America overcomes the debt crisis as Britain sinks deeper into the swamp … Britain has sunk deeper into debt. Three years after bubble burst, the UK has barely begun to tackle the crushing burden left by Gordon Brown. The contrast with the United States is frankly shocking … The latest report on “Debt and Deleveraging” by the McKinsey Global Institute shows that total public and private debt in the UK is still hovering at an all-time high. It has risen from 487pc to 507pc of GDP since the crisis began … The ordeal of belt-tightening will be grim, dragging out for a generation if Japan is any guide. The Japanese at least began their post-bubble debacle as the world’s top creditor nation with a trade super-surplus and a savings rate of 17pc. Britain has no such buffers. It is a very different picture in the US where light is emerging at the end of the tunnel. American banks, firms, and households have been chipping away at their debts, more than offsetting Washington’s double-digit deficits. The total burden has dropped to 279pc, down from 295pc at the peak of the boom. Households have purged roughly a third of the excess, roughly tracking the historic pattern of post-bubble deleveraging. – UK Telegraph
Dominant Social Theme: The US is really doing well. It only appeared to be doing badly. And President Barack Obama is doing better and better …
Free-Market Analysis: Every now and then our favorite mainstream journo, Ambrose Evans-Pritchard, runs off the tracks. Evans-Pritchard makes the case (see excerpt above) that Britain is not recovering from the 2008 financial crisis but that the US is on the way up.
Say what? As a publication that covers dominant social themes of the power elite – the fear-based promotions that frighten middle classes into giving up power and wealth to globalist constructions – we would point to this sort of article as a good example of power elite rhetoric.
We are not accusing Evans-Pritchard of purposefully writing an article that buttresses Anglosphere power-elite themes. In fact, he’s an acute observer of the economic scene and has written a steady stream of great articles about the increasingly hopeless position of the euro and even the European Union itself. But in this case, whether or not he is aware of the larger promotional picture, he certainly has written an article that fits into a trend we are observing.
Taken at its broadest brush, we tend to believe the powers-that-be want US President Barack Obama re-elected. This is because evidently and obviousy he is “their” man. They’ve put a lot of time and energy into making him seem presidential in our view. They’ve awarded him the Nobel Peace Prize (!); they’ve ensured massive, positive coverage of him and his positions in the West’s bought-and-paid-for mainstream press. Something funny is going on with this fellow. Once he’s re-elected, if he is, we may soon know more …
And they do seem to be moving on the re-election front. We became aware of it at least three months ago when more and more reports of the US “recovery” began to be issued. These reports featured a dropping jobless rate along with increased economic activity.
Now Evans-Pritchard has discovered a McKinsey Global Institute report that apparently contrasts the UK unfavorably with the US. Evans-Pritchard seems suddenly convinced that the US is handling its “recovery” a lot better than the UK. Here’s some more:
Tim Congdon from International Monetary Research said US banks were never as damaged as claimed and now have the highest capital ratios in over thirty years. The rate of loan write-offs has dropped from 3.2pc to 1.9pc, a faster improvement than after the financial crisis of the early 1990s.
In hindsight, the US property boom was was remarkable modest compared to what happened in Spain, or what is happening now in China now where the house price to income ratio in Beijing, Shanghai, and Shenzhen is near 18. America’s ratio peaked at 5.1 and is already back to its modern era average of three.
Personally, I am coming to the conclusion that the US crisis in 2008-2009 was largely a case of botched monetary policy and could easily have been avoided. The growth of M3 money — which the Fed stopped tracking thanks to a young Ben Bernanke — was allowed to balloon in the bubble, then collapse in 2008.
Europe’s crisis is more intractable, with far greater levels of bank leverage and vast intra-EMU trade imbalances. But botched monetary policy is a big part of the story there too. The ECB let M3 growth overheat, then let it crash in 2008, then crash again late last year, dooming Club Med to Sisyphean torture and certain asphyxiation.
Where to start? The capital ratios that Evans-Pritchard speaks of are electronic digits and have no applicability to the traditional backing of “honest money” – precious metals. If one is comforted by the idea that banks have accumulated electronic fiat digits under force of law, then one will think US banks have made “progress.” But one could make the opposite argument as well.
He claims the US property boom was actually remarkably “modest” – but we remember that at one point the US Fed had to drop tens of trillions into the US and the world’s economy because the entire banking system was freezing up. Tens of TRILLIONS.
We’ve estimated central banks – especially the US Fed – have probably backstopped the world’s financial system with funds in excess of US$50 trillion by now. That doesn’t sound like a modest crisis to us. It wasn’t a real-estate crisis, either, but a crisis of central banking fiat money. It was ultimately a crisis of the dollar reserve system.
And we’ve long maintained the dollar reserve system basically died in the past three years. It is no more. When you have to prop up your financial system with a US$50 trillion injection of money-from-nothing, you don’t really HAVE a financial system anymore.
In any case, the Internet has played its part as well. As we’ve pointed out for years, the moral authority of central banking has eroded, especially in the US where millions, even tens of millions, are aware of the trillions that the US Fed has spent propping up the world’s financial system.
When the elites cannot make a moral argument for their actions then the system itself begins to look despotic. That’s what is happening now. Someone who’s lost his home, job and family will not easily accept an explanation that the banking system receives its trillions for the sake “stability.”
Add to this, in the US anyway, sociopolitical guarantees – according to economists – of something in the area of US$200 trillion and you have a system that is nothing like Evans-Pritchard’s characterization. It is NOT a stable system at this point. Certainly, the US is NOT facing a “remarkably modest” crisis.
The symptoms of instability go beyond the economic, however. There is a good deal of social unrest in the US – as there is increasingly in other larger states, especially China. And while the US of late does not have a cultural affinity for violent revolution, there are evident and obvious forces at work destabilizing the current “empire.”
The forces, of course, are being generated by the country’s inherent support for its one-time republican form of government. Various freedom-oriented movements such as the Tea Party movement and a massive coalition supporting libertarian-republican presidential candidate Ron Paul are radically shifting the cultural conversation.
The current US empire is in a sense both socialist and fascist, from what we can tell. Its million-plus intelligence employees are mostly concerned with spying on US citizens. The Anglosphere power elite that wants to run the world has always looked on the US as its primary problem.
This handful of elite families that control central banks around the world have used their trillions to build a shadow government in the US and elsewhere that mimics traditional government but has entirely different goals. In the 21st century, however, this shadow system of burgeoning global governance has been found out by those who have created websites and blog sites on the Internet with the purpose of reporting on their societies and economic situations.
What has emerged is far different than the story that the mainstream media explained to Western populations in the 20th century. Bereft of its controlled media, the elites have not been able to counteract a flow of real news and information.
Over time, the elites’ shadow system of governance has become a more palpable reality. In the US alone, sophisticated blog-observers such as Catherine Austin Fitts have pointed out an up-to-US$1.5 trillion black budget of unreported and diverted funds that are going to various unacknowledged projects probably of military or military-intelligence import.
The US has perhaps 1,000 overseas military bases and is fighting probably a dozen covert or public wars and threatening more of them. Internet reporting increasingly shows us that financial statistics presented by the US government, especially the federal government, have little or no applicability to reality.
The US is not just an empire – it is apparently an empire in the service of the Anglosphere one-world conspiracy. The wars that the “US” is fighting now are the capstone of the New World Order. The electorate has little idea of why they are being fought or why they are taking so long and maiming so many.
The US and the West itself is not actually run by its citizens anymore and probably hasn’t been (at least in the case of the US) for about 100 years. Small-bore elections and small-bore economic and the entrepreneurial activity have little impact on the larger power structure, which is animated by huge corporate, banking and military enterprises run out of the City of London, Washington DC, Tel Aviv and apparently the Vatican.
To indicate that the US economy is “bouncing back” is to make a statement that is devoid of reality, in our view. The unemployment rate in the US is probably 20 percent or greater, price inflation is far greater than is generally stated and whole cities (Detroit) are being torn down as US industry continues to move abroad, thanks to such malicious managed trade treaties as CAFTA and NAFTA.
Here’s what’s going on – and Evans-Pritchard is not, in our view, reporting on it, for some reason, not this time anyway. The powers-that-be apparently want to re-elect Barack Obama – and from now until election day US citizens may be exposed to a steady diet of “economic recovery” news.
But after the re-election of Barack Obama – who is not what he appears to be – the globalization of the West and especially the US will continue apace. We shall discover the “recovery” is not quite so substantial as it has been said to be.
Instead, there will be a continued effort by the elites to hollow the US’s and the West’s economy in order to bring the economies of the developing world and the US into rough parity. This is all part of a larger process inherent in creating an equitable new world order – from the point of view of the elites, at least.
Conclusion: US “recovery” has little to do with it and is, in fact, beside the point.