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EU Monetary And Economic Failures

The monetary, financial and political weaknesses of the EU are about to be exposed by the forthcoming global credit crisis.

The Duran

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Authored by Alasdair Macleod via GoldMoney.com:


This article assumes the combination of end of credit cycle dynamics and the rise in trade protectionism in 1929 is a valid precedent for gauging the scale of a developing global credit crisis today, as described in my earlier article published here. Then, it was heavier tariffs coinciding with a less destabilising inflation cycle than we face today, a combination that saw stock markets collapse. Today, we have the additional factors of far greater monetary inflation, far higher levels of government debt, low savings coupled with record consumer borrowing, and unbacked fiat currencies likely to lose purchasing power instead of gold-backed currencies which increased their purchasing power.

Declining international trade has already become evident in only a few months, and prescient observers detect early signs of a rapidly developing global recession. In response, the ECB has announced it will target lending to non-financial businesses with its TLTRO-III programme from September onwards.

The larger problem is the crony capitalists in the EU have captured the EU institutions, including the ECB, and will demand ever-accelerating monetary inflation. I have chosen to examine the consequences for the Eurozone, which is one of the more vulnerable economic and political constructs likely to be exposed in the severe economic downturn the world faces today.

The monetary failure

Last week, the ECB announced the reintroduction of targeted long-term refinancing operations for the third time. TLTRO-III is scheduled to start from next September. The idea is to make yet more money available for the banks at attractive rates on condition they increase their lending to non-financial entities.

The policy is justified because the ECB sees growing signs the Eurozone economy is stalling, possibly badly. The weaker Eurozone economies are moving into outright recession, and Germany’s motor exports appear to have dramatically slowed, putting a constraint on her whole economy.

The ECB’s reintroduction of TLTRO is an offer of yet more monetary and credit inflation, despite the evidence that unprecedented waves of monetary inflation in the last ten years have failed in all the objectives for which they were designed, except two: governments have continued to get the funds to spend without meaningful restraint, and insolvent banks have been preserved.

Only two months after its asset purchase programme officially ended, the inflationists are at it again. But one wonders why the ECB bothers to delay TLTRO-III until September. If it is such a good thing, why not introduce it now?

There is another explanation, and that is the ECB is intellectually adrift with no economic compass. We do not know how many economists and monetary specialists are employed in the Eurosystem, which includes the ECB and the regional central banks, but they are certainly not economists, otherwise they would understand money. They may be technicians, which is not the same thing. If they were economists, or more precisely properly schooled in the human sub-science of catallactics (the theory of exchange ratios and prices) they would more fully appreciate the consequences of monetary inflation. They would understand Bastiat’s broken window fallacy: it’s not what you see, but what you don’t see. They see the supposed benefits of inflation but appear blind to the strangulating burden imposed on ordinary people who make up the productive economy.

The destruction and transfer of wealth from Eurozone savers to debtors and from the general public to the banks, government and large corporations are the principal and hidden consequences of monetary inflation. Monetary stimulation is progressively destroying Eurozone economies, which coupled with high taxes and excessive regulation has turned the Eurozone into one massive economic zombie. Any student of catallactics learns this early on. Yet, state-employed economists ignore the mathematics of dilution and are unaware of the changes in relative values people place on an unbacked currency, when they finally realise what the central bank is doing to it.

The ECB’s functionaries are similarly ignorant of catallactics as are their confrères in the other major central banks, but that must not excuse them from ignoring the contradictions inherent in their actions. They wield power, and that has responsibilities. Instead, they are trying for a third time a policy, that even if it appears to briefly succeed, emasculates the Eurozone’s economy even more.

Pumping yet more credit into the Eurozone is as effective as giving adrenalin to a dead horse. Lack of credit is not the problem. Put simply, there is a global momentum of economic contraction evolving, which any business and lending banker would be foolish to ignore. There is a developing crisis, the consequence of earlier monetary inflation in the credit cycle. Economic actors may not understand the origins of the crisis, but we can be certain they are becoming acutely aware of its looming presence. And as the crisis rapidly develops, those that require additional loans will already be insolvent.

The signal sent by the ECB to lending-bankers is likely to be misinterpreted when credit contraction is the looming threat: if TLRTO-III is the smoke, there must be a fire, possibly out of control. Better surely to call in existing loans to businesses rather than waiting to be repaid from profits unlikely to materialise. An encouragement to lend early in the credit cycle is more effective and less likely to be misunderstood than a similar encouragement later in the credit cycle. This is why a renewed TLTRO policy will almost certainly fail.

The inability of bureaucrats, with their heads buried in spreadsheets, to appreciate the role of human psychology is not the ECB’s only failing. Its executives do not even understand what interest rates represent, thinking it is simply the price of money. This is why it believes in keeping interest rates suppressed as a means of increasing credit. Earlier in the credit cycle, rate suppression does generate some credit expansion, mainly in financial rather than non-financial activities, because lower interest rates lead to higher prices for financial assets. That is basically a spreadsheet, almost non-human function. Large industrial corporations are opportunist, borrowing to fund buy-backs and to take over weaker rivals. Smaller and medium-sized business borrowers are usually offered credit only later in the cycle, when it is a mistake to accept it.

Consequently, in a zombie economy, such as that of the Eurozone, the only borrowers are wealth-destroying, socialising, debt-entrapped governments, taking full advantage of the Basel accords, which rates them for lending banks’ purposes as riskless borrowers.

More on the true role of interest rates

Interest is not the price of money. It is a reflection of the difference between future values compared with present values. It has its origin in the human expression of time-preference. When a businessman agrees loan terms with a banker, they should reflect existing time-preference, so as to defer some consumption sufficient to fund investment. Anything else is a distortion with Bastiat-like consequences. Central banks have destroyed the basic function of capital intermediation based on time-preference by replacing savers with money and credit inflation as the principal source of investment capital.

This was wished for by Keynes in his General Theory, published in 1936. He wanted to see savers euthanised (his word) and for the state to provide the necessary capital to businessmen. He expected the entrepreneur to accept state direction of capital. Entrepreneurs “who are so fond of their craft that their labour could be obtained far cheaper that at present” should move from a risk-based approach to business to a socialising function.

Keynes’s wish is granted posthumously, and ordinary people in the Eurozone and elsewhere are paying for it. Economic strangulation and wealth destruction are the consequence. Functionaries such as Mario Draghi and his fellow directors at the ECB are fully committed to pursuing these Keynesian objectives. Having promised their political masters economic salvation on Keynesian principals, they have delivered instead the Keynesian dream, but at the expense of the economy.

Yet, the deferral of TLTRO-III to September suggests that in the back of their collective minds, the panjandrums at the ECB suspect they may be on a path to perdition. Or perhaps it is the influence of the few sound-money men left at the Bundesbank, across the road in Frankfurt, whose families suffered two currency destructions in the twentieth century and vowed never again.

But even they have been silenced. The protests against the ECB in the German and European courts are in the past. If, as this writer expects, the global economy proves to be on the edge of an abysmal credit crisis, there will be no meaningful objection to a further acceleration of monetary inflation to the point where the euro becomes worthless. If so, Mario Draghi will be identified by future generations as a latter-day Rudolf Havenstein, who famously printed the Reichsmark out of existence.

Unlike the Reichsmark, the euro is a cut-and-shut of a number of fiat currencies with very different time preferences. A knowledge of catallactics would have advised against its creation, proof if it was needed of institutional ignorance in matters of money and exchange. If its origin had been one currency, we could expect its demise to follow the path of all fiat currencies in the past. A single state granting itself the sole right to issue the medium of exchange can never resist the temptation to use it as a source of finance until its destruction. But the euro is a compromise between states with track records of widely different rates of inflation. What suits Germany does not suit Italy. The euro could face a quicker destruction, simply by the Eurozone falling apart.

However, Germany and a few Northern states like her appear trapped, this time through TARGET2 imbalances whereby the Bundesbank is owed approaching a trillion euros by the system. Inflation of money and credit, ultimately the cause of these imbalances, has taken the ECB beyond a point of no return. Inevitably, at some future point, ordinary people will replace their wishful thinking, that the ECB and the national central banks have control over the purchasing power of the euro, with a growing realisation that they don’t. And when they awaken to that reality, they will dump all euros surplus to their essential requirements.

We know that attempts by the authorities to side-step successive credit crises ultimately fail, and it is in that light we should look at TLTRO-III. We must conclude that it is a diversion, window dressing for the shop-front of a failing ECB. It will achieve nothing, because the banks do not want to lend to non-financials, with the exception perhaps of the most credit-worthy large corporations, the corporations that have the political class in their pockets. It is not just the ECB following economically destructive policies, but an unholy alliance between big business and politicians, which is what Brussels and the ECB is all about.

Crony capitalists love inflation

It is a good rule of thumb to reckon that GDP is split 20% in favour of large businesses and 80% in favour of small and medium-size enterprises. The 20% employs armies of lawyers and lobbyists for the explicit purpose of influencing politicians and for the implied purpose of restricting competition. It is not widely appreciated that the European Union is a partnership between these crony-capitalists and the political class.

Europe has a long history of powerful industrial dynasties supporting the political class. This crony capitalism, the true source of much social discontent, is a feature of governments everywhere, but it is perhaps embedded in the EU more deeply and insidiously. An important part of this relationship is the profits generated through monetary inflation.

The most outstanding example pf profiteering from inflation was probably that of Hugo Stinnes in Germany, who a hundred years ago was a passionate supporter of the Reichsbank’s inflationary policies. Stinnes used inflation to build further his pre-war empire based on coal, shipping and electricity generation. By 1923 Stinnes’ interests consisted of roughly 4,500 enterprises, producing nearly 20% of Germany’s industrial output. By borrowing in depreciating Reichsmarks he obtained through exports foreign currencies backed by gold, with which he was able to pay off his heavily devalued Reichsmark debts. He earned the soubriquet Inflationskönig. Stinnes died in April 1924, and his empire collapsed shortly afterwards, though a much-reduced Hugo Stinnes Schiffart GmbH still exists.

Stinnes understood how to benefit from inflation, as do the establishment businesses in the Eurozone today. Large corporations, very often with their own finance arms, have direct or indirect access to the ECB’s largess, borrowing at close-to-zero rates to finance their ambitions. Compared with the relatively sound German mark, today’s large German manufacturers must love the euro.

While big business gains its financing advantages against its smaller competitors, the bulk of any economy is not the large crony-capitalistic organisations, but the small and medium size businesses that make up 80% of any economy’s GDP. For banks these are risky customers, relatively so compared with lending to large corporations. As Stinnes discovered, the relationship between big business, the banks and SMEs effectively transferred wealth from the latter to him through monetary debasement.

As surely as the end of the 1920-23 inflation killed off the Stinnes empire, the end of monetary inflation in the Eurozone will kill off the large European multinationals. But now that the crony-capitalists face a contraction in global trade, they are likely to agitate for yet more inflation. They will say they need a competitive euro to offset declining world markets, so the ECB must take steps to ensure the euro depreciates more rapidly against the US dollar. They can only dream of the profits and power earned by Stinnes from hyperinflation, before Hjalmar Schacht ruined everything for him by stabilising the new mark. But they are making a mistake: borrowing euros to earn fiat dollars to eventually pay off devalued euro debts is not the same as borrowing Reichsmarks to accumulate gold-backed foreign currencies.

The major banks are in trouble

Despite the ECB’s subsidy of the Eurozone’s banking system, it remains in a sleepwalking state similar to the non-financial, non-crony-capitalist zombified economy. Gone are the heady days of investment banking. There is now a legacy of derivatives and regulators’ fines. Technology has made the over-extended branch network, typical of a European retail bank, a costly white elephant. The market for emptying bank buildings in the towns and villages throughout Europe must be dire, a source of under-provisioned losses. On top of this, the ECB’s interest rate policy has led to lending margins becoming paper-thin.

A negative deposit rate of 0.4% at the ECB has led to negative wholesale (Euribor) money market rates along the yield curve to at least 12 months. This has allowed French banks, for example, to fund Italian government bond positions, stripping out 33 basis points on a “riskless” one-year bond. It’s the peak of collapsed lending margins when even the hare-brained can see the risk is greater than the reward, whatever the regulator says. The entire yield curve is considerably lower than Italian risk implies it should be, given its existing debt obligations, with 10-year Italian government bonds yielding only 2.55%. That’s less than equivalent US Treasuries, the global risk-free standard.

Government bond yields have been and remain considerably reduced through the ECB’s interest rate suppression and its bond-buying programmes. The expansion of Eurozone government debt since the Lehman crisis has been about 50% to €9.69 trillion. This expansion, representing €3.1 trillion, compares with the expansion of the Eurosystem’s own balance sheet of €2.8 trillion since 2009. In other words, the expansion of Eurozone government debt has been nearly matched by the ECB’s monetary creation.

Bond prices, such as that of Italian 10-year debt yielding 2.55%, are therefore meaningless in the market sense. This has not been much of an issue so long as asset prices are rising and the global economy is expanding, because monetary inflation will keep the fiat bubble expanding. It is when a credit crisis materialises that the trouble starts. The fiat bubble develops leaks and eventually implodes.

Now that the global economy has stopped expanding and is on the brink of recession, under these changing conditions the monetary, systemic and economic dangers facing the Eurozone are rapidly rising. This is a problem beyond the ability of the ECB to contain. Politicians and their institutions in Brussels seem unaware of the approaching storm, but when they do become aware, they will turn to group-think for protection. Like fish in a tightening bait-ball, they actions are set to accelerate their own demise.

The start of EU disintegration

There can be no doubt that the ECB has so far only managed to prevent a financial and systemic crisis materialising because of the background of a worldwide monetary and credit expansion inflating financial asset prices. A global background of rising asset values was necessary for the consequences of the Greek financial crisis to be absorbed without destabilising the whole caboodle. If it had happened during a global credit crisis the outcome would have been different.

Inevitably, at some stage the euro’s purchasing power will begin to fall under the weight of accelerating monetary inflation and the demands from crony-capitalists for a competitive exchange rate. Rising bond yields will be the inevitable outcome, requiring yet more QE from the ECB. It takes little imagination to realise that in an environment of rising bond yields and falling asset values the Italian government and its economy will be exposed to intractable difficulties. The difference from the on-going Greek crisis is Italy’s economy is nearly ten times the size of that of Greece. So far, aided by inflating markets, there has not been a full-blown crisis. In a vicious bond bear market of the scale likely to accompany the next credit crisis, Italy alone could crash the whole Eurosystem.

That could happen by the end of this year, because when things go wrong the pace calamities usually accelerates. Today, the EU is threatened with Brexit, which at the time of writing is yet to be resolved. But there’s a significant possibility Britain will leave the EU without a comprehensive trade deal and without paying all the money allegedly owed to the EU. The money will have to be made up by the other members, principally by Germany, France, Italy and Spain, being the largest remaining economies. Furthermore, the UK’s economic policy is bound to focus on being a competitive regional entrepôt for global trade, enhancing her economic performance relative to a stultifying EU. Existing political tensions within the EU are certain to escalate as the EU falls behind, and Brussels, hooked on profligacy, for the first time faces budget cuts.

It is becoming increasingly obvious to independent observers that the EU supra-national socialising model is failing structurally, politically, economically and financially. The next credit crisis, which appears to be evolving from the seeds of today’s events, looks set to end the European dream.

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regolo gelliniJohn Nolan Recent comment authors
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Why don’t the pollies, the public, the media, etc., realize that it is the banks who are the cause of all enomomic catastrophes, seeing they, the upper echelon thieves, have stolen the public’s ownership of our money, make capital out of nothing, loan it to the governments, the public, at unpayable rates of interest, (they never make the interest, do they?) and now, technically, own the world.
Wake up people, especially those who pretend to have all the answers, as the greatest economic crunch is now taking place. Who gave the FED.,ownership our money?
I didn’t vote for that, did you?

regolo gellini
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regolo gellini

I have a question : Italy has a big debt that has been bought by 70% by italian borrowers the rest abroad. The private savings of the italian families amounts to the double of the external debt. Italian families have very little debts contrary to UK and France. 80% of the families own their own house.
Italy has two big problems, a terrible buraeucracy and four regions in the hands of mafia organisations that have already infected also the North of the country.
With all this in mind, can Italy survive the next EU crisis ?

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Can Zelensky bring peace to a Ukraine torn apart by Obama’s Maidan coup? (Video)

The Duran Quick Take: Episode 150.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a look at Vladimir Zelensky’s landslide victory against incumbent Petro Poroshenko in Sunday’s historic Ukraine, second round, Presidential election.

Not much is known about Zelensky’s political acumen, but the job of uniting a country torn apart by an Obama funded Maidan coup in 2014, will prove to be a daunting task for the comedy TV star.

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Via TASS News…

Ukraine’s ‘Opposition Platform – For Life’ party will support Ukrainian president-elect Vladimir Zelensky only if he takes practical steps to bring peace to Donbass, Chairman of the party’s Political Council Viktor Medvedchuk said in an interview with the Rossiya-24 TV channel on Monday.

“Today, we can’t say that we support him because support is only possible if he truly wants peace in Donbass, if we see that he is taking actual steps to achieve this goal,” he said.

According to Medvedchuk, this is the only condition on which the ‘Opposition Platform – For Life’ party is ready to provide assistance to Zelensky if the need arises.

Ukraine’s presidential runoff took place on April 21. With 99.53% of the vote counted, leader of the Servant of the People political party Vladimir Zelensky has received 73.23% in Ukraine’s presidential runoff, while incumbent President Pyotr Poroshenko gained 24.45%.

 

 

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TRUMP  –  The Reckoning

The Trump/Russia hoax has been called bigger than Watergate, in reality it dwarfs Watergate.

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Submitted by Alexander Baron via Medium…

Now that the Mueller Report has been published and Donald Trump has been cleared of colluding with Russia, heads will roll.

Donald Trump was nearly seventy years old when he announced he was running for President of the United States. He had been asked if he would run way back in the 1980s, and ruled it out. Having literally no political experience, he was treated largely as a joke candidate, something he took in good humour, but the joke turned sour, first when he decimated a seventeen strong field of Republican hopefuls, and then when he beat Hillary Clinton losing the popular vote but winning the electoral college and thus the Presidency.

By this time, the jokes had turned to hysteria. What would any reasonable person have expected him to do at his age? With a much younger wife, a young son, an extended family, fame, and wealth beyond the dreams of avarice, he could have spent his golden years playing golf, doting on his grandkids, and doing anything he wanted and was able to within reason. Instead he elected to spend six hundred million dollars of his own money on a long shot to capture the Presidency, then work like a dog afterwards. Why? Because he saw his country being trashed and figured only he could save it.

You can call that wishful thinking, arrogance, even a Messiah complex, but the fact remains he put his money where his mouth is and delivered the goods. He didn’t even take a salary. And he has clearly been enjoying himself in both the run up to the election and in his Presidency, but there has been a dark side, a very dark side. While Trump has won millions of fans, he has earned the scorn of the elites, the intellectuals, the mass media, and the leadership of the Democratic Party. To date he has been the victim of an albeit half-hearted assassination attempt by a deranged British national, he has been assassinated in effigy in imitation of the Ides of March, decapitated in effigy, slandered and libelled from pillar to post.

After his Republican enemies released the now notorious Access Hollywood tape, a gaggle of demented and simply dishonest, attention-seeking females came forward to accuse him of a variety of sexual misdemeanours. He has been branded a bigot, a money launderer for the mob, his sanity has been questioned, and crude innuendo has been directed at him about his relationship with his eldest daughter.

Not content with trashing the man himself, elements of the media have attacked his daughter, his son Donald as a Russian “colluder”, his wife has been branded a prostitute, even his young son Barron has not been spared. Fifty years from now or even twenty, future American historians will look back on his treatment in shame. But the biggest lie, one that should never have been credited, is that he was somehow in the pockets of the Kremlin, or Vladimir Putin in person. How this lie came about has now been thoroughly documented, not by the mainstream media but by Fox News and its pundits who have broadcast the findings of Gregg Jarrett, Dan Bongino, Sara Carter, Joe diGenova, the Judicial Watchteam, The Epoch Times, and other Conservative organisations. To this list must be added the names of several leading Republican politicians, including Devin Nunes, Jim Jordan, Louis Gohmert, Jason Chaffetz, Trey Gowdy and Lindsey Graham.

So how did the Russian collusion hoax begin? It is based entirely on a spurious so-called dossier written ostensibly by former MI6 agent Christopher Steele, a man who had excellent credentials, although in view of its contents one is entitled to ask if those credentials should not now be scrutinised carefully. The most outrageous claim of this dossier is that while he was in Moscow, Trump hired a brace of prostitutes to urinate on a mattress in the hotel suite that had been used by the Obamas.

Although there is little or no chance of his ever submitting himself to questioning by Congress, Steele has now admitted (ie claimed) in civil proceedings that he didn’t actually visit Russia to “research” this dossier but did so by telephone. This has led some people to claim the Russians have played the Democratic leadership for fools, but we have no proof that any Russians much less any working for the Russian Government had anything to do with the Steele dossier. Dan Bongino has pointed out that this Russian collusion stupidity actually originated as far back as 2007 and has simply been rewritten and tailored to fit Trump. Dick Morris, who knows how a certain person’s sick mind works, suggests it was written in-house by two Clinton henchmen.

Whoever actually wrote the dossier, most of this so-called opposition research was funded by Hillary Clinton who disguised its funding by paying for it through the law firm Perkins Coie. This is not so much a campaign violation as money laundering, but as with her e-mail scandal, laws are for the little people.

Although Clinton was responsible for the Steele dossier, Republicans were initially involved, including the late John McCain. McCain may have been a war hero, but that was the limit of his humanity. If he had beaten Obama in 2008, the Middle East would quite likely have gone up in flames.

The dossier was used not only to spread disinformation in the mainstream media but to dupe the Foreign Intelligence Surveillance Court into issuing warrants to spy on the Trump campaign. Its contents were fed to the Yahoo! News hack Michael Isikoff, a so-called investigative journalist, and the resulting news reports were used to bolster its authenticity, a classic case of circular reasoning. This allowed rogue operators to spy on Carter Page, and in effect on Trump himself.

If the Steele dossier and spying on Page had been the limits of the conspiracy, that would have been bad enough, but the extent of it and the names of the major players is breath-taking. We know now for certain that in addition to Hillary Clinton, the following people were involved: James Comey, John Brennan and James Clapper — the top men of the three major intelligence agencies; Andrew McCabe, the number two man at the FBI; Peter Strzok and Lisa Page, also top FBI agents; Bruce Ohr and his wife Nellie, the former being a senior Department Of Justice official; Susan Rice, a top aide to Barack Obama; Loretta Lynch, Attorney General in the same administration; and Sally Yates, an Obama holdover who was sacked by Trump for insubordination.

The Trump/Russia hoax has been called bigger than Watergate, in reality it dwarfs Watergate, this was America’s Gunpowder Plot because its intention was nothing less than to destroy a duly elected President and topple his administration. That amounts to sedition, some would even call it treason.

Not content with simply spreading disinformation about Trump/Russia, the conspirators used agents provocateurs to infiltrate the Trump campaign and try to set up innocent men as Russian assets. Two we know of are the academic Stefan Halper and the mysterious Joseph Mifsud.

The attempt to set up Donald Trump Junior by arranging a meeting with Russian lawyer Natalia Veselnitskaya was blatant. Don Junior was clearly gullible, otherwise he would have arranged for his attorney to be present, or better still his attorney and a video camera. Adam Schiff made much of this claiming it was an attempt to collude to get dirt on Hillary Clinton. Then he was hoist by his own petard when two Russian comedians phoned him at his office and offered him photographs of Trump naked! Schiff was enthusiastic, but he is so far gone he doesn’t see the double standard.

How did they expect to get away with this? As Joe diGenova has pointed out, under President Hillary Clinton, all this would simply have gone away; the problem is, she didn’t win. The conspirators also had other, greater aims besides taking down Trump, in particular covering up Clinton’s earlier crimes, stopping any future Trumps, and, some of them, of reigniting the Cold War.

It is not difficult to understand why the Deep State and its operatives hate Trump so much and moved Heaven and Earth to get rid of him. Trump is a businessman, he knows how big business operates, how it plays the system and buys influence. He intended to put a stop to that, and has done to a certain extent. He was also intent on downsizing so-called capitalist America’s massive bureaucracy. A simple but spectacular example of this is his simplification of the tax system which especially benefits small companies and the self-employed. Now, most Americans filing their tax returns need fill out only one double-sided sheet of paper instead of thirty or so pages. Think of the bureaucracy and make-work jobs that destroys.

Apparatchiks are extremely well paid, have excellent terms of service, fat pensions, and are all but unsackable. All that is changing under Trump. Now imagine he gets only so much done, and ten, twenty years from now someone like Bill Gates or Mark Zuckerberg comes along, someone who like him is wealthy beyond the dreams of avarice so cannot be bought, bribed or intimidated. The Hell Trump has been put through was designed to ensure that never happens. The Deep State and their allies have also sought not only to punish Trump but anyone who has the temerity to work with him.

This is why we have seen people on the fringes prosecuted for process crimes like lying to the FBI, crimes that would not have been committed but for the Mueller investigation, and crimes that are extremely minor. This is why Paul Manafort and Roger Stone were arrested by armed agents in dawn raids, tactics that may be suitable for taking down terrorists but not for men accused of white collar crimes. Manafort is now serving a heavy prison sentence for such crimes committed years before Trump announced his Presidential run. The arrest and pressurising of Roger Stone and others was done in the words of Alan Dershowitz, not only to make them sing but to compose.

Trump’s lawyers wisely advised him not to sit down for a formal interview with Mueller because it was clearly a perjury trap. In situations like this, perjury is anything the “investigators” say it is. Their utter ruthlessness is proof positive of that.

Another reason his enemies have gone all out to stop Trump is to cover up the crimes of Hillary Clinton. When she was Secretary of State, she set up a private e-mail server in her home on which she conducted Government business. This was uncovered accidentally by Judicial Watch. This is such a big thing because the e-mails of a public servant belong to the state. A humble police constable or low level local government administrator who did what she did would be sacked. But Hillary Clinton was using her private e-mail to for correspondence that must remain secret because lives could literally be at stake. And, as theYouTube vlogger HA Goodman has pointed out repeatedly, Clinton or someone close to her found a way to transfer top secret information from JWICS onto the regular Internet. JWICS is a high security American Government Intranet, so communications cannot be transferred onto the Internet accidentally; such transfers must have been manual. This alone constitutes serious espionage, and it begs the question why?

The answer to that question is simple, Clinton was peddling influence through the foundation she and her husband set up after he left office. Eric Trump summed it up with a question, what service or goods did they supply that made them so rich? The Clintons are now worth hundreds of millions of dollars, yet when they left the White House, he had lost his law license and was at best looking forward to making a living on the rubber chicken dinner circuit, a perk of the Presidency. That would certainly have kept him in cigars, but would it have stretched to a private jet? If Jason Goodman and especially Charles Ortel are right, the corruption of the Clintons and their associates is off the scale.

The third reason the Deep State was and remains so anxious to take down Donald Trump is because there are lunatics in high places who seek to reignite the Cold War. Indeed, there are some who even want to see war with China. How insane is that? It isn’t for those who make money out of it, only for us peasants, especially those who are sacrificed in these obscene, never-ending, no-win wars.

It is difficult to assess how much damage these people have already done. We know for example that Chinese agents hacked Clinton’s e-mails while she was Secretary of State. And this absurd mantra of “Russia, Russia, Russia” has even pushed Trump in the direction of confrontation instead of cooperation with Russia because every time he backs off , he is attacked as a Putin puppet, absurd as that is.

There are signs though that big change is coming, and it may be coming sooner than anybody thinks. Trump himself has said what happened to him cannot be allowed to go unpunished, and that nothing like this must ever be allowed to happen to a future President. The Democratic leadership and the mass media may howl and scream in unison, but there is already more than enough damning information in the public domain for Trump and his new Attorney General to do what he promised back in 2016: drain the Swamp.

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The Second Belt and Road Forum: A Transformation of the World Economic Order

Rather than embrace this new potential, western “old paradigm” forces representing the entrenched deep state have screamed and hollered against the “dangers of China and Russia threatening our democratic way of life”.

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From April 25-27 Beijing will host a second international forum on the Belt and Road Initiative and it won’t be a small deal.

The four weeks preceding this event have seen an incredible surge of nations and institutions joining the BRI framework beginning with Italy’s Memorandum of Understanding as the first G7 nation in March, followed soon thereafter by Luxembourg and Switzerland. Weeks later, China won another victory by consolidating billions in infrastructure deals with the 16+1 Central and Eastern European Nations who have signed onto the BRI. This particular forum was especially important as it saw Greece join the alliance changing the name to the 17+1 group. Greece’s official participation in this bloc extended the group beyond its nominal “central and eastern” geographical limits and the importance of Greece- whose Port of Piraeus and emerging rail infrastructure funded by China provide a key bridge in the Maritime New Silk Road to Europe.

If that wasn’t enough, China participated in the April 9-10 International Arctic Forum in Russia whereby the first treaty was signed between Russia and China on scientific cooperation in the Arctic, and sweeping agreements were made around Chinese-Russian infrastructure development on a policy which has become known as the “Polar Silk Road”- again extending the limits of the BRI beyond its “east-west framework”. Just as the Arctic conference was ending, an unprecedented Canadian Arctic Policy Report was publicized calling for a transformation of Canada’s Arctic doctrine towards a pro-development orientation in response to the “changing geopolitical rules” initiated by Russia and China.

While China and Russia consolidated the BRI-Eurasian Economic Union treaty in June 2018, a major leap was announced towards the finalization of a China-Eurasian Economic Partnership with the Deputy Director of Eurasian Affairs Wang Kaixuan stating on April 19:

 “Now it has to be endorsed by the specialized agencies. China has already completed its internal procedures. We are now waiting for our Russian counterparts, after that we can immediately start the negotiations. I believe that will happen soon,”

From April 15-16, China initiated a sweeping array of treaties with Arab countries during the 2nd Arab Forum on Reform and Development under the heading “Build the Belt and Road, Share Development and Prosperity.” The Arab nations already have over $200 billion trade with China and 18 Arab countries have signed MOUs with the BRI. China’s capacity to bring long term infrastructure to nations torn by western-funded wars and regime change is seen as a vital stabilizing influence not only to alleviate poverty and de-radicalize but also to provide a framework for genuine independence from western intrigues. Commenting on the forum, the President of Lebanon stated “The Arab countries have huge markets. We regard China as a good friend and are willing to further consolidate the relationship with China. We would like to draw the experience from China’s reform and development so as to benefit our people and seek our opportunities for development”.

Rather than embrace this new potential, western “old paradigm” forces representing the entrenched deep state have screamed and hollered against the “dangers of China and Russia threatening our democratic way of life”. Exemplifying this outlook was the Washington Post’s April 20th feature article “How Washington can beat China’s Global Influence Campaign”, calling for an “alternative to the BRI” controlled by the western elite. This plan is entirely absurd since America has not only permitted its own infrastructure and productive powers to rot for 50 years, but has created no relevant infrastructure that has benefited nations abroad during that same time frame. All that has been created under decades of IMF-World Bank lending has been debt slavery, impoverishment, and a $700 billion derivatives bubble that is ripe to explode.

Although incredible efforts were made over two years by the Five Eyes/Mueller led witch hunt to destroy the potential alliance Trump was proposing to form with Russia and China, the now published Mueller report turned out to be little more than a goose egg failing to  prove any of the claims of Russian collusion. Jumping off that victory, Trump called loudly on April 5 for a conversion of vast military expenditures which only risk world war three towards a program of long term investments between Russia, China and the USA:

“Between Russia, China and us, we’re all making hundreds of billions of dollars worth of weapons, including nuclear, which is ridiculous… I think it’s much better if we all got together and didn’t make these weapons… those three countries I think can come together and stop the spending and spend on things that are more productive toward long term peace.”

Going into to this month’s BRI Forum (titled “Belt and Road Cooperation: Shaping a Brighter Shared Future”), 5000 participants, including 37 heads of state, and 100 heads of organizations will discuss the megaprojects that will give vitality to the coming century with the Chinese leadership and business community. There is no doubt that the collapse of the Trans-Atlantic banking system will be on everyone’s mind as opportunities to tie our destiny to long term projects that benefit all nations will be presented as open offers for all to join. Will the West follow Italy, and Greece’s lead by joining the BRI, or continue to party like its 2008?


BIO: Matthew J.L. Ehret is a journalist, lecturer and founder of the Canadian Patriot Review. His works have been published in Executive Intelligence Review, Global Research, Global Times, The Duran, Nexus Magazine, Los Angeles Review of Books, Veterans Today and Sott.net. Matthew has also published the book “The Time has Come for Canada to Join the New Silk Road” and three volumes of the Untold History of Canada (available on untoldhistory.canadianpatriot.org). He can be reached at [email protected]

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