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The Greek crisis will flare up again. And why should it not?

With ongoing austerity and low demand, Greece was never going to manage any sort of growth or budget surplus.

Greece has ceased to make headlines. (...) there were fears that a crisis that had been steadily becoming more acute in the first half of 2015 could result in the single currency splintering.

That threat was removed by a deal that involved a humiliating climbdown by the Syriza-led government. Greece received a bailout, but with harsh conditions attached.

There were three obvious problems with that 2015 deal, which secured Greece its third bailout in five years. The first was that the new dose of austerity would make it more difficult for Greece to emerge from a slump just as severe as that which gripped the US in the 1930s. The second was that Greece’s creditors were making unrealistic assumptions for growth and deficit reduction. The third was that sooner or later the Greek crisis would flare up again. It was a case of when, not if. (...)

All that said, though, the first two predictions have come true. By last summer, Greece had suffered a five-year slump that was on a par with the damage caused to the US economy in the Great Depression. Yet the country’s creditors thought it was a good idea to suck even more demand out of the economy through spending cuts and tax increases. (...)

Unfortunately, lessons have not been learned. The 2015 bailout package assumes that Greece will run a budget surplus, once debt interest payments are excluded, of 3.5% of GDP year in and year out. The IMF, which now has a more realistic assessment of Greece than the commission or the ECB, says few countries have managed to sustain budget surpluses of this size, and that Greece could do so only by further cutting wages and pensions. The IMF also thinks “it is no longer tenable” to imagine that Greece can move from having one of the eurozone’s weakest productivity growth rates to the highest.

The IMF says that without debt relief, Greece’s debt could hit 250% of GDP by the middle of the century. Germany would prefer those discussions to be delayed until after its election in autumn next year. But the chances are that Greece will be back in the headlines before then.

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Tags: #greece #crisis #imf #ecb #debt #debt relief #growth #budget #euro #euro zone #eu #european union #troika #banks #dijsselbloem

The Greek crisis will flare up again. And why should it not?

With ongoing austerity and low demand, Greece was never going to manage any sort of growth or budget surplus
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Bert Ernste 6 years ago from Diaspora

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In #Glasgow today, #Scotland United Against #Austerity rally, against the #Tory cuts and with solidarity to #Greece, who were presented as an example against austerity, the bankers and the #IMF.
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Vazelas99 7 years ago from Diaspora

A War Written in Stone



Speculations about whether or not the #US will attack #Syria are all over the news. Some believe the whole thing is a bluff, others that it will lead to a Third World War. I exclude no possibility but dare say that a new armed conflict in the #MiddleEast is inevitable. A major #war in the Middle East is written in stone, and in this post, I will try to explain why.

The dollar as the world currency

After the Second World War, the #dollar emerged as a global currency. #USA stood victorious with a fully intact industry and with the world’s largest #gold reserve; there was simply no realistic alternative to the dollar at that time. The post-war monetary paradigm that emerged was called the #Bretton-Woods system. The basic principle of this system was that all currencies were pegged against the dollar, which in turn was pegged against gold at $35 per ounce. In 1971, the Bretton-Woods system collapsed when the United States declared that it had printed too many dollars relative to how much gold it possessed. In practice this meant that the United States went bankrupt and the entire international monetary system had to be replaced.

Introducing the Petrodollar

Until 1971, the dollar was backed by the gold reserve possessed by the U.S. Everyone had confidence in dollars, because they could always be redeemed for the same amount of gold; hence trading in dollars was equivalent with trading in gold. In 1971, this confidence vanished and the lack of trust destabilized financial markets as the dollar now in practice was nothing more than a worthless piece of paper. To restore confidence in the dollar, and to maintain its position as a world #currency, Washington was forced to back its dollars with something else. The problem was tricky to solve because, not only did the U.S lack enough gold, it was also struck by #PeakOil the very same year. The decision was therefore to blatantly back up the dollar with other countries’ oil. #Washington knew that all countries in the world must buy oil in order to survive, and if everyone had to pay for that oil with dollar, the dollar would become even stronger than it had been before 1971.

The U.S. implemented a simple plan 1971: Forcing #OPEC to only accept dollars as payment for its #oil. Earlier, the U.S. gold reserve gave the dollar strength, now it was OPEC’s oil. Suddenly, the U.S. could print any amount of dollars at any time without presenting any underlying assets of its own.

The World of Petrodollar

Simplified to three individual countries, we can explain the current world trade like this:

#SaudiArabia: Provides the rest of the world with oil. Accepts only U.S. dollars as payment and thus have a large pile of dollars in its vault.

#China: Provides products and services to the rest of the world. By selling mainly to the U.S., and therefore getting paid in dollar, China is also piling up huge amounts of dollars.

#UnitedStates: Provides the world with U.S. dollars, as long as the printing press works the U.S. can freely #consume any amount of oil, and import whatever it needs from China.

It may seem absurd, but this is how the #Petrodollar works. China and Saudi Arabia are indeed rich in this system, but they are rich in dollars. If China and Saudi Arabia starts trading, they will actually just trade dollars with each other. No country can shop for their dollars without someone else getting an even bigger pile of dollars. You cannot escape the Petrodollar, period. The only thing that consumes Petrodollar in this system would be indebted countries that must pay of their dollar denominated debts. The fact that all dollars originate from the #printingpress in the U.S., translates into that all nations indebted in dollars are working for the U.S… for free.

Organizations such as the #WTO are actively maintaining this unjust world order by enforcing global #trade in Petrodollar. The #IMF is an organization that in a similar manner emits #loans in dollars, and thus forcing countries into the world of Petrodollar. All #debt must be paid by future #growth, which in turn requires more oil. Both debt and oil is paid for in dollars, the #monopoly currency of the United States. The #media is talking a lot about how the WTO stands for #freetrade and the IMF is helping poor countries get back on their feet. Nothing could be more misleading.

Have you ever wondered why some #thirdworld countries are so poor even though they have large amounts of natural #resources, cheap #labor, non-existent environmental laws and other benefits that would contribute to economic #wealth? These countries have no choice but to sell everything they own in exchange for dollars. Mines that take 10,000 men 100 years to build can easily be bought by the U.S. if the printing press runs a few extra hours in the evening. The Petrodollar is a #rigged game where some will lose no matter what they do.

Why not leave the Petrodollar?

Four OPEC countries have chosen to leave the Petrodollar: #Iraq, #Libya, #Iran and #Venezuela. The first two were bombed by the U.S., after which they re-introduced the Petrodollar. Iran and Venezuela suffer massive economic, diplomatic and even violent attacks from #Washington. Already eleven years ago, the #CIA organized a coup d’état in Venezuela that almost succeeded. Iran is even worse off with half the U.S. fleet off their coast. If you as a leader decide that your country should leave the Petrodollar, you may expect the U.S. to level your nation with the ground and make sure that you never make the same ”mistake” again.
Nobody wants to end up like #Gaddafi or #Saddam; therefore most countries sell their oil for dollars and enjoy U.S. #military protection.

Other nations of the world are either allied with the U.S. in this Petrodollar system, or in desperate need of oil, and thus have no other choice but to recognize the Petrodollar. #Russia is one exception to this rule, and one of few countries that dares to talk back to the U.S, simply because Russia is a huge oil producer and immune to the Petrodollar. Also China may resist pressure from Washington because the country imports large amounts of oil from the enemies of the Petrodollar in Russia, Iran and Venezuela. For countries that do not want to entrust Russia with their future, no alternative remains but to buy oil for dollars.

The Petrodollar is already 40 years old, will it survive another 40 years?
OPEC has lost half of its share of the world oil production since the Petrodollar was introduced. America’s own oil production has already peaked and will continue its downward trend once #shale oil no longer delivers what it promises. This is bad enough for the Petrodollar, but it will get worse.

In the beginning of this post I wrote that the dollar since 1971 was backed by oil. Even if OPEC, Russia and all other countries around the world tried to keep the Petrodollar alive it would not be sufficient since Peak Oil has already occurred. Because of Peak Oil, we know that oil production will not increase, but rather decrease. If oil production drops, the U.S. can no longer shop for freshly printed dollars without causing the price of oil, which is priced in dollars, to reach the moon.

The dollar is a currency backed by the amount of oil sold in dollars; this is the essence of the Petrodollar. The #price of oil will therefore increase if the U.S. prints more dollars than there is oil for sale in U.S. dollars. Similarly, the price of oil drops if the U.S. prints fewer dollars. Since Peak Oil has occurred, the U.S. has no choice but to print fewer dollars until the day comes when the Petrodollar finally dies. If the U.S. continues to print dollars at the same rate as before, #inflation and #hyperinflation will inevitably occur.

To stop printing dollars is not an option for the U.S. since Washington has indebted the country to the hilt. If the #FED even suggests that tapering is on the table, #interestrates skyrocket and #stockmarkets collapse. If the U.S. reduces the rate at which it is printing dollar, the national #debt will implode. If the U.S. doesn’t reduce the rate, the dollar itself will collapse through hyperinflation. Therefore, I am confident that Petrodollar cannot survive another 40 years, or even 4 years. Because of Peak Oil the collapse of the Petrodollar is a fact, the only questions are when and how.

Why must there be a war?

War never starts because someone has the wrong religion, is cruel to its people or anything else you have learned in school. People are fed with these stories to motivate families to sacrifice their sons for others’ financial interests. The #genocide in #Rwanda in 1994 was blatantly ignored, and countries like #France chose to leave the defenseless victims when it became critical. No one accepted the #UN’s appeal for #military intervention because there was no economic interest in an intervention in Rwanda. If there on the other hand are financial interests in a conflict, outside countries gladly provide #terrorists with #weapons in the hope that a situation will arise that justify military intervention.

The Petrodollar is the largest financial interest mankind has ever seen. Two world wars have been started for far less. When Peak Oil is now slowly but surely causing the Petrodollar to collapse, the U.S. has two options:
  • Accept that the #game is lost and let the nation implode.
  • Take advantage of the fact that it has a larger defense budget than the entire rest of the world combined.
The U.S. will obviously #gamble on option 2, especially since the impact of option 1 is at least as bad as a #war. Washington have known since 1971 that this day will eventually come and have already decided on option 2, this is the reason behind the enormous #defense budget. The U.S. has also clearly demonstrated, in for example #Iraq, that Washington will choose option 2 without a doubt.

Although the Petrodollar is doomed because of Peak Oil, Washington will try to exploit this #system to the very end. Let us assume that the U.S. succeeds and defeats Iran without triggering a new world war. Surely the Petrodollar will survive a couple of more years, but then Russia will emerge on the list of countries to be bombed. Or is there some other giant oil reserve I have missed that you can buy for dollars?

As unlikely as the U.S. abandons the benefits of the Petrodollar, is the idea that Russia and China voluntarily would allow themselves to be #enslaved under the very same Petrodollar. It should now be clear to everyone that Russia and China will not let U.S. embark on Iran without a fight. The leadership in #Moscow and #Beijing are fully aware of how the Petrodollar operates and understands the importance of keeping the world’s fourth largest oil producer beyond Washington’s grip.

The current situation gives the U.S. no choice but to bomb one oil country after another to feed the Petrodollar with new oil. In the end, China and Russia will be compelled in self-preservation to defend one of these oil countries, where after the war is a fact. By all appearances, it looks as if this #oilnation is called Iran.


The world has already been divided into two camps and the polarization is likely to continue, especially within OPEC. The #cartel has lost #Gabon and #Indonesia as members. #Ecuador has clearly demonstrated its contempt for the United States by failing to hand over #Assange. Iraq and Libya are in ruins after civil wars and American bombing raids. #Angola has slowly but surely fallen victim to China’s charm. Iran and Venezuela are at the forefront of an open #revolt against Petrodollar. For each day that passes, the U.S. loses influence over OPEC and must by all accounts take drastic measures not to lose control of the Petrodollar.

To directly attack Iran is considered too dangerous, which is why #Obama now threatens to attack Syria instead. Since Iran and Syria has a defense alliance, Washington hopes that Iran will feel compelled to intervene and thus be blamed for the entire war. If Iran does not interfere, and lets the U.S. bomb Syria unpunished, the Iranian regime will be undermined for the foreseeable future.

However, Obama is playing a dangerous game here; the situation in the Middle East can quickly escalate out of control. Neither China nor Russia will accept the U.S. offer of a world war just to save the regime in Syria, but both Beijing and Moscow stand ready to defend Iran regardless of circumstances. If Iran sinks an American ship in the #Persian #Gulf in retaliation for the attack on Syria, the war is a fact. By attacking Syria, the United States is simply giving Iran the right to decide whether or not this is the time for a new world war.

No matter what happens with Syria this autumn, the U.S. will escalate this conflict closer to a war with Iran. Russia and China defends Iran which, in turn, promised to defend Syria. Exactly how this develops is anybody’s guess, but at some point the U.S. will forcibly impose the Petrodollar on Iran, and that is why the #war is written in stone.

#capitalism #corruption #banks #bankers #fuckthesystem

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Peak Oil och dess konsekvenser

25 Facts About the Federal Reserve

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Unelected, unaccountable central planners from a private central #bank run our financial #system and manage our #economy. There is a reason why financial markets respond with a yawn when Barack #Obama says something about the economy, but they swing wildly whenever Federal Reserve Chairman Ben #Bernanke opens his mouth. The Federal Reserve has far more power over the U.S. economy than anyone else does by a huge margin. The Fed is the biggest Ponzi scheme in the history of the world, and if the American people truly understood how it really works, they would be screaming for it to be abolished immediately. The following are 25 fast facts about the #FederalReserve that everyone should know…
  • The greatest period of economic growth in #US history was when there was no central bank.
  • The #UnitedStates never had a persistent, ongoing problem with #inflation until the Federal Reserve was created. In the century before the Federal Reserve was created, the average annual rate of inflation was about half a percent. In the century since the Federal Reserve was created, the average annual rate of inflation has been about 3.5 percent, and it would be even higher than that if the inflation numbers were not being so grossly manipulated.
  • Even using the official numbers, the value of the U.S. #dollar has declined by more than 95 percent since the Federal Reserve was created nearly 100 years ago.
  • The secret November 1910 gathering at Jekyll Island, Georgia during which the plan for the Federal Reserve was hatched was attended by U.S. Senator Nelson W. Aldrich, Assistant Secretary of the Treasury Department A.P. Andrews and a whole host of representatives from the upper crust of the #WallStreet banking establishment.
  • In 1913, Congress was promised that if the Federal Reserve Act was passed that it would eliminate the business cycle.
  • The following comes directly from the Fed’s official mission statement: “To provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in #banking and the #economy has expanded.”
  • It was not an accident that a permanent income tax was also introduced the same year when the Federal Reserve system was established. The whole idea was to transfer wealth from our pockets to the federal government and from the federal #government to the #bankers.
  • Within 20 years of the creation of the Federal Reserve, the U.S. economy was plunged into the #GreatDepression.
  • If you can believe it, there have been 10 different economic recessions since 1950. The Federal Reserve created the “#dotcom bubble”, the Federal Reserve created the “#housing bubble” and now it has created the largest bond bubble in the history of the planet.
  • According to an official government report, the Federal Reserve made 16.1 trillion dollars in secret #loans to the big banks during the last financial #crisis. The following is a list of loan recipients that was taken directly from page 131 of the report…
  • The Federal Reserve also paid those big banks $659.4 million in fees to help “administer” those secret loans.
  • The Federal Reserve has created approximately 2.75 trillion dollars out of thin air and injected it into the financial system over the past five years. This has allowed the #stockmarket to soar to unprecedented heights, but it has also caused our financial system to become extremely unstable.
  • We were told that the purpose of #quantitativeeasing is to help “stimulate the economy”, but today the Federal Reserve is actually paying the big banks not to lend out 1.8 trillion dollars in “excess reserves” that they have parked at the Fed.
  • Quantitative easing overwhelming benefits those that own stocks and other financial investments. In other words, quantitative easing overwhelmingly favors the very wealthy. Even Barack Obama has admitted that 95 percent of the income gains since he has been president have gone to the top one percent of income earners.
  • The gap between the top one percent and the rest of the country is now the greatest that it has been since the 1920s.
  • The Federal Reserve has argued vehemently in federal court that it is “not an agency” of the federal government and therefore not subject to the Freedom of Information Act.
  • The Federal Reserve openly admits that the 12 regional Federal Reserve banks are organized “much like private corporations“.
  • The regional Federal Reserve banks issue shares of stock to the “member banks” that own them.
  • The Federal Reserve system greatly favors the biggest banks. Back in 1970, the five largest U.S. banks held 17 percent of all U.S. banking industry assets. Today, the five largest U.S. banks hold 52 percent of all U.S. banking industry assets.
  • The Federal Reserve is supposed to “regulate” the big banks, but it has done nothing to stop a 441 trillion dollar interest rate derivatives bubble from inflating which could absolutely devastate our entire financial system.
  • The Federal Reserve was designed to be a perpetual debt machine. The bankers that designed it intended to trap the U.S. government in a perpetual #debt spiral from which it could never possibly escape. Since the Federal Reserve was established nearly 100 years ago, the U.S. national debt has gotten more than 5000 times larger.
  • The U.S. government will spend more than 400 billion dollars just on interest on the national debt this year.
  • If the average rate of interest on U.S. government debt rises to just 6 percent (and it has been much higher than that in the past), we will be paying out more than a trillion dollars a year just in interest on the national debt.
  • According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is the one that is supposed to have the authority to “coin #Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”. So exactly why is the Federal Reserve doing it?
  • There are plenty of possible alternative financial systems, but at this point all 187 nations that belong to the #IMF have a #centralbank. Are we supposed to believe that this is just some sort of a bizarre coincidence?
#capitalism #fascism #dictatorship #banks #petrodollar #fiatmoney #currency #fail #fuckthesystem
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himindri 8 years ago from Diaspora
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