I am standing at the edge of an abyss, …

I am standing at the edge of an abyss,
asking that same question.
Looking at the abyss
And I’m hoping for some miracle
To breakout to escape from all this
Whispers in the air tell the tale
Of a life that’s gone
Desolation, devastation
What a mess we made,
when it all went wrong (1)

Now we remember ANZAC day, through this simple ceremony, annually attended by a fair few people, young and old.

It is a pity that we do not have one special day set aside, say each five years, to remember the effects of economic devastation, thrust upon us by the very same politicians that are only to eager to participate in any war, on this planet.

History is doomed to repeat itself, as the passion of man never changes.

I am alluding to financial economic catastrophes that destroy people, their assets, soul and lives all brought about by corrupt corporations that dictate policy to politicians. Cronyism and self delusion, self importance and ignorance, willful or otherwise entrenched amongst all our politicians.

It appears that we have forgotten what was described, in the last months of 2008 whereby we witnessed what is being called the ‘worst financial crisis’ since the Great Depression of 1929-30. Then again it appears that we appear to have forgotten the Great Depression. (3)

The deep and persistent losses of the 2008 financial crisis forced Countries to make broad cuts in spending and public workforces. For businesses, the recession led to a large number of liquidations, a changes in expansion plans, an unchanged plan of direction. For individuals, it has meant a future postponed, through unemployment, loss of assets, deaths through suicide and continued reliance by many on social security. Loss of self confidence and self esteem.

Seven years after the financial crash, the countries are still struggling to recover. In fact debt is crushing the majority of Countries and civil unrest is apparent through the introduction of austerity measures, forced on taxpayers to repay bloated Government debt. This through the sheer stupidity of those inept politicians with bloated Governments and continual overspending. No Country has effectively reduced their debts, rather increased debt load since 2008, to a situation now that is beyond their individual capacity to repay should the Federal Reserve increase interest rates. Deflation has proceeded stagflation.

The cobweb of cross border financial transactions throughout the world are suspect, at breaking point and are on the verge of collapse.

‘And the cobweb, shall it be eternal?
If the maid does not destroy it, the spider itself will tear it up.’

Goethe, Zahme Xenien VIII

I quoted Goethe, as the cobweb is the financial transactions, the maid was the ‘economic creative destruction’ and the spider is the Governments and Financial Institutions.

First and foremost, the blame for the current state of economic affairs, lays at the feet of the Governments and the inept politicians.

‘Economic Financial Destruction’ was predicted throughout history, in that the economy will implode and destroy itself. Social and evolutionary economists all have predicted these cycles throughout history, it is just that we have inept politicians and economists that ignore the obvious.

There are far more astute people than me in the past, in the present and will be in the future. I have to back my assertions; not in a veiled way, but factual; so that those people who are reading this whether economists, politicians or the lay person, can get my point.

I admire the early evolutionary economists for their astounding patience and foresight, thereafter Irving Fischer, Hayek, Keynes and Minsky.

Then we have the author, George Orwell who saw the effects of the fascist and totalitarian governments evolving around Europe and Burma, during his lifetime. Their greed for more power and control and his novel ‘1984’ was a warning against totalitarianism, a modern autocratic government, in which the State involves itself in all facets of society, holding total authority over the citizens and seeks to control all aspects of public and private life wherever possible.

In my opinion the number of conditions that Orwell states in this book, such as psychological control, are still very relevant today with political propaganda and fabricated news dominating everyday media. Western Governments are corrupted from within and have adopted destructive policies. So destructive are these policies that they will lead to a total collapse of the financial system.

Politicians misinform the public by twisting the truth to support their own personal agendas. As in the book 1984, the Party lied about how the war against Eastasia and Eurasia was going, our media lies or hindering publications of similar subject matters is very relevant today.

The purpose of incorporating Orwell into this blog is simple, we have reached that point of insanity, that we no longer have the ability to be truly free, we are monitored by all Governments under the NSA / USA five eyes project, all our metadata is collated and it is with disgrace that those international Governments, which were not a founding member of this project, are scrambling to introduce similar legislation for their secret service organizations.

To add salt into the wounds the Government controls the Internet and has the ability to turn any nation into a nanny state, prohibiting what we can and can’t see. This control is absolute, even now there is legislation in certain Countries, that allow for people to the detained and charged for writing the truth; incarcerated; simply because it is against the State. Turkey is a prime example of Presidential decree to shutdown social media when it does not suit them, the US President has similar powers, as certain congressmen disapprove of the State detractors and legislation is currently being introduced which will give total control to the State.

The so called ‘free press’ of Western Societies is controlled by the Oligarchs, who in turn ascend to the wishes of the Governments and act as a propaganda machine, silence on important events, distortion of facts and generally supporting nationalist sentiment. This is relevant to a fascists collective society, the mere fact that RT (Russian Television) and Sputnick News in Russia, whilst two wholly controlled state media organizations, have a far greater news coverage of the facts in all other countries, than what the Western Media do, this is symbolic of a Government controlled enterprise.

When one looks at the economic policies of the Governments in supporting corrupt bankers and ‘too big to fail’ companies since the finance collapse in 2008, then we have government dictating (also through the Central Banks) not only who the elite are, but condoning their bad and corrupt practices. This does not filter down to the smaller corporations, it is only those Companies that are required by government to exist (and the affiliated rating agencies, insurers and re-insurers).

This is all due to these Banks having the ability to sell to their clients, the Central Banks Gilt Bonds, to raise the necessary money for the Government to pay their bills. These Corporations influence the Government in a number of ways, in particular funding for politicians election campaign, employ of advisors and lobbyists and then, atypical approach to avoid regulatory problems these Banks employ the administration’s regulatory employees into their organizations.

The impact of the Banks is well written with some writers (Matt Taibbi, in particular from Rolling Stone magazine) showing great passion in exposing the blatant corrupt lending practices of the Banks not only to Pension Funds, Businesses and investors but through all forms of Government.

Needless to say it was in the Clinton Government’s actions (through ex Goldman Sachs – Rubin) when our current problems arose, in the repeal of the Glass Steagall Act.

The Glass Steagall Act was introduced in the Great Depression for a simple reason, to stop risk-taking by the Banks, by it’s very nature it prohibited proprietary trading, it kept transactional banking separate from proprietary trading. Repeal of this Act by Clinton/Rubin was to set in place the 2008 financial collapse.

The Dodd Frank Act, introduced after the 2008 financial collapse created a large amount of financial regulatory reform. The impact of this legislation on Banks forced Citibank (as one of a number of Banks), to write its own legislation rolling back the new provisions and ensuring that this was passed into law in 2013. (4)

The ‘Citibank’ provision enables the big banks once again to use insured deposits and other taxpayer subsidies and guarantees to gamble in the derivatives markets, the very type of business that triggered the 2008 financial crisis, through the failure of Lehman Bros and the economic devastation that followed.

Then we have at the Federal Reserve (and other Central Banks) actions on interest rates, it appears that the whole policy was to ‘re-capitalise’ the ‘too big to fail’ Banks capital account and allow large corporations, a refinance portal at lower interest rates. In no way did the excessive monetary easing policies or the lower interest rate assist the whole economy in any way.

In fact the introduction of these policies has put at risk the elderly, insurance companies, pension funds and retirement accounts. Those groups that require a gilt edged interest rate return to survive. Savers, who require interest to live on, pension funds (pension payments) and insurance companies that offered life policies (annuities) at a guaranteed rate on retirement or maturity.

In a deflationary environment since 2008 (lower rental returns, lower interest) the need for income, means a diversion from Gilt Bonds, to a higher risk in equity markets. Even the Central Banks themselves, have invested into the equities markets, which in turn has increased the inherent value of equities, far in excess of the individual companies inherent value / earning capacities of these Companies. This then provides a barrier, due to the excessive cost, for retail investors and retirees and savers, so in general deflating available income.

The Bankers and Hedge Funds have not only invested in the equity markets but also real estate, the collapse in the values of real estate allowed a low entry point to accumulate large real estates to allow an apparent ‘capital gain’ and rental revenue. This in itself causes immense problems for the unemployed, under employed and those people on low incomes. They want their pound of flesh and no arguments. Rents cannot be deferred and their insatiable demand, has pushed the value of the real estate in certain countries, beyond the ability for people to buy their own home.

The impact of the Government’s actions in 2008 did not allow a complete financial market re-set. What has transpired, is that the monetary policy introduced, did not follow economist JM Keynes theory implemented in the Great Depression. It was a bastardized monetary policy to appease the corrupted Bankers, insurers, rating agencies and Hedge Funds

Governments in their wisdom, did not tackle bloated administration, inept regulatory authorities and excessive quasi government bodies, in fact these were increased and no significant reduction was made, so as to force the governments to increase debt to cover costs. Lower tax revenue and increased health costs with military spending increases resulted in a situation whereby Governments, took it upon themselves to target taxpayers to cover their own revenue excesses.

This single situation inspired an ‘Orwellian’ approach on two fronts, first and foremost was offshore tax havens and multinational companies, which were targeted in an attempt to close down all loopholes and the Banks that assisted in any transactions, to be castigated and fined by the authorities. To assist them in this plight, they have everyone’s metadata on tap to enable control and one would not doubt blackmail.

Second is cash, the single biggest mode of transactions in the world today, the black economy. Ban cash full-stop. Issue everyone with a credit card, so that the Government can monitor what you spend, where you spend it and then assess your taxation exposure on the amount of funds deposited into this account. Should it be deemed necessary ‘they’ can cut off your credit, no longer can you store ‘cash’ in the mattress when Banks are failing. Your money is their money, any fines can be automatically deducted without any recourse, or recourse is available only after you pay the fine (as with the ATO).

Imagine if you would, those bureaucrats in the taxation/revenue sections, having an orgasm over this utopian moment. Complete control over every citizens income, direct and indirect and then knowing full well, that they have the powers to automatically deduct tax and penalties directly from your credit card. These taxation agencies already have authority, through administrative process to garnishee your bank account, but they are limited, as to how many accounts you actually have and at which banks these accounts are held, thereby limiting the nature of their action.

The simple process will return every individual, into servitude for the Government. The takeover by the Government of our financial transactions will ensure their ability to meet costs in a timely manner and any other subsequent increase of taxes, from the individual taxpayers. The introduction of corporate tax reform has already been undertaken to limit ‘personal’ and ‘non trading’ expenses from the corporate tax return, in addition to taxing ‘fringe’ benefits.

George Orwell, was against fascism and wholly supported socialism, this being brought about by doing the research for his book ‘Down and Out in Paris and London’. Looking at the Western World Governments they are starting to resemble fascists and the Orwellian government.

Western Governments are no longer capitalists and/or capitalist/socialist governments. They have changed from within.

Frederick Hayek was against socialism and if one looks at say America and England today the policies are not dissimilar, as to what Hayek warned about in the 1920’s.

Hayek noticed that many British socialists were advocating some of the same policies for Government control of people’s lives that he had seen advocated in Germany in the 1920s. The Germans and Italians, long before the Nazis, were attacking liberalism and democracy, capitalism and individualism.

He had also seen that the Nazis really were National Socialists; that is, they were nationalists and socialists. So Hayek wrote ‘The Road to Serfdom’ to warn people of the dangers of socialism.

His basic argument was that government control of our economic lives amounts to totalitarianism. “Economic control is not merely control of a sector of human life which can be separated from the rest,” he wrote, “it is the control of the means for all our ends.”

If one sees what we came from in the feudal system, to individualism in our Western Society to Capitalism through to Capitalist/Socialist mix and where we are going, are we not bound by socialistic issues?

Communism could not survive as a collective. Socialism cannot survive, social and evolutionist economists foresaw this event, in theory and today we are seeing it in reality.

The social economists Karl Marx (1818-1883), through to Werner Sombart (1863 to 1941) to Joseph Schumpeter (1883-1950) all discussed and expounded on a term called ‘creative destruction’, (also Zeitgeist through the works of Friedrich Nietzsche).

Schumpeter stated that the intellectual and social climate needed to allow entrepreneurship to thrive, will not exist in advanced capitalism; it will be replaced by socialism in some form. There will not be a revolution, but merely a trend in parliaments to elect social democratic parties of one stripe or another.

He argued that capitalism’s collapse from within will come about as democratic majorities vote for restrictions upon entrepreneurship that will burden and destroy the capitalist structure, but also emphasizes non-political, evolutionary processes in society where “liberal capitalism” was evolving into democratic socialism because of the growth of workers’ self-management, industrial democracy and regulatory institutions.

Schumpeter saw that ‘creative destruction’ provided a powerful force for making societies wealthier, because it made scarce resources more productive, as they flowed from the least to the more efficient industries.

This ‘creative destruction’ that caused lost jobs, ruined companies, and destroyed non competitive industries, was an inherent part of the growth system. That societies allowed ‘creative destruction’ to operate, grew more productive and richer.

While Schumpeter clearly saw that capitalism’s pain and gain are inextricably linked, politicians today are not so accommodating of the thought that some individuals (voters) would become worse off, not just in the short term, but perhaps forever. This attitude forced socialism upon the capital class, allowed it to mushroom and basically destroy the capitalist system, as it was never repudiated by the right.

It is, by the actions of governments and politicians, to try and preserve jobs or protect industries that would have been ‘creatively destroyed’ will no doubt lead to stagnation and decline of an economy. ‘Creative destruction’ whilst obviously the better course in the economist’s mind, it is never welcomed by those on the destructive side of the paradoxical term.

As long as political democracy itself functions, electorates will not tolerate the malfunctioning economic systems inevitably produced by major left wing policies. The problem is though, is political democracy functioning in America, in England or elsewhere?

It appears that America is no longer a democracy as a recent Princeton University research disclosed. “Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association and a widespread (if still contested) franchise. But we believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened,” (6)

All things being equal the electorates will always turn on those responsible for the policies that undermine the economy, once they correctly identify the responsible political groups. However, the policies that initially undermine economic performance are often those of self-interested big government conservatives, such as those of the 1920s and the Bush/Clinton/Bush/Obama administrations, and in the process a collapse of democracy.

It is not always clear as to what is happening, with political parties in America or around the world, left is leaning right and right is leaning left and one wonders how much responsibility lies with left wing demagogues and how much with the unprincipled political hacks of right wing big government political alternatives.

It appears relevant that the electorate can only churn incumbents until they empower a political class that can get it right. The problem is though, that with this creative destruction which has been brought upon us, by the personally corrupt political and business class, is how much pain does civilization have to bear to get the system right?

This wave of creative destruction is technically by our own design, that is to say we voted in the politicians and regardless of their actions, we kept voting them into Government (the political Parties) and they, through their own self interest and incompetence, plus the lack of knowledge (or ignorance) on economics, led us to this position. Our apathy allowed the system to be created that will eventually destroy our wealth, through their greed and their own self importance.

Individualism, in contrast to socialism and all other forms of totalitarianism, is based on the respect of Christianity for the individual man, his assets and the belief, that it is desirable that men should be free to develop their own individual ‘gifts and bents’. This was the Renaissance, so truly valued was this freedom that it blossomed into ‘Western Society’. This general direction was of freeing the individual from the bonds to feudal society.

The political parties are a paradox, a logical paradox from philosophy in the questioning of whether a political party system, repaired over time, by replacing each of its politicians and party platforms would remain the same political party. (2)

The Governments in my opinion are evil, as ignorance is being used as an excuse for putative evildoing. In this way ignorance can be a legitimate excuse by politicians for causing unjustified harm.

Since Aristotle, theorists have recognized that ignorance is only a legitimate excuse for causing unjustified harm when we are not responsible for our ignorance, i.e., when the ignorance is non-culpable. One sort of culpable ignorance which has received a fair bit of attention from philosophers writing about evil is ignorance that results from self-deception.

In self-deception we evade acknowledging to ourselves some truth or what we would see as the truth, if our beliefs were based on an unbiased assessment of available evidence. “Self-deceivers are initially aware of moments when they shift their attention away from available evidence to something else, although they may not be aware of the overall project of their self-deception.”

Some tactics used by self-deceivers to evade acknowledging some truth, including

1) avoiding thinking about the truth,

2) distracting themselves with rationalizations that are contrary to the truth,

3) systematically failing to make inquiries that would lead to evidence of the truth and

4) ignoring available evidence of the truth or distracting their attention from this evidence (3)

‘And the cobweb, shall it be eternal?
If the maid does not destroy it, the spider itself will tear it up.’

So basically we, the people, have created a Government that is out of control on a fundamental level ignoring our basic human rights, with political parties that are no longer relevant due to their aligning policies. This against a background of an extreme financial catastrophe that will make the financial crash of 2008 pale into insignificance.

When this creative destruction arrives; which it will soon, as all the storm clouds are gathering apace; our options are limited as to whom shall step into the void and attempt to tackle this mess.

Apathetic approach by the people and political and economic ignorance, in how to handle the debt situation, will lead to a prolonged period of suffering for very people who voted these politicians into power and everybody else.

The financial system is going to crash and burn and the last thing we need, is to lose all our rights by making the Governments stronger, allowing a totalitarian regime to take control.

Governments are no longer representing the people. They are representing themselves.

It is time to wake up.

I am not an advocate for revolution by the people against the Government or Bankers, it is an unsavory thought, yet this has happened throughout history. The problem is though, without the civil unrest how can we, as people, get a Government that will look after the people?

Addendum:

Ron Paul, ex congressman of the US notes that the war by the Government on the middle class “….will cause a major economic downturn that may even be worse than the Great Depression. The main victims of this crisis will be average Americans. The only way to avoid this calamity is for the American people to force Congress to free them from the burdens of the warfare state, the welfare state, taxation, and fiat currency.

http://www.ronpaulinstitute.org/archives/featured-articles/2015/april/26/the-real-war-on-the-middle-class/

The White House has refused to release information about a secret policy that permits the Department of Homeland Security to unilaterally shut down private cellphone service in the event of a national crisis.

http://sputniknews.com/us/20150427/1021452090.html#ixzz3YYzmBhdl

The Financial Crisis History

Also Sweden (1990 – 1994). Moral of the story: Don’t save stockholders if you can save taxpayers. Investors, who take calculated risks by investing in the stock market, are in a position to bear losses with partial responsibility. Taxpayers, meanwhile, should not be punished for someone else’s oversights.

Tulip Mania (The Netherlands, 1637) Moral of the story: People go crazy when they become convinced that they can get rich quickly. Even off a tulip bulb future.

Wall Street Crash (1929 – 1932) Moral of the story: Don’t panic, if you do not lose your money the first time, you will later. Many scholars now say that the 1929 crash didn’t cause the Great Depression, but certainly contributed to its severity. Public panic only makes situations worse than they already are.

The Japanese asset price bubble (1986-1990) Moral of the story: When bubbles grow, they’re wonderful in every way. When they sink—and they can sink, rather than popping—they can set the economy back more than a two decades.

The .com bubble (1995-2000) Moral of the story: The market, your favorite bipolar uncle, likes to celebrate wildly when he finds out about new technology. Just be sure to steer clear of him when his mania turns into prolonged, howling grief.

1997 Asian Financial Crisis (1997-1999) Moral of the story: When things crash, rich people may interfere, offering money in exchange for an agenda. That doesn’t mean their agenda is right, or even useful. Moral #2: Financial meltdowns can happen at the speed of light.

Russian financial crisis (1998) Moral of the story: Don’t anger people while financing yourself with a Ponzi scheme. It ends up being much more expensive in the long run.

Argentine economic crisis (1999–2002) Moral of the story: Freezing bank accounts is a really bad idea.

United States Savings and Loan Crisis (1986-1989). Moral of the story: When the government puts impossible restrictions on a bank’s ability to make money, the bank finds a workaround to keep its bottom line working. When the Fed makes a change that blows the lid off the bank’s workaround, the whole system collapses.

Financial Crisis (2008) Moral of the Story: Governments should not support corrupt financial institutions to the detriment of the taxpayer. (5)

Financial Crisis (2015) Moral of the Story: Do not allow corrupt Governments and cronyism to rule. Bank’s should not have the ability to roll back regulations for their own agenda at the expense of the taxpayer.

1. Altered stanza from Nuclear. http://metalgear.wikia.com/wiki/Nuclear_%28song%29
2. ‘Ship of Theseus’ Philosophy Paradox in the questioning of whether a ship repaired over time, by replacing each of its wooden parts would remain the same ship.
3. http://plato.stanford.edu/entries/concept-evil/
4. http://www.globalresearch.ca/the-2008-world-economic-crisis-global-shifts-and-faultlines/12283
5. http://www.businesspundit.com/10-of-the-worlds-most-dramatic-financial-crises-and-their-lessons/
6. http://sputniknews.com/us/20150427/1021431612.html#ixzz3YVko66ec

Regret foot nights and alignment. Still have my “L” plates on formatting and transferring functions.

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