakis memorandum ‘deal’ is so respectable, why do none of the players, or their Party bigwigs, or the markets, like it?

There’s a piece in the online magazine Counterpunch at the moment purporting to show how Greek finance minister Yanis Varoufakis has ‘kept Greece in the euro by its fingernails’. Without going over the same tedious ground yet again, nobody can do that, because Greece doesn’t need to cling onto anything: once you’re in the euro, there’s no way out.
The piece continues as follows:‘So, those who think that Varoufakis should have given the Eurogroup an ultimatum (“Reduce our debts or we’ll leave.”) simply don’t understand the nature of the negotiations.  Varoufakis was forced to operate  within very strict parameters. Given those limitations, he nabbed a very respectable deal.’
If I had a Pound for every expert who responded to an injection of reality with “no no, you don’t understand” I’d be a very rich man indeed. QE, derivatives, the gold price, the euro’s value, UK ‘growth’, fractional reserve banking, the Manchester United owning Glazer brothers, ludicrously over-priced bourses, the EC’s finances, and BoJ asset purchases have all been ‘sold’ to me over the years are the best way forward…when they are obvious disaster areas waiting to happen.
In this case, it’s the idea that what Varoufakis signed last week was a ‘very respectable deal’. I’d like to put one simple question to the Game Players: if the deal is so good, why does no side – there are more than two – want it?
The Greek KKE doesn’t want it, 8 senior Syriza MPs don’t want it, and yesterday afternoon Merkel was given a seriously rough ride by her own CDU Upper Circle. I’ve yet to meet a single anti-federalist who likes it…but I’ve been told a dozen times that Varoufakis has “bought time”. He has: but is it peace in our time, or time for things to get worse for the Greeks?
Even the fairly large print of the Memorandum makes YV’s job impossible, and it isn’t helped by the obviously manipulated departure of bank deposits. Four months from now they will be back around the same table, and there is just one thing alone that might make Yanis’s hand stronger: Italy turning to sh*t – which it could do….and ought to do.
But if your main adversary is an Italian crook heading up the ECB, I wouldn’t hold your breath on it. In that four months, there’ll be 24/7 smearing and trolls, manufactured bank panics, and pretty much anything they can think of to take Syriza’s eye off the ball. Last month, a record €12.2 billion left Greek banks: that is more  than any outflows experienced during any of the previous Greek crises and bailouts. Zero Hedge is now confirming the Slogpost of last week when it says ‘the Troika did everything in its power to accelerate the bank run in order to crush any negotiating leverage Varoufakis may have had’.
As for Tsipras himself, his hardest task will be to keep the Coalition together…plus social protests and unrest coming from the KKE and Golden Dawn…both of whom are virulently anti-euro.

I wrote earlier this week that Varoufakis missed his chance to exploit the enormous Bundesbank v ECB v France rift – the thing that will do for the entire EU in time regardless of anything else that might happen. But he failed to call the bluff. That’s all Draghi had: bluff.

Today, with this marvellous deal nobody likes, the euro has fallen further, and now stands at 1.38 to Sterling. If he had walked last Friday, Troika2 would’ve been in l’ordure profonde. There is an old adage that says, “When you borrow £10,000 from a bank, it’s your problem. When you borrow $280billion and can’t pay it back, it’s the bank’s problem”. So far, EU citizens haven’t paid a red cent of any of the funny-money involved in bailing out Greece. Now they will have to…and it could tip at least two of them – Spain and Italy – over the edge. This is the size of the opportunity Varoufakis missed.

On verra. But I remain at a loss to see what Greece has gained here…except the bewildered disrespect of a lot of the neutrals.

At the End of the Day

We’ve just had a sunset here that can’t measure up to West Indian or Greek ends-of-day for awesome brilliance followed by soft red, but will always beat them hands-down for the range of colours involved.

In this sort of late-winter Aquitainian sunset, there are light greys, charcoals, limes, four shades of blue, infinite yellows – and spectacular solid rays that reach up to the heavens. Religiously influenced 19th century paintings of the English sunset made great play with the rays thing, but they all look insipid alongside what I just saw here.

The thing that’s particularly enthralling about the skies in the Lot is that they’re never boring. This enhances the sense, at sunset, of the illusion of Time being played out second by second: it’s a bit like watching a Turner painting observed through the Polaroids of David Hockney. You can’t take your eye off it for even a second, because all is change. As the Buddhist mantra has it, all things are in transition.

*********************************

If only the same could be said for Wolfgang Schäuble. You always know where you are with Wolfie: the bloke comes with a cast-iron guarantee that he will always support his inflexible approach with an insane argument. He was on top form in the Bundestag today, asserting to his CDU naysayers that “This is not about lending more money to Greece, it is about continuing with the programme”.

Just to insert the odd undisputed fact here, since 2010 his geliebte programme imposed upon Greece has produced the greatest depression of any Western economy in recorded history. Yet Dr Strangelove insists that Greek recovery will without question emerge from Aphrodite by the waterhole standing firmly at the side of Phoenix among the ashes – neither of whom have any money to consume the goods that the Greek economy cannot produce, because it has no finance.

You really do have to be profoundly mad to stick to that kind of programme.

But in Germany, political rebellion takes place in a way no other country can reproduce. In Germany, the leading CDU rednecks give Merkel a hard time for being a liberal pinko, and then traipse into the Bundestag to vote overwhelmingly for the extension of the Programme. In a German revolution, everyone forms an orderly queue to express dissatisfaction at the soft treatment being meted out to the Üntermenschen who do not grasp their Weltanschauung. Then they obey whatever bonkers bollocks Mutti Merkel comes out with.

It is all terrifyingly similar to Goebbels yelling that “All Jews are Communists, and all Communists are Jews”.

*********************************

Now that South Korea’s Constitutional Court has decriminalized adultery, Bloomberg reports that the country’s leading condom manufacturer Unidus shares rose by 11.75% today.

If you’re in any doubt about the importance of this ruling, I should point out that in 2008, actress Ok So Ri acknowledged publicly she had an affair with a singer. So her compassionate actor husband called for the maximum penalty of two years in prison. She got a suspended eight-month term. I’m not the world’s most right-on person, but the idea of this kind of chastity-belt claptrap still existing in the 21st century is not good news. Take a look at Indonesia’s laws against women: they beggar belief.

I do believe in long-term relationship sexual loyalty, but manufacturing crime out of human passion is about as bad as it gets.

That said, I have problems with the share price rise…as I so often do with f**kwitted stock market logic. If you’re marrried and you have an affair involving unprotected sex, presumably your husband knows you’re unprotected. So why would condoms be necessary – especially in the passion of the moment?

I do dislike reducing love to the mechanics of it all. But the problem with bourses the world over is that they’re dominated by daft testerone-fuelled blokes whose left brains are atrophied as a result of none-use.

And on that happy note, I bid you all bon weekend.

Our politicians make a hash of it because they’re bought, not because they’re braindead

mcteeth From Athens to Washington via Berlin, Paris and London, we are getting the wrong policies for us, because they’re not designed to be for us in the first place

Herewith a very small proportion of some major political cockups of recent vintage:

The EU ‘annexed’ former Soviet satellites in central and eastern Europe without giving a thought to what the effect might be in terms of cheaper goods and lower-cost workers.

The EU and US conspired to meddle in Ukrainian politics, and as a result were given a bloody nose by Putin.

The EU created one currency across 18 cultural divides without giving any exit door, and as a result the Greek population is paying for the crimes of the pro-EU oligarchy.

The EU is imposing a mad scorched earth policy on the Greeks in the bizarre hope that the grass will regrow two minutes after the fire goes out.

The EU trampled all over Cyprus, and as a result Putin has completed a bailout deal with them….in return for naval bases there.

The EU created a government structure in which unelected functionaries have all the ‘ideas’ – and the elected MEPs get to rubber stamp them – and hoped that democracy would flourish.

The US blundered into Iraq twice, supported the Muslim Brotherhood in Egypt, bombed Iraq for a third time, supported the rebels in Syria, and then changed its mind to support Bashar Assad and bomb the rebels…all in pursuit of energy control, without ever trying with any consistency to develop beyond fossil fuels.

The UK Prime Minister David Cameron gave a speech in Ankara heaping praise upon closet Islamist Recep Erdogan and referring to Gaza as “a concentration camp”….while Erdogan was busy supplying the unfortunates living in the small State with arms.

Cameron hired Andy Coulson despite being warned by a dozen well-placed people that he’d committed myriad crimes while at Newscorp.

The UK supported Bush in the Gulf War without any thought for the jihadist consequences…leading directly to 55 deaths in London and a wholesale radicalisation of British Islamics.

Successive UK governments allowed immigrants to pour into Britain over a 40 year period, dismissing all naysayers as racists – but without a thought for where they were all going to live….and now dismisses all opponents of their radical house-building policy as tree-huggers.

The UK government supports fracking – despite the calamitous fall in the oil price and the obvious threat to Britain’s already compromised water supply…and thus also increased lack of land on which to build homes to house the migrants they thoughtlessly let in after 1970.

…………………………..

I could go on like this all day. For a week even – and never stop, except for comfort breaks and sleep. Whichever way you cut it, these politician chaps are not very good, are they? Also, they’re incorrigibly corrupt…as the latest revelations in the UK showed only too well this week. And not very bright. Unpleasant when you meet them. Unresponsive. In fact, incapable of seeing the consequences of anything they do. So we need another bonfire –  after the ones for civil servants, lawyers and accountants die down – on which to chuck the politicians.

The current crop of politicians in the West are indeed pretty dire, and woefully lacking in leadership skills or the ability to unite rather than divide. But they’re the product of a culture – nothing more, nothing less.

The one thing all these idiot policies have in common is self-serving lobbyists.

In consecutive order, the lobbying that dictated the disasters listed above came from the US State Department, multinational business, the CIA alongside Silicone Valley, multinational banking, the German Interior Ministry, Wall Street, the European Central Bank, the US oil industry, NATO, Newscorp, the race relations industry, neoliberal employer organisations, and the construction industry.

Now you could argue that a lot of those lobbies are merely part of the political process, but they are not. Only two sets of people should set political policy: elected legislators, and the electorate. The rest – especially Whitehall – are supposed to shut up and pay attention, but they don’t. The same applies to central bankers, bourse districts, and business generally. The policies currently driven by lobbyists fail over and over again because they are about ego and bottom lines, not the needs or Will of the People.

When Jean Blondel wrote Voters, Parties and Leaders in the late 1950s, he described what he called ‘pressure groups’. Their job was to bring to the government’s attention plights and opportunities, not to bribe them: such a thing was thought completely improper then. Today, US, UK, and EU civil servants openly take up positions in banks, multinationals, and energy companies after leaving the bureaucracy. This is a twofold phenomenon: the reward for past favours done, and the ability to show the poachers how to avoid the gamekeepers.

You may choose to believe, for instance, that John McCain is mad. But he is far from that: he is almost exclusively bankrolled by the oil and munitions industries – especially the US areospace business. So instead of ‘mad’, think Middle East, ISIS oilfield attacks, arming the Ukraine, and bombing jihadists. All the wrong policies, and all for the same reason: more munneee for Mr McCain, more contracts for the arms business, and security of supply for the oilcos.

If you take a degraded culture – some would even say a depraved culture – and allow it to produce the politicians…who then get offered free wonga by obsessive multinationals, this is the entirely predictable result. The final result might, one day, be final in the most terrifying sense of the word: greedy little men like McCain starting World War III as a result of selling jets to Iran, or 2D undetectable weaponry to the Israelis, or covert nuclear delivery to the Germans, tactical nukes to African mercenaries, or anybody else – never mind who, business is business kid – that has the munnneeeee.

I’ve been giving Syriza something of a bashing this week (which I think they richly deserve) but the great thing in their favour is the desire to make Greece a more open, honest and accountable culture. It is the ultimate c-word, and the only way real radicals can effect change now. We need a different way of rolling back greed through education and example: what we don’t need is the old Big State Left and Neolib Right ideologies replayed yet again: they don’t bear any relevance to social anthropology, and so I switch off once the empty historical syntax gets trotted out.

Syriza’s form of localism appeals to me because its communal and bottom-up. Sadly, I now fear that the situation will go tits-up before they get the chance to put it into practice. One thing people who don’t ‘get’ Greece can’t grasp is that Syriza’s ‘natural’ franchise of voters is probably under 6%, if not less. It is a loose collaboration of convenience designed to stand up to Brussels and get rid of the Greek oligarchy. Once people think its leaders are just as boneless as their predecessors, Greek politics could easily descend into chaos…perhaps even civil war.

But Tsipras and co still have a chance – albeit a slim one – to tell the EU where to get off, and then watch as the opposing edifice collapses in acrimony. If they do, then four things have to go in Greece: neoliberal drivel, privately funded political Parties, dishonest officials, and lobbying. If they can start to make a go of that alongside communal support and better education, they might just achieve something truly worthwhile for citizens everywhere around the World.

Memo to Varoufakis

Off the keyboard of John Ward

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Published on The Slog on February 26, 2015

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Memo to Varoufakis: Game theory is fine, but this isn’t a game.

Yanis Varoufakis was caught in the headlights last Friday: he should stop denying it

https://hat4uk.files.wordpress.com/2015/02/varoufheadlinghts.pngThe anti-‘deal’ leaks from the ECB, Berlin, the IMF and Brussels have been in full flow since Tuesday evening. It’s all terribly predictable: a clever process of suggesting that – purely out the goodness of their hearts – Troika2 is going to cut Greece some slack….even though T2 has – to tot up the list to date – ‘grave doubts’, ‘major reservations’, ‘worries about the lack of detail’, and ‘concerns about achievability’. There is slack rope, and there is enough rope to hang oneself.

The stench of hypocrisy in all this is vomit-inducing: Greece is being set up to fail, and in the meantime the ECB will continue its covert policy of creating bank cash-flow problems…ensuring that Syriza comes across as a Skid Row lush dependent upon never-ending welfare.

From Yanis Varoufakis, the Master of Game Theory, there has been little since the sign-off beyond rationalisation. In an interview with the Irish Times’s Damian Mac Con Uladh today, Mr Varoufakis gives us:

“Good compromises don’t always satisfy everyone, and leave in a sense everyone somewhat dissatisfied. But the mandate from our party, our government and my prime minister was very straightforward. To get a deal done. So, compromise. The question is if we have compromised our basic principle. And the answer is a big, fat no….Our mandate was to struggle against this black and white, this either/or, and to create a third way….It’s a triumph for democracy and marks the end of automated austerity….Anything is better than confining us to an austerity hole where we shrink every day.”

Compare and contrast that entirely reasonable attitude with this BBC interview on February 3rd:

“”Europe in its infinite wisdom decided to deal with this bankruptcy by loading the largest loan in human history on the weakest of shoulders… What we’ve been having ever since is a kind of fiscal waterboarding that has turned this nation into a debt colony….[the Troika is] a committee built on rotten foundations…Greek democracy has chosen to stop going gently into the night. Greek democracy resolved to rage against the dying of the light….We are going to destroy the basis upon which they have built for decade after decade a system, a network that viciously sucks the energy and the economic power from everybody else in society.”

I’m being ironic: I vastly prefer the second (earlier) Varoufakis to the new relaunch. Today’s Irish Times interview shows Damian Mac Con Uladh giving Yanis an unbelievable easy ride on the subject of a fat, hairy mammoth in the room: the now well-documented way in which the Greek Finance Minister was ambushed by the Euromafia at 4.30 pm last Friday.

I recognise perfectly well that I’m breaking from the optimist pack, but then I do understand the sociopathy of that Mafia better than most Greeks. To be blunt, I think Varoufakis underestimated it; and last Friday, the breathtaking, bullying illegality of their input caught him napping.

I do not believe Syriza has bought time, I think it has sold principles. I’m sure Yanis knows all the tricks of Game Theory, but this is not a game. He is dealing with (as are we all sooner or later) a nasty and yet hopelessly splintered EU oligarchy of far greater venom than any existing in Greece. The division on the opposing side is what he missed.

It’s easy to define, and even easier to evidence: the Germans are fed up of the French, and losing faith in the Americans. That’s a very serious split, because the man with the most unaccountable power in the eurozone is Mario Draghi….who works for Wall Street. The French, meanwhile, bitterly resent the idea that a nasty piece of work like Wolfgang Schäuble will be eyeballing them during March…and if and when FiskalUnion ever comes to pass, telling them what they can and can’t spend 24/7. The idea that Paris has the remotest desire to acquiesce in that arrangement is ridiculous. Apart from anything else, it would hand millions of votes to both Marine Le Pen and Nigel Farage.

On top of that we have a general trend in Southern Europe towards euroscepticism: the continuing growth of Podemos in Spain, and europhobic Berlusconi attitudes in Italy. These can only be encouraged by a flat refusal by Greece to deal with the idiots who caused the problem in the first place.

This is the perspective from Syriza that I find flawed: the much bigger picture. Last week, Varoufakis focused on it, and then lost the plot on Friday. He was a refusenik, but now he’s a pragmatist.

The post I wrote earlier this week laying out the story behind this was taken down by the Blue Meanies. I am therefore eternally grateful to the half-dozen Sloggers who still had it open and used page capture to return the piece to its rightful owner. It is reproduced below for anyone who missed it first time around.

€€€€€€€€€€€€

GREECE CRISIS OPINION: TROIKA RISES FROM THE DEAD AS DRAGHI LEADS THE CHARGE, AND VAROUFAKIS EMPLOYS BRAVE FACE

Conflicting rumours surround the Syriza reform programme approval process tonight, but whatever emerges from this farcical trading of angels on a pinhead, I’m increasingly concerned as details of the humiliation process programme ‘deal’ accepted by Yanis Varoufakis last Friday come to light. I don’t actually think the five-point italic hand-tying target codicils matter a damn to be honest, because they’re all unachievable anyway.

Far more relevant is what EC behaviour has been found acceptable to the Greek Government.

Did you know, for instance, that both the Gang of Four revisions, the Friday ambush, and the ELA threats/leaks to Greek banks were driven by Draghi?

Did you know that – in a direct sideswipe at rehiring Ministerial cleaners – there is a blanket ban under the agreement on any more public sector hiring?

Did you know that, just to rub in really hard that how they think the Greeks shit on their shoes, eurogroup told Varoufakis Friday that they were “handing over the judgement process to the organisation formally known as the Troika” – Draghi’s exact words. This was a direct hit on Syriza’s refusal to deal with the Troika. “Eurogroup will leave the details to this institution, who will present their view to eurogroup” he added.

Varafoukakis told CNN this evening that it was eurogroup who wanted more time to think, not the Troika. That is very, very economical with the truth – and not how other Syriza officials see it. The Troika has made it clear to eurogroup there are things they don’t like. As Naked Capitalism reported yesterday, ‘The Greek government is required to submit a list of reforms to the Troika by the end of day Monday. If it is not approved, the Eurogroup will meet on Tuesday.’

Guess what? Earlier this evening, Greek Channel NERIT announced that the eurogroup has asked Greece to submit a revised reforms list for its meeting Tuesday morning. The Guardian carries the same story.

I’m sorry, but at the minute Yanis Varoufakis isn’t coming out of this very well. For now, I support him to the hilt: but he is either going to resist the EC/ECB/creditors Troika or he isn’t. I know perfectly well that there are many among Athenian opinion-leaders who disagree with me about this. So perhaps – to illustrate the point – I might be allowed to relate an infamous Churchillian anecdote.

In the mid 1920s, WSC found himself seated next to a lady of liberal leanings at supper. Glad to have this arch anti-Communist to herself, the socialite took him to task about strike breaking, dissembling newspaper articles about the working class, and several other genuinely unpleasant dimensions of Churchill’s curate’s egg of a personality.

As ever when in the presence of what he regarded as uppity suffragettes, Winston was cutting and dismissive, telling the woman she should stick to worrying about her children and suitable marriages for her daughters – while remaining grateful for the fact that Britain had unwisely given her the vote.

“Mr Churchill,” said the shocked supper companion, “If I were married to you, I would put poison in your wine”.

“Madam,” Churchill lisped, “if I were married to you, I would drink it”.

Think of this as the “Drop dead” period of Syriza/EU insult exchanging immediately following the election.

Back in 1927, this not entirely auspicious exchange rapidly deteriorated, such that by the time pudding arrived, the lady concerned had reached the end of whatever short tether she possessed.

“Mr Churchill,” she said loudly, “You are the last person in the world I would ever marry”.

“Madam,” WSC responded, “A small part of marriage involves procreation in the bedroom. In order to show you what my real intentions are, under what circumstance would you consent to sleep with me?” The mortified woman hesitated, and then replied.

“There is no amount of money on Earth that would so persuade me”.

“Not even,” asked Winston, “£10 million?”. She laughed out loud.

“Don’t be ridiculous, that’s more than the Poor Relief budget. No woman is worth that”.

“Very well then,” said the future war leader, “Shall we say £500?”

“That is an insult,” she responded, “what do you take me for – a common prostitute?”

“Madam,” said Winston Churchill, “We have already established your profession. At this stage, we are merely haggling about the price”.

Fast forward to 2015: that’s what has been going on since Friday afternoon between Syriza and the Troika.

I don’t buy the “lose the battle, win the war” argument. While the Troika, Wall Street, US economic colonisation, EU fascism and banking sociopathy are indeed the enemy, this is a peace time exchange, not all-out war – yet. A strategic retreat is one thing: preparedness to cling to the driftwood of credibility is merely appeasement.

I’m now informed – in the last twenty minutes by a well-placed Syriza source – that fully eight Greek Cabinet members are opposed to acceptance of the deal. For myself, I feel cheated and made to look stupid by the hidden facts and cynical spin that followed Friday’s little re-enactment of the 1938 Munich crisis. But my feelings don’t matter a jot: let  The Slog’s Saturday post stand as a testament to rushed judgement. More to the point is the reality that an opportunity to call the Troika bluff has been blown.

If Yanis Varoufakis wants to regain his dignity – and keep Syriza together – he needs to think very carefully about what Prime Minister Tsipras should be asked to accept tomorrow…and then sell to his Party. For what will it benefit a man if he buys time, yet sells his soul?

€€€€€€€€€€€€

European Union at Ground Level

Off the keyboard of John Ward

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Published on The Slog on February 19, 2015

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Our glorious and beloved EU at Ground Level

As even German newspaper OpEds begin to ask if the MerkeSchäuble ist von der Apfelküchentrolley untergangen, what is gradually becoming clear – albeit far too slowly – is just what a dictatorial, law-breaking scam the European Union is. At its heart are two institutions: the European Commission – an organisation so steeped in corruption, nobody will sign off its accounts; and the European Central Bank – run by a Goldman alumnus whose career suggests that removing the ‘lum’ from the Latin sums him up perfectly. It is, in brief, an authoritarian scam.

For the average citizen, however, it is a sham….and in their everyday lives, that’s a far bigger failing. No supranational organisation in world history has quite managed managed to put the sham into shambolic like the EU.

I took up residence here in France 20 months ago, having moved from the UK. Even something as simple as switching from the British NHS to the gallic CPAM for healthcare has been a nightmare of lost formules, confusing instructions, and near-zero coordination between UK and French officials. Switching from UK car ownership to French immatriculation was a similar Hell of incomprehension…and don’t get me started on changing from one insurance regime to another.

I’m beginning to realise that – in order to once-and-for-all join the French tax system – I shall have to kidnap senior officials from each side and demand that functionaries take note of my changed status….otherwise beheading videos must surely follow. There is no way beyond a jihadist approach that will get through to these dozy creatures.

As for the legal system, well: if you thought British lawyers were slow, you will marvel at the Eternal Now in which most French avocats exist. They have two speeds – All Stop & Full Reverse Both – and for them, an impasse is not so much an obstacle to be circumvented as something from which only retreat is possible.

But this isn’t a gallic thing, it’s the EU. When you try to “take advantage” of This Great Project of Ours, there is no coming together. Mainly, there is coming apart. Such laws as get passed by the Eunatics in the Commission are ignored or otherwise depending on the interests of each Member State. In many areas, there is simply no coordination at all. Pharmacy rules about OTC v prescription drugs offer a supreme example. In Greece, you can walk into a chemist and ask for a kilo of heroin: the only response will be “Certainly, would you like that in 100gm or 200 gm packs?” In France, requesting a pack of Tagamet over the counter may involve you in an intimate body search, plus full-scale Interpol investigation.

The European Union has added nothing to the quality of life in our continent. However, it has added an enormous layer of pointless, busybody bureaucracy, a single currency that let Germany out of its richly-deserved cage, unimaginable levels of debt encouraged by Trichet’s ECB, former Soviet States whose ability to undercut the Western members is frightening, and – above all – moved the supreme source of power away from legislatures to fractional reserve banker criminality.

Mind you, the one thing from the start that the fluffy creators of the EU and the eurozone managed to subtract was one, genuine point of sovereignty that might reassure debt-bond creditors.

You can either interpret that uncomfortable fact as the infinite desire of every unaccountable bureaucrat to avoid any responsibility for anything, ever; or as just an utter lack of foresight based on commercial and fiscal incompetence.

I voted to stay in the EEC as it then was in the 1970s because I believed it possible to take the best from all cultures, and meld them into one Rule of Law. But since then, the most obvious (if that’s the right word) tactics of the EU have involved subterfuge, laws passed under the radar, voter rejections ignored, Nation objections bullied into submission, and now (under Draghi) blatant mobsterism in pursuit of the ends of unfeeling currency blocs.

I’m not sure this will come to pass, but I will rest easy in my grave if our grandchildren are brought up not to admire Syriza politics, but to see the shrewdness and courage of Varoufakis and Tsipras as a vital force that got off the sofa and chose to tackle evil greed head-on.

Eurosummit Breakdown

Off the keyboard of John Ward

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Published on The Slog on February 17, 2015

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Who did what and why?

As one Troika dies, another is born

Practically every Western press title and news bulletin this morning uses the word ‘defiant’ in relation to Greece’s rejection of the New Troika’s terms, and it isn’t a compliment.

The Greek contingent rejected the ‘deal’ because it wasn’t a deal, it was just the same old same old. But up until 90 minutes before closure, it had been something else. Allegedly drafted and then pushed hard by French finance minister Pierre Muscovici, the first draft (a copy of which Varoufakis still has) offered Greece more time, few targets, and then an attempt at economic growth.

It was taken off the table by yet another Troika – in most cases, remotely: Mariano Rajoy, Wolfgang Schäuble, and of course (no drum roll required) Mario Draghi. During the final day, Spanish PM Rajoy (for purely selfish political reasons, it would appear) scrambled around desperately trying to get the hawks to play more of a vulture role. His ginger-group plus the EC/ECB/Berlin/Frankfurt axis canned the original draft, and insisted on a return to all the original demands.

Then some of them briefed the press pack with pernicious spin about Greece messing them about, moving goalposts etc and being (this week’s insult of choice) “anti-European and irresponsible”. The truth is that, some time around 10.45 am CET, Varoufakis was lining himself up to sign the draft. Getting back to the realities:

– Greece cannot be allowed concessions, because Podemos would immediately demand the same (Rajoy)

– Greece’s load cannot be reduced, because then they might pay it back (Draghi)

– Greece’s flagrantly spendthrift behaviour must not be rewarded, and more austerity is the only answer (Schäuble).

So then – as many of us always suspected – the deal was scuppered by a hardline, corrupt, anti-libertarian Spaniard, a banker whose career is followed by clouds, and who retains his loyalty to Wall Street, and the residue of a tragically failed assassination attempt upon Germany’s top spook.

The only vaguely satisfying things to emerge from this charade are first, that once again the quintessence of controlling fascism that lies at the EU’s heart has been revealed; and second, the Western MSM really do not have a clue about how to handle the Greek attitude.

Four days ago, I wrote in reply to Merkel’s assertion that “Europe’s success is that it will always find a compromise”:

‘The small issue I have with this bollocks is that the movement by either side so far is tiny – in fact, barely above homoaeopathic…. In just 36 hours we have gone from “Drop Dead” to “Let’s compromise”. But where can it go from here? In my view, nowhere: the two sides are incompatible unless one or the other radically invents itself. Neither of them will do that.”

Sure enough, the Brussels Brigade reverted to type with black arts and making up new rules as they went along. And as they promised, Syriza refused to renege on its election commitments.

Watch those markets crash as the bond yields spike. The euro is dead, the EU dream has become a nightmare, and the fundamental attitude split between Berlin and Paris  is once again there for all to see.

Stay tuned.

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With a bit of ice on the floor depositers could almost ride the seeds right on in (photo by Global C [...]

Well, at least it was made sure that the Svalbard Global Seed Vault looks real pretty (photo courtes [...]

Now it's data that makes the world go round? It's comfortably accepted by many that what w [...]

I left off last week's post – "Money Doesn't Grow on Trees, Industrial-Scale Renewabl [...]

When you wish upon a star the Blue Fairy sends Tinker Bell, who plants a magic seed, which grows int [...]

Daily Doom Photo

man-watching-tv

Sustainability

  • Peak Surfer
  • SUN
  • Transition Voice

Planting A Personal Forest"If you appreciate the effort it takes for a single individual to become carbon-neutral, you ca [...]

A Personal Forest"Every year on New Years Day I write down my annual electric meter reading, chart the milage of [...]

Is God Serious?"How ironic is it that having cornered some seemingly unique absence of reality, adherents cann [...]

The Gospel of Chief Seattle: Written For Television"No bright star hovers about the horizon. Sad-voiced winds moan in the distance. Some grim Neme [...]

Can Foodies Save the Planet?"Facing all of these grave threats, humans collectively have chosen to go insane."Having a [...]

The folks at Windward have been doing great work at living sustainably for many years now.  Part of [...]

 The Daily SUN☼ Building a Better Tomorrow by Sustaining Universal Needs April 3, 2017 Powering Down [...]

Off the keyboard of Bob Montgomery Follow us on Twitter @doomstead666 Friend us on Facebook Publishe [...]

Visit SUN on Facebook Here [...]

In the echo-sphere of political punditry consensus forms rapidly, gels, and then, in short order…cal [...]

Discussions with figures from Noam Chomsky and Peter Senge to Thich Nhat Hanh and the Dalai Lama off [...]

Lefty Greenies have some laudable ideas. Why is it then that they don't bother to really build [...]

Democracy and politics would be messy business even if all participants were saints. But America doe [...]

A new book argues that, in order to survive climate change and peak oil, the global money economy ne [...]

Top Commentariats

  • Our Finite World
  • Economic Undertow

Artleads- Dozens???? Wouldn’t that be more like thousands? Good thing there are over 6k different sp [...]

Dennis Coyne thinks yes If Dennis thinks it then it must be true. That is good enough for me. No rea [...]

To me both seem equally obnoxious. Are you insane? One is an comedian and intellectual. And the othe [...]

You can fight for social justice and save the planet all while you poop! LOL Genius! [...]

Welcome to new day, added 's' to 'http' so everyone should feel more secure ... [...]

Just to be clear about all the different administrations mentioned; All the while not one thing that [...]

Clintons job was to keep the party going, BJs under the desk for all! Bushs job was to tell jokes an [...]

Hey Steve, why don't you look into becoming REs neighbor. After the great power down, you can l [...]

Think Vermont. All you need is a wood stove and an internet connection. I'll bet you have a lot [...]

RE Economics

Going Cashless

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Simplifying the Final Countdown

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Bond Market Collapse and the Banning of Cash

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Do Central Bankers Recognize there is NO GROWTH?

Discuss this article @ the ECONOMICS TABLE inside the...

Singularity of the Dollar

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Kurrency Kollapse: To Print or Not To Print?

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SWISSIE CAPITULATION!

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Of Heat Sinks & Debt Sinks: A Thermodynamic View of Money

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Merry Doomy Christmas

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Peak Customers: The Final Liquidation Sale

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Collapse Fiction

Useful Links

Technical Journals

In this paper, we study the use of wheat land fallow production systems as a climate change adaptati [...]

Ambulance services are in operation around the world and yet, until recently, ambulance data has onl [...]

In this investigation, a numerical model expressing advection and diffusion effects is used to exami [...]