We are witnessing ever-increasing alarm at the increasingly imminent collapse of world financial markets. The more euphemistic language of unsustainable sovereign debt and erosion of political autonomy does little to mitigate the harrowing scenario of national economic foreclosure at the behest of apparently omnipotent financial institutions. In much the same way that the courts declare a private individual, a business or a corporation insolvent and order the appointment of receivers; the likes of the ECB (European Central Bank), IMF and World Bank can routinely foreclose on entire nation states and deliver their governments into the hands of unelected ‘technocrats’ (i.e. bankers) who can be relied upon to manage the safe liquidation of any saleable assets, while directing the flow of quantitative easing and bailouts to flush the Augean sewers of the banking system onto the heads of the hapless public. We are urged with the utmost exigency to identify a sane and healthy way to proceed. We must move out and away from the deep psychosis that has gripped the world.
Chaos is certainly not a preferred option and because of the damaging effect it would have, the world’s leading democracies are loath to entertain the prospect of the EU (which in effect would be Germany) sending in a military police force to restore order in Greece, or any other belligerent failed State while the ‘reality’ of the situation finally sinks in: that austerity measures are the only apposite and, therefore, acceptable remedy on offer. Nevertheless, whatever the results of the end-game failure of democratic governments to stand their ground, Greece, as well as Italy, Portugal, Spain, Ireland, France and not to exclude the US or UK, will pay. The banks will be paid.
A convoluted and seemingly bizarre mechanism has been put in place by the ECB to facilitate Greek interest payments on their national debt. Put simply, new money is lent to Greece (through an account that the government cannot access as it might be tempted to use it to pay the salaries of civil servants, or fund health-care, social services, education or pensions), which is then immediately paid back to the lender by way of interest payment on the pre-existing outstanding debt. So, what is the point? The point is that it is in the best interests of the global financial institutions that these countries not default. Therefore, the fact that the books show that payments are being made to service the debt allows the indebting procedure to continue unimpeded, whilst seizure and foreclosure remain on the table as a final, though far from ideal, option for the lenders.
If world wars were fought to “make the world safe for democracy”, then the objective in today’s world is to ensure that democracy, as the sole legitimate legislative structure, is maintained in order to ensure the repayment of national debts incurred by a perpetually rotating body of political non-entities, sometimes liberal, sometimes conservative – each blaming the previous administration for whatever maladies may be afflicting the general public. Anything remotely resembling personal rule – in which accountability is inherent – has gradually disappeared from the stage and the world is now completely governed by ‘system’. In the meantime, unnoticed by the vast majority of people, there has been a coup… a coup de banque! But though it has transpired through a system, it cannot be forgotten that it has been perpetrated not by machines, but by men. An obsequious political class functions as salaried employees (albeit elected by plebiscite) that have paved the way by means of passing the requisite legislation to provide the juridical framework for the coup to take place.
We are witness to a systemic malady that has become a highly contagious pandemic which has circulated unabated amongst the elected tribunes of the people who are today sitting in senates around the world. It is a most democratic phenomenon, as it makes no distinctions of race, region and religion: from Paris to Pretoria, Buenos Aires to Berlin and now, from Cairo to Mumbai. ‘Located’ within computer networks with major nodes in Wall Street and the City of London and linking listed stock exchanges, a numbers based financial system has spread a virtual spider’s web over the world. It is both real and unreal, hence its psychotic effect.
The ‘leaders of the free world’, who one after the other have stepped centre stage to announce a series of multi-billion dollar, pound, euro bailouts that the general public will ultimately have to pay for, have in the inevitable aftermath, made no small amount of noise. Things may get tough, but the “Yes We Can” man has given his word that our financial system, protecting the freedoms of democracy, will prevail. It is quite extraordinary how ‘good’ it always sounds. The frantic behind-the-curtain play that intensified in 2008 as the previous US presidential administration started winding down was, of course, the Lone Ranger Show with Hank Paulson in the title role and Bush as Tonto. The ignominious British Prime Minister, not wanting to be upstaged (yet again) by the American, proved that he too was tonto. British politicians, who have to resort to cheating on their expense allowances to get a few hundred extra quid, are nowhere near the premier league of financial oligarchs who can create money, i.e. currency and credit from less than nil (a deficit) to the tune of trillions.
Nevertheless, after so much artificial over stimulation by the massive printing of new money, the current global hangover is horrendous, with many experiencing excruciating headaches. In the world’s largest consumer economy, and the one that carries the largest debt, the hangover isn’t their only headache. Anxiety levels over not having enough are keeping pharmacy counters packed, with Prozac flying off the shelves.
The situation in terms of credibility and continued viability of the global economy, whether looked at from the vantage point of individual countries or as one unified whole, is ostensibly one of perception. For a variety of reasons: from egregiously bloated state bureaucracies; to ill advised and imprudent borrowing (public and private); to unconscionable over-lending of unsecured home loans by banks (who in turn sold on their debt to keep it off their books), propelled by hugely inflated real estate ‘values’ that lenders imagined would keep rising; and, most significantly, driven by a stupefying degree of greed by men who simply were making too much money. As a result, certain countries such as Greece, Ireland, Portugal and more recently Italy, have lost credibility in the eyes of bond investors, consequently driving up their cost of borrowing while ever deepening the sink-hole of their fiscal woes. As early as 2010 the Bank for International Settlements came up with a statement regarding these and other unstable economies. It stated that the financial crisis came on top of an already serious pre-existing structural problem of debt accumulation. Of course, the exact same thing can be said of the UK and US. It is simply a matter of perception!
Niall Ferguson in his recent book, Civilization, states: “most cases of civilizational collapse are associated with fiscal crisis as well as wars. All the examples of collapse discussed above were preceded by sharp imbalances between revenues and expenditure, as well as by difficulty with financing public debt.” Ferguson goes on to cite the rise in the cost of servicing the Ottoman debt in the nineteenth century from just under 17% to over 50% by 1877. Not mentioned by Ferguson, but showing how serious an already exacerbated situation had become, is that by the fin de siècle the cost of servicing the Ottoman debt (just the interest alone) went off the chart and swallowed the entire GDP.
The immitigable failure of Ottoman suzerainty resulted in the disintegration of its territories from the Mediterranean to the Balkans, to Central Asia and on to a chronically unstable Middle East with its longstanding propensity towards rebellion and sedition. All of these fell easy prey to rapacious European powers, eagerly awaiting their moment to step in with generous lines of credit (secured by the enormous oil wealth of their new clients) to facilitate their development as independent nation states, and to supply the technical expertise required to build modern infrastructure. I draw the readers attention to the following extracts from a website article by Shaykh Dr. Abdalqadir as-Sufi: ‘Islam – TheRecovery’, which reveals elucidating parallels with the infected condition of the current fiscal environment in which the earlier predators are now the ‘sick men of Europe’:
“It can now be said that the fall of the Osmanli Dawlet was never the result of a military defeat. The so called modernisation of Turkey, the Tanzimat, historically stood for the transfer from gold-based currency to paper notes for the masses and the banking system to be used by the State in all its fiduciary arrangements. The bankers in the last phase of Osmanli rule were highly honoured. The head of the Comondo bank was given a State funeral. When, precisely by their manipulation of capital, the Empire collapsed, they simply walked away to set up shop in Egypt and Europe. Not one banker proposed even a capitalist road to recovery for the State – a lesson European States are now learning. The Osmanli Dawlet, it can now be clearly stated, was destroyed by capitalism.”
Moving to the East Shaykh Dr. Abdalqadir continues:
“The Mughal Empire which flourished under the brilliant system of Haraj and Zakat taxation, the Zimindar pattern, was brought down by the fiduciary contracts of the East India Company and its final transformation into Empire status. The gold and silver Mughal currency was replaced by the paper Rupee, turning its formerly wealthy people into helpless poverty.”
“Thus, we can now confirm two important facts. Neither the Osmanli Dawlet nor the Mughal Empire was ever defeated militarily. Kemalism was a coup d’état achieved in the bankruptcy following the forced exile of Sultan Abdalhamid Khan II. Britain, under the flag of Empire seized India by simple coup d’état.”
“The suffering of the Muslim world after World War II stems from our failure to see that the conquest of Muslim lands was not based on political dominance but by the imposition of the capitalist/usury system of debt based, that is loaned, paper receipts for money called bank notes. Paper money was capitalism’s true weapon of mass destruction.”
This perspicacious insight into the past clearly sheds light on the present, and stands out as sound counsel. Alas, it is the poor Arabs who are once again deluded, as their Facebook Revolution 2.0, known as the Arab Spring, has so quickly turned into the winter of their discontent.
It is now confirmed that Muhammad Mursi of the Muslim Brotherhood has become the democratically elected President of Egypt, and I should like to extend my condolences to the courageous young men and women who braved the extreme dangers of Tahrir Square only to see their country handed over to the defeatist Brotherhood that (not so) secretly has preached revolution for decades as they occupied comfortable positions in both the governmental and financial institutions of the country they denounced. With ousted President Hosni Mubarak’s former prime minister as the other presidential candidate there was simply no choice. Reuters announced that a 51% turnout marginally brought Mursi the electoral victory the international community decreed was free and fare, and has been applauded as an unprecedented event in Egypt’s long history. A more accurate estimation is that possibly less than 30% of eligible voters turned out to cast their vote. The overwhelming majority of people, ostensibly the largest party in the country, wanted neither! With Egypt being second only to Israel as the recipient of the largest amount of US foreign aid, Mursi is quickly coming into line so as to ensure that his new government will continue to receive the same generous allowance that Mubarak received. The cabinet will surely be egalitarian, as a Copt and a woman have already been appointed. We should also expect the visually impaired to be well represented - always useful to have in high government positions!
For the benefit of those that may not necessarily be familiar with the ideological path of the Muslim Brotherhood, also known as the Ikhwan al-Muslimeen (abbr. the Ikhwan), I should again like to quote from the distinguished Dr. Abdalqadir as-Sufi’s article:
“The Ikhwan in Egypt after Nasser had their eyes fixed firmly on political power. Their key text was no longer the uneducated ramblings of Sayyid Qutb but rather al-Kattani’s ‘Tartib al-Idariyya’ which with strong erudition had gathered recensions from the Prophetic period and then claimed that therein lay the blueprint of Islamic politics. However, in placing the model over Western State practices he seemed to offer as true model the teetotal capitalism of Herbert Hoover.”
“So the Egyptians turned the Deen of Islam into a political philosophy which the West renamed as such – Islamism, along with communism and capitalism. In the new Islamist language they took a word from its historical context and set it over their programme of power aspiration.”
You end up with Prohibition era politics, usury capitalism and deeply boring political recreants in the service of foreign paymasters. At least the Americans had Al Capone and Lucky Luciano. Most tragically, the very life-breath that their religion gifts to them is choked out.