GLOBAL FOOD UPDATE: PRICES REMAIN HIGH!

GLOBAL FOOD UPDATE: PRICES REMAIN HIGH!

Erle Frayne D. Argonza

Here’s the bad news for everyone across the globe: global food prices remain high. In the Horn of Africa particulary, food crisis remains as the calamity that recently hit the area bordered a catastrophe of drought cum famine.

As Zoellick of World Bank had contended, the food crisis is far from over. Calamities after calamities have struck different parts of the globe in a super-convergent fashion, thus contributing to the high price index of food as a whole. Thailand is still under flood waters as of November, thus hampering the overall grains production, leading to further speculation in the cross-border prices of grains.

Below is a summary of the bad news going about food prices.

[Philippines, 20 December 2011]

Source: http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23036667~pagePK:64257043~piPK:437376~theSitePK:4607,00.html

Global Food Prices Remain High and Volatile Affecting Poorest Countries the Most

Press Release No:2012/134/PRM

Floods in Thailand add further uncertainty. Food crisis in the Horn of Africa continues

WASHINGTON, November 1, 2011–Global food prices remain high and volatile, hitting the poorest countries hardest and adding to the strains facing the global economy, according to the World Bank Group’s new Food Price Watch released ahead of the G-20 Summit in Cannes, France. While the Bank’s food price index has dropped 5 percent from its February 2011 peak and dipped marginally in September by one percent, it remains 19 percent above its September 2010 levels.

“The food crisis is far from over,” said World Bank Group President Robert B. Zoellick, who has urged the G-20 to put food first. “Prices remain volatile and millions of people around the world are still suffering. The World Bank has been working closely with the French Presidency of the G-20 and our partner international organizations on actions to protect the most vulnerable from the dangers of food price volatility, while also addressing some of its root causes. Let's remember, averting crisis is not just about banks and debt. Millions of people around the world face a daily crisis of hunger and malnutrition. At Cannes, the G-20 can and should take steps to address their needs."

The Group of 20 heads of government, who are meeting in Cannes Nov. 3– 4 to discuss the global economy, are expected to endorse a package of concrete actions to improve transparency and policy coordination to detect and correct problems early; to help countries manage price volatility using sound risk management tools; to promote more productive and resilient agriculture; and to get food to the needy fast through emergency regional humanitarian food reserves and agreement not to ban exports of food for World Food Programme. As the world population reaches a staggering 7 billion people, it is more important than ever for the global community to galvanize around actions to improve food security.

According to Food Price Watch, a quarterly report, recent floods in Thailand−the worst in 50 years−may add uncertainty in the short run following estimated production losses of between 16 to 24 percent of total production. In the meantime, the food crisis in the Horn of Africa continues, affecting over 13.3 million people in the region–an additional million since August, and the outlook remains frightening.

The report said prices of grains rose 30 percent (September 2010–September 2011), with maize increasing by 43 percent, rice by 26 percent and wheat 16 percent. Soybean oil went up by 26 percent. Over the last quarter, however, an increase of 3 percent in the price of grains was roughly offset by a 3 percent decline in the prices of fats and oils.

Volatility, which is higher in low income countries, is expected to persist in the medium term due to multiple global and domestic factors. Structural factors contributing to the volatility include rising populations and changing diets, increasingly intertwined relations between food and energy prices, and increasing production of biofuels.

On the other hand, a favorable outlook on supply and stocks is likely to relieve some of the pressure on global food prices. Latest forecasts show global wheat stocks reaching a 10-year high in 2011-12, global production of maize to rise by 4 percent from increased production in Argentina, Brazil, China, Russia, and Ukraine. Global rice output is also likely to get a boost in 2011-12 due to an expected bumper harvest in India following very favorable monsoon rains.

These production gains in some markets underscore the critical need to keep international markets open, to get food where it is needed, provide incentives to farmers who expand production, and avoid panic behavior created by export bans.

While a troubled global economy could dampen demand and push food prices down, the effect on developing countries would be mixed−hurting food exporting countries and poor producers in rural areas, and benefiting food importers and consumers. The problem, Food Price Watch warns, is that developing countries might have now limited resources to protect vulnerable populations following the economic crisis and stimulus spending.

In addition, fears associated with the global economy may affect medium to long-term investments in agricultural research and more productive agricultural techniques, especially amid persistent volatility.

Among the ongoing efforts to improve volatility-related information, the G-20 agriculture ministers introduced the Agricultural Market Information System (AMIS), officially launched in September, to increase market transparency on the short-term global food outlook, especially stocks, and to identify abnormal international market conditions in order to prompt early responses.

How the World Bank Group is helping to put food first

 In the Horn of Africa, the World Bank Group is providing $1.88 billion to save lives, improve social protection, and foster economic recovery and drought resilience. More than 13 million people are affected by the crisis.

 A first-of-its-kind World Bank Group risk management product, provided by the International Finance Corporation (IFC), will enable up to $4 billion in protection from volatile food prices for farmers, food producers, and consumers in developing countries.

 The Global Food Crisis Response Program (GFRP) is helping some 40 million people through $1.5 billion in support.

 The World Bank Group is boosting its spending on agriculture to some $6 to $8 billion a year from $4.1 billion in 2008.

 Supporting the Global Agriculture and Food Security Program (GAFSP), set up by the World Bank Group in April 2010 at G-20’s request, to assist country-led agriculture and food security plans and help promote investments in smallholder farmers. To date, six countries and the Gates Foundation have pledged about $971.5 million over the next three years, with $571 million received.

 The World Bank Group is coordinating with UN agencies through the High-Level task Force on the Global Food Security Crisis and with NGOs.

 The World Bank Group supports the Consultative Group for International Agriculture Research (CGIAR), which it helped to establish in 1971. In 2008, the CGIAR with the support of the World Bank and other donors launched a reform process, which culminated in the adoption of a comprehensive strategy that determines the new global research programs and a new funding model that prepares CGIAR to absorb and attract vastly more program funding, with a target annual budget of $1 billion by 2013, to which the World Bank contributes some $50 million per year. With agriculture production needing to rise some 70 percent by 2050, and with a five- to ten-year window to develop new varieties and get them to farmers, increased funding from the international community for global research is critical.

Contacts:

In Washington: Alejandra Viveros, (202) 473-4306, aviveros@worldbank.org

For Broadcast Requests: Natalia Cieslik, (202) 458-9369, ncieslik@worldbank.org

To access Food Price Watch, please click:

http://go.worldbank.org/26VBL9Q3F0

Food Price Watch author, Jose Cuesta will take part in World Bank Live online discussion about Global Food Prices on Tuesday, November 8 at 10:00 am EST (15:00 GMT). Participate and submit questions in advance here: http://live.worldbank.org/qa-global-food-prices-nov-2011

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US AID BUDGET CUTS, SIGNS OF THE TIMES!

US AID BUDGET CUTS, SIGNS OF THE TIMES!

Erle Frayne D. Argonza

Overall budget appropriation pattern in the US Congress has shown an increasing cuts of aid to other countries. The US $4 Billions given each to Egypt and Israel were squeezed down a mere $3 Billions for both countries.

The rationale given by the mentally bankrupt US legislators is that priority for allocations should be domestic needs rather than those that fit foreign relations matters. Isolationism is creeping inside legislators more so the House of Representatives or ‘lower house’. In US institutional history, the term ‘lower house’ was used to label the House of Representatives to signify the low level of wisdom and competence of its members relative to the Senate.

Signs of the times, isn’t it? US hegemonism on the global terrain is now crashing down in a context that is increasingly moving toward multipolar power arrangement. Domestic demands for larger money inputs is ever rising at exponential rates while the debt levels are sucking down financial resources intended for more productive uses (pump priming) and social welfare.

Below is an analytical piece about the subject culled from the New York Times.

[Philippines, 16 November 2011]

Source: http://www.nytimes.com/2011/10/09/opinion/sunday/no-time-to-get-stingy-about-foreign-aid.html?_r=2

No Time to Get Stingy

CAROL GIACOMO

Published: October 8, 2011

Spending for diplomacy and foreign aid has long been a favorite target of Congressional budget cutters. That’s truer than ever this year with the supercommittee looking for a $1.5 trillion reduction in the federal deficit. Why spend precious tax dollars overseas when the need at home is so great?

For the sake of national security, this country cannot afford to retreat from the world. Its investment in the State Department and foreign aid helps advance peace and stability by feeding starving people, providing access to doctors and medicines, opening new markets, promoting democracy, curbing nuclear arms and strengthening allies with military and economic assistance. It also gives Washington leverage.

There is a lot of public misunderstanding about foreign aid, which accounts for less than 2 percent of the federal budget. And the truth is, much of that money — too much — goes to American producers of food, medicine and weapons that are delivered abroad.

International affairs spending — on diplomats and embassies, aid to more than 100 countries and funding for the World Bank, the United Nations and others — declined after the cold war. It rose after 9/11, from about $32 billion in 2002 to $57 billion in 2010, largely because of obligations connected to the wars in Iraq and Afghanistan, aid to Pakistan and a greater investment in global health.

The trend is shifting again. As chart A shows, the budget was cut by $6 billion, or roughly 11 percent, in 2011, with a $2 billion reduction possible in 2012 if the Republican-led House prevails. The largest category of spending is direct economic aid, which supports global health programs, as well as efforts to reform economies, expand education and respond to disasters in Haiti, Japan and elsewhere. That type of spending was cut to $21 billion in 2011 from $25 billion in 2010.

Military and security aid to fight terrorism abroad, combat drug trafficking and underwrite foreign arms purchases and military training amounted to $8 billion in 2011. Israel gets about $3 billion annually, with money also going to Egypt, Afghanistan, Iraq and Pakistan. This is one category the House would increase. The State Department’s salaries, embassy construction and security, and contributions to international institutions make up most of the rest of the budget.

At least four critical areas would suffer disproportionately from cuts proposed by the House. The Obama administration opposes those cuts and is seeking limited increases. As chart B shows, food aid, which was $1.7 billion in 2011, would fall 28 percent to $1.2 billion in the House plan. A global health initiative, which is reducing malaria in Africa and preventing the spread of H.I.V./AIDS, under that plan would lose $700 million from its $7.8 billion budget. The United States Agency for International Development (Usaid), which oversees aid programs and ensures that funds are properly spent, faces a $400 million cut — and likely staff layoffs. Money for development projects like water filtration plants would be sliced by 18 percent by the House.

Savings squeezed from the State Department and foreign aid — which together are less than a tenth of the basic Pentagon budget — would be a tiny share of the $3.8 trillion federal budget. Yet the effects would be hugely damaging to American foreign policy. Washington needs resources to support new democracy movements in Tunisia, Egypt and Libya. This is also a critical time in Iraq and Afghanistan, where demands for diplomatic resources are growing. National security has always depended on more than military strength. We need diplomats to anticipate problems and find nonmilitary solutions. The drive to cut diplomatic resources and foreign aid seriously harms our ability to do just that.

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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,
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EURO-OLIGARCHS’ SLASH FUNDS AWASH AMID EU’S BANKRUPTCY

Erle Frayne D. Argonza


Good evening from the Philippine suburbs!

I wish Europeans could find sufficient reason to brighten themselves up these days. Maybe the northern Europeans can still find some reason to smile in the light of welfare state graces still flowing to their pockets, while those of southern Europe’s are grilling in the heat of a continent burning in economic firestorm.

Europe is rapidly going down the route of bankruptcy as shown by the panic behavior of its Brussels-based central bank as well as the respective member-states’ own central banks. Whatever the serial bankruptcy could forebode, the Europeans better prepare for the worst scenario.

Economic intelligence updates report that only the IMF and USA are infusing some fresh monies unto the European coffers. The problem is that the IMF is itself running out of funds soon, and so it may decide to probably print money that it just puzzlingly couldn’t securitize enough (does IMF possess gold bullions to back up those monies in case?).

As to the USA providing fresh cash to Europe, we concerned observers are simply befuddled about. The USA was bankrupt even before Obama became president, a fact that amplifies our own confusion about where does the USA source such funds and how will it securitize them in case of its aiding of a burning Europe.

It seems that coteries of Nero officials were designated as chief execs and technocrats in the entire continent plus the UK & Ireland, Neros who fiddled in their palatial roofs while their respective countries burned. I wish the likes of Brown, Merker, Sarkozy, and Barroso could convince me that they are not some Nero clones who collectively did burn their own continent at the behest of the financiers. [Cameron replaced Brown recently, performing a “too late the hero” act.]

Now, just to remind the readers more so the Europeans, around a couple of years back, when the USA was in the midst of its ‘great recession’, the greedy Anglo-European financiers reportedly stashed a staggering $3 Trillions worth of slash funds in the big financial houses of the continent itself. That was then, it’s now 2010 and the slash funds may have grown to at least 33% its original size.

A very suspicious act for sure, as it reveals a highly privileged class that operates outside the ambit of established rules in the continent. Just exactly what are those funds intended for, we can only speculate. The greedy financiers know about a coming turbulence that will engulf the entire trans-Atlantic economies most likely, and they were preparing for the worst scenario.

The worst scenario is now taking shape, the scenario of total bankruptcy and the Eurozone’s economic roof collapsing. The Jurassic bank IMF was already called upon to intervene with emergency measures for central banks to stash hundreds of billions of euros to salve ailing banks, while it imposed austerity measures on heavily affected countries such as Greece.

To say that the financiers are but passive observers of events would be over-stretching naïve posturing bordering torpor. The greedy financiers led by the House of Rothschild and its subordinate subalterns (Soros & cronies) have been orchestrating the events in the continent, even as they were responsible for directing the pliant IMF to enter the scene in order to hasten anarchy and economic collapse.

Europe’s member states could all but wish for some more industries that could be sold to the financiers who wait in the wings for more bankrupt companies to be sold at cheap dirt prices. Europe has already been effectively de-industrialized across the decades via virtual economy policies of deregulation, privatization, and liberalization, so there isn’t much an industry left for such a purpose.

Maybe the last frontier of Europe to generate money is to sell all of its major infrastructures—freeways & roads, bridges, levees, wharves, airports/runways, railways—to the financiers via their agents. Netherlands’ flood control infrastructures, for instance, would surely be cause for salivation by the same greedy moneybags which they can perhaps maneuver to buy at rummage sale.

Concerned Europeans themselves should keep watch over the reports filtering to the OECD and Bank for International Settlements about the country performance of EU’s member states. Panic and desperation, at a given juncture, is sufficient cause to pad data, rendering such central institutions as unreliable and suspect. When an economic house burns, a central bank would casually resort to lying such as our own central bank in the Philippines did during the depression years of ‘84-‘86.

Likewise should the Europeans, more so the working class, better keep track of oligarchic slash funds being stashed surreptitiously in their own backyard. Such funds should be allowed to surface and be applied with transparency rules to know what they are intended for.

[Philippines, 31 July 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]

ISLAMIC BANKING RECONSTRUCTED

Erle Frayne D. Argonza


Islamic banking is part of the totality of ‘best practices’ that originated from Asia. Being among the strong proponents of the ‘Asian way’ as the way out of our capitalist economic malaise and crises of our times, I’d share my own notes of hallelujah to Islamic banking.

I am among those development practitioners and social scientists who propose that let’s all undertake a review of Islamic banking. This banking practice is based on zero-interest banking. The challenge is for us to reconstruct the practice to suit the current context of information society.

Usury is among the proscriptions of spiritual masters and sages of the East. It is within the context of a non-usurious finance, embedded in spiritually-guided livelihood practices, that Islamic banking emerged in Western Asia.

Zero-interest financing contributed immensely to accumulating wealth for the Asiatic polities that engaged in them in antiquity. The same wealth was utilized for social services, ambitious projects, building cities, and advancing the arts, sciences, and philosophy.

Usury is alien to Asia, even as its massive introduction to the continent brought untold miseries to the marginal folks. It had also tied up Asian economies in debt peonage to the financial cartels of the West and their local banking/financial partners.

Before the Asian economies, notably the emerging markets, will go down the drain and lose their growth gains due to usury and predatory finance, their own stakeholders should rethink their borrowed paradigms. They better review those golden Asiatic economic principles taught by spiritual masters, and make ways to re-carve their financial systems following such principles.

Asia is indubitably the driver of the global economy today. It is time for Asia to set the trends by beginning with new financial paradigm such as the one offered by Islamic banking.

[Philippines, 07 June 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]

BAILING OUT AILING BANKS IS IMMORAL/CRIMINAL

Erle Frayne D. Argonza


Good afternoon, fellows!

Bailing out ailing banks with people’s money (taxes) is immoral and criminal. I have already stated this contention in previous articles, and I’d re-echo it again in light of the financial fiasco going on in Europe right now.

We’ve had more than enough bad experiences in past crises that point out to massive speculative engagements by banks that have contributed to economic downturns and crash. Japan started the ball rolling by salving big banks with taxpayers’ money in the 1990s, and this practice is awefully wrong and immoral.

Fast forward to the year 2007, when we saw big banks implode as the bubble economy of the USA burst. The same ‘Japanese solution’ at salving ailing banks with taxpayers’ money was again repeated, this time in the USA.

Taxpayers’ money is hard earned revenue for the state for purposes of advancing the general welfare. The priorities for revenues should be infrastructures, social services, pump priming, and ensuring ‘safety nets’ for the marginal classes and groups against the impacts of financial volatilities on the productive sectors.

The solution to ailing banks lies in strengthening regulatory mechanisms. The first agenda on the line is to ban banks from engaging in speculative engagements notably those hedge funds operations. Another agenda is to institute good corporate governance and instilling public accountability by the banking sector.

Bailing out ailing banks in Europe, through taxpayers’ money, can only mitigate the systemic crisis for a while. Also, it will push more folks down grinding poverty due to austerity measures. It is part of the ‘rule of madness’ that now governs ‘late’ capitalism as a whole.

[Philippines, 07 June 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]

SCUTTLE EU NOW, BEFORE 4TH REICH OPTION AWAKENS!

Erle Frayne D. Argonza


Magandang hapon! Good afternoon!

I have no wish to intervene in the internal affairs of Europe. However, judging by the flow of events in the continent, from the signing of the earlier treaties through the monetary union and the Lisbon Treaty, there has been a clear sign of concurring agreements without the benefit of public consensus.

True, there were debates about the formation of the Union from its earlier days as an energy coalition through the birth of the Eurozone and finally the Lisbon Treaty. But the signing of treaties has been a monopoly of bureaucrats and technocrats who do not the least show accountability towards the great mass of struggling Europeans.

Now that the Eurozone is in trouble, which further threatens the continent with a gigantic crash that could be worst than the USA’s, the prospects of more Draconian measures of implementation and austerity measures imposed on member countries are getting more real.

Let us just hope that the increasing chaos of events in the EU won’t lead to the dreaded hyper-inflation, an ailment that crippled the late Weimar Republic and paved the way for Hitler’s rise to power. Already, the doors of Europe are opening for new fascist movements arising, movements that could very well serve the interest of the bureaucrats & technocrats working for the fat financiers led by the House of Rothschild.

If there is any unsolicited advise I can offer to the Europeans, it is this: scuttle the Union now while there’s still time. A gigantic maelstrom is gathering in your backyard, which could lead to the rise of a 4th Reich of sorts.

Let me share to you a past blog article about the 4th Reich possibility.

[Philippines, 24 May 2010]


4TH REICH IS A TRANS-ATLANTIC 2-HEADED TOTALITARIAN MONSTER

Erle Frayne Argonza y Delago
Good morning, Fellows across the globe!
Let me continue to write awareness-raising materials about peace, cooperation and development, by focusing on the machinations of the financier oligarchs. The Empire is rising again, the logic being that it is a most fit governance machine for global oligarchic games and forthcoming conflicts.
Guessing gamers have been busy releasing speculations about the next financiers’ great war, and the state machinery that will undertake it. Lacking sophistication in political economy, the guessing gamers end up with superstitious sloganeering and fear-mongering, or reactive behaviors that hardly possess merit and serious attention by the more adroit minds of younger generations.
Following the historic patterns of Empire formations, it has always proved fruitful to wage synchronized conflicts and fatten the oligarchic purses in the process, if an empire formation would do the hot-work jobs for the oligarchs. The last Empire that did the massive aggression for the Anglo-Dutch oligarchs was dubbed as 3rd Reich by its created abomination, Hitler & Nazi movement.
The same Anglo-Dutch financiers, who control at least 80% of the world’s total financial flows, are itching to create a 4th Reich totalitarian state. It is time for a great war, the result of which will flatten the economies and enterprises of contending nations. The wrecked enterprises will then be bought at dirt cheap price by the same oligarchs, and the flattened economies funded back to life by the same financiers.
The question is, just exactly what oligarchic state formations to employ? The EU and USA each produce over 22% of the world gross product, or altogether produce 45% of GDP. The Anglo-Dutch financiers, on the other hand, control over 80% of the global financial flows. Using such data, it is very easy to see the congruence of continental economies and financier interests.
In my analysis, using a combination of institutional analysis and political economy, the combined EU-USA force would be excellent for creating the draconian 4th Reich. Of course, the possibility of a North American Union can be examined, but such a Union doesn’t have the purse power to leverage political strength, do understand this. On the other hand, the EU cannot impose its will on the USA without public dissent being aroused to hell fires, and so no USA-EU political integration is in the offing.
The web of institutional arrangements will see a mega-alliance of USA-controlled North America and a Brussels-based European Union. The trans-Atlantic alliance is a last-ditch effort of the same financiers to exhibit muscle power over the planet, and only the USA-EU axis remains as the loyal consenter to the financier machinations. Japan can still veer away from the axis, while the emerging markets’ giants—China, India, Brazil—are beyond the ambit of such machinations.
The institutional plan calls for the implementation of the final treaty in Europe, the Lisbon Treaty, that will see the advanced unification of the continent. Synchronically, a North American Union, with a common currency called Amero, will replace the NAFTA, complete the political unification process, and form the American bulwark of the new fascist axis. That done, the 4th Reich will be in place, rock-solid in armaments and awash with liquidities for more ambitious, gigantic war efforts.
Part of the governance innovations will be to abolish nations in both continents. Region-states will rise to replace the nations, each region being almost of equal population and size. With no more nations in Europe, the nuclear arsenal of France and UK will be placed in the custody of Brussels, thus transforming Brussels into a nuclear power overnight.
Transformed into police states, both continents will then wage population-control campaigns in the neighborhoods. Gangster groups will logically be deputized to augment police in searching for guns, drugs, insurgent evidences, terrorist cells, petty criminals, and other perceived enemies of the state. Those young ones engaging in binge drinking and sex orgy parties will also most likely be apprehended.
To accelerate public compliance toward the new order, riots can be engineered in cities across both continents. Food price hikes, oil price hikes, massive unemployment, social welfare cuts, overnight hyper-inflation are the most contentious issues that easily inflame quiet neighborhoods into angry urban mobs. Any high school student taking up a subject on sociology can very facilely see this possibility today. It has already been tried and tested across the globe in fact most recently.
While the continental backyards are being provided draconian order by police forces, the military assets will then flex their muscles for huge wars overseas. To ensure that competing regions and continents will be mowed down fast, inter-regional wars will be engineered. The Sunni-Israel versus Iran-Shiite war is now on the pipeline, waiting for a go-signal, a conflict that will see the weakening of the Semitic military establishments and economies, thus paving the way for less costly involvement there.
Other continents will surely see their own war fireworks fanned to the maximum most likely. It would be an instructive work to analyze and forecast the shaping of events there. For instance, the China-Taiwan and inter-Korean conflicts may ensue again on their 2nd phases. Japanese aggression may also be pursued on a 2nd phase, which could see the Japanese islands devastated with nukes combined with the Tesla Earthquake Machine to put an abrupt end to its zealous militarism.
To cap the article, it is a Trans-Atlantic 4th Reich that is now fast rising. How fast the citizens of both America and Europe can neutralize the abominations now shaping up in their backyards remains to be observed. One this is sure here: it doesn’t matter who will be president of the USA or EU. The financiers and their paid technocratic-political subalterns have already ensured that the oligarchy is in control of the situation.
[Writ 22 June 2008, Quezon City, MetroManila]

‘LATE’ CAPITALISM CRASHING DOWN ITS DEATH BED

Erle Frayne D. Argonza


Good evening!

The events in the Eurozone are now getting to be more alarming. Forecasters are now claiming that another round of recession is in the offing, as the bubble burst that began in Greece will spread to Spain, Ireland, and other member-states of the EU.

Will liberal capitalism continue to live a life that seems to hang in the balance? Or will capitalism need to restore itself through totalitarian means? What’s so wrong with the system that it just can’t be sustained enough?

Let me share to you past blog writings about the subject: ‘mad economics’ and the ‘demise of liberal capitalism.’

[Philippines, 23 May 2010]


‘LATE’ CAPITALISM ENDS IN CRASHING BLOW POST-‘MAD ECONOMICS’

Erle Frayne Argonza

Good afternoon!

At this moment, I’m sipping coffee contained in a pack that is sold for worth P130, or $3.00. The pack is one of the domestic brands of brewed coffee blends, ready for the drip coffee maker, of the Arabica and/or Robusta varieties. In economic parlance, this coffee is a commodity because (a) it was intended for exchange and not for the coffee producer’s consumption alone, and (b) money was used to acquire (purchase) it.

I have such deep fondness for coffee, as I acquired my coffee-drinking behavior as a childhood habit yet. In my hometown of Tuguegarao (city), Cagayan province (North Philippines), coffee beans were grounded into powder form and sold right inside the ‘wet’ market, was brewed using the local decoction techniques, and was consumed by people of all ages from pre-school to senior’s age. That was then, and that was how I learned to drink this beverage at age 5 more or less. I was hooked to the habit since then, even as I continued to drink milk that I still do till now.
Both coffee and milk are among my health formulas, and both are commodities.

The question I’m asking now is, will commodity-based economics survive the times ahead? Both coffee and milk will survive for sure, but will the money economy that underpins them survive as well? As to the broader world system of capitalism, will it survive too or is it in fact on its death knell today?

Capitalism was the last of the world systems that embodied the ‘money economy’ to which it properly belongs. With the opening of the 20th century, the socialist world system appeared on the social landscape and attempted to serve as an alternative to capitalism, but this experienced its early demise as its implementers found out that it cannot be sustained after all. Both capitalism and socialism are embodiments of the ‘money economy’ as it later turned out to be, they are just but two sides of the same coin: the ‘money economy’.

Socialism is gone, and no matter what attempts there may arrive to survive it in some other forms, this variant of the ‘money economy’ is gone. Now capitalism is all alone, and it is getting more real than virtual that it too is bound to crash a catastrophic end, and with its demise, the “last of the (economic) Mojicans” is bound to disappear (my apologies to Mojicans if my note sounds ethnically incorrect). And with capitalism’s demise, the whole of the ‘money economy’ folds up like unto a book that had reached its last chapter, and deserves more to be consigned to the archives of history.

The Frankfurt school thinkers, notably Jurgen Habermas, cogitated that capitalism’s life span was extended somehow, and was dubbed as ‘late’ capitalism in this last phase of the world system. In this phase, state planning and interventionism were infused into the system to extend its life. Before ‘late’ capital came the mercantile, free enterprise, and monopoly phases of this world system. Will there be another phase to capitalism after ‘late’ capital?

Before I answer that extension of life span, let me stress that ‘late’ capitalism shall end in the following process and manner:

• The re-introduction of liberalization—of free market and free trade principles—into ‘late’ capital shifted engagements away from production, the real foundation of the economy, to the sphere of predatory finance, thus producing the gargantuan ‘bubble economy’. The ‘physical economy’ of production transmogrified into the ‘virtual economy’ that produces no real value other than imaginary or delusional values. It is ‘mad economics’ in operation, no longer the ‘rational economics’ of mercantilists, classicists and neo-classicists.

• The ‘mad economics’ led to the yawning gap between actually produced values and the aggregates of financial derivatives and debts combined, to the extent that the former shrinks at a rapid rate relative to the latter. As bubbles burst from one commodity sector to another, leading eventually to a crisis of gargantuan proportion, all the more will production shrink, unable to produce values that can input into the demand functions for fresh money to pay for aggregate credits, primary debts, secondary debt obligations, and so on.

• The crisis will then move on to the further shrinking of production, tightening of credit sources, and hyperinflationary situation in utilities (notably gas & power), food, base metals and other vital commodities. Total economic collapse results from the foregoing.

• The economic collapse then leads to social unrests, turmoil, upheavals, civil wars, food wars, water wars, and possibly intercontinental wars such as another 3rd world war. The clash of world powers and their surrogate emerging markets will become the flames of a possible long war akin to the 30 Years War (c.1618-48).

Let me now end at that instance. Suffice me to proclaim that the death knell of ‘late’ capitalism and the whole of the ‘money economy’ of the last 2000 years or so are ending. The ‘non-cognitive economics’ of the Roman to feudal era, the ‘rational economics’ of the Renaissance to monopoly capital era, and the ‘mad economics’ of ‘late’ capital were markedly the underpinning mediation processes of that entire 2000-year epoch. The epoch and its last phase of capitalism is rapidly drawing to a close.

[Writ 22 August 2008, Quezon City, MetroManila.]

CAPITALISM’S DEMISE: WHAT WENT WRONG?
Erle Frayne Argonza

To all fellow men and women out there who may have deep fondness for the liberal capitalist model of economic adaptation, I hope that you can make some adjustments in your cognitive banks. Capitalism is not a permanent facet of human life, but merely one among various epochs that will come to pass. Only impermanence is sacrosanct in the cosmos, so please refrain from singing hallelujah to a world system that is on its death knell as I articulated in a previous article.

And please refrain from swallowing hook-line-&-sinker the contentious propaganda of Francis Fukuyama about the ‘end of history’, that accordingly history had concluded with the galvanization of liberal capitalism, that history makes no more sense. Fukuyama’s theory is a slapstick narrative of hyper-valuation of the ‘mad economics’ of late capitalism and hypo-statization of reality that has no relation at all to the real in the world out there. Fukuyama had taken as ‘real’ what is actually ‘virtual’, and froze time much like unto a fairy tale of timelessness, of history-less Nietzschean moment that is fit more for infants than for adult humans.

Fukuyama epitomizes the ‘mad economics’ of all those Pied Pipers of the global oligarchy for whom he works, and his discourse is akin to the ‘mad discourse’ so described by the late Michel Foucault. The ‘mad economics’ of Friedman, Hayek, Fukuyama, and all those technocrats who serve as processors and bagmen for the global oligarchy, is precisely symptomatic of that colossal ailment of a world system, and as we all know, madness can never salve ailments but rather hasten the system’s death. Caput! Blow your horns, prepare dirges to this Dead One!

Unless that you yourselves have become maddened by the seemingly infinite monies flowing unto your purses as you are among the beneficiaries of ‘late’ capital, unless that you are indeed now suffering from combined maladies of sociopathy and schizophrenia, unless that sanity had departed from thee forever, please heed the last plea of your own conscience where sanity had retreated: CAPITALISM IS DEAD! No amount of propagandizing, of contorted interpretations, can ever change the course of history at this juncture, as we are all headed for a TOTAL SYSTEM COLLAPSE in the months ahead. Read that please: MONTHS AHEAD, not years ahead.

What went wrong with capitalism? I’m sure all of you fellows knew what went wrong, do I even need to answer that? Your previous thinker mentors, among economists and sociologists, forewarned you all of the forthcoming demise of capitalism, but you paid nary an attention to those brilliant minds as you were so engrossed in your ‘conspicuous consumption’, behaving more like some infantile EATERS or as anthropoids rather than as thinking and spiritually evolving humans. You are all very much human, so please consistently behave like one, and begin by listening to the Inner Voice of your conscience, for that voice is your soul’s.

Let me summarize the diagnostics, forewarnings and/or prophecies of our thinker mentors from the West, and I’d stress WEST because there are some other thinker mentors from the EAST and SOUTH whose peregrinations are so recondite they are not so easily digestible. Let me just stress the WEST as this is what is common to us all. So let me re-echo the thinkers and their theories:

• Karl Marx & Friedrich Engels: The internal contradictions between the private nature of capital (ownership of means of production) and the social nature of production. The ‘crisis of overproduction’ and the ‘law of the falling rate of profit’ are attendant patterns. Social revolution results, then the alternative society will be constructed.

• Max Weber: Industrial capitalism’s granite product, the bureaucracy, led to dehumanization. He never forecast though whether this dehumanizing system can be sustained—but please read between the lines. (His contemporary Emile Durkheim had a similar observation about ‘anomie’ or normless state of urban/industrial society.)

• Thorsten Veblen: The end-phase of industrial capitalism is markedly pathological. ‘Conspicuous consumption’ is the disease of this phase, the toxic behavior from the ruling class that later filtered down to the emerging middle class.

• Joseph Schumpeter: The internal contradiction between the desire for profit and the revolutionary character of innovation. The demise of capitalism will see the possibility of the technical class taking over society and build that alternative system later.

• Daniel Bell: The ‘post-industrial’ society had already been born right inside capitalism. A distinct modality in itself, post-industrialism will eventually prevail in a system that isn’t capitalist (or money economy) but rather knowledge-based. The ‘service worker’ had arrived on the social landscape, the prototype class of the future.

• Theodore Adorno, Jurgen Habermas, Herbert Marcuse: ‘Late’ capital is characterized by the pervasiveness of ‘instrumental reason’, where reason is used to justify the non-rational (‘madness’ in Foucault’s argot), where state planning/intervention was infused into a system that scorned intervention.

• Alvin Toffler: Both capitalism and socialism are based on hoarding, both are variants of the same industrial society of yesteryears, both are based on ‘2nd wave’ capital-intensive technologies and non-renewable energy sources. The ‘post-industrial’ society is altogether distinct, isn’t based on hoarding, production-consumption (‘prosumer’) is based on ‘3rd wave’ knowledge-intensive technologies and renewable energy sources, knowledge cannot be hoarded.

I need not articulate further, do I? They all converged on one theme: capitalism is transitory, it bred social maladies (alienation, dehumanization, anomie, conspicuous consumption,…), is systemically flawed, and will be dismantled at sometime in the future.

No matter how delimited their theories maybe, as they all proceeded from certain perspectives (they were all ‘paradigm’-based in the jargon of Thomas Kuhn), they all proclaimed—in either tacit or explicit fashion—the coming demise of the system. They weren’t as silly as Fukuyama who popularized seemingly ‘satanic verses’ (distorted precepts) about a non-changing, permanent economic landscape called ‘liberal capitalism’, but were rather so adroit at social forecasting that they saw a vision of the future as they were articulating on their empirical observations of the present society.

So, fellows out there, prepare for the months and years ahead. We are headed towards those stormy months, years, maybe even decades. How the future society will come to shape is not easy to forecast. “Something blurs the Force, darkens our sight of the future,” declared a Jedi Master in the Star Wars cinema fame. Let me end right here.

[Writ 22 August 2008, Quezon City, MetroManila.]