Predictions & Revolutions: A Conversation with Ravi Batra

 Predictions & Revolutions: a Conversation about Electronics & Economics with Ravi Batra 

Apek Mulay, CEO, Mulay’s Consultancy Services
12/28/2016


Dr. Ravi Batra, a professor of economics at Southern Methodist University in Dallas, has made a great career from his uncanny forecasts. He started making predictions in 1978 when he wrote a book called The Downfall of Capitalism and Communism, which predicted the fall of Soviet Communism by the end of the century, and the demise of monopoly capitalism around 2010.


No one took the book seriously until the Berlin Wall fell in 1989 and the Soviet Union collapsed soon thereafter. So stunning and swift was the fall of the Russian empire that Italy awarded Dr. Batra a medal of the Italian Senate for his accurate prediction. He updated his book in 2006 in another work titled The New Golden Age: The Coming Revolution in Political Corruption and Economic Chaos.

Forecasts he made in this book were as breathtaking at those in his earlier work. Again, he foresaw a variety of revolutions beginning in 2009 and going all the way to 2019. As with his earlier work, this one also is a mixture of history and economics.

Prof. Ravi Batra, Southern Methodist University, Dallas, Texas (USA)

He predicted a big recession starting in 2008 from a major rise in wealth concentration and the price of oil, which you may recall peaked at $147 per barrel. He also foresaw a collapse in the oil price after 2011.  Regarding politics, he predicted a revolution in 2009 and then again in 2016.

Since many of his forecasts have been accurate, I caught up with Dr. Batra just before Christmas and interviewed him about his predictions, focusing on the role of technology in the economy and history. He was gracious enough to spend a few hours with me and later offered written answers to my questions, explaining why and how he saw what no one else did. Here is an account of that interview.

Mulay: Thank you Dr. Batra for agreeing to explain the nature of your work. My first question is about the role of technology in your economic and historical analysis. I have heard from many economists that a good deal of American unemployment arises from the use of new technology that makes labor redundant. What do you think?

Batra: Let me start by thanking you for offering to air my views. Modern economists have a myopic view of technology, because they have failed to look at history. New inventions are nothing new; they have been occurring from the very birth of the American Republic. First came horse-driven carriages, then came railroads, then automobiles, and now airplanes, computers, cellphones, robotics and so on. The list of new inventions is endless. Yet for much of US history there has been full employment. So new technology is not the cause of unemployment, at least from a study of history.

Mulay: But you have to agree the use of computers etc. has sharply increased labor productivity and indeed led to some unemployment.

Batra: “Let me tell you why technology is not the culprit here. It is the government policy which is at fault. You see, there are two types of technologies: labor replacing and job creating. Computers indeed are labor replacing, but building those computers creates new and more lucrative jobs. In the past, we had foreign trade but no outsourcing, which today’s economists believe works like foreign trade. This, however, is wrong and has destroyed the positive effects of new technology.

On the one hand, new inventions make labor redundant, but they generate new products on the other. In the past, when labor became redundant from innovations, the displaced workers found high-paying jobs in industries that built new products. But now new inventions still occur in the labs of universities like MIT, but new products are produced abroad because of outsourcing. Like, Apple discovered a wonderful product as the smartphone, but its production occurs in China. So nowadays, new technologies only displace labor in America while creating jobs in other countries. Thus, the fault lies not with technology but with government policy that permits outsourcing.

Mulay: So we had full employment for much of our history, while our living standard kept rising because new products were built in the U.S., and they raised our productivity as well.

Batra: Yes, you got it.

Mulay: But outsourcing alone cannot generate so much unemployment that we still have? Our own labor department tells us that if we count the long-term unemployed and part-time workers who want to work full time then the unemployment rate is still more than 9%. Furthermore, there is tremendous poverty in America today.

Batra: Here again my answer is the same. Modern economists just don’t know economics, or else after adding $18 trillion to federal debt since 1981, you would think both unemployment and poverty would have vanished completely. 1972 is an important year in American history, because that is when the real wage peaked and has been gradually declining ever since. That is also the year when economists began to adopt deficit financing to cure any economic problem. When oil price skyrocketed in 1973, the government raised the budget deficit to fight the rising unemployment, while the Federal Reserve (the Fed) dutifully printed more money to finance the rocketing deficit. This is what deficit financing is. By 1979 inflation was so bad that joblessness soared; then the Fed cut down on money supply to bring inflation under control. This made unemployment even worse and by 1981 we had a mega recession, almost as bad as the recession of 2007. My point is that economists don’t believe in free markets anymore; so we keep hopping from one crisis to another. In the process poverty keeps rising.

Mulay: I think you are onto something. Recent budget deficits have been higher than ever since 2008 and the Fed has continued to print money. I have heard about Helicopter Ben, as Ben Bernanke was the Fed chairman when the Great Recession hit us, and he is said to have had a helicopter printing press for money to fight unemployment. 

Batra: I have also heard about this, though it may be a joke. The private sector is the main job creator, and if this sector continues to malfunction, the government money works only as a band aid and problems fester.

Mulay: Then what is the real cause of poverty and unemployment?

Batra: The true cause is a rise in the gap between the real wage and productivity. If productivity rises faster than wages, then both unemployment and poverty go up; this is purely a matter of supply and demand. Productivity is the main source of production or supply and real wages are the main source of demand. If productivity rises faster than the real wage, supply increases faster than demand, and overproduction occurs, which in turn results in layoffs and poverty. We need to ban the export of new technology, which raises productivity, but its export through outsourcing does not create jobs in America. So this is double whammy. While productivity rises the real wage may actually fall, as has been happening since 1973.

Mulay: What do you think of Mr. Trump, the president-elect and his policies. He seems to be against the kind of outsourcing you have just described.

Batra: Mr. Trump is certainly doing the right thing in this matter. However, he also intends to raise the budget deficit sharply, and that will hurt the nation in the same way it has been hurting us ever since 1973. By the way in The New Golden Age, on page 174, I had predicted the rise of a personality like Mr. Trump to defeat the rule of money in politics, at least presidential politics.

Mulay: What? I have read that book and I know you predicted revolutions in America for 2009 and 2016. That book was written in 2006; how could you make earth-shaking prophecies ten years ago?

Batra: Mr. Obama became president in 2009 and Mr. Trump was elected in 2016. I  had selected these years as years of revolutions. Since I foresaw the start of a huge recession in 2007, it was easy to forecast its political consequences, because in every election a bad economy means a loss for the incumbent in the White House. Mr. Obama did not lose but his protégé did.

Mulay: But presidents change every four or eight years, whereas revolutions occur once in a century. How did you know that the incoming presidential changes would be revolutions?

Batra: Well, this is not the first time I predicted revolutions. I foresaw the fall of the Soviet Union in my 1978 work and the Ayatollahs replacing the Shah of Iran in my 1980 work. It is possible to forecast revolutions by examining the patterns of history that I have described in my books.

Mulay: So you also predicted the rise of Ayatollahs in Iran. Anyway, what Mr. Trump has done astonished everyone and is indeed a revolution. Did Mr. Obama achieve the same thing?

Batra: Yes, of course. First, both had an anti-establishment message that focused on the vanishing middle class. Then Mr. Obama did what no one has done in 5,000 years of recorded history. To my knowledge, he is the first black man to head a nation that arguably was, and perhaps is, the richest and militarily the most powerful. Nothing like this ever happened at any other place on earth.

Mulay: What do you foresee now?

Batra: I think Mr. Trump’s presidency would be like that of Mr. Reagan—two bad years followed by wide-spread prosperity. 2017 could open up as a bad dream resulting from a mismanaged economy since 1981. While Mr. Trump has a good policy on international commerce, his other ideas remind you of deficit financing, which to me is likely to create really bad problems for the world.

Mulay: What then is the right thing to do?

Batra: The nation, indeed the world, needs free-market reforms that I have described in detail in my new book, End Unemployment Now: How to Eliminate Joblessness, Debt and Poverty Despite Congress.

Mulay: Have you sent this book to Mr. Trump.

Batra: I have sent it to his campaign manager.

Mulay: What is her response?

Batra: No reply yet.

http://www.ebnonline.com/author.asp?section_id=3315&doc_id=282269&

Humans may speak a universal language, say scientists 

 humans may speak a universal language,
say scientists 

Sarah Knapton,
TELEGRAPH science editor
12 SEPTEMBER 2016 • 8:00PM


Humans across the globe may be actually speaking the same language after scientists found that the sounds used to make the words of common objects and ideas are strikingly similar.


The discovery challenges the fundamental principles of linguistics, which state that languages grow up independently of each other, with no intrinsic meaning in the noises which form words.

But research which looked into several thousand languages showed that for basic concepts, such as body parts, family relationships or aspects of the natural world, there are common sounds – as if concepts that are important to the human experience somehow trigger universal verbalisations.

“These sound symbolic patterns show up again and again across the world, independent of the geographical dispersal of humans and independent of language lineage,” said Dr Morten Christiansen, professor of psychology and director of Cornell’s Cognitive Neuroscience Lab in the US where the study was carried out.

“There does seem to be something about the human condition that leads to these patterns. We don’t know what it is, but we know it’s there.”

The study found, that in most languages, the word for ‘nose’ is likely to include the sounds ‘neh’ or the ‘oo’ sound, as in ‘ooze.’ Similarly, the word for ‘leaf’ is likely to include the sounds ‘l,’ ‘p’ or ‘b’ while ‘sand’ will probably use the sound ‘s’. The words for ‘red’ and ‘round’ are likely to include the ‘r’ sound.

“It doesn’t mean all words have these sounds, but the relationship is much stronger than we’d expect by chance,” added Dr Christiansen. Other words found to contain similar sounds across thousands of languages include ‘bite’, ‘dog’, ‘fish’, ‘skin’, ‘star’ and ‘water’. The associations were particularly strong for words that described body parts, like ‘knee’, ‘bone’ and ‘breasts.’

The team also found certain words are likely to avoid certain sounds. This was especially true for pronouns. For example, words for ‘I’ are unlikely to include sounds involving u, p, b, t, s, r and l. ‘You’ is unlikely to include sounds involving u, o, p, t, d, q, s, r and l.

The team, which included of physicists, linguists and computer scientists from the US, Argentina, Germany, the Netherlands and Switzerland analysed 40-100 basic vocabulary words in around 3,700 languages – approximately 62 per cent of the world’s current languages.

The researchers don’t know why humans tend to use the same sounds across languages to describe basic objects and ideas. But Dr Christian said the concepts were important in all languages, and children are likely to learn these words early in life.

“Perhaps these signals help nudge kids into acquiring language,” he added: “Maybe it has something to do with the human mind or brain, our ways of interacting, or signals we use when we learn or process language. That’s a key question for future research.”

Figura 1: Spiky objects tend to have 'kiki' sounds - Credit: Christmasstockimages

Figura 1: Spiky objects tend to have ‘kiki’ sounds – Credit: Christmasstockimages

One of the most basic concepts in linguistics is that the relationship between a sound of a word and its meaning is arbitrary. However recent studies have suggested that some words may share common sounds, for example, researchers have shown that words for small spiky objects in a variety of languages are likely to contain high-pitched sounds, while rounder shapes contain ‘ooo’ sounds, which is known as the ‘bouba/kiki’ effect.
Dr Lynne Cahill, a lecturer in English Language and Linguistics at the University of Sussex said it was possible that some words were similar across languages because they are the first noises children make. So the ‘ma, ma, ma’ and ‘da, da, da’ sounds made be babies became mama and daddy.

But she said it was too early to say there was a universal root for other words.

“You could argue that the words chosen here are very old and therefore most likely to have a common ancestor language in the past, from which they all derived,” she said.

“I think this is an interesting study which has looked at so many languages but I don’t think it quite justifies their claim that it debunks the idea that language is arbitrary and I think they looked at too few words to make any firm conclusions.”

The research was published in the Proceedings of the National Academy of Sciences journal.

 

 Nose, Nase, Nez: Shared Sounds and Meaning Link World Languages 

By Nathaniel Scharping | September 13, 2016 4:59 pm
(Credit: Petr Vaclavek/Shutterstock)

(Credit: Petr Vaclavek/Shutterstock)

In English we say “nose”, the French say “nez” and Germans pronounce it “nase.” The words that different cultures use to describe the same objects or concepts might be more similar than we realize.

That’s the conclusion of a statistical analysis of thousands of languages, which concluded that some of the most basic words in our vocabularies share important characteristics, no matter the language being spoken.

The findings contradict a basic assumption in linguistics: that the origin of our words is largely arbitrary. There are exceptions to this rule of course, but by and large, it is commonly held that the meaning of a word has no bearing on the sounds which form it.

By proving otherwise, the researchers raise intriguing questions about the ontological roots of language, and suggest that some shared features of our brains had a hand in shaping the development of language.

 words upon words 

In their paper, published Tuesday in the Proceedings of the National Academy of Sciences, researchers from Germany and Switzerland examined two-thirds of the more than 6,000 languages we know about today. They compiled 6,452 lists of the most basic words that languages share, words like pronouns, motion verbs, and nouns for natural phenomena and body parts. They then broke the words down into symbols representing specific sounds, which they were able to feed into an algorithm to tease out the commonalities between them.

The researchers were looking for sounds that showed up in words describing the same things. If there were truly no connection between vocalizations and meaning, the sounds should be evenly distributed. That wasn’t the case though — they found 74 words that showed a correlation between the sounds they used and what they meant. This held even if the languages came from completely different lineages, meaning that they never borrowed from each other.

These correlations were both positive and negative, meaning that some words shared sounds, while others all seemed to shy away from certain sounds. Some words turned out to have both. Take “tongue” for example: Across all the languages, the sounds for “e” and “l” show up more often, while “u” and “k” appear less frequently than would be expected.

Both “red” and “round” show an affinity for “r”, while “name” rarely possesses “o” and “p”.

An image from the study showing words that have either positive or negative associations with specific sounds.(Credit: Damián E. Blasi et. al)

 does it make sense? 

On the surface, it makes sense that some of our words sound the same. After all, we’re all human, and wherever our languages came from, they spring from brains that work largely alike.

On the other hand, these findings may seem to be partly counterintuitive — after all, there are plenty of words that sound the same but mean very different things across languages. In addition, some of the researchers conclusions don’t seem to jive with our own language — take for example, their finding that the word for “you” doesn’t often possess “o” or “u” sounds.

It’s important to remember, however, that the researchers found correlations on a very broad scale. On the scale of thousands of languages, English is just a drop in the bucket. The researchers don’t lay out hard and fast rules for languages — instead, they find that a good number of sounds show up in a way that shouldn’t happen randomly.

 but why? 

They don’t know exactly why this happens. The roots of language far exceed any written documents, and archaeological finds don’t often provide good insights into speech patterns. One theory is that all of our languages today come from ancient proto-languages — after all, most languages should share an etymological root if you go back far enough. Like the broad similarities between species that diverged millions of years ago, this could explain some of the parallels.

Another theory is that we formed words based on similarities between how they sound and the action or thing they describe. Previous studies have found that high-pitched sounds are often used to describe small things and low-pitched sounds describe large objects. It is also thought that sounds with particular “shapes” describe some objects better. Smoothly rolling “r” sounds might show up often in words for “round,” because the sounds mimics the shape.

The researchers say that this is the first time anyone has taken a big data approach to the issue by compiling information on a wide number of languages. They hope that future work will be move beyond establishing a correlation, and actually shed light on why we might prefer certain sounds for particular words.

The answer will likely involve much more than linguistics — this is a question that relies on the fundamentals of how our brains process information about the world.

Impending Global Financial Collapse, Will Change the World Order

Crying Wolf? Impending Global Financial Collapse Will Change the World Order

Global Research, June 25, 2015
Systemic Crisis  of the World Economy:  Global Geopolitical Dislocation

Worse than any disease or even leprosy, anyone spouting Austrian economics or even “common sense” (almost extinct today) has been shoved into the outcast corner by the mass delusional majority. Over the last few years, “theory after theory” has become fact after FACT afterFACT! There can no longer be any question, conspiracy to delude and defraud has run rampant and is a day to day operation in the Western world.

Originally my thought was to write this piece about and around the perfect response, “but you do agree the government is bankrupt, right?“. I say this because almost anyone (in the U.S.), no matter what age, sex, religion, race or financial status will generally agree with this. For those who don’t agree, it is better to leave well enough alone, this is a subset living in their own delusional world.

For those who do agree “the government is broke”, they are broken down into basic subsets. There are those who “get it” fully. There are those who know the government is broke but don’t really understand what it means or the ramifications (they can’t connect the dots). Another group are those who agree and know in the back of their mind this is true …but they don’t REALLY believe it because they simply cannot …”it’s too awful to comprehend”. Then, we have another group, probably the largest of all, those who agree but think it really doesn’t matter. They may also believe no financial crisis will ever occur because “the government will never let it happen”. Let’s talk about this group next.

The “can’t happen here” crowd only need the dots connected for them. I believe it is best to ask them questions in an effort to lead them to their own answer and understanding. This is much better than lecturing or “telling” them because they will actually have to think to answer your questions. Questions such as:

  1. if the government is broke, how will they make good on their obligations such as payrolls, Social Security, food stamps, paying the military and most importantly paying on their debt? Forget the first four, “do you realize Treasury securities are what funds Social Security, your pension, the bank’s balance sheet which holds your money …AND what underlies the dollar itself?”!
  2. If the above doesn’t work, you might ask if the economy currently “feels good”? Then ask, do you realize the federal government spends almost 20% of GDP (and their spending is “counted” as part of GDP). If they are broke and have to drastically cut back on spending, will the economy not shrink by the amount the government can no longer spend? Do you see without government spending, under any definition we would be in a depression greater than the 1930′s?

I don’t want to go through the entire exercise but please understand, “guiding” someone to their own conclusion which happens to be correct is best done with questions, MANY OF THEM. If you can, take two, three or even more philosophical roads to help them reach the same conclusion each time …the understanding will be that much more cemented in their mind when they finally do(hopefully) arrive!

Switching gears just a bit, we have seen the “mentality” change somewhat over the last year or so. Even the mainstream is showing some signs of a shift. This “shift” has even become evident amongst and within the “old boys club”. For example, who would have imagined Germany, Netherlands, Belgium and Austria would ever ask for their gold back? Or Texas building its own depository and using the words “not” and “confiscate” in the legislation for proposed repatriation?

Several very well known and at one time mainstream money managers have publicly told of the dangerous situation. The latest is a bond manager who has gone entirely to cash, how’s this for putting a crash helmet on?

http://www.bloomberg.com/news/articles/2015-06-22/tcw-braces-for-bond-market-collapse-by-piling-the-cash-up-high

Just a few weeks ago, Bloomberg put out an article asking if China could gold back the yuan. This was significant because no news source (other than maybe Kitco) has been as bearish and slandering regarding gold than Bloomberg.

http://www.bloomberg.com/news/articles/2015-05-20/chinese-gold-standard-would-need-a-rate-50-times-bullion-s-price

Going to the beginning and back to the top, who exactly was correct in 1999-2000? Who was correct from 2005-2008 about an impending crisis? The answer of course is the very same people screaming bloody murder today “the financial system will come apart from the seams”. Are those who were correct before, now “crying wolf”? Or are they saying the same things for the same reason and forecasting the same results as before? “They” (we) were not crazy then and are not crazy now. In fact, it is even much easier to see now than previous. As a side note if you recall, we heard in late 2008 and 2009, “who could have seen it coming”? Or, “no one could have seen it coming”. This is dead wrong! In fact, even within the mainstream press there was a concerted effort to silence the truth. For example, Greg Hunter while at CNN tried to warn of the banking collapse. He was told “don’t go there” and was rewarded by having his contract not renewed!

“Some” saw the dotcom bubble coming, more saw and warned of the 2008 crisis coming …and even more see this one coming. Not only are there more and louder voices today, the numbers are growing slowly but surely and even engulfing some mainstreamers who used to laugh at “us tinfoilers”!

I know how difficult it is and has been.

The financial landscape is perverted beyond recognition and any time you open your mouth, you are proven wrong.

Gold goes down the following day along with a new high in stocks so you look “stupid”. You are not.

“We” cannot make price, we can only tell the truth as we see it and suggest via common sense and logic the need to prepare for the worst. As I see it, the outcome is not in any doubt and becomes clearer each day. My fear is we are not in 2008 anymore, the coming collapse will change the world order to one unrecognizable to today. The U.S. is in fact “broke” as we spoke of at the beginning. The “realization” of this not only can happen but WILL happen. Sadly, because of how badly the U.S. has treated the world over these last years, we will be given no mercy when negotiating our bankruptcy. It will be a real live wolf at our door!

Disclaimer: The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible for any inaccurate or incorrect statement in this article.
Copyright © Bill Holter, Global Research, 2015

Film on OGM – Scientists Under Attack

 Scientists Under Attack 

http://www.responsibletechnology.org/scientists-under-attack

Biotech’s Dirty Tricks Exposed in New Documentary Scientists Under Attack – Review by Jeffrey M. Smith

Film by Bertram Verhaag and Denkmal Films. 60 minutes, Plus 30 minute bonus documentary: Monster Salmon.

“One question means one career.” This was the harsh warning of UC Berkeley Professor Ignacio Chapela for those daring to conduct independent research on genetically engineered foods and crops. “You ask one question, you get the answer and you might or might not be able to publish it; but that is the end of your career.” Both he and biologist Arpad Pusztai dared to asked questions and do the research. And then all hell broke lose.

Using stunning visuals filmed on three continents, veteran German filmmaker Bertram Verhaag tracks the fate of these two scientists at the hands of a multi-billion dollar industry that is desperate to hide the dangers of their genetically modified organisms (GMOs).

BR Online says of the film, “Belief in noble and incorrupt research and science is reduced to absurdity.” Arthouse says the “movie shows how purchased truth becomes the currency in the perfidious business between science and multinationals.” And GMWatch writes, “Original research showing problems with GM crops is buried under a deluge of smears and follow up studies are not done.” Read the full Review

Watch the Trailer

From the Director

For  more  than  30 years I’m making documentaries together with Claus Strigel in our own production company  DENKmal-Film.  We made about 120 films in three decades, among them eight full-length cinema productions. We as producers, authors and directors are consequently, persisting and sustainably engaged without exception in political, environmental and social themes. In the last 10 years we have developed nine films on the theme of genetic engineering in own direction and production, which encourage many people to get active in politics or resistance.

My latest film “Scientists under Attack – Genetic engineering in the magnetic field of money” started in the German cinemas on March 10th. “Scientists under Attack” is a documentary thriller on the theme of genetic engineering and the independence of science. We show the fate of scientists – such as Árpád Pusztai and Ignacio Chapela – who do research in the field of genetic engineering and who were punished through character assassination and by withdrawing their means of research. They are only examples for many important scientists whose careers have been ruined. Statements of scientists prove that 95 % of the scientists in the field of genetic engineering are paid by the industry. Only 5 % are independent. The loss of freedom of thought and democracy is obvious. May the public – may we all – still trust the scientists?

DENKmal-Film produces with its films products which have a high common use for all and it is in the best sense a “social business”. We participate in the “movement” of our society to more humanity, respect of nature and of natural laws, to sustainability and we encourage to interfere.

Film by Bertram Verhaag and Denkmal Films. 60 minutes, Plus 30 minute bonus documentary: Monster Salmon. $19.95

Press Reviews

Denkmal Office:A5_Projekte:01_Projekte:Gekaufte Wahrheit:11_Öffentlichkeitsarbeit:05_GW_Pressestimmen:GW_Pressestimmen_Auswahl:Logos:logo-br-online.gif“Amazing how this movie brings facts to light that reveal the fine line between agrogenetic engineers and sellers of poison and proves how critics are ostracised by unfair means. Verhaag does not try to do justice to every party, and instead takes a harsh stance. He is consciously subjective when he reveals how Monsanto and the other large businesses finance science and determine what is investigated and how in accordance with the principle of “He who pays the piper calls the tune”. Belief in noble and incorrupt research and science is reduced to absurdity.”

Denkmal Office:A5_Projekte:01_Projekte:Gekaufte Wahrheit:11_Öffentlichkeitsarbeit:05_GW_Pressestimmen:GW_Pressestimmen_Auswahl:Logos:kino_zeit_kl.jpg“Bertram Verhaag’s ambitious documentary movie shows how purchased truth becomes the currency in the perfidious business between science and multinationals.”

“The independence of research? The producer from Munich, Bertram Verhaag, took a closer look at genetic engineering. His conclusion: Corporations silence critical scientists; the major part of research is paid for by industry.”

Denkmal Office:A5_Projekte:01_Projekte:Gekaufte Wahrheit:11_Öffentlichkeitsarbeit:05_GW_Pressestimmen:GW_Pressestimmen_Auswahl:Logos:freiewelt.jpg“Scientists are worried about gene-manipulated food products that are introduced into our nutrition without safety tests and turn us into subjects in a huge experiment. Official statistics show that the share of nutrition-related diseases in the USA doubled in the past 10 years after the introduction of genetically modified food products. It is phrases like this in this movie with the subtitle, “Genetic engineering in the field of money“, that frighten the viewer, because they reveal the explosive and dramatic nature of the scene that is taking place on the quiet.”

Denkmal Office:A5_Projekte:01_Projekte:Gekaufte Wahrheit:11_Öffentlichkeitsarbeit:05_GW_Pressestimmen:GW_Pressestimmen_Auswahl:Logos:NN.jpg“In the hard-hitting new documentary SCIENTISTS UNDER ATTACK – GENETIC ENGINEERING IN THE MAGNETIC FIELD OF MONEY, German filmmaker Bertram Verhaag explores the heavy hand of the biotechnology industry in steering “science” towards its own interests, and eliminating the actual, legitimate science that exposes genetic engineering (GE) as the fraud that it is.”

Denkmal Office:A5_Projekte:01_Projekte:Gekaufte Wahrheit:11_Öffentlichkeitsarbeit:05_GW_Pressestimmen:GW_Pressestimmen_Auswahl:Logos:szene-hamburg.gif“World Star of the Month. According to producer from Munich, Bertram Verhaag, in an interview with Süddeutsche Zeitung, Monsanto has already tried twice to take his movies out of circulation by means of an interim injunction. Anyone who becomes a target of the multinational agricultural and food corporation in this way may already be considered “world-renowned”, even if they don’t take much pleasure in that role. Bertram Verhaag will also have to reckon with sharp reactions from Monsanto representatives in his most recent documentary movie, SCIENTISTS UNDER ATTACK – GENETIC ENGINEERING IN THE MAGNETIC FIELD OF MONEY. However, they are bound to be unsuccessful this time as well.”

Denkmal Office:A5_Projekte:01_Projekte:Gekaufte Wahrheit:11_Öffentlichkeitsarbeit:05_GW_Pressestimmen:GW_Pressestimmen_Auswahl:Logos:augsburg_kl.gif“Verhaag’s vivid report shows that we have already been guinea pigs of the genetic engineering mafia for a long time. What is termed genetic research is only related to the higher sciences in rare cases, and instead is associated with hard core business and enormous prospects of profits – but only if critics keep mum. Anyone asking the wrong questions puts their career at risk.”

 

Denkmal Office:A5_Projekte:01_Projekte:Gekaufte Wahrheit:11_Öffentlichkeitsarbeit:05_GW_Pressestimmen:GW_Pressestimmen_Auswahl:Logos:Neues-Deutschland.jpg“SCIENTISTS UNDER ATTACK goes on to show how the GM industry has blocked the evolution of scientific knowledge. If the industry were interested in scientific truth, it would push for studies to be repeated with the alleged “flaws“ corrected. But this never happens. So the original research showing problems with GM crops is buried under a deluge of smears and follow up studies are not done. For the public, the difficulty and expense involved in accessing full research papers makes it hard to find where the truth lies.”

“We are so honored to include your film in our lineup.  A very important and timely film, indeed.”

 

Denkmal Office:A5_Projekte:01_Projekte:Gekaufte Wahrheit:11_Öffentlichkeitsarbeit:05_GW_Pressestimmen:GW_Pressestimmen_Auswahl:Logos:cinearte.jpg“Very controversial, intriguing and provocative”

 

“Amazing film, folks were blown away. Big crowd, we ran out of seats. Thanks so much for letting us screen SCIENTISTS UNDER ATTACK”

 

International Awards

– Prize at the Indie Fest 2010 in the category “Current Best of Show Winners”

– Top 10 place at Kansas International Film Festival

– “AT&T Award for environmental conservation and Stewardship” at the Arpa Film Festival

– “THE COLUMBUS INSTITUTE FOR CONTEMPORARY JOURNALISM” AWARD

– ACCOLADE AWARD: FEATURE DOCUMENTARY

– Best feature Documentary at the Maverick movie Awards 2010

– Best original score at the Maverick Movie Awards 2010

Invitations to international festivals

liiaa

Festival Internacional de Cine Documental (MIRADASOCS) Teneriffa, Spain
International Documentary Film Festival Amsterdam Amsterdam, Netherlands
Ökofilmtour 2010 Germany
International Festival of Audivisual Programs (FIPA) Paris – Biarritz, Frace
Thessaloniki Doc Market Thesaloniki, Greece
International Film Festival Oxford(OX DOX) Oxford, France
Natur Vision Neuschönau,Germany
Deutschland 31st Durban Film Festival Durban, South Africa
5 Seen Festival Bayern Germany
New York International Film Festival New York, USA
Columbia Gorge (Washougal) International Film Festival Washougal, WA, USA
Kos International Film Festival Kos, Greece
Central Florida Film Festival Orlando, USA
Green Screen Eckernförde, Germany
15TH Milano Film Festival Mailand, Italy
Filmtage zum Recht auf Nahrung Wien, Austria
Columbus International Film and Video Festival (Chris Awards) Columbus, Ohio, USA
Festival du nouveau de cinema Montreal Montreal, Canada
2nd CNEX Documentary Film Festival Taipei, Taiwan
Festival de liberties Belgium
Atlantis Film Festival Wiesbaden, Germany
Kansas Film Festival Kansas City, USA
United Nations Assoiciation Film Festival Stanford, USA
International Festival of Sustainable Development Films (ekotopfilm) Bratislava, Slovak Republic
Tacoma Film Festival Tacoma, USA
DOCUTAH Film Festival St.George, USA
Chagrin Falls International Documenttary Festival Chagrin Falls,USA
Southern Appalachian International Film Festival Erwin, USA
Louisville International Fest of Film Studio City, USA
Arpa International Film Festival Los Angeles, USA
Fort Lauderdale International Film Festival St. Augustine, USA
The Indie Fest La Jolla, USA
Silk City Flick Fest Hartford, USA
Santa Fe Independent Film Festival Santa Fe, USA
Twin Cities Film Fest Minneapolis, USA
East Silver Film Festival 2010-09-28 Jihlava, Czech republic
Globale Mittelhessen Marburg- Gießen , Germany
Forum International Medias Nord Sud Burkina Faso, Africa
Planet in Focus Film Festival Toronto, Canada
Festival Tutti nello stresso piatto Trento, Italy
Wild and Scenic Film Festival Nevada City, USA
Maverick Movie Awards Meriden, USA
International Human Rights Festival Paris, France
Beloit International Film Festival Beloit, USA
Sedona Film Festival Sedona, USA
Peace on Earth Film Festival Chicago, USA

Film by Bertram Verhaag and Denkmal Films. 60 minutes, Plus 30 minute bonus documentary: Monster Salmon.

 

From Energy War to Currency War

From Energy War to Currency War: America’s Attack on the Russian Ruble

Global Research, December 26, 2014

A multi-spectrum war is being waged against Moscow by Washington. If there are any doubts about this, they should be put to rest. Geopolitics, science and technology, speculation, financial markets, information streams, large business conglomerates, intelligentsia, mass communication, social media, the internet, popular culture, news networks, international institutions, sanctions, audiences, public opinion, nationalism, different governmental bodies and agencies, identity politics, proxy wars, diplomacy, countervailing international alliances, major business agreements, non-governmental organizations (NGOs), human rights, prestige, military personnel, capital, and psychological tactics are all involved in this multi-spectrum war. On a daily basis this struggle can be seen playing out on the airwaves, in the war theaters in Ukraine and the Middle East, through the statements and accusations of diplomats, and in the economic sphere.

Additionally, the debates and questions on whether a new cold war—a post-Cold War cold war—has emerged or if the Cold War never ended should be put to rest too. The mentality of the Cold War never died in the Washington Beltway. From the perspective of Russian officials, it is clear that the US never put down its war mace and continued the offensive. The dissolution of the Warsaw Pact, defeating the Soviets and Eastern Bloc, and seeing the Soviet Union dismantled into fifteen republics was not enough for the Cold War warriors in the US. The newly emergent Russian Federation had to be placated in their views.

Petro-politics have been a major feature of this multi-spectrum war too. [1] Not only have energy prices been a factor in this struggle, but so are financial markets and national currencies. The manipulated decline in the price of energy, which has been driven by the flooding of the global market with oil, is now being augmented by a siege on the value of the Russian ruble. This is part of what appears to be a deliberate two-pronged attack on the Russian Federation that seeks to cut Russia’s revenues through market manipulation via economic sanctions and price drops. It is what you would call a «double whammy». While sanctions have been imposed on the Russian economy by the US and its allies, including Australia, Canada, the European Union, and Japan, offensives on Russia’s main source of revenue — energy — and its national currency have taken place.

Currency Warfare and Inflation

The price of the Russian ruble begun to drop in December 2014 as a consequence of the economic siege on the Russian Federation, the drop in global energy prices, and speculation. «Judging by the situation in the country, we are in the midst of a deep currency crisis, one that even Central Bank employees say they could not have foreseen in their worst nightmares», Interfax’s Vyacheslav Terekhov commented on the currency crisis while talking to Russian President Vladimir Putin during a Kremlin press conference on December 18, 2014. [2] Putin himself admitted this too at the press conference. While answering Terekhov, Putin explained that «the situation has changed under the influence of certain foreign economic factors, primarily the price of energy resources, of oil and consequently of gas as well». [3]

Some may think that the drop in the Russian ruble’s value is a result of the market acting on its own while others who recognize that there is market manipulation involved may turn around and blame it on the Russian government and Vladimir Putin. This process, however, has been guided by US machinations. It is simply not a result of the market acting on its own or the result of Kremlin policies. It is the result of US objectives and policy that deliberately targets Russia for destabilization and devastation. This is why Putin answered Terekhov’s question by saying that the drop in the value of the Russian ruble «was obviously provoked primarily by external factors». [4]

Both US Assistant-Secretary of State Victoria Nuland — the wife of the Project for the New American Century (PNAC) co-founder and neo-conservative advocate for empire Robert Kagan — and US Assistant-Secretary of the Treasury Daniel Glaser told the Foreign Affairs Committee of the US House of Representatives in May 2014 that the objectives of the US economic sanctions strategy against the Russian Federation was not only to damage the trade ties and business between Russia and the EU, but to also bring about economic instability in Russia and to create currency instability and inflation. [5] In other words, the US government was targeting the Russian ruble for devaluation and the Russian economy for inflation since at least May 2014.

It appears that the US is trying to manipulate the Kremlin into spending Russia’s resources and fiscal reserves to fight the inflation of the Russian ruble that Washington has engineered. The Kremlin, however, will not take the bait and be goaded into depleting the approximately $419 billion (US) foreign currency reserves and gold holdings of the Russian Federation or any of Russia’s approximately 8.4 trillion ruble reserves in an effort to prop the declining value of the Russian ruble. In this regard, while holding a press conference, President Putin stated the following on December 18, 2014: «The Central Bank does not intend to ‘burn’ them all senselessly, which is right». [6] Putin emphasized this again when answering Vyacheslav Terekhov’s question by saying that the Russian government and Russian Central Bank «should not hand out our gold and foreign currency reserves or burn them on the market, but provide lending resources». [7]

The Kremlin understands what Washington is trying to do. The US is replaying old game plans against Russia. The energy price manipulation, the currency devaluation, and even US attempts to entrap Russia in a conflict with its sister-republic Ukraine are all replays of US tactics that have been used before during the Cold War and after 1991. For example, dragging Russia into Ukraine would be a replay of how the US dragged the Soviet Union into Afghanistan whereas the manipulation of energy prices and currency markets would parallel the US strategy used to weaken and destabilize Baathist Iraq, Iran, and the Soviet Union during the Afghan-Soviet War and Iran-Iran War.

Instead of trying to stop the value of the ruble from dropping, the Kremlin appears to have decided to strategically invest in Russia’s human capital. Russia’s national reserve funds will be used to diversify the national economy and strengthen the social and public sectors. Despite the economic warfare against Russia, this is exactly why the wages of teachers in schools, professors in post-secondary institutions of learning and training, employees of cultural institutions, doctors in hospitals and clinics, paramedics, and nurses — the most important sectors for developing Russia’s human capital and capacity — have all been raised.

The Russian Bear Courts the Turkish Grey Wolf

The Kremlin, however, has an entire list of options at its disposal for countering the US offensive against Russia. One of them involves the courting of Turkey. The Russian courtship of Turkey has involved the Russian move away from the construction of the South Stream natural gas pipeline from Russia across the Black Sea to Bulgaria.

Putin announced that Russia has cancelled the South Stream project on December 1, 2014. Instead the South Stream pipeline project has been replaced by a natural gas pipeline that goes across the Black Sea to Turkey from the Russian Federation’s South Federal District. This alternative pipeline has been popularly billed the «Turk Stream» and partners Russian energy giant Gazprom with Turkey’s Botas. Moreover, Gazprom will start giving Turkey discounts in the purchase of Russian natural gas that will increase with the intensification of Russo-Turkish cooperation.

The natural gas deal between Ankara and Moscow creates a win-win situation for both the Turkish and Russian sides. Not only will Ankara get a discount on energy supplies, but Turk Stream gives the Turkish government what it has wanted and desired for years. The Turk Stream pipeline will make Turkey an important energy corridor and transit point, complete with transit revenues. In this case Turkey becomes the corridor between energy supplier Russia and European Union and non-EU energy customers in southeastern Europe. Ankara will gain some leverage over the European Union and have an extra negotiating card with the EU too, because the EU will have to deal with it as an energy broker.

For its part, Russia has reduced the risks that it faced in building the South Stream by cancelling the project. Moscow could have wasted resources and time building the South Stream to see the project sanctioned or obstructed in the Balkans by Washington and Brussels. If the European Union really wants Russian natural gas then the Turk Stream pipeline can be expanded from Turkey to Greece, the former Yugoslav Republic (FYR) of Macedonia, Serbia, Hungary, Slovenia, Italy, Austria, and other European countries that want to be integrated into the energy project.

The cancellation of South Stream also means that there will be one less alternative energy corridor from Russia to the European Union for some time. This has positive implications for a settlement in Ukraine, which is an important transit route for Russian natural gas to the European Union. As a means of securing the flow of natural gas across Ukrainian territory from Russia, the European Union will be more prone to push the authorities in Kiev to end the conflict in East Ukraine.

In more ways than one the Turk Stream pipeline can be viewed as a reconfigured of the failed Nabucco natural gas pipeline. Not only will Turk Stream court Turkey and give Moscow leverage against the European Union, instead of reducing Russian influence as Nabucco was originally intended to do, the new pipeline to Turkey also coaxes Ankara to align its economic and strategic interests with those of Russian interests. This is why, when addressing Nabucco and the rivalries for establishing alternate energy corridors, this author pointed out in 2007 that «the creation of these energy corridors and networks is like a two-edged sword. These geo-strategic fulcrums or energy pivots can also switch their directions of leverage. The integration of infrastructure also leads towards economic integration». [8]

The creation of Turk Stream and the strengthening of Russo-Turkish ties may even help placate the gory conflict in Syria. If Iranian natural gas is integrated into the mainframe of Turk Stream through another energy corridor entering Anatolia from Iranian territory, then Turkish interests would be even more tightly aligned with both Moscow and Tehran. Turkey will save itself from the defeats of its neo-Ottoman policies and be able to withdraw from the Syrian crisis. This will allow Ankara to politically realign itself with two of its most important trading partners, Iran and Russia.

It is because of the importance of Irano-Turkish and Russo-Turkish trade and energy ties that Ankara has had an understanding with both Russia and Iran not to let politics and their differences over the Syrian crisis get in the way of their economic ties and business relationships while Washington has tried to disrupt Irano-Turkish and Russo-Turkish trade and energy ties like it has disrupted trade ties between Russia and the EU. [9] Ankara, however, realizes that if it lets politics disrupt its economic ties with Iran and Russia that Turkey itself will become weakened and lose whatever independence it enjoys

Masterfully announcing the Russian move while in Ankara, Putin also took the opportunity to ensure that there would be heated conversation inside the EU. Some would call this rubbing salt on the wounds. Knowing that profit and opportunity costs would create internal debate within Bulgaria and the EU, Putin rhetorically asked if Bulgaria was going to be economically compensated by the European Commission for the loss.

The Russian Bear and the Chinese Dragon

It is clear that Russian business and trade ties have been redirected to the People’s Republic of China and East Asia. On the occasion of the Sino-Russian mega natural gas deal, this author pointed out that this was not as much a Russian countermove to US economic pressure as it was really a long-term Russian strategy that seeks an increase in trade and ties with East Asia. [10] Vladimir Putin himself also corroborated this standpoint during the December 18 press conference mentioned earlier when he dismissed — like this author — the notion that the so-called «Russian turn to the East» was mainly the result of the crisis in Ukraine.

In President Putin’s own words, the process of increasing business ties with the Chinese and East Asia «stems from the globaleconomic processes, because the East – that is, the Asia-Pacific Region – shows faster growth than the rest of the world». [11] If this is not convincing enough that the turn towards East Asia was already in the works for Russia, then Putin makes it categorically clear as he proceeds talking at the December 18 press conference. In reference to the Sino-Russian gas deal and other Russian projects in East Asia, Putin explained the following: «The projects we are working on were planned long ago, even before the most recent problems occurred in the global or Russian economy. We are simply implementing our long-time plans». [12]

From the perspective of Russian Presidential Advisor Sergey Glazyev, the US is waging its multi-spectrum war against Russia to ultimately challenge Moscow’s Chinese partners. In an insightful interview, Glazyev explained the following points to the Ukrainian journalist Alyona Berezovskaya — working for a Rossiya Segodnya subsidiary focusing on information involving Ukraine — about the basis for US hostility towards Russia: the bankruptcy of the US, its decline in competitiveness on global markets, and Washington’s inability to ultimately save its financial system by servicing its foreign debt or getting enough investments to establish some sort of innovative economic breakthrough are the reasons why Washington has been going after the Russian Federation. [13] In Glazyev’s own words, the US wants «a new world war». [14] The US needs conflict and confrontation, in other words. This is what the crisis in Ukraine is nurturing in Europe.

Sergey Glazyev reiterates the same points months down the road on September 23, 2014 in an article he authors for the magazine Russia in Global Affairs, which is sponsored by the Russian International Affairs Council — a think-tank founded by the Russian Foreign Ministry and Russian Ministry of Education 2010 — and the US journal Foreign Affairs — which is the magazine published by the Council on Foreign Relation in the US. In his article, Glazyev adds that the war Washington is inciting against Russia in Europe may ultimately benefit the Chinese, because the struggle being waged will weaken the US, Russia, and the European Union to the advantage of China. [15] The point of explaining all this is to explain that Russia wants a balanced strategic partnership with China. Glazyev himself even told Berezovskaya in their interview that Russia wants a mutually beneficial relationship with China that does reduce it to becoming a subordinate to Beijing. [16]

Without question, the US wants to disrupt the strategic partnership between Beijing and Moscow. Moscow’s strategic long-term planning and Sino-Russian cooperation has provided the Russia Federation with an important degree of economic and strategic insulation from the economic warfare being waged against the Russian national economy. Washington, however, may also be trying to entice the Chinese to overplay their hand as Russia is economically attacked. In this context, the price drops in the energy market may also be geared at creating friction between Beijing and Moscow. In part, the manipulation of the energy market and the price drops could seek to weaken and erode Sino-Russian relations by coaxing the Chinese into taking steps that would tarnish their excellent ties with their Russian partners. The currency war against the Russian ruble may also be geared towards this too. In other words, Washington may be hoping that China becomes greedy and shortsighted enough to make an attempt to take advantage of the price drop in energy prices in the devaluation of the Russian ruble.

Whatever Washington’s intentions are, every step that the US takes to target Russia economically will eventually hurt the US economy too. It is also highly unlikely that the policy mandarins in Beijing are unaware of what the US may try to be doing. The Chinese are aware that ultimately it is China and not Russia that is the target of the United States.

Economic Terrorism: An Argentina versus the Vulture Funds Scenario?

The United States is waging a fully fledged economic war against the Russian Federations and its national economy. Ultimately, all Russians are collectively the target. The economic sanctions are nothing more than economic warfare. If the crisis in Ukraine did not happen, another pretext would have been found for assaulting Russia.

Both US Assistant-Secretary of State Victoria Nuland and US Assistant-Secretary of the Treasury Daniel Glaser even told the Foreign Affairs Committee of the US House of Representatives in May 2014 that the ultimate objectives of the US economic sanctions against Russia are to make the Russian population so miserable and desperate that they would eventually demand that the Kremlin surrender to the US and bring about «political change». «Political change» can mean many things, but what it most probably implies here is regime change in Moscow. In fact, the aims of the US do not even appear to be geared at coercing the Russian government to change its foreign policy, but to incite regime change in Moscow and to cripple the Russian Federation entirely through the instigation of internal divisions. This is why maps of a divided Russia are being circulated by Radio Free Europe. [17]

According to Presidential Advisor Sergey Glazyev, Washington is «trying to destroy and weaken Russia, causing it to fragment, as they need this territory and want to establish control over this entire space». [18] «We have offered cooperation from Lisbon to Vladivostok, whereas they need control to maintain their geopolitical leadership in a competition with China,» he has explained, pointing out that the US wants lordship and is not interested in cooperation. [19] Alluding to former US top diplomat Madeline Albright’s sentiments that Russia was unfairly endowed with vast territory and resources, Putin also spoke along similar lines at his December 18 press conference, explaining how the US wanted to divide Russia and control the abundant natural resources in Russian territory.

It is of little wonder that in 2014 a record number of Russian citizens have negative attitudes about relations between their country and the United States. A survey conducted by the Russian Public Opinion Research Center has shown that of 39% of Russian respondents viewed relations with the US as «mostly bad» and 27% as «very bad». [20] This means 66% of Russian respondents have negative views about relations with Washington. This is an inference of the entire Russian population’s views. Moreover, this is the highest rise in negative perceptions about the US since 2008 when the US supported Georgian President Mikheil Saakashvili in Tbilisi’s war against Russia and the breakaway republic of South Ossetia; 40% viewed them as «mostly bad» and 25% of Russians viewed relations as «very bad» and at the time. [21]

Russia can address the economic warfare being directed against its national economy and society as a form of «economic terrorism». If Russia’s banks and financial institutions are weakened with the aim of creating financial collapse in the Russian Federation, Moscow can introduce fiscal measures to help its banks and financial sector that could create economic shockwaves in the European Union and North America. Speaking in hypothetical terms, Russia has lots of options for a financial defensive or counter-offensive that can be compared to its scorched earth policies against Western European invaders during the Napoleonic Wars, the First World War, and the Second World War. If Russian banks and institutions default and do not pay or delay payment of their derivative debts and justify it on the basis of the economic warfare and economic terrorism, there would be a financial shock and tsunami that would vertebrate from the European Union to North America. This scenario has some parallels to the steps that Argentina is taken to sidestep the vulture funds.

The currency war eventually will rebound on Washington and Wall Street. The energy war will also reverse directions. Already, the Kremlin has made it clear that it and a coalition of other countries will de-claw the US in the currency market through a response that will neutralize US financial manipulation and the petro-dollar. In the words of Sergey Glazyev, Moscow is thinking of a «systemic and comprehensive» response «aimed at exposing and ending US political domination, and, most importantly, at undermining US military-political power based on the printing of dollars as a global currency». [22] His solution includes the creation of «a coalition of sound forces advocating stability — in essence, a global anti-war coalition with a positive plan for rearranging the international financial and economic architecture on the principles of mutual benefit, fairness, and respect for national sovereignty». [23]

The coming century will not be the «American Century» as the neo-conservatives in Washington think. It will be a «Eurasian Century». Washington has taken on more than it can handle, this may be why the US government has announced an end to its sanctions regime against Cuba and why the US is trying to rekindle trade ties with Iran. Despite this, the architecture of the post-Second World War or post-1945 global order is now in its death bed and finished. This is what the Kremlin and Putin’s presidential spokesman and press secretary Dmitry Peskov mean when they impart—as Peskov stated to Rossiya-24 in a December 17, 2014 interview — that the year 2014 has finally led to «a paradigm shift in the international system».

NOTES

[1] Mahdi Darius Nazemroaya, «Oil Prices and Energy Wars: The Empire of Frack versus Russia,» Strategic Culture Foundation, December 5, 2014.
[2] Official Kremlin version of the transcribed press conference — titled «News conference of Vladimir Putin» (December 18, 2014)—has been used in quoting Vladimir Putin.
[3] Ibid.
[4] Ibid.
[5] Mahdi Darius Nazemroaya, «Psychological War In The Financial Markets And The Sino-Russian Gas Deal,» Mint Press News, May 29, 2014.
[6] Supra. n.2.
[7] Ibid.
[8] Mahdi Darius Nazemroaya, «The ‘Great Game’ Enters the Mediterranean: Gas, Oil, War, and Geo-Politics,» GlobalResearch, October 14, 2007.
[9] Mahdi Darius Nazemroaya, «Oil Prices and Energy Wars,» op. cit.; Mahdi Darius Nazemroaya, «Turkey & Iran: More than meets the eye»RT, January 20, 2014.
[10] Mahdi Darius Nazemroaya, «Psychological War In The Financial Markets,» op. cit.
[11] Supra. n.2.
[12] Ibid.
[13] Sergey Glazyev, «Alyona Berezovskaya interviews Sergei Glazyev,» Interview with Alyona Berezovskaya, Ukraine.ru, July 17, 2014: .
[14] Ibid.
[15] Sergey Glazyev, «The Threat of War and the Russian Response,» Russia in Global Affairs, September 24, 2014.
[16] Sergey Glazyev, «Alyona Berezovskaya interviews,» op. cit.
[17] Mahdi Darius Nazemroaya, «WWIII aimed to redraw map of Russia?» Strategic Culture Foundation, September 10, 2014.
[18] Sergey Glazyev, «Alyona Berezovskaya interviews,» op. cit.
[19] Ibid.
[20] Всероссийский центр изучения общественного мнения [Russian Public Opinion Research Center], «Россия-США отношенияв точке замерзания» [«Russia-US Relations at Freezing Point»], Press release 2729, December 4, 2014: .
[21] Ibid.
[22] Sergey Glazyev, «The Threat of War,» op. cit.
[23] Ibid.
Copyright © 2014 Global Research

2015: “Year of the Militaristic Neocons”

2015: “Year of the Militaristic Neocons”: Looming Global Financial Crisis and Wars?

Global Research, December 31, 2014

The dangerous patriot: The one who drifts into chauvinism and exhibits blind enthusiasm for military actions. He is a defender of militarism and its ideals of war and glory. Chauvinism is a proud and bellicose form of patriotism, … which identifies numerous enemies who can only be dealt with through military power and which equates the national honor with military victory.” – James A. Donovan (1916-1970), American lawyer and Commander in the United States Navy Reserve


 

“Where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control.”Lord Acton (1834-1902) (John E. Dalberg), English Catholic historian, politician, and writer

“If you want war, nourish a doctrine. Doctrines are the most frightful tyrants to which men ever are subject… ” – William Graham Sumner (1840-1910), American academic

“The great rule of conduct for us in regard to foreign nations is in extending our commercial relations, to have with them as little political connection as possible. … It is our true [foreign] policy to steer clear of permanent alliances with any portion of the foreign world.” – George Washington (1732-1799), First President of the United States, (1789-1797), Farewell Address, 1796

These days, militaristic Neoconservatives, or Neocons, have near complete control of the American government under the façade of whoever is president at the time. They direct U.S. policies at the State Department, at the Pentagon, at the U.S. Treasury and at the Fed central bank. They are thus in position to influence and frame American foreign policy, military policy, economic and financial policies and monetary policy.

This was not the case before the Ronald Reagan administration (1981-1989) when the latter adopted a neocon-inspired “muscular foreign policy” based on military intervention abroad, perpetual war, arbitrary regime changes, and imperial worldwide governance in any matters deemed to be in American interests and of that of its close allies. Even though they fared less well under the George H. Bush administration (1989-1993), when they were considered the “crazies in the basement”, they resumed their ascendance within the American government under the Bill Clinton administration (1993-2001) with the U.S.-led Kosovo war and with the irresponsible dismantling of the Glass-Steagall Act, thus paving the way for the 2008 worldwide financial crisis.

The Neocons’ greatest success, however, came with the George W. Bush and Dick Cheney administration (2001-2009) when they persuaded the latter to launch the (illegal) 2003 U.S.-led invasion of Iraq, a war still with us and expanding today, twelve years later. They also drafted the so-called “Bush Doctrine” of (illegal) preemptive wars and of forced political regime changes in other countries.

This was an ideology that the Neocons had long advanced, both when Paul Wolfowitz was Deputy Secretary of Defense for policy in the George H. Bush administration (1989-1993), even though the latter publicly repudiated it, and in various essays published by a neocon think-tank dubbed “The Project for the New American Century (PNAC)” and founded by William Kristol and Robert Kagan.

After the fall of the Soviet empire in 1991, the warmongering Neocons argued that there should not be any “Peace dividend” for American taxpayers but rather that the United States should seize the opportunity to become the sole world military superpower and should therefore increase and not decrease its military spending. The intention was to establish a military New American Empire for the 21st Century, along the lines of the British Empire in the 19th Century.

Indeed, after the events of 9/11 and the arrival of George W. Bush in the White House in 2001, Paul Wolfowitz, as U.S. Deputy Secretary of Defense under Donald Rumsfeld, was in a better position to push for increased U.S. military spending and for the adoption of a new aggressive U.S. foreign policy. What was most troubling is the fact that the PNAC produced a paper in 2000, titled “Rebuilding America’s Defenses”, (of which Paul Wolfowitz was a signatory), which enigmatically noted that only a “new Pearl Harbor” would make Americans accept the military and defense policy transformations that the neocon group was proposing. Then, in September 2001, the “new Pearl Harbor” coincidentally and conveniently morphed into the 9/11 attacks.

The war against Afghanistan, where the 9/11 terrorists had trained (and who came from Saudi Arabia and a few other countries), and the war against Iraq, a country not even remotely connected with the events of 9/11, followed.

At the beginning of 2015, Neocons occupy key positions within the Barack Obama administration and it should be no surprise that U.S. foreign policy is hardly any different than it was under the George W. Bush administration. They are constantly pushing for provocations, confrontations, conflicts and wars. In fact, the year 2015 could be the year when many of the fires they have lit could turn into conflagrations.

Let us look at a few of them.

1. The danger of another major financial and economic crisis

On July 21, 2010, President Obama signed an already watered down version of the Dodd–Frank Wall Street Reform and Consumer Protection Act to reign in financial corruption that brought about the 2008 financial crisis. The new law was supposed to re-establish part of the provisions of the 1933 Glass-Steagall Act gutted out by the Clinton administration in 1999, in order to prevent megabanks and insurance companies from using government-insured deposits to build for themselves a pyramid of risky bets on the derivatives market (credit default swaps, commodity swaps, collateralized-debt obligations and other risky derivative financial products, etc.).

But guess what! Only four years later, on December 16, 2014, lobbyists and lawyers working full time for the megabanks persuaded President Obama to sign a massive $1.1 trillion omnibus bill disguised as a Budget Bill and which contains a provision to remove a rule known as the ‘swaps push-out’ rule, the latter requiring insured banks to establish uninsured subsidiaries to conduct their speculative derivatives trading activities.

As a consequence, American megabanks are now back in business speculating with government-insured deposits. When the entire financial house of cards will blow out again is unknown, but you can be sure that it will, especially if a serious political or economic shock hits the economy.

I would call that ‘financial brinkmanship’ and I would call Obama’s caving in to the megabanks ‘political cowardice’. And who do you think will pay in various ways for the economic mess when it occurs? Certainly not the megabanks that transformed their insolvent asset-backed securities into newly printed cold cash after the 2008 financial crisis, but ordinary people.

The U.S. economy and many other economies are still reeling from the 2008 financial crisis brought about by corrupted politicians and bankers with their lax or nonexistent regulations and excessive speculation schemes. Such economies are vulnerable and sensitive to unforeseen financial shocks because debt-to-income ratios are still high in many countries, including in the U.S. where the indebtedness ratio reached a peak of 177 percent just before the 2008-09 economic recession and still now stands at a lofty 152 percent. (Historically, the debt-to-income ratio has remained well below 90 percent.) A sudden rise in interest rates could therefore wreak havoc with many economies.

For one, the European Union (EU), the largest world economy, is teetering on the brink of recession, suffering from various government-imposed austerity programs, from an overvalued euro currency (for those countries in the euro zone) and from the economic blowback of its conflicts with Russia over including Ukraine into NATO. Europe is indeed in the midst of a lost decade of high unemployment, low economic growth and deteriorating social conditions. And, there is no light at the end of the tunnel.

China’s economy, the third largest world economy, is also slowing down fast, with excess manufacturing capacity while its exports are suffering from a 25 percent appreciation of the Chinese renminbi since 2004 and from weak world demand. Moreover, its financial sector is also vulnerable to the fact that China’s debt level is now at a lofty 176 percent of its Gross Domestic Product (GDP). The Chinese economy is also going through structural changes as the Chinese government pursues policies to reduce the country’s reliance on foreign markets and to shift from an export-oriented model to more domestic sources of growth.

As for the U.S. economy, it is still weak and unable to generate enough new jobs, despite a rebound during the last few months, while the labor force participation rate has declined from 66.5 percent before the 2008-09 recession to 62.7 percent today. The fact that millions of Americans have part-time jobs and would like to have full-time jobs, and that real wages of those who work are stagnant or falling are also indicators that things have not come back to normal.

Since there is no fiscal policy and no industrial policy originating from the U.S. government, the Fed central bank has been obliged to step in with the most aggressive monetary policy in its history. Indeed, the Fed has quadrupled its bank lending to $4.5 trillion since 2008 and it has pursued a policy of risky zero-rate and low-rate policies.

As a consequence, the Fed has created a gigantic financial asset bubble. The unwinding of such monetary prodigiousness won’t be an easy task. What’s more, the U.S. government will be paralyzed by a political gridlock over the coming two years, a republican-controlled Congress being pitted against a lame-duck Democratic president, thus making it difficult for the U.S. government to respond adequately to a new financial crisis.

Another ominous sign is the collapse of the velocity of money in the U.S., just as during the late 1920s, right before the start of the Great Depression, and it is now at a nearly 20 year low. That both the American political and financial sectors are unhealthy should be worrisome for the coming years.

2. The real danger of a nuclear war with the rekindling of the old Cold War with Russia

Brinkmanship in financial matters is one thing; brinkmanship with nuclear war is another. Sadly, the neocon-inspired U.S. government is today involved in both.

Indeed, for many years now, the U.S. government has been engaged in an aggressive geopolitical warfare against Russia, first in pursuing a policy of geopolitical and military encirclement of Russia by expanding NATO to its borders with the integration ofUkraine, and second, by implementing a policy of economic warfare against Russia in order to undermine its economy and, eventually, to provoke a regime change in that country. It’s a game of “dare you?”

Some of the more lunatic Neocons openly call for a new World War III, presumably with Russia a country against which they seem to have personal animosities. These are some of the lunatics President Barack Obama listens to.

Oil as a geopolitical tool

The 50 percent drop of oil price in 2014 may be part of a wider U.S.-led economic warfare plan to destabilize the Russian economy and provoke an Oil Slump, knowing full well that 50 percent of Russian state revenue comes from its export sales of oil and gas. Above all, policy-makers in Washington D.C. want to break the Gazprom-E.U. supply dependency to weaken Russia and keep control over the E.U. via American allies such as Saudi Arabia and Qatar.

Such an artificial drop in oil price appears to be a complement to the already known decisions to saddle Russia with stiff American-led economic and financial sanctions designed by the U.S. Treasury’s Office of Terrorism and Financial Intelligence, (an outfit created in 2004 after intensive lobbying by AIPAC) and other attempts by the U.S. government to reduce Europe’s reliance on Russian oil and gas.

Since September, Saudi Arabia, a country with excess oil capacity and low-cost production, (and in a position to manipulate the international price for oil), has suddenly and dramatically decided to sell crude oil at deeply discounted prices and to maintain its oil production at high levels in face of a declining world oil demand.

This is a reversal of what Saudi Arabia and the OPEC countries did in the fall of 1973 when they suddenly quadrupled the price for oil and provoked a global economic recession.

This is, however, a strategy similar to what Saudi Arabia adopted in 1986 when it flooded the world with cheap Saudi oil, thus collapsing the international price of oil to below $10 a barrel, after an agreement with the U.S. government. The objective then was to undermine the economies of the Soviet Union and its then Iraq ally, even though other economies such as the Canadian economy suffered greatly from such a gambit.

This time, there seems to be a convergence of interests between the U.S. government and the Saudi kingdom. From a U.S. government’s point of view, the main objective is to hurt the Russian and Iranian energy sectors and damage the finances of President Vladimir Putin’s Russian government, while securing Saudi Arabia’s assistance in fighting the Islamist State (IS) in Iraq and in Syria.

From a Saudi point of view, a world oil price war meets its regional and global objectives in three ways. First, it is well known that the Saudi government wants to dominate oil and gas production in the entire Middle East region and is in opposition to Iran and Syria for securing the rich European market. Second, the Saudi government would also like to pressure Russia to end its support for the Syrian al-Assad government. Third, Saudi Arabia also wishes to regain market shares that it lost to more costly oil from shale oil and oil sands. By lowering oil prices, Saudi Arabia hopes to reduce or even put such competing oil production out of business by making their production less profitable.

However, such a move is bound to severely damage oil production from oil shale in North Dakota in the USA and oil-producing states like Texas may fall into recession, even though the overall U.S. economy will benefit from cheaper oil. Oil production from tar sands in Alberta, Canada will also badly suffer and this means a drop in the Canadian dollar, and possibly a Canadian recession. The shale and tar sands oil industries will be the main innocent victims of the overall geopolitical policy pursued by the U.S. government and its Middle East allies.

Indeed, since the kingdom of Saudi Arabia is an American client state, it is most unlikely that such a move to flood oil markets and precipitate a stiff drop in oil price was decided without a tacit, if not an overt, approval by the U.S. government. In fact, there is wide speculation that when U.S. secretary of state John Kerry met with King Abdullah in September 2014, they allegedly struck an overall deal to that effect.

Ukraine as a geopolitical pawn

As to the destabilization of Russia’s neighboring Ukraine, Assistant Secretary of State Victoria Nuland has pretty much confirmed that the U.S. government was deeply involved in overthrowing the legitimate elected Ukrainian government last February, with the avowed objective of installing a U.S.puppet government in that country. This makes a mockery of democracy and only demonstrates how deeply the U.S. government is involved abroad in power politics and in aggressive interference in the domestic affairs of other countries.

Neoconservative Victoria Nuland, appointed Assistant Secretary of State by President Barack Obama, has publicly confirmed that the U.S. government has “invested” $5 billion to destabilize Ukraine and create a conflict between the latter country and Russia. It is hard not to conclude that the Ukrainian crisis is a made-in-Washington crisis. Her famous and insulting remark about Europe [“f*** the E.U.”] is another clear indication that the U.S. government wished to provoke a crisis with Russian not to help Europeans but to serve its own narrow imperial objectives, whatever the costs to the Russian people and to Europeans.

What is most disturbing is the irresponsibility with which the U.S. House of Representatives passed Resolution 758, on December 4, 2014, that is tantamount for all practical purposes to a declaration of war against Russia, based on false premises, distorted facts and false accusations. With that kind of irresponsible leadership, the world is presently in very bad hands.

The truth is that if Soviet missiles in Cuba, 90 miles from U.S. territory, were unacceptable to the U.S. government in 1962, American missiles in Ukraine, on the Russian borders, are unacceptable to the Russian government in 2015. What’s good for the goose is good for the gander. For whoever knows history, that should not be too difficult to understand.

Conclusion

If world affairs take a turn for the worse in 2015, the world should know where to point the finger at the culprits. Some people think that world events occur by pure chance and there is no planning behind them. They are wrong. Dead wrong. Bad government policies, misdeeds, false flag operations or simple miscalculations are often at the heart of many geopolitical crises, be they financial, economic or military. Sometimes, it just happens that the “crazies in the basement” are in charge.

It is becoming clearer and clearer, even for the uninformed and the misinformed among us, that the resurgence of the Cold War confrontation with Russia has been engineered in Washington D.C. and that Russia has not been the aggressor, (as the official propaganda wants us to believe), but has rather reacted to a whole series of U.S. – led provocations.

Why have there been so many destabilizing interventions by the U.S. government around the world and who profit the most from this man-made instability? This is a good question that ordinary Americans should ask themselves.

Domestically, should the U.S. economy continue to be run by bankers? Internationally, should the U.S. government pursue its policy of deliberately attempting to drive the Russian government into a corner and takes measures to destroy the Russian economy? These are acts of war. Are ordinary Americans in agreement with such policies? Who will profit the most and who will loose the most if there were to be a nuclear war with Russia? Since Europeans would be at the forefront of such a conflict, this is a question that has also to be answered in Europe.

What the world desperately needs now is a law-governed international environment, not a jingoistic and chauvinistic world empire that looks only after its narrow self-interests.

More fundamentally maybe, we should reject the false ideology of clash between nations. It is a grave and dangerous fallacy that can only lead the world to disaster.

To write to the author:
rodrigue.tremblay1@gmail.com


 

Disclaimer: All quotes mentioned above are believed in good faith to be accurately attributed, but no guarantees are made that some may not be correctly attributed.

Copyright © 2014 Global Research

Diabetes, Stress and Meditation


Today, the 14th November 2014, is World Diabetes Day as in previous years. The World Health Organisation reported that non communicable diseases, viz., diabetes, cardiovascular diseases (hypertension, atherosclerosis and cardiac/cerebral strokes), cancer, etc. account for more than 60% of deaths in India at present.


bolivian_police

Above: Bolivian police officers during a meditation session

DHojaiBy Dr. Dhruba Hojai

Today, the 14th November 2014, is World Diabetes Day as in previous years. The World Health Organisation reported that non communicable diseases, viz., diabetes, cardiovascular diseases (hypertension, atherosclerosis and cardiac/cerebral strokes), cancer, etc. account for more than 60% of deaths in India at present. The non-communicable diseases are related to stress. Although some main forms of cancer are directly related to the use of tobacco in both smoking and non smoking forms, they are also indirectly related to stress.

“Stress = diabetes”

Stress causes our bodies to release stress hormones. Hormones are normally secreted by the endocrine or the ductless glands for the biochemical function of the body. However, during stressful conditions, all the hormones of the body, except insulin (which is required for utilisation of sugar in the body), are secreted in excess. Therefore, those hormones secreted in excess amount during stressful conditions (except Insulin) are referred to as the stress hormones.

Now, how do the stress hormones change the biochemistry of the body? One molecule of stress hormone has the capacity to release one million molecules of sugar in the blood. Sugar is normally stored in the body in the form of glycogen in our muscles, liver and spleen. The stress hormones release sugar (glucose) from the stores during periods of stress and the level of sugar in blood rises very high in states of extreme stress. Therefore, extrinsic sugar is not responsible for diabetes. Our brain is the manufacturer of intrinsic sugar in the body. That is to say we don’t have to take sugar from outside our bodies to get diabetes. It’s stress which give us diabetes.

“Meditation will teach us to sublimate stress into it’s natural course out of our minds”

Now how to deal with stress? Acharya Haratmananda Avt., Proutist, during one of his discourses at Haflong, India a few years back gave wonderful demonstrations of the ways of dealing stress. Everybody has stress. However, stress is required for our development. But, the problem is that we absorb stress. Even, the sanyasis/sanyasinis (the moncs and nuns) have stress but they know how to play with stress. Therefore, the science of spiritual sadhana (meditation) or yoga is the only cure for stress. Medicines can only supplement in the cure of diabetes but the cure lies in practising spiritual sadhana.

Sadhana will teach us to sublimate stress into it’s natural course out of our minds. Moreover, meditation will help in the secretion of ‘melatonin’ from the pineal gland situated in front of the brain in the position at level between the two eyebrows. Melatonin is an over the counter drug in the United States and other western countries but abuse of the drug can be very harmful. Therefore, it’s much better to generate melaton in the natural way. All day animals and birds including humans secrete melatonin when dusk and darkness set in. That’s why birds and animals return to their homes and nests during dusk by instinct. But, humans have practically lost this instinct because of the impact of overload of work for survival in the mundane world, we are presently living in.

Shrii Prabhat Rainjan Sarkar described “Ego”, referred to as one of the ten ‘vrittis’ or ‘tendency’ that human beings have in the mundane mind, as one of the main stumbling blocks in one’s spiritual progress. Ego is the result of negative microvita [life force] just like a rotten apple is a result of negative microvita. P.R. Sarkar advised his disciples to form the habit of doing sadhana (meditation) at least twice a day.

From: PROUTGLOBE.ORG

Dr Dhruba Hojai,
Director of Health Services, Assam.(Retd.)
House # 24(Prashantika),
Sankar Nagar,
Lakhami Path,
Beltola Tiniali,
Guwahati-781028.

A New Theory of Unemployment

 a new theory of unemployment: globalization and the wage-productivity gap 


A deep recession started in 2007 in the United States and quickly spread abroad. Keynesian policies were followed, sharply raising money supply and budget deficits all over the world. But even five years later, the globe suffered from high unemployment. This paper offers a new theory, and argues that joblessness occurs when a wage gap develops in that labor productivity rises faster than the real wage. This occurred in the 1920s that were followed by a depression, and also happened for several decades after 1980, only to be followed by a severe recession. Free trade may be partly responsible for a rise in this wage gap.


The economist Ravi Batra proposes, in this article, a new approach to the theory of unemployment, recession and economic depression. His idea is that the increase of the difference between wages and corporate profits, is a major cause of the recession and the economic depression because, he says, what’s does not go to wages goes to profits, triggering a chain of speculative investments. And that appened in 1929 and again in 2007 causing the Great Recession.

L’economista Ravi Batra propone, in questo articolo, un nuovo approccio alla teoria della disoccupazione e recessione e depressione economica. La sua idea è che l’aumento della differenza tra i salari e i profitti aziendali, sia una delle maggiori cause della recessione e della depressione economica poiché, spiega, ciò che non va ai salari va ai profitti, innescando una catena di investimenti speculativi . E’ successo nel 1929 e ancora nel 2007 causando la Grande Recessione.


Download full article: A New Theory of Unemployment: Globalization and the Wage-Productivity Gap

Introduction

ravi-batraIn a recent article, Robert Shiller (2001), a renowned economist and best-selling author, remarks: “A great embarrassment for modern macroeconomic theory is that it has never achieved any consensus on the basic questions of what makes the stock market rise or fall and what ultimately causes recessions….we have not been able to pinpoint what ultimately causes recessions”  These words are  astounding but highly credible. They are astounding because in view of all that has been written about macroeconomics over the past two hundred years, you would  think that by now we understand the ultimate or basic cause of unemployment or recessions. They are also credible because a deep slump started all over the world in 2007, and, fully five years later, its ill effects of high poverty and unemployment continued to afflict the globe. If we really knew the ultimate cause, unemployment should have vanished soon after the NBER proclaimed the end of the recession in 2009.[1] Instead, in 2012 the official unemployment rate exceeded 8 percent in the United States, and, if part-time and discouraged  workers are included, it exceeded 16 percent. The picture was not any brighter around the world. In fact, Europe was back in recession in 2011 with a jobless rate surpassing 11 percent, which was the highest since the record began in 1995.

Paul Krugman (2009) was just as blunt as Shiller, when he wrote, “Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy” Let us face it: The popular theories of macroeconomics, both classical and Keynesian, do not know what ultimately causes a recession or high unemployment, or else the planet would have been free from this scourge soon after the proclaimed end of the slump. The purpose of this paper is to fill this gap. It argues that unemployment or recessions occur when there is a persistent rise in the wage-productivity gap. In other words, when labor productivity rises faster than the real wage for some time, a wage-productivity gap develops and ultimately leads to layoffs and a jump in the rate of unemployment. Furthermore, a major cause of the rising wage gap for some nations is free trade and outsourcing.

 

Popular Theories and the Great Recession

The American downturn that began in 2007 is now called the Great Recession, and was the worst since the Great Depression. Millions of workers were laid off and millions more suffered wage losses and poverty, and continue to do so. The unemployment rate jumped from less than 5 percent in 2006 to 10 percent in 2009. Naturally, a question arises: Did anyone foresee such a calamity? After all, a crisis does not occur in a vacuum. There were all sorts of premonitions of things to come. There was a housing bubble, and an oil bubble, along with a torrid stock market between 2003 and 2007. The general view encouraged by policy makers and the academia is that no one foresaw the coming slump. But this is not true. Some of those who base their thinking on empirical models and assumptions, rather than purely theoretical and frequently hypothetical assumptions regarding microeconomic foundations, warned the world in no uncertain terms about the looming economic crisis. According to Dirk Bezemer, “It is not difficult to find predictions of a credit or debt crisis in the months and years leading up to it, and of the grave impact on the economy this would have — not only by pundits and bloggers, but by serious analysts from the world of academia, policy institutes, think tanks and finance.” (2009, p. 2) Roubini, Shiller and Batra, among a dozen writers, predicted the onset of a recession well before its arrival.[2] In fact, in a book published at the end of 2006 and released on January 9, 2007, Batra even pinpointed the year in which it could happen. Some of his words were:

The economy will steadily get worse with home prices falling and layoffs rising…(p.173)

The housing bubble appears to be a major event, which once had a lot of momentum but is now beginning to recede. Its starting point was 2001, when the interest rate started a panicky fall. It is likely to burst in 2008, give or take a year. The burst could start in 2007 and continue till 2009. (p.175)

The economy could still face a steep recession because of rising oil prices, but avoid the calamity of a depression. Unemployment could rise to the level of 10 percent or more…There could be more stock market crashes from 2008 to 2011 or 2012. (p.179)

The rest is history. The housing bubble punctured in mid-2007, whereas, according to the NBER, the recession began in December 2007 and ended in July 2009. In addition the stock markets crashed between October 2007 and March 2009, and had not fully recovered even by 2012, while unemployment approached 10% by November 2010. Thus, some economists did foresee the arrival of the Great Recession, but few macro experts and policy makers paid attention.

Why did most experts fail to heed the advance warnings that were obvious to some? This is because, as Shiller (2001) remarks, popular theories still “have not been able to pinpoint  what ultimately causes  recessions.” Let us focus on the word “pinpoint,” which suggests that there may be only one underlying cause of a downturn. This paper agrees and argues that ultimately the one major cause of a recession is the persistent rise in the wage gap. This happened in the 1920s, which were followed by the depression, and it happened from 1980 to 2007, only to be followed by a serious recession. In fact, the wage gap continues to rise, and that is why the slump persists and will not be over until its underlying cause is removed.

There is only one ultimate cause, although there are a lot of symptoms that masquerade as causes  in popular macroeconomic models. The classical and neoclassical theorists argue that real wage rigidity induced by powerful labor unions or the minimum wage legislation results in long-term unemployment. Few policy makers take this idea seriously, although it still resonates with a lot of economists. On the other side, Keynesians and neo-Keynesians blame recessions on inadequate aggregate demand and see expansionary monetary and fiscal policies as panaceas to end the crisis. Such policies were indeed successful for a long time in ending recessions, but we argue that they only postponed the problems and, furthermore,  new recessions usually required a stronger dosage of expansionary measures. Now Keynesian remedies no longer work in spite of the massive dosage administered to the ailing patient called the global economy. They may stabilize the patient’s illness but will not, and cannot, cure it into robust and self-sustaining health.

Another popular theory is offered by the Austrian school, which blames recessions on excessive expansion of money and credit by financial institutions and on the heavy debt burden of consumers prior to the crisis. This view also focuses on the symptoms. The big question is why consumers get hugely indebted prior to the slump. There is no doubt that bank loans and consumer debt rocketed in the United States during the years leading up to the recession.[3] But the question is why. Our answer lies in the rising wage gap. Thus this paper searches for the ultimate or the primary cause of a recession and not for the symptoms.

 

The Wage Gap in the United States

Let us begin with the concept of the wage gap, which may be defined as the excess of a nation’s labor productivity over its real wage. Suppose this excess is symbolized by E, then

E = (A – w)/w = (A/w) – 1 = β – 1

Where A is the average product of labor, commonly called productivity, and w is the real wage, and where

β = A/w

Thus, E is the wage gap, and moves up or down in accordance with variations in β; so, β is the index of the wage gap. Let Y stand for real GDP or a nation’s output, and L for the employment of labor. Then

A = Y/L

Normally, the wag-gap index remains constant over time as the real wage rises roughly in the same proportion as productivity, but once in a while it goes up in some decades. That is when trouble follows.

Table 1 furnishes the behavior of the US wage gap over two time periods, first from 1919 to 1929 and then from 1962 to 2010. Column 4 displays the wage-gap index during the 1920s and shows that it jumped sharply from 111 in 1919 to 156 in 129, or by 40 percent in just one decade. This was the fastest rise in the index in US history and, as argued later, this could not but generate the worst depression. In any case, this information will come as a surprise to neoclassical economists, who believe that the real wage equals the marginal product of labor, which in turn is proportional to labor’s average product, so that the wage gap is constant in the neoclassical world.

Column 2 presents the behavior of the wage gap between 1962 and 2010; these are the years for which the relevant data are readily available from the 2012 Economic Report of the President, and so the information is furnished for 5 decades to see how the wage gap behaves in good and bad times. This column is obtained by dividing the figures for hourly output in the business sector by real hourly compensation. The data start from 1962 and end in 2010.

Table 1: The Wage-Gap Index in the United States in Selected Years 1920s and 1962–2010

(1) (2)   (3) (4)
Year Wage Gap Year Wage Gap
1962 72 1919 111
1965 74 1921 128
1970 73 1923 130
1975 77 1925 148
1980 77 1927 154
1985 84 1929 156
1990 86
1995 88
2000 94
2005 100
2010 107

Source: Column 2 from Table B-49 of The Economic Report of the President, 2012, Council of Economic Advisers, Washington D.C.; Column 4 from The Historical Statistics of the United States: Colonial Times to 1970(Washington D. C., U. S. Department of Commerce, 1975), series D 685, D 727, and D 802.

 

The table shows that the wage gap remained constant during the 1960s and rose slightly in the 1970s. For all practical purposes, there was little change in the gap during these two decades, as its index varied between 72 and 77 over 18 years. However, from 1980 on, the wage gap began to rise steadily, as its index rose from 77 in 1980 to 107 in 2010, or by roughly 40 percent over three decades. Thus, the wage gap rose consistently, but compared to the 1920s it was a much slower rise.

By now we have seen that the wage gap rocketed during the 1920s and was followed by the worst depression, and then it rose steadily from 1980 on and was followed by the Great Recession. Is it a mere coincidence that in both cases trouble followed the rise in the wage gap? The next section argues that this was not a coincidence but an inevitable consequence of the growing gap.

>Continua

The Global Financial Crisis: What Caused it, Where it is heading?


Ravi Batra, economista di origine indiana, della Southern Methodist University di Dallas, Texas, autore di molti libri di natura socio-economica come il best-seller “La grande depressione del 1990”, propone una analisi del crack finanziario del 2008 e le soluzioni per non averne in futuro.
Qualcuno parla di Ravi Batra come di una Cassandra che prospetta sempre il peggio… ma sfortunatamente, spesso ci azzecca.


RBatraTwo thousand eight was year extraordinaire. It started off in a rather nonchalant way, but ended with a bang. Its myriad and breathtaking events caught the world off guard, but please allow me to say, arrogant as it sounds, that they did not surprise me, including the epoch-making victory of Barack Obama in the US presidential election. I had anticipated them all in two books more than two years ago. The first, Greenspan’s Fraud, was written in 2005, and the second, The New Golden Age: The Coming Revolution against Political Corruption and Economic Chaos, was finished before October 2006. In fact, the title of the second work itself reveals that I had anticipated an Obama-like revolution in the United States.

It now appears vain to remind the people of my forecasts, but see what I had to endure after I made them. Both books had served to reinforce my reputation as a crack pot, who sought public attention with bogus claims and phony prophecies that occasionally came true. Greenspan’s Fraud was especially galling to my fellow economists, even some of my colleagues. Alan Greenspan was still the chairman of the Federal Reserve in the United States, and had been so for the past 18 years. Some people regard the Fed chairman, with his all-encompassing ability to influence interest rates globally, as the most powerful man in the world.

This is perhaps an exaggeration, but Greenspan, who had actually been in the limelight for over three decades, was more than just a Fed chairman. Investors around the world came to worship him in the 1990s, as share markets broke record after record in many nations. Best-selling author Bob Woodward, who achieved celebrity writing about the Watergate scandal, declared Greenspan as the Maestro in 2000 in a book with the same title. Others were equally euphoric about him. Some called him a rare genius, the best economist ever; even Queen Elizabeth chipped in and knighted him in 2002 as Sir Alan Greenspan. Here I was, a mere professor at Southern Methodist University, who had the temerity not just to criticize him but call his policies self-serving and fraudulent. My book’s title shocked the people, who in turn mocked me without reading my facts and arguments. But sometimes one has to bear insults to bring out the truth.

Where did I learn my economics? The question makes me nostalgic and takes me back into the 1960s, when I was a masters’ student at the Delhi School of Economics. There I studied under luminary professors such as K. N. Raj, Jagdish Bhagwati, Amartya Sen, and India’s current prime minister, Manmohan Singh. They were great teachers and taught me the fundamentals of modern economics.

However, there was one other teacher, whose theories were remarkably different and unknown. He was not even at the Delhi School. I met him in Lucknow, at the time a rather small town in India. He was Shri Prabhat Ranjan Sarkar, a wonderful man of vast knowledge in many different areas. He had written books on history, economics and philosophy among others. Two points stood out in his theories. First, the foundation of prosperity is people’s purchasing power; second, rising inequality eventually destroys any economy.

I left India for the United States in 1966 to do a Ph. D., but Sarkar’s ideas stayed with me and followed me wherever I went. I studied classical economics, Keynesian thought, and numerous other schools, but none focused on what Sarkar had stressed. Finally, I decided to write about his ideas and introduce them to the world, because few paid attention to the gems he had offered. I wrote a number of books based on his theories, starting in 1978, but here I want to emphasize how his ideas enabled me to see through the vacuity and deception of Greenspan’s policies.

The Wage-Productivity Gap

Greenspan focused on company profits and labor productivity as the main engines of economic growth and prosperity. He believed that high profits generate high employment and high wages lead to joblessness. I will now show how this view is myopic and the sole cause of most of the economic travails afflicting the world.

Let me start with a universally acceptable statement. A healthy economy requires that there is a balance between supply and demand. Here supply means the production of goods and services offered to entire society, and demand means society’s demand for such things. Thus, economic balance requires that

Supply = Demand

Without this balance, there is either high unemployment or high inflation. The main source of supply is labor productivity, whereas the main source of demand is the real wage, or people’s purchasing power in Sarkar’s nomenclature. When productivity rises, production or supply goes up and when the real wage increases, consumer spending, and hence investment spending, go up. Because of this investment and new technology, productivity grows over time, which means supply rises over the years. Therefore, demand must also grow proportionately to maintain the economic balance, implying that the real wage must rise in proportion to productivity. However, Greenspan loved to see the rise in productivity but hated the rise in the real wage. He even wanted to abolish the minimum wage, and always argued against its rise, although relentless price increases in the United States had all but demolished its purchasing power. In this respect, the maestro had a lot of company, including the support of President George W. Bush and economic establishment. As a result, the U.S. minimum wage, which peaked at $10 per hour in 1969 in terms of 2008 prices, is now less than $7. Incidentally, the unemployment rate in 1969 was just 3.5 percent, among the lowest in US history.

If the real wage fails to grow as fast as productivity, then over time, a wage-productivity gap develops and

Supply > Demand

Then how do you maintain the indispensable economic balance? This is where the special genius of Greenspan, along with that of conventional economics, came into play. This is where liberal and conservative economists alike, some of them Nobel Laureates, preached their gospel and in the process failed the world.

There is another way through which demand can be raised—new debt. It is an artificial way, and cannot be used forever, but it can postpone the problem for a long time, while the potential economic imbalance builds and cumulates. From 1981 on, U.S. budget deficits, with Greenspan and company advising President Reagan, grew apace. Economists called it fiscal policy, but in reality it was a debt-creating policy. This is how the supply-demand balance was maintained in the presence of the rising wage gap. Thus, for a while, economic balance occurs when

Productivity growth = growth of the real wage plus debt

andThe_Global_Financial_Crisis

new debt = supply – demand

 

The Profit and Stock-Market Bubbles

Once productivity outpaces the real wage and debt fills the supply-demand gap, company profits skyrocket, because the entire fruit of rising productivity goes to capital income. However, these are debt-supported profits, because without this debt goods will be unsold and profits will fail to materialize. With rocketing profits come rocketing share prices, so everybody becomes happy and begins to dance. This is how Greenspan won the world’s adulation, and no one looked at the magical role played by debt.

Once federal debt began to sore in the United States from 1981 on, it took barely a year, before the Dow Jones Index (the Dow in short) began to rise. The Dow ended the year around 800, but climbed above 2,000 by mid-1987. It had taken the ballyhooed index about 100 hundred years to go past 1,000, but the next 1,000 came in merely two years. A grateful Reagan appointed Greenspan as the Fed chairman in August 1987, but two months later the maestro had to face the music of his own handiwork. The debt-built stock market bubble, founded by that debt-built profit bubble, crashed in the month of October. Greenspan had no idea of how the rising wage gap generates the supply-demand gap. Instead of focusing on wages, he turned to the other way of creating debt. He flooded the world with money and trimmed the interest rate to lure consumers into borrowing. New debt was now created with the help of fiscal policy as well as what economists like to call monetary policy. However, such euphemisms only mask the truth, which is that these policies solve the problem only by generating new debt.

With increasing use of computers and the Internet, productivity began to rise faster than before, while government policies restrained wage growth. So the wage gap continued to rise and actually accelerated. Not surprisingly, new debt played an even larger role during the 1990s. The government did not borrow as much as before, but the public did more than its share. The mushrooming U.S. trade deficit also made a contribution in this regard, because the rest of the world bought American government bonds with its trade surplus that resulted in its dollar hoard. Consequently, American interest rates remained low for a long time and lulled Greenspan and the fawning world into believing that his policies were actually responsible for the surface prosperity.

So the debt-and-stock-market party that had been derailed by the 1987 crash returned with a gusto. This time the world got drunk on the dot.com boom that took share markets to stratosphere, with the Dow crossing 10,000 in 1999. Still no one realized the crucial role played by new debt in the ever growing mania. For a variety of reasons, the US federal government enjoyed a budget surplus in 1999. Since the wage gap continued to rise, I became convinced that the budget surplus would soon generate a supply-demand gap and hence a crash in profits and share prices. That is when I wrote my book, The Crash of the Millennium, predicting that share markets would collapse in 2000 and beyond. This is exactly what happened, because in an environment of the growing wage gap, the moment debt stops growing, supply exceeds demand, over production results, profits tumble and share prices sink. The stock-market crash of 2000-2001 was the worst since the great crash of 1929.

 

The Housing Bubble

Somehow Greenspan loves bubbles. As the stock market plummeted in 2000, he panicked and slashed interest rates to depths that had not been seen since the depression of the 1930s. He knew consumer demand was inadequate but did not attribute it to the stagnant real wage. He would rather have the public spend money through borrowing than through higher salaries. Greenspan also encouraged people to use their home equity to secure loans and asked banks to lower their lending standards. The banks dutifully followed as they and their CEOs began to make bushels of money. Add to this his deregulation spree that freed banks to trade in the stock market, and bubbles started to emerge in home prices and credit markets. Soon the new bubbles bested even the dot.com balloon of the 1990s. Greenspan still had not realized that since debt cannot grow exponentially all bubbles burst in the end, and when they do the consequences are very painful.

I have just given you a capsule of Greenspan’s follies and policies; there is much more that cannot be presented in a brief article. But the main point is that the maestro succeeded in hiding the true consequences of his actions and tailored his advice to the ideology of whoever became the American president. In the process Greenspan contradicted his earlier policies, mainly to secure his reappointment as the Fed chairman by the incoming president. Today people realize that Greenspan is mostly to blame for the global crisis. In fact, the cable television channel CNN recently included him among the top 10 culprits responsible for the spreading fiasco, but the same CNN had once idolized the maestro.

Greenspan retired in January 2006 and was replaced by Ben Bernanke, who is no different from the former chairman. Mr. Bernanke is also unaware of the role played by sufficiently high wages in restoring economic balance. So he has rehashed Greenspan’s policies at even faster place, although it must be added in his defense that the current mess is not entirely of his making.

 

Where Are We Headed?

In The New Golden Age, I predicted that economic chaos would begin in 2007 with a housing meltdown in the United States, followed by a banking crisis and share price declines in 2008 and 2009. I now foresee that this crisis would last at least till 2010, and possibly longer. This is because conventional economists still do not understand the nasty economic effects of the wage-productivity gap, which has grown enormously all over the world. If the doctor does not diagnose the sickness properly, the patient has to suffer for a long time. That is why I am afraid the global financial debacle will turn into a steep recession and be the worst since the Great Depression, even worse than the painful slump of 1980-1982 that afflicted the whole world. I have offered a number of economic reforms deriving from the theory of the wage gap in my two books explored above, and it is possible to come out of the recession within a year, but alas conventional economists would not let us escape the looming disaster so quickly.

Yet all is not lost. There is an effulgent silver lining lurking behind the pal of dark clouds. Sarkar’s historical cycles that I have repeatedly used in my forecasts also show that eventually the world will see a wonderfully prosperous era enshrined in the new golden age. This, I feel, could happen by the end of the next decade.

*Prepared for St. Stephen’s College, Delhi.

by Ravi Batra
© November 15, 2008
Professor, Department of Economics
Southern Methodist University, Dallas, Texas 75275, USA


 

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