What do you do when inflation is so high, your people are having to choose between heating and eating? Well, logically, you should admit that your economic management has been poor. But the problem is, when it comes to the economy, Western nations are pretty bad at self-reflecting.
Three years ago, in an episode of Renegade Inc., Matthias Weik gave a very stark warning about the global economy. Then, in the following November in Stavanger, Norway, the author warned about inflation and The Biggest Crash Ever.
Given that Jerome Powell recently conceded that inflation is effectively out of control, and that US national debt is on an unsustainable path growing faster than the economy, it would appear that Weik has not only been vindicated, but that the central bankers are stuck between a rock and a hard place.
In a sense, it doesn’t take a genius to predict that the printing of huge swathes of money that finds its way into land prices and asset bubbles, results not only in higher inflation but also higher profits for a small enriched minority. Indeed, Weik points out that the super-rich have more than doubled their wealth in the decade since the Lehman Brothers crash.
The problem political decision-makers face is finding a pragmatic way of reining-in these excesses for the betterment of society. Ultimately, it’s the poorest who end up paying the price for the proliferation of money-printing by way of rising utility costs and food prices. But if the central bankers hadn’t printed so much money, this situation wouldn’t have arisen in the first place.
Weik says the establishment are thus faced with a dilemma. On the one hand, if the central bankers stopped printing money, stock, crypto and real estate profits would plummet and people would lose their jobs. But on the other hand, if they keep on printing, inflation would go through the roof. In other words, it’s a no-win situation for society.
The key problem, is that in 2008 the public were told that the ‘solution’ to the crisis, was to be a temporary measure. Quantitative Easing (QE), we were told, would be a stop-gap method of fixing the fundamental structural problems within the economy. But it turns out that it hasn’t been a temporary measure at all, but rather, QE has become a permanent economic tool.
This lack of foresight among policy-makers appears to be predicated on the notion that the problems associated with pumping seemingly endless amounts of money into the system is to merely postpone, rather than solve, these problems.
Weik predicts that central banks will raise interest rates incrementally but then reduce them again in response to criticisms from US stock markets and pension funds, thus potentially making an already over-inflated debt bubble even bigger.
The author says that interest rates are unlikely to reach the high levels of the 1980s and 1990s because policy-makers and central bankers today are confronted with a completely different landscape compared to then.
Weik notes that, essentially, banking models have had to adjust to take into account this changing landscape and that it has become extremely difficult for policy-makers to navigate levels of private debt and a multitude of exotic financial products that weren’t there 30 or 40 years ago.
“If the debt bubble bursts”, says Weik, “we’ve got a much bigger problem than we would have had in the 70s or the 80s.”
The author appears to suggest that it’s only a matter of time before inflationary pressures result in the bursting of the bubble and predicts that the stock, asset and crypto markets will be the first to go followed by the real estate sector.
Weik suggests that best way for the public to protect themselves against these pressures is to invest in precious metals and to avoid the debt trap by living the lifestyle that is affordable for them, not what they pretend is affordable.
“For me”, says Weik, “the biggest thing is health and freedom. If I’ve got debt I’m not free, that’s why I don’t have debt.”
Alex Krainer is another commentator who, for many years, has been warning about inflation and loose monetary policy. Krainer says that inflation’s entrenchment is illustrative of what the Scottish writer, Robert Louis Stevenson said is a banquet of consequences that everybody, sooner or later, sits down to.
“Central bankers”, says Krainer, “have only one tool left and that is QE, which is just a fancy word for printing money. Basically, they will not abandon that one policy tool and what we’ll end up getting is a period of stagflation. Inflation will probably, over the years accelerate, and could even turn into hyper-inflation.”
A stagflation scenario, that is, either sluggish economic growth or no growth at all, set against a backdrop of rising inflation, is a typical outcome of printing far too much money and where debt gets to unsustainable levels. We are now at the point where the bankers are scrambling to do something about it.
The only prosperity-creating tool they have at their disposal, is more debt monetization. But this kind of strategy doesn’t solve any of the economic issues. It only makes them worse. Even the biggest cheerleaders for the system know that this is an absurd policy to follow. But the bankers have no choice because deflationary collapse and economic depression is the inevitable consequence of not turning to the printing presses.
Krainer says that pumping money into the system only buys bankers and politicians time. It doesn’t address the fact that the monetary system as a whole is fraudulent. Not only does the system have crisis baked into it, but it has also tended to move societies towards war.
Krainer outlines the history and rationale that underpins the war-dependent economy:
“The Bank of England was created in 1694. Between 1701 until 1815, England prosecuted 18 officially declared wars against its rival France at that time. This is not a coincidence. US congressman Ron Paul said that it’s no coincidence that the century of central banking has coincided with a century of total war.”
“In more modern times, Journal of Public Health researchers in the United States tallied up all the wars that have been prosecuted in the world from the end of WW2 until 2001, and they found that the United States initiated fully 80 percent of them.”
There is a systemic explanation for this imbalance. In the past two decades and more, Western interventions in the likes of Kosovo, Afghanistan, Iraq, Libya, Yemen and Syria, are indicative of the neocons permanent state of war footing. The West needs constant enemies as diversions from its neoliberal economic problems.
As Krainer wrote in August, 2020:
They have “surely planned diversions to misdirect our grievances… One of the greatest means of diversion are wars. We must therefore guard against believing that our enemies are the Russians, the Chinese or whomever the logic of divide-and-rule would pit us against.”
The most recent example of the Wests systemic impulse for war is their geopolitical game-playing against Russia. The manufacturing of the public’s consent necessary to enable it, has been ongoing since the neocon putsch began in 2014 in Ukraine. The ultimate beneficiaries of any war against Russia are the tiny minority within the military-industrial complex.
Krainer is optimistic that public opinion opposing war with Russia will be sufficient enough to arrest any military aggression, mainly because he argues that the West have lost control of the narrative. But that doesn’t mean that the likes of the US and the UK have any intention of wanting to learn from Russia in terms of the conservative way the country has managed its debt-free economy.
The Wests imperial delusions are premised on the notion that Russia would implode if not for its oil and gas exports. NATO remains locked into the illusory narrative that the state of the stock market in the West is indicative of a strong economy and that it’s this that justifies the continued existence of its war machine.
Citing the Preamble to the Constitution of UNESCO, Krainer says that the most important thing we can do to stop this machine is the truth:
“Conditions for war are created in the minds of men. It’s in the minds of men that conditions for peace have to be defended.”
“War is always the war for people’s minds. If we refuse to go to war, war is not going to happen”, says Krainer.
Has the time come for the people of West Asia to reclaim political and media narratives stripped from them by Western imperialism?
Are the chickens finally coming home to roost for the BBC?
Does the US withdrawal from Afghanistan mark the end for the empire?