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New Chaos And Old Versailles: Is This Guided History ?

Politics / Global Debt Crisis Nov 27, 2011 - 12:29 PM GMT

By: Andrew_McKillop

Politics

Best Financial Markets Analysis ArticleEverybody knows that Keynes' first (some would say only) claim to fame was to argue that Kaiser Germany's war debt reparations following the 1914-18 war were too high and should be struck down. In modern parlance this is called debt write down and economic bail out by an accelerated turn of central bank money printing presses, and the play of institutions partly-proposed or invented by Keynes, the IMF and Bank for International Settlements (BIS).


In the 1920s and 1930s this didnt happen, and Hitler Germany did happen. National revenge on the international community-equivalent of the time - the Allied winners of World War 1 - played a big motivating role for German middle class voters who massed to vote for Hitler. Chaos did rule but it wasnt OK.

Nothing stops history repeating itself, especially when the real bases of old style, Victorian style capitalism are still there to keep the speculative roulette wheels whirring, chaos building, the poor poorer, and the rich richer: this is artfully called "No Alternative". Imaginative persons add that exactly like the 1930s, the chaos-provoking dark shadow of also-Victorian great banking families plus a few billionaire newcomers, like the Bills (Gates, Joy and Clinton) are currently at work with the aim of loss and impoverishment for all mankind, but especially the indebted.

Mainstream media will be rather shy on the details of the real processes at work: what really happens as mass protest turns to street fighting, this morphs into near civil war, and The Great Leader emerges out of the chaos like a jack-in-the-box.

EUROPEAN DEBT AND THE OIL CRISIS
Called a "directoire" in French, this new power system is already formed by the knockabout pair of comics, Nicolas Sarkozy and Angela Merkel whose house style is disarmingly close to "The Simpsons". This unlikely pair of would-be great leaders is presented by doomsters as a "cabal" seeking formal European wide federal government and – in particular – the spreading of European debt far and wide, to China, the Moon and beyond. Barack Obama, in a TV interview with Sarkozy was invited on board this Night Flight to Venus, and gave every sign of being eager to take the ride. If he understood the question.

Only having to address their shrinking ranks of "middle class voters" the fear-based promotions used to sell this outdated merchandise are becoming more stark every day. Global warming has almost totally fallen off the teleprompter, these days. Its popularity ratings have fallen even lower than ratings of the Sarkozy-Obama-Merkel trio - and GW is now replaced and superceded by a threat even middle class consumer chaff can understand: your savings will be trashed to nothing if you dont obey. All banks will close. All political power will now move to specially prepared globalist institutions.

The first two parts of this message have a real hold on middle classes - who in any case feel uncomfortable voting out Lifetime Presidents and PMs, starting with Reagan and Mrs T. They will be little moved by the most important new message: Democracy is terminated. No need to waste time voting, anymore. Markets have a horror of uncertainty and one thing dictators deliver is certainty: why do you think Mubarak, Ben Ali and Gaddafi (RIP) hung in so long and had such solid support from their consumer-educated and greedy middle classes, like Bashr el Assad still has, today ?

To be sure, actions speak an awful lot louder than words. Despite its fantastic economic unreality and unrelatedness to the real world, but with stolid determination, an oil crisis is in preparation. If there is one thing that gets the middle class moving, it is an oil crisis ! After that, the chimpanzee-like middle classes will be massing and twittering in the electric car salesrooms, with no need to worry about voting and all monetary worries forgotten for a while.  With sufficient agit-prop and the right theatricals the National Unity governing coalitions, rigorously self-declared and self-elected, will be nodded through by middle class opinion to become permanent institutions of government. The mature postindustrial postdemocracies will be enshrined.

The car industry, for starters, can be saved but first the middle classes have to believe in the New Mission of the capitalist ruling classes, and other actions are underway to help them believe.

GUIDED HISTORY
The posh words for this are "directed history". The basic theory is that the power elite, the rich and troublesome, the parasitic 1% classes, are orchestrating a max of controlled and directed chaos. Nobody is obliged to believed this, we can add. Once the chaos level is judged to have attained the right intensity, this cabalistic and parasitic elite will switch to outright authoritarian rule: for example eugenics and the police state, to make up for 40 years of ignoring population problems.

In olden times, up to about 1945 and the invention of atomic weapons, guided history meant Victorian-style colonial wars on a regular basis, if only to restore middle class morale. Unsatisfied with only raising misery inside their own societies, they could spread their poison wider and further. These wars are now more or less off the menu, except for the now failing Comfort War in Afghanistan and drone attacks in Pakistan or Yemen, so the high ground is occupied by the "war on debt" AKA the sovereign debt crisis, currently focused on Europe.

What we know is the likelihood of this crisis ever occurring was very low in the 1990s, leapt higher with the creation and forced introduction of the Euro at the turn of the century, and was totally certain by at latest 2007.  Doomsters ask: Who planned this ? Others can argue that nobody did.

Conspiracy theory is a story of wheels within wheels. Fractals breed fractals. The process can go on for a long time, but exclusively imagining that Evil Elites plan and operate economic chaos on a pushbutton production line basis to amuse their middle classes may be a fatal error. Later, we might find there was No Pilot On Board, but this was not of much interest to the crash victims' families - and of no interest at all to the direct victims.

Since Keynes and the famous, or infamous Versailles Treaty are so close linked and not only in the imagination, we should understand this treaty did an awful lot more damage to the world before it lost credibility from 1935, than the Kyoto Treaty ever did, before it lost all credibility in 2011 and was abandoned in 2012. The Versailles Treaty forced reparations payments on Germany that not only it didnt want to pay - but couldnt pay. All we know from conventional history is that this was a "mistake."

Was the Treaty of Versailles an innocent mistake? First, the losers had to express guilt for losing - which as we know is only partly applied to Wall Street losers. Germany had to admit it started the war. Forcing the expression of guilt, Germany would then pay reparations for losing – roughly $24 billion in money of the day, or roughly 2 to 3 months of current Greek debt repayments as presently scheduled. As we know, the sovereign national debt of Greece, today, is only a tiny fraction of European aggregate sovereign debt, Japanese debt, or American debt. Debt wheels within wheels, also called compound interest look after that.

From the last conference in the Versailles Treaty series, in 1923, to Hitler Germany's total repudiation of all its obligations in 1936, less than 13 years was needed to start what was by then the inevitable process culminating in World War 2. More important and long before this, in fact from the years 1930-31, it was evident that Germany could never pay the total of reparations. Today, we know the War on Debt is lost and the countdown to chaos has started.

DO THE ELITES WANT ECONOMIC COLLAPSE?
Details of Germany's economic rout, starting with hyperinflation can be given a kick-off date as Summer 1921. This hyperinflation only moved into deadly high gear from late 1922 and the start of 1923, and is well described by Phillip Cagan in his "The Monetary Dynamics of Hyperinflation", where he defined hyperinflation as a monthly inflation rate of at least 50%.

Interested persons can try current (November 2011) interest rates applied at Greek sovereign debt auctions. Little or nothing prevents this shifting to Italian, Spanish and French debt.

When national spending for any reason - like war reparations or debt reparations - exceeds all capabilities of the nation to pay, the result is programmed and certain. Several models exist to explain the process, but in Germany's case, and probably Greece's case in a short-term future, and in Egypt's case in a probable near-term future, we have the so-called "confidence model"

In the confidence model, middle class consumer morale melts to zero. Defeat in battles and wars, invasion and occupation, stock market losses, hyperinflation, the disappearance of old and respected moneys (like the national moneys destroyed to enable the euro) erodes mass confidence that authorities issuing money are reliable and will remain solvent. This in fact concerns central banks, but for the middle classes their mass belief is that it concerns government.

Fear of demonetization or inflation - basically the same thing - is almost openly used, today, to force the middle classes to perform robot-style and to spend, because of their fear of holding bank notes which will lose value and may become valueless. To be sure, vendors of anything will demand a greater and greater premium over the original price they set for any good or service. This confidence trick of central banks and governments however has a shorter and shorter "best by" date. The hyperinflation process is geometric, as shown by the German 1922-23 sequence.

Under this model, the main and "traditional" method for ending hyperinflation is to issue a completely new money - but this was already tried in Europe, 10 years ago. This shifts the most likely candidate to the US dollar, at least in theory. If the new money is issued under unfortunate economic circumstances, as proven at least a dozen times through the 20th century with a wide variety of countries, the result is not double dip - but double disaster. The better model, the better precedent is to backtrack to 1923 and the Versailles Conference. Basically, Germany went all on its own into hyperinflation.

War is the most commonly cited cause of middle class crises of confidence, but the German context following November 1918 was postwar. For a considerable time (at least 2 to 3 years) there was no sure outline of what German middle classes might have to lose by way of the Treaty. Their first kneejerk response was typical: hyperinflation. The fear of future possible loss triggered the petit bourgeois bad habit of panicking, and this was no isolated case.

MASS PSYCHOSIS
As a multitude of case examples show, from as early as the 19th century Napoleonic wars and their aftermath, middle class confidence meltdowns can be purely mass psychological. Arguably, the worst, most murderous excesses of the 1789 French revolution can be traced to a form of middle class panic where anybody else's blood, on the street, was needed to restore bourgeois "order". Following the revolution, French middle classes lined up to watch an estimated 30 000 public executions, by guillotine, in Parisian squares and parks in the first 6 months following the collapse of royal power. Who says the Taliban are especially barbaric ?

In an increasing number of European countries, government admission of profligacy is current practice paving the way to unelected National Unity coalitions. Like German leaders forced to express guilt at losing World War 1, this admission of profligacy makes the shift to austerity completely logical and rational for the middle classes - who will take a little time to understand their own consumer greed is going to take a big hit. When they do, only fascist-type Great Men (or perhaps women) can occupy the political scene, after an initial and short transition period of so-called Technocrats.

Dealing a heavy blow to the "guided history" conspiracy theory where Technocrats remain in power forever and  reinforce the one-way march to one-world order, the real world result of No Alternative one-world economics - misery, despair, resource waste and depletion, intensified concentration of elite power and wealth - acts like a time bomb. Bourgeois society quickly morphs into fascism, nazism and totalitarianism. There really is No Alternative.

Related rationales for one-world order being guided for all our tomorrows are even less credible - for example a supposed mass action (coordinated of course) by the Great Banking Families to lend impossible-to-repay amounts to Europe's soft underbelly southern rim of Club Med countries. Provoking sure and certain crisis, Technocrat rule could only come next. Claims that this is a planned campaign of economic terrorism for creating a European super state to be dovetailed with the US super state imagine that somehow the clock can be stopped dead and the fractals stop turning, when the Evil Elite punches the right button. Maybe, maybe not.

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2011 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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