When the Smoke Clears, Who Will Still Be Standing?

The Bank Panic of 2008 will once again prove what should be common knowledge: a nation that makes nothing is worth nothing. It will also prove what the British Empire learned after parliament in 1861 allowed British business to go to the colonies to seek cheap labor: impoverishing your own people for the sake of a small elite and de-industrializing all lead to disaster. A nation of shop owners is just that, a nation of shop owners. It is not a nation of power. Long ago, if the British had not become obedient lap dogs of the Americans, Britain would have become a quaint little second/third rate European power.

As it stands, the zenith of British power was fully demonstrated for the world in the Falkland Wars where the British strained every resource they had just to reach the islands and then fight a second rate and half way demoralized Argentine army. Yes they won, but that was as much of a victory worth celebrating as the American victory over the Iraqis.

So again, the question stands, who will be left standing when the last crag of the dieing financial empires falls from the weight of its own paper and the dust finally settles upon it? It will be the nations that have retained or built up their industrial base and who first and foremost service their own citizenry. Thus it will be Japan, South Korea, Taiwan, Russia, Germany and France and maybe just maybe India but not China nor America.

First and foremost, Japan, Korea, Taiwan, France and Germany have an updated industrial base that first services their own population and then that of the export markets. In other words, they can meet their own needs. The Germans in particular were also very careful about their banking behavior. The central German bank will spend a whopping $12 billion over two years to fix up the economy and that's $12 billion it actually has and does not have to borrow.

Russia too, with an old soviet industrial base, that was ravaged by the West, has been rebuilding its foundations for the past 9 years, with an annual rate of industrial growth of 7-8%. It too is now in a position where it first and foremost services its own internal demand. To most Anglo-Saxons, this may come as a shock, as the propaganda they have been fed is of a collapsed Russian economy dependent only on oil. However, the Russian boom started in 1999, long before oil broke $20/barrel.

India will be harder pressed as much more of its industry is based on export. However, unlike China, it has not developed as much consumer goods industry solely for exports and is still more focused internally. This may give it a fighting chance to come out of this disaster poorer but with a foundation to build on.

China is a disaster in progress. Over 100,000 factories have closed, civil unrest is sky rocketing and a possible civil war is never out of the question. This is because, outside of the 200 million that make up the Chinese middle class, the billion plus can not buy nor afford the trinkets that the industry produces not to mention the more expensive items. With American and, to a smaller extent, European demand drying up, at an incredible rate, the Chinese production capacity, which fed them, is a pointless weight. The local population can not afford to absorb the capacity, since wages were kept as low as possible, many less than $.25 per hour. The working poor now being laid off will only grow angrier and more rebellious.

As for the Americans and the British, this is a disaster from which it will take generations to recover. Both nations have de-industrialized and can barely provide the base necessities of industrialized goods for their people. By bare necessities, we do not mean TVs, electronics and other such things, but processed foods, clothing and shelter. Even their defense industries are dependent on foreign subcomponents. Luxury items, such as consumer electronics, furniture, etc are all imported. The Anglo-Sphere has long ago built its future on the false promise of paper wealth, a wish that while at first bringing a sweet high like heroine, in the end will cost dearly in withdrawal.

The Americans in particular will now face the same challenge as the Soviet Union, a nation which while it still had some capacity to produce large heavy machinery and military equipment, was totally unable to satisfy its people's cravings for consumer goods and who with little real wealth available, was no longer be able to purchase it abroad. It is moments like these that even the tame peasants of the Anglo-Sphere may actually rise up in rebellion.

In the end, the Anglo-Sphere's and Sino-Sphere's economic theories of paper wealth and mass export industrialization will be both proven to be evolutionary dead ends. Once more merchantalism will be proven as one and sure economic end game that has and still does work.

The Bank Panic of 2008 and the Death of Nato

NATO, an organization not only out dated but without official purpose has not only out lived its enemy, the Warsaw Pact, not only out lived its purpose in defending Western Europe from the Soviet Union and the Warsaw Pact but like a ravenous blob, has, instead of dieing a dignified death, gone on an eating spree swallowing up one nation after another in it's "pact of peace and defense" while launching three wars of aggression.

NATO was originally designed to keep Germany down, America in Europe and the Soviets out. With no Soviet Union, NATO's purpose, like that of all good bureaucracies, has mutated. It has reneged on its promises to Russia not to expand eastward and has expanded eastward into some rather questionable regimes, particularly in the Baltics. All the same, as it was declaring Russia a useful partner, though a minor one not worthy of ever inviting in, it sought out a new purpose.

The purpose was found on first the battle fields of Bosnia and than later in the air over Serbian cities, where civilians were massacred to the back pats of "job well done" from NATO. Of course, this was all done with major arm twisting by the Americans of a reluctant European NATO. It would seem that defending and militarily supporting Islamic jihadists was something that Dhimmi Washington was much more apt for than the Europeans. However, the USD won hands down and Europe went along, just like it went along to Afghanistan.

Afghanistan was and is the first real NATO fighting war. No longer is this primarily NATO bombers dropping bombs, often on civilians targets, from 3,500 meters, no this is a fighting war with a jihadist guerrilla force, trained by the very same NATO experts. Afghanistan as a whole has already shown NATO to be an empty shell. Many of the members have opted out of contributing anything to the conflict and quite a few that have sent soldiers have sent them with such strict rules of engagement (ROE)s that they are all but useless.

To the Anglo-American Neocons, this of course was a disaster. Their grip on power over Europe and thus the EU in general, was cracking. Add to this the economic knots tied by Russia to several key members, using the very real ropes of energy and business investments, and NATO was opting to be nothing more than a sewing circle.

The Anglo-American Neocons had to take bold action, something that would cause the member states of NATO to recoil back under the Neocon umbrella and unify against a common enemy. But whom? The Muslims showed little ability to project military power into Europe, they do much better with immigrants. The Chinese were out of the question a general rule, way to much elite money at risk for that kind of nonsense. Thus there was only one clear choice: Russia. But how to resurrect the Soviet Union, or at least it's shadow?

Enter stage right, a small time Georgian dictator and one not to bright but very egotistical. The perfect dupe: Saakashvili.

Apparently convincing Saakashvili that exterminating an autonomous province full of a minority that was at once not only protected by Russians but who were 90% Russian citizens, was not a difficult concept, even though he must have known that there was a very large chance that things would turn out just how they turned out. How much and what kind of aid was promised to the Georgian leadership will always be a mystery. What is known, from this writer's first hand knowledge, is that the Georgians have been expecting America to fight a war with Russia for them, since 2001, from the times of Shevardnadze.

Of course, the over stretched US and UK had no plans to ever start a war for Georgia but Georgia was central to their plans to start a war for them. Start a war it did, however not only did the Russians react but they reacted with lightening speed, destroying the Georgian war machine in 2 days and absolutely routing the Georgian forces into a full retreat. In small nations there is precious little space to retreat to.

The Angl0-American Neocons won the over all PR war, making their sociopathic puppet look the part of the victim. However, past rhetoric, the desired reaction did not happen. Germany, France and Italy did not move to the side of the Anglo-American military industrial complex. Instead they negotiated a settlement, the last thing the Neocons planned on or wanted. Furthermore, rifts appeared in various other NATO countries, even Estonia, where groups of MPs decided enough was enough and they were not going to suffer for the Georgian stupidity by loosing business with Russia. Even Brussels said "No" and all flatly said no MAPs (Membership Action Plans) for Ukraine and Georgia.

These were all severe blows to the Anglo-American Trotskytes, no less severe as not coming themselves to the defense of their puppet. This was equally a powerful message. The failure in Afghanistan only adding insult to injury.

Still, all this in itself, may not be enough to finally finish off NATO and end the 100 years of Ideological Warfare, for yes, dear reader, we have yet to leave that period. Russia is no longer the Soviet Union, no longer the Stalinist Marxists, but Economic Trotskyte Marxism (fascism) is alive and well, having infected the West flowing from the decayed corpse of Military Trotskyte Marxism (Nazism). NATO is the final guard against the return of the traditional world, where nations sought economic advantage for themselves not in the name of some mutant form of Internationalism. It is the final guard against nationalistic states that sought the betterment of their people first and foremost and not that of some hypothetical global village or for an internationalistic elite.

The Bank Panic of 2008 may be, however the final stone to knock down this aged and staggering Goliath. The Anglo-American Trotskytes who created this mess are in short, bankrupt.Their ability to project power grows weaker every day with a new DOW low. At the same time, nations such as Iceland, once one of their key military posts, are seeking aid not from their so called allies but from Russia itself. Bound together by economic or cultural or religious or historical ties, or all of the above, nations such as Iceland, Germany, Romania, Bulgaria, Greece, Czech, Slovakia and others will naturally pull away from the now bankrupt alliance. Historical ties that were supposed to have died along with history, as proclaimed by one of the fathers of Trotskyte Neoconism: Fukuyama, will now return the globe to an equilibrium long not seen and one that promises more stability than the Internationalist regimes of the past 100 years.

When Doing Nothing Is the Only Smart Thing To Do

The global melt down is raging and gathering strength, turning from a Category 3 Hurricane to a Category 4 and threatening a Category 5 with maybe an earthquake or a volcano for company and every move of the central banks has failed. Why?

Simply put, the Masters of the Universe (or at least it's Finances) have read the wrong history books to draw the wrong conclusions. All are looking at the Great Depression, where over inflated stocks and high interest rates and a relatively tight money market caused a large crash and where liquidity was pulled out causing a massive contraction.

The problem is, of course, this is the wrong experience to look at but it is the model upon which they are basing their solutions on: flooding the market with liquidity where hyper inflation is not a possibility but now a given. Of course the issue here is one of confidence not more cash, but as the insanity continues (doing the same thing under the same conditions and expecting a different result) liquidity and lower interest rates (thus sparking more liquidity) is being constantly created and yet the markets continue to fall. Why?

The better historical example is the Bank Panic of 1872. What never heard of that? To bad, because it made the Great Depression look not so great and not as so much of a depression. Unemployment rates hit nearly 50% from the central plains of the Russian Empire west to the gold coast of the American Empire (and yes, the US has been an empire from the day it broke away from England. An Imperial Republic but an Empire non-the-less. On this at another time).

What caused the great Bank Panic of 1872? The introduction of mortgages in Austro-Hungary and the German Empire (substitute for complex mortgages by modern America and England). Both were driven on to much loose money, no supervision, massive corruption and a huge "perpetual" building spree. The entry into the market by a new economic giant under cutting prices in the industrialized world for manufactured goods and food products, was the final push. In this case it was America doing it to Europe, just like China has done it now to America.

America in the late 1860s early 1870s caused a collapse of established industries in Russia, Austro-Hungary, Germany and France. This in turn drove up unemployment, put a brake on new planned and often under construction projects and caused the banks to reposes property. Thus began a Crisis of Confidence and walla, something that makes the Great Depression look almost trivial and affected every major nation. Sounds like today? "Ywu Betche" as Vice Presidential candidate Palin would say, if she understood anything about economics. She doesn't.

So what is the solution for a Crisis of Confidence? Doing nothing...something the modern Keynesian ideologues can not bring themselves to do. They blindly, and yes these egotistical monsters are blind to anything but their own bloated opinions of self worth, feel in the deepest recesses of their souls that they must do something, always, for the world would surely collapse if they did not.

But here is the rub, the more they do, the more radical their actions, the more of a message of panic they send. This is simple human logic, but something far beyond their ability to grasp. Every bailout has shown that the central banks fear a far worse future then they let on. This in turn has drawn a bigger draw down in the markets. Every flood of cash, has had the same effect. Every hollow assurance has rung just hollow, but still they continue.

If you want the solution, say enough is enough. The markets did not collapse when the US Congress, for a short brief momentary break from its greed and stupidity, actually shot down the $700 billion bailout. The markets began to recover, yes recover. But what did those idiots that the American people hire but never fire, in Congress do? They allocated yet even more funds to various "emergency" projects and now passed a $850 billion bailout, even bigger, even more radical and sending an even louder message of "we're doomed! All doomed!"

The markets have reacted accordingly.

The coordinated rate cuts have done the same. Now the crisis is obviously not limited to one or two or three countries but to the investors' eyes, it has spread world wide. Why else would central banks collaborate in this way. It must be true.

Again, the markets have reacted accordingly.

This weekend's meeting of top world leaders with the Bush regime, to "solve" the issue and the possibility of further American Marxism (yes America, you are a Socialist mega-state taking your final steps into the loving embrace of Marx...enjoy the next 100 years of pain, you're bringing it on yourself), by further nationalization of the banking sectors, will cause the markets to again react accordingly.

Thus the vicious cycle, where every solution only creates a worse problem and requires a yet more radical solution creating as yet a more radical problem.

The only question that remains in this perfect spiraling storm: is this all by accident or purposeful?

The Global Credit Panic Is Russia's Chance to Reverse the Status of Colony

First, dear readers, let us establish why states through out history have established colonies in far away and not so far away places. The reasons are varied and defense, expansion of populations and outlet for ambitious men, imperial or missionary drives are part of the answer, however, these are all "cost" centers of sorts. Only one reason exists that actually benefits the bottom line of a nation: economics.

Colonies, specifically economic colonies, serve a dual purpose. The first is as a source of raw resources, be they common resources in greater abundance in the colony or rare resources found no where or in few other places. The second, equally important duty is as a dumping ground, a closed but yet extended market, for the excess production capacity of the home country.

For this reason, the Tsars moved east into Siberia, even as the British, French, Spanish, Portuguese, Dutch, Swedish and Danes moved to the Americas (also to be followed by the Russian Empire at a later date), Africa and eventually the rest of the world. This is what the original 13 British colonies of the modern USA were built upon. This is what China with the various zones of economic control was used for. This is what the US passed the Monroe Decree in it's attempt to block off the Americas only for itself. History is full of such instances and they go back to the ancient Greeks and Philistines, over 4,000 years ago.

Unfortunately for Russia, and the former states of the Soviet Union, that is also the exact position that they found themselves in in 1991 and have continued to be in various and to various degrees since. Only Russia to a greater extent has started to truly throw off the mantel of Western colony and reassert itself.

Soviet enterprises and what passed for businessmen were simply not ready for the onslaught of the West and to a smaller degree of the east Asians. Coupled with corrupt and drunken government puppets, they and the people as a whole, fell quickly prey to the schemes of the imperial powers. Not since the Polish invasions of the Time of Troubles (Smuta) have foreign powers held so much power and sway over the lives of all the Rus peoples.

Raw resources, industrial equipment and even the brain power of the former Soviet Union have been drained and captured and pulled out, while masses of manufactured goods of foreign make dumped on the Russian market at below production costs, making sure that no local competition could ever surface. Even food, was pushed in as one Russian and Ukrainian farm or kalhoz after another failed and whole villages cleared out. All the while, corrupt oligarchs and politicians played to the tune of their Western (and Eastern) masters.

Russia's first break came when the ponzi scheme that was the Yeltsin economy collapsed in 1998. Though at first seen as a total calamity, it in truth held the final opportunity for Russia. This was the final point that would determine if Russia would survive or if the Third Rome would fracture and dissolve away forever. It survived, by the Grace of the Heaven and by the economic short sightedness of Western corporations.

With the collapse, profit margins of Western companies shrank fully and they fled Russia like rats off of the Titanic. With the pressure gone, even momentary, Russia's companies came roaring back and in the few years that followed, before the Western return, they had made their move to grow and grow quickly. With their growth, the empty service economy model of the West (to the ever wise exclusion of Germany) collapsed, just like it is now collapsing in the rest of the West. Russian companies provided Russians jobs and greater spending monies, but they provided something much more valuable: they provided hope for the people, for the future and a strong drive to buy Russian to make Russia powerful.

Are you listening America? This is YOUR only hope for salvation, to follow the Russian model of success not the Service Economy model of debt and failure.

So Russia had thrown off the yoke of the economic colony for over produced goods, but it has still clung to its other economic colonial designation: the source of raw resources. No society will ever get rich by digging up its lands and shipping them off at low commodity prices to foreign factories, nor will it ever gain respect or a strong enough foundation for true national defense. Only through strong economic industrial growth, will Russia stand taller than the rest. While this process is under way, it must be accelerated and an environment made appealing enough to first draw back the vast Russian diaspora with their experience from abroad and two to draw the brightest and best from the rest of the world and make them want to be Russians. Drawing the poor and uneducated is not the solution.

This Great Bank Panic is Russia's chance, a chance to stand on strength due to the wise prudence of Putin and Medvedev and Russia's firm financial base and push its goods through to the Near Abroad and than to Europe and Africa and eventually Asia and the Americas. At the same time, its export of resources should be curtailed through heavy taxation. Vast and cheap energy and raw resources in Russia itself will help stimulate growth of the key value adding industries that will provide the world with finished quality goods.

It is paramount for the government through policies and the modern businessmen and reformed and now patriotic oligarchs to seize this moment and like the eastern powers of Japan, S.Korea, and Taiwan, work together to plan the nation's course to economic success. For when the dust finally settles from this financial collapse, the only powers sure to stand are Japan, S.Korea, Taiwan, China, Germany and Russia, for the Third Rome will never get another opportunity like this one.