DAMAGE OBAMA HAS CAUSED - ANGRYGIRL FEMINIST.COM
"The Financial War Against Iceland - Being defeated by debt is as deadly
as outright military warfare."
It reviews its key information in advance of Hudson's April 14 scheduled
appearance on The Global Research News Hour to discuss. What's true for
Iceland holds everywhere, including the developed world, the idea being to
enrich finance capitalism through state-sponsored debt bondage and neo-feudal
impoverishment. The global economic crisis was no accident. It was long ago
hatched and has been brewing for years, gestating, percolating, then bubbling
into the 2000 tech crash, a mere prelude for today's greater one spreading
everywhere like cancer but hitting the developing world and most indebted
nations hardest. Hudson:
"Iceland is under attack - not militarily but financially." Like many
others, "It owes more than it can pay" and is bankrupt.
It was planned that way, and the idea is to strip-mine the nation and its
people of their resources, enterprises, assets, land, homes, jobs, and
futures through perpetual debt bondage.
Bankers get enriched. Nations and people, however, are discarded like trash,
with the IMF as enforcer, to be reinvigorated with an additional (G
20-pledged) $750 billion, quadrupling its resources to $1 trillion if
fulfilled. Wall Street and Western European bankers planned it and now ordered
the government "to sell off the nation's public domain, its natural resources
and public enterprises to pay (its) financial gambling debts."
Also, raise permanent taxes at the worst possible time, then suck the
maximum wealth from the country leaving behind an empty hulk and an
impoverished, desperate population.
It's called dystopia Merriam-Webster defines it as: "an imaginary place where
people lead dehumanized and often fearful lives," the opposite of utopia under
conditions of deprivation, poverty, disease, violence, oppression, and terror,
much like in Orwell's Nineteen Eighty-Four. Permanent debt bondage "is as
deadly as outright military" defeat. Loss of livelihoods and assets leave
people vulnerable to sickness, despair, and early deaths, much like what
happened to post-Soviet Russia under Washington-imposed "shock therapy:" --
80% of farmers went bankrupt; -- around 70,000 state factories closed;
-- unemployment became epidemic; -- a permanent underclass was created; --
poverty rose from two million in 1989 to 74 million by the mid-1990s, and in
half the cases it was desperate; -- alcoholism and drug abuse soared; -- so
did HIV/AIDS 20-fold; -- suicides also and violent crime four-fold; and -- the
population declined by 700,000 a year; by 2007 it was 10% lower than in 1989
because of sharply reduced life expectancies. Iceland, the developing world,
and the West take note. This cancer is heading everywhere, courtesy of
banker-imposed diktats, mainly from America and the UK. They insist Iceland
"impoverish its citizens by paying debts in ways (they'd) never follow" even
though the government has no way to do it.
No matter. "They are quite willing to take payment in the form of foreclosure
on the nation's natural resources, land and housing, and a mortgage on the
next few centuries of its future" - perpetual debt bondage no different than
the spoils of war under permanent occupation. However, in this case, debtors
are convinced to pay voluntarily "to put creditor interests above the
economy's prosperity (and) national interest."
Their indebtedness comes at a huge cost - "chronic currency depreciation
(and) domestic price inflation for many decades to come." Contrast this to
how developed countries, like America, handle debt - by inflating (not
deflating) their way out to pay it off with cheap (reduced purchasing
power) money because inflation erodes its value.
It's simple - by printing money and running budget deficits the way Washington
did after Nixon closed the gold window in August 1971, ended the 1944 Bretton
Woods Agreement, and no longer let dollars be backed by gold or converted into
it in international markets.
A new monetary system creates money
like confetti and lets us spend and live beyond our means, then have
developing and indebted nations pay the price. In recent years, dollar
weakness and price inflation "wiped out much of the US international debt."
The Iceland model turns "this inflationary solution inside out....in violation
of traditional credit practice." Instead of currency inflation, Iceland
"inflate(d) its way into debt, not out of it, (by) indexing (it) to the rate
of inflation," thus guaranteeing "a unique windfall for banks at the expense
of wage earners and industrial profits." The result: the destruction of its
traditional way of life. Iceland must "repudiate this debt bomb" to escape.
It's indexed to inflation and "will never lose value." It's caught in a
destructive whirlpool creating economic shrinkage, falling assets and wages in
the face of perpetually burgeoning debt, the same global model needing to be
exposed and renounced "now." Otherwise, economies will be hollowed out,
"capital formation will plunge," people will be impoverished, and most won't
survive.
Maybe the prostitutes and cock roaches.
Hudson's Background His expertise comes from "having been an insider to
imperial-style plundering....for forty years" - as an economist for Chase
Manhattan Bank, Arthur Andersen, and the UN Institute for Training and
Development (UNITAR). He's also taught economics since 1969, heads a
Harvard-based economic and financial history group, is a Research Professor at
the University of Missouri, and organized the first sovereign-debt fund in
1990 at Scudder, Stevens, and Clark. "All these jobs (except his current
professorship) involved analyzing the limited ability of debtor countries to
pay - how much could be extracted from them through foreign-currency loans and
how much public infrastructure (could) be sold off (through) voluntary virtual
foreclosure (under) creditor-dictated rules." He advises countries not to
borrow in foreign currencies, instead "monetize their own credit for domestic
spending and investment." Iceland broke "the cardinal rule of international
finance: Never borrow in a foreign currency for credit" that can freely be
created at home.
"Governments can inflate their way out of domestic debt," not the foreign
kind.
Post-Soviet economies did it the wrong way, and now suffer, and recent riots
highlight their problems. "Instead of helping them industrialize and become
more efficient," Western bankers loaded them with debt and exploited them -
not for manufacturing and infrastructure development, as loans against
existing real estate and infrastructure, but to suck as much wealth out
quickly. It produced "bubble economies built on debt-financed real estate and
stock market inflation," illusory wealth "bubbles (that) always burst." The
only sustainable financing of imports is through enough exports for a
favorable balance of trade. De-industrialization destroys economies by
shrinking them, the result of plunging property valuations, rental income, and
exchange rates.
READ THE FULL REPORT HERE.
Foreign currency mortgage costs exceed property values producing defaults and
losses for lenders. It's hitting Sweden, Austria, and leading creditor states
like America and the UK. Real estate, stock market, and employment are
declining "in a straight line unprecedented even in the Great Depression."
It's turned neoliberalism into a nightmare.
"Just as individuals can't live off a credit card forever, neither can
nations.
As any classical economist knows, societies that only manufacture debt are
unsustainable." Eventually, they collapse into bankruptcy just like a business
or household. The old saying applies. Things that can't go on forever, won't.
No matter. Predator banks want to prolong the game as long as possible, grab
all the wealth they can, force debtor nations to sell state enterprises at
distressed prices, and then get new business by lending to investors who buy
them on the cheap. Will it work? Only if targeted countries go along. In the
case of Iceland, its very future is at stake. Sound v. Imprudent Banking For
centuries, banks created credit responsibly - loaning money for sound
investments to debtors able to repay with interest. No one imagined a world
like today's with massive defaults occurring globally. In America, one-third
of home mortgages are in "Negative Equity;" that is, "the mortgage exceeds the
(property's) market price pledged as collateral." US national debt tripled in
one year, from $5 - $15 trillion, and according to some economists like John
Williams, it's much higher under GAAP accounting - including unfunded
liabilities around $65.5 trillion, an amount exceeding world GDP through FY
2008, meaning America is bankrupt. Williams also puts unemployment at 19.8% by
reengineering it to include discouraged and involuntary part-time workers and
excluding fictitious birth-death rate ratio inclusions. Blunt Truths about the
"Dismantling of Industrial Capitalism" Instead of extending credit to
construct and grow them, financial oligarchs turned indebted nations into
"casinos (through) debt-leveraged gambles," redistributing wealth upward and
creating "debt peonage for most citizens." Even in America, nearly half the
population has no net worth, and the gulf between the richest and the rest is
unprecedented.
"This is the unfair system that the world's top creditors would export to
Iceland - if they can convince its voters (and leaders) to accept neoliberal
debt pyramiding as a way to get rich." It's not working throughout post-Soviet
states that see it as the road to hell if public riots are a gauge. "Better
alternatives (are) the only defense" as it's impossible for "astronomically
indebted economies to 'work their way out of debt.' " Trying will "collapse
the currency's exchange rate," divert huge amounts of revenue and property to
creditors, and produce "a new kind of post-capitalist (unjust, unsustainable)
non-production/consumption economy" too gruesome to imagine or tolerate.
Iceland's financial crisis is the result of lawless predation, an
"international (austerity demanding) Ponzi scheme"
under rigged market rules imposing public and private "asset stripping" to pay
debt. A simple scheme transfers wealth. Economies and populations are trapped
on a "debt treadmill from which there is no escape. (Lenders) pile on credit
and let debts grow (through) the 'magic of compound interest,' knowing that
loans cannot be repaid - except by asset sell-offs." They're strip-mined
through unending debt service so the parasite keeps feeding on its food
source. The idea is to get it all, leaving empty hulks behind, then on to the
new victims. It's "euphemistically dubbed post-industrial wealth creation,"
the kind that's collapsing economies globally and destroying people. Obama is
the commander-in-chief of the process.
America as Lead Predator It's a viciously ugly scheme that's "trapped other
countries into a nightmarish system in which (they're practically forced) to
recycle their excess balance-of-payment dollar inflows back to the US," mainly
as loans to the Treasury. "When foreign central banks receive dollars for
their exports (or asset sales)," their choices are limited. "Congress won't
let them buy important domestic companies or resources," or get paid with US
gold reserves. The alternative is to buy Treasuries and
mortgage-backed securities like Fannie and Freddie debt. Icelanders and other
nations must remember that America is the world's largest debtor, and as Adam
Smith explained in The Wealth of Nations - "no nation ever repaid its debt,"
and he never envisioned one as large as America's.
We grow it by issuing paper for real assets and services. Until other
countries demand more than confetti, this "Madoff-Ponzi scheme" will
persist - for tiny states like Iceland (population 319,000 as of January
2009) until nothing is left to hand over. Today's road to riches isn't
through capital investment.
It's by "foreclose (ing) at pennies on the dollar and mak(ing) 'capital gains'
by flipping property onto (central bank-inflated) world financial markets." In
a word, socializing risks, privatizing profits, preying on the weak, and
getting "a free lunch" at public expense. It's a zero-sum game. One side's
gain is another's loss, and when it matches America against Iceland, it's easy
to exert pressure, but no certainty it'll prevail.
As a sovereign state, Iceland can choose. More on that below. Throughout the
process, "financialized wealth is extractive, not productive....because loans,
stocks, and bonds are claims on wealth," not the kind produced by making
things. This is Iceland's dilemma. "Homeowners are paying tribute, not in
taxes to (an occupier), in interest to (debt pyramid, international creditor)
sponsors of "over-financialization," aiming to strip-mine the country of
everything, the way it's worked in many developing states. "Yet many
Icelanders are heading into this future voluntarily" with little understanding
of the trap, propelling them toward debt peonage destitution under the guise
of an IMF rescuer - like a spider to a fly.
It shouldn't happen and
won't if countries refuse to be trapped and extricate themselves in time.
Iceland is at a crossroads, still able to avoid what ruined Russia, other
post-Soviet states, South Africa, and many other nations misjudging America
and the IMF are saviors, not world-class predators. "Back to the Future" - A
New Age of Neo-feudal Debt Bondage Conventional banking works by extending
credit in the form of interest-bearing loans and seizing collateral only in
cases of default. Central banks were created to finance governments and
commercial ones to "expand trade, related infrastructure, mining and
shipping," and develop other forms of business and industry. More recently,
"financial managers persuaded many countries to sell off public enterprises,
like their water or energy supplies, mainly to pay debts or cut taxes" for the
rich. It's turned debtor nations into "tollbooth economies in which basic
services become a vehicle to extract greater and greater portions of national
income and wealth for the benefit of the few." It's the opposite of how
classical economists define "free markets."
Today, financial interests control them to extract labor and capital
investment-produced surpluses - for themselves under the guise of
"economic democracy." The result "pushed much of the Third World into
poverty since the 1960s," and now the same cancer is heading
everywhere.
