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Yanis Varoufakis

Yanis Varoufakis

Max Keiser and Stacey Herbert

Max Keiser

Professor Steve Keen Kingston University

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Armstrong Economics

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It was always going to happen. Bubbles larger than Saturn were overdue for bursting. The Debt Economy was always going to capsize, it was just a matter of when. That when would take out the USA, the alleged greatest economy in the world.

To cover for this catastrophe, make sure there was always someone else to blame, another pandemic in a long line of attempted pandemics looks like the ideal 'look the wther way instrument, while all the time being able to maximise and steal as much fiat as they can. Trouble is fiat is dead and gold is non existant where they're hoping it is.

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Yanis Varoufakis

“The European Union Is Determined to Continue Making the Same Errors It Made After 2008” – JACOBIN interview

12 April 2020 - The lack of EU help for the states hardest hit by COVID-19 is the latest sign of the hollowness of “European solidarity.” As Yanis Varoufakis tells Jacobin, the European Union’s institutions are hardwired to ignore the needs of the social majority — preferring to allow mass suffering than to change their own rules.

The lack of EU help for the states hardest hit by COVID-19 is the latest sign of the hollowness of “European solidarity.” As Yanis Varoufakis tells Jacobin, the European Union’s institutions are hardwired to ignore the needs of the social majority — preferring to allow mass suffering than to change their own rules.

Yanis Varoufakis is used to controversy. Since stepping down as Greece’s finance minister in 2015, the self-described “erratic Marxist” has become the leading spokesperson for DiEM25, a European-wide party that seeks to restructure the European Union’s institutions in the interests of the majority.

In March, Varoufakis made news for dropping what he dubs the “EuroLeaks” — his secret recordings of the closed meetings where eurozone finance ministers decided Greece’s fate back in 2015. The recordings confirm many of our worst suspicions about such opaque bodies — and provide fascinating insights into how neoliberal technocrats really work.

Europe’s institutions are again in the spotlight today, due to their weak reaction to the coronavirus pandemic and the resulting economic shutdown. As another round of rescue packages loom, Varoufakis spoke to Jacobin’s Loren Balhorn about the European Union’s response, what lessons elites have learned from the last crisis, and what different paths are today open to the Left.

LBYou released the “EuroLeaks” a few weeks ago. Are you satisfied with the reaction so far?

YVAbsolutely. We wanted to empower anyone who cares to understand how power abuses not itself, but those who have created it — that is, voters and the demos more generally. We’ve been overwhelmed by the positive response, even by those who disagree with us. They say, “At last, somebody has let us in, given us a front-row seat into what is happening behind closed doors, on our behalf without our knowledge.”

LBWhat has the response been like in Greece?

YVThe same. On the one hand, there are those who make a living serving the interests of the oligarchy. They consider the EuroLeaks to be a major enemy and an affront and do everything in their power to discredit it. But even they cannot help but listen to the leaks and hopefully feel a bit embarrassed.

LBIt seems like one of the reasons you released the recordings now is that you are being blamed by both the current Greek government as well as the Syriza leadership for the very tough conditions Brussels imposed on the country. How much of this is about settling scores against your political enemies, who are trying to discredit you?

YVLet me tell you where I’m coming from. Greece is a country whose population was on the floor even before the coronavirus hit. We have watched a new neoliberal/ultra-rightist, nationalist, and xenophobic government introduce legislation that will, with mathematical precision, seriously increase discontent and misery.

In December they passed a bill selling most nonperforming loans and mortgages to vulture funds, mainly from the United States and some from Europe. A sequence of evictions is also about to begin. When you hear the finance minister introduce that bill, trying to defend it on the basis of distortions of what was going on in those Eurogroup meetings — in which I was representing Greece — at that point I think, if you were in my place, you would also do it. Not to settle scores, but exactly the opposite: to reveal the lies and fake news that were coming out of those meetings. To prevent new policies from being legislated against the interests of weak, innocent people who are still being targeted for liquidation.

LBTurning to the European Union, the pan-European party you helped to found, DiEM25, arguably puts forward the clearest critiques of how the European Union functions and what kinds of policy measures could be taken to make it less institutionally neoliberal and technocratic. Nevertheless, you have made little progress electorally, and failed to enter the European Parliament last year. How do you evaluate your performance so far? Why do you think it is so difficult to gain a hearing for your argument and win over large numbers of people to a platform like yours?

YVWe came together in February 2016 in Berlin to restart the process of thinking about progressive transnational politics. In the middle of a defeat — because 2015 was a defeat, not only for us here in Greece but for the whole Left across Europe. At a time of rising xenophobia, we made the assessment that our collective defeat was going to be the first step towards the strengthening of what you’d call the “nationalist International,” which finds itself in a loop of positive reinforcement with the liberal establishment. Because let’s face it, the Merkels and Macrons of Europe need people like [Marine] Le Pen and the Alternative für Deutschland (AfD) in order to convince the rest to vote for them. At the same time, the Le Pens and the AfDs need the austerity policies of Macron and Merkel in order to create the discontent that feeds them.

We always knew that we would be caught up between these forces, which antagonized one another and fed off each other. We had no organization and we had no money, and we always knew it was going to be tough. In the end, every single progressive force in Europe, including DiEM25, lost out in the May 2019 European Parliament elections. We all suffered from the success of the liberal establishment, who continue to do business as usual when business cannot be continued as usual. They are feeding the nationalist international, which then feeds back and reinforces the liberal establishment.

We have 120,000 members, but that’s not that many across Europe. We managed to secure 1.5 million votes on a total budget of €60,000. Not great, I was expecting us to do better, but it’s not catastrophic either. This was only a small first step. Are we going to succeed? I have no idea. What I do know is that what DiEM25 tried to do is the way to go.

LBEleven years since the global economic crisis and five years since the Troika imposed austerity on Greece, Europe is facing what looks to be a twin crisis of both a pandemic and, caused by it, a massive economic downturn. Do you have any hope that European technocrats learned from the last crisis and will adopt a different approach this time?

YVThere is a spectacular coincidence of errors by the European Union today and in 2010. They’re making the same category error: in 2010 they decided to paint the crisis as a crisis of public debt and lack of liquidity, meaning the solution must certainly be loans. So, the Greek state was loaned the largest amount in history, on condition of austerity. Mistaking a bankruptcy for a liquidity problem is what effectively incarcerated a very large section of Europe — a vast majority of Europeans — into permanent stagnation.

When the coronavirus hit, the eurozone economy was already very significantly damaged by the inane handling of the Euro-crisis due to that category error of purposefully mistaking a bankruptcy for a liquidity crisis. And they are doing exactly the same thing now. If you look at the communiqué of the Eurogroup, if you look at [German finance minister] Olaf Scholz’s pronouncements, his policies, they sound rather large — with huge sums like €500 billion in Germany alone. But if you look at the detail of what they are proposing, both in Germany and in the Euro-group for the European Union as a whole, you will find exactly the same category error — they are proposing large sums in the form of credit lines, loans, or tax deferments. Again, they’re treating what is crucially a sequence of bankruptcies as a lack of liquidity, as something that can be dealt with by means of loans. They’re doing exactly the same thing

So, no, they haven’t learned. They are determined to continue with the same error. But let’s not be naive. This is not a failure of the faculties, it is not a failure of rationality. The Euro-group and the European Union have been hardwired never to be able to make any decisions that utilize public finance in favor of the majority. The whole point about creating the eurozone was to eradicate the possibility of fiscal policy. And why was that? Because a particular configuration of European capital decided that the best way to maximize capital accumulation in Europe was to fix monetary policy and never give parliaments the opportunity to compensate for capitalist crises by means of fiscal stimuli.

They are absolutely determined. They would much rather see half of the continent sink then do away with that principle, which is a class-war principle from their perspective. We saw that in 2010, and we can see it with the coronavirus today.

LBSo, the bankers and the institutions will not change anything, but does it open a window for our side?

YV Yes. Every crisis is an opportunity for the peoples of Europe to unite. But until and unless we form a genuinely transnational progressive movement — not a confederacy of nation state–based left-wing parties, but a genuinely pan-European transnational movement against the transnational bankers and oligarchs — we will not be able to utilize that window of opportunity. That is the lesson of 2015 — at least the lesson I drew here in Greece.

Dr John Ioannidis

The EU’s new coronavirus relief deal is a gift to Europe’s enemies – THE GUARDIAN

13th April 2020 - Europe suffered a historic defeat on Thursday night. After weeks of impasse, the Eurogroup gathering of finance ministers, whose countries share the euro, reached a decision on their collective response to the coronavirus pandemic’s economic impact. Besides constituting an epic dereliction of duty, the Eurogroup’s decision dealt a decisive blow to the foundations of the European Union – much to the delight of Europe’s critics and enemies.

Most of continental Europe using the euro is in lockdown. The economic shockwaves caused by a lockdown do not care what currency we use. Just as in the United Kingdom, the United States or Japan, the precipitous falls in private incomes must be counterbalanced by substantial increases in public expenditure. If governments fail in this, the sum of private and public expenditure (which equals aggregate income) will crash even faster, bankruptcies will burgeon and government tax revenues will collapse further in the medium turn.

The challenge facing the 19 countries of the eurozone is unique. The massive boost in public debt that is now so necessary is hampered by the quaint arrangement of sharing a central bank that, on the one hand, has no common treasury to lean against and, on the other, is banned from backing directly the 19 treasuries that must borrow in euros to fight the crisis. The euro crisis that began in 2010 stretched this monetary architecture to its limits. The coronavirus recession is now pushing it beyond them.

With the countries worst hit by Covid-19, such as Italy, being the most indebted and thus the least able to shoulder the necessary new debt, an impossible conundrum emerges: the new debt needed to revive the private sector will push the state into default, so destroying the banks whose capital is mostly government debt and, in short order, the rest of the private sector. The only way out of this trap is for the new debt not to fall on the weak shoulders of the most indebted eurozone countries but to be shared across the eurozone. Except that this debt-sharing is banned by the treaties that created the eurozone, at the insistence of the northern european countries running a trade surplus with the rest.

It is in the shadow of this riddle that the Eurogroup met on Thursday night. To counter the oncoming tsunami of bankruptcies, they had to emulate the British, American and Japanese stimuli programmes by channelling approximately 8% of total eurozone income (€1tn) into fresh public expenditure, while also setting aside another such sum for an investment fund to power up the post-Covid-19 recovery. And they had to find a way to avoid circumventing the ban on debt-sharing without which an additional €2tn public expenditure would crush members such as Italy, Spain and Greece thus reviving the spectre of disintegration.

On Thursday night, impasse gave way to an agreement. While you may be reading headlines of an impressive sum of €500bn to rescue Europe, the truth is far less heroic. In fact, the price of reaching the agreement was impotence. Instead of the 16% of total eurozone income (€2tn) stimulus needed, the eurozone will throw a derisory 0.22% (€27.7bn) at the crisis. To make the numbers sound better, and reach the magical €500bn figure, they will extend credit lines to countries such as Italy, via Europe’s bailout fund (the European stability mechanism, or ESM), to the tune of 2% of a recipient country’s national income. And they will allow for more loans, of about €100bn, to the social security systems of countries whose unemployment benefit bill spikes more than others – on condition that the monies will be returned when unemployment subsides.

Before the Eurogroup met, hope was in the air that Europe would, at last, change its rules to save its greatest creation: the European Union. Unlike in 2015, when I was alone in the Eurogroup in demanding a common instrument for restructuring public debt, in the past few weeks the governments of eight southern states, plus France, demanded a rethink on debt-sharing without which the eurozone will remain an iron cage of austerity for most and a source of economic stagnation for everyone. Belatedly, but correctly, they demanded a so-called “eurobond”: a common debt instrument that allows total long-term debt to shrink by transferring a portion of it from member states, which have a lot of debt, to the eurozone, which has none.

This debate is now dead in the water, killed off by the Eurogroup’s decision to rely almost entirely on new debts falling squarely on the member states’ weakened shoulders. The only concession to the nine governments suggesting debt-sharing was that the new ESM loans will have no strings attached to them. This is, alas, a red herring as the conditions will come later, once the eurozone’s fiscal rules bite again.

The message today to Italians, Spaniards and Greeks is: your government can borrow large amounts from Europe’s bailout fund. No conditions. You will also receive help to pay for unemployment benefits from countries where employment holds up better. But, within a year or two, as your economies are recovering, huge new austerity measures will be demanded to bring your government’s finances back into line, including the repayment of the monies spent on your unemployment benefits. This is equivalent to helping the fallen get up but striking them over the head as they begin to rise.

The EU is, of course, a lot more than a monetary area. It is a peace project, a realm of shared culture, a source of identity and an opportunity to stem toxic nationalism. Nonetheless, if its economic foundation buckles, powerful centrifugal forces already in play are ready to tear the union apart. Thursday’s Eurogroup verdict, besides being macroeconomically insignificant, was politically irresponsible and a fantastic boon for Eurosceptics in Europe, the UK and indeed in the White House.

Max Keiser and Stacy Herbert

The CoronaCrisis Quarter

On Sputnik Radio

13 April 2020 - On today’s episode of Double Down, Max Keiser and Stacy Herbert take a look at the biggest event of the first quarter of 2020: the coronavirus called COVID-19.
Listen to the podcast below

Podcast with Max and Stacy - 7th April 2020

Post-Pandemic Economy

On Sputnik Radio
24th March 2020
- On today’s episode of Double Down, Max Keiser and Stacy Herbert talk to trends forecaster, Gerald Celente, about the future for the #covid19 pandemic economy.

Podcast with Max and Stacy and Guest Gerald Celente - 24th March 2020

As the world enters total lockdown to fight the #covid19 pandemic, DOUBLE DOWN asks trends forecaster, Gerald Celente, how this might alter our economic system forever. The virus has exposed the fact that the US is unable, for example, to provide healthcare workers with personal protection equipment as it is unable to manufacture such things - will this sort of capacity need to return to the US after the pandemic has gone? What does the future hold for the youngest generations coming of age during this crisis and will it be a more self-sustaining, self-sufficient one? Tune into Double Down to hear more about what Gerald Celente has to forecast for our post-pandemic future.

Professor Steve Keen

Thinking Exponentially about Containing the Coronavirus

As featured on Steve's  Rebuilding Macroeconomics

4th March 2020 - This is an excellent articles concerning what central banks and governments are doing, or should be doing, in the turbulences resulting from the Coronavirus.

Thinking exponentially about containing the coronavirus 

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One reason why we react far too slowly to threats like the Coronavirus is that thinking about processes that involve exponential growth just doesn't come naturally to us: we tend to extrapolate linearly instead. That is seriously hampering our reactions to this threat. If we did think exponentially, we'd be practicing serious containment, right now. I want to illustrate why with a simple graph.

There are roughly 100,000 serious Coronavirus cases around the world now, and without public health measures, the infections appear to double every six days. That rate will not be sustained as more people get infected, and many may have only mild symptoms. That said, if the base rate of doubling did continue, and if the serious cases were the only ones that existed (which they're not of course: there are many carriers who are asymptomatic right now), then the entire human population of the planet would be infected in three months.

What if we slow the doubling rate down a bit, to ten days, by better hygiene, not congregating in large crowds, etc? Then it would take five months for everyone to be infected.

We could do better than that though: by really limiting social interaction, really ramping up personal hygiene in public. If we slowed the doubling rate to once every month, it would take one and a half years to infect the whole planet's population.

And if we did even better, perhaps with something approaching China's controls, and reduced the doubling rate to two months? Then it would be three years before the virus infected everybody.

This is why it's necessary to impose strict limits on social interaction now, not later. The longer we leave it, the longer the doubling rate stays at 6 or so days. All it takes is a hundred such days, and it's too late: everyone already has it.

So a sensible containment policy would ban large gatherings, where carriers (many of whom are non-symptomatic) can infect many others. Sporting events should stop—or rather events could still happen, but be watched by near-empty auditoriums, and broadcast. Schools and universities should shut down—or conduct classes online. Churches should hold services online as well. Since it seems to take about 15 minutes of sustained exposure within 1-2 metres to pass the disease on, actions that eliminate such gatherings now could slow down the disease's momentum, and give us more time to develop vaccines, anti-virals, pre-symptomatic screening systems.

The trouble is, this reaction will be seen as too extreme, and resisted—until such time as the number of infections have hit such a level that everyone panics. So I worry that we won't politically accept extreme confinement measures until we've hit a terrifying number of serious cases and deaths—perhaps once 100,000 people have died.

We're currently at 3,000 deaths from 90,000 reported serious cases. How long will it take us to get to 100,000 deaths, if the doubling rate sticks at the current 6-day level? One month: by the beginning of April.

I don't think it will be that fast by the way—changing personal behaviour might increase the doubling rate a lot, to say, every two weeks. How long does that give us till we hit 100,000 deaths? About 70 days—or early May.

Many other factors will come in to play, some good, some bad. Hygiene and isolation will both improve—but this will challenge our financial system, as people stop earning an income and businesses go bankrupt. So we have to plan for that: as I suggested in my previous post, we need to stop the ordinary rules of capitalism, which are suited for episodic events, making this systemic crisis even worse. Some ideas include

a "modern Jubilee", similar to what Hong Kong has already done, where they have given every citizen HK$10,000, or roughly US$1250. Give everyone a direct cash injection into their bank accounts on a per capita basis. This will allow people to pay their rents and service their mortgages, even if they've been sacked, lost their "gig economy" job, or had to shut their restaurant;

Put a hold on bankruptcy proceedings, for businesses likely to be affected adversely by the crisis, and maybe give those firms a Central Bank money injection too, on a "share of market" basis. Obviously, airlines, sporting venues, restaurants, personal service industries, are all going to be affected adversely.  

Toilet roll manufacturers, sanitation producers, etc., are going to do very well—so maybe what we need there are price controls, combined with the same Central Bank money injection.

Direct support for share prices by direct Central Bank purchases of shares, as Japan's Central Bank has been doing for some time. This is to stop a stock market collapse triggering financial collapses, especially by banks.

Modify bankruptcy rules for the interim for banks banks. Banks should be able to operate even if they end up in negative equity, to keep the payments system going.

Mitch Feierstein

Mitch Feirstein;
The Great Economic Depression
of 2020

Featured on Mitch's Planet Ponzi Blog
4th April 2020 -The Great Economic Depression of 2020

After 2008, we were promised that too-big-to-fail caused by too much debt, credit, and leverage was history. Covid-19 exposed Wall Street’s culture of “Heads I win, tails you bail me out.” That’s not capitalism, it’s extortion.

Are globalization’s new record highs a minefield-filled Potemkin village? In 2020, financial markets have set numerous records. In January, at the World Economic Forum in Davos, Switzerland, famed Bridgewater boss and fund manager Ray Dalio told a CNBC audience that “cash is trash” and encouraged viewers to “buy the dip.” Next, he went as far as to warn investors “not to sell stocks.” In February, as if on cue, every stock index obediently and euphorically rocketed to new all-time highs. If ever alarm bells were ringing to warn how stratospheric valuations fueled by twelve years of reckless central bank “temporary emergency measures” could signal a market top, Dalio’s Davos hubris certainly qualified. President Trump neatly summarized the market’s frothy top in just twelve words.

Nine days after Trump’s “raging bull market tweet,” an unprecedented collapse began that swiftly and violently turned history’s longest bull market (2009 -2020) into a bear market that sent indexes plummeting over 20 percent in less than a month–another record. The bull-to-bear collapse was quicker than both 1999 and 1929. In 2007, the Great Financial Crisis (GFC) wiped out Bear Stearns and Lehman Brothers. 

The crisis eviscerated prudent savers’ ability to earn interest. Ben Bernanke, the boss of the US Federal Reserve Bank at the time, told the world that subprime mortgage default woes “won’t seriously hurt the economy.” He went on to say “subprime debt is contained.” Bernanke was wrong–very wrong. The defaults in subprime mortgages triggered the GFC, bankrupting many over-leveraged institutions despite trillions in taxpayer-backed bailouts.

In 2017, Federal Reserve Boss Janet Yellen assured global markets that “the banks are very much stronger due to the Fed supervision, higher capital levels, and other measures…. We will not see another financial crisis in our lifetimes.”   

So, what happened? Since globalization, the world has not experienced simultaneous supply and demand shocks. The ‘Coronavirus shock’ ignited a liquidity-soaked tinderbox. Central bank policies have inflated asset bubbles in the stock, bond, property, and credit markets. Mandarins at the central banks reduced interest rates to six-hundred-year lows. Policies included trillion-dollar bank bailout programs and unlimited quantitative easing (money printing) as well as zero and negative interest rate policies intended to create aggregate demand. After hundreds of rate cuts over the past twelve years, have the policies worked? No, they haven’t. These policies have failed and have only helped the 0.01 percent.

What have record low rates achieved? Corporate plunder. The rate cuts and bailouts enabled corporations to borrow record amounts of cash and to conduct massive stock buyback programs. It allowed corporations to enrich CEO compensation packages at the expense of future growth and job creation, enabled malinvestment in billion-dollar zombie corporations that are all debt without earnings, and created a record wealth-inequality gap. 

It is different this time, but not how you think. Unemployment is about to skyrocket to over thirty percent, helping to send GDP plummeting forty percent or more. The world is filled with mountains of debt and very few assets that can generate cash. As a result, central banks are panicking. The Bank of England’s new boss has promised to “do whatever it takes”–a stale Mario Draghi line that worked for the European Central Bank during the GFC but will not work now. Banks are on the ropes and their clients are going bust. A tsunami of defaults is coming. Bankers’ ‘Whatever It Takes’ bazookas are impotent and only dribble or misfire. In other words, no lessons were learned from the GFC. The recent all-time-high volumes of risky BBB, junk bonds, and leveraged loan buying that resulted from stock chasers scrambling to buy any garbage with yield was extraordinary. The Whatever It Takes strategy enabled the risk parity trade which worked until it exploded, toxic derivative products, underfunded pensions, all of which will result in catastrophic losses by Wall Street speculators. 

The lunatics are running the asylum. Money printing, unlimited bailouts, central bank manipulations and ‘buy the dip’ no longer work. Keep your powder dry and wait for the dust to settle.  

Articles of Interest

Jonathan L Trapman is an author, creative writer and photojournalist who has spent the better part of his 45 odd years in public life, learning from his personal experiences, sharing them, listening to others, whose lives have allowed him to open his own mind to a beauty, even within horror, that is transforming and empowering. His written work endeavors to convey, through true tales and fiction, impressions thus garnered. Dreams and Realities can be purchased (signed by the author if wanted) here.

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