An FT email this morning has this headline:
Melodramatic? I don't think so. I'm beginning to get those September / October 2008 feelings all over again. Except this time it's different.
2008 was about the elite not realising what they were doing and destabilising the system. I don't believe they did that deliberately to provide an excuse to shrink the state, shift wealth upwards and to centralise power. They just took that opportunity from it as it arose. I stress, I think, that's the case.
But this time we know this crisis is deliberate, planned and coolly calculated. The Tea Party are engineering this crisis at the behest of their paymasters. The aim is to bring down the state, to undermine its power, to break its capacity to deliver and to then use the power of the capital belonging to the few - and already located in large part beyond what those who own it think is beyond state control in the world's tax havens - to create a new order.
And this time they want the disorder as the justification for their now order.
Obama can't blink. Better default than blink. And then just hope. This is one democrats (I use the small d deliberately) have to win.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Seems to me a bit overrated. Firstly in the unlikely but plausible event of a technical default come October 17th [or more likely a couple of weeks later than that]the Treasury has the option of simply minting a Platinum coin to the value of a trillion dollars or whatever and the Fed would almost certainly be legally obliged to accept it. a more temporary workaround would entail the Fed cancelling some of the Trillion plus in bonds that the Treasury owes it. Both of these options have the advantage of almost certainly being beyond any legal challenge, though there are other options of a more dubious legality which probably wouldn’t be used for that very reason. eg; authority of the 14th Amendment to repudiate the debt ceiling.
Either way, does anyone really doubt that at some point the government will make the interest and principle payments on its debt? I don’t think so. So its completely different to the 2008 crisis in the sense that no one knew who was going to get what without the eventual government back stop.
To the extent we see a spike in interest rates [which according to the above suppositions would only be limited in nature and duration] and some softening of the dollar exchange rate it could be argued that this would do more good than harm to the US economy which has long since suffered from the burden of an overvalued currency.
And this is why I’ve been saying we should be developing local currencies, so in the event of something like this happening we have a ready supply of alternative trading tokens and won’t be hamstrung by any lack of mainstream currency. Not that anyone listens, ho hum.
Gold is rising again -looks like the toilet rolls are out! Obama is essentially no different to the republicans in terms of being in thrall to the goldman sachs/JP Morgan oligarchs, very much a one party system as here, with inconsequential differences. Many are aware in America that democracy is under threat it will have to be grass roots response -it could be messy.
This crisis is fascinating (even as it’s horrifying) because it isn’t at all clear how this shutdown is in the interests of the corporate world in general. In fact it isn’t. It’s a particular far right, very politically engaged faction that are pushing this not only against the liberal centre but against much of the centre right too.
A great many businesses are adversely affected by the shutdown. Surely most, even those who support the neoliberal programme in general, are smart enough to realise that basically decapitating government spending overnight would be an economic catastrophe. But that far right faction have a stranglehold on the whole system. They have the whole concept of democratic due process on the chopping block. Democracy itself is indeed at stake.
What’s really worrying is the US media’s coverage. The centrist media just continue to report as if this is a dispute where both sides are at fault – the fetishisation of ‘neutrality’ at all costs. The rightwing media is simply on board with the whole agenda.
It’s scary. A portent of what could happen here if the UK media’s ownership biases aren’t addressed.
Agreed
Richard, I understand your thinking in relation to the US events in 2008 but I think it most unlikely that the banking elite were not fully aware of the structure of the financial instruments which were used to extract vast sums from the normal financial world. These had been constructed very cleverly and most experts would now say illegally,in contractual terms, and should we believe that there was a tier of senior management who could operate this system without authority from the senior directors?
It is likely that the elite could not fully predict the outcome of this meltdown though, and as you say, they responded to each event as it occurred and maximised their advantage
I saw first-hand what happened in Barings in Singapore, then BCCI in Gibraltar and the stories put forward via the media had no relation to reality in either case.
Talking of BCCI heres a copy of a report from 1995. http://www.businessweek.com/stories/1995-01-29/dirty-linen-in-the-channel-islands A Mr Jack Straw making comments. Nothing has changed in the past 15 years.