EUROZONE’S PATHETIC 0.8% GROWTH

Erle Frayne D. Argonza

Pathetic! This is what I can say of the latest 0.8% growth for the Eurozone during the 1^st quarter of 2011. The figure seems to echo the growth for Greece during the same period, of 0.8% growth in growth domestic product or GDP.

As I’ve been saying for a couple of decades now, based on a pattern that was started from 1990 onwards yet, Europe is flat on its back, and that flatness just doesn’t seem to be changing at all. I already heralded the alarming trends way back in the 1990s, as a professor at the University of the Philippines Manila, and shared my notes to tv and radio audiences whenever I was invited as guest resource speaker on economics and social development.

When the Euro was launched, simultaneously with efforts to politically integrate Europe, I saw the opportunity for a slight correction of the stagnant situation of Europe. But monetary solutions to non-monetary problems will only be temporary, and sooner or later this solution will falter. Then the entire stagnation trend will ensue.

The ‘fall of Europe’ economically traces back to the radical return of the obsolete doctrine of liberalism laissez faire. European nations rose to wealth and fame based on physical economy doctrines, so it is best to reconstruct those doctrines the moment that stagnation and decay would take place. But to junk entirely those strategies and policies that brought Europe to where it was till 1990, is to champion madness in the economic terrain.

The same radical embers of liberalization, privatization, deregulation, and reinforcing policies (tax reforms, decentralization, currency liberalization, decreased budgets for social services) were enforced in the United States and Japan, and look at where those powers are today.

Well, the same ‘mad economics’ policies were imposed on the developing economies like the Philippines’, and the results of the austerity measures that were used as sticks to enforce them redound to mass poverty, endemic unemployment & underemployment, low or sub-optimal wages, and hunger. The ‘dragon’, ‘tiger’, and ‘emerging market’ economies have learned their lessons the hard way, and they are today the drivers of the world economy.

Look at these degenerative results of the obsolete ‘mad economics’: (a) de-industrialization, (b) agriculture decay, (c) deterioration of infrastructures, (d) decline of cutting edge in S&T (science & technology), and (e) deteriorating transport facilities. Destroy those sectors mentioned, and you destroy a nation’s economic foundation altogether.

That was exactly what happened to the North—Europe, Japan, U.S.A.! Just make a close scrutiny of Greece, where de-industrialization alone factored so strongly to bring down growth, degrade labor to paltry wages (down by 35%-40%), and saw its remaining wealth looted by greedy, demonic financial predators. The same financiers that looted Asia and led to its financial meltdown in 1997, have destroyed the North and will continue to do so.

Eurozone’s technocrats are mentally bankrupt and should be lined up in the Hall of Shame. Like the Mad Nero that fiddled in the roof as Rome burned, the technocrats and politicians of the entire European Union or EU have been fattening their purses and meteoric prestige rise, while Europe’s folks grovel in the dire effects of austerity measures imposed by the financiers’ puppet bank IMF.

[Philippines, 14 May 2011]

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US ECONOMISTS WARN OF ANOTHER CRASH!

US ECONOMISTS WARN OF ANOTHER CRASH!

Erle Frayne D. Argonza

Magandang araw, mga kapamilyang global! Good day, fellow global family members!

Let me echo a theme that has been reverberating among circles of economists in the USA lately: a new cycle of economic crash. I’ve already begun to echo notes about whether the ‘stimulus package’ did its task as effectively as it can to deliver the goods, notes that connect to what the economists have been saying of late.

Among a leading light of the US economist circles is Joseph Stiglitz, former executive at the World Bank. A brilliant and dynamic mind in America, Stiglitz represents a coterie of rare experts who can be adjudged as independent-minded, for most of America’s experts are intellectual prostitutes whose purses are fattened by their loyal patronage of oligarchic and political interest groups.

America’s economists are again echoing the alarm calls about another round or cycle of recession which could lead the USA into a ‘double-dip recession’ the impact of which could be the worst that the U.S. work force will have ever experienced. The alarm call practically resonates with an identical forewarning by European economists on the bigger crash that could happen to Europe’s already burning economy.

The very same experts are very keen observers of the global economy aside from their deep grounding in their own domestic economies, and so the cautionary echoes include Japan’s and Canada’s economies as well. Practically all of the pillars of the Western economy—all powerful members of the OECD—have been receiving alarm calls from their own economists.

Maybe the media should better seek audiences with other experts as well, notably the sociologists and public policy as well, who have been keenly observant of the domestic (USA’s) and global economies. Why not consult the likes of Peter Evans and Theda Skocpol for instance, who have been doing works over the past decades that run parallel to what economists have been doing?

Chances are that the experts across a broad spectrum of the social sciences will end up with parallel if not identical evaluations about the impact of the stimulus package and the directions of the US economy and society.

The last round of financial reforms and a new stimulus package announced by White House recently just don’t seem to fit into the expectations of the noblesse experts who all trace the economic malaise of America to the effects of excessive liberalization reforms. Those reforms saw the diminution of the ‘real economy’, to note: (a) de-industrialization, (b) agricultural decay, (c) infrastructure neglect and collapse, (d) neglect of transport & communications sectors, and (e) decay/erosion of science & technology.

Whether the Bush & Obama stimulus package was able to shore up the collapsing ‘real/physical economy’ is now doubtful. The recent Obama-initiated reforms is only putting some caps on regulation problems for big business and ensuring some fairness in the games of the financial-monetary sectors. The coming tax cuts are added incentives to big business that do not necessarily ensure the revivification of the physical economy.

And that’s where the rub lies in America today. By the very fact that a new ‘stimulus package’ is being prepared in the pipeline means precisely the failure of the recovery program. As already shared by me in a previous article, the pronouncement of a new pump priming package is already causing jitters among portfolio and long-term investors.

With the investment field blurred anew in the USA, the resuscitation of employment to full employment level had been turned into an elusive dream. Whether tax cuts can induce new investments (inclusive of the realty sector), factoring the new financial reforms, will be a raging debate not only in America but among other global observers as well.

I am now of the opinion that Obama has been badly advised by his own economic team about the policy and institutional options for salving the structural ailments of the US economy. Bad advise means the resort to ‘bad economics’, a behavior that is ‘bad science’. Bad science breeds bad practice, and bad practice breeds disasters and catastrophes.

Will Obama and the policy-makers listen to the independent-minded economists this time?




[Philippines, 01 October 2010]

[See: IKONOKLAST: http://erleargonza.blogspot.com,
UNLADTAU: http://unladtau.wordpress.com,
COSMICBUHAY: http://cosmicbuhay.blogspot.com,
BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com, ARTBLOG: http://erleargonza.wordpress.com,
ARGONZAPOEM: http://argonzapoem.blogspot.com]

ANOTHER STIMULUS PACKAGE BY OBAMA?

Erle Frayne D. Argonza


Good evening from the paradise boondocks south of Manila!

The weather in this tropical area where I reside right today has been so fine for almost two (2) weeks now, and this is unusual for the month of September when four (4) storms pass over the country on the average. At any rate, this makes me a bit happy, enough to ruminate again about the global economy specifically the White House policy pronouncements.

I was among those analysts and development experts in my country who made a go for stimulus packages as core ‘pump priming’ strategy for staving off the ill effects of the global recession. To recall, I even went to the extent of saying my kudos for America’s own stimulus package that was pronounced late by then president Bush and then extended by the new president Obama.

Being all to familiar with pump priming, as I had been witness to how this tool was wielded every time we experienced the pains of spiraling crash right in my own country, I have been all too eager to see the tool be employed judiciously in the Northern countries (EU, USA-Canada, Japan) that have either remained flat growth-wise for successive years or crashed calamitously such as what the USA went through in 2002 and 2007.

The Obama administration had its chance of employing this tool, with no less than $800 Billion as war chest for its execution, and somehow the pump priming proved to have stopped the catastrophic collapse that went on after the implosion of the realty bubble in ‘07. As per my own textbook orientation in macro-economics, it takes two (2) years for a stimulus program to optimize the economy back from appalling sub-optimal performance accountable to a recessionary crash.

The two (2) years since the package was begun by Bush yet will end this month, as far as I can recall the beginnings of it. After the two (2) year gestation period is over, it is standard task for policy-makers and stakeholders to evaluate the overall performance of the measure. The evaluation will unveil what kinks remain that were largely un-addressed by the measure.

It is surprising on my part to learn of the latest pronouncements from the White House that the US president is again ready to launch a new stimulus package on top of the existing one, coming at a time when the first package has never been evaluated to the fullest. The next package includes tax cuts that are but a rehash of the Bush-era stimulus for big business.

I just hope that the pump priming won’t be misconstrued as rendering the stimulus tool into a permanent policy tool. Just by pronouncing that a new stimulus package is on the drawing board can already send jitters to business stakeholders as the pronouncement is a tacit acceptance of the failure to revive the economy as a whole, and that a new round of recession could be in the offing.

Maybe the White House has in mind not only the US economy but also that of its Atlantic partner Europe. Hasn’t the USA been handling fresh cash to Europe to mitigate the bursting of bubbles and gnawing crisis there? Did the White House or Federal Reserve even bother to submit a report to the US Congress about the subsidies to Europe, subsidies that should be hands-me-down to America’s laborers who continue to suffer from the ballooning unemployment in the homeland?

The White House pronouncement is also sending bad signals to Asia’s emerging markets that have already been growing appreciably over the past eight (8) months of the year. Asia’s own stock markets, financial and money markets are trembling over the Obama stimulus news, and there are now silent moves inside board rooms to map out contingency measures in case that the USA will go thru another round of recession in the aftermath of the failure of the first stimulus package to induce totally recovery.

If there is anything I can advise to the White House and Federal Reserve technocrats at this point, it is to desist from making such an untimely measure. Ensure that the most optimal results from the first stimulus package were achieved first of all, report the results to the US congress and the world community, and show clear patterns of transparency in the dealings regarding the pump priming.

If a stimulus package is utilized largely to fatten the purses of corporate executives and owners, who will then use the same to buy new yatch and spend most luxuriously for their board meetings, then the clear message is this: forget about stimulus package!!!

[Philippines, 14 September 2010]

[See: IKONOKLAST: http://erleargonza.blogspot.com,
UNLADTAU: http://unladtau.wordpress.com,
COSMICBUHAY: http://cosmicbuhay.blogspot.com,
BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com, ARTBLOG: http://erleargonza.wordpress.com,
ARGONZAPOEM: http://argonzapoem.blogspot.com]

USA’S LEADERSHIP HAD EVAPORATED, WHY OUGHT STOCK MARKETS FOLLOW?

Erle Frayne D. Argonza


Good day fellow global citizens!

It’s late afternoon here in the Philippines, daylight is still around though quite faded a bit. The time of the day seems to be delivering the message that there is still some light in the global economy, and that is a feel-good ambience.

Light there may be for the global economy, but that light no longer comes from the Western economies. Definitely no longer from the once mighty ‘economic superpower’ USA that had lost the leadership leverage this decade when it suffered two (2) successive recessions within a short span.

I’ve already treated the matter of declining Western techno-economic power and hegemony over the rest of the globe in many articles. There is hardly any serious, highly-informed analyst in the world today who doesn’t share the same view, a view that Western (Caucasian) social forecasters do likewise hold even as they forewarned the West of the catastrophes that will confront them.

Stock markets across the globe, however, just couldn’t adjust to the new reality soon enough. They still behave like old hush puppies that look up to Wall Street for precedence in setting the trends of local bourses. That renders the local bourses as laughing stock dinosaurs that need to retool quickly, and the quickest that such retooling will be translated into practice, the better will it be for their respective stock trades and financial-monetary markets.

To reminisce a bit, America was the unchallenged global leader after World War II as it contributed 40% to the Gross World Product or GWP. Its European & Japan partners contributed another 20% to GWP, so that empowered the USA & partners’ (OECD) 60% contribution to GWP to exercise hegemony in all regions of the planet.

Today, the economic landscape had entirely changed. The USA’s $13+ Trillion GDP is down 22% of world income, while the entire EU’s $13+ Trillion is another 22%. EU + USA/Canada + Japan put together couldn’t even amount to 50% of Gross World Product, so the old partners may just have to metamorphose out of their old identities and retool quickly. They no longer hold the planet’s collective purse and should desist from bullying other nations with their economic clout that is pathetically a non-clout today.

Herd behavior, of course, is the least that we can make of the behavior of plummeting bourses. “Follow the leader” mindset of cave dwellers is still in, a mindset that is a messy sticking point for retooling purposes.

Why should local bourses refuse to see the new reality and dis-engage from the antiquated herd instinct? After all, stock markets are the exclusive games of the big corporate boys and consummate traders who have been addicted to the casino economy of antiquity. They hardly matter for the real economy sectors, such as those of Asia’s that have effectively built firewalls between the real economy and casino stock markets.

If to serve a bit of relevance to domestic growth at all, local bourses ought to look at the health of their own domestic physical economies and financial-monetary wellness.

Take a look at East Asia. The region has been driving the global economy beyond doubt, its average investments and savings rates are high, gross international reserves are equally high, and the physical economy as a whole has shown the way to high value-added production. Stock markets should better follow the lead of the healthy conditions of their domestic economies rather than look up to an offshore global leader that is now a chimera.

Or, if they can’t resist looking at offshore patterns, then they should look at their very own regional backyards for such models. Regional integration has been the strategy of the day, so why get fixated to a dinosaur fiction (USA as leader) when there are regional economic patterns that can show the lead.

USA’s lead will never ever return, this is a foregone conclusion. And Europe ought to rethink its integration efforts, as the Eurozone is now hotly burning, so Europe better not behave like a global hero that can fill up the vacuum left by the USA. A continent that is perennially flat on its back and is now burning in financial-monetary flames can never fill up such a vacuum.

As already articulated by me in previous articles, the Western markets will decline progressively across time. Consumption from 2007 through 2015 will decline by as much as 30% of their pre-recession levels. In contrast, Asia’s consumption will more than double during the same period, thus rendering Asia the unquestioned driver of the global economy in terms of (a) technological cutting edge, (b) production levels of the real economy, and (c) consumption levels.

In closing, just like the pattern for mega-cities where no one mega-city can be considered a global center today, so is it with national economies. Economic leadership has already been de-centered, global hegemony had been erased, and there can only be inter-dependence between markets as the most viable option. That interdependence should find translations in the bourses and currency markets.

[Philippines, 13 August 2010]


[See: IKONOKLAST: http://erleargonza.blogspot.com,
UNLADTAU: http://unladtau.wordpress.com,
COSMICBUHAY: http://cosmicbuhay.blogspot.com,
BRIGHTWORLD: http://erlefraynebrightworld.wordpress.com, ARTBLOG: http://erleargonza.wordpress.com,
ARGONZAPOEM: http://argonzapoem.blogspot.com]

2009 ECONOMIC FORECASTS: DEPRESSION, INTERVENTIONISM, REVERSAL

Erle Frayne Argonza

Magandang hapon! Good afternoon!

2009 will be another bleak year economically, more so for the North (USA, EU, Japan are topmost). The recession that began with the subprime mortgage bubble burst in America in 07, will ensue with even mightier turbulence, as there are no coherent policy solutions of a strategic nature that can salve the economic ailment on a global scale.

As already articulated by this economist/analyst in various articles, the policy environment must be changed and regulatory mechanisms strengthened to immediately gain business confidence and reverse the tide of catastrophe. On the domestic front, the solution begins by following a New Deal type of policy set, which will bring back the fervor of production-driven growth and full employment. On the international/global front, a new financial architecture must be agreed upon via a global summit called for the purpose, akin to a New Bretton Woods.

The only intervention mechanisms we observe today are bailouts of failing financial and business institutions, which are toxically immoral as those criminal oligarchs are even rewarded for their sordid looting and corrupt practices. Only Russia and China have openly resorted to a New Deal type solution, in consonance with the practices of the late regime of Franklin Delano Roosevelt of the USA. As far as the international-global front is concerned, the concurrence of a new treaty that will resonate a new financial architecture is nowhere in sight.

In the absence of genuine solutions that can stabilize ailing economies on both the domestic and international fronts, the downward spirals will continue, until the economies of the North will hit rock bottom depression that will be worse than the one that crashed the USA, UK and Germany almost a century ago (USA, UK, Germany were then the world’s top industrial & military powers). In the absence of capital control policies up North, capital flight will ensue at dizzying speed, draining their respective countries of trillions of dollars and/or euros at levels far higher than the 2008 drain. The smart money that will sneak out will find better shelters in the South (emerging markets notably East Asia + India).

The possibility of North-based companies transferring their headquarters to the South is not entirely ruled out. The other option is for the corporate owners to transfer domicile from the North to the South, leaving their ailing mother companies in the hands of trusted stewards. The era of distance remote control-type management by corporate owners could very well begin this year, which will modify corporate governance by no small means.

The positive light for the global economy is that finally the corporate and state leaders will see light at the end of the tunnel and call for a global conference to carve out a new financial architecture. Laissez faire, a cadaver doctrine before the 2nd world war that was revived by the monetarists and greedy financiers, will finally lay to rest as it gives way to dirigist or interventionist economics. Stronger regulatory mechanisms may be charted this year too, at least on paper.

New Deal, Keynesian, and welfare state doctrines will be blended together to produce an eclectic admixture. Since New Deal has an international facet into it thus rendering it more comprehensive, as the late FDR cogitated the need for international cooperation and development for all countries to end all wars and foment lasting peace, this doctrine will more or less be followed. We will not be surprised if, after the Davos conference, the shape of the future will already be definitively of the New Deal type.

Conclusively, even if the Northern economies will flatten down to zero and/or negative growths, the downward spiral may stop by the last quarter of the year. The full effects of the intervention solutions won’t be felt this year though, as it will take some more years to get them to galvanize. So let us brace for more turbulent winds, while hoping that the storm would finally stop so we can enjoy a delightful holiday season comes December.

[26 January 2009, Quezon City, MetroManila]

CONTINUING BOURSE PLUNGE DOWN NEAR DEPRESSION LEVEL

Bro. Erle Frayne Argonza

Good afternoon, Fellows of Planet Earth!

The planet’s bourses are still plunging as of yesterday (Friday), a day that was dabbed as ‘black Friday’ in Japan which saw the Nikkei plunge by 10%. ‘Bloody Friday’ may be a better term, as the word ‘black’ in ‘black Friday’ could be construed as a racial slur.

This gentleman is among the economists/social scientists in Manila who forecast, way back in the late 1980s yet, that the Western economies led by the USA will experience another horrific depression this decade. We were then following the trends of a yawning gap between the ‘financial economy’ or ‘virtual economy’ and the ‘real economy’ based on the GDP statistics. The American economist Lyndon LaRouche devised a very potent graph of the event which he termed as ‘collapse function’.

As of late 2007, debts in the USA already exceeded the GDP by four (4) times. That means that, in the event of a bubble burst (which came from the realty markets), the economy will come crashing down. It is simply impossible for a $13 Trillion GDP to pay up for debts approximating $50 Trillion last year. In the secondary debt markets, financial derivatives exposures breached the $120 Billion mark in the USA last year, and that all the more exacerbates the weakness and fragility of a $13Trillion economy that simply doesn’t have the money to pay up for ballooning private and public debts.

My own forecast is that the stock market plunge across the globe, which is now in the vogue of a ‘freefall’, will continue till next year yet. At its best, the Dow Jones index reached past 13,000 points about less than a couple of years ago. The same index had already shrunk below 10,000 points at its worst. By next year, the Dow will further shrink by as low as 8,000-8,500 points, the range that actually represents the real value of the entire US economy.

1 Point in the US bourse is equivalent to $1.5 Billion more or less, at its best. A shrunken size would deflate the value to around $1 Billion. At 13,300 points, the Dow index represents a value worth $20 Trillion, which seemingly exceeds the GDP of the entire federation. But that amount is largely speculation, the speculative value exceeding beyond 50% of the real value of the commodity lines traded.

8,500 points in the Dow index would yield, at deflated value, around $8.5 Trilion dollars. That same estimate is the real value of the US economy in GDP terms, per year, as of today. The value of $13 Trillion includes the value of speculation and fiction, on account of the predominance of the ‘virtual economy’.

As I’ve already explained in a previous article, the Bush-Paulson bailout, allocated an amount of $700 Trillion, is a faulty measure to salve the financial ailments of the USA. It follows from the flawed Japanese ‘crisis management’ bailout of huge banks that went in the red last decade, a tragic measure that flattened Japan’s growth to almost zero for around ten years at least. It is a band aid solution to a gargantuan problem that is equivalent to cancer, and everybody knows that band aid doesn’t cure cancer.

That explains the jittery situation of the post-bailout law scenario. Financial traders and investors who still recall well the Japanese fiasco just couldn’t be appeased by a repeat of the same band aid solution, this time to an economy almost three times bigger than Japan’s (in real value). For as long as no strategic solution to the global financial crash is in site, the stock markets will be jittery till next year, and before long we would see both the USA and Europe plunge back to the depression years of the mid-1920s to early 1930s.

Let’s see what will happen to the election fever in the USA. Some liquidity will be produced by the election spending there, and the optimistic pitch created by the electoral situation may somehow drive back the bourses up a bit. That is just a temporary respite from the blazing flames of the crash, rest assured.

[Writ 11 October, 2008, Quezon City, MetroManila]

IMMORAL U.S. BAILOUT ECHOES JAPAN’S 1990s ‘CRISIS MANAGEMENT’ FLAWS

Bro. Erle Frayne Argonza

Magandang hapon! Good afternoon!

It’s been some couples of weeks now since the financial downspin in the USA took a further plunge as mega-banks sought help from federal government for rescue. The closure of the Lehman Brothers and the S.O.S. by other big banks that are now in the red rocked the global stock markets to a new round of instabilities and volatilities, even as the US economy is in danger of another Great Depression.

As I’ve already expressed in many articles of mine, the US financial collapse, an event that economists in many parts of the world forecast as early as the 1990s yet, is bound to happen, on account of many factors. The key factor, as this analyst and fellow ‘nationalist economists’ have been saying since 1998 yet (when I was actively involved with a group of economists in Manila called the Independent Review circle), is the widening gap between the (a) ‘virtual economy’ based on predatory finance that produces mere fictitious values and the (b) ‘real economy’ or ‘physical economy’ that produces real values.

The serial liberal economic reforms that began in 1971 yet, which saw the collapse of the gold standard and the dropping of fixed exchange rate (FER) in favor of ‘floating rate’, and onwards through the liberalization-privatization-deregulation-decentralization (structural adjustment policies or SAPs) of the 1980s, and onwards to the GATT-Uruguay Rounds that created the WTO in 1994, took its catastrophic toll on the economies of the planet, but most specially the USA’s.

The Nixon-era financial-monetary reforms and the Reaganomics (SAPs) were the policy culprits of America. They dealt the final death blows on the dirigist policies of New Deal, initiated by Franklin Roosevelt but which was inspired by dirigist policies of earlier luminaries (i.e. Alexander Hamilton, Abraham Lincoln, Friedrich von List), provided the impetus that created the strong, gigantic ‘physical economy’ of the country, and transformed it into a world power economically, politically and culturally. Without dirigist economics (interventionist) and the New Deal, Middle Class America wouldn’t have been possible. The neo-liberal reforms simply wiped out whatever was left of the New Deal by the 1980s, and with the liberalization of the financial –capital-monetary markets, the predatory financiers had their field day of looting the middle class purses under the rubric of portfolio capital and derivatives operations.

Had the US policy makers just labored a bit and assigned their staff to scour the world for some related experience of bank-financial collapse, their researchers could have easily ‘discovered’ the experiences of Japan in the 1990s. By the early 1980s, when Japan clearly demonstrated its sterling industrial and technological capabilities as the base for its wealth production, the Zaibatsus and the policy makers decided to go the liberalization way, confident as they were that the fruits of decades-old ‘physical economy’ build up can’t just be easily wiped out by predatory financier operators.

Japanese technocrats (both in Japan and overseas) also theorized that the key to producing a sound, healthy, mighty Japanese economy was in the realm of micro-economics more than public policy. Never mind if the policy environment will shift from the protectionist-dirigist policies of the post-war decades to liberal policies, provided that at the level of production and organization, capacity and internal potency can be demonstrated. The likes of William Ouichi’s ‘theory z’ comes to mind, or ideas that spawned strategies and tools dovetailing on quality control, team building, and decentralized operations. The world was so awe-inspired by the ‘Japan Incorporated’ model that was based precisely on the micro-economic route, and was extolling the Japanese corporate firm to the hilt as the new champion of the globalizing economy.

The USA that had demonstrated its strength on macro-economics—In the terrain of public policy—as the route to economic might, must have been seduced by the Japanese ideological onslaught at one point, that it so sonorously echoed the Japanese technocratic jargon of ‘globalization’. But when Japan’s financial system began to buckle down in 1994, which then impacted on the rest of the economic sectors, the US politicians and technocrats simply didn’t pay attention, fixated as they were to the seductive results of the ‘virtual economy’ (bubble operations) on the GDP of America.

To recall, Japan suffered miserably for the bailout mistake it pursued. Dabbed as ‘crisis management’, the state went on a binge of saving ailing banks and financial houses, the very same measures that the Bush-Paulson team is now embarking on. Alarmed at those events than in Japan, which led to a 10-year recession & almost zero growth, I began to raise howl about the ballooning portfolio investments in the Philippines by 94-95, and was among those experts who forewarned the state officials that Japan’s ‘crisis management’ was seriously flawed, was tantamount to giving incentives to looters instead of criminalizing, them, and should never be enforced in the Philippines or ASEAN in case that the portfolio bubble will burst in Manila and the region (the bubble burst in 1997).

To repeat: Japan suffered miserably from that fiasco. Recession howled like unstoppable forest fires for ten (10) years, and were it not for the high growth of East Asian markets, Japan couldn’t have risen back to appreciable growth by 2005. Interest rate was compelled to be brought down to zero percent, a precedent that many countries affected by financial meltdowns were aloof to emulating. Bankruptcies, corporate closures and downsizing led to dislocations and unemployment. For the first time in many decades, former decent Japanese executives and employees who lose their jobs and had their remaining mortgaged properties confiscated, were rendered homeless and starving, and forced to reside in the streets as paupers and vagabonds.

Sitting with my fellows in the Independent Review circle from 1997-onwards, we took turns in exposing the maladies of the neo-liberal reforms, spoke in diverse media (TV, radio) to forewarn the public of the imminent financial collapse in East Asia (the meltdown took place beginning in June of ’97), and by 98 were of the consensus that the USA was next in line for a meltdown of even catastrophic proportions than either Japan’s or South East Asia’s (97 meltdown). The very destructive effects of predatory finance saw the decline of industry (de-industrialization), agriculture (land use conversions, decay), infrastructures (some huge infra were even privatized), S & T (low priority in budgets & education), and transport & communications in the USA. If the neglect of the ‘physical economy’ will continue for another ten (10) years, it will be too late for salving the US economy as a whole. Any catastrophic bubble burst and financial-monetary meltdown could bring the economic house down, collapse consumption, and render the US economy much like unto a Latin American economy past 2010.

As I recall then, we experts from the Independent Review circle strongly opined that the ‘crisis management’ tactic was immoral and extremely perverted. How in the world could the state ever reward criminals at all? The bankers and financiers looted the Japanese purse by probably worth trillions of dollars, they should have been criminalized for their sordid crimes, and yet they were even rewarded! Unbelievable! This is one excellent narrative for the Ripley’s Believe It Or Not!

Fortunately for the Philippines, there was no large-scale bailout of any bank as a result of the 1997 Asian meltdown. Those realty and construction companies affected by the crisis, affected precisely because they over-exposed themselves to ‘hot money’ foreign portfolios that simply dried up as the same portfolios were pulled during the first month of the meltdown, were immediately able to cope up by retooling and re-engineering their strategies and tools. Interest rates were lowered, excess liquidities were flashed out in well managed manner that deserve our central bank accolades from the Bank of International Settlements. In less than a year after the meltdown began, we were back to consumption patterns like there was no recession at all. We didn’t take the Japan route, luckily. By 2001 and onwards our growth patterns were back to appreciable growth, and the local bourse moved up as well.

Today, all over the ASEAN + China-India-Korea (minus Japan), the Asian meltdown seems like an ancient event down memory lane as things have been moving fast. We just can’t believe that our mighty economic partner, the USA, didn’t learn its lessons from the 2001 recession there and from the flaws of the Japanese bailout. ‘Bailing out the rich’ isn’t the issue here, but rather ‘bailing out the criminals’ which is a gross disincentive for the legitimate SMEs and other market players that didn’t receive the same favor.

If we were to seriously search for appropriate short-term tactic for salving ailing financial institutions, the answer lies in a proven approach to corporate ailments: bankruptcy reorganization. The economists Robert Reich (former US secretary of Labor) and Lyndon LaRouche (Executive Intelligence Review) have been airing this solution very strongly, and I am myself bent on accepting this micro-economic short-term solution as an exemplar for the rest of the world. I would not be surprised if the eminent economists Joseph Stiglitz and Paul Krugman would air a similar advisory, and they should better air their counsel strongly.

The entire planet today is watching the horrific bailout in the USA, almost forgetting that this copycat bailout already flattened Japan for a decade at least before. Each one of us should look at our own backyards and make sure that our respective states won’t emulate the rather devious and insane bailout of Japan Incorporated and the Bush-Paulson team.

[Writ 04 October 2008, Quezon City, MetroManila.]

EU-BRITISH OLIGARCHS PRACTICE WAR VIA VASSAL GEORGIA

Bro. Erle Frayne Argonza

The ‘peace arena’ is getting to be fuzzier by the day as armed hostilities are escalating worldwide. The latest among these was that brief full-scale hostilities between Georgia and Russia, hostilities that were directly related to South Ossetia.

On the level of appearance, it was a conflict among neighbors Georgia and Russia. However, when one reflects on the added facet of Georgia’s application to the NATO as a member-state, the underpinning machinations of the Anglo-European oligarchs will be easily seen.

As already elucidated by this analyst, the global oligarchy had already formulated the blueprint for its wars of the future and the mutation of the EU and USA into totalitarian police states in the short run. Global ‘synergistic anarchy’ (synarchy), modeled after the ancient Empire of Rome, is a key strategy of the same oligarchic circles to foment conflicts across the globe, aimed as always to preposition the financier and industrial interests of their respective families and members.

It is very clear to this analyst that Georgia’s leaders have chosen to gravitate to the power orbit of the financier oligarchs, and desire to be counted among the NATO member-states. This same military umbrella will be the military arm of a forthcoming North Atlantic Empire comprising of the EU and USA, an empire that is now rapidly shaping before our own eyes.

The presence of NATO in Afghanistan and its proxy war versus Russia via the new vassal-state Georgia are among the exercises aimed at honing the military might of the alliance. The encirclement of Russia is being tested at this moment, as well as assessing the firepower capabilities of the revived Russian state whose very own leaders have turned hawkish during the last few years.

Below is an article by Helga Zepp-LaRouche, leader of the Shiller Institute, regarding the oligarchic machinations behind the Georgia-Russia conflict.

[15 August 2008, Quezon City, MetroManila. Thanks to Executive Intelligence Review database news.]
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IN THE FACE OF GLOBAL COLLAPSE
British, EU Target Russia With Shooting War in the Caucasus
by Helga Zepp-LaRouche

With the underpinnings of the present world financial system growing shakier by the day, the outbreak of warfare in the Caucasus shows how quickly the current world situation can be thrown out of joint. It also gives us a foretaste of how quickly it could expand into a new general war. Even if no one can precisely predict how much time we have left to address the underlying cause of the growing threat of war—namely, the systemic crisis of the world financial system—the military operations in the Caucasus nevertheless make clear that our brief window of opportunity could close quite suddenly.

"Caucasus War Catches Europe Flat-Footed," was Spiegel-Online's headline to its article on Aug. 8 about the escalation of the conflict between Georgia and South Ossetia—a conflict which has taken on the character of a typical proxy war between the United States and Russia. The article's author, Hans-Jürgen Schlamp, reports from Brussels on the alleged "helplessness" of the European Commission and of the French government, which currently holds the EU Presidency, all of which can do nothing except express their "deep concern."

Nothing could be further from the truth. Back in February, when the European Union—Great Britain, France, and other nations, supported Kosovo's unilateral declaration of independence, it was already perfectly clear that this destabilization would not only affect the Balkan states, but was also giving the green light to every conceivable separatist movement and minority throughout the world. Just as in the Balkan wars leading up to World War I, and also in the 1991-95 Balkan War, this ethnically complicated region is serving as a chessboard for British geopolitical destabilizations, with the ultimate aim of drawing the great world powers into the conflict, and/or preventing any peaceful economic cooperation on the Eurasian continent. And it is certainly no accident that, since Dec. 12, 2007, the chief of the EU's planning team for Kosovo has been none other than the British diplomat Roy Reeve, a Russia expert, whose previous postings took him to Northern Ireland, Ukraine, Armenia, and Georgia—i.e., precisely those countries which have problems with nationalities and ethnic minorities.

Already on July 15, Ronald D. Asmus of the German Marshall Fund (GMF) wrote that a war between Georgia and Russia was in the offing, and that this could easily ruin relations between Russia and the West. And that was obviously the intention all along. Asmus also chaired a meeting of the GMF earlier this year in Brussels, where five former military general staff members presented an outrageous report proposing that NATO be transformed into a globally operating intervention force which, under certain circumstances, would be permitted to launch a first strike with nuclear weapons.

With its so-called "Rose Revolution," and its desire to join NATO, Georgia has turned out to be a willing instrument of the Anglo-American strategy for encirclement of Russia. But what induced Georgia to reoccupy South Ossetia at this particular moment, 16 years after the latter declared its independence? The war in the Caucasus is part of a global destabilization effort, coinciding with the arrest of former Bosnian Serb leader Radovan Karadzic, as well as with the destabilizations of Turkey, Pakistan, Sudan, and Zimbabwe, by means of terrorist attacks or sanctions—and we are only mentioning the most prominent of many other similar crisis spots.

Financial Crisis Fuels War Threat

As I already pointed out above, the overall context of these events is the escalating collapse of the global financial system, which has been pulling ever larger chunks of the real economy down into the abyss with it. The Federal Reserve is now committed to using its rediscount facility for making practically unlimited liquidity available to the two de facto insolvent mortgage giants Freddie Mac and Fannie Mae—which together, guarantee $5.3 trillion in U.S. mortgages! Not only does this have enormous hyperinflationary ramifications, but it only plugs one solitary hole in the leaking boat. In the United States, speculators are debating whether it's 3,000 or 5,000 banks which are bankrupt; eight banks have already officially shut their doors so far this year. Meanwhile, the U.S. economy—or what's left of it, after years of "outsourcing"—is sinking ever more deeply into depression: the auto sector, the airline industry, the construction sector. More and more states and municipalities are being forced to make draconian cutbacks, such as in California, where 22,000 state employees have been laid off, and another 200,000 are threatened with having pay reduced to the minimum wage.

Meanwhile, some analysts have joined Lyndon LaRouche in the view that the rate of collapse in Europe is going to be even faster. Spain's collapsing real estate sector is bringing a massive banking crisis in its wake, and similar scenarios are playing out in Great Britain, where the Royal Bank of Scotland has had to write off $12 billion in the aftermath of the government takeover of Northern Rock. The situation in Denmark is equally dismal. The official inflation rate in the EU is hovering above 4%, whereas the real rate of inflation for less well-off wage earners is far greater, because they have to spend the bulk of their income on food, energy, gasoline, housing, etc. And when none other than former Federal Reserve chairman Alan Greenspan, "Mr. Bubble" himself, starts talking about the crisis of the century—a crisis for which he is personally responsible—then it's clear that he wants to prepare the world for the great crash immediately ahead.

It wouldn't be the first time in history that the international financial oligarchy has attempted to keep a worldwide financial and economic crisis under control by fanning the flames of war. And anyone who prepares for war, must first create an enemy image, so that the population can be brought into line.

Vile Attacks on China

That is precisely the intention behind the repulsive China-baiting being emitted by the media and by politicians on the occasion of the Olympic Games. Regardless of whether it's coming from witting agents of the British Empire faction, or from mindless dumbos on the morning news shows: The irresponsible gossip that has been spread during the run-up to the Olympic Games, has been simply monstrous. Without any regard for the truth, and without a shred of knowledge of China's history and culture, the wildest assertions have been floated—assertions which could well succeed in poisoning relations with China, and in helping prepare for coming conflicts with China (and with Russia).

Not only were the opening ceremonies of the Olympic Games in Beijing wonderfully beautiful and poetically conceived, but they were also a magnificently staged demonstration of the 5,000-year history of this great nation, one which, for a long time, was the world's leader, and which is now preparing to resume that role sometime in the future. Even though China certainly has its fair share of problems—for example, the poverty of the great majority of its rural population, and also a certain degree of Western materialism which has infected part of its population—what counts is the vector of development, and in China that vector is going upwards—in contrast to what's happening with the arrogant sophists of the West's empire faction.

The Chinese government has blocked Internet access to anti-Chinese propaganda emanating from international and British organizations in connection with Tibet and the Uighurs—and it has every right to do so. After all, do the British and American governments allow the Taliban's tracts or al-Qaeda's instructions to be circulated around the country? What do destabilization efforts by an enemy power, have to do with democracy and human rights?

The fact that in Europe, a politician who voted for the ratification of the Lisbon Treaty, or a representative of the media which, even after the Irish "No" in their referendum, did not run a single pertinent article on an EU treaty which would abolish parliamentary democracy in Europe once and for all, and would establish an oligarchical dictatorship, would now dare to decry a lack of democracy and human rights in China—that is truly the height of Goebbels propaganda! It would have made Goebbels pale with envy. Europe is dominated by a truly terrifying democracy deficit, resulting in an increasingly deep-seated and extremely dangerous cultural pessimism, as expressed in the famous retort, "There's nothing we can do about it, anyway." And so, those politicians and journalists who raise a fuss about democracy in China, ought to go out and listen to what the population thinks about the political class and the media—in Germany, for example.

If we are to make use of the fast-closing window of opportunity, which will hopefully remain open long enough for us to prevent the great catastrophe, then we will have to embark on a radically different path. One very promising impulse in that direction, is an article that Russian Foreign Minister Sergei Lavrov wrote for the current issue of the journal Russia in Global Politics, under the title "Russia and the World in the 21st Century," which directly reflects the positions of President Dmitri Medvedev and Prime Minister Vladimir Putin.

Lavrov affirms the obvious fact that the epoch of the past 400-500 years, during which European civilization has dominated the world, is now closing, and that a new vision is therefore required. He rejects not only the idea that the world will gradually adopt Western values, and the theory of "the end of history"—the idea of a global Anglo-American empire—but he also rejects the idea of a "post-American" world without the United States.
The Russian Foreign Minister emphasizes that he absolutely disagrees with the idea that current developments must end in chaos and anarchy. Rather, he believes that a new international political, financial, and economic architecture can be created, one in which Russia must play a major role as an equal partner.

The Anglo-Saxon (i.e., free-trade) model is tottering, Lavrov writes, just as it was in the 1920s, and therefore today, just as then, the model of Franklin Roosevelt's New Deal is called for. China, India, Russia, and Brazil must be integrated into this new reform of our international institutions. On this basis, plans can be made for a common future for the entire Euro-Atlantic region and for the world as a whole, a future in which security and prosperity become truly inseparable, he states.

Two Options

The Western nations today have essentially two options: Either they follow the British line, treating Russia, China, and India as antagonists—which means, for example, using Georgia for anti-Russian operations, fostering separatist tendencies inside China, setting financial locusts against India, and other such things. In which case, the great catastrophe is sure to come.

Or, they can heed the proposal which LaRouche has been making for some time, that a new international financial and economic order, in the tradition of Roosevelt and his New Deal, and Bretton Woods, be put onto the agenda. In such an arrangement, the United States, Russia, China, and India must collaborate as a core grouping, around which other sovereign nations can congregate. And that is essentially what Foreign Minister Lavrov says in his article.

For Europe's nations, this means that they must extricate themselves from the European Union straitjacket which, for Germany, since Maastricht at the latest, has become a new Versailles Treaty. Europe's nations can, and certainly should cooperate as a Europe of sovereign republics—which will be vastly more in keeping with the spirit of humanist Europe, than is possible today with an EU bureaucracy which is farther away from Europe's humanist tradition, than Earth is from a galaxy a couple million light-years distant.

Let us hope that the coincidence of what Greenspan himself has described as the financial system's crisis of the century, with the realization of how quickly war can break out, will be sufficient to shock responsible people back to reason.

ANOTHER GREAT DEPRESSION COMING AS FINANCIAL SYSTEM ENDS

Bro. Erle Frayne Argonza

Is the global economy moving downward towards a devastating collapse?

If we employ a long-term Kondratieff cycle to model the world economy, we can see that the period beginning in 1935 approximately (when the big market economies US-UK-Germany moved towards another cycle of growth approximately after the Great Depression) should have ended around 1995 approximately, after which comes another great depression.

As early as 1989, ramblings of a global collapse began to murmur in the US economy. Mexico, Japan, Argentina, and other economies followed in the 1990s, while Europe went through a general low-growth trend that was the most sustainable for the continent as a whole. Then came the Asian meltdown of 1997. Then the USA again went through a recession in 2001, a pattern that has been repeated again from 2008 to the present. It seems that the pillars of the world economy couldn’t get out of a short-term crisis without having to crash back to another episode of short-term crisis altogether.

Is it really a ‘short-term’ crisis in the first place? Or is it in fact a ‘systemic crisis’, and that the financial downspin the Northern economic pillars are going through could very well be the terminal phase of a very long cycle of growth that began after the end yet of the Treaty of Westphalia (1648)? That in fact, several long-wave Kondratieff cycles have already passed over since that time, and that finally the system is DEAD in the wood?
Well, not only the financial system but the whole of CAPITALISM is already on its death throes.

Those oligarchs behind the systems now dying won’t see the system they built die down just like that without “bringing down the other houses” with them, it seems. Which means that, right after the terminal phase of the system, another huge, catastrophic war will come, which will later see another Westphalian-type treaty or so that will re-carve the contours of polities into a Post-Westphalian totalitarian technotronic global order.

Below is a briefer from the Executive Intelligence Review that summarizes the issue at hand.

[18 August 2008, Quezon City, MetroManila. Thanks to Executive Intelligence Review database news.]
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End of the Line for Financial System; Bankruptcy Issue Raised

Aug. 10, 2008 (EIRNS)—The death of the financial system was the implicit subject of several articles in the financial press over the weekend, reflecting the way reality is setting in and attitudes are changing.

"Investment banking is dying," was the blunt statement by William Cohan, in a op-ed in today's Washington Post entitled "The End of the Masters of the Universe?" Cohan says that the revenue streams of the investment banks are drying up, and that there is genuine fear in the corridors of power on Wall Street.

"We have a banking crisis and an agency crisis and a mortgage crisis and a coming credit card crisis. We've never seen anything like that before. And it all seems to be coming home to roost at the same time. That's never happened either," Charles Geisst, a professor of finance at Manhattan University, told yesterday's Washington Post. He said the Great Depression was the last time the financial markets were hammered by such a variety of factors, adding: "But we did not even have credit cards in the 1930s; there was no such thing as student loans."

The specter of generalized bankruptcy was raised by Yale finance professor Robert J. Shiller in an op-ed in the New York Times. Citing the failure of Bear Stearns and the government measures to bail out Fannie Mae and Freddie Mac, Shiller asks, "What if the next case is worse? No one in government seems to feel a responsibility for warning about such possibilities and formulating a detailed policy for dealing with them." Shiller says that "Bankruptcy law is a good place to start. After all, the dreaded financial meltdown would amount to a wave of bankruptcies.... What would happen to the economy if hedge funds had to liquidate, one after another, in a financial crisis? We need to rethink the theory and practice of bankruptcy, given the new complexities."

Shiller points to the inherent limitations in current bankruptcy laws, which were largely drawn to protect narrow financial interests, and are poorly suited to deal with systemic problems, when a "subsidized system of triage would be needed to identify which companies should be saved, with the main criterion being the possible economic impact of their liquidation."

These comments, taken as a whole, represent the way discussions of the "unthinkable" are beginning to percolate, and converge upon the outlook of Lyndon LaRouche. Shiller's mention of triage by bankruptcy echoes the emergency measures proposed by LaRouche, of putting the financial system itself through bankruptcy, protecting the population with a firewall, and freezing the financial paper while we determine what debts will, and won't, be honored. Whatever Shiller may think about LaRouche's proposals, he is implicitly admitting that the system is finished, and that we must prepare for its demise, making decisions on the basis of the interests of society, and not merely the narrow interests of financial institutions. Reality is setting in, and reality leads inexorably to the policies outlined by LaRouche.

US WATCH: IT’S THE ECONOMY!

Bro. Erle Frayne Argonza

The US presidential polls are approaching. The Democrat Party nomination was recently concluded, and there goes the polls.

As an observer of ‘US reality’, I’d candidly say that if there’s anything most worrisome in the US right now, it’s the economy. Without the pejorative ‘stupid’ by the way, I leave that to Bill Clinton’s spin doctors.

Whoever wins, and whoever would be vice president, this tandem of statesmen (hopefully) will have to go about moving heaven and earth to salve the ailing economy. The ailment is not just a structural one that will be resolved with some palliatives.

First of all is the recession. There is no more denying about this fact. The more that the fed and monetary officials would deny information, the greater the amount of suspicion, the greater the legitimacy question. It was good that finally, there was the admission about the sad state of the economy.

Now, folks, most especially you American voters out there, the recession may not be the end of the downspin yet. Watch out, for the recession could well slide into depression. A 6-quarter period of sustained depression (which means a contraction below the established average, or below zero growth) could be the final blow to the long-drawn drift towards the total collapse of the once-mighty US economy.

Look at the signs of the times, Joe! After World War II, the US produced 40% of the Gross World Product or GWP. It’s now down to 22%. The EU, by integrating their economies, produce a similar aggregate of 22% of GWP. The trend is still of a downward drift, including the EU’s, over the years, not an upward lift.

As to what has been causing the downward drift, let’s take those matters slowly in quite chewable fashion. For now, it’s clear to this observer that “it’s the economy” and not the war or parochial sectoral matters such as immigration, gender, more autonomy for states and cities, and so on.

[Writ 05 June 2008, Quezon City, MetroManila]

NY STOCKS LOSES TOTAL $3 TRILLIONS, AND STILL GOING DOWN

Bro. Erle Frayne Argonza

Since the stock markets began to plunge late last year, downturns that began with the implosion of the housing subprime mortgage bubble, over 2000 points were already shaved off from the Dow Jones index, the prime index of the USA’s stock markets. It’s now down to nearly 11,000 points from its best time total of 13,000+ points last year, representing actually a 20% plunge.

Each point in the Down Jones is worth $1 Billion as the roughest minimum estimate, though this may range up to $1.5 Billion, depending on the season of trading. Using the minimum as the yardstick, a 20% plunge from a total of 13,000+ index represents at least $2 Trillion worth of loses. If we were to add the loses in the other indices notably the Nasdaq, the figure can get us up to $3 Trillions loses.

Do note that the figure of $3 Trillions is only a conservative estimate. If we use the same figure to compute for the Global Portfolio loses, and multiply this with the number 6 (US’ portfolio capital flows represent 16% or 1/6 of total global flows, using BIS index), the operation would yield a total of $18 Trillions worth of portfolio investments gone down the drain.

It should be stressed that those loses are now gone forever. The stock market investors should better think of other options at this moment, since the plunge hasn’t ceased yet. Those loses of theirs will not return, rest assured. The plunge, per my forecast, will take a long time going yet till middle of next year.

The alarm bells are now up for a total global financial meltdown, and so every concerned fellow of the planet must make necessary preparations for the worst, whatever the worst could be. Corporate social responsibility or CSR may now need to do some contingency re-assessment and re-adjustment of goals and strategies, in the light of the continuing plunge.

Likewise should states rethink their goals and options, recheck their fiscal situation and re-adjust targets accordingly. There has been so much knee-jerked reactions by state players, central banks included, that must be re-examined, including pumping too much liquidities, rescuing ailing or bankrupt banks the erroneous way, and re-allocating budgets for populist welfare subsidies that would, in the short run, only lead to serious fiscal problems in the short run.

What is surfacing much clearly is that the old tools being applied—to salve the crisis—don’t seem to work as much as expected. The search for sound options is a tough challenging one, and the expectations from consumers, who have already slowed down consumption generally, are intensifying. Let us watch out for more contingent events.

[Writ 26 June 2008, Quezon City, Manila]

RECESSION STAYS, SPIRAL POINTS TO GLOBAL MELTDOWN

Erle Frayne Argonza

The recession stay, the downward global economic spiral will continue for an indefinite time. This is the pattern that we can now see across the globe.

Stock markets have been crashing, going through a freefall for couples of months now. In Manila, the Philippine stock market is down at 2,500+ points as of this morning, or 800 points short of its best performance of 3,300+ late last year. The pattern is true in other stock markets as well.

One thing is clear: this is a global meltdown going on, and the spiral’s turn-around towards more positive gains in the succeeding months. Trillions of dollars have already gone down the drain, loses that may never be recovered again.

Many pockets are getting badly hurt, both from the fund-rich hedge funds and portfolio financiers to ordinary middle class investors. Just about two (2) years ago, everything was bullish in world stocks, most especially in Asia. That situation had since evaporated.

Unfortunately, the harbingers of liberal dogma are still banking on liberalization policies that have proved to be so bankrupt they are, in fact, the very cause of this global meltdown shaping up. The ‘virtual economy’ unleashed by liberalization resulted to looting sprees by fund managers and hedge fund operators, the same money that they partly utilize for corporate social responsibility.

Now the oil price hikes and currency market volatilities have compounded the recession. It’s just mid-2008 by the way, and there’s still the bombing of Iran that we all await as the non-surprise ‘surprise attack’ from neo-cons and Zionist fascists, which will guarantee higher prices for oil and better dollar leveraging power. This will come sooner or later.

Forecasting has been made simpler by anarchic events at this moment. There is no end in sight to the recession, oil prices will still move up, and the recession will lead to a deeper meltdown of the liberal financial-monetary system of casino-style looting by financier operators.

Better do some belt-tightening if you haven’t done this yet. Let’s continue to watch the horrible unfolding of events. Madness and unparalleled greed have shattered the financial-monetary system, the ‘virtual economy’ of predatory financiers.

[Writ 12 June 2008, Quezon City, MetroManila]