The Economic Collapse of 2012 on a Global Scale

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A Look at the Big Picture. A full understanding of the coming economic meltdown by lead investors and economists.

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Prognosis 2012: Towards a New World Social Order

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Richard K. Moore | Global Research

Historical background – the establishment of capitalist supremacy

When the Industrial Revolution began in Britain, in the late 1700s, there was lots of money to be made by investing in factories and mills, by opening up new markets, and by gaining control of sources of raw materials. The folks who had the most money to invest, however, were not so much in Britain but more in Holland. Holland was the leading Western power in the 1600s, and its bankers were the leading capitalists. In pursuit of profit, Dutch capital flowed to the British stock market, and thus the Dutch funded the rise of Britain, who subsequently eclipsed Holland both economically and geopolitically.

In this way British industrialism came to be dominated by wealthy investors, and capitalism became the dominant economic system. This led to a major social transformation. Britain had been essentially an aristocratic society, dominated by landholding families. As capitalism became dominant economically, capitalists became dominant politically. Tax structures and import-export policies were gradually changed to favor investors over landowners.

It was no longer economically viable to simply maintain an estate in the countryside: one needed to develop it, turn it to more productive use. Victorian dramas are filled with stories of aristocratic families who fall on hard times, and are forced to sell off their properties. For dramatic purposes, this decline is typically attributed to a failure in some character, a weak eldest son perhaps. But in fact the decline of aristocracy was part of a larger social transformation brought on by the rise of capitalism.

The business of the capitalist is the management of capital, and this management is generally handled through the mediation of banks and brokerage houses. It should not be surprising that investment bankers came to occupy the top of the hierarchy of capitalist wealth and power. And in fact, there are a handful of banking families, including the Rothschilds and the Rockefellers, who have come to dominate economic and political affairs in the Western world.

Unlike aristocrats, capitalists are not tied to a place, or to the maintenance of a place. Capital is disloyal and mobile – it flows to where the most growth can be found, as it flowed from Holland to Britain, then from Britain to the USA, and most recently from everywhere to China. Just as a copper mine might be exploited and then abandoned, so under capitalism a whole nation can be exploited and then abandoned, as we see in the rusting industrial areas of America and Britain.

This detachment from place leads to a different kind of geopolitics under capitalism, as compared to aristocracy. A king goes to war when he sees an advantage to his nation in doing so. Historians can ‘explain’ the wars of pre-capitalist days, in terms of the aggrandizement of monarchs and nations.
A capitalist stirs up a war in order to make profits, and in fact our elite banking families have financed both sides of most military conflicts since at least World War 1. Hence historians have a hard time ‘explaining’ World War 1 in terms of national motivations and objectives.
In pre-capitalist days warfare was like chess, each side trying to win. Under capitalism warfare is more like a casino, where the players battle it out as long as they can get credit for more chips, and the real winner always turns out to be the house – the bankers who finance the war and decide who will be the last man standing. Not only are wars the most profitable of all capitalist ventures, but by choosing the winners, and managing the reconstruction, the elite banking families are able, over time, to tune the geopolitical configuration to suit their own interests.
Nations and populations are but pawns in their games. Millions die in wars, infrastructures are destroyed, and while the world mourns, the bankers are counting their winnings and making plans for their postwar reconstruction investments.

From their position of power, as the financiers of governments, the banking elite have over time perfected their methods of control. Staying always behind the scenes, they pull the strings controlling the media, the political parties, the intelligence agencies, the stock markets, and the offices of government. And perhaps their greatest lever of power is their control over currencies. By means of their central-bank scam, they engineer boom and bust cycles, and they print money from nothing and then loan it at interest to governments. The power of the banking elites is both absolute and subtle…

“Some of the biggest men in the United

States are afraid of something. They

know there is a power somewhere, so

organised, so subtle, so watchful, so

interlocked, so complete, so pervasive

that they had better not speak above

their breath when they speak in

condemnation of it.”

— President Woodrow Wilson

The end of growth – capitalists vs. capitalism

It was always inevitable, on a finite planet, that there would be a limit to economic growth. Industrialization has enabled us to rush headlong toward that limit over the past two centuries. Production has become ever more efficient, markets have become ever more global, and finally we have reached the point where the paradigm of perpetual growth can no longer be maintained.

Indeed, that point was actually reached by about 1970. Since then capital has not so much sought growth through increased production, but rather by extracting greater returns from relatively flat production levels.  Hence globalization, which moved production to low-waged areas, providing greater profit margins. Hence privatization, which transfers revenue streams to investors that formerly went to national treasuries. Hence derivative and currency markets, which create the electronic illusion of economic growth, without actually producing anything in the real world.

If one studies the collapse of civilizations, one learns that failure-to-adapt is fatal. Continuing on the path of pursuing growth would be such a failure to adapt. And if one reads the financial pages these days, one finds that it is full of doomsayers. We read that the Eurozone is doomed, and Greece is just the first casualty. We read that stimulus packages are not working, unemployment is increasing, the dollar is in deep trouble, growth continues to stagnate, business real estate will be the next bubble to burst, etc. It is easy to get the impression that capitalism is failing to adapt, and that our societies are in danger of collapsing into chaos.

Such an impression would be partly right and partly wrong. In order to understand the real situation we need to make a clear distinction between the capitalist elite and capitalism itself. Capitalism is an economic system driven by growth; the capitalist elite are the folks who have managed to gain control of the Western world while capitalism has operated over the past two centuries. The capitalist system is past its sell-by date, the banking elite are well aware of that fact – and they are adapting.

Capitalism is a vehicle that helped bring the bankers to absolute power, but they have no more loyalty to that system than they have to place, or to anything or anyone else. As mentioned earlier, they think on a global scale, with nations and populations as pawns. They define what money is and they issue it, just like the banker in a game of Monopoly. They can also make up a new game with a new kind of money. They have long outgrown any need to rely on any particular economic system in order to maintain their power. Capitalism was handy in an era of rapid growth. For an era of non-growth, a different game is being prepared.

Thus, capitalism has not been allowed to die a natural death. First it was put on a life-support system, as mentioned above, with globalization, privatization, derivative markets, etc. Then it was injected with a euthanasia death-drug, in the form of toxic derivatives. And when the planned collapse occurred, rather than industrial capitalism being bailed out, the elite bankers were bailed out. It’s not that the banks were too big to fail, rather the bankers were too politically powerful to fail. They made governments an offer they couldn’t refuse.

The outcome of the trillion-dollar bailouts was easily predictable, although you wouldn’t know that from reading the financial pages. National budgets were already stretched, and they certainly did not have reserves available to service the bailouts. Thus the bailouts amounted to nothing more than the taking on of immense new debts by governments. In order to fulfill the bailout commitments, the money would need to be borrowed from the same financial institutions that were being bailed out.

With the bailouts, Western governments delivered their nations in hock to the bankers. The governments are now in perpetual debt bondage to the bankers. Rather than the banks going into receivership, governments are now in receivership. Obama’s cabinet and advisors are nearly all from Wall Street; they are in the White House so they can keep close watch over their new acquisition, the once sovereign USA. Perhaps they will soon be presiding over its liquidation.

The bankers are now in control of national budgets. They say what can be funded and what can’t. When it comes to financing their wars and weapons production, no limits are set. When it comes to public services, then we are told deficits must be held in check. The situation was expressed very well by Brian Cowan, Ireland’s government chief. In the very same week that Ireland pledged 200 billion Euro to bailout the banks, he was being asked why he was cutting a few million Euro off of critical service budgets. He replied, “I’m sorry, but the funds just aren’t there”. Of course they’re not there! The treasury was given away. The cupboard is bare.

As we might expect, the highest priority for budgets is servicing the debt to the banks. Just as most of the third world is in debt slavery to the IMF, so the whole West is now in debt slavery to its own central banks. Greece is the harbinger of what is to happen everywhere.

The carbon economy – controlling consumption

In a non-growth economy, the mechanisms of production will become relatively static. Instead of corporations competing to innovate, we’ll have production bureaucracies. They’ll be semi-state, semi-private bureaucracies, concerned about budgets and quotas rather than growth, somewhat along the lines of the Soviet model. Such an environment is not driven by a need for growth capital, and it does not enable a profitable game of Monopoly.

We can already see steps being taken to shift the corporate model towards the bureaucratic model, through increased government intervention in economic affairs. With the Wall Street bailouts, the forced restructuring of General Motors, the call for centralized micromanagement of banking and industry, and the mandating of health insurance coverage, the government is saying that the market is to superseded by government directives. Not that we should bemoan the demise of exploitive capitalism, but before celebrating we need to understand what it is being replaced with.

In an era of capitalism and growth, the focus of the game has been on the production side of the economy. The game was aimed at controlling the means of growth: access to capital.  The growth-engine of capitalism created the demand for capital; the bankers controlled the supply. Taxes were mostly based on income, again related to the production side of the economy.
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Nuclearisation of South Asia

Victory in East Pakistan made the Indian leaders euphoric and megalomaniac. They ventured upon an ambitious force modernization program and also conducted nuclear test in 1974 which impinged upon the security of Pakistan. It impelled Zulfiqar Ali Bhutto to lay the foundations of uranium enrichment plant at Kahuta on 31 July 1976 under Dr. AQ Khan. He pursued the nuclear option despite host of barricades built around him and for this act he was made a horrible example.

Late President Ziaul Haq took full advantage of the favorable phase of Pak-US close relations because of US high stakes in Afghan war and allowed the nuclear program to develop at Kahuta with speed. He announced in December 1982 that Pakistan had achieved the capability to enrich uranium. This miracle was brought about in six years in the face of total ban imposed by the West on transfer of nuclear technology or import of any part related to it. To keep this sensitive project secret from the world was in itself a commendable effort on part of all those associated with it. By the time the western powers got the wind of it, the project had reached an advanced stage and there was no turning back. The significance of the feat becomes more distinguished and inestimable when one realises that this breakthrough was made by a third world country where even needles and ball bearings are not indigenously produced.

Zia made several proposals to make South Asia free of nuclear weapons but India spurned all his offers. No sooner the Soviet troops withdrew from Afghanistan in 1989 and the threat of communism evaporated in the thin air, it brought about fundamental change in the policies of USA in South Asia. Pakistan lost its strategic significance and its nuclear program once again became an eyesore. In order to restrain Pakistan from pursuing its peaceful nuclear program, the US Administration stopped the flow of arms supply and economic aid through infamous Pressler Amendment in 1990. The US on becoming sole super power after the collapse of Soviet Union in 1991, sidelined Pakistan and took India on board. Taking advantage of growth of close ties with Washington and souring of Pak-US relations, India stepped up its propaganda campaign to convince Washington to declare Pakistan a terrorist and a nuclear proliferating state. Obsessed by its security concerns and in anticipation to the fourth round, Pakistan strove hard to keep the widening military balance within limits. It was in the context of its extreme security concerns that Pakistan was forced to make its nuclear deterrence credible by conducting six successful nuclear tests on 28 May 1998 in response to Indian five tests on 12 May. These tests were undertaken in spite of extreme pressure put by the US and other world powers.

Even the Indo-Israeli axis exerted pressure by trying to put into action its long conceived plan of a surgical air strike from Srinagar airbase against Kahuta on the night of 27 May 1998.Vested groups within Pakistan did not lag behind in trying to discourage the leadership from giving a tit for tat response to India and strained their lungs asserting that such a venture would be suicidal for Pakistan.

Irrespective of the colossal internal and external pressures, Pakistani nation stood like a rock and urged the government to go ahead with nuclear blasts whatever be the cost. Pakistan under Nawaz Sharif rose to the occasion and lived up to the expectations and aspirations of the nation.

Nuclearisation of Pakistan poured cold water on the aggressive designs of India. The US started to vainly exert pressure on Pakistan to sign CTBT unilaterally since India refused to do so. Pakistan also kept up with its missile development program which was initiated by Benazir Bhutto and produced series of short and medium range guided missiles much superior to Indian missiles. Once Pakistan got caught on the wrong foot due to AQ Khan’s confession obtained under duress in 2004, the Americans started exerting greater pressure and succeeded in not only penetrating into our sensitive areas but also collecting sensitive data like number of warheads and triggers and storage through aerial photography, infra red snaps and satellite triangulation. They succeeded in making our managers separate warheads from delivery means and from triggers and storing the three components separately, all under the pretext of safety and security. Realising that it can no more blackmail Pakistan or wage an open war, India in connivance with USA, UK and Israel is now trying to achieve its sinister objectives through sabotage and subversion as well as psychological and cultural onslaughts. A vile Indo-US-Israeli campaign has been mounted expressing serious concerns about the safety of Pakistan’s nuclear program. Irrespective of assurances given by Pakistani leaders, they keep stressing that nukes would be stolen by extremists or by officials working inside nuclear installations. In actuality, the trio is striving hard to steal Pak nukes through Blackwater.

The US is least concerned about Indian nuclear program which has worst safe keeping record in the world because of numerous incidents of pilferage and smuggling of fissile material as well as accidents.

Consequent to Indo-US civilian nuclear deal, output of India’s 22 nuclear power reactors would jump to 10,000 megawatts by 2012 and manufacturing rate of nuclear bombs would leap to 40 per year. India has also inked nuclear deal with Russia, which has promised to set up 4 new reactors. India’s agreement to place only 4 nuclear reactors under safeguards of IAEA by 2014 is inconsequential. In next five year time, it would be able to manufacture 200 additional nuclear bombs thereby doubling existing stock level. It is a purposeful move to pressurize Pakistan to do the same well knowing that US influenced IAEA has double standards when dealing with Muslim and non-Muslim countries. Indian lobby in USA succeeded in making Kerry Lugar aid bill for Pakistan harmful. Apart from other insulting conditions, the bill seeks freeze of Pak nuclear program. Despite achieving quantum jump in nuclear field, Indian leadership remains worried over Pakistan’s nuclear capability. While Indian Army Chief Kapoor is threatening to wage war against Pakistan and China, on the other he and naval chief are fretting and sweating that Pakistan has exceeded minimum nuclear deterrence level and improved its nuclear capability. Blackwater outsourced by CIA and RAW is being used to create anarchy in major cities and to gain access to nukes. Reportedly, Blackwater has begun to make diagrammatical drawings and video films of nuclear installations as well as available routes.

Pentagon had conducted a war game in 2000 in which it was brainstormed that whenever Indo-Pakistan war takes place and Pakistan Army is on the verge of throwing up its cards and is preparing its nukes, US Special Forces would swoop in to destroy them during the assembly of warheads and triggers or while on the move. Currently, the US is busy giving final touches to its sinister plan how to quietly extract Pakistan’s nuclear teeth after giving heavy dozes of anesthesia.

It is desperate to gain access to our nuclear arsenal under the garb of making it safe and secure from accidents, proliferation and theft. It wants its special marine force to create secure parameter around each site, or evolve a joint control system. Notwithstanding that acquisition of nuclear and missile capability by Pakistan has greatly minimised the risk of war with India, however, it has earned Pakistan the perpetual hostility of India, Israel and USA in particular and western world in general since possession of nukes with a Muslim country is unacceptable to them. New ways are now being devised by our adversaries to denuclearise Pakistan without having to wage a war.by Asif Haroon Raja

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