The on-going financial crisis results not from a cyclical or managerial failure, but from a structural one. Part of the evidence for this assertion is that there have already been more than 96 other major banking crises over the past 20 years, and that such crashes have happened even under very different regulatory systems as well as at different stages of economic development.
We urgently need to find better solutions because the last time we faced a breakdown of this scope, the Great Depression of the 1930s, ended up in a wave of fascism, and World War II However, so far the conventional solutions being applied – nationalization of the problem assets (as in the original Paulson bailout) or nationalization of the banks (as in Europe) – only deal with the symptoms, not the systemic cause of today’s banking crisis. Similarly, the financial reregulation that will be on everybody’s political agenda will, at best, reduce the frequency of such crises, but not avoid their re-occurrence.

The good news is that a systemic understanding and technical solution are now available that would ensure that such crashes become a phenomenon of the past. A recent conceptual breakthrough, that takes its evidence from balanced, structurally sound, and highly functioning eco-systems now proves that all complex systems, including our monetary and financial ones, become structurally unstable whenever efficiency is overemphasized at the expense of diversity, interconnectivity and the crucial resilience they provide. The surprising systemic “a-ha” insight is that sustainable vitality involves diversifying our types of currencies and institutions and introducing new ones that are designed specifically to increase the availability of money in its prime function as a medium of exchange, rather than for savings or speculation. Additionally, these currencies are expressly designed to link what would remain otherwise unused resources with unmet needs within a community, region or country. These currencies are know as “complementary” because they do not replace the conventional national money, but rather operate in parallel with it.

The front-page commentary in the overseas edition of the People’s Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.

A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said.

The People’s Daily is the official newspaper of China’s ruling Communist Party. The Chinese-language overseas edition is a small circulation offshoot of the main paper.

“The grim reality has led people, amidst the panic, to realize that the United States has used the U.S. dollar’s hegemony to plunder the world’s wealth,” said the commentator, Shi Jianxun, a professor at Shanghai’s Tongji University.

Shi suggested that all trade between Europe and Asia should be settled in euros, pounds, yen and yuan, though he did not explain how the Chinese currency could play such a role since it is not convertible on the capital account.

A two-day Asia-Europe Meeting (ASEM) of 27 EU member states and 16 Asian countries was set to open on Friday. Though few analysts expect much in the way of concrete agreements, Shi said it could prove momentous.

“How can Europe and Asia grasp each other’s hands and together confront the once-in-a-century global financial crisis sparked by the U.S.; how can they construct a new equitable and safe international financial order?” he said.

Background from 2006 on dollar hegemony and earlier attempts at breaking it.

Petrov: The Proposed Iranian Oil Bourse

A nation-state taxes its own citizens, while an empire taxes other nation-states. The history of empires, from Greek and Roman, to Ottoman and British, teaches that the economic foundation of every single empire is the taxation of other nations. The imperial ability to tax has always rested on a better and stronger economy, and as a consequence, a better and stronger military. One part of the subject taxes went to improve the living standards of the empire; the other part went to strengthen the military dominance necessary to enforce the collection of those taxes.

For the first time in history, in the twentieth century, America was able to tax the world indirectly, through inflation. It did not enforce the direct payment of taxes like all of its predecessor empires did, but distributed instead its own fiat currency, the U.S. Dollar, to other nations in exchange for goods with the intended consequence of inflating and devaluing those dollars and paying back later each dollar with less economic goods-the difference capturing the U.S. imperial tax. Here is how this happened. [...]

The economic essence of this arrangement was that the dollar was now backed by oil. As long as that was the case, the world had to accumulate increasing amounts of dollars, because they needed those dollars to buy oil. As long as the dollar was the only acceptable payment for oil, its dominance in the world was assured, and the American Empire could continue to tax the rest of the world. If, for any reason, the dollar lost its oil backing, the American Empire would cease to exist. Thus, Imperial survival dictated that oil be sold only for dollars. It also dictated that oil reserves were spread around various sovereign states that weren’t strong enough, politically or militarily, to demand payment for oil in something else. If someone demanded a different payment, he had to be convinced, either by political pressure or military means, to change his mind.

The man that actually did demand Euro for his oil was Saddam Hussein in 2000. At first, his demand was met with ridicule, later with neglect, but as it became clearer that he meant business, political pressure was exerted to change his mind. When other countries, like Iran, wanted payment in other currencies, most notably Euro and Yen, the danger to the dollar was clear and present, and a punitive action was in order. Bush’s Shock-and-Awe in Iraq was not about Saddam’s nuclear capabilities, about defending human rights, about spreading democracy, or even about seizing oil fields; it was about defending the dollar, ergo the American Empire. It was about setting an example that anyone who demanded payment in currencies other than U.S. Dollars would be likewise punished.

Trust is instrumental to the function of a society, without trust it falls apart.

In the US Department of Defense, a `trusted system or component’ is defined as `one which can break the security policy’. (1)

The New York Times reported on 19 February 2002 that the Pentagon’s new “Office of Strategic Influence” (OSI) is “developing plans to provide news items, possibly even false ones, to foreign media organizations” in an effort “to influence public sentiment and policy makers in both friendly and unfriendly countries.”(2)

The argument is that funding has dried up because the money markets don’t trust the banks.(3)

The reason the money markets have seized is that banks don’t trust each other. The reason Europe struggles to find a systemic solution to this crisis is that governments don’t trust each other. (4)

“Trust in the United States as the leader of the free world and the free economy and confidence in Wall Street, has been damaged I believe forever. There will be no return to the previous position.” (5)

Trust is a prediction of reliance on an action, based on what a party knows about the other party. Trust is a statement about what is otherwise unknown.(6)

Swedish defense minister Mikel Odenberg sign cooperation agreements with Homeland Security chief Michael Chertoff

The monetary/financial crisis, that may have just begun, can create legions of poor, homeless and hungry people. In such a situation the society easily polarizes and forces the state to become more predatory and cannibalistic. For many the growth of the security state and the humiliating subservience to the Washington consensus have eroded trust in the Swedish society, the culture of spin and disinformation, often to the advantage of the foreign power also affect memes from ‘good old times’, jobs, healthcare and education pales into distractions and tax ploys equally false and corrupt as democracy-promotion and neo-liberal freedom. Economic plunder and insights in the history of banking can make the favorite ideology feel like a loose tooth in the mouth.

AB:Environment taxes not used to improve the environment

The state charges around 8 000 SEK per Swede and year in green taxes. Expenses to improve the environment and ease adaption are 500 SEK.

…a factor sixteen, and a political efficiency of 6,25%.

How did we get there? During the last century, it could be said that Sweden was shaped by relatively benign intentions as a middle road in the fight between capitalism and communism, a polar system that still dominates the political scale. But what about the spin factor in such a belief? Here are a few quotes that can make you wonder.

A. Sutton:Wall Street and the Bolshevik revolution

This activity in behalf of the Bolsheviks originated in large part from a single address: 120 Broadway, New York City. The evidence for this observation is outlined but no conclusive reason is given for the unusual concentration of activity at a single address, except to state that it appears to be the foreign counterpart of Carroll Quigley’s claim that J.P. Morgan infiltrated the domestic left. Morgan also infiltrated the international left.

The governments of the world, according to the Marburg Plan, were to be socialized while the ultimate power would remain in the hands of the international financiers “to control its councils and enforce peace [and so] provide a specific for all the political ills of mankind.

Revolution and international finance are not at all inconsistent if the result of revolution is to establish more centralized authority. International finance prefers to deal with central governments. The last thing the banking community wants is laissez-faire economy and decentralized power because these would disperse power.

But so long as the reader looks at world history in terms of an inexorable Marxian conflict between capitalism and communism, the objectives of such an alliance between international finance and international revolution remain elusive. So will the ludicrousness of promotion of the public good by plunderers.

In the 1930s foreign firms, mostly of the Morgan-Rockefeller group, built the five-year plans. They have continued to build Russia, economically and militarily.

History is written by the winners

“Dr. Dodd said she first became aware of some mysterious super-leadership right after World War II when the US Communist Party had difficulty getting instructions from Moscow on several vital matters requiring immediate attention. The American Communist hierarchy was told that any time they had an emergency of this kind they should contact any one of three designated persons at the Waldorf Towers. Dr. Dodd noted that whenever the party obtained instructions from any of these three men, Moscow always ratified them. What puzzled Dr. Dodd was the fact that not one of these three contacts was a Russian. Nor were any of them Communists. In fact, all three were extremely wealthy American capitalists! Dr. Dodd said, ‘I would certainly like to find out who is really running things.’” Her conclusion: “I think the Communist conspiracy is merely a branch of a much bigger conspiracy!”

Ideologies come and go but the trusting and deceptive human nature prevails.

“One thing to realize about our fractional reserve banking system is that, like a child’s game of musical chairs, as long as the music is playing, there are no losers” -Andrew Gause, Monetary historian

“Money is a new form of slavery, and indistinguishable from the old simply by the fact that it is impersonal, there is no human relation between master and slave” – Leo Tolstoy

1. Why do governments choose to borrow money from private banks at interest when gov’t could create all the interest-free money it needs, itself?
2. Why create money as debt? Why not create money that circulates permanently?
3. How can a money system dependend on perpetually accelerating growth be used to build a sustainable economy?
4. What specifically needs to be changed?

Click here to view the embedded video.

Bernard Lieater:Beyond greed and scaricity

What are the shadows of the Great Mother archetype? I’m proposing that these shadows are greed and fear of scarcity.

Louis Even:The money myth exploded – An introduction to Social Credits

“The Money Myth Exploded” … remains one of the most popular to explain how money is created as a debt by private banks

Morgan Stanley has issued a full recession alert for the US economy, warning of a sharp slowdown in business investment and a “perfect storm” for consumers as the housing slump spreads.

Paul Craig Roberts:Impending Destruction of the US Economy

The US dollar has lost 60% of its value during the current administration.
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If foreigners were to reduce their existing holdings of dollars, superpower America would instantly disappear
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We have arrived at the point where it is no longer bold to say that nothing now can be done. Unless the rest of the world decides to underwrite our economic rescue, the chips will fall where they may.

Moscow Times:Rosneft Considers The Ruble

Rosneft said it might switch crude sales to rubles from dollars as the U.S. currency weakens, following similar statements by domestic rivals Gazprom and LUKoil.

ISNA:Iran stops selling oil in U.S. dollars

Iran has completely stopped selling oil in U.S. dollars.

And some good news said ten years ago.

Bernard Lietaer:Beyond Greed and Scarcity

Money is like an iron ring we’ve put through our noses. We’ve forgotten that we designed it, and it’s now leading us around. I think it’s time to figure out where we want to go – in my opinion toward sustainability and community – and then design a money system that gets us there.
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I have come to the conclusion that greed and fear of scarcity are in fact being continuously created and amplified as a direct result of the kind of money we are using.
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A study done by The International Metalworkers Federation in Geneva predicts that within the next 30 years, 2 or 3 percent of the world’s population will be able to produce everything we need on the planet. Even if they’re off by a factor of 10, we’d still have a question of what 80 percent of humanity will do.
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My forecast is that local currencies will be a major tool for social design in the 21st century, if for no other reasons than employment.
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A key concept Jung uses is the archetype, which can be described as an emotional field that mobilizes people, individually or collectively, in a particular direction. Jung showed that whenever a particular archetype is repressed, two types of shadows emerge, which are polarities of each other.
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If there is a repression of an archetype on this scale and for this length of time, the shadows manifest in a powerful way in society. After 5,000 years, people will consider the corresponding shadow behaviors as “normal”.
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The question I have been asking is very simple: What are the shadows of the Great Mother archetype? I’m proposing that these shadows are greed and fear of scarcity.
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In 1929, the stock market crashed, but the gold standard held. The monetary system held. Here, we are dealing with something that’s more fundamental. The only precedent I know of is the Roman Empire collapse, which ended Roman currency. That was, of course, at a time when it took about a century and a half for the breakdown to spread through the empire; now it would take a few hours.
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The biggest issues that I believe humanity faces today are sustainability and the inequalities and breakdown in community, which create tensions that result in violence and wars. We can address both these issues with the same tool, by consciously creating currency systems that will enhance community and sustainability.