News & Analysis
Why the West is Losing
The dollar is fair game coming out of the G20 meeting of finance ministers. In morning London trading, the dollar is losing ground across the board, most decisively against the yen. ... The dollar's weakness ... stems from the declaration of "no currency wars" coming out of the G20 meeting. Loosely translated, that means countries won't intervene to tamp down their own currencies. At least not for a little while. – Wall Street Journal
Dominant Social Theme: Trading continues. Life goes on. The dollar goes up and down.
Free-Market Analysis: The dollar was knocked down on Monday, apparently by the perception that BRIC countries would not be buying dollars to weaken their own currencies. This is of course a kind of knee-jerk professional trading reaction. But most traders work for big bank currency desks, so what can you expect? The currency marts themselves are entirely artificial entities; the idea is to give people a perception that fiat currencies are worth something – worth trading anyway. Sub dominant social theme: Take the paper money and run.
Something much bigger is going on nowadays, however, bigger than the fiat currency trading this article (excerpted above) alludes to, bigger even than the idea of a single, global fiat currency. What is going on in our estimation is that the Western power elite itself is struggling and even failing. The Anglo-American axis has had the idea that it could soon, or fairly soon, create some sort of Western-based global governance, but that animating goal seems to be receding faster than a Eurozone recovery.
Now there are plenty of conflicting reports about the health of "money power." And here at the Bell we combat them as best we can. Money power in the commonest definition is indeed WESTERN. Even if one goes back a thousand years, one still finds the West (and Italy) at the heart of money power. Go back 2000 years and you will find it in Rome, launching a hostile takeover of Christianity (in our view). Money power, of the kind we discuss, has always been Western, or at least for several millennia.
Lately, the idea that money power is not a regional entity has emerged. Read any article (of a certain kind) on the Internet, and you may find the suspicion that Western money power runs Asia and China, especially. This is a kind of myth-making in our view; we find it present in the idea that Western money power has sought to lose its wars in Iraq and Afghanistan. Every loss handed to money power, in this analysis, is a victory. Every problem is merely a slyly configured solution. Every difficulty, every challenge, every setback is planned for some nefarious purpose.
But as we have pointed out, sometimes a defeat is just a defeat. In Afghanistan, the Anglo-American axis that has pursued this war of Islamic domination is making a last ditch effort to intimidate Pakistan into invading Pashtun/Taliban strongholds along the border. While the Pakistani leadership is making cooperative noises (and may even launch an operation), we have trouble seeing how it will work out in the long run. The Pakistani elite has made it plain that it needs the Taliban more than it needs the dubious goodwill of the West. And what is money power, ultimately, to do about it?
No, this is not the 1800s. The Pakistan Punjabis, all 120 million of them, are united mostly in one thing – a dislike, even a hatred of the West and its murderous incursions. In fact, there is nothing that the West CAN do about it, short of invading Pakistan itself (a terrible idea in our view). The British learned this 100 years ago when they slunk out of Afghanistan after failing to conquer the Pashtuns. That was the high water mark of the British Empire. They have tried again, in our view, using the US as the proxy, and the enterprise has fared little better. Perhaps the tribes understand the true vision of the Western elites and want no part of it. We don't blame them; in fact we would suggest this is a far bigger truth than whatever "war on terror" the West claims to be fighting in that tortured land.
And now the Anglo-American axis has embarked on its most ambitious battle, which is to stitch together a global currency using the resources of the BRIC countries. But the trouble the axis is running into, and it is an obvious trouble, is that the axis does not control the decision-making process of the BRIC countries. For instance, we have read much speculation about how India could build an anti-nuclear missile defense that would give it primacy over US armaments. Brazil didn't even bother to attend the recent G20 meetings and China, for all its publicly accommodating face, has bluntly refused to abide by any numerical cap that would hinder its ability to respond to market forces with appropriate revaluations.
There are other problems that the Western monetary elite has run into in the past two years, especially. The global warming promotion that was supposed to result in some sort of international carbon currency is not seemingly going to come to any sort of near-term fruition. It was supposed to result in a UN tax – the first of its kind – but perhaps that will not take place either. The other themes that the warming promotion was supposed to spawn – food and water scarcity – have seemingly made little headway as well (at least for now) because there is no justification for them. The global warming theme was to provide the rationale but it is likely in terminal decay.
It gets even worse. A basic building block of elite promotions was total control over the mainstream Western media. But in the 21st century, the Internet has entirely unraveled that control. If the 20th century was like a yo-yo winding up, then the 21st century is like one spinning in the other direction. Every single historical untruth foisted on a writhing Western population during the 20th century is coming unwound now, from the progressive "heroics" of Woodrow Wilson and the two Roosevelts, to the installation of the Keynesian financial system itself after World War II, to the larger Pax Americana.
The Internet is full of all sorts of debunking, and as the economic situation continues to worsen, the anger rises and the promotions put in place by the Anglo-American axis – whether historical or current – continue to lose credibility in our humble view. The response of the elite, especially in America, has been to reset the Hegelian "goal posts" of the promotional conversation. "Conservative" media figureheads such as Sarah Palin and others have adopted many of the talking points of the Internet-inspired free-market conversation now taking place.
But as the truth-telling of the Internet has continue to make inroads, the elite has found itself in the ludicrous position of in a sense endorsing all but the most radical free-market thinking. In other words, in order to maintain credibility, the elite has adopted so many of the more radical libertarian ideas that its positions are not often indistinguishable from the rhetorical perspectives it is trying to co-opt. This is not, one would think, a satisfactory situation for an Anglo-American axis that for at least 150 years has sought to undermine the idea that civil society can exist without the murderous beneficences of the state.
But it is still worse. Only 60 years ago, the Anglo-American axis controlled the greatest empire ever known to man. After World War II, the globe was virtually prostrate at its feet. An entire global infrastructure was initiated at this time. The BIS, the World Bank and the IMF were all reconfigured and positioned around the crown jewel – the United Nations itself. At the same time an obscure trade-treaty was initiated in Europe, one that was to become, of course, the European Union.
But something happened on the inevitable march to full globalization under the control of the Anglo-American axis. The Internet appeared – first merely an annoyance and now a full-fledged and seemingly uncontrollable (pointy) weapon aimed directly at Leviathan. Like the Gutenberg press before it, it has entirely undone the culture of control that was so painstakingly wrapped round the world after two world wars. What is taking place today in our view is truly a New Enlightenment.
We realize this flies in the face of the doom and gloom that propagates itself within the generous confines of the alternative 'Net press. But in fact, the old order is collapsing just as we have predicted for a decade now. Of course, we are well aware that the Renaissance, the Reformation and the Enlightenment were not entirely peaceable movements. But here is another point: For whatever reason we sense a certain weariness affecting the Western elites. Many of those in vanguard, for whatever reason, seem to be old men and the younger ones meanwhile may be slightly abashed at how savagely the veil of secrecy has been ripped away from money power. They read the Internet too.
So perhaps the power elite will take a step back – and perhaps that retreat will be less bloody than resigned. We don't know of course. How are we to know? It is all speculation based on pattern analysis, creating a paradigm and then applying it over and over to the real world to see it if it holds and is, in some sense predictive. Hey, that's what we got! We apply it every day.
We watch. Here's Timothy Geithner, the Treasury Secretary, pursuing various ranking members of the Chinese communist party around the world. Watch Timmy run. His grim mission: harry the Chinese into voluntarily raising the value of the yuan. He pursues and pursues. He talks and talks. (He plays basketball with his hosts and hits three-point shots.) But he has no way of imposing the Anglo-American vision of how the world should work. One hundred years ago, the Anglo-American elite dominated a prostrate China, but that is not the case now. China has for the most part always gone its own way. Like Islam, it is not especially permeable to Western advances, except occasionally under duress. The time that Western elites could intimidate China militarily is probably long gone.
So what is the West to do? Wall Street banks scramble to settle the Chinese business transactions in yaun; the alternative press is abuzz with reports that the yuan will therefore take over from the dollar as the world's reserve currency. This strikes us as somewhat improbable; more revealing of the elite's desperation than some nefarious plan to replace the dollar with Chinese paper. It begs the question of why India, Brazil and Russia would cooperate with China in so strengthening the yuan.
In fact, what is going on is fairly simple in our view. The West is losing control of the global economy. Just as it is losing in Afghanistan, so the Anglo-American elites are losing when it comes to the great game of economic domination. The sad thing is that only 60 years ago it seemed as if nothing could stand in the way of Western elites.
But the point then, as now, was not to build a civil society but to plunder and dominate – first its own countries and then the world. This the Anglo-American axis has been doing with relative efficiency for the past half century. But unfortunately it seems that it has mostly undermined its OWN middle class. It has raped and ruined its OWN Western economies. It has miscalculated. And now it faces the BRIC countries without the resource base it needs to impose its will on such increasingly powerful opponents. The irony is blinding.
Money power, as we (and others) define it and track it, is ubiquitously Western. It is the West that has engaged in wars of domination. It is the West that has had the ambition to bestride the world and dictate all its thoughts and moods. But now Western money power is greatly weakened. It has been undermined from within by the truth-telling of the Internet and by a variety of external (free-market) forces that it did not anticipate.
And yet ... China is no more capable of running the world than India, Russia or Brazil. The era of fiat currencies, in our estimation, may come to an end sooner rather than later. We are surprised, in fact, at how fast events are moving. But in our view there likely will be no grand deal. We cannot see the world's fractious leaders agreeing to a single IMF basket of currencies; these are players who cannot even agree on coordinating interest rates.
Conclusion: We have maintained for a decade (and now for more than two years on these modest pages) that the world's Pax Americana might simply degrade over time. At some point, China or Russia could decide to start to back their currencies with gold or gold and silver. The movement could spread, a defacto gold standard eventually evolving. It's not something the increasingly desperate elites of the West would seek, of course. Not after spending a century trying to build a Western-style New World Order. The 20th century was all about structure. The 21st is about entropy, perhaps – and increasing freedom as a result. That's our best guess, anyway (right now). We could be wrong.
Posted by Marc De Piolenc on 10/29/10 12:26 AM
This is the most sensible and plausible article on this topic that I have yet read. One for the archives.
Posted by 4irw4y on 10/28/10 08:55 PM
Post-sell and guarantee services are, I believe, what helps Chinese companies hold on afloat if/when the desired liberalisation of export prices begins.
It will call liberalisation of common values and national denominators out of the depth, while the Western entrepreneurship's on the tidal rise. Some $300 bn will solve the problem (in metals, CIF Asia and Europe) (-:
I also believe that everything will be OK with the territorial question. Targeted placement/proper map directioning of metal carts is the key technology... which obviously prepares its way well, is what makes the danegeld about possibly ten times of the estimated op cost.
Posted by George on 10/28/10 05:32 AM
Dirty Little Secrets – The Hidden, Awkward Origins Of World War 2
The unexpected views of four key diplomats who were close to events:
Click to view link
Posted by WuYeYouMin (æ— ä¸šæ¸¸æ°‘) on 10/28/10 12:40 AM
It is not incorrect to say that the exploitation is being inflicted by the Communist government itself. What I forgot to point out when I posted the original link was that the PERCEPTION of Western exploitation is fairly widespread in China itself. In fact, some young people modified the lyrics to a very popular Chinese music video to say 'Chinese people are very dumb. We are all being laughed at by foreigners for selling our stuff so cheaply.'
Posted by John Blenkins on 10/27/10 11:28 PM
"Tax them till their younger members are forced to work at MacDonalds"
Boy not only are you pissed your utterly ruthless.
NO NOT THE GOLDEN ARCHES
Posted by Ram on 10/27/10 11:05 PM
Who are you guys?
(classic line -slightly altered my me-- from the movie Butch Cassidy & the Sundance Kid... when a weary Robert Redford looks thru binoculars from a hill top at these unshakable trackers (as in Corporate hired, best of breed- trackers) that relentlessly keep on their trail day & night.
Nevermind... we're obviously on the same wavelength when it comes to important stuff. Kudos Daily Bell. We are allies against a common enemy. But I am oh so wary of the ...as you say "anglo americian elite", despite the power of the Internet as you so cooly opine.
And Why? Because these powers-that-be have corrupted and co- opted the government over my head.. my entire life. And I am oh so fed up with that. Yes, My entire adult life as a US citizen I've looked upon things here and thought ...this is sooo NOT right. It's corrupt. And why the F.. are most all my fellow citizens hell bent on chasing status enhancing things ... that in the ultimate analysis, mean little. And why does the main stream media seemingly excuse & condone it? Programming. Social programming ... that's about how I figure it.
And no... it is in no way,shape or form "tin hat" conspiracy thinking that a handful of ultra rich families are at the root of this. After all, Money talks. It buys politicians (as a long suffering US citizen... I can SURELY affirm that it buys politicians). So, once we've established that money=political power, then it isn't surprising that whoever has money, has power.
And who has power? Why the bankers of course. Since the dawn of civilization. But fairly recently it's been brought to attention that yet another export of Italy (other than the mafia) is yet a more sinister clan of evil. Banking families!
Banking families --with significant jewish flavor (no, nothing racist here.. I am merely stating a FACT).
Banking families that relocated to England,Holland in the ....what.. 15th-16th century. Powerful Families that have always been lurking in our background. Content to stay out of the lime-light as kings and governments come and go. Yes, they are happy to bankroll the conceited aspirations of the spiritually misguided. After all, they always get their "cut". Their royalties. Always controlling Click to view linkom behind the scene.
Hell, enough of this. Time to flush this people out in the open like the cockroaches they are. Let's start by breaking their control of politicians & central banks. Then let's focus on a "wealth" tax. No, not a tax on income...but a tax on accrued family wealth.
Tax the dickens out of them (once we've dis-asociated them from their politician puppets). Tax them till their younger members are forced to work at MacDonalds.
Posted by Roy Perlmutter on 10/27/10 03:09 PM
Dear Daily Bell: Keep up the good work.
Posted by Rayce Patane on 10/27/10 03:08 PM
OMG!!!! Reading this brilliant (as in enlightened) article was akin to meeting someone from your home planet. All that I have believed and thought to be the "real world" is Click to view link's horrific but I take solice in knowing there are others like me who will not be fooled nor hoodwinked by the powerful and premeditated. I pray for the light to return to this world once again and hope that men and women of honor and conscience and good intention will rise once again to restore the humanity that has been locked away for far too long. Daily Bell....I applaud you for your postulating and honesty. BRAVO!!!!!!
Reply from The Daily Bell
Thanks for the kind words and sincere feedback.
Posted by WuYeYouMin (æ— ä¸šæ¸¸æ°‘) on 10/27/10 01:21 PM
I posted the article despite it being 3 years old because the systemic problems described within are still very much unresolved, and in some cases, have gotten worse. The article is consistent with what the overseas non-Communist Chinese language media is reporting in respect of the sufferings of the common people.
Reply from The Daily Bell
Thanks for the article. We do not agree that the people in China have merely been exploited by Western powers. We believe the Chinese government itself inflicted a 50-year boom on China (gradually) to save itself and make many people (Han mostly) prosperous.
When China implodes, and the people lose what they have gained the rage may wash away the government. At this point, either Western powers will dominate or there will be yet another political cycle within China. The result of that would be either more libertarian or socialist. We lean toward some sort of increased European-socialism taking root. It would be influenced by Western powers but not of it. That's our best guess. We could be wrong!
Posted by AmanfromMars on 10/27/10 11:24 AM
Re: Posted by WuYeYouMin (????) on 10/27/2010 4:30:08 AM
"This is a perspective from within China:.... Click to view link " ..... WuYeYouMin,
That article is over three years old and, given the rate of change in China, is unlikely to be something that anyone can rely on as being accurate.
And perhaps China should sell its goods at a higher price, for as the article shows, the retail price bears absolutely no relationship to the wholesale price or cost of manufacture, which is always the problem with a capitalist profit culture, with profit being just an arbitrarily decided figure tacked onto a base number creating an artificially expensive market and is essentially a money for nothing promotion, which is really something, isn't it.
When everything, as everything invariably is, is loaded with profit at every stage of manufacture and distribution and sale, will everything always rise in price to a level which very soon becomes unaffordable.
Posted by John Blenkins on 10/27/10 11:10 AM
Thank you DB.
My sister sent me links last night, along with the thread that has run through many of my post's to you over recent weeks the recipe idea germinated.Spoke to her this morning she said your mistake was a compliment, she has asked my permission to post recipe on David Ike's site.Just before i spoke to her i was about to post a reply to your article today "Is the elite destabilizing the world on purpose" Which i have expressed in a number of previous post's as my beliefs. Managed to lose that now such are my computer skills . Along with my thoughts and a couple of links i was going to add recipe again as it seems even more poignant today .
Thanks again DB . John
Reply from The Daily Bell
Keep up the good work.
Posted by 4irw4y on 10/27/10 09:39 AM
Thanks, John Blenkins; it needs a parallel clearing.
Posted by John Blenkins on 10/27/10 09:12 AM
DB RE:" Winter cake recipe 2010/11" The above is entirely my own
original work and not take from anybody.THE links i sent were meant
to high light the food price rises in context and back up to my post.
Reply from The Daily Bell
Oh, well, we stand corrected. It was so well done we assumed it was a report from a major publication. Especially because you put links.
Posted by 4irw4y on 10/27/10 08:59 AM
This is interesting. To some, in plain txt.
Got a link?
Posted by Theodorej on 10/27/10 08:55 AM
Another thought provoking and painfully factual article on the dilema that faces the western elites,however, I sensed a glimmer of hope among the dire consequence of total loss of control and that is the outcome of the coming US election...Is the world ready for a collapse of the western economies will china be able to sustain the losses incured by a currancy collapse in conjunction with major stopage of western consumption not to mention thr pilferage of western technology....
The elites have the ability to embrace change even if means fiscal responsibility which thay have the power to still put in place with respect to western economies specifically the US...A massive cut in the FREE LOAD will bring every level socialistic policy to an end in conjunction with a new culture that "A Man is to earn his keep by the sweat of his brow" otherwise known as responsibility for your own well being...The poor will always be with us,however ,it is the lazy that creates the problem...
Posted by 4irw4y on 10/27/10 08:24 AM
I was advised to possibly correct my "Bring the Priest" as "Bring the Devices".
Posted by Tariq K on 10/27/10 08:02 AM
A brilliant summary of piecing together and connecting the dots although I also have sympathies with the Jack T comments below. The elite are not going to surrender without a fight, which may turn out to be bloody. However, as far as the media is concerned the paradigm has shifted from control to credibility. The BBC for example is no longer considered credible after it refused to air the Gaza appeal and recently when it blurted out Israeli propaganda on its Panorama programme on the flotilla. Fox, Sky, CNN, ABC etc. are all now regarded as right wing stooges and have no credibility whatsoever.
John before you believe everything you read in Clash of Civilizations, Huntington is rabid zionist who wrote this piece of rubbish to find a new bogey man after the collapse of the soviets to channel american military for the benefit of its client state, Israel. 911, war on terror, Iraq and Afghanistan are all part of that great plan, as I am sure you can find out by searching the internet.
Posted by Nicholas Gold on 10/27/10 06:58 AM
I am by no means an economist, but I do know history. Our attempts to subdue the middle-east are doomed to utter failure. What is currently happening with G-20 is in my estimation, illusory. China has already made great strides to divest itself of dollars, and right now there is nothing that the western powers can do to halt it. The Chinese, unlike our policy makers, take a long view of the world. Asia is now poised to take its place as the world's major arbiter.
Posted by WuYeYouMin (æ— ä¸šæ¸¸æ°‘) on 10/27/10 04:30 AM
The West is losing and China is getting ahead? Perhaps not?
This is a perspective from within China:
Click to view link
Posted by 4irw4y on 10/27/10 01:57 AM
The Guardian. In partnership with Bill abd Melinda Gates foundation. Thanks for bringing/moving the theme closer.
Yes, I (also?) have a suspicion that the Guardian's copyright lawyer is a clandestine editor of the newspaper.
In Rome, they talked about Food Crisis being so sure in it happening that they capitalise it (-;
I dunno why I'm remembering "Omen". Bring the Priest.