Money Is Political

Political Economists,

  Dr. Tim Morgan, Surplus Energy Economics, The Everything Crisis looks at where we now are, in a global economy in absolute decline because the percent of the economy that now has to be spent getting energy sources like oil and gas, is now such a heavy economic price that economies are shrinking in real terms. the ECoE, energy cost of Energy is like an everything tax. There is no truthful economic framework to explain this, so excuses like COVID-lockdowns, War and Russian-sanctions.

​  ​Global trend ECoE (from all sources of primary energy) has risen from 2.0% in 1980 to almost 10% now, and is likely to reach 13% by 2030, and 17% by 2040.What this means is that, from every 100 units of accessed energy, the ‘available for use’ or surplus component has decreased from 98 units in 1980 to 90 units now, and is likely to have fallen to 83 units by 2040.
​  ​It’s important to remember that surplus energy isn’t used just to supply products and services to consumers, but to maintain and replace productive and social infrastructure as well. This means that sensitivity to rising ECoEs is an inverse function of complexity –the more complex an economy is, the greater is the surplus energy required just to sustain the system.
​  ​Complexity is highest in the Advanced Economies of the West which has meant, in practice, that prior economic growth in these countries went into reverse first, happening once their ECoEs reached about 5%, a climacteric which was traversed in the early 2000s. EM (emerging market) economies, by virtue of their lesser complexity, have been able to carry on expanding at ECoEs above 5%, but most of these countries have now hit their own inflexion-points, which occur at ECoEs of around 10%.
​  ​Accordingly, global prosperity per capita peaked in 2019, and preliminary data indicates that world aggregate prosperity may have peaked in 2022. https://surplusenergyeconomics.wordpress.com/2023/03/13/251-the-everything-crisis/comment-page-1/#comment-34800

​  A snippet from Michael Hudson from the presentation he did with Radhika Desai about financial imperialism, and alternatives. "Since Money Is Political" is the first part coming second. Forgive me. 

  What is money, and how is it used? Hudson mentions this option, which the US did before WW-2, and Japan did, and China and South Korea have done, and Germany did under Bismark and much of the time since... (and the Bank of North Dakota still does.)

​  What you say, about finance living in the short run, is very important. There was an alternative and I have a chapter about that in my Killing the Host. And the alternative was Germany and central banks. The banks worked with the government and heavy industry to take a long term view of the economy. And this isn’t something abstract.

​  ​When WWI broke out in 1914, there were articles written in the British press about why Britain was likely to lose the war, and it was likely to lose because they said, “Our financial system is quasi-feudal. It lives in the short run. When a stockbroker in England buys stock, they want to use the company to pay out all of its income and dividends. They don’t want the company to reinvest. They want to make the stockholders rich by paying out dividends and stock buybacks.”
​  ​The Germans, with the government, use their dividends to reinvest in capital formation, and they said that because of the Reichsbank in Germany and other Central European practices, it’s likely that Germany and its allies are going to be able to outlast England because English finance is self-destructive.
​  ​The difference you’re talking about is between industrial capitalism and the old feudal finance capitalism. But after WWI, it turned out that instead of having the productive, socialized German system, you had finance capitalism or neo-feudal money under the direction of the United States, which has always followed the British system, short term, hit-and-run, grab. The more you can impoverish the debtor, the more money you have in your own hand — as opposed to public banking.
​  ​This is all important, as is money and credit. We’re back to: Is it going to be a public utility run in the public interest by governments, or is it going to be run by bankers (whose objective is to impoverish the economy in order to enrich themselves)? https://michael-hudson.com/2023/02/since-money-is-political/

​  Simon Black writes, "If SVB is Insolvent,So Is Everybody Else"​, then he proves it. In 2008, junk mortgage backed securities were the toxic paper that forced banks into massive losses; now it is US Treasury debt, at low long-term interest rates, which is losing value precipitously as interest rates rise.  The Fed holds a lot of it. All of the banks that hold it are either insolvent, or nearly insolvent now. Silicon Valley Bank was audited in January. It was exemplary. https://www.sovereignman.com/trends/if-svb-is-insolvent-so-is-everyone-else-146244/

  Michel Hudson, Why The Banking System Is Breaking Up  [Well, not quite yet, I think.]

..Interest rates, which spiked last Thursday and Friday to close at 4.60 percent for the U.S. Treasury’s two-year bonds. Bank depositors meanwhile were still being paid only 0.2 percent on their deposits. That has led to a steady withdrawal of funds from banks – and a corresponding decline in commercial bank balances with the Federal Reserve.
 Most media reports reflect a prayer that the bank runs will be localized, as if there is no context or environmental cause. There is general embarrassment to explain how the breakup of banks that is now gaining momentum is the result of the way that the Obama Administration bailed out the banks in 2008 with fifteen years of Quantitative Easing to re-inflate prices for packaged bank mortgages – and with them, housing prices, along with stock and bond prices.
  The Fed’s $9 trillion of QE (not counted as part of the budget deficit) fueled an asset-price inflation that made trillions of dollars for holders of financial assets – the One Percent with a generous spillover effect for the remaining members of the top Ten Percent. The cost of home ownership soared by capitalizing mortgages at falling interest rates into more highly debt-leveraged property...
 ..But in serving the banks and the financial ownership class, the Fed painted itself into a corner: What would happen if and when interest rates finally rose?
  In Killing the Host I wrote about what seemed obvious enough. Rising interest rates cause the prices of bonds already issued to fall – along with real estate and stock prices. That is what has been happening under the Fed’s fight against “inflation,” its euphemism for opposing rising employment and wage levels. Prices are plunging for bonds, and also for the capitalized value of packaged mortgages and other securities in which banks hold their assets on their balance sheet to back their deposits...
..Any bank has a problem of keeping its asset valuations higher than its deposit liabilities. When the Fed raises interest rates sharply enough to crash bond prices, the banking system’s asset structure weakens. That is the corner into which the Fed has painted the economy by QE.
  The Fed recognizes this inherent problem, of course. That is why it avoided raising interest rates for so long – until the wage-earning bottom 99 Percent began to benefit by the recovery in employment. When wages began to recover, the Fed could not resist fighting the usual class war against labor. But in doing so, its policy has turned into a war against the banking system as well...
..There is an even larger elephant in the room: derivatives. Volatility increased last Thursday and Friday. The turmoil has reached vast magnitudes beyond what characterized the 2008 crash of AIG and other speculators. Today, JP Morgan Chase and other New York banks have tens of trillions of dollar valuations of derivatives – casino bets on which way interest rates, bond prices, stock prices and other measures will change.
  For every winning guess, there is a loser. When trillions of dollars are bet, some bank trader is bound to wind up with a loss that can easily wipe out the bank’s entire net equity.
  There is now a flight to “cash,” to a safe haven – something even better than cash: U.S. Treasury securities. Despite the talk of Republicans refusing to raise the debt ceiling, the Treasury can always print the money to pay its bondholders. It looks like the Treasury will become the new depository of choice for those who have the financial resources. Bank deposits will fall. And with them, bank holdings of reserves at the Fed.
  So far, the stock market has resisted following the plunge in bond prices. My guess is that we will now see the Great Unwinding of the great Fictitious Capital boom of 2008-2015. https://www.zerohedge.com/markets/hudson-why-banking-system-breaking

​  ​The Federal Reserve Launches Program to Bail Out Banks
​  ​On Sunday, the FDIC created “bridge banks” to handle both insured and uninsured customer deposits. Banking regulatorsassured depositors that they would have full access to all of their funds.
​  ​Meanwhile, theFederal Reserve announced a loan program that will allow other banks to easily access capital“to help assure banks have the ability to meet the needs of all their depositors.”
​  ​The Bank Term Funding Program (BTFP) will offer loans of up to one year in length to banks, savings associations, credit unions, and other eligible depositoryinstitutions pledging US Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral.Banks will be able to borrow against their assets “at par” (face value).
​  ​According to a Federal Reserve statement, “the BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.”
​  ​TheUS Treasury will provide $25 billion in credit protection to the Fed from the Exchange Stabilization Fund...
 ..As interest rates rise, bond prices fall.With interest rates rising so quickly, banks have not been able to adjust their bond holdings.As a result, many banks have become undercapitalized on paper. The banking sector was buried under some $620 billion in unrealized losses on securities at the end of last year, according to the Federal Deposit Insurance Corp.
​  ​The BTFP gives banks a way out, or at least the opportunity to kick the can down the road for a year. Instead of selling bonds that have dropped in value at a big loss,banks can go to the Fed and borrow money at the bonds’ face value.
​  ​In effect,the Fed will print money out of thin air to loan to banks. This is the very definition of inflation.
​  ​Also, the Fed is putting its thumb on the bond market by incentivizing banks and other institutions to hold Treasuries instead of selling them into the market. In effect,it creates an artificial limit on the supply of Treasuries, which will artificially keep prices higher than they otherwise would be...
..The plan creates a mechanism for banks to acquire capital they couldn’t otherwise access under normal market conditions.Meanwhile, uninsured depositors will get their money back.
​  ​The government can plausibly claim it is not bailing out SVB or Signature Bank. Both institutions appear to be doomed.But the government is bailing out uninsured depositorsand it is setting the stage to bail out other banks that would have suffered the same fate without the loan program... https://schiffgold.com/commentaries/federal-reserve-launches-qe-extra-lite-to-bail-out-banks/

​  These articles present an economic picture where notional economy and real economy a badly mismatched, and the assumptions about future economy are based on growth, when it must actually continue to contract. This contraction has to spare the necessities, so it must take place in non-necessities, "discretionary spending". 

  Debts are based on the assumption that the economy will grow in the future, so debts are much greater than the real economy, and that reality-gap is growing.

For an economy to work best, the reality of the physical economy should be reflected in the structure and assumptions of the notional economy, represented by money. A debt is an asset, and equivalent to money in the current system. A lot of the stock market gains mentioned above, fed by money at low or effectively-negative interest rates since 2008, do not correspond to company value or dividend payment. They have just been bid-up. Reducing these valuations is possibly the easiest way to bring more realism into the correlations between notional wealth and physical wealth.​ 

  General price inflation, reducing the notional value of money/debt, also brings the notional economic representation closer to the physical wealth in existence. House prices may not fall much, but the dollars will be worth less, a replay of the stagflation of the 1970s and early 1980s, which was a similar adjustment phase.

  A big challenge is to keep a functioning financial system, so that the real economy can keep working, because if it fails, then society has lost its life support system. Nothing would have trade-value beyond a bag of potatoes, water and a propane tank. Cannibalism was widespread in Ukraine during the famine called the "Holodomor". Families ate family members bodies. Parents ate their dead children. Stalin needed money for tank factories and sold too much of Ukraine's grain. The hate engendered drove Western Ukraine, Galicia, into an alliance with the Nazis. 

  As financial losses and monetary inflation bring the notional economy of money closer in valuation to the physical wealth in existence, ownership is critically important. There are easy levers to pull to protect bank-ownership, and to protect bank deposits, though they create money to place into some specific gaps, which is inflationary, difffusing losses to everybody who spends money. 

  When people can't keep up payments on a mortgage, the lienholder takes the whole house, even if it is 90% paid-off. Is that fair? The rich get richer, and the middle class gets poor. How might something like that be arbitrated. The Obama administration said they would help the homeowners, but actually wiped them out and gave their houses to Wells Fargo, instead. Everybody knows that now. Assignement of economc losses will need to be open and fair to maintain a social contract through hard times. The gap between rich and poor is already greater than at any time in US history. Creating an Americn Holodomor would be a gross error. Assignment of most losses of real wealth to the wealthiest could preserve function in American society. How will that be approached and managed, or even discussed, after the banking and equity-market losses are assigned? Roosevelt managed such a task. There were 3 assassination attempts on him, wherein several other people were killed, before he was inaugurated. Then came the "businessman's coup" that USMC ret. General Smedley Butler revealed.

  Countries run by oligarchies, as the US is, still need a powerful executive to act independently in times of rapid and critical economic change. The US oligarchs have not been willing to give up their decision-making power so far, and have held to the failed unipolar-world model within the $US and Eurodollar global financial system. Russia, China, Turkey, India, Saudi Arabia and Iran all have such executives now....

  We can see a lot of systemic blame being tallied-up now, which will be placed on the outgoing political administration, not on the oligarchic "owners", who they serve. The very big question is whether a real executive will be allowed into the office of POTUS, which JFK  was,  until various oligarchs had him eliminated. After WW-2 was all but over, FDR, having had Truman forced upon him as running-mate, against his will and better judgement, died-suddenly. Stalin was sure that he had been poisoned by "Churchill's gang", who certainly had the means and motive to maintain their empire, or maybe just graft its head from the City of London to New York City. We can see that potential real-executives for POTUS 2024 include Donald Trump, Ron DeSantis, and potentially RFK Jr. , who is in discussions about a presdential run. It would need to be a "different" Democratic Party to allow him to run. Kennedy is much more independent than Bernie Sanders, and Sanders was fraudulently kept from the Democratic nomination twice. Kennedy knows the stakes. He could follow his father and uncle (& maybe cousin John Jr.).

​  ​Jan. 6 Attorney Alleges FBI Criminally Altered Evidence, Requests Special Master Review Of Leaked Messages https://www.zerohedge.com/political/jan-6-attorney-alleges-fbi-criminally-altered-evidence-requests-special-master-review

  In a country run by bankers: 10,000 Dutch Farmers Protest Govt's Crippling Nitrogen Emissions Target In The Hague

Protesters claim the Dutch government is lying about the extent of the emissions problem in order to grab privately owned land... https://www.zerohedge.com/political/10000-dutch-farmers-protest-govts-crippling-nitrogen-emissions-target-hague

​  Xi Jinping will go to Moscow to meet with Vladimir Putin, presumably to announce something together. The exact date remains secret, so maybe they await an ideal geopolitical moment to make an announcement. Xi will teleconference with Zelinsky after meeting with Putin. I suspect that Putin and Xi can make Zelinsky/Ukraine a much better deal than Washington/NATO can, going into the rest of this decade, but this might not yet be the moment for that. https://news.antiwar.com/2023/03/13/chinas-xi-to-speak-with-zelensky-meet-with-putin/

Ukrainian Official: 'We Don't Have The Resources For Counteroffensive'​   https://www.zerohedge.com/geopolitical/ukrainian-official-we-dont-have-resources-counteroffensive

China's Prestigious Middle East Deal May Soon See Challenges, Moon of Alabama

​  ​[C]onfidential clauses were inserted into the Beijing Agreement to assure Iran and Saudi Arabia that their security imperatives would be met.Some of these details were provided to The Cradle, courtesy of a source involved in the negotiations:
​ ​ Both Saudi Arabia and the Islamic Republic of Iran undertake not to engage in any activity that destabilizes either state, at the security, military or media levels.
​  ​Saudi Arabia pledges not to fund media outlets that seek to destabilize Iran, such as Iran International.
​  ​Saudi Arabia pledges not to fund organizations designated as terrorists by Iran, such as the People’s Mojahedin Organization (MEK), Kurdish groups based in Iraq, or militants operating out of Pakistan.
​ ​Iran pledges to ensure that its allied organizations do not violate Saudi territory from inside Iraqi territory. During negotiations, there were discussions about the targeting of Aramco facilities in Saudi Arabia in September 2019, and Iran’s guarantee that an allied organization would not carry out a similar strike from Iraqi lands.
​  ​Saudi Arabia and Iran will seek to exert all possible efforts to resolve conflicts in the region, particularly the conflict in Yemen, in order to secure a political solution that secures lasting peace in that country.
​  ​According to sources involved in the Beijing negotiations, no details on Yemen’s conflict were agreed upon as there has already been significant progress achieved in direct talks between Riyadh and Yemen’s Ansarallah resistance movement in January. These have led tomajor understandings between the two warring states, which the US and UAE have furiously sought to undermine in order to prevent a resolution of the Yemen war.
​  ​In Beijing however, the Iranian and Saudis agreed to help advance the decisions already reached between Riyadh and Sanaa, and build upon these to end the seven-year war.​..

..The U.S. does not like the deal because it diminishes its role in the region. Israel does not like the deal because it lessens its chances to go  after Iran:
​  ​The U.S. and Israel don’t look kindly on the news of the diplomatic breakthrough. They first fear that China is increasingly assertive in its role in the region, and the U.S. does

 not want to experience what Britain experienced in Suez in 1956: a watershed moment signaling its global decline. The U.S. stood up to Britain, France and Israel who combined to attack Egypt after its leader Gamal Abdel Nasser nationalized the Suez Canal. The event is seen as the final act of the British Empire before joining the more powerful U.S. imperium.
...If the agreement does accomplish the goal of truly bringing peace and amity between the two rivals, China may then enjoy a Suez moment: when the world signals the end of the American Empire like what happened to the British.
​  ​Both, Israel and the U.S, are capable and likely willing to do whatever is necessary to prevent an implementation of the deal. They can probable use their good relations with the United Arab Emirates to make things difficult. False flag attacks in Iran and in Saudi Arabia could be a way to do that. If a new 'Iranian' drone attack happens in Saudi oil fields or new 'Saudi financed' terrorist attack in Iran happen the deal could indeed be scraped.
​  ​One hopes that China and the other parties involved in the deal are conscious of that. https://www.moonofalabama.org/2023/03/chinas-prestigious-middle-east-deal-may-soon-see-challenges.html#more

​ ​Israeli officials are expressing dismay at the Iran and Saudi Arabia peace dealwhich was announced from Beijing last Friday,with an aide to Prime Minister Benjamin Netanyahu telling reporters that it's the result of American "weakness"as well as failings of the prior Israeli government.
​  ​"There was a feeling of US and Israeli weakness and this is why the Saudis started looking for new avenues. It was clear that this was going to happen,"the unnamed senior official said while traveling in Netanyahu's entourage in Rome.
https://www.zerohedge.com/geopolitical/israeli-official-blames-american-weakness-chinas-iran-saudi-deal

​  Flyboys will be flyboys...

​  ​'Reckless' Intercept By Russian Jets Caused US Drone Crash In Black Sea: Pentagon

​  ​The US military statement of events, blaming a pair of Russian fighter jets for "reckless" maneuvers which resulted in the MQ-9 drone being struck and crashing in international waters at a "complete loss":
​  ​Two Russian Su-27 aircraftconducted an unsafe and unprofessional intercept with aU.S. Air Force Intelligence, Surveillance, and Reconnaissance unmanned MQ-9 aircraft that was operating within international airspaceover the Black Sea today.
​  ​At approximately 7:03 AM (CET),one of the Russian Su-27 aircraft struck the propeller of the MQ-9, causing U.S. forces to have to bring the MQ-9 down in international waters.Several times before the collision, the Su-27s dumped fuel on and flew in front of the MQ-9in a reckless, environmentally unsound and unprofessional manner.This incident demonstrates a lack of competence in addition to being unsafe and unprofessional.​  ("Lack" of competence?)
​  ​“Our MQ-9 aircraft was conducting routine operations in international airspace when it was intercepted and hit by a Russian aircraft, resulting in a crash and complete loss of the MQ-9,” said U.S. Air Force Gen. James B. Hecker, commander, U.S. Air Forces Europe and Air Forces Africa. “In fact, this unsafe and unprofessional act by the Russians nearly caused both aircraft to crash.”​   (​S​o "mission-accomplished", right?)
​  ​“U.S. and Allied aircraft will continue to operate in international airspace and we call on the Russians to conduct themselves professionally and safely,” Hecker added. https://www.zerohedge.com/geopolitical/us-reaper-drone-downed-over-black-sea-incident-russian-jet

​  ​The doctor indicted for not killing his patients​   I sure​e​mpathize.
​  ​Seventy-five years ago, it was established at the Nuremberg trial for doctors that never again would we allow medical experimentation upon human beings without their consent... Meanwhile, a doctor who took his Hippocratic Oath seriously and allegedly saved nearly 2,000 patients (with FULL CONSENT) from the shots, is facing serious federal charges for conspiracy to defraud the government defrauders...
​  ​In January,Dr. Kirk Moore, along with two members of his clinic’s staff and a neighbor, were indicted on conspiracy to defraud the federal governmentby allegedlyoffering nearly 2,000 patients saline injections along with vaccine documentationwhile disposing of thereal shots into the sink. To be clear, he is not being accused of tricking patients. He never offered unsuspecting patients fake shots.These were all people (or parents of minors) who desperately sought him out to bypass the genocidal, unconstitutional, inhumane, and immoral jab mandates, so they could go on with their lives unharmed by this terrible technology...
..According to theAMA Medical Code, “When physicians believe a law violates ethical values or is unjust, they should work to change in law.”However, it adds that“in exceptional circumstances of unjust laws, ethical responsibilities should supersede legal duties.​"​That is clearly going to be part of Moore’s defense if he is indeed shown to have given people saline at their request.
​  ​Ironically, Moore is being accused of grifting and running a fake vaccine card ring and earning $98,000 off it. Dr. Moore, though, rigorously disputed this fact in an interview on my podcast and notes thatwhen people asked him for his fee for COVID treatment, he told them to donate it to a 501(c)(3) medical freedom group. https://www.conservativereview.com/horowitz-the-doctor-indicted-for-not-killing-his-patients-2659571048.html

​Treasures in Heaven (took this picture of Jenny with blooming pear tree​)