Greece is the way we are feeling!

By Max Musson:

Grexit 3According to those who promote European union as an idealistic aim and those who promote the EU as the embodiment of that ideal, such a union is intended to be beneficial for all concerned – a state of affairs in which each member state is stronger and more secure because of the fraternal support provided by the others. However this does not seem to be working out too well for Greece in her hour of need.

This week we have seen the mask slip — the true face of the European Union (EU) has been exposed for all to see, and it has not been pretty, nor just, nor noble. We have seen the people of Greece humiliated through the thinly veiled, hostile imposition of punitive austerity measures in retribution for their temerity in rejecting previously proposed austerity measures and even considering the option of withdrawing altogether from the Eurozone.

Greek Debt Crisis 3This blow has hit the Greek people hard as they have been led to believe there are real alternatives to severe austerity and the left-wing government of Prime Minister Alexis Tsipras and his party, Syriza, pledged to defy the EU in demanding a just and tolerable solution to the country’s financial problems. As it is, Tsipras, emboldened by his people’s 61% rejection of the earlier bail-out proposals, tweaked the noses of the pompous Eurocrats only for his defiance to collapse at the eleventh hour in contrite supplication to the will of German Chancellor, Angela Merkel, and her Davros-like Finance Minister, Wolfgang Schaeuble.

As I have pointed out in an earlier article, the financial difficulties facing Greece at this time, may be marginally more the result of Greek profligacy than the financial difficulties faced by other European states, but the root cause of Greek indebtedness is twofold; the ubiquitous but corrupt system of Fractional Reserve Banking in which new money is ‘borrowed into existence’; and the fraudulent peddling of junk-bonds and their derivatives as ‘low-risk’ investments by US bankers, primarily at the behest of the American government in the decades leading up to the 2008-09 Credit Crisis.

Grexit 6If EU leaders were to act in what they proclaim is the ‘spirit of the European Union’ – a spirit of ‘ever closer union’ moving towards the formation of a federal European super-state, one would expect them to regard the debts of any one member state, as a component part of the total debt burden shouldered by all of the EU member states collectively, in the same way that our Westminster government has over the centuries since the formation of the United Kingdom, regarded debt incurred through public expenditure in Wales, or in Cornwall or Yorkshire, as part of a collective national debt owed by the United Kingdom as a whole and the responsibility of the United Kingdom as a whole. However, the EU has not reacted as if this is the case.

Instead, the member states of the EU have distanced themselves and failed to acknowledge any shared responsibility for the Greek debt and the Greeks are being forced to fend for themselves, despite not having control of their currency.

Morally and in consideration of the Greek people entering into monetary union with the other member states of the Eurozone; with a shared currency, the Euro; and with a border-less single market, the EU as a whole should regard themselves as ‘jointly and severally’ liable for any debts incurred and bail-out the Greeks without recrimination. This is how a political and economic union should work, but such a union should also be a fiscal union with a single taxation system and centralised control of public spending by the various member states.

Greek Debt Crisis 4When a nation forgoes control of its own currency, and enters into a federal arrangement with other nations, in which there is a ‘single market’ and in which there are no internal controls over the movement of goods, or capital, or people, it is rather like an individual giving away control of his or her own bank account and trying to manage their finances through a joint bank account together with a group of other people, each of which has the ability to deposit or withdraw money as they choose.

Unless one of the parties to this joint banking arrangement is nominated to act as the ‘Treasurer’ of the ‘partnership’ and administers the group’s finances as a whole, at some point it will inevitably be discovered that rather more money has been withdrawn and spent than planned and as a consequence the ‘partnership’ will be in danger of breaching its overdraft arrangements and of possibly not meeting its financial obligations.

This is why in English Commercial Law all ‘business partners’ are held ‘jointly and severally liable’ for the debts of a partnership, so there can be no wrangling over who is responsible. All of the partners involved in a partnership are legally responsible for their collective debts, even if those debts may have been incurred through the actions of just one partner.

Just as with a business partnership, the member states of the EU are ‘partners’ involved in a ‘joint enterprise’ – to create a single European state — and they have joint banking arrangements and should morally therefore be ‘jointly and severally liable’ for the debts collectively incurred by them, both individually and as a group.

This should be heralded as one of the primary and most fundamental tenets of a political and economic union such as the EU aspires to be, however the current problems experienced by Greece in her relationship with her European partners, demonstrate that such a state of affairs does not exist, and the reasons for this are twofold and are fundamentally issues of honesty:

Firstly, in order for the EU to function as a ‘partnership’ in which the ‘partners’, i.e. the member states of the union enjoy greater financial and economic security as a result of the pooling of their resources, there needs to be centralised control of taxation and of public spending throughout the union and this would require the EU to become a single state in every sense, with the concomitant loss of statehood and/or nationhood by all of the individual member states.

Grexit 2While a single currency has been established throughout the Eurozone, and the European Central Bank has been established to control  the issuing of new money, none of the nations comprising the member states have so far been prepared to ‘go the whole hog’ — to surrender to the EU, full fiscal control, that is, control of taxation and public spending – and this is because the EU has been built upon deceit. It is an aspiring super-state that dare not speak its name.

The various peoples of Europe generally feel well disposed towards each other and are happy to enjoy the benefits of economic co-operation, but there is little desire for the kind of ‘ever closer’ political and economic union that our political elites desire, nor for the loss of national sovereignty that such a union would require.

Therefore, ever since the EU was formed, it has proceeded towards political and economic union through stealth, at each stage denying its ultimate objective, because that objective was not and never has been politically acceptable to the vast majority of the people of the member states concerned. This is why Edward Heath deliberately lied to the House of Commons and to the British people when he told us that membership of the ‘Common Market’, as the EU was then called, would not involve any loss of national sovereignty, and this is why successive Labour and Conservative administrations have systematically lied to us at every step and turn along the way, each time denying that the ultimate objective of the EU project would be a total loss of national sovereignty, a total loss of nationhood and our total absorption into a European super-state.

In order to maintain their pretence, the governments (the political elites) of the member states have so far retained fiscal control, control of taxation and their individual public spending, and this is why they cannot afford to respond as appropriate to the needs of the ailing Greek economy.

Grexit 1Having given away control of their currency, the Greeks have been unable to do what we British and the Americans did following the Credit Crisis, in order to lighten the debt burden we carry. They have been unable to employ Quantitative Easing (QE) — that is the printing of a quantity of new bank notes which are used to pay off a proportion of the national debt. The Greeks can only benefit from QE if the European Central Bank agrees to the printing of Euro bank notes which can be given to the Greeks to pay off some of their national debt, but the European Central Bank will not do this, because it would dangerous to do so without full fiscal control over the entire EU — control that the European Central Bank can only have if the EU assumes full nation status and dominion over all of the member states – something that is still politically unacceptable to the European electorate.

The second issue relating to honesty, or rather the lack of it, and serving as an impediment to the EU responding appropriately to the plight of the Greeks, is the failure of our political elites to address the issue of our corrupt fractional reserve banking system, which has been the primary source of the debt based financial problems faced by all of the member states of the EU as well as most of the nations of the rest of the world.

Our current banking system, which was established towards the end of World War II and in the early post-war period, in conferences held at Dumbarton Oaks and Bretton Woods, is one in which banks have the ability to create credit out of nothing in the form of ‘electronic money’ and in which governments are normally only allowed to expand the money supply in their respective countries by literally borrowing that money into existence. Through the Bank of International Settlements, set up following the Bretton Woods Conference, in which the US Dollar is regarded as the international ‘reserve currency’, the power to effectively control the banking systems of the world was granted to the US Federal Reserve, the US central bank which is a privately owned corporation, owned and controlled by a number of merchant banks, and which is constitutionally beyond US governmental control. The head of the Federal Reserve is therefore able to control the money supply of the world, and as we all know, ‘he who pays the piper, calls the tune’. An understanding of this is crucial to an understanding of international power politics.

Sadly very few politicians actually understand the flawed nature of our banking system, and those that do are all too often in thrall to the powerful moneyed interests that control the Federal Reserve. This fact was amply demonstrated on 11th June 2015, when UKIP MP Douglas Carswell very bravely raised the issue of fractional reserve banking on the BBc’s flagship politics programme, Question Time, only to have the matter ignored by the other pundits present, but not before the host, David Dimbleby admitted he had no idea what fractional reserve banking is!

If David Dimbleby, who has had the opportunity to question and speak at length with all of the major establishment politicians in Britain over several decades has not heard of fractional reserve banking before, this gives us a fairly strong indication that no-one has ever mentioned it before, almost certainly because they either know nothing about it, or because they don’t want the public to find out about it or gain an understanding of it.

Debt accumulated through our current banking system, which could be avoided entirely if new money was printed into existence in the form of bank notes rather than borrowed into existence in the form of electronic data entries, and the fact that the German finance minister and the heads of the European Central Bank have not been sympathetic to the plight of the Greek people, and the fact that the Greek Prime Minister made no headway at all in his attempts to have a proportion of Greek debt written off, demonstrates clearly a lack of appreciation of the iniquitous nature of our current banking system and shows that the European political elite are either ignorant of the flaws in our banking system or committed to concealing them. Whichever it is, they are either incompetent or they are crooks and it is deplorable that they have responded to the dire plight of the Greeks in the manner of a loan shark, offering nothing more than a ‘restructuring’ of the current debt arrangement in such a way that their victim will never have the opportunity to be debt free, as they struggle to make ends meet on the ‘never, never’!

Interestingly, the Greek people have not reacted meekly to the climb-down performed by Alexis Tsipras, many viewing the bail-out terms as a betrayal, and as soon as the terms were announced the Greek civil service unions announced a strike aimed at placing pressure upon the Greek government to once again stiffen its resolve against the austerity measures being proposed. It will be interesting to see whether the current Greek government survives or whether Tsipras will be forced to call a snap general election. Either way, the current situation must present a immense opportunity for Golden Dawn to capitalise on the widespread sense of betrayal and humiliation felt by the Greek people. Let us hope so because this crisis could provide that ‘SHTF’ moment that so many nationalists dream of and it could provide the historic opportunity for Golden Dawn to rise from the ashes of their mass arrests and wrest control of Greece from the feeble hands of Syriza. Let us hope so!

‘Greece is the word,
Greece is the word, is the word that you heard,
It’s got groove, it’s got meaning,
Greece is the time, is the place, is the motion,
Now, Greece is the way we are feeling’.

By Max Musson © 2015

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6 thoughts on “Greece is the way we are feeling!

  1. Michael Woodbridge

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    How remarkable that David Dimbleby who comes from a highly politicised family, some of the older readers here will remember his father Richard Dimbleby who presented ‘Panarama’, shouldn’t have heard of fractional reserve banking! At least he should be given credit for his honesty if that’s what it was. What a remarkable climb down from Tsipras though! However, in retrospect, judging by the iniquitous way the Golden Dawn has been treated perhaps it was mistaken to expect any honour from him or his party Syriza.

  2. Linc's Patriot

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    Onwards and upwards for Golden Dawn hopefully! By the way, Dimbleby comes from a family with alleged Jewish ancestry – therefore it might be in his interest to deceive onlookers! 14w

    1. It is often alleged that the Dimblebys have Jewish ancestry, however this is merely based upon the fact that Richard Dimbleby’s father (one of David Dimbleby’s grandfathers) had the middle name ‘Jabez’ and was once in a business partnership with an allegedly Jewish journalist. This is ‘evidence’ therefore by no means substantial, let alone conclusive.
      .
      What is clear is that the Dimblebys are a family with a strong liberal tradition, which makes them antagonistic towards White nationalism of any kind.
      .
      If Dimbleby had wished to confound understanding of fractional reserve banking, he would have been more likely to ignore Douglas Carswell’s mention of it, rather than invite him to explain what it is. I don’t think therefore that Dimbleby was acting disingenuously on this occasion. I think he genuinely had no idea what fractional reserve banking is.

  3. “… the EU has been built upon deceit. It is an aspiring super-state that dare not speak its name.”

    You got it.

    1) “banks have the ability to create credit out of nothing ” I know why you’re saying that and it’s a hallowed phrase (at least two major sources quoted iirc in for example Thomas Robertson’s “Human Ecology” and didn’t William Paterson at the founding of the Bank of ‘England’ say it?) but is it really right? I still can’t get my head round this but it does seem a thought-hangover from the goldsmiths’ practice of issuing more gold receipts than they had gold on hand and benefiting from the interest.
    What the banks are doing in substance is monetizing (or liquidising as it was once said) executory promises/property and then charging interest on that monetized amount rather than charging just a fee for evaluating the worth of the credit and the underlying security and administering the loan. Despite the old banking adage “the best lending is unsecured” in reality ALL lending is collateralised, as for example has been discovered by house owners who paid off their mortgage but later could not pay off ‘unsecured’ credit card loans and found their home had been made subject to a security interest by the bank or credit card operator despite their never signing any formal security deed or document. Money is a unitisation of value-worthy, executory promises/assets. The banks do not possess anything to lend beyond their free deposits so why should they be remunerated as if they did when they are just evaluating the prospective merits of a debtor and his collateral and administering the loan?

    (For reasons of brevity this doesn’t also consider other vices of the existing money system such as the rowing of the money supply by periodic expansions and contractions of credit by ‘Government’ policy directions / central banks requiring banks to place more of their deposits with them, all of which actions encourage lending and then economic downturns and attendant failures to pay after job losses etc when collateral is seized in lieu).

    2) I feel ambiguous about Dimbleby’s professed ignorance. In fact Robert Peston (who might be expected to know too) said in a TV documentary on the 2008 banking crisis that aired iirc early 2011 that banks lent out moneys deposited with them, without asserting any ‘leverage’ factor (I’m contradicting #1 I know). Who knows, maybe Dimbleby was on the back foot or forgot the benefit of “no comment”.

    3) I know nothing of Douglas Carswell but there are some who would appear to be critical of him, including Justin Walker who occasionally airs on the UK Column podcast. Around the 42 minute mark of their 9th July 2015 show he claims he was ‘snubbed’ by Carswell for raising the “Bradbury Pound” interest-free currency idea. (Walker has stated he raised the concept also with representatives of the Greek government).

    http://feeds.soundcloud.com/users/soundcloud:users:78178407/sounds.rss

    However a fairer explanation than mere haughtiness might be that Carswell’s been warned off by, shall we say, ‘vested interests’. I can’t recall exactly but he was behind a draft Bill in 2010 which I think was intended to restrict banks’ lending to amounts matching their deposits, but the Bill made no progress.
    By the way UK Column has some ex-copper (‘ex’ as in their Brian Gerrish being ‘ex’-Navy) who talks about freeman on the land / common law type issues which are mostly codswallop, and his presence may be obfuscation of the issues surrounding the money question. For example he has trotted out the (US originated, like all that stuff) line that a house buyer signs a promissory note when taking a mortgage and the note is in payment of the debt. While it is true that US banks’ loan practice was often to get a borrower to sign promissory notes as well as signing a loan agreement, this was likely in the days before securitisations and was a method either to get the loan off the books to make room for more profitable use of capital and/or for reasons of better enforcement, I think the idea being that promissory notes being negotiable instruments could not be met with defences. I never signed a promissory note for a mortgage. You get a loan offer and then the mortgage deed. Even if the borrower signed a promissory note when buying a house plainly it’s rubbish to say that his note satisfies the loan – its secondary market value is basically nothing as he doesn’t have that cash, hence his borrowing the loan in the first place. This supposed legal chicanery is the hallmark of deceit.

    4) Don’t forget that House of Commons debate “Money and Society” 20 November 2014 which was attended by HARDLY ANY MPs AT ALL. People get what they deserve – the issues are well accessible now with the internet. Conversely I think up till about the 1980s it was not allowed to discuss (or critique?) monetary mechanics on the floor of the House, though I may be wrong on this as Captain Kirby MP raised it in the 1960s – Erskine May back editions may reveal. Also the financial interests are represented in the Commons by their watchdog the ‘Remembrancer’.

    5) Tsipras is 40 years old and not exactly an elder statesman, neverthless he must have had advisors around him who knew the issues, and one of the actions to take in order to make negotiations most productive would have been to take steps 6-9 months ago to get ready with systems to support a move to (new) Drachma on an exit from Euro. Remember that in August 1914 the British Government was able to extend the bank holiday for another 2 or 3 days which was time sufficient to get the new Bradbury Notes issued by the Treasury and made available to the banks for them to issue in lieu to customers demanding the gold which the banks had only in insufficient amounts. Tsipras has been grossly negligent or grossly treasonous. Real world assets will be seized by creditors but will the Greek people resist by supporting Golden Dawn? And incidentally, is GD any more versed in the monetary issues than Syriza?

    6) As well as other currencies being linked to the dollar the value of the dollar itself is supported by geopolitical arrangements (such as those with the Saudis factored by Henry Kissinger?) whose practical effect is that commodities such as oil can be purchased only with dollars (the franchise is now weakening of course). The backstop ultimately is American weapons. For the same reasons one might deduce why non-oil, efficient eco-friendly energy substitutes have not been developed and utilised widely.

    PS: UK Column is the subject of much low-key controversy; I listened to their podcasts of July 15, 16, 17 and found they contained interesting and plausible material (their Scottish ‘correspondent’ on Friday is a cut above the rest) – but the good stuff was punctuated in one case by Brian Gerrish laying responsibility on the (Knights) Templars…

    1. I think it is fairly clear that banks are able to, and do create ‘money’ out of nothing. This is evidenced by the massive disparity between the quantity of coins and banknotes in existence, compared to the total value of all bank deposits, promissory notes, loanstocks etc., that form the wider M3 measure of money supply.
      .
      Whether Dimbleby was being disingenuous in claiming ignorance of fractional reserve banking or not is a moot point. It was evident from the programme that no-one else on the panel had any knowledge of what Carswell was talking about, which aptly illustrates the point I was making.
      .
      I don’t hold up Douglas Carswell as someone we should particularly admire, he is after all so liberal that he would be a better fit in Cameron’s Conservatives than UKIP, but for whatever reason he did raise the issue of fractional reserve banking for the very first time on Question Time, which was interesting.
      .
      I agree that while Tsipras was forced by circumstances to behave in a rather nationalistic fashion for a while, he had obviously not made much preparation for any sustained resistance to the will of the EU.
      .
      I take on-board what you say about commodity markets, the maintenance of the US Dollar as the international reserve currency is key to enabling the issuer of Dollar Bills, i.e. the Federal Reserve, under the auspices of the Bank of International Settlements, to effectively control the purse strings of the world.

  4. It does surprise me that such people haven’t heard of fractional reserve banking or that most money doesn’t physically exist but I haven’t got two O levels to rub together, so what do I know!

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