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.

Russia Today:New kids on the block better listen – EU

“My message to Poland and Lithuania is that it’s better for you to be with all of the member-states in expressing a single view rather than having different views towards Russia,” Barroso said.

The situation seems to have changed drastically over the past two weeks, as the UK had abandoned the earlier demand to freeze EU-Russia relations and voiced the readiness for a new page in that relationship. The Czech Republic, Sweden, Estonia and Latvia sided with the UK.

Only Lithuania and Poland adhered to the position voiced upon the beginning of August hostilities in Georgia. However, the UK refused to sign that document. In fact, the EU does not need authorisation from other EU agencies for resuming negotiations on a new strategic partnership agreement with Russia, as French representative Christine Roget told a Friday press briefing before the EU informal summit.

Pockets of anti-Russian sentiments after the conflict in Georgia

Britain retreats from its hardline position against Russia, the Czech republic and the Baltic states follow suit leaving Lithuania and Poland. According to the same webpage the missile defence has become an issue of debate among British MPs.

Russia Today:British MPs call for debate on U.S. missile shield

The British government has already given permission for two bases on British territory, but now more than 70 senior Labour Party figures, including over 50 MPs, are questioning the wisdom of the move.

They took action after a new poll showed almost two thirds of people asked about the system said it would make the country less secure.

About time, the missile defence, becoming operative 2012, threatens survival on the planet. Near term regional consequences for a strategic partnership doesn’t look bright either.

Poland and the Missile Shield – an interview with Radek Sikorski

As Radek Sikorski, Poland’s FM who signed the deal with Condi Rice, told me last week, it’s all about US “boots on the ground”.

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.

Wikipedia:Ancient Olympic Games

During the Olympic Games a truce or ekecheiria was observed. Three runners known as spondophoroi were sent from Elis to the various participant cities at each set of games to announce the beginning of the truce. During this period armies were forbidden from entering Olympia, wars were suspended and legal disputes and the use of the death penalty were forbidden.

Mark Almond:Plucky little Georgia? No, the cold war reading won’t wash

Although Mikheil Saakashvili has done little for the refugees since he came to power early in 2004 – apart from move them out of their hostels in central Tbilisi to make way for property development – he has spent 70% of the Georgian budget on his military. At the start of the week he decided to flex his muscles.

Ynet news:War in Georgia: The Israeli connection

The Israelis should be proud of themselves for the Israeli training and education received by the Georgian soldiers,” Georgian Minister Temur Yakobashvili said Saturday.

Yakobashvili is a Jew and is fluent in Hebrew. “We are now in a fight against the great Russia,” he said, “and our hope is to receive assistance from the White House, because Georgia cannot survive on its own.

Michel Chossudovsky:War in the Caucasus: Towards a Broader Russia-US Military Confrontation?

US-NATO military and intelligence planners invariably examine various “scenarios” of a proposed military operation– i.e. in this case, a limited Georgian attack largely directed against civilian targets, with a view to inflicting civilian casualties.

The examination of scenarios is a routine practice. With limited military capabilities, a Georgian victory and occupation of Tskhinvali, was an impossibility from the outset. And this was known and understood to US-NATO military planners.

A humanitarian disaster rather than a military victory was an integral part of the scenario. The objective was to destroy the provincial capital, while also inflicting a significant loss of human life.

If the objective were to restore Georgian political control over the provincial government, the operation would have been undertaken in a very different fashion, with Special Forces occupying key public buildings, communications networks and provincial institutions, rather than waging an all out bombing raid on residential areas, hospitals, not to mention Tskhinvali’s University.

The announcement by the Georgian Ministry of Defense on July 12 stated that they US and Georgian troops were to “train for three weeks at the Vaziani military base” near the Georgian capital, Tbilisi. (AP, July 15, 2008). These exercises, which were completed barely a week before the August 7 attacks, were an obvious dress rehearsal of a military operation, which, in all likelihood, had been planned in close cooperation with the Pentagon.

The war on Southern Ossetia was not meant to be won, leading to the restoration of Georgian sovereignty over South Ossetia. It was intended to destabilize the region while also triggering a US-NATO confrontation with Russia.

Asia Times:The end of the post-Cold War era

The United States is carefully cultivating an opinion in Western capitals that Russia is “bullying” Georgia. This will strengthen Washington’s case for inducting Georgia into the North Atlantic Treaty Organization, which will in turn facilitate the deployment of the US missile defense system onto Russia’s border. If Moscow remains passive, the Caucasus could become its “bleeding wound”.

Timeline and international reactions (wikipedia).