A view from Japan

Subject: Re: Tokyo runs out of bottled water

Sorry for a rather long reply. Helps me to let some steam off in this rather annoying situation I find myself in here.

Herd mentality and tipping point is the key to everything.

Is 'Snake Plissken' possible? Well, hard to tell. The whole Japan situation is very difficult for me to gauge. Since there is very little open debate here, a kind of conspiracy of silence, I desperately try on my own to figure out what's up. Here in Kyoto the earthquake, tsunami and reactor situation is a non-topic. Kind of impolite to raise the issue. Why? Hard to tell, if you are an outsider. Part of it is simply this fatalistic acceptance business. Nothing can be done about it, so why mention it. Herd-behaviour breeding what appears to be stoicism. To ask questions or raise the issue would be stepping out of the self-reinforcing herd mentality that there will be no problem as long as everyone ignores it. So, my insistence on 'what's going on?' is kind of disruptive, only distracts from what we all are supposed to do: function well in our daily chores.

Applied to Tokyo I would say that the situation is calm, so far. People do not panic. They go on with their daily business as if nothing had happned. But do not mix this up with English stoicism (The Blitz mentality). In the Blitz, I suppose, people as citizens and individuals knew what they were fighting for. They saw themselves represented by their government in a fight against an an enemy of individualism and freedom, at the heart of their civilised live. The Japanese, however do not know whether keeping calm makes sense for them as individuals, and they do not want to know. They keep calm because everyone else keeps calm.

Underlying is, I think, their rather different sense of society: in Britain state power is checked by individual freedom,  rights and political and economic competition, an open society. The Japanese are not really interested in all this individualism-society stuff, they just  love to be an organised collective, directed by unquestioned authority. Startreck's 'The Borg' (well, the friendly version). Organisation is everything. From their social engineering, organisational point of view,  individual self-determination is suboptimal, creates instability and frictions, or even gridlock. Japanese society, rather than seeing collectivist herd mentality as a problem, embraces it by running the whole society a big machine, in which everyone links in with everyone else as a smooth, well-oiled clog-wheel. A nation of engineers, bureaucrats and craftsmen, not citizens. They do what everyone else does: They do their utmost to function well, to the bitter end if needed, no matter what the need, the cause or the consequences. They do it, because everyone else does it. They expect everyone else to do it and everyone else expect them to do it. Self-fulfilling reinforcing common purpose. If no one is disruptive, they will succeed, in whatever they are asked to do, and they will enjoy a sense of satisfaction, regardless of purpose or outcome. 

There are some nice lines about Japanese torture and cameras in the 'Dr Strangelove ' movie, capturing this mentality. 

Mandrake, a British Wing Commander, talks to General Jack Ripper, a US officer, about having been a POW of the Japanese in WWII:

Ripper:

Did they torture you?

Mandrake:

Ah... yes, they did. I was tortured by the Japanese, Jack, if you must know. Not a pretty story.

Ripper:

Well what happened?

Mandrake:

Oh... well... I don't know, Jack. Difficult to think of under these conditions. But, well, what happened was they got me on the old Rangoon HNRR railway. I was laying train mines for the bloody Japanese puff puffs.

Ripper:

No, I mean when they tortured you, did you talk?

Mandrake:

Ah, oh no, I ah... I don't think they wanted me to talk, really. I don't think they wanted me to say anything. It was just their way of having... a bit of fun, the swines. Strange thing is they make such bloody good cameras.

That is exactly what I mean: it does not much  matter what they do, not even to them. But they do it together and with dedication, regardless of the costs for themselves or those outside the collective. The dream job is for them a secure collective with a set purpose. Most young graduates these days want become civil service bureaucrats.

The results of this mentality are amazing: supermarket staff risks their lives during the earthquake to prevent bottles from falling off the shelves rather than taking cover, simply because they are supermarket staff.  Tepco officials functioned smoothly as functionaries of Tepco, even if this meant falsifying records and running poor safety standards, as they were doing their best obeying instructions as members of the company collective.When they were told that they are judged to having done wrong, they become tragic heroes who apologise in tears. It was not up to them to judge by themselves, everyone understands.  

As you can imagine, whistle-blowers are the true criminals in such a society. 

Now, how could this organised herd tip over into panic? What happens if the collective machine sputtered for some reason? The whole self-reinforcing herd mentality-functionality nexus could comedown. It might simply tip over into a big social bank run. 

But I doubt it will happen in Tokyo. Take the mineral water story: my wife thinks the empty shelves were due more to supply bottlenecks in a situation were people obeyed the instructions not to give tap- water to infants, rather than panic. 

I tend to agree. Let's assume a situation of more severe radioactive food, air and water contamination in Tokyo, dangerous for everyone. Clearly the risk exists that the organised herd breaks down, tipping over to become a bank-run-style herd .However, deeply ingrained in Japanese herd behaviour is the realisation that for any herd behaviour to give sense of purpose, it needs direction, which must come from outside, logically. Therefore Japanese herd-mentality combines with an absolute sense for obedience to authority, again, at all costs. Japanese people expect nothing from their authorities except for direction. Tell us what to do, so that we collectively find purpose in obeying and over-fulfilling. Better to obey even an authority which you 'individually' might judge to bad or wrong, than disturbing its function to give the herd sense of purpose.Uttering doubts might set a precedent for  socially disruptive behaviour, threatening everything.. The authorities respond in kind: they discharge bureaucratically regulated directions. The purpose does not much matter, but everything is being instructed down to the fine detail in endless forms to be filled in. So the herd can relax and find satisfaction in these forms. Direction has been established, and they are living up to it. So, authoritarianism, bureaucracy, organisation and herd-mentality go hand in hand here. 

It could break down if the authorities screwed up and failed to instruct clearly and decisively. The undirected herd might tip over. But as long as they direct firmly and in great detail, the herd will obey and organise gratefully. For example, in a crisis situation in Tokyo, authorities could instruct the herd to get a rationing distribution system of scarce bottled water running  via neighbourhood committees along a bureaucratically organised hierarchy of needs, starting with infants. Everyone would willingly pick up the offer to get organised, rather than thinking of running. Then they could, for example, instruct an evacuation of, let's say, small children up to 5 years old, with the families staying behind. Mothers would get in line and fill in the forms, giving away their children, volunteers would face radiation exposure to make sure that little ones get safely on buses on what will be empty streets, whereas fathers would get up at 3am and walk through radioactively polluted Tokyo to  their meaningless jobs in offices were no one calls, rather than coming along to say farewell. The worse it gets, the more task could be devised  for the herd to get organised.

Thus, as long as the authorities do not loose the organisational capacity to direct, everything will be fine. The disaster will never show up as a disaster, it will be an organisational miracle. The people of Tokyo will die orderly together if well instructed, quietly, accepting, organised, and satisfied with their lives. What bliss. Once it is all over, the country will quickly go back to normal, as if nothing has ever happened, organisation will shift from organised dying back to organised living. Social cohesion was maintained, everyone functioned well. No need for social change or restructuring, only sentimental pride in the collective's embrace of self-sacrifice.

From an investor's point of view this is all not necessarily good news.We might end up with a country severely damaged by this disaster, with its  key region, greater Tokyo, polluted, but everyone going on as before. That would be the end of Japan as a serious place for doing business. Others, China esp.,are waiting to take over. 

As to social breakdown, I am looking forward to their ultimate fiscal meltdown. Will mean inflation. Since there is no such thing as well organised inflation, that promises to be interesting. However, we know how the herd responds to chaos: they want authority, at all costs. They got that in the 1930s.

On a brighter note,  have a look at this very reassuring info leaflet from the Japanese nuclear safety authority. All very cute, no need to panic!

http://www.nisa.meti.go.jp/english/files/en20110316-1.pdf 

Moneyprinting - the link between population growth, global government and the environment

I was hoping to get some answers to my questions on global government but instead of addressing them directly you have veered off into a lecture on the environment.  There are so many topics to address from your collected thoughts on this and the associated topic of population growth.  I must tell you I profoundly disagree with your views: but I hope it is of some comfort that your views are most certainly with those of the vast majority of the elite and in many quarters are effectively though not explicitly official government policy (particularly in the UK and France).

 

First I will address your question.  The reason a global government is more malevolent than a national government is because it would be a monopoly. By definition if it is global it must exclude every other alternative.  Correspondingly it would deny a voice to any dissenters and would actively seek to suppress any opposition.  What keeps some national governments vaguely within the bounds of reasonableness is the knowledge within the jurisdiction of comparative conditions in other jurisdictions, and the freedom to move and travel to those jurisdictions.  What undermined consent most effectively in the former Soviet Union : the visible evidence that negative value added was so universally persistent and living standards were visibly declining both in relative and absolute terms under the communist regime.  A global government of any persuasion would lack any competition and this would lead extremely rapidly to corruption and tyranny.  The only people who support this dangerous nonsense are people who consider themselves as part of the chosen elite, with a self-appointed divine right over every action of the mass of humanity.  Their attitude is surprisingly akin to the medieval church, which was (at least in Christendom) a retrograde form of global government.

 

What is also akin to the medieval church is the dogma of the modern environmental movement. Your breathless description of the imminent catastrophe is one put forward by every rabid environmentalist (and is very similar to the medieval church's description of hellfire).  Curiously the catastrophe is always some years removed but is always so potentially serious that it justifies the removal of all civil and individual rights and of course many, many new taxes all of which seem to find their way (via the government and publicly funded quangos) into the pockets of these very same environmental illuminati. Unsurprisingly most of these people support global government as a fast track to the imposition of 'emergency' environmental measures and taxes (though they never seem to apply to them personally).

 

Another aspect of the environmental movement that bears a strong resemblance to the medieval church is the elevation of 'the planet/the ecosystem' to the status of a deity. Of course in this you are also harking back to the ancient religions of the past: in advocating extreme population control for the sake of the environment you are effectively calling for a modern form of human sacrifice to pacify the gods of nature or the rain or the moon or the sun. How very curious. And to return to the analogy of the medieval church anyone who dares to oppose this stifling consensus is to be insulted and tortured until he recants or condemned to die on the stake.  As evidence in response to any questioning of the environmental consensus of imminent disaster I know I must expect environmentalist replies full of threats of eternal environmental damnation for daring to challenge the will of the goddess of nature, taken straight from the medieval churchbook.

 

As an aside climate change is the latest narrative these people have come up to justify the imposition of a vast range of taxes and regulations on human action. Ian Plimer's book seems to me to have completely shredded the climate change propaganda but of course this and other thoughtful sceptical contributions are ignored and belittled by the catastrophe campaigners who instead prefer to manufacture fraudulent temperature data and draw hockey stick graphs (pure fraud on the front cover of the IPCC report) that they then broadcast at top volume in the mainstream media in a meretricious attempt to justify their continued funding and ever more extensive regulation on everyone else.  And of course the narrative ties in with support for Keynesian moneyprinting: as economic activity grinds to a halt as a result of the imposition of idiotic environmental targets and taxes on growth the solution is always to print money. This distorts economic calculation and reduces growth and capital accumulation still further but to explain away the increasing stagnation there is always a pseudo-intellectual Keynesian justification usually centred around the bogus concept of the output gap.  This in turn justifies yet more moneyprinting.

 

Naturally the same people who are so eager to enslave the existing world population are all desirous of also suppressing future generations. And the natural desire of most human beings to procreate. As most human beings find out sooner or later that children are the only thing that make sense: our link with the past and the future, effectively life itself is the meaning of life. Planning to deny this to current and future generations is effectively to seek to deny human life: environmentalists should be more accurately labelled as anti-human, in that the logical extension of their argument is that they would prefer that no human beings existed and the planet was left entirely in the hands of polar bears and plant life.  Then the ecosystem would indeed be completely 'natural' but presumably we and they would not be around to observe this perfect utopia.  Or perhaps only a chosen few would be permitted to remain in heaven on earth and enjoy whilst the rest of us are condemned for eternity – thus the environmental movement strikes me as atavistic and medieval.

On a very specific note I am sure we should all be very grateful your mother chose to have you – she chose life and I imagine you are grateful that she did so. Otherwise we would all have been deprived of your unique insights. Without children what will become of your unique views, your unique self – it will be gone with the wind and there will be nothing left.  On a different note when reading your diatribes on population control I always wonder exactly which people or nations you would see suppressed. If a growing population is so dreadful and must be immediately stopped by edict then who is going to decide who survives and who is to be sacrificed on the altar of carbon emissions.  I wonder if you and those who share your views would care to publish the exact mechanics of your proposed population control programme. Perhaps you are waiting for the installation of global government, after the next World War.  There is something rather chilling about highly privileged and comfortable people (usually already having had their own children) calling for the neutering of the mass of humanity simply so their own monopolistic privileges can be preserved (these privileges largely being anchored on impoverishing these same people through imperialist moneyprinting by the Empire).

 

As for supporting the one child policy in China I am afraid I must also part company with you.  This policy is a heinous crime that has resulted in the effective murder of thousands of live human beings. The policy was only introduced because of the failed central planning policies of Mao and the gang of barbaric thugs who succeeded him - they were surprised to find themselves unable to generate sufficient agricultural productivity through murder, brutality and dogma. As always the one child policy has had and will have huge negative unintended consequences e.g. a large preponderance of angry young men who cannot find female partners.

 

It is generally the case that as people get richer they have fewer children.  And as more capital is built up there are more resources for extensive environmental protection.  Have you noticed the birth/death ratio is far lower than replacement in Norway , Germany , Italy etc?  It seems more likely to me that in 30-40 years some governments will be desperately seeking taxpaying citizens and economic agents to fill the vacuum from the absence of people in their countries than thinking of ways to eliminate sections of the world population.  Generally people are highly rational and have more or fewer children not because they are stupid or selfish as you and the population suppressing elite appear to believe but because of the prevailing economic incentives (or lack of them). It is not human beings who are maladapted to life on our planet but the current hypocritical global elite.  If reducing population growth is truly the aim then the best way of doing so naturally and voluntarily is to encourage capital accumulation instead of moneyprinting, fostering peace and stable prices instead of promoting war & inflationary finance, and freeing the world from the burden of taxation of the recycling mechanism/reserve accumulation/ debt slavery that is imposed as a result of the global fiat money regime that privileges a few leveraged speculators at the expense of the rest of the world.

 

ED 

 

____________________________________________________________________________________________________________________________________________________________________________

Original post:

 

Thank you for your robust and passionate note!

 

Let us first establish  the parameters for debate: considering that the likelihood of a global government coming into existence before the entire ecosystem collapses is precisely nil, we are here engaged in an exercise of what the French call 

Politique fiction (by refernce to Science fiction) - a pure intellectual exercise with no real-world implications.

 

I disagree with you entirely! 

First of all, I see no reason why a global government would be more malevolent than a national one. I do not think that the European Union is any more "evil" than the governments of Belgium , Germany or Italy …

And the dystopian concentration camp universe you speak of can be readily enough applied on a small scale – and I think that a larger multinational entity would tend to dilute out ideological and nationalistic tendencies.

But this is all neither here nor there.

 

The point is that, time is running very short – the physical/biological system which allows the fineries of competing currency systems and parliamentary government is being rapidly destabiliized to the point that one has to be wilfully blind to imagine more than another couple of decades of meta-stability. The system is breaking down NOW…climate, energy, agricultural production – the destruction of the oceans, upon which I spend a large part of my life, defies description. In 30 years, we have gone a good way towards destroying what took many hundreds of millions of years to develop. No, I do not exaggerate.

 

If there is a single recurrent theme to my writing, it is the danger of ideology, which like the sorcerer Circe turns men to swine.

Also, the deterioration of intellectual life to the mouthing of empty phrases and buzz-words. My un-favourite is "democracy"  Apparently, it cures all ills everywhere and always. And when it doesn't….well, we must reinterpret the results - just like a doctrinaire Marxist would do with any data which tended to disprove the ultimate truth of the dialectic. 

A second buzz-word is "Freedom. "  It is taken as the ultimate good – free people will be good people, will be honest and productive people, will builid stable and sustainable societies… and…for Chrissakes, Adam, you accuse ME of being Fabian!

In fact, people will freely opt to drive large cars, clear-cut forests, to consume as much as physically possible, to destroy the environment for short-term gain, to assert their power over their weaker neighbours, and to happily engage in unsustainable lifestyles without concern for the consequences elsewhere. We all do - you and I and everyone else we know!

 

Individuals and famliies and countries may choose to produce children at a disastrous rate – for the individual in question it is nothing more than an exercise of free will. For the world, it is nothing short of a catastrophe. 

Indeed, among the developing countries, the Chinese example of population control has been overwhelmingly successful – one of the only bits of good news I can think of as we toboggan into self-made obliviion.

The results of the "free–market" approach adopted by India defy description – population growth totally out of control. 

The consequences of this model are there for all to see in Egypt , and across the Middle-East. And that's just the starter…the problem is that, in the good old days, these countries, having made the wrong choices from themselves, would be left to suffer the consequences. Given globalization, they will export these problems – emigration "of biblical proportions" being just one consequence

 

The problem with the ideologically–based Ayn Randish system you seem to advocate is that it takes no account of the externalities of our acts. 

Great – so we have small, self-enclosed communities – democratic as you may wish  - who happily dump their toxic waste on their neighbours. Who deplete the oceans, who build nukes along fault-lines, who pump C02 into the atmosphere and ignore the obvious consequences, while in the "developing world," other small, democratic societies aspire to nothing more than the lifestyles you and I enjoy - despite the obvious fact that they cannot conceivably attain them without irreparable damage to the planet. 

 

It is unfortunate that we live in a finite environment. It would be so much easier if it were non-finite, and we could simply focus upon enhancing growth. In fact, like bacteria depleting their milieu, that growth will prove our undoing.

 

Yes, the victories of the multinational approach are modest and few. The United Nations has a few victories to its credit (obviously, I do not refer to the Security Council, corrupted by the interests of a few preponderant countries). 

The whales have, amazingly, been saved – for now. Perhaps so will a couple more species – the survival of the photogenic. The release of ozone-destroying gases has been halted (that wasn't too difficult). 

Were our brains configured differently, we would be desperately thrashing around for solutions – however uncomfortable in the near term – to keep the system working. In fact, our brain evolved for a vastly different environment, one very similar to the one you advocate (tribal) - they are manifestly maladaptive for the world we now inhabit.

 

Après moi – le deluge!

 

UM

(WPT) NY Fed Confirms Intervention in Currency Markets for First

Subject: (WPT) NY Fed Confirms Intervention in Currency Markets for First

(WPT) NY Fed Confirms Intervention in Currency Markets for First
Time in More Than a Decade                                   

Article in Washington Post confirming intervention to weaken Yen -  but my question is why on earth would you intervene to make Yen weaker... it makes no sense whatsoever for the people of Japan to have a weaker Yen at this time.... they need to import huge volumes to rebuild .... unless of course you are acting solely for the benefit of a  small number of highly leveraged financial institutions who are up to their eyeballs in the Yen carry trade borrowing at zero rates to fund vast asset books.  The global financial system is truly being run completely for the benefit of a small but very powerful gang of crooks.

                                          

Global governance - a dystopian nightmare

The idea is often advanced by the Fabian illuminati that 'benevolent global governance' would be the best political outcome for humanity.

Under this proposed global government what will happen to people who disagree with rule by a single central government? Are dissenters to be put down or sent to concentration camps as has been the outcome of every grandiose centralised utopian governance vision?  If it is to be a democracy what will happen if the democratically elected outcome is the separation of various dissenting groups from the global dictatorship?  If it is to be a 'benevolent' autocracy who are the rulers going to be - an enlightened self-appointed Fabian elite whose views only concord with their own?  What if power ends up being concentrated in the hands of a few thugs like the Stalinist regime or worse still in the hands if a psychopath like Pol Pot? Don't you see any danger that such a concentration of central power over the whole of humanity is likely to be highly dangerous, corrupt and tyrannical?  Would you be in favour of a global government that suppressed you?

Personally I regard ideas of 'global government' as a dystopian     nightmare - a nightmare outlined wonderfully by Aldous Huxley and by Orwell.

The space for divergent views is a prerequisite for discovering the truth.  I cannot imagine a global government would have any truck for any diverging views and would constantly strive to end all diversity in all aspects of human lives.  This has been our permanent and constant experience of totalitarian regimes.

In any event we already have a global government (the USA). And we have witnessed their astonishing stupidity and arrogance at work across the world. Ohio is the same as Iraq. We are bringing freedom and democracy.  We are freeing women from oppression.  We saunter up and down the Middle east and the rest of the world secure in our utter contempt for anything unAmerican.

This current global government is breaking down.  Similar to the Roman Empire before it - the last global governance system.  Thank goodness: I look forward to dancing on the grave of these monolithic governance blocs and the fiat money system.   I hope the replacement is 500-1000 small diverse pluralistic culturally particular countries none of which is powerful enough or large enough to impose its will on any other.

Gold in pension funds

An article in today's FT "Gold's role in pension funds under scrutiny" (March 14 2011) quotes Alasdair McDonald, head of investment strategy at Towers Watson, stating "over the very long term the value of gold relative to goods and services or paper money has remained constant...gold offers a negative long term rate of return so I struggle to see a role for gold in strategic allocation."
Wrong. Yes, over the long term gold has remained constant in terms of goods and services. But this is not true of paper money versus goods and services. The value of paper money has gone DOWN whilst the purchasing power of gold has remained constant. Gold buys the same amount of oil today as it did in the 1960s. Whereas in paper money a barrel of oil cost $2 in 1968 but now costs $115. A gold sovereign (£1) would have bought dinner at the Savoy in 1913. And (now worth £240) will still buy you the same dinner today. Whereas £1 in paper money is not enough for the cloakroom.
All if which proves Mr Macdonald is a total cretin. And that pension consultants are totally redundant. I am going to be amused watching them explain away the total obliteration of government bonds.

Hyperinflation

Question:

If the Fed is ultimately forced to be the buyer of last resort for a tidal wave of US Treasury debt, would the un-leased hyperinflation due to monetization dramatically raise US housing prices as a real asset safe haven to inflation? If people cannot afford the payments, I cannot get my head around this?

Answer:

I think the answer is that in local currency terms prices would rise.  But in real terms - in terms of an external price point, say gold or CHF, they would decline significantly. 

Large debtors would see their debts wiped out.  Monthly Payments denominated in fixed local currency amounts will be affordable as wages/handouts will be increased in local currency by a moneyprinting government keen to maintain people's consent.  

An example is Mexico in 70s.  In mid 70s you could get a mortgage in pesos with a fixed monthly repayment.  (This is a real example)  By mid 80s the monthly repayment would not  buy you a pack of cigarettes.  But conversely the price of the house in USD terms had declined from say $ 20000 to say $5000.  So the mortgaged homeowner both gained (on the monthly payments) and lost. 

My impression in the US and elsewhere is that hitherto inflation has been diverted/trapped into asset prices and by virtue of maximum abuse of reserve currency privilege and old fashioned military enforcement the US has kept a cap on day to day inflation suffered by the average working man.  However this is now breaking down (with the renewed rise in oil) and accordingly they will have to increase the size and scope and speed of monetization so that it encompasses a much wider set of interest groups i.e. beyond Goldman and JP.  Though of course the glitterati will still come first.  In this sense the Yugoslavia hyperinflation of the Milosevic regime is a helpful model.  Powerful financial industrial groups got the printed money first and then it trickled down in a waterfall to the rest of the population, in order of political power.  And of course permanent war is a necessary corollary to this. Hence the 1991-95 wars following the mid 80s hyperinflation.  

What a happy future for all of us to look forward to!

China

China: Clearly they do want to get away from the dollar, somehow.Here is another, more far-fetched, dystopic and admittedly slightly paranoid Fantasy: In an 'ideal' world, from their point of view, one could imagine that they are ultimately aiming for a new Chinese world economic order, not dissimilar to the way they run China itself: in this order they would continue running surpluses, ever more monopolizing manufacturing, ever more high-tech, in China, and export manufactures  in exchange for commodities. If everything would be denominated in RMB, they could then finance deficit countries via RMB loans, RMB bond issues abroad etc. (plus buying up and bringing under their control everything which stands). 

The US could not print its way out of debt any longer, but Chinese mercantilism would instead face the problem of default by its debtors (similar to Germany in the Eurozone). Might be OK with them,because their creditor power would be greatly enhanced. They could dictate political and economic conditionality in return for bail-outs and so on, especially if they controlled the strategic heights of global production with their SOEs. 

From  a liberal point of view this is not all that attractive a scenario, as the German case shows: German banks' exposure,private investors' losses, financing by German taxpayers, voter dissatisfaction. But for China such a position might be more attractive, since China wants control, global control, first of all, and can squeeze its own masses easily to buy and bribe itself into global control.They do not have to care about the private sector, private investors, or citizens in general. They can squeeze surplus out of them to finance foreigners' deficits, and to finance their own capitalist cronies in the cities, with their long tail of rent-seekers and speculator. They will be reaping huge  monopoly rents and subsidised profits. There would be unimaginable opulence in the cities, and below this a billion of worker ants. That is the secret to the glory of old despotic civilisations: using your own people as slaves.  In this scenario China's strategy is essentially one of world domination (Ernst Stavro Blofeld-style) in completely illiberal atavistic fashion. They use their billions of cheap labour to build global strength. Classic mercantilism: the country's wealth is build to enhance first of all the nations international power (not for individual citizens welfare). You squeeze your people to build global strength. But it is a balancing act: they might rebel at some point if they don't get their grab. So, you have to use global power as well to deliver the minimum for stability in your domestic industrial labour camp: food, work, work, work, and basic housing. So, what China wants is not necessarily proper market returns on foreign investments, but control of foreign resources and key industries as  at almost any prize, to maintain a stable and sufficient flow to keep the domestic labour camp machine rolling, compensating the masses with bread and circus and by restoring China's rightful place at the centre of the world. This might to some be a loss making exercise as to foreign economic interaction, but such a global command economy will allow you to monopolize the commanding heights of economic activity in a new global command economy . If this is sub-optimal in terms of market-based profit, who cares, as long as it puts you in control. From an liberal economic point it would be stupid to create a world of permanently imbalanced creditor-debtor relations. But from a political control point of view it opens the option of a new world tributary system of dominance and subservience, where bail-outs (financed by squeezing your mass population)  can be granted in return for obedience and respect and for accepting a global economic hierarchy centred on Beijing. But of course, all this will only work if you provide the global currency.

 

WH

The consequences of moneyprinting

Moneyprinting seems to affect everyone and everything.  Nothing is as it seems because there is no anchor.  We are denied any ultimate meaning, any underlying standard of value because every bill can be settled with an illusion: printed money.  No one is free because there are increasingly no contraints on the universal moneyprinting press; a printing press that can buy power, votes, resources, countries, even private thought.  Instead of being free we are led by the nose towards acquiescence with a univeralist, 'modern' agenda that few people agree with and even fewer actually understand.  Democracy is indeed a god that has failed - like equality and fraternity it is both unattainable and undesirable, as these simplistic concepts lend themselves perfectly to being inevitably hijacked by every passing demagogue. 

This blog is intended to be nothing more than a stream of conciousness, a personal commentary on the inequities of moneyprinting and its consequences, which I perceive around me everyday.  I do not seek office, nor popularity, nor even followers.  I simply feel the need to describe what I perceive.