Rant Du Jour

If it's any comfort to you folks in the West, Asia's economy has slammed on the brakes, too.

When I first came to Indonesia in 2008, the country had 8% growth, the energy industry was going gangbusters, and foreign investment money was pouring in like a waterspout in monsoon season.  Cina was on a building spree to end all Building sprees, buying up Indonesian coal like it was the last supply on Earth.  Everyone was making money hand over fist.

Then the bottom fell out.

The US and EU economies tanked and China's exports were chopped off at the knees.  Western sanctions against Russia put the halt on the next hottest economy around (which was the real intent).  Southeast Asia, which was basically the low-cost labor supplier to China, along with the coal, suddenly found jobs drying up.

A combination of oil price cuts and really, incredibly short-sighted bureaucratic blunders on the part of Indonesia's Energy Ministry caused the bottom to fall out of the industry here.  And when I say bottom fall out, I mean the backup to the backup of the bottom fell out, too.  The sudden black hole in the government's budget has caused it to go on a tax hunt like never before in this country.

They are scrutinizing tax returns.  They are going through every title and deed.  They are hog-tying mud-caked tribesmen with bones in their noses (oh, yes, still have them) and forcing them to get tax numbers and start reporting their non-existent incomes.  The government is terrified also that a bunch of out-of-work, bored folks will suddenly realize how cushy and out-of-control all those ministries have gotten.

See 1998 for an example of what happens when that occurs.  People have gotten quite accustomed to upward mobility around these parts.

The areas of Jakarta, like Kemang, where all the ex-pat execs used to live have dried up.  Houses that used to rent for a month what a "normal" house gets for a year have stood empty for months.  All the oil companies have pulled out most of their ex-pat staff and are running on skeleton crews until the ministry comes to its senses.  By that I mean that current rules require exploration risks to be 100% on the company, all equipment imported for drilling can never leave again, and the government gets a majority share of production for doing nothing.  This is not to mention wonderful cabotage laws that require only Indonesian-flagged vessels to operated in national waters.  Bye-bye ExxonMobil, Chevron and Total.

A combination of greed, corruption and the attitude that good times always continue are sinking the ship of state.  Can you say "panic?"

None of this is to say that it's not happening in the rest of the world, too.  The Globalists have pushed too hard and tried to jump too far on the final leg of their take-over plans.  The blow-back comes in the form of all the nationalist movements worldwide, such as Brexit, Trump and the astounding rise to sainthood of Vlad the Putinator.

Alternative economic systems, such as ASEAN and BRICSA, that still respect national boundaries and cultures, while replacing the over-ripe and rotting carcass of the Western banking system, are coming into their own.  China's battle for the 9-Dash Line in the South China Sea is a direct dart in the eye of Western hegemony.  The unbridled gold-buying spree in China, India and Russia show a long-term plan to reinforce monetary foundations and stabilize economic shocks that are coming as the post-WW2 alliances and agreements start to unravel.

Honestly, I have no problem with globalism, per se.  The problem has been that for the last 60 years, the push has been to free corporations from national boundaries and level the playing field for faceless, soulless entities, at the cost of individual freedom and the sanctity of culture.  I would be quite happy to get rid of the money-making scam that is commonly evident in visas and passports for human beings.

However, the Western concept of corporations has shown repeatedly that these monster "legal entities" cannot be trusted and should never be allowed to slip the regulatory leash.  In other words, free the people, not the mega-corps.

When free to choose, people will always gravitate to areas with their common language, culture, foods, and sensibilities.  On the other hand, corporations don't care about any of that.  They are predatory and will slither into every nook and cranny, and gut the place of anything valuable unless they are tightly controlled.

People will care for their land.  Corporations will suck every penny of profit out of it until there is nothing left but waste.

When I say "people first," I am not referring to the liberal catch-phrase that hides a multitude of "diverse" evil.  I am referring to taking the yoke off of all us individuals.    Yes, it's a libertarian pipe-dream, but one that has the benefit of never having been tried. There's been a lot of lip service to "liberty" and "freedom," but in fact that has only been shared with the privileged few and not the masses.

In many ways, Karl Marx was right, but the execution has failed miserably, because true communism only works on small scales with ethnically and culturally homogeneous populations.  Massive state infrastructure that forces "diversity" and jumbled populations to work together is doomed to fail, as it has repeatedly.

People will smoke.  People will do drugs.  People will eat fatty foods.  Let them the hell alone.  Just don't steal my stuff, leave my family alone and don't murder anyone who isn't trying to do one of the previous two things.  What more do you need for a decent life?

If left the hell alone, people will do what is right for themselves and the ones they care about.  And they will collect in groups of like-minded folks who all have similar goals and cultures.  Let them.

But when Uncle Globalist wants to come in and rape and plunder your wealth using the deadly power of the government, well he should be roped, chained, tarred and feathered.  Maybe even a good turn in the pillory for some humiliation and ridicule might do him some good, as well.  But for gods' sake, don't enable him with TPP and TTIP and all those other alphabet fuels on the fire.

Kind of got off topic there, didn't I?

Well, that's why you come here and lurk in the corners, isn't it?

The Answer In Your Pocket

Source: Kompas, Wed., 10 April 2013

In just 15 short years, the world has gone from the Asian Contagion to the Western Festerin'.  Back in 1998, most Westerners sat back with satisfaction and not a little mirth as the Asian economy tanked, making imported cars and electronics dirt cheap for the average American or European.

Meanwhile, such stalwart Asian engines as Japan saw their markets crash, real estate prices tumble and imports slow to a trickle.  One can clearly see from the above graph, however, that the tables have turned a bit.  The only measure showing any weakness at all is Southeast Asia (Asia Tenggara) taken as a whole.  By nation, though, the Asian economies are red-hot (headline: Wages Driving Consumption [no shit Sherlock]).

How to explain this complete flip-flop of fortunes?  According to the International Monetary Fund (IMF), the so-called Advanced Economies will experience growth of 1.9% this year, while the so-called Emerging Economies will have 5.9% growth in 2013.  Those are regional averages (US/EU vs. BRICS), and that's if we don't question any fudging on the part of a Western-biased reporting agency.

First off, I question the terms "Emerging and Developing Economies" and "Advanced Economies".  Seems they belie a certain amount of undue hubris and self-aggrandizement, given the 4% difference in growth rates.  Second, these raw data imply that one group is doing something right, while the other is not.

So, how to interpret the numbers?

The standard biz school economic interpretation would be that the growth rate for 'developing' economies is due to the expansion of new industry in previously 'undeveloped' nations, combined with the fact that Asia experienced its depression back in the 90s, thus clearing debt and malinvestment, thus positioning those nations' economies for growth and expansion.

This is a neat and tidy explanation that avoids the true underlying situation, which is a taboo subject in Western academia and public discourse.  What it doesn't explain is why the Asian economies, supposedly dependent on exports to the West, are growing at such a massive pace when the West's imports are drying up.

Sure we can write it all off to China's thirst for raw materials that in turn is floating all boats in Asia, but what is driving China's expansion?  After all, aren't they completely dependent on Western demand and money?  And hasn't that market deflated like an old balloon in recent years?

What you are about to read is top secret, known only to the deepest insiders and requires you to destroy your computer immediately after reading.  Be sure and burn your hard drive as an additional safety precaution.

The simple truth is that China's, and many of Asia's central banks are state-owned and issue credit-based money based on the national GDP.  Inflation in these nations is based primarily on over-issuance of currency vis-a-vis production, though some amount is due to charging interest on loans - a trick learned from the Western banksters.

Here's the crux of the matter: in the West, central banks are owned by private corporate cabals which issue debt-based money at high (compounded) interest rates.  In China, Indonesia and other Asian countries, the national productive surplus is converted to credit and issued as currency.

Now, you may think this is the same thing, but it isn't.  The former is a closed economic system that creates unemployment, scarcity and ultimately ends in disaster.  The latter fosters open-ended growth, full employment and, if properly administered, has no preset disaster at the end of the line.

Before we get into how this works, let's first look at how the first system collapses.  Debt-based currency always entails compounding interest.  If you have an economy with $100 in it, and someone borrows $100 with 5% interest, then you have automatically created $5 out of nothing, and since the entire economy consists of $100, there is no conceivable way to pay back the $5 interest.  Furthermore, with compounding interest, the 5% rate is applied to the remaining balance on a regular basis, say every month.  In effect, the actual cost of the loan can be far above the actual 5% (as much as 50% or more), depending on the length of the repayment schedule.

Since many transactions in the economy bear interest (savings accounts, loans, bonds, etc.), it doesn't take long for the original $100 to be diluted to nothing and for the entire economy to be based on nothing, and for those at the center of the system (banksters) to collect the entire $100 in bits and pieces called interest payments.

Eventually, this system becomes unstable as all the real wealth is transferred to the hands of the few.  Unemployment soars as real wealth vanishes and companies forego hiring in order to make interest payments  Prices soar as those at the center control availability of resources and profit from the rising prices on their assets.

The result?  Complete and utter collapse without constant expansion, first in new markets, later in new sources of raw materials.  At this point in history, the closed Western economies must either exploit 'emerging' economies and steal their resources - becoming increasingly problematic - or expand into space to find new sources of raw materials and create new markets for labor.

This is what is behind Obama's recent pronouncements on asteroid mining and space commercialization.

By comparison, the Chinese government issues currency based on the growth of its economy.  The GDP grows 7%, the currency grows 7%, and so on.  They also offer very low-cost or free loans to farmers and small industry (and even other nations) to expand operations and increase output.

Granted, they do charge some interest on some loans, so there is inflation in the Chinese economy, but it is far more controllable since it is public institutions causing it and a simple policy change can stop it.  In effect, however, the interest in this case is more of a tax on projected increases in output rather than usury charged by private interests in a closed system.

None of this is to say that the Asian systems are perfect, but they are more flexible and have better long-term growth outlooks than Western economies.

Historically, however, the Western bankster cabals don't like state-owned currencies.  Obviously, they don't benefit and are unable to corner the market on wealth.  How much don't they like it?  Well, look at Libya, Iraq and Syria.  Listen to the rhetoric on Iran.  Witness the long-term castigation of North Korea, Cuba and Venezuela.  Despite other short-comings, all these countries have/had open economies.

Want more examples?  How about the Continental Congress which preceded the current United States?  Or Lincoln's greenbacks, which financed his war against the break-away States.  Or Jackson.  Or Garfield.  Or Kennedy.  Jackson was impeached and nearly removed from office.  Lincoln, Garfield and Kennedy were both shot dead.  All of them had one thing in common: they wanted to issue credit-based currency controlled by the State rather than private interests.

How about Nazi Germany?  One of Hitler's first acts was to issue a state-owned, labor-based Reichmark that fueled Germany's astronomical growth in the pre-war years.

History argues that these men and countries were destroyed because they dared defy the bankster class, rather than any ideological differences.  Certainly, one look at the US today says that they had/have no issue with fascism, only who controls and benefits from it.  The same with genocide, since the US committed wholesale slaughter of the indigenous peoples of North America, thus negating any sanctimonious talk of holocausts.

From this argument, it would seem that the West has a vested interest in destroying the current systems employed in many Asian countries, including China.  So why haven't they?

As stated a number of times in these columns, one perceives a certain panic among the Western (read Anglo-American) oligarchies.  We must assume that this is so based on the threat that China and Asia pose to their closed economic system.  That panic can be laid at the feet any open war between China and the West would be one of attrition  and that the West would lose because its economy is imploding at a time when China's is soaring.

Therefore, direct confrontation is off the table.  Instead, we see covert cyberwars, proxy wars (North Korea, Venezuela) and other indirect attacks.  Some have speculated that scalar weapons affecting weather and geological processes have been deployed, and there is a good bit of circumstantial evidence in that regard.  In any event, the recent use of North Korea's lame rhetoric to position US military assets across the Pacific theater argues an increasing threat on the part of Asia towards Western hegemony.

The West cannot allow, under any circumstances, to let China's influence get out of control, especially in the southern hemisphere, where China has exerted the greatest influence.  The southern hemisphere not only contains a vast wealth of raw materials, it also is a major source of cheap, exploitable labor.  On top of that, China is exporting its open economics, which is the greatest threat to the Western oligarchies' long-term survival.

Most definitely, the oligarchies cannot afford to let the real people under their control figure out the benefits and problems of open and closed economics.  The ultimate nail in their coffins would be losing control of their own backyards (see note on Kennedy and EO11110).

Looking back at the chart at the top of the page, one can see that Asia is doing something right.  This article has attempted to put forth a reason for that astounding growth in an otherwise depressed global economy.  There is sufficient evidence in favor of the 'open economy' argument, but it does not argue that the extant systems are by any means perfect, only better.

For those interested in reviving the West economies and becoming competitive and prosperous once again, a thorough review of Continentals, Reichsmarks and Kennedy's silver certificates would be in order.  There is a better way and ironically, China is showing us the path.  We must deprogram the views foisted on us by the privately owned media that support the privately owned banks, and start examining the Iceland Miracle and other economic success stories for their common denominators.

Or we must face extinction quietly and with dignity, secure in the fact that we did nothing to change our lot in life.