When Reality riles the élites, they will turn it off. When Debt War roils the Brics, they will turn it on.
The Slog argues that US Quantitative Teasing and crumbling Brics may not be accidental. The more the American élite sees an opportunity to screw up emerging nations and shut up its own citizens, the more they will exploit it. Media control, geopolitical ambitions, fiscal management and individual liberty are ineluctably intertwined to an extent that is unique in human history.
Asian stock markets weakened again earlier today, following U.S. Federal Reserve official Stanley Fischer suggesting there was a “pretty strong case” for raising rates in September. It was a surprising thing to say, but either way, all four Chinese stock indexes headed south until the Beijing shi-o-fou-shi Shanghai Defence was been applied to the afternoon session as per last Friday:
Meanwhile, all four Japanese markets were off around 1%+, with exactly the same position on the four Australian bourses.
It doesn’t take much to spook people at the moment. Spooky people panic and cause nasty outbreaks of reality. And as always, the desire of the élites to disguise reality at all costs is a threat to our liberties.
Just as the Gujurati élite three days ago turned off all mobile phones to stop digital protest, George Chen reports that China’s Public Security Ministry says it will continue to investigate & arrest all those who spread rumours on social media ‘to cause market panic, misleading society and investors – and thus deserve to be arrested’. So far, nearly 200 people have been banged up. Here in France, as I’ve posted before, suggesting that French banks have liquidity or solvency problems is also against the law.
Under a dictatorial economic system that has gone awry, the alteration of reality becomes a de facto truth. French retailing remains in a dire state. Two DIY managers told me bluntly that sales have collapsed: “in this area, only the British owners and professionals are buying materials” said one. Everywhere in every shop, everything is on sale. This merely reflects what the French ISEE gdp data just released makes clear: such pitiful growth as France has shown this year went back to a big fat zero in Q2 2015.
And although I have finally been allowed into the CPAM – the French version of the NHS or Obamacare – three separate sources have all confided in me as follows: your CPAM won’t be enough, subscribe to private mutual health cover as well. “France,” said my gp, “is bankrupt, and the day of reckoning is approaching very quickly”.
The more the reckoning approaches, the fewer our freedoms of speech will be. For three weeks now I have been trying to point out how many Dollars are getting out of equities….but the newest data sets are way beyond even those we have seen so far: $29.5 billion burst out of equity funds last week – easily the highest exodus since such data began being collected in 2002.
How long will it be before this too will be a fact we aren’t allowed to debate or publish? Under the May/Cameron NVE legislation being planned, such observations would be a threat to the State…and thus subject to censorship. The highly effective digital censorship still in the pipeline (and which must be attacked by the good and true) is the segmentation of internet service such that the big money gets better quality and higher speeds and privileged access to sensitive information first.
The principle at stake here is ‘Net Neutrality’ (another Slog hobby-horse going back five years) – a level playing field in which everyone gets the same speed and access. Think the Barclay twins, Murdoch, Trump and Camerlot able to get bad news in advance and plaster the media with spin designed to minimise its impact. What chance do you think there is of the Sleeple paying any attention to later rebuttals?
So while we still have roughly equal access, here’s one to think about: were Fischer’s remarks (made at Jackson Hole) really that surprising? Think of the timeline involved…he steps up to the lectern Saturday afternoon local time and says the Fed’s still on course to raise rates. Six hours later, Chinese traders open their laptops and read the speech. The bullish QT attitude of the Americans spells trouble for Beijing.
As Willem Buiter the Chief Economist at Citigroup said in New York last week, the dollar “will go through the roof” if the US Federal Reserve does lift interest rates this year. This will only make things worse for the Brics. The ‘C’ in Brics stands for China, of whom Buiter said “China has bungled both fiscal and monetary policy, and is now sliding into recession”. Professor Zhiwu Chen from Yale University told the same event that China will be doing well if it can contain its slow-motion crisis to mere stagnation for the next 10 years, “given the dangerous levels of debt in the system”.
24 hours after Stanley Fischer makes the speech, the folks in Shanghai go to work, and the composite plummets 4%. So Beijing has to step in with yet more money.
All down the line – since around 2011 – every time Beijing did something in its own interests, Washington squawked and blustered and said how unfair it was to have an ‘undervalued’ Yuan rendering its exports artificially cheap. (Pretty much, in fact, as Germany did by exploiting the euro after dumping its expensive Mark). Now, it seems to me at times, an alliance has been formed between the State Department, the Fed and Wall Street – via which come what may, China winds up between a rock and a hard place. Maybe the ‘bungled’ devaluation of the Yuan was the last straw for those who insist that the US and the US alone must run the World.
I’ll return to a recently established theme here: we can no longer divorce or even separate geopolitical debt from financialised capitalism’s markets in stocks, commodities and energy. A war is taking place here, and it isn’t a currency war, its a debt war.
All last week we were told that China had “no effect” on the West, despite this being obvious bollocks. Here’s a chart that shows just what utter drivel that idea is: how long will it be before displaying this sort of evidence will be deemed NVEism and thus ‘just cause’ for being silenced and/or imprisoned?
For years now, I’ve been boffing on about Australia’s ridiculous overdependence on China as an export market. Here we see a complete vindication of that opinion. Do you really think Abbott the Ant-Brain and his mining mates will be happy to let this one run and run in open media once the breasts are pointing to the heavens?
As I noted earlier, everyone in key fiscal and financial posts around the world is now nervous bordering on neurotic. The neoliberal socio-economic model retains its self-defeating mass consumption flaw. The hastily glued together global banking farce and euro fiasco are leaking glue under every shoe on every market floor. Civil unrest is in the air in ClubMed, US police forces are being militarised, China’s bourses are Canute’s waves being ordered to retreat, and Africa’s torture at the hands of religious fanatics has physically inserted the tragedy onto every borderline in Europe.
Realities, fundamentals, cans kicked to death, Sovereigns trying to vapourise debt, and corporacratic politicians fearing both bourse panics and citizen violence. Given the context, liberty and democracy don’t have a snowball in Hell’s chance of remaining intact.
And on that cheery note, I wish you all a fruitful week.