Discussion starter for the day…

Written By: - Date published: 7:49 pm, March 10th, 2015 - 116 comments
Categories: Abuse of power, International, monetary policy, overseas investment, Politics, us politics, war - Tags:

picking-brain-goldOne of the things I’ve found interesting about being involved in writing for The Standard is getting to recognise the particular thoughtfulness of some of those who regularly comment. There are some good brains out there, and some highly informed people. Therefore I’d like to share two posts I’ve read/watched of late. I’m a scattergun reader, usually trying to fit it in around my ‘real’ writing, in the little gaps throughout my day. So I’d appreciate your thoughts. True? False? If so, so what? Does this scare the bejezus out of you or is it just another conspiracy theory? (though I hesitate to use the phrase, given our PMs love affair with it when confronted by the truth!) I have to say just seeing the words ‘World War III’ written so starkly is pretty damn unsettling.

The first info came in the form of a video posted via Facebook:

The Geo-politics of World War III

I don’t know much about this crowd so was unsure how much to believe. But it certainly unsettled me.

Then, a couple of weeks ago I came across this, from John Pilger, which seems to be backing the essential facts of the video up: “Why the rise of fascism is again the issue

So here you go – would love to know your thoughts! Let the game begin!

116 comments on “Discussion starter for the day…”

  1. lprent 1

    I couldn’t resist adding the right image 😈

  2. One Anonymous Bloke 2

    The video strikes me as propaganda – complete with emotive dissonant soundtrack.

    As for Pilger, he makes bold statements – “they” want this, “they” want that. He’s very short on evidence.

    That said, the struggle against fascism, against oppression and human rights abuses, is always with us.

    Today, we heard that Putin reveals secrets of Russia’s Crimea takeover plot. Perhaps the BBC is lying, and if not, where does that leave Pilger’s claim that “the US is dragging us to war”.

  3. Chooky 3

    Wow thankyou for those links….makes horrible, terrible sense….sobering stuff indeed….and will need another listening and reading and digesting

  4. Colonial Rawshark 4

    I’ve just watched 13 minutes of the Geopolitics video. It is spot on in the most important ways although little technical details may be off.

    The US has the privilege of being the sole issuer of the world’s pre-eminent reserve currency, the US dollar. A reserve currency is one which is very widely accepted and very widely demanded for trade and investment. By going off the gold standard and pushing for financialisation of the entire world economy, the US has constructed a system whereby there will always be global demand for US dollars even as the US Federal Reserve “prints” unlimited billions of extra IS dollars a weak by keyboard strokes. While on the gold standard, there was a strict physical limit to the amount of USD which could be issued. Ensuring key commodities like oil is only bought and sold in US dollars also ensure ongoing demand for US dollars as stated in the video. But today, more than that, a huge quantity of the world’s financial assets (stocks, shares, bonds, derivatives) are denominated in US dollars. If you want to invest in anything serious, you have to get US dollars.

    http://www.zerohedge.com/news/2015-03-08/global-dollar-funding-shortage-back-vengeance-set-surpass-lehman-crisis-levels

    So demand for US dollars is at an all time high even though “quantitative easing” has pushed trillions of new US dollars into the world financial system.

    The video correctly states two reasons why the US dollar system is absolutely critical to American empire.

    1) The US government can electronically ‘print’ money by keystrokes, and people all over the world are happy to exchange those electronic credits with real goods, real labour and real services. Thinking about this for a few minutes makes it clear the extent of the power, colonisation and illusion behind this.

    2) The US dollar system, including the debt, investment, transaction and payment system associated with it can indeed be used as a weapon. “Financial weapons of mass destruction” can actually do exactly what a military war can do: take over land and property, seize control of a government and its machinery, destroy productive assets, lay fields, roads and rail as disused wastelands, capture whole companies and industries, take hostage valuable skills and expertise, leave a peoples destitute, hungry and broken.

    • M Scott 4.1

      However, a really interesting new book by an American ‘forensic economist’ entitled “The Death of Money”, don’t have it with me and can’t remember author’s name, paints a different picture of the future of the US dollar. Especially because of quantitative easing and the way the US has decided to approach the GFC, as opposed to massive structural changes to the way they let all those greedy merchant bankers operate.

  5. Colonial Rawshark 5

    One more note – remember that American exceptionalism sees the United States as the one indispensable nation in the world. Think about what that implies about every other nation.

    Out of interest:

    “Reserve currency status does not last forever”

    http://www.zerohedge.com/news/2014-08-14/world-reserve-currencies-what-happened-during-previous-periods-transition

    • nadis 5.1

      The whole gold standard/fractional banking/fed controlled by shadowy global elite conspiracy thing is just another far right delusion, in fact so far right that it appears to meet up with some delusional far lefties.

      Some really simple questions to ask yourself and points to reflect on (the video actually raises dozens more inaccuracies and general crazy things):

      1. Does the Fed (not banks) control money creation? (Hint: Yes. I’ve explained fractional banking before and guess what, Banks don’t have the ability to create infinite new money. Every dollar they lend is matched by a dollar they or another bank must borrow from the central bank. Please don’t make me explain it again…….)

      2. Who owns the Fed? You can get your answer here: http://www.federalreserve.gov/faqs/about_14986.htm

      or here:

      http://www.globalresearch.ca/who-owns-the-federal-reserve/10489 (this link is either for balance or comedic effect. It is actually quite humorous for the ridiculously large logical flaw in the description of how reserve banking works)

      3. Who is forcing the world to use USD as a reserve currency? (Hint: No-one. Real answer #1: US creditworthiness is regarded by investors as being better than anywhere else. So far no-one doubts that Uncle Sam will not be able to pay his loans back. Remember, it is not how much debt you have, it is your ability to service that debt that really matters. #2: Rule of law for commercial disputes is better or equal to anywhere else. #3: The best environment to invest in. #4.10 carrier groups. #5. The largest 2 air forces in the world.) #6. Military forces deployed or seconded in around 150 countries. (i’m guessing the only country where they aren’t welcome (at least by the govt) is Cuba).

      4. Unsurprisingly, US foreign policy is primarily concerned with maximising US interests (just like the UK, just like Russia, just like China, just like NZ etc)

      5. Why is the US so wealthy? 200 years of resource extraction from the second most resource rich country in the world. 200 years of relatively open immigration. Favourable demographics for the last 200 years and and the next 25. Educational freedom. Innovation. Rule of law. Property rights. Human rights (usually). Some bad things come with that combination but also lots of good. If Russia hadn’t been ruled by thieving gangsters for the last 300 years and had the same English and French influence that the founding fathers had, then it too would be a rich country, rather than coming first (for a large country) on every negative social indicator you can think of. Not only does Russia have terrible demographics, its’ middle class (except for the 70% who are government employees) is voting with their feet. Emigration under the last few years of Putin has rocketed. The third largest offshore ethnic Russian community outside Russia is in the USA (after Ukraine and Kazahkstan). Then come Germany and Israel. (I suppose the majority of them might be FSB sleeper agents, mafia, billionaires and high frequency trading software developers).

      6. Want a gold standard? Go ahead and buy gold right now at US$1158 an ounce (or the equivalent currency of your choice). LOOK! the USD (and the NZD and every other currency) are freely convertible into gold!!! You can create your own gold standard! Without pesky government control! Only right now it is easier than the old days when you had to go down to the Central Bank and fill out a bunch of forms and pay a transaction tax to the govt. Just lucky you didn’t buy it back in 2011 at US$1860 an ounce (Alos please don’t get sidetracked by paper versus physical gold. Anyone who understands how futures markets works knows that gold manipulation via futures is impossible, in fact the physical delivery futures market provides a GUARANTEED way to turn paper gold into physical at zero cost and within 3 days). Most gold standard/paper gold proponents you see on the interwebs are making a living out of their shock horror claims. The number of people I have come across who have bought physical gold at a 15-20% bid offer spread astounds me. Stupid.

      7. Why a gold standard. Why not silver? Or Aluminum? Or Natural Gas? Or sea shells? Or bacon and egg pies? Or unicorn antlers?

      8. Oil is not “only tradeable in USD”. Ever heard of freely convertible currencies? The recent sell off in oil has many likely causes. One of which is that the demand for oil priced in Chinese Renmimbi fell. Demand for oil priced in US dollars actually hasn’t fallen that much.

      9. When the “inevitable societal breakdown occurs” (as described by your average right wing US conspiracy theorist) occurs, why own gold? Personally I’d put my faith in a shotgun, canned food, seeds, a water source, shelter, fire and a first aid kit.

      10. Yes a large chunk of the US economy profits from US defense spending and has created a mutually reinforcing circle of taxation and spending. This actually really started in WW2 and was notably identified by President Eisenhower in 1960. Surprised large companies lobby politicians for spending? Same thing happens in every industry from health care to education to agriculture etc, and in every country where you have a central government spending tax money.

      11. US and Russia are in the 71st year of a dick waving contest about who’s the biggest, and both countries believe they have legitimate influence to wield just about everywhere. The Russians have a fear of foreigners which has been stoked by 100 years of shitty governments combined with a sad propensity for allowing said government to exploit and rob them blind. The US has an evangelical belief that its’ way is the preferred choice of everyone else, and if “they” don’t make it then a few prods in the right direction are in order. Thus Ukraine and dozens of other countries around the world. Easy to see the US POV when 95% of economic refugees (for the last 200 years) choose it or the UK as their preferred destination.

      12. Just because the US can “print money with a keystroke” – not quite lets go with it – doesn’t automatically bestow status on that as a weapon, or a force for evil. If people sell goods or land or services for USD presumably it is a willing transaction (otherwise it would be theft) and transacted becausethe seller values the USD more and the buyer values the item more. It’s called “commerce”.

      • felix 5.1.1

        Could you re-do no.6 please, it’s absolute nonsense.

        • Colonial Rawshark 5.1.1.1

          Yep. And some of the rest of it. Convertibility of a US dollar note into gold not just *guaranteed* by the issuer of the US dollar note, but actually *by* the issuer has very different characteristics to trying to convert a dollar into gold via the market.

          Of course, there is no where enough gold available in the world to meet the conversion needs of the money which has been printed – that’s the point of having gone off the gold standard.

          The other thing about gold – it is seen by central banks as a valid reserve. Even the German central bank has been working hard over the last few years to take back its gold which has been stored by the NY Fed. Russia and China reserve banks have been buying up gold to add to their non-dollar reserves.

          • Jones 5.1.1.1.1

            “There is no where enough gold available in the world to meet the conversion needs of the money which has been printed”… surely that just means the price of gold goes up?

            It’s seen as a valid reserve because it has thousands of years as a recognised form of money… it’s baked into the human psyche. The banks are hedging against a future loss of public confidence in the paper money.

          • nadis 5.1.1.1.2

            Two things on the gold standard.

            Why is buying gold from the market with $1 different from buying it from the central bank with $1? The exchange rate in both cases is the market price as defined by the relevant market (the gold exchange or the central bank)

            There is of course enough gold. You are assuming that gold would convert at the current gold price. Why?

            Gold is seen as a valid reserve by many banks, but as admitted by most central bankers for diversification or historical reasons. In the same way some central banks hold equities and mortgage securities and corpoorate bonds etc. And guess who holds many of the short futures positions? (Hint: it might be official institutions who want to hedge the price risk on the gold they have. Not an unusual response in a deflationary environment).l

            • Sans Cle 5.1.1.1.2.1

              …..and you are assuming a market structure similar to the institution(s) we have today, which is a bit presumptuous. Why do you assume this?

              The value theory of gold was just a means to store value/wealth or future consumption in a trusted system (ala John Locke’s labour theory of value).

              Now it has turned into a system of fractional reserve banking, based on trust – with no real logical basis. Just because it is the dominant system of exchange in the world doesn’t mean that it is irreplaceable.

            • Colonial Rawshark 5.1.1.1.2.2

              Why is buying gold from the market with $1 different from buying it from the central bank with $1?

              Because the latter is an obligation of the central bank, and not an operation of the market subject to market conditions. And in the early 20th century when you converted a paper US dollar into gold at the central bank you weren’t “buying” the gold from the central bank. It wasn’t a sale and purchase transaction.

              Just to be clear – I am not an advocate of the gold standard at all.

        • nadis 5.1.1.2

          Which part? It looks factually correct to me. What do you want assistance with?

          If it is the paper/physical gold thing why don’t you explain how manipulation works given physical delivery futures and I’ll critique it for you?

          • felix 5.1.1.2.1

            Then I guess you don’t see any difference between trading 1NZD for 1NZD and trading 1USD for 1NZD.

            Cool, let’s swap some.

      • Colonial Rawshark 5.1.2

        The Reserve Bank “prints” (by crediting retail banks accounts that it holds itself) a huge amount of brand new money on a daily monthly yearly basis. Every reserve bank does similarly.

        • nadis 5.1.2.1

          Technically the settlement banks (those that deal with the central bank) borrow the money. An important qualification, and one almost always overlooked by fractional banking nutjobs because by acknowledging it their whole “infinite money creation by bankster” argument is invalidated.

          • thatguynz 5.1.2.1.1

            Sorry mate but “fractional banking nutjobs” loses you all credibility even though your intent was obviously the opposite.

            • nadis 5.1.2.1.1.1

              I think nutjob is a good description of someone who believes in something despite overwhelming evidence to the contrary. Perhaps I should qualify that a litte. Fractional banking is obviously a fact. What is not true is that commercial banks can create as much money as they like without any cost or control of the central bank. That is patently and provably false yet many still believe it. They are therefore nutjobs.

              If those nutjobs focused on actual bank mis-bheaviour (related to frctional banking) around regulatory capital arbitrage that would be an interesting discussion, but sadly that level of dialog is beyond the nutjobs.

              • thatguynz

                OK just so we’re clear on your position. From your perspective what %age of lending outflow from a retail bank do they either need to retain on account (as deposits) or to have borrowed from the relevant central bank?

                • nadis

                  Depends on the required capital adequacy ratio which is a function of the actual capital structure of the bank (. That has to be held in certain assets. All money lent to clients has to come from somewhere. Ultimately that is the central bank and iit comes at a cost.

                  Roughly speaking, if your reserve ratio is x%, then the largest a bank balance can (should) be is 1/x. Which implies the total loan book is 1/x -x. The difference between 1/x and x is either borrowed form the market (deposits, bonds etc which carry their own reserve requirement) or from the central bank (which also carries an implicit reserve requirement as the bank must post collateral to back the borrowing). And it is not free to borrow form the Central bank.

                  • thatguynz

                    Good – so you acknowledge that the loan book itself less the capital holding is money “created” by the bank yes?

                    The bank then charges interest on the full loan book at y% and pays interest to it’s lender on the capital holding of z% right?

                    Easy question – where does the differential (ie. total $ value of y% less z%) come from?

                    • nadis

                      There’s a really important definitional issue here. Technically it is not created by the bank. The bank creates demand for it, but it is created by the central bank. Only the central bank can magic money out of thin air, trading banks can’t.

                      The difference (not differential) is a combination of deposits, bonds, equity and loans from the central bank, all of which the trading bank pays interest or dividends on. Your point?

                      Basic accounting requires that the asset side of the balance sheet equals the liability side. On the asset side you have loans to bank customers and financial assets and buildings and computers etc. On the liability side you have equity plus borrowings (including from the central bank). One side must equal the other. If you do more lending you make the asset side bigger. You must then also make the liability side bigger by borrowing the amount you have lent.

                    • nadis

                      Just to clarify, I do not accept that

                      the loan book itself less the capital holding is money “created” by the bank

                      That creates a demand for new money. The demand is met either by:

                      – the bank borrowing from the market (equity,deposits, bonds etc)
                      – borrowings from the central bank.

                      The new money is ultimately created by the central bank, not the retail bank. Unless you understand that point you will never understand how central banking works. Never. If you can’t get your head around that any discussions about banking with you will ultimately be fruitless.

                    • thatguynz

                      Hold on, let’s go back a step – the G/L already balances in a purely accounting sense when the loan is made. From the banks perspective it looks like this:

                      Assets: $Assortment of loans within the loan book
                      Liabilities: $Accounts of those that have taken the loans

                      As an example say Kiwibank approves a mortgage for me. They will create an asset entry for say $500k for the money that I will be repaying them. Correspondingly they create a liability which is the $500k they have deposited in my account to enable me to purchase a house.

                      Simplified example I know but you get the drift.

                    • Colonial Rawshark

                      Retail bank money is created first by the bank approving a loan and crediting the borrower’s account. The retail bank goes looking for the reserves they need at the end of the day (or month) AFTER this happens.

                      Yes there are controls and limitations to this retail bank money creation process, but I also don’t think anyone here said that retail banks can create an infinite amount of new retail bank money/retail bank credit without limit. And yes, one of the limitations is the amount of base money created by the central bank.

                      Correspondingly they create a liability which is the $500k they have deposited in my account to enable me to purchase a house.

                      To better visualise it, I wouldn’t say they “deposited” anything in your account. Nothing physical is being moved. They simply incremented the numerical value stored in your bank account.

                    • thatguynz

                      Yes you are right Tat, it’s simply 1’s and 0’s 🙂 I was trying to keep it simple for the purpose of illustration 😉

                    • Colonial Rawshark

                      The loanable funds model of banking has been trashed for half a century or more now. Yet people keep going back to the idea that if a bank lends $250,000, it has to first find $250,000 in deposits from savers or monies from other institutions to do so.

                      Its been really clear for a long time now – loans create deposits, not the other way around.

                    • thatguynz

                      That was the point I was headed to. No less luminaries than the Bank of England and the IMF have acknowledged it so I was trying to get to the bottom of why they were to be considered “fractional banking nutjobs”.

                      Nadis may have a completely justifiable view – I’m interested in finding out what it is and how it relates to the aforementioned.

                  • The Murphey

                    Basic accounting requires that the asset side of the balance sheet equals the liability side

                    Except for off balance sheet liabilities

                    Yours Truly

                    Arthur Anderson

                    • nadis

                      heh….. you’ll notice I did say:

                      “the largest a bank balance can (should) be is 1/x”

                      But that doesnt actually change the money supply or creation situation. Those off balance sheet transactions are just a way of fiddling capital adequacy regulations (nb I did mention that also earlier). It just changes the risk profile of the bank, but $100 invested in an off balance sheet transactions still requires the $100 to come from somewhere, just not necessarily the bank.

                    • nadis

                      ok keep working the example, you’ll get there. I’ll make it slightly exaggerated so the point is clear.

                      Starting point is Kiwibank books balance but they have zero cash in the bank.

                      You borrow 500k. Kiwibank now has an asset of 500k (your loan) and a liability of 500k (the money they have to give you). Books still balance, but the liability is unfunded, and the overall balance sheet is larger by 500k.

                      Now you write a check to the house seller who banks at BNZ.

                      What happens when the check clears? 500k is transferred from Kiwibank to BNZ. The liability now has to be funded funded.

                      Kiwibank now has to fund that 500k from somewhere? Where does it come from?

                      Only one possible source. Kiwibank has to borrow it from either depositors, the bond market or the central bank.

                    • thatguynz

                      So you’re suggesting from your understanding, that while it is actually a “creation” of money it’s only transitory until the loan is actually drawn down on?

                      To directly answer your question, the balance sheet after the draw down of the loan still balances:

                      Bank
                      Assets: less $500k reserves
                      Liabilities: less $500k from my deposit account

                    • Colonial Rawshark

                      Kiwibank now has to fund that 500k from somewhere? Where does it come from?

                      Why does that money have to come from anywhere? The $500K went from Kiwi Bank to BNZ. No money left the banking system. Why would Kiwi Bank now need to find an extra $500K from somewhere to put into the banking system?

              • thatguynz

                And I haven’t heard too many people suggest that banks can “create as much money as they like without any cost or control of the central bank” – just that they create money. Caveat – I haven’t as yet watched the videos in the OP so I apologise if that is what you are referencing as your starting point.

                • nadis

                  maybe I’m exaggerating, but that is usually where these discussions end up. “The FED is a tool of Bank America, Goldman Sachs and the Bilderbergs, and the banksters control money creation.”

                  • Colonial Rawshark

                    With QE several trillion dollars at near zero interest rates have gone – straight to the banksters and the investment bank prop desks. So it matches pretty well.

                    • nadis

                      Don;t forget the businesses and families who have been able to borrow money at record low interest rates too.

                      If you look at bank P&L over the last 5 years you’ll actually see it hasnt gone to the prop trading desks. In fact most banks have closed them down.

                • nadis

                  CR – really? You do this all the time – create a thought experiment that works in your head and then argue reality should match it, thereby proving your argument, even though that is completely at odds with reality.

                  Lets continue with the example. It’s me selling the house. I bank with Kiwibank. You borrow 500k form kiwibank.I want to sell the house and spend 500k on drugs. I take the 500k out of the bank in $20 notes. Where did it come from?

                  And no thatguynz it doesnt balance, your example balance sheet makes no sense at all. Your loan from the bank ADDS to the balance sheet – how could you possible believe it reduces the bank assets? It is an asset to the bank and a liability to your personal balance sheet. Before you write those things please apply some logic. The reductio ad absurdum approach would really help you. For instance- start your balance sheet example with a balance sheet of zero and see how you go.

                  You guys actually lack the basic knowledge required to converse about this. There is no common tongue here. My 15 year old son doing year 11 business studies already has a vastly more sophisticated understanding of what a balance sheet is and how lending works than you do.

                  In actual fact, on this subject you are less knowledgable than 13th century Florentine traders. thats when these concepts were first developed. They could grasp them – I’m stunned you cant..

                  • Colonial Rawshark

                    Wait, we know that year 11 business studies is fatally flawed at every level up to and including drawing demand/supply curves.

                    CR – really? You do this all the time – create a thought experiment that works in your head and then argue reality should match it, thereby proving your argument, even though that is completely at odds with reality.

                    Lets continue with the example. It’s me selling the house. I bank with Kiwibank. You borrow 500k form kiwibank.I want to sell the house and spend 500k on drugs. I take the 500k out of the bank in $20 notes. Where did it come from?

                    As you know, almost now bank branch today holds more than $20K in physical cash on hand. So even the bank branch is going to have to go far and wide to get that cash and they will probably say to you to go back to them in 2 days. At which time the police will probably be waiting for you.

                    Now I do not know the details intricately, but I do know that you are pushing the obsolete “loanable funds” model (where there is a market for loanable funds and that banks must engage in that market to find funds to loan out to borrowers) which was discredited many many decades ago.

                    • nadis

                      Wow – your anti- science, anti -learning bias knows no bounds. Not content with demolishing medicine and engineering your’re now taking on the social sciences? You actually know better than the millions of academics who have developed our current broad body of multi-disciplinary knowledge. Now that is ego!

                      Nothing I’ve said here is even closely related to the loanable funds model. At least read the research behind the buzzwords you are googling.

                      I’m describing the mechanics of how current banking works. Please detail where I am incorrect?

                      And CR – again you are displaying your lack of knowledge around accounting. What happens when you borrow or withdraw money from the bank in a balance sheet sense? Clearly not what you think.

                      Do you run a business? If you do, heres something that might help you. When your accountant does your accounts and provides you with the finished accounts – read them. Look at what is in the assets and liabilities column, the profit and loss statement. You might get it then.

                      (FYI I have worked in finance all my life including a stint at the reserve bank as a fresh faced grad back in the day. I do kind of know this stuff.)

                    • Colonial Rawshark

                      I’m describing the mechanics of how current banking works. Please detail where I am incorrect?

                      I’m not as familiar with monetary operations as you are, nevertheless money creation into an economy matches the creation of debt, and the level of money creation is typically only very lightly governed by the central bank. These are the observed facts.

                      Do you run a business? If you do, heres something that might help you. When your accountant does your accounts and provides you with the finished accounts – read them. Look at what is in the assets and liabilities column, the profit and loss statement. You might get it then.

                      But how is that even relevant? A bank keeps all kinds of things on and off balance sheet that I cannot do as a sole trader or small company. I do not have cash balances moving in and out of my business in anyway resembling what a bank does and I do not need to square up with the RBNZ at the end of every day. It’s like how a household budget has nothing to do with the budget of the nation.

                      Nothing I’ve said here is even closely related to the loanable funds model.

                      Really? You said that banks need to hunt for funds to loan out. You specifically said that if Kiwi Bank lends out $500K they now need to go find that $500K in funding, in the market place. THAT seems to me to meet the essence of the loanable funds model of banking operations.

                  • Colonial Rawshark

                    Steve Keen describes this better: the theory of exogenous money vis a vis the theory of endogenous money (which he has empirically verified)

                    The root of this belief is the Neoclassical “exogenous” model of money creation, in which “nothing is so unimportant as the quantity of money expressed in terms of the nominal monetary unit” (Friedman 1969, p. 1), the money supply is determined by the actions of the Central Bank, the level of private debt is determined by the supply of and demand for loanable funds, and private banks, as mere intermediaries between savers and borrowers in the loanable funds market, can be ignored in macroeconomics…

                    (Other) results call for a hypothesis that is consistent with them: the endogenous money hypothesis…

                    The essence of endogenous money hypothesis is that banks create spending power for borrowers without reducing the spending power of savers. If true, this makes banks far more than mere intermediaries, and a crucial part of a valid theory of macroeconomics. An essential pre-requisite of this theory is that bank lending is not effectively constrained by the Central Bank.

                    Both the essence and the pre-requisite receive substantial support from existing empirical research (as well as the results above), and from information on the actual practices of Central Banks.

                    http://www.debtdeflation.com/blogs/2012/07/03/european-disunion-and-endogenous-money/#sthash.d9BCGieA.dpuf

                    • greywarshark

                      banks create spending power for borrowers without reducing the spending power of savers
                      Is this the nub of why everybody must dance around the camp fire of low CPI while in the distance the conflagration of housing prices burns high for the citizens of Mordor but can be kept separate from the CPI that rules us all.

                      “One does not simply walk into Mordor. Its black gates are guarded by more than just Orcs. [A gated community, we know about those.] There is evil there that does not sleep. The great Eye is ever watchful. It is a barren wasteland, riddled with fire, ash, and dust. [This is an area of demolished Housing NZ bungalows.] The very air you breathe is a poisonous fume.”
                      —The Fellowship of the Ring, The Council of Elrond

                      http://lotr.wikia.com/wiki/Mordor

                    • nadis

                      In case you don’t understand what it is you have googled, here is a very short Wikipedia description. Its called Monetary Circuit Theory (note use of the word theory). And no Steve Keen hasnt empirically proved it. If he had it wouldnt be called a theory, it would be called the law of monetary circuitry.

                      http://en.wikipedia.org/wiki/Monetary_circuit_theory

                      Funnily enough, the Graziani theory doesnt say that you cannot create money without the central bank. Essentially the argument between Graziani and the traditional view is whether the banks create the demand or the central bank pushes out the supply. You should also be careful refereincing Keen and Graziani because one of the outcomes of their theory is that a gold backed economy is a barter economy, not a currency economy..

                      Think QE – (central bank pushing out supply) – it certainly created demand in the US and Japan.

                      As Ben Bernanke said “QE works in practice, but not in theory”

                    • Colonial Rawshark

                      Think QE – (central bank pushing out supply) – it certainly created demand in the US and Japan.

                      It created a Wall St demand for financial assets as investment banks and other institutions wondered what to do with all the USD arriving on their doorstep at next to no interest.

                      Demand on Main St – not so much.

                      So you agree that the central bank usually applies minimal effective constraints on bank lending, yes?

                  • thatguynz

                    Just wow. You patronising prick. I suggest you re-read what I said the balance sheet movements were as you’ve gone off half cocked.

                    I think you may need to rethink who’s the fractional reserve “nutjob” here as you’ve just demonstrated every characteristic of one. Or perhaps you’d suggest the people/institutions below are the “nutjobs”?

                    As a starting point try:
                    http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

                    Or you could read “Economics” by David Begg

                    Or perhaps Don Brash is more your scene?
                    “Commercial bank deposits are created by banks’ lending. When a bank makes a loan, it will, in the first instance , deposit the proceeds to the borrowers account. Of course, the the borrower invariably raises funds to spend them, so the proceeds (deposit) typically will end up in a bank account of someone other than the borrower – often at another bank than that which made the loan. However, it remains that bank loan transactions ultimately lie behind the deposit balances that banks hold. By influencing interest rates, the Reserve Bank is able to influence the rate of growth in bank lending and hence the rate of (bank deposit) money growth.”

                    • nadis

                      er I did re read it. Unless I dont understand, you say they got smaller? And I don’t know what you mean by reserves. Or have I misread it somewhow?

                      Bank
                      Assets: less $500k reserves
                      Liabilities: less $500k from my deposit account

                      Fractional banking cant work if the money supply gets smaller everytime you lend.

                      Here’s what actually happens:

                      Assets: increase by 500k (that asset is the loan to you)
                      Liabilities: increase by 500k as the bank funds your loan and creates a liability to someone else by borrowing money from them. (Could be a deposit, could be a another bank, could be the reserve bank, could be a bond issue). Whats hard about that?

                      I don’t mean to be patronizing, but seriously, double entry accounting was invented in the 13th century and you pretend like it doesn’t exist.

                    • Colonial Rawshark

                      Liabilities: increase by 500k as the bank funds your loan and creates a liability to someone else by borrowing money from them. (Could be a deposit, could be a another bank, could be the reserve bank, could be a bond issue). Whats hard about that?

                      And voila, you’re pushing the loanable funds model of banking where the bank has to go out and secure the funds that it loans out.

                    • thatguynz

                      No, you have clearly overlooked the part that says that is the G/L effect AFTER the loan has been drawn from. Scroll up, we’ve already discussed the G/L entries of when the loan is written.

              • Colonial Rawshark

                What is not true is that commercial banks can create as much money as they like without any cost or control of the central bank.

                But that’s more a formality than a real constraint. The central bank is never going to deny a retail bank reserves overnight if that is what the retail bank requires to stay within the rules.

                The retail bank is never in the position of having to turn down a credit card transaction or mortgage application because it doesn’t have sufficient reserves at the central bank.

                The shortage that constrains banks from issuing more and more credit money into an economy is therefore not limits on central bank reserves, but the supply of credit worthy borrowers.

                • nadis

                  Recent evidence in NZ would suggest you are 100% wrong. Don’t you recall what happened when the RBNZ introduced minimum deposit rules for new mortgage applications?

                  I hesitate to point it out but please see comment 5.1.2.1.1.1.

                  ipso facto and all that.

                  • Colonial Rawshark

                    What is not true is that commercial banks can create as much money as they like without any cost or control of the central bank. That is patently and provably false yet many still believe it.

                    There are multiple constraints on retail bank money creation. For instance, the money can only be created if there are borrowers, and in particular, credit worthy borrowers. In the USA of course they ended up not worrying about the second part too much.

                • nadis

                  Maaan. Red herring. Not important.

                  Just reword it all and say the bank has the balance sheet and generates demand for a loan through advertising. Same process, but not your loanable funds model (which is actually something different to what you think it is by the way.) I’m talking about where the money creation occurs not where the demand for it comes from .

                  And this?

                  Assets: $Assortment of loans within the loan book
                  Liabilities: $Accounts of those that have taken the loans

                  What does that even mean? It is gobbledegook and doesnt match any known financial system I’ve heard of. So you’re saying I take a loan from the bank and that becomes a bank liability? Please, read here:

                  http://en.wikipedia.org/wiki/Balance_sheet

                  and here

                  http://en.wikipedia.org/wiki/Double-entry_bookkeeping_system

                  I’m done with this- I’ve got better shit to shovel.

                  • One Anonymous Bloke

                    Thanks for the education Nadis. Kia kaha.

                  • thatguynz

                    For someone that has supposedly spent an entire working career in the finance sector with a brief sojourn at The Reserve Bank (or was it the Treasury?) your understanding of money creation is scant yet you have the gall to label others as nutjobs. Astounding.

                    By all means go and shovel your other shit – I sure hope you don’t analyse accounts for a crust these days.

                    • Phil

                      Picking up on Nadis’ points, there’s one key factor in bank activity that the “banks can create all the money they like” proponents consistently ignore; prudential regulation.

                      Going back to basics again: A = L + C.
                      Assets must always equal liabilities plus capital. That’s not an economic or political statement – it’s the accounting identity that underpins all accounting since double-entry book keeping began in the middle ages.

                      If a bank could create money at will (i.e. make more loan assets and deposit liabilities) it would grow its balance sheet. The ‘A’ and ‘L’ in that equation would both grow with ‘C’ remaining constant.

                      This is where prudential regulation comes into play…

                      The rules and regulations banks in NZ have to comply with are vast and complicated. They cover everything from liquidity standards to governance to OBR to high-LVR lending. You can get a sense of the rules here: http://www.rbnz.govt.nz/regulation_and_supervision/banks/banking_supervision_handbook/

                      The one part of the rules that, in my view, are the keystone component to any prudential regime is capital standards.

                      Capital standards set down the minimum value of capital (“C” in the equation) that a bank has to have as a percent of assets. A good rule of thumb for understanding capital is that the global base-line is 8%. It’s been refined and adjusted and developed over the last 30 or so years by the Basel Committee, but 8% is a reasonable enough starting point for understanding how much capital is required. In essence; for every $100 of assets a bank has, they must hold at least $8 of capital.

                      Failure to meet minimum standards is a breach of the law and has very serious repercussions for a bank and it’s owners/executives.

                      A bank cannot grow its balance sheet with impunity. To do so would lead to breaching its requirement to hold sufficient levels of capital, and the regulators would put it our of business.

                    • thatguynz

                      Precisely Phil.

                      I mentioned something similar (obviously without your depth and quality explanation) earlier in the discussion.

                      “And I haven’t heard too many people suggest that banks can “create as much money as they like without any cost or control of the central bank” – just that they create money.”

                      That’s part of the reason I quite like the approach of Michael Kumhof’s (IMF) “The Chicago Plan Revisited” – it introduces much more substantive controls around the C.A.R

          • Phil 5.1.2.1.2

            @Nadis, Colonial rawshark

            In October last year I took a shot at explaining a bank balance sheets to CViper. The debate was good, but got lost as the thread moved further down the front page of The Standard…

            It’s technically incorrect to say that banks ‘create money’. What they do, when making a loan to you or I, is record a series of accounting entries today that represent future commitments to repay a financial transaction. By international standards and convention (see the IMF’s Monetary and Financial Statistics Manual 2000) we choose to call those bank liabilities ‘money’ because of the connections those transactions have to other macro-economic variables like inflation, GDP, and the balance of payments.

            All hail RBNZ independence! – Armstrong

      • les 5.1.3

        1,6,7,8,11,and 12 your opinion only and do not withstand objective scrutiny.

        • nadis 5.1.3.1

          Really?

          #1 is factual
          #6 is factual
          #7 Clearly I’m not advocating for a Bacon and Egg pie backed currency. Thee point is, if you want a physical backed currency rather than a “full faith and credit” you can actually use anything. And something you have good access to is a good start. A big misconception is that the gold standard actually worked. Plse see “economic history”. The gold standard – like most financial experiments – worked until it didnt.
          #8 is factual, ridiculously so
          #11 is my opinion, but seems reasonably well founded. Can’t see anything egregious in it.
          #12 hard to see anyhting wrong with that/

          Happy to debate – can you explain your issues?

          • les 5.1.3.1.1

            well #1 has been debated,and I dont think you make a case as to the finite amount of credit that can be created.Do you believe that there is an alliance of western central banks that largely dictate global financial transactions?The link re the Fed has the Fed claiming to be owned by no one.The shareholders are member banks,and the structure of the FOMC is designed to make it apolitical but it is an exclusive club that historically does not answer to Congress.The repeal of Glass Steagal allowed banks to engage in riskier practices. Capital reserve ratios of a mere 2% became the order of the day.Where are the checks and balances you imply with your simplistic…’every dollar they lend is matched by a dollar they or another bank must borrow from the central bank’….if they existed banks would not become too big to fail and would not need govt guarantees and bailouts.The creation of CDO’s and CDS financial instruments and the explosion in derivatives fueled the so called ‘irrational exuberance’ that culminated in the GFC.Talking about creating ‘money’ is quite misleading…transfers of credit is more accurate.

            • nadis 5.1.3.1.1.1

              Les – you are just flat out making stuff up.

              The Federal Reserve system is subject to various statutes in the US including Title 12 US Code Chapter 3. Google it.

              Amongst other things this sets out procedures for appointing governors (by the president, confirmed by senate). Required testimony to congress – also see Humphrey Hawkins Act, powers of the Fed, rules the Fed has to follow, required audits etc. So how again does it not answer to congress given congress wrote the laws it operates under?

              Whats contentious about the “every dollar they lend bit?” How else could it possibly work? It doesn’t mean the money you lent cant disappear a la GFC – where did I suggest that? Or that fractional banking doesnt exist. IT just describes the mechanism of how fractional banking works.

              But you are quite right, there is an alliance of central banks to promote international payment systems – its called BIS or Bank for International Settlements. See here for what they do – guess what, it is not dictating global transactions….
              https://www.bis.org/about/index.htm?l=2&m=1%7C1

              • Colonial Rawshark

                The Federal Reserve system is subject to various statutes in the US including Title 12 US Code Chapter 3. Google it.

                So who was held responsible when Fed funds were used by big bank executives, their spouses and relations as cheap personal loans for financial speculation with?

                When was the last time the Fed submitted to an audit by Congress?

                I don’t think the controls you are referring to are worth much in practice.

                Whats contentious about the “every dollar they lend bit?” How else could it possibly work? It doesn’t mean the money you lent cant disappear a la GFC – where did I suggest that?

                That money didn’t “disappear”, it was pocketed by the worst most egregious financial market speculators.

              • les

                there is a plethora of information as to how the Fed has behaved and could not even answer the most simple questions as here for instance…
                http://dailybail.com/home/the-fed-under-fire-the-federal-reserve-is-the-black-hole-in.html

                You must realise economics is not a science its theory or philosophy.

                To open the batting on your #6..where you speak of physical gold as opposed to ‘paper’ gold and the risk factor!….the investors who were rinsed by NZX listed Goldcorp would be interested, as selling the same physical gold to numerous parties via paper contracts was the m.o of the company.

      • thatguynz 5.1.4

        Oh my word. I actually expected more of you Nadis. What twaddle.

        • nadis 5.1.4.1

          Happy for you to join the debate with facts or well founded opinions. Or you could just lob smarmy insults.

          • thatguynz 5.1.4.1.1

            Seemingly as could you when your assertions are challenged. Pot meet kettle.

    • Chooky 5.2

      “American Exceptionalism” reminds me of the concepts of the ” Master Race” of Nazism or “The Chosen” ones of the God of Zionism

      … in other words all concepts of male arrogance and fascism ( not to be encouraged if we want WORLD PEACE)

  6. tc 6

    It mostly always comes back to the oil.

    Daniel yergins Pulitzer winning ‘the prize’ Published in 1990 just after bush senior went into Kuwait and a 6 part PBS series is a great background as is his follow up in 2011 ‘the quest’

    The US use of financial weapons on nations highlighted in ‘inside job’ is also as relevant as ever.

    • Colonial Rawshark 6.1

      And not just oil, but also gas.

      And not just oil and gas, but where the pipelines have to go to get that energy to where it is wanted and where there are $$$ for it.

      • les 6.1.1

        its really about military power and the influence of the U.S…do you want dollars or…bombs…!

        • Jones 6.1.1.1

          +1… there is a direct correlation between the US dollar as the world’s reserve currency and the world’s largest military. It’s a protection racket on a global scale.

          • nadis 6.1.1.1.1

            There is no compulsion to use the USD as a reserve currency. Countries choose it for economic reasons. Why else would China, Russia and almost every other country in the world hold most of their reserves in USD?

            • Colonial Rawshark 6.1.1.1.1.1

              I find it odd that you say this. A massive amount of the world assets, liabilities, commodities and liquidity is denominated in USD. That alone makes the USD in high demand, and that demand perpetuates itself. Go anywhere in South America, Europe, Africa or the Middle East with a stack of US $100’s and you will do just fine transacting with the locals.

              • nadis

                That is the exact point I am making. There is no compulsion to use the USD. People choose to use it because it is the most liquid, most creditworthy, most clearly priced, and most fungible choice. No-one is compelled to make that choice. Think Zimbabwe or Russia and many other countries. It’s often easier and cheaper to use USD rather than the local currency.

                Its like when you buy something from a shop. Technically you can use anything from gold to Thai Baht to tractors, but you choose to use NZD because that is most convenient for you. That’s the reason why most of the world uses USD.

                • The $US holds its value not because it represents the strength of the US economy which is stagnating and has a debt to GDP of 100%, (it is worse as GDP misrepresents value because it includes unproductive military production etc) but because the US uses it global power to compel nations to use the dollar in trade in commodities, critically, oil.

                  China is in the process of setting up an alternative global financial structure that will allow nations to genuinely opt out of the $US protection racked for the yuan. This will see the BRICS and potential BRICS eg Egypt, Iran, Turkey and Argentina move to the yuan. The $US will then become one of two or more global currencies and its value will decline relative to the performance of its economy.

                  So long as China and the developing world aligned to the BRICS grow their real GDP relative to the US currency bloc, then paper currencies backed by actual commodities will see gold left as a reserve for the time when China faces the same terminal economic crisis that is facing the US.

                  An interesting comment on the state of the global economy https://thenextrecession.wordpress.com/2015/03/10/a-fictitious-boom/

                  • nadis

                    dave- your comment doesnt make logical sense. If I am Venezuela and I want to sell oil to China, who is compelling me to use USD?

                    The US produces roughly 8% of global crude and consumes around 18% (guesstimates off the top of my head).

                    Wheres the compulsion for the other 200 crude producing countries to trade only in USD? (Hint: There is none, it’s just easier). But non-USD energy and commodity deals do happen all the time. I remember the NZDB selling milk powder to Russia and getting crappy Ladas in return.

                    • Nadis, you should ask that question to the countries that use the $US. And to those that are already trading in yuan.
                      Venezuela has moved from $US bloc towards yuan bloc as a result of China investing billions in oil etc.
                      But that was as a result of a semi-revolution in which Venezuela threw out most of the US oil companies took back control of the national oil company and asked China to bankroll ALBA.
                      Take Ukraine. US tries to pull Ukraine into EU and its $US bloc. Only to find that Russia shrugs off this offensive and tightens its alliance with China.
                      My main point was that the $US value is not based on real production of commodities which is stagnating (note the Roberts link), but on a political/military/financial mafia scam.
                      The Yuan value is much more based on China’s economic performance and expansion into Eurasia, Africa and Latin America.
                      That is why the $US is doomed and the Yuan is on the rise.
                      http://redrave.blogspot.co.nz/2014/11/brics-around-neck-of-proletariat_2.html

                • greywarshark

                  It then doesn’t have to be compulsory to use US$, it’s monopoly money and that is the only game in town. You can take some NZ dollars with you but it will likely be nada. In Oz in the 1970’s shops weren’t keen to use NZ travellers cheques thought I though these were readily accepted.

  7. McFlock 7

    The video applied cynicism to US foreign policy, and fair enough. But applying that cynicism to only one nation in geopolitical matters is a curious combination of cynicism and naivity.

    • Colonial Rawshark 7.1

      Not just any nation – the worlds one and only hyperpower.

      • miravox 7.1.1

        “…the worlds one and only hyperpower”

        Can’t we stick with ‘super’ as a superlative? Hyperpower is a bit of hyperbole isn’t it?

        • Colonial Rawshark 7.1.1.1

          It was all the talk in US foreign policy circles in the 1990s after the Soviet Union fell.

      • Lanthanide 7.1.2

        I don’t think they’re a hyperpower. Maybe in the 50’s and 60’s.

        They’re a waning superpower. They still have impressive military force, but their economics and politics are truly fucked up.

        China hasn’t really flexed its muscles, yet.

        • Colonial Rawshark 7.1.2.1

          Indeed…although I think that Deng Xiao Ping’s exhortation to China to “bide it’s time” is just about over…

      • McFlock 7.1.3

        lol

        That expression still doesn’t explain why similar cynicism wasn’t applied to Russia, China, Iran, Libya, Germany, Japan…

        • Colonial Rawshark 7.1.3.1

          Still. Only one country has triple the military budget of all those you listed put together.

          • McFlock 7.1.3.1.1

            well, double-ish, but that still doesn’t mean that it’s the only country primarily motivated by cynical self-interest. Putin didn’t send troops to the Crimea to raise funds for the Red Cross.

          • nadis 7.1.3.1.2

            On a percentage of GDP, USA military budget actually ranks behind Saudi Arabia, UAE and Russia according to the frst table in Mcflocks wikipedia reference). 3.8% of GDP for the USA doesn’t seem too out of line with the rest of the world.

    • nadis 7.2

      not cynicism and naivety. More like pseudo-intellectual posturing. “USA bad, therefore everybody else good”

  8. Colonial Rawshark 8

    The future of freedom: NSA whistleblower Bill Binney

    This has been linked to on the Standard a few times now, but it is very good for putting in the context of – why implement this absolutely massive security and surveillance state?

    • Chooky 8.1

      +100….thanks for this!….It is a MUST WATCH!…even although it is so long and I missed the last part because I went to sleep in my chair after midnight ( will have to watch that part again)

      ….this Bill Binney is as brave as Edward Snowden !….Binney was high up in NSA and resigned before 9/11 !.

      …they tried to throw him in jail on false reasons but he was smart enough to defend himself….this guy is a true American HERO! …(from a straight shooting , humble ,hill billy background)

      ( Snowden took his lessons from Binney’s experience in the way he released information to the public without going higher up in NSA and the usual channels)

      …Bill Binney is warning us that if we dont curb mass surveillance urgently and soon ….. it is going to get worse for our hum,an rights and democracies !….fascism

      (….he also has questions about 9/11….along with other USA engineers and scientists)

      OK Andrew Little and David Shearer …as you have put yourselves on the spy committee….you are now ACCOUNTABLE ….what are you doing to protect New Zealanders from mass spying?!

      • Colonial Rawshark 8.1.1

        Binney is the kind of guy who reminds me of what a certain old fashioned kind of America was like – before the American ethos was replaced with the corporate ethos.

        • Chooky 8.1.1.1

          yes sadly ….many Americans are most admirable people!…and it is a great country!…but it has been let down by certain politicians and secret government organisations which operate secretly contrary to the democratic LAW of the USA …what Binney would call now is pre -fascism

          I am particularly interested in what Binney and other NSA whistle blowers propose to remedy the NSA situation of mass spying …it is important that this is itemised and debated in public …. because it is a strategy for reigning in the mass surveillance and hence democratic and human rights abuses…. and at the same time making it more effective against real terrorism

          … as i recall it from this video ( and I would appreciate it if someone else would summarise what Binney has said because this is rather a hasty and brief summary and does not do Binney justice at all …also a detailed Post on what he has said would be great):

          1. stop bulk collection of metadata

          2. nothing into storage except from “target” focus groups

          3. list reasons for “targets”

          4. the name(s) of the operative(s) who list the “targets” must be registered…so there is “accountability” ie the person(s) who compile “watch/kill” lists must be held “accountable”….at the present time they are NOT! ….(shocking because it is open to abuse and corruption!)

          ( people are being killed on the basis of metadata…it is possible some Americans are being killed in their own country )

          Everyone should watch this video…and make up their own minds!

  9. barry 9

    It is good to have an alternative to the invisible propaganda that we get all the time in our media. It is a ptiy that Pilger has to publish on ICH where it can be dismissed as crazy conspiracy talk.

    OTOH Pilger goes a bit too far the other way.

    The only good thing that can be said about Putin is that he is rather unsubtle and only a danger to Russians and his neighbours. He wants to control his neighbours but all he can offer Ukraine is money and guns. Nato offered “Europe” which is tantalising enough to gloss over the fact that the money they offer never actually materialises.

    I travelled through Kosovo and Serbia before the main troubles began. The local Kosovo population were definitely resentful of the Serbs but i never feared for my safety. I didn’t get to know any Kosovars and the Serbs I knew explained the history and the importance of Pecs to their cuture, took me to Skull Tower (http://en.wikipedia.org/wiki/Skull_Tower). The situation is very complicated, but the bombing was hardly justifiable. The Serbs were being punished for being politically too close to Russia. but the ordinary people of Serbia DID have a deep bond with Russia.

    I also got to know some refugees from the fighting in Afghanistan after the Russian invasion. These were educated Muslims, some of them Hazara. They would have hated the Teleban, but at that time hated the Russians. They were Muslim and religion was a large part of the justification for their opposition the the Russians. So the Teleban may have been in part created by the CIA, but the other part is also due to the Russians.

    So Pilger’s article has some value, but pitched for ICH it is never going to be a serious counter to the everyday one-sided stuff we see in our papers.

    • Colonial Rawshark 9.1

      I think the people of Serbia are mostly Slavs, which a majority of Russians consider themselves as.

  10. philj 10

    Try listening to Dan Carlin’s Podcasts on Hardcore History and Commonsense. He does a great job at presenting a critical overview of US politics and US involvement in world affairs. His Hardcore History podcast is excellent, albeit lengthy. He has great ability to entertain in a storytelling style.

    • Phil 10.1

      I’m also a fan of Carlin. His series on the ‘decline and fall of the roman republic’, in particular, deserves to be transcribed and kept for the ages.

  11. Colonial Rawshark 11

    Pepe Escobar notes that the US driven TTIP excludes Russia, while the TTPA excludes China.

    http://www.tomdispatch.com/blog/175903/tomgram%3A_pepe_escobar%2C_new_silk_roads_and_an_alternate_eurasian_century

  12. Huginn 12

    Propaganda.
    There’s a link to the transcript which is easier going than the video. This quote from the transcript points to Bashir Assad as the commissioner, it also dates the video.

    ‘In 2013 these same Al-Qaeda linked Syrian rebels launched two sarin gas attacks. This was an attempt to frame Assad and muster international support for military intervention. Fortunately they were exposed by U.N. and Russian investigators and the push for airstrikes completely fell apart when Russia stepped in to broker a diplomatic solution.’

    Things have moved on since this was made.

    — New EU Syria sanctions reveal regime collusion with Isis – http://www.ft.com/cms/s/0/324b07f6-c42a-11e4-9019-00144feab7de.html

  13. Ennui 13

    Nice conversation starters thank you MH. Good links. I suggest the mega trends are obvious. Russia is doing what it always does when confronted by western aggression which is to retreat East to regroup before it sends the bill. The USA is on some divinely ordained mission to spread good old democracy all around whilst vacuuming the energy resources of the world…yes this is the oil play and those pesky Arabs and Russians have got it. Then to fascism..let’s just say it wears a corporations face and deals in zero hours contracts at the minimum wage. We are at war already.

  14. Colonial Rawshark 14

    Max Keiser and Stacey Herbert have put together their latest edition of the Keiser Report just for you. (First half is on “war is a racket” and how the imperial power levers are moving once again to war, for economic reasons.)

  15. Tracey 15

    I enjoy being provoked (intellectually) but I also like to see supporting evidence. The problem with wanting everything set out that way is that it doesn’t account for those instances where, for reasons connected to the issue at hand, the evidence is not available… something people like Key rely on. He may have knowledge of the evidence but due to confidentiality/”National interest”/shredder he believes it can never come to light so makes his grand statements…

    Since 1989 there is not alot of evidence that the recent Russian leadership has worked to benefit their majority of people. They did throw open the doors to capitalism with some gusto (practically giving away major industry) in the belief that profits would benefit the country, as would employment etc… BUT Greed has dominated… and while all the people are not queuing for bread all the time… they all are sometimes and some are often.

    I am aware that Russia is doing some military creeping but why not the same amount of focus and angst on China? We keep basing summits there, olympic games and so on and yet they have a very poor human rights record… democracy campaigners, rightly, fear for their lives.

    And then there is Saudi Arabia… Saudi freaking Arabia. I remember when the first George Bush went to “help” Kuwait. he did it for democracy… that’s right, to bring democracy… women did get the vote in 2001 (2002?)

    But Saudi Arabia is immune from such advances as human rights, rights for women and democracy… and nadis (above), how much of their military budget is stuff purchased from the USA? Do you know if the weapons and hardware SA purchases are traced (do we know where they all end up?)

    • Colonial Rawshark 15.1

      Since 1989 there is not alot of evidence that the recent Russian leadership has worked to benefit their majority of people.

      There is a trans-national oligarchic class in power and we are seeing some internal argey-bargey within that class in these geopolitical games. Ordinary people are regularly, deliberately and easily sacrificed.

      When American senators talk about sending arms to Ukraine to “raise the cost” to Russia of the Ukrainian war, they mean of course the cost in terms of Ukranian blood, in a war that German intelligence says at least 50,000 people have already died in.

      The leadership of the UK, USA and other major countries have also not worked to benefit the majority of their people. In fact, to achieve their goals they are quite willing to sacrifice tens and hundreds of thousands of civilians – Madeline Albright reveals the power elite mindset in this 24s clip:

      Let alone the historical revelations around Operation Northwood.

  16. Tracey 16

    I wagged school to march down/up Queen St in Auckland to be nuclear free. I remember those days and the devastating impact of cold war rhetoric (from both sides), my generation genuinely feared we could all be obliterated by an old guy in washington or Moscow who was arguably insane.

    I don’t feel the same sense of immediacy I remember then, but I was young.

    Such times called for courageous leaders and brave (not always populist) decision-making. We got Homosexual law reform within a few years of that event too.

    It is the unravelling of crucial social fabric that i fear the most today… we are, in my opinion, well into the dismantling of certain fabrics with the almost cheering aquiescence of people who should know better. THAT has been a deliberate, thought out strategy to marginalise certain people and make it ok to be dismissive of the vulnerable by proxy, in society to enable them to be economically and in other ways disenfranchised.

  17. Once was Tim 17

    The problem with American Exceptionalism (the CORE) is that the periphery (that democratic majority that Key understands as ‘winner takes all’) ALWAYS eventually get restless (in the case of NZ very very very EVENTUALLY).
    Like those split ends – “it won’t happen overnight – but it will happen”. Meantime, pass me the bottle of Pantene and I’ll wash my mouth out

  18. Murray Simmonds 18

    Thank you for the two extremely interesting. links, MHager.

    My gut instinct is to believe that the stories that they tell are probably pretty close to the truth.

    Some 50 years ago I half-jokingly argued among a group of friends that World War III would be fought “by economic means – by opposing nations shifting money around.”

    Of course everyone laughed at me. We all knew that there was an arms race on at the time, the cold war was burgeoning, and nations were busily stockpiling enough nuclear weapons to annihilate the planet several times over.

    Then came the sobering idea of the” Nuclear Winter” that would follow even a small-scale nuclear encounter between the superpowers.

    After that, global population control became the big issue . . . but that soon got put in the “too hard” basket. And so on and so on . . . down to the present.

    Less than 6 months ago, I commented on ‘The Daily Blog’, that world events were already beginning to feel like they were shaping up towards World War III. I got voted down for it – perhaps deservedly. My comment was based on some historian’s observation I’d heard about somewhere – the idea that major wars erupt about every 100 years (1812 – ask Tchaikovsky; 1914 (ask the Kaiser); 2016, ask ???.

    Unfortunately, 1710, or thereabouts seems to buck the trend.

    Gut instincts aside, however, I am not a great fan of conspiracy theories – except for those of them that I personally believe in, of course!

    And the one thing that I do firmly believe is that Mainstream Economic Theory (MET) is one great big con. It is a con that is perpetuated by the 1% and it is foisted upon us, the remaining 99% for one reason only:

    That reason is that MET enables the 1% to hang on to their vast stockpile of wealth, and thus to hang on to their power and privilege. After all, that is the system under which they amassed their vast wealth in the first place – and so of course they HAVE to believe in it!

    It is not beyond the ingenuity of humankind to devise an economic system that works fairly for all, and not just for the 1%. But it will never happen while the 1% firmly remain in control of the purse strings. Money means power. Those who have it aren’t going to give it up any time soon.

    Sorry, all you old-fashioned main-stream economic believers out there. But you’ve got it wrong, wrong, wrong!

    Ask any “average Greek” that you might happen to meet wandering unemployed in the streets of Athens. They know, they understand, and they and may yet provide an interesting test case for the EU. But the odds (in the form of the well-heeled) will be making damned sure that they don’t succeed!

    And thanks again to Nicky Hager for all his contributions to the health and well-being of NZ society. I just wish I hadn’t gotten too old to fully comprehend and react to the two articles that MHager drawing our attention to above. (I’d much prefer to be responding to them with something more useful than mere ‘gut feeling’, . . . )

    Good luck to Nicky Hager with whatever major topic he decides to take on next. And likewise to you, MHager, (whoever you might be.)

  19. AmaKiwi 19

    “Obama declares Venezuela a national security threat” (March 10,2015) and imposes sanctions (using its control of the US dollar).

    It is absurd to think Venezuela can militarily threaten the USA. But their oil wealth makes possible Venezuelan socialism which is a threat to the security of America’s vision of a corporate controlled global empire.

    “Diosdado Cabello, the head of the Venezuelan National Assembly, said, “These types of measures (US sanctions) . . . are only threats from an empire that has power, but that lacks scruples,”

    He also urged the general population to be prepared for an armed US-led attack.

    “These emergency resolutions are used by the North American empire every time they are going to attack a country. They say they feel threatened. What weapons do we possibly have to threaten the United States?”

    http://www.aljazeera.com/news/2015/03/obama-declares-venezuela-national-security-threat-150309164808710.html

    What weapons did Vietnam, Serbia, Iraq, Afghanistan, Libya, Yemen, Syria, etc., have that they could possibly threaten people living in the USA?

    Regrettably I, too, have concluded World War Three began with 9/11. Now it only remains for us to see which countries line up on which sides and which stay on the sidelines.

  20. Vaughan Little 20

    The argument of the video is flawed.

    The US can’t even come up with decent strategy for engagement with a single one of the nations listed; how could anyone accuse them of coordinating some global geopolitical conspiracy?

    Many people believe that the US dollar’s status as the global fiat currency gives the US some kind of advantage. If I understand it correctly, this thinking is a key element in the video’s argument. I side with Michael Pettis (strongly recommend his blog, mpettis.com) in believing the opposite: the US economy would be better off if its currency weren’t the global fiat, because other nations’ use of it, done at scale, can have disruptive effects on the domestic economy. The US would have greater economic sovereignty if some other instrument were the global fiat.

    Geopolitics is complex, but it’s essentially a human story. people are justified in being fearful of Russia, and the video does itself no credit in its silence on that dimension of the story.

    Lastly, I recommend a recent blogpost by Pettis which goes over some of the ground covered in the video, but from a much healthier perspective:

    http://blog.mpettis.com/2014/12/my-reading-of-the-ft-on-chinas-turning-away-from-the-dollar/

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  • Ending dairy in Canterbury
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    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Is National the party of climate arson?
    The Zero Carbon Bill is currently before select committee. While its targets are weak, its a generally sensible bill that promises to establish a long-term framework to guide emissions reductions. But National hasn't made up its mind on whether it will support it - and according to Andrea Vance in ...
    No Right TurnBy Idiot/Savant
    2 weeks ago

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