2010 Analysis: The Road to Disaster

In this edition of my series of economic analysis, I choose to publish a speech presented by  Professor Antal E. Fekete at Money and Banking San Francisco School of Economics about six weeks ago. According to Mr.Fekete is today’s financial system a result of a 100 year old experiment that’s gone terrible wrong, and if we don’t change it soon, our whole sivilisation is heading for a disaster of unknown porpotions.

“The past one hundred years must be looked upon as a reactionary episode in our civilization, a mindless experiment with irredeemable currency. The experiment has failed miserably, as have all similar experiments in the past. Unless stopped forthwith, it will plunge the human race in unprecedented economic misery. It literally threatens the survival of our civilization and the entire system of our values.”

Antal E. Fekete

(Article in Norwegian, transcipt of original speech in English)

Dagens finanssystem er resultatet av et 100 år gammelt tankeløst ekspriment som har gått forferdelig galt, hevder professor Antal E. Fekete. – Med mindre det ikke stanses straks, vil menneskene kastes ut en økonomisk elendighet som truer vår sivlisasjon og våre verdier, sier professoren.


I serien av økonomiske analyser for 2010 velger vi denne gang å publisere en tale som den anerkjente professoren Antal E. Fekete holdt under en privat middag i New Zealand for om lag seks uker siden.

Jubilet vi glemte

– 2009 vil mest sannsynlig utløpe uten noen markering av 100-årsjubilet for den viktigste begivenheten i historien som fremstår som hovedårsaken til den største økonomiske krisen i dette århundret, begynner Fekete sitt foredrag.

Han viser til den såkalte “loven om gangbar mynt” fra 1909.

Det var en lov som ga franske og tyske banker lov til å lage pengeseddler som var godkjent som betalingsmiddel.

Resten av verden fulgte snart etter, og her startet egentlig gjeldsboblen, forklarer Fekete:

“In this way all roadblocks were removed in the way of financing the coming world war through credits and monetizing the resulting debt through the issuance of bank notes.”


“Krigsveldferdssystem”

Ifølge Fekete bankenes monopol på lovlige betalingsmidler skapt det han kaller et “welfare-warfare”-system, som ved flere anledninger har vært brukt til å finansiere krigføring.

Det pussige er at systemet fører til at begge parter i konflikten tjener på det.


“One unintended effect was that all efforts to avert the war and the concomitant great bloodshed and destruction of property through better diplomacy were short-circuited. The war parties in both countries had won a great victory. The cause of peace suffered a decisive defeat.”

“The first author to unmask the connection between the Legal Tender Laws of 1909 and the outbreak of the war five years later, in 1914, was the German economist Heinrich Rittershausen (1898-1984). He also predicted the Great Depression, and linked the coming unprecedented wave of unemployment to legal tender.”

Systemet må revurdes

Professor Fekete mener dagens pengesystem må revurderes og vi ennå ikke forstår full ut hvordan kreditt og gjeld påvirker samfunnsutviklingen.

“We are left to second-guess history. Would the senseless killing and destruction of property have come to an early end in the absence of legal tender laws, just as soon as the belligerent governments had run out of gold to finance it? Most contemporary observers had predicted that it would have. There was no way to finance a conflict of this magnitude out of taxes. People did not understand that legal tender was an invisible form of tax to pay for the greatest war up to that point in history.”

Prostituerte og kvakksalvere

Professoren kommer også med et par knytteneveslag til dagens økonomer og finansjournalister.

Om økonomene:

Mathematics has been prostituted as never before in the history of the Queen of Sciences. Research papers on economics and monetary theory studded with formidable-looking but otherwise vacuous differential equations are presented as Holy Grail. The studied gestures and hocus-pocus of latter-day economists is similar to those of the priesthood in ancient Egypt. By virtue of their knowledge of astronomy ? knowledge denied to the general public? Egyptian priests could predict eclipses of the Sun and other celestial events. They keep their audience in awe and in fear of their supernatural powers. The difference is this: while Egyptian priests were professionals representing state-of-art scientific knowledge, mainstream economists are charlatans and quacks who, while basking in their own glory, are totally incapable of predicting financial collapse even when it is staring at them in the face, as their miserable performance in 2007 showed. Worse still, they are totally incapable to admit their own mistakes.”

Om media:

“The loyalty of the economists’ profession and that of financial journalists, has been bought by the central banks’ eagerness to sponsor research. “Whoever pays the piper shall call the tunes.” Authors who were prepared to sing the praise of irredeemable currency were handsomely rewarded. Authors critical of fiat money need not apply. Most of the economists and financial journalists today are scribes for hire, selling their pen to the government and the central bank. Propaganda is passed on as research.”

Gullstandarden må gjenninføres

Professor Fekete har også en klar oppfatning av hva som må til for å løse flokene i dagens finanssystem.

Blant annet må fiat-pengene erstattes med et betlingsmiddel som kan relateres til noe håndfast og målbart, som gull.

Hvis ikke verdens ledere gjør noe straks vi verdens kastes inn i en økonomisk elendighet vi aldri har sett maken til, og som truer sivlisasjonens overlevelse.

En ny verdenskrig er uungåelig hvis vi fortsetter med det samme pengesystemet, er Antal Feketes konklusjon.

Her er en utskrift av hele talen som professor Antal E. Fekete holdt 28.oktober.

(Her er en google-oversettelse til norsk )


Tidligere analyser:

David Rosenberg – Gluskin Sheff

Goldman Sachs

Sosiété Générale

UniCredit

Danske Bank

Deutsche Bank

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0 thoughts on “2010 Analysis: The Road to Disaster

  1. Pingback: China’s Sovereign Wealth Fund To Invest In Nassim Taleb’s Bear Fund « The Swapper

  2. Pingback: China’s Sovereign Wealth Fund To Invest In Nassim Taleb’s Bear Fund « Econotwist's Blog

  3. IMPORTANT CORRECTION: This was first presented as a speech made by professor Benoit Mandelbrot.

    I was misinformed.

    These words belong to professor Antel E. Fekete of San Francisco Business Shoool.

    I appologize for the mix-up.

    TheEconotwist

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