KWENU! Our culture, our future
| Special Issues Countdown to Danzig 2009
Wednesday 15 April 2009
Peter Alexander Egom
The G20 leaders bought, on April 2, 2009, the standard Cartesian, and frightfully autistic, IMF-SDR model for global financial chaos.
The current problem of the global economy is this. An unruly and footloose pile of 6.8 trillion US dollars of non-gold international reserves roams the key Western bourses of the floating-rate IMF/SDR debt standard. This is what drives the speculative yo-yo movements of currency, stock and commodity prices across the markets of the globe. And, it was within these markets of the floating-rate IMF/SDR debt standard that the global financial crisis emerged in August-September 2007. This happened as soon as the gory details of the US sub-prime scandal and crime went public. And, in consequence, trust and confidence in the bankability of the major financial players in the global market casinos for currency, stocks and commodities evaporated.
One would, thus, have reasonably expected that the agenda of the London G20 Summit of April 2, 2009 would concentrate on two clear-cut issues of global financial re-engineering as follows. First, what should be done to canalize into real value-adding work, across the globe, the pile of the 6.8 trillion US dollars of crash and speculation money which is bottled up in the Western money and financial centres of the IMF/SDR debt standard? And, second, what should be done to provide the globe with an alternative debt-free and seigniorage-free global payments standard, with a fixed-rate value anchor, in replacement for the current debt-clad, seigniorage-bound, bottom-less, umpire-less and implosive IMF/SDR debt standard? Unfortunately, however, the IMF-compliant and ostrich-like myopia of national economic self-interest within the ranks of the G20 nations, rather than genuine concern for the global common good, got the better of the judgments of the G20 leaders in London on April 2, 2009. They then went on to agree that the yo-yo IMF/SDR debt standard is a durable foundation for the global economy if only it is touched up here and patched up there. And this is what their group of economic prompters of the IMF-sponsored Trevor Manuel Committee, TMC, must have advised them to do.
For, the TMC of cracking economic scholars and economic statesmen like Amartya Sen, Michel Camdessus, Trevor Manuel himself, and others of G20 stock, which shaped the economic position of the G20 leaders at the London Summit, ignored the key issue of the moment in the global financial crisis. This is that unless and until the 6.8 trillion US dollars of crash and speculation money is disabled somehow and removed from the centre of the global financial system, then the current global financial crisis will not go away. Besides, it must have crossed the minds of the distinguished economic personalities of the TMC that the implosive IMF/SDR debt standard, which sired the implosive and staggering pile of 6.8 trillion US dollars of non-gold international reserves, cannot possibly serve as the durable anchor and foundation for a stable global market environment either now or in the future. But, in this regard, the TMC said nothing concrete about how to provide the globe with the level-ground and tremor-less global payments standard beyond the ambivalent talk about the establishment of the G20 Financial Stability Board.
All in all, therefore, the TMC gave the G20 leaders a global economic recovery script which wished out of existence the two critical menaces of today’s global economy which they were supposed to grapple with at that Summit. And these are the footloose 6.8 trillion US dollars of non-gold international reserves and the yo-yo and bottomless IMF/SDR debt standard. But this is not the first time, within the past seven decades, that world leaders did such a cop-out act on an issue of global import and all of this to our common peril.
Take, for example, the story which the first-class British historian, A.J.P. Taylor, tells us on page 252 of his masterly book of 1961, “The Origins of the Second World War”. Here we see how the then Western Powers of France, Germany and Great Britain got the world into that cruel war simply because they sought to handle by default the issue of Danzig, which was then at stake, in this manner:
“The three Western Powers did their best to wish Dazing out of existence:
As I was going up the stair I met a man who wasn’t there He wasn’t there again today I do wish he’d go away.
This was the spirit of European diplomacy in the summer of 1939. Danzig was not there; and if all the Powers wished hard enough it would go away”
But, Danzig was there and did not go away. And, so, by September 1939, Danzig became the proximate cause for the Second World War, 1939-45. And, in like manner, come September 2009, the dangling Sword of Damocles of the 6.8 trillion US dollars of non-gold international reserves will snap to smash up and dissipate the bottomless and umpire-less IMF/SDR debt standard into the abyss of total financial ragnarok. And this is precisely what a close reading of J.M. Keynes’s erudite two-volume work of 1930, “Treatise on Money” should have warned and prepared the TMC against. After all, we are now concerned with issues that border on the general theory of economic policy and payments standards and the world is yet to have a better authority on this matter than Lord Keynes himself. And the market story of economic cause and effect which Keynes’s seminal work of 1930 tells us is as follows.
First, any economy of any size is made up of two complementary money-flows market compartments as follows: its currency and financial markets make up its financial circulation of money or its market structure for money supply; and its labour and commodity markets make up its industrial circulation of money or its market structure of money demand and use. Second, an economy grows or shrinks in domestic value-adding as its market structure for money supply moves close to, or shrinks away from, its market structure of money demand and use.
And, third, it tells us, implicitly but not explicitly, that there are two types of economic policy and payments standard too. The one type of economic policy and its associated payments standard seeks to glue an economy’s market structure for money supply to its market structure of money demand and use and to, thereby, promote its growth in social and material circumstances. But, the other type of economic policy and in its associated payments standard uses an amoebic pile and bubble of public sector indebtedness to put a growing gap of domestic resource unemployment between an economy’s market structure for money supply and its market structure of money demand and use and to, thereby, engender its shrinkage in social and material circumstances. This is as far as Keynes’s general theory of economic policy and payments standards went in, especially, Book IV Chapter 15 of ”Treatise on Money”.
But, when one now pursues Keynes’s chain of reasoning on the general theory of economic policy and payments standards to its logical conclusion, two strands of economic thought emerge. The first strand is concerned with that economic policy and its associated payments standard which brings about shrinkage in the social and material circumstances of the economies of the globe. This is the territory of interest-based public sector debt money. And this capitalist debt money of race and empire has this peculiar habit of bifurcating the globe into two unequal groups of the fractional reserve nations of the West on the IMF/SDR debt standard and the external reserve nations of the global South and Eastern Europe on the currency board debt standard. Each fractional reserve nation of the West, on the IMF/SDR debt standard, uses the twin inflationary and fiscalist phenomena of Public Sector Borrowing Requirement, PSBR, and Interest, with their accompanying pile and bubble of public sector indebtedness, to interpose an ever-increasing gap of industrial outsourcing and domestic resource unemployment between its financial and industrial circulations of money. But this is not all.
Remember that each fractional reserve nation of the West is also the producer and manager of the international currency means of trade, payments and reserves management. So, the fractional reserve nations of the West are both players and umpires in the global terrain of trade, payments and investments. Accordingly, their domestic piles and bubbles of public sector indebtedness get to translate into the global pile and bubble of the 6.8 trillion US dollars of non-gold international reserves. Brilliant, isn’t it? And, this is the way of imperial seigniorage. It makes the fractional reserve nations of the West the centre nations of the globe which control all forms of global economic middlemanship: financial, commercial, industrial and technological.
Then, take a look at the external reserve nations of the global South and Eastern Europe. The capitalist debt money of race and empire forces them to make and receive external payments in the convertible fractional reserve currencies of the West. They, thus, must manage the savings foundation of their domestic currency markets, and of their domestic financial systems as a whole, in the financial systems of the West. This is why they are external reserve nations. And this is precisely why their growth in social and material circumstances must be export-led and externally induced. Consequently, the external reserve nations of the rest of the world are the captives of the imperial seigniorage of the West such that they selectively become newly industrializing nations of the BRIC-type only to the extent that they are favoured with financial and industrial patronage from the fractional reserve nations of the West.
This is to say that it was from within the bowels of the IMF/SDR debt standard of the West that decisions were made to elevate the G20 nations of China, Brazil, Indonesia, etc, to the status of industrial capitalist nations with the financial and industrial support of the fractional reserve nations of the West. And, in like manner, Nigeria, the anchor nation of the black race, plus the raft of the other black Sub-Saharan African nations are where they are today on the IMF-and -SAP- compliant mat of economic squalor because it so suits the race and empire daydreams of Tony Blair’s Africa Commission, in particular, and of the fractional reserve nations of the IMF/SDR debt standard, in general. So, it must now be clear to every reasoning person that the G20 is the special capitalist product of the yo-yo IMF/SDR debt standard and its extant pile and bubble of the 6.8 trillion US dollars of non-gold international reserves. And, this source of ideological embarrassment to some stridently anti -capitalist G20 nations can not be made to go away just like that. For, the pot and the kettle are equally black!
In other words, the problem of the global economy is the very existence of the capitalist G20 itself. For without the IMF/SDR debt standard and its accompanying pile of 6.8 trillion US dollars, the G20 would not be anywhere to be found on the globe. So, what the G20 leaders endorsed on April 2, 2009 in London was the twin Danzig 2009 impasse of the 6.8 trillion US dollar pile and bubble of non-gold international reserves and the yo-yo IMF/SDR debt standard which sired and sustains it. Neither the G20 leaders nor their economic prompters of the TMC were ready, on that occasion, to pronounce the death sentence on this capitalist ideology of race and empire which debt money spreads all over the globe.
But, a lasting solution must be found to the current global financial crisis. This will entail the elimination of the current global market hierarchy of capitalism which the G20 presides over. And this is where the second strand of the updated general theory of economic policy and payments standards of Lord Keynes comes in handy. Here we are concerned with that economic policy and its associated payments standard which brings about, across the globe, growth in the social and material circumstances of nations. And, this is the global market turf of interest-free and communitarian equity money of the level-ground and popular sovereignty. Its job is to eliminate and liquidate the piles and bubbles of public sector indebtedness which fractional reserve banking interposes between the financial and industrial circulations of money in all the nations of the globe. For where equity money is at work, in any nation of the globe, the full reserve principle and practice of central banking emerges to eliminate the twin inflationary and fiscalist phenomena of PSBR and Interest from the nation’s money-flows market structure. And, thereafter, there will be no domestic pile and bubble of public sector indebtedness to wedge a gap of industrial outsourcing and domestic resource unemployment between the nation’s financial and industrial circulations of money. And, by logical extension, no nation of the globe may now produce and manage the international currency means for trade, payments and investments and no nation of the globe may, thus, export its domestic pile and bubble of public sector indebtedness to the global market place.
In effect, the global financial crisis of yesterday and today will go away only when the fractional reserve nations of the West cease to be the producers and managers of international currency means of trade, payments and investments and when they do manage to withdraw all their domestic piles and bubbles of public sector indebtedness from the global financial system. For, when this happens, we will notice that there will be no gap of resource unemployment between the global financial and industrial circulations of money because there is no gap of resource unemployment between the financial and industrial circulations of money of any nation of the globe. This is the global regime of equity financing and industrial insourcing which is waiting, rather impatiently these days, to come to the global economic rescue of humanity with care, compassion and charity.
In sum, this updated version of Lord Keynes general theory of economic policy and payments standards, as per his work of 1930, reads thus. An economy shrinks in domestic value-adding as fractional reserve central banking creates and interposes a pile and bubble of public sector indebtedness between its financial and industrial circulations of money. This is the economic policy and payments standard way of interest-based and capitalist public sector debt money with its baggage of inflation targeting monetary policy. But, an economy grows in domestic value-adding as full reserve central banking eliminates and liquidates the pile and bubble of public sector indebtedness that fractional reserve banking has hitherto wedged in-between its financial and industrial circulations of money. And this is the economic policy and payments standard way of interest-free and communitarian equity money with its baggage of deleveraging or deflation targeting monetary policy.
And, therein lies the simple genius of the work of Lord Keynes on the general theory and practice of economic policy and payments standards. It is, indeed, the general theory and practice of economic index numbers, in the embryo. And the reason why contemporary economic thought and practice is so non-plus-ed and baffled by the current global financial crisis is that it lacks this Keynesian and Riemannian economic policy geometry to help it to navigate, with aplomb, our incredibly variable and complex, but no less ordered, economic world of Chronos.
Given, therefore, the caliber of the economic minds of the TMC, it cannot be that the updated Keynesian idea of a table or a spectrum or a ready-reckoner of economic policy cause and effect, as outlined above, was not at the background of their deliberations on how to come to grips with the current global financial crisis. So, the TMC must have been clearly aware that the IMF/SDR debt standard is responsible for the 6.8 trillion US dollar pile and bubble of the Western public sector debt in the global market place and, therefore, that the global economy must be rid of it before the global financial circulation of money may move closer to the global industrial circulation of money and, thereby, grow the globe, across the board, in social and material circumstances.
Why, then, did the TMC choose to ignore the monetary Danzig 2009 of the 6.8 trillion US dollars of non-gold international reserves and its associated yo-yo IMF/SDR debt standard in its policy prescriptions for the G20 leaders? Simply because the TMC believed that if every capitalist-G20-roader wished hard enough, the monetary Danzig 2009 will just go away. For it was obvious to the TMC that the disappearance of the 6.8 trillion US dollars of non-gold international reserves from the centre of the global financial system would toll the death-knell for the global capitalism of race and empire and would herald the birth of the global communitarianism of care, compassion, level-ground and democracy. In any case, the TMC was hired by the IMF to do the hatchet job of defending, by all means fair but mainly foul, the capitalist ideology of race and empire which created and sustains the G20. And, in this connection, the claims of equity money, no matter how reasonable they may be, must be seen and regarded as the pure revolutionary hemlock; they are simply anathema!
Nevertheless, the updated Keynesian and Riemannian general theory of economic policy and payments standards, as narrated above, tells us that the G20 leaders bought, on April 2, 2009, the standard Cartesian, and frightfully autistic, IMF-SDR model for global financial chaos. And, come September 2009, the current yo-yo global capitalism of might is right, which the G20 represents, will no longer be anywhere on this globe to be found. And so it is written.
---- Mr. Egom is Consultant Academic Editor, Nigerian Institute of International Affairs Lagos. 15 April 2009. |
www.kwenu.com: Simply surprise yourself yonder!
Nessun commento:
Posta un commento