Friday, December 19, 2014



dimonJerk or psychopath?
When Yellen tapered, Brics gaped. They thought cheap money was going to last forever. When Wall St and The City attacked the oil price, Venezuela had an attack of the vapours and Russia began hurriedly to top up its already engorged gold reserves. As Ambrose Evans-Pritchard writes in the Telegraph this morning, ‘They [the Brics] now face the margin call from Hell as the global monetary hegemon pivots’. They certainly do: significant among my ‘7 reasons who Obama should’ve vetoed Congress’s new anti-Putin sanctions’ from yesterday was this one:
‘4. Think about the effect on emerging markets debt: by yesterday afternoon, investors worldwide were storming out of EM bonds. If things get worse, Turkey and South Africa will start to suffer.’
A day later, it’s already happening. Nigeria, Venezuela and other petro-states are facing deadly margin calls and capital flight at one and the same time. The Turkish lira is down 12%, and the Istanbul bourse is down 20%. The Brazilian real has fallen dramatically against the Buck…to a level last seen in 2005. The country’s oil giant Petrobas owes $170bn…but faces an economic crash.
You think these folks are minnows? Think again: emerging markets now account for roughly 50% of global gdp. Just when everybody’s output has died – based on the poor demand predicted here last April – Washington is tightening the money supply, attacking the oil price, and inviting the return of currency defence via interest rates. I finished yesterday’s piece by observing, ‘Up until now, Washington has been shooting itself in the foot. It is in danger of shooting itself in the head’. The US has shot itself in the head, and we are heading for 1929 – The Remake only on a scale vastly more destructive than the original movie.
I must confess to, last night, pausing for some other thought: that the mad 3% in fact knows exactly what it’s doing: that it wants to bring the stock markets crashing, property dying and even its own debt problem to a head by wiping out Russia’s business model, decimating the demand for Chinese goods, and destroying every fiat but the Dollar in a last desperate bid to restore its unassailable power….before those keen to freeze them out of transactions can get their act together.
Imagine how beneficent the US would look if, at some time around, say, March 2015, it declared that times were so desperate, it was now time for a global Jubilee, via which all debt would be wiped off the slate….and so a real recovery could get under way again.
I don’t know whether the ageing Australian political giant Malcolm Fraser had this in mind when he wrote yesterday:
‘It is time for Australia to end its strategic dependence on the United States. The relationship with America, which has long been regarded as beneficial, has now become dangerous to Australia’s future. We have effectively ceded to America the ability to decide when Australia goes to war. Even if America were the most perfect and benign power, this posture would still be incompatible with the integrity of Australia as a sovereign nation. It entails not simply deference but submission to Washington, an intolerable state of affairs for a country whose power and prosperity are increasing and whose national interests dictate that it enjoy amicable, not hostile, relations with its neighbors, including China….’
As time goes on, I suspect – and quite quickly – many more nations will decide the same thing: the US is heading for pariah status. Pariahs – be they ancient Rome, Victorian Britain or Soviet Russia – always end up being brought down by their hubris. And someone pulling hard on your hubris is not funny, let me tell you.
So: is this the élite’s final Act – the denouement of a plot designed to enslave everyone else? No, frankly – I don’t think it is. It’s just more of “thmericunwayee” crap one’s come to expect of corporate-institutional America.
I believe what we’re seeing here is Snafu on a hitherto unimaginable scale. By and large, pretty much since the end of the Second World War, the US hierarchy’s upper levels have demonstrated serial ignorance, knee-jerk testoterone, thinly-disguised aggression and unbelievable insensitivity in their dealings with the outside world. By 1960, virtually every country in Latin America loathed imperial Washington. By 1980, most of Europe did. The collapse of the Soviet Union, however, marked the solidification of that tiny US axis insisting that all other ways than naked globalist greed were prima facie evidence of insanity or Communist leanings – and probably both.
Only neoliberal banker-swamped Britain has gone along with them on this, and in my view (accompanied by an avalanche of evidence) it has destroyed the place as a functioning ‘social’ civilisation. The French reject ‘l’anglo-saxonisme’ utterly – a large percentage of the reason I live there now. The Germans under Merkel have seemed generally keen to do America’s bidding, but the ‘old’ Eastern, central and south-eastern European States do not want anything to do with what they increasingly see as US-led globalist colonialism. The Poles suspect American motives, the Hungarians actively oppose them, and Greece will never forgive the US for siding with fascists throughout its postwar period. All of these States feel closer to Moscow: they detested the Communists, but see Putin as a bulwark against Washington.
All of this seems to bounce off sovereign America without making the slightest dent in policy. And as long as the politicians remain the bought whores of US corporates and bankers, that braindead response will continue.
As I’ve written before about both the UK and Brussels, “Anything could happen, but nothing will change”.

No comments:

Post a Comment