OPINION: Turning points, and the serendipity of events

The confluence of coincidence

“Events dear boy, events” was how Harold Macmillan replied to an interviewer who asked him what most drove politics. On the dimension popularised by Harold Wilson – “A week is a long time in politics” – he was of course right. But as a political historian by training, I’ve always been fascinated by the degree to which sometimes random events combine as catalysts for longer-term change.

At the very moment when one of Britain’s most blindly europhile editors – Alan Rusbridger at The Guardian – chose to retire, Eurogrope bullying of Greece went out of control….and newly freed-up journalists piled in to ask why Britain’s Establishment seemed so committed to a European ideal that had become an authoritarian ideology.

Not long after that moment, Labour’s largely self-inflicted electoral defeat brought forth Jeremy Corbyn as the rank outsider stalking horse in the Labour Leadership contest. Since that moment, all liberal and left-leaning British media (and there aren’t many left) have been inundated with columns asserting why Jeremy is Not a Joke…and now he is the favourite to win. Indeed, so persuasive is his candidacy in Labour Party circles, the terminally wind-blown, boring Andy Burnham has said his first act as Leader would be to give Corbychev a Shadow Cabinet post. What cynical, presumptuous and vicarious tosh that represents.

But strangely, as this leadership contest unfolds, it chimes coincidentally with the growing reality of a world slump, the malign nature of Shadow Banking, and the muddled mendacity of austerity as an instrument of neoliberal fantasy. Above all, awareness of the need to challenge not just governments but politico-media driven assumptions is persuading more and more people to look beyond traditional Party solutions.

We are now, at last, at the start of the turning point which – seven years ago – was for most people nothing but another bust. It is the end of the beginning rather than the beginning of the end, but for me the decision by China to come out fighting against received wisdom is what marks the point where the turn occurred. There is a confluence of coincidence in play at the moment, and its effect will be the better for all of us, not the élites.

Connected from earlier at The Slog: Don’t assume China will conform for much longer

26 thoughts on “OPINION: Turning points, and the serendipity of events

  1. Well said JW. The entire Tory ‘austerity’ gambit is simply a way to manage the economy, expectations, aspirations and living standards down to a level which the ‘busted’ economy will support.

    The entire boom cycle was based as you have said, on debt and shadow banking funny money, this game is basically over so ways have to be found to deflate things back to the mean without crashing the banking system – tricky.

    As you have said, the new Corbyn anti austerity bandwagon is running on rails put in place by the banking crisis and why not? The howls and shrieks from the ‘establishment’ Labour camp are nothing short of laughable. 15 years ago most of Corbyn’s policies would be mainstream Labour, now they want to chase him up a tree and set it alight.

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  2. There is certainly a whiff of sulphur in the air. The’ extend and pretend’ by the Central Banks and their QE has run its course and the day of reckoning is nigh. The dumbnuts confused fiat money with wealth and it is time to pay the piper. A major reset in the Financial system is in the offing and much of the derivative funny money will vanish in a poof ,back to the ether, whence it came.
    Food ,shelter clothing,tools, are the necessities of life. Paper money makes a good bonfire when hyperinflation kicks in.
    A dose of reality is descending on the Masters of the Universe. It will not be pretty.
    A distraction for the debt serfs is planned. War and chaos is their modus operandi, the biggest distraction of all.

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  3. QE was just an asset swap. Where Govt bonds (create by journal entry) were converted to BoE reserves (also created by journal entries). So whats the big issue with QE?

    And no one confusing fiat money with wealth. But many are confused about what money is, how it’s created, why its needed and what its backed by to give it value. And that’s the problem here. And why some wrongly think that hyperinflation is near.

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  4. The game is not over. The bust is part of the game. Where large debt increases fuel a boom. And then small debt increases lead to a bust. Those with money who understand what is going on benefit from the boom (investing in rapidly rising assets) and bust (buying up cheap assets). The large majority are confused and just wonder WTF is going on. And often support policies that lead to their downfall.

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  5. QE was about driving down interest rates and creating a “false market” in government bonds. Lets face it, no one in their right minds would touch Japanese JGBs unless their central bank was buying up most of them. This leads to mis-pricing of bonds and a bubble. Like housing, we all know how those bubbles end. This is why QE will turn out to be toxic and not just an accounting exercise.

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  6. You are of course correct RJ, the contraction is simply part of the monetary tide, a concept which I have explored myself on these threads many times. Thanks.

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  7. @ RB. Unsure what you mean by creating a false market in Govt bonds. QE has the impact of indirectly funding UK Govt deficit spending with BoE reserves rather than Govt bonds. What is the big issue with doing this? IMO its largely pointless but I guess it does lower interest rates slightly.

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  8. John,
    If you want to understand and predict the actions of China there is just one fact you need to know. The Party is waging an all out war on the power of the shadow banks, which are perceived as a threat politically and a major source of the rampant graft within the system.
    Western powers would rather we didn’t understand who the real enemy is.

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  9. @Ray Livesey.
    The days of sea power are past . Large naval aircraft carriers are easy targets for modern missile warfare. The US Navy may be master of the worlds oceans and control the choke points of the Suez ,Panama Canal and Mallacca Straits, but sea power is rapidly becoming obsolete.
    China is building the new Silk Roads of high speed rail from Xianjin to Duisburg via the Central Asian belt., thus bypassing the sea routes.
    The US is very much aware of this and also of Sir Halford Mackinders thesis, back in the early 20th century, formulated to reflect the policies of the then British Empire.
    ‘He who controls the Central Asian belt ,controls the world’. Referencing the wealth of natural resources of this area and the trade routes to Europe.
    The US will lose its financial hegemony of the US dollar reserve currency, as trade on these Silk Road routes will be in a basket of currencies.
    The Middle East wars and the Ukraine war are US imposed destabilisations to disrupt these routes. There are other geopolitical aims of course regarding pipelines.
    The US Empire is in decline and the decay is now obvious. Their mighty Military machine has been neutralised by Asian strategic thinking.

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  10. Mmmm, but the US would rather neutralise Asian strategic thinking with their mighty Military machine than lose the hegemony it’s clinging on to. Therein lies the rub.
    Would they initiate WWWIII in an attempt to hold on to that hegemony? I think they might just do that.

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  11. Could it be that the same rejection of traditional party politics is at work in the USA through the campaign of Donald Trump? As one wit wrote, “Mr. Trump would be a great choice as he has gone through 4 bankruptcies and therefore has the skill set to take America through its bankrutcy process!

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  12. Survival of bankruptcy is seen as a badge of honour in the States. But I do think it’s only a matter of time before somebody pulls the rug out from Donald. (Gerritt???)

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  13. But you also have Bernie Sanders, a socialist, running ahead of Hilary on the left. So anti-establishment politics is alive and well, forthe time being, on the left hand side of the pond too. Of course, it won’t last. The corrupt machines will buy the farcical ‘elections’ in the end.

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