THE QE/TROIKA/AUSTERITY THING: Don’t call it mad, call it out.

troikaWhy austerity, QE,Troikanauts & Zirp are not economic tools.

One gets the feeling listening to voters and reading the old media at the moment that things like central banks, QE and Troikas are assumed to be there for the good of the citizens and their economic future. It’s time this nonsense was deconstructed once and for all.

I’m not sure why this has occurred to me as an opening gambit this morning, but I almost feel over the last week or so that the sheer weight of falsehood surrounding politics, economics, fiscal policy and investment in 2015 is such that we need an audit of exactly what the main ones are. And as the three above go together like, well, fish, chips and mushy peas, I thought I’d add some vinegar and a generous pillar of salt.

Let’s take central banks in general. They’re sort of like the TUC for banks. If harm comes to the banks – and it is always self-harm – they will collar the nearest finance minister (and probably the Prime Minister or President) and tell them that the financial system will collapse in chaos unless they act now. Hank Paulson did it to Bush, Weidemann does it to Schauble, Mervyn King did it to Brown and Darling, and the Bank of Japan doesn’t need to do it to Abe because he’s obviously mad already.

Usually the two tactics applied under the heading ‘action’ are QE and bailout. The latter has been changed recently to bail-in, which merely means that the finance ministers have become uppity about their national debt ballooning, and so the next step if the Government has no spondoolicks is us (again) – but this time more directly: we’re no longer customers, we’re now creditors. A directive has been passed in the eurozone: bailouts are out, bailins are in. Berlin signed up to this – with the usual mutterings about obyink ze rules at all timess – and then two months later bailed out a Bavarian bank. It’s a cultural thing.

It goes without saying, of course, that if and when the bank failures come thick and fast and fear stalks Wall Street, bailing in or bailing out will be roughly as useful as collecting anal wind in a colander – and the Government will run out of money in very short order once investor fears shove up the borrowing rates.

This is where QE comes in. Depending on whose definition of QE you follow, this policy has been tried a total of thirteen times in the major trading nations outside the EU. It has failed to stimulate sustained economic growth on every single occasion, which is of course why the ECB’s Chairman Mario Draghi has now opted to use it in the eurozone – except Greece of course, because he doesn’t like them.

Now you may have spotted that ‘economic growth’ in the above paragraph has not featured at all in this amble through the facts since the introduction at the start. This is because it has nothing to do with bailing, QEing or Troikaing: growth is not the objective of any of this. The first objective of QE is to buy all the banks’ daft, badly targeted loans off them, and pay them enough in return to increase their liquidity. The second one is to, in so doing, provide business with fabulously cheap loans they can then invest or lend at a higher margin, and thus make their bottom line Bodoni Bold black rather than Futura Light red. This sends the bourse share prices up, and thus maintains confidence in the system: a sort of appropriate outcome, given that it is one huge confidence trick.

Pretty much every Bourse in the world is now at least 55% overvalued because of QE: it is based on playing money games, not economic fundamentals. The one exception is Russia, because there it reflects the fact that their oil business is being destroyed by US and Saudi money games. And that just goes to prove once again what a thoroughly unprincipled dictator Vladimir Putin is.

Keeping the central and investment banks/firms train on the rails is what the Troikanauts are about too. In order to maintain the mirage of economic good being done, however, unscrupulous and at times just plain thick politicians have been hired in order to explain to the Sleeple that only by scorching the earth can it be made fertile enough for rapid growth afterwards. But really, their job is to ensure that American banking firms get paid (and make a profit) on bonds they foolishly bought related to monies they foolishly lent (the IMF) taxes are increased and tax evasion at the lower levels are reduced in order to find yet money to repay an unrepayable debt schedule (the ECB) and prices are increased on essentials to ensure the permanent dependency of the citizen upon the EU (aka German Fiskalunion) and by so doing make Brussels and Nordeurope the permanent Fat Controllers of eurozone fiscality (the EC, now being hijacked gradually by Berlin and its hairdresser friends in the Netherlands).

When after two years, it became obvious even to the village donkey that the strategy wasn’t working (in fact, 50% of the population under 30 wasn’t working) pure and incorruptible politicians like Mariano Rajoy and Evangelos Venizelos were hired to lie about the numbers and say good times were just around the corner. When that didn’t work in Italy, the banker Mario Monti was drafted in.

But this is where those who say “repeating QE endlessly and hoping austerity can produce growth are sure signs that these people are 100% deficient in marbles” have got it all wrong. None of it is working in terms of economic growth, because that’s not the idea.

The idea is save the backsides of Bourse-quoted multinationals and the deep-liquidity bonus pool of investment bankers suffering from tertiary frontal lobe syndrome.

That’s why the British economy is almost obscenely unbalanced in favour of shuffling financial instruments around, and needs to squeeze every last penny out of health and welfare provision in order to keep things seeming normal. Because the City owns Boris Johnson, Michael Fallon and George Osborne, Newscorp owns Jeremy Hunt, the security services own Theresa May, and rich donors in all the sizes and all the colours own David Cameron and Grant Shapps.

This is all being done for the 3% at the top, and no political process in the Anglo-Saxon world has a genuine Opposition that shows the remotest interest in changing it. Most legislators in the US have been bought by arms dealers, oilcos, media moguls, the Pentagon, Wall Street and the ISPs-to-NSA axis. The British Labour Party isn’t quite that crooked, but it is hopelessly naïve about what’s going on.

What’s going on is a concerted attempt to replace genuinely representative democracy with various forms of corporacratic dictatorship.

This is what makes the struggle of Podemos, Syriza, Viktor Orban, Occupy and all those who oppose business-to-banking colonialism: we may not agree with many of their policies or methods, but the abject failure of mainstream processes to produce a Resistance means they are the best weapons – the only weapons – we have.

Enjoy the day.

41 thoughts on “THE QE/TROIKA/AUSTERITY THING: Don’t call it mad, call it out.

  1. Interest rates are not about to rise anytime soon, if they were to, it would be game over. All any of them are doing is painting themselves tighter and tighter into the corner in the hope that if they only paint one side of the corner at a time the other side will be dry enough for them to step on before painting the other side. You see, quick drying paint is all they need.

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  2. As Max Keiser and his frequent guest Mitch Feierstein are continually repeating “You cannot taper a Ponzi scheme” there is no way out.

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  3. It’s time to call it what it is, John.
    It’s Fascism. We now live in a Fascist country.
    The exact moment our poxy muppet politicons deemed the banks “too big to fail”
    this country became Fascist.
    The whole Western world is now a Rothschild central bankster empire, which has invaded, bombed, balkanised & depopulated 5 countries in 7 years, not to mention the failed Venezuela coup.
    Thank God for Putin & Orban.
    I keep wondering if China has been too deeply infiltrated.
    Best,
    John Doran.

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  4. Sorry, those comments are marked “awaiting moderation”, which John doesn’t do,
    so someone else is doing it.
    I have split them up to give clues, but it seems, for now, I must post a tad obliquely.
    John Doran.

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  5. I asked this last week, and did not get any sensible response. Your post today speaks of central banks, and in a manner that suggests that they are not part of the government as such.

    John Ward, March 17, 2015 at 7:29 pm

    If you look at the structure of the eurozone CBs and the ECB, you will note it is absolutely impossible for the Greek default (which happened 2 years ago but is still being denied) to ever cost either the German taxpayer or their government in Berlin one red cent. In fact, Germany’s income alone on the interest repayments from ClubMed (given to them as the largest ECB shareholder) is in excess of 130m euros per annum.

    Gemma, March 17, 2015 at 8:51 pm

    Now: when you say “Germany’s income alone on the interest repayments from ClubMed” – are these not paid to the German Central bank in Frankfurt? Do remember that this is a privately owned institution in the grand tradition of the Rothschilds. This is VERY DIFFERENT from suggesting that these interest payments go into the coffers of the German government.

    I am interested in your response to this issue, because it is all too easy to tangle privately owned banks, privately owned central banks and the treasury of a government.

    I am still interested in your response.

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  6. Were there two links in your comment? WordPress has a button where the administrator can change this – it seems that this has not been done; and something I fell foul of on no few occasions until I realized what was going on.

    If JW is interested, I can send an email with a screenshot from my own dashboard.

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  7. I would suggest that there is a process which the corporatists will listen too.

    They like have more of it than you. Again MLK suggested using the money in your pocket to bring about change. All you have to do is abstain from buying something as a collective.

    If the cattle in the UK moved as a collective away from a particular energy provider, they would listen.
    If the cattle in the UK, moved as a collective away from a particular supermarket chain, they would listen.
    If the cattle in the World, moved as a collective away from a brand drink like Coke a Cola, they would listen.

    I call this the MLK Gambit, the act of making a small sacrifice for a compensating larger advantage later on.

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  8. “Most legislators in the US have been bought by arms dealers, oilcos, media moguls, the Pentagon, Wall Street and the ISPs-to-NSA axis.” Can’t help thinking that at least one major lobby has been left out of this list.

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  9. “If the cattle in the UK moved as a collective away from a particular energy provider, they would listen” – are you sure?

    I thought the game went something like this: “If the cattle in the UK moved as a collective away from a particular energy provider, they would ask the government for funding because they employ so many people (etc).” and so on.

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  10. Austerity an economic tool but how does it work? Reckon this as an overview.

    In the Keynes economy over a period of artifical inflation by bankers bad debt starts to appear. Now if the system is not put into recession (austerity) that bad debt starts to consume new investment faster, think Japan after it DID NOT BLEED THE BAD DEBT FROM ITS ECONOMY A DECADE AGO.

    The issue I think they find is this when you apply the recessionary tool (forget social consequences for people it is only about the money for banksters) for every £1 of bad debt destroyed £1 of the real economy is burned. The bad debt being so big in 2008 if you applied the tool as they always did before the bad debt > size of the real economy.

    Hence we live in a surreal world of austerity more like a persistant recession continually trying to remove the bad debt but as fast as you get rid of £1 another appears (stagnation) or if it is not applied fast enough it grows as in Japans case.

    Every decade of my life we have had a 2-3 year recession now it is continual and cost my parents their marriage in the first instance as a child and you realise your life is a consequence of BANKSTER AND POLITICIANS ACTIONS and there can be no forgiveness for this.

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  11. Remember that the bad debt that caused the 2008 crash was CREATED by allowing banks to give out sub-prime loans to any Tom, Dick or Harry. That bad debt was actively encouraged by a government!

    What it did was allow a bank to issue a loan against a property that was not worth any money at all!

    The German government took a different route: they said to a houseowner that they could have their home re-developed. For free. The point however, was this “free” money came with a sting: after so many years, the houseowner had to pay the current rate for the house. The entire cost of the house! This was written into the contract that the houseowner had been given.

    Naturally, few could pay! So they got a mortgage instead; with the collateral of a well maintained property, this was no problem. The mortgage was issued against a house with genuine value.

    Well, it wasn’t a problem until the US crash sent German house prices tumbling! Without the stupidity of the US government, the German house redevelopment would be carrying on apace.

    The problem is this: the Anglo-Saxons do not like being given ‘free’ money. They’d rather give out bad loans from the start…

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  12. What a ridiculous comment.
    Of course we don’t live in a fascist country. You need to get out more and experience REAL life instead of reading all the doom and gloom mongers on the internet.
    Off out to the big town centre and will report back later regarding sightings of secret service agents loitering around street corners….

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  13. The Gestapo never did; they just relied on evidence they were supplied with.

    Think about it, when a freedom loving government wants to read your emails ;)

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  14. @JDSeanJD
    I do not think that Fascism means what you think it means…
    From Wikipedia:
    “Fascists have identified World War I as having been a revolution that brought revolutionary changes in the nature of war, society, the state, and technology, as the advent of total war and total mass mobilization of society had broken down the distinction between civilian and combatant whereby a “military citizenship” arose in which all citizens were involved to the military in some manner during the war.[6][7] The war had resulted in the rise of a powerful state capable of mobilizing millions of people to serve on the front lines or provide economic production and logistics to support those on the front lines, as well as having unprecedented authority to intervene in the lives of citizens.[6][7] Fascists view World War I as having made liberal democracy obsolete and regard total mobilization of society led by a totalitarian single-party state as necessary for a nation to be prepared for armed conflict and to respond effectively to economic difficulties, such a totalitarian state is led by a strong leader as a dictator and a martial government composed of the members of the governing fascist party to forge national unity and maintain a stable and orderly society.[8] Fascism rejects assertions of violence automatically being negative in nature and views political violence, war, and imperialism as means that can achieve national rejuvenation.[9][10][11][12]

    Fascism borrowed theories and terminology from socialism but replaced socialism’s focus on class conflict with a focus on conflict between nations and races.[13] Fascists advocate a mixed economy, with the principal goal of achieving autarky to secure national self-sufficiency and independence through protectionist and interventionist economic policies.[14] Following World War II, few parties have openly described themselves as fascist, and the term is usually used pejoratively by political opponents. The terms neo-fascist or post-fascist are sometimes applied more formally to describe parties of the far right with ideological similarities to, or roots in, 20th century fascist movements.”

    In the UK, our armed forces are being starved of funding – equipment, housing, uniforms, maintenance, all going down the toilet.
    In the UK, we don’t have a totalitarian single-party state.
    In the UK, we don’t have a mixed economy based on achieving national self-sufficiency and independence.
    In the UK, a good blast of Fascism may be a better alternative to the situation we have currently!!!!

    Democracy depends on an informed electorate. If the electorate can’t be arsed to inform themselves, they get what they deserve IMO. It’s just a shame the rest of us have to suffer as well…

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  15. Gemma,

    You think that would happen but you aint sure, cause the cattle could move again and again until er we were in a monopoly situtation rather than the cartel situation we are in now.

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  16. whatever the in and outs there is no doubt at all in my mind that the MPs are both puppets and quislings and not working in the interests of the majority. those that pull the strings strive to stay behind the curtains that we are not allowed to have.

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  17. Probably brought down by the Israelis in revenge for the Germans and French dealing with Putin. Can’t see a German-operated plane suffering mechanical failure. A terrible tragedy.

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  18. a large section of the world population – er, cattle – are being moved in a certain way, toward slaughtrer. the herd will be culled.

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  19. You say “you think that would happen but you aint sure” – if you had been reading this blog for any length of time, you would know what happened to the banks when they didn’t have enough money.

    Why would it be different for an energy conglomerate?

    Any self-serving Anglo-Saxon government would lean over backwards to keep the peace. By which I mean in their offices where they like quiet. Having a rabid lawyer shout at you from the other end of the phone is not what a politician wants, especially when they can keep the lawyer off of their tail by paying the conglomerate what it needs.

    [O/T] By the way, if there’s no “reply” button, go up the thread and use the first one you find. Then your answer will be at the end of the thread. WordPress are not the most imaginative of people, and rarely think of the people using their software. Life’s easier like that.

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  20. Ten minutes is not a long time for an aircraft that is designed to glide for long distances.

    Ten minutes calculates at roughly 900metres per minute descent. That’s pretty sharp.

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  21. Another excellent piece of work.
    You would think that the solution would always be revolting -or at least rebellion.
    Yet the Irish didn’t throw out their politicians, neither did the Italians, the Spanish, or the Scots (at least they didn’t realise what they could seize, confused by Salmond offering mere colonial outpost status. The main UK election? Where are all these “not going to stand for it any more” candidates?
    Fear of the future seems to drive vast populations; even worse than that, fear of a self-determined future is what spooks people. I just don’t get it.

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  22. Pingback: John Ward – The QE/Troika/Austerity Thing: Don’t Call It Mad, Call It Out – 24 March 2015 | Lucas 2012 Infos

  23. The reason the Russian stock exchange is not so overvalued is because any successful business runs the risk of being stolen by the crooks running the country.

    Anyone who sees Putin as part of the solution is mad or bad or both.

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  24. Skirmish, your reply contains zero useful information, just snide denigration. Real value? Sweet FA.
    REAL life experience? For 40 years, I’ve more than made a living building contracting.
    Than which, no life is more real, troll.

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  25. Rowan, a simpler definition of Fascism: A govt by corporations in conspiracy/partnership with complicit/subservient politicians.
    My definition.
    Are you really daft enough to think we have a multi-party system? With their zero/fagpaper differences on minor policies, & their absolutely zero differences on the major policies of immigration & the doomed trainwreck which is the EU? I know you’re daft enough to spout that.

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  26. Wikipedia is owned by the 1%s, & delivers a straight propaganda line, to their benefit.
    For example, Wiki allowed Connelly to alter 4,500 + articles in order to better sell the global warming scam.
    Wiki’s value as propaganda? depends which side of the Truth/Lies fence you stand.
    Wiki’s value as a source of dependable info?
    Nada.

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  27. LOL because it isn’t so overvaqlued because it could be stolen by crooks,if it any market is overvalued then it is stealing from others to keep it up,& you think Putin is mad bad or both, equations are whole not part

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  28. ‘The British Labour Party isn’t quite that crooked, but it is hopelessly naïve about what’s going on.’
    Good grief John, I really think you are losing it. You used to talk eminent sense, these days I think all that French sun and wine has addled your brain.

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