350 Greek Tragedies in Athens in June Alone

You have to wonder how people will cope when it really gets bad.

When all the conveniences vanish, when Europeans live like Pakistanis and Pakistanis live like dogs.

“Money has no value in and of itself; it derives that value from the world it rolls in. Take away that world, and you take away the value.”

Promising opening and an accurate followup. It’s that second clause in the middle that shows just how tenacious the use of money is in affecting our thinking. That clause is a lie. Money has no value, derived or otherwise. That’s the long-standing, unquestioned lie that led, ultimately, to those suicide attempts.

Beautiful video! Much food for thought.
I have several conflicting inner impulses ranging from my own strong Buddhist leanings to far less charitable ideas about turning banksters into organ donors.

This reminds me of a fascinating little book by Robert A. Johnson called Transformation: Understanding the Three Levels of Masculine Consciousness.
To grossly oversimplify, level one is exemplified by Don Quixote – the windmills he saw were monsters to him and nothing could change his mind. In other words, “The way I see it is THE way it is.” Period. And no other realities are possible to that individual than his own. He is Unconscious Man.

Level two is exemplified by Hamlet, a tragic figure who could see that there are multiple ways to interpret a situation and, when he had the opportunity to kill the right man to avert great tragedy, he froze in his own confusion and questioning of his own perception. Tragedy ensued. In other words, There are multiple, legitimate ways to see things and who is anyone to say that their way is the right way? (Johnson says our culture is at this level now. It is dangerous and difficult place to be.)

Level three is exemplified by Faust. There are numerous versions of this tale. The one Johnson uses to illustrate is different from the one I read, but the fundamental take-home is this: At level three, the Conscious Man can see things multiple ways, but is in a state of equanimity about his choices. He does not second guess himself and get stuck. He chooses, quite wisely, and moves along. He actually looks quite a bit like a man at level one – but with vastly different inner workings.

I often end up swirling around in my own “what-to-do?” level two stuff. But my advice to myself is to choose something and take action. Learn to build a solar water heater today. Deleverage myself a bit more today. Build community. Whatever. Just take some action.

In the words of an ancient Chinese Proverb: Many a false step is taken standing still.

SfV said “You have to wonder how people will cope when it really gets bad.”

I suspect most people will not cope well, especially with no phones to text friends.

As this article explains very well, it’s not the euro that’s in trouble. It’s the people

https://www.counterpunch.org/2012/08/16/the-euro-is-not-in-trouble-the-people-are/

The Euro is Not in Trouble; the People Are
by VINCENT NAVARRO

One of the phrases frequently written in economic circles in the United States (and to a lesser degree in Europe) is “the Euro is going to collapse.” Those who repeat that phrase over and over again do not seem to know how the Euro was established, by whom, and for whose benefit. If they knew the history of the Euro, they would have noticed that the major forces behind the Euro have done very well and continue to do so. As long as they continue to benefit from the Euro’s existence, the Euro will continue to exist.

Let’s start with the Euro’s history and the major reason it was established. After the collapse of the Berlin Wall, it looked like East and West Germany could reunite and¾as the Western German establishment wanted¾become, once again, a united Germany. That possibility did not please democratic Europe. Twice in the 20th century, the majority of European countries had to go to war to stop the expansionist aims of a united Germany. The European governments were not pleased to see post-Nazi Germany reunited. President François Mitterrand of France even said ironically that, “I love Germany so much that I prefer to see two Germanys rather than one.”

The only alternative these governments saw was to make sure the united Germany would not become an isolated country in front of everyone else. Germany had to become integrated into Europe. It had to become Europeanized. Mitterrand thought one way of doing this was to have the German currency, the mark, be replaced by a new European currency, the Euro. This was thought to be a way of anchoring post-Nazi Germany to democratic Europe.

The German establishment, however, put forth conditions. One was to establish a financial authority, the European Central Bank (ECB), that would manage the Euro and have as its only objective to keep inflation down. The ECB would be under the heavy influence of (i.e., controlled by) the German Central Bank, the Bundenbank. The other condition was to establish the Stability Pact, which would impose financial discipline on member states of the Eurozone. Their public deficits would have to remain lower than 3% of their GDP, even in moments of recession.

To understand why the other countries accepted these conditions, one has to understand that neoliberalism (which started with President Ronald Reagan in the United States and with Prime Minister Margaret Thatcher in the United Kingdom) was the dominant ideology in those countries. A major position within that neoliberal dogma was to reduce the role of the states as much as possible, encouraging private financing and de-emphasizing domestic demand as the way of stimulating the economy. In this view, the main motor of the economy should be the growth of exports. These are the roots of the problem¾not of the Euro, which is in good health¾but of the welfare and well-being of the population in those countries.

The European Central Bank is Not a Central Bank

What a central bank does is to print money and, with that money, buy public bonds of the state, making sure the interests of those bonds are reasonable and do not become excessive. The central bank protects states against the financial market’s speculation. The ECB, however, does not do this. The interest of the states’ public debt in some countries has skyrocketed because the ECB has not bought any of their debt for quite some time. Spain and Italy are fully aware of this.

What the ECB does, however, is to lend a lot of money to private banks at a very low interest rate (lower than 1%), with which they buy public bonds with very high interest (6% to 7% in Italy and Spain). It is a fantastic deal for these banks! Since last December, the ECB has lent more than 1 trillion Euros (1,000,000 million Euros) to private banks, half of it (500,000 million Euros) to Spanish and Italian banks. This transfer of public funds (the ECB is a public institution) to the private financial sector is justified by indicating that this aid was needed in order to save the banks and, thus, ensure credit is being offered to small and medium-sized business enterprises and families in debt. Credit, however, has not appeared. Both individuals and businesses continue to have difficulties obtaining it.

Occasionally, the ECB buys public bonds in the secondary markets from states that are in trouble, but it buys them in an almost clandestine way, in very small doses and for very short periods of time. The financial markets are aware of this situation. This is why the high interest of the public bonds goes down for a while when the ECB buys them and then goes up again, making it very difficult for states to sustain them. The ECB should announce openly that it will not allow the interest of the public bonds to go over a certain level, making it impossible for financial markets to speculate with them. But the ECB does not do this, leaving the states unprotected in front of those financial markets.

In this situation, the agreement that Spain and Italy must reduce their public deficits to recover the confidence and trust of financial markets is not credible. Spain has been reducing the public deficit, while the interest of Spanish bonds has been increasing, proving that it is the ECB, not the financial markets, that defines that interest.

Who Controls the European Financial System?

In theory, the ECB was supposed to be the manager of the Euro. But the one that really controls the Euro, and the European financial system, is the Bundesbank, the German Central Bank. It was designed that way, as previously noted. But there was another reason for control of the European financial system by the Bundesbank and the German banks. That influence (almost to the point of control) was the result of a set of decisions made by the German government, specifically by the Schröder social democratic government (Program 2010), and continued by Merkel’s conservative governments, which emphasized the export sector as the economy’s main motor. Oskar Lafontaine, Schröder’s Minister of Finance, wanted to put domestic demand as the main motor of the German economic recovery. He proposed increasing salaries and public expenditures. He lost and left the social democratic party, forming a new party, Die Link/The Left, and Schröder (now working for an export-oriented industry) won. As a consequence of that emphasis on exports (the majority to the Eurozone), German banks accumulated an enormous amount of Euros. Rather than using these Euros to increase German workers’ salaries (which would have stimulated not only the German economy, but the whole European economy), the German banks exported those Euros, investing in the periphery of the Eurozone. That investment was the cause of the housing bubble in Spain. Without German money, the Spanish banks could not have financed that bubble, which was based on a huge speculation.

When Did the Crisis Appear in Spain?

When German banks stopped lending to Spain as a result of their panic (when they learned that they themselves were contaminated with toxic products from U.S. banks) the housing bubble collapsed, creating a hole in the Spanish economy equivalent to 10% of its gross domestic product, all within a few months. It was an economic tsunami, an authentic disaster. Immediately, the public national budget went from a surplus to an enormous deficit, as a result of the collapse of revenues to the states. It did not have anything to do with the growth of public expenditures (Spain had the lowest public expenditures per capita among the EU-15), but rather the dramatic decline of revenues. The emphasis by the “Troika” (the European Commission, European Central Bank, and International Monetary Fund) that Spain needs to cut its public expenditures even more is profoundly wrong because the public deficit has not been caused by a growth of those expenditures (as suggested by the frivolous remarks of Chancellor Merkel about the “extravagance of the Spanish public sector”). Moreover, those cuts are causing an enormous recession.

What is the Purpose of the Financial Aid?

The official rhetoric is that the financial authorities of the Eurozone have made available to Spain 100,000 million Euros to help its banks. Reality, however, is very different. The Spanish banks and the Spanish state are deeply in debt. They owe a lot of money to foreign banks, including German banks, which have lent almost 200,000 million Euros to Spain. These banks are screaming to have their money back. That is why the 100,000 million Euros have been approved by the German parliament. Peter Bofinger, economic advisor to the German government, put it quite clearly: “This assistance is not to these countries in trouble (like Spain) but rather to our own banks who owe a lot of private debt in those countries.” (Chatterjee Pratap, “Bailing out Germany: The Story Behind the European Financial Costs” [28/05/42]). It could not have been said better.

If the European authorities had wanted to help Spain, they should have lent that money at very low interest to the Spanish public credit agencies (such as ICO, Official Institute of Credit), resolving the enormous problem of lack of credit in Spain. This alternative was, of course, never considered.

Where is the Supposed Problem with the Euro?

The fact that Spain has an enormous problem of lack of liquidity does not mean the Euro is in trouble. Many regional governments cannot pay their public servants because of a lack of money. As a matter of fact, those enormous differences in credit availability within the Eurozone are benefiting the German banks. Today, there is a flow of capital from Spain to Germany, enriching German banks and making German public bonds very secure. The fact that there is an enormous crisis with huge unemployment rates in the peripheral countries does not mean, however, that the Euro is in crisis. It would be in crisis only if these peripheral countries, including Spain, would leave the Euro. That would mean the collapse of the German banks and the European financial system. But this is not going to happen. The measures being taken in Spain and other peripheral countries, with the support of the Troika, by the Spanish and other governments are the measures that the conservative forces they represent have always dreamed of: cutting salaries, eliminating social protection, dismantling the welfare state, and so on. They claim they are doing it because of instructions from Brussels, Frankfort, or Berlin. They are shifting responsibilities to foreign agents, who supposedly are forcing them to do it. It is the externalization of blame. Their major slogan is, “There are no alternatives!”

When Mr. Mario Draghi, the president of the European Central Bank, calls Mr. Mariano Rajoy, the Spanish president of the most conservative government in the European Union, close to the Tea Party of the United States, he tells him that in order to help him, he will have to make reforms in the labor market (i.e., make it easier for employers to fire workers). He is quite open about it. In a recent press conference (August 9, 2012), Mr. Draghi was quite clear. The ECB will not buy Spanish public bonds unless the Spanish government takes tough, unpopular measures such as reforming the labor market, reducing pension benefits, and privatizing the welfare state. The Rajoy government will gladly follow these instructions. It has already made many cuts and projects 120,000 million Euros more in cuts within the next two years. The Euro and its system of governance are working beautifully for those who have the major voice within the Eurozone today. The ECB is instructing the governments of its monetary zone to dismantle Social Europe and they are doing it. It is what my good friend Jeff Faux, a founder of the Economic Policy Institute in Washington, D.C., used to call “the international class alliances,” that is, the alliance among the dominant classes around the world. That alliance is clearly operating in the Eurozone today. It is because of this that the Euro is going to be around for a long, long time.

Vincent Navarro is Professor of Public Policy at Johns Hopkins University in the United States and Pompeu Fabra University in Spain.

Hi rwg,

Yes this parallels the ‘triumvirate’ found in most spiritual traditions, exemplified in the Zen saying of “Before enlightenment mountains are mountains and rivers are rivers, during enlightenment, mountains are not mountains, rivers are not rivers, after enlightenment, mountains are again mountains, and rivers are again rivers.” This shows the three stages of unawakened, awakened and finally liberated of the spiritual path. But as Bernadette Roberts points out, the path is only ever seen in retrospect: https://www.spiritualteachers.org/b_roberts_interview.htm and ‘Edji’ also has a good take on getting stuck in the middle: https://www.wearesentience.com/awakening-vs-liberation.html

As for the current ‘illusion’, the biggest resource/obstacle is that little bubble of reality in side your own ‘head’.

“Morpheus: The Matrix is a system, Neo. That system is our enemy. But when you’re inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save. But until we do, these people are still a part of that system and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.”

L,
Sid.

Just met a Syrian living in Switzerland on holiday in Thailand. Without any prodding at all he said everyone he knows in Switzerland is preparing for “collapse”. Again, I didn’t bring up anything about this–he did! I didn’t show my cards as a crazy collapse-nik even for one moment. I’d say the guy is about 25. He says all his friends are leaving the cities and trying to find a place to live in the countryside because they are expecting the absolute worst. Maybe only anecdotal, but interesting. Is this how fear spreads?

Jack, the dude is a total anti-Semite. Don’t be fooled. And it’s a shame you’ve broken the incredible track-record in the TAE comment section which avoids legitimizing such conversations (unlike the plethora of other financial collapse blogs, such as Zero Hedge et al.).

Check out The Armenian Weekly essay entitled, Jacobs: The Outrageous Claim of Christopher Jon Bjerkness: The Jewish Genocide of Armenian Christians.

https://www.armenianweekly.com/2010/01/12/jacobs-the-outrageous-claim-of-christopher-jon-bjerkness-the-jewish-genocide-of-armenian-christians/

If you refuse to read the well-written, and well-argued article in its entirely, here’s a snippet or two:

It is a mainstay of anti-Semitism and anti-Semites that conspiracy theories abound, most especially about supposed world-wide Jewish power and Jewish behind-the-scenes control and manipulation of all those currently in positions of political, governmental, economic, and military leadership. This has been very much in evidence since the beginning of the 19th century with the publication of the notorious Russian forgery The Protocols of the Learned Elders of Zion, a totally spurious and fraudulent document supposedly telling the story of a secret midnight cemetery meeting of a group of rabbis at which their leader spells out their plans in twenty-four “protocols” for world take-over.

Not content with this absurdity, he also rails against “the Jewish controlled book publishing industry…Jewish controlled academia…Jewish control of the press” (pg. 24), tropes which are also included in the Protocols.

Etc…etc. Goodnight.

The choice is all of ours not to repeat the egregious evils of our past. The previous financial collapse of the 20s was accompanied by the very same conspiracy theories. In this age of the Internet, it’s the same phenomenon just dressed up in a digital suit and tie. Simple answers, like grand conspiracy theories which target a small identifiable “race” or culture simply satisfy our basest needs. It’s the easiest and most evil of our human traits.

We have a responsibility to do more for the people of the world, and for the planet itself. Let’s start by getting people to think about how we consume as individuals and as a culture, how we must reject debt, how houses don’t answer our prayers for riches, how we need to become more community-based and self-sufficient. There is quite a lot of work there alone, given most people would rather just buy Apple stock and supposedly live off the windfall.

Darkness is everywhere and within us. And people like the dude you’re endorsing are going to take us down even darker paths than we’ve gone yet. Don’t let them.

Off topic …
conspiracy theories have a habit of hiding behind some facts.

Here is some research. You might want to check what you believe to be facts.

The Lost Science of Money
by Stephen A. Zarlenga,
a masterful work that traces this debate back to ancient Mesopotamia, Greece and Rome.

… the harvest cycle in ancient farming societies, but Zarlenga (2002), Del
Mar (1895), and the works cited therein contain numerous other historical examples where
this mechanism was at work. It repeatedly led to systemic borrower defaults, forfeiture of
collateral, and therefore the concentration of wealth in the hands of lenders. For the
macroeconomic consequences it matters little whether this represents deliberate and
malicious manipulation, or whether it is an inherent feature of a system based on private
money creation. We will return to this in our theoretical model, too.

A discussion of the crises brought on by excessive debt in ancient Mesopotamia is
contained in Hudson and van de Mierop (2002). It was this experience, acquired over
millennia, that led to the prohibition of usury and/or to periodic debt forgiveness
(“wiping the slate clean”) in the sacred texts of the main Middle Eastern religions. The
earliest known example of such debt crises in Greek history are the 599 BC reforms of
Solon, which were a response to a severe debt crisis of small farmers, brought on by the charging of interest on coinage by a wealthy oligarchy. It is extremely illuminating to
realize that Solon’s reforms, at this very early time, already contained many elements of
what Henry Simons (1948), a principal proponent of the Chicago Plan, would later refer
to as the “financial good society”. First, there was widespread debt cancellation, and the
restitution of lands that had been seized by creditors. Second, agricultural commodities
were monetized by setting official monetary floor prices for them. Because the source of
loan repayments for agricultural debtors was their output of these commodities, this
turned debt finance into something closer to equity finance. Third, Solon provided much
more plentiful government-issued, debt-free coinage that reduced the need for private
debts. Solon’s reforms were so successful that, 150 years later, the early Roman republic
sent a delegation to Greece to study them. They became the foundation of the Roman
monetary system from 454 BC (Lex Aternia) until the time of the Punic wars (Peruzzi
(1985)). It is also at this time that a link was established between these ancient
understandings of money and more modern interpretations. This happened through the
teachings of Aristotle that were to have such a crucial influence on early Western thought.
In Ethics, Aristotle clearly states the state/institutional theory of money, and rejects any
commodity-based or trading concept of money, by saying “Money exists not by nature but
by law.” The Dialogues of Plato contain similar views (Jowett (1937)). This insight was
reflected in many monetary systems of the time, which contrary to a popular prejudice
among monetary historians were based on state-backed fiat currencies rather than
commodity monies. Examples include the extremely successful Spartan system (approx.
750-415 BC), introduced by Lycurgus, which was based on iron disks of low intrinsic
value, the 390-350 BC Athenian system, based on copper, and most importantly the early
Roman system (approx. 700-150 BC), which was based on bronze tablets, and later coins,
whose material value was far below their face value.

Many historians (Del Mar (1895)) have partly attributed the eventual collapse of the
Roman republic to the emergence of a plutocracy that accumulated immense private
wealth at the expense of the general citizenry. Their ascendancy was facilitated by the
introduction of privately controlled silver money, and later gold money, at prices that far
exceeded their earlier commodity value prices, during the emergency period of the Punic
wars. With the collapse of Rome much of the ancient monetary knowledge and experience
was lost in the West. But the teachings of Aristotle remained important through their
influence on the scholastics, including St. Thomas Acquinas (1225-1274). This may be
part of the reason why, until the Industrial Revolution, monetary control in the West
remained generally either in government or religious hands, and was inseparable from
ultimate sovereignty in society. However, this was to change eventually, and the beginnings
can be traced to the first emergence of private banking after the fall of Byzantium in 1204,
with rulers increasingly relying on loans from private bankers to finance wars. But
ultimate monetary control remained in sovereign hands for several more centuries. The
Bank of Amsterdam (1609-1820) in the Netherlands was still government-owned and
maintained a 100% reserve backing for deposits. And the Mixt Moneys of Ireland (1601)
legal case in England confirmed the right of the sovereign to issue intrinsically worthless
base metal coinage as legal tender. It was the English Free Coinage Act of 1666, which
placed control of the money supply into private hands, and the founding of the privately
controlled Bank of England in 1694, that first saw a major sovereign relinquishing
monetary control, not only to the central bank but also to the private banking interests
behind it. The following centuries would provide ample opportunities to compare the results of government and private control over money issuance.

Greece wounds me By Eirene: https://99getsmart.com/?p=4527

Greece: The Troika Even Sets the Sales-Tax Rate for Restaurant Meals: https://99getsmart.com/?p=4506