Demonetization

On the day that America voted, Indian PM Modi announced that 500 and 1000 rupee notes would no longer be valid currency. Everyone had until the end of the year to exchange them at the banks.

The policy was announced as a way to flush out private stockpiles of cash, and to shut down criminal and terrorist groups using forged notes. But as the chaos created by the announcement refused to subside, a new motivation was introduced: this was a chance for India to go digital and become a cashless society.

This immediately aroused my suspicion. In the western media, the abolition of cash has been advocated by an Ivy League professor who has previously worked at the IMF and the Fed. One of his star students is now economic advisor to an Indian state...

Like Modi, he says it's a way to flush out untaxed money. But apparently, one of his motivations is that this will allow central banks to impose negative interest rates. You see, if cash is an option, people might take their money out of the banks and weaken the impact of the policy. But if cash is not an option, they have to just sit and watch their savings dwindle; or else start spending, the objective of the policy.

I should clarify that, having seen what happened in the years since the financial crisis of 2008, I instinctively hate and distrust these people. They are the high priests and apologists of an ideological system as corrupt and dogmatic as the old Soviet system - so says my intuition.

Steve Keen has argued that a dogmatic belief that there could never be too much debt - basically ignoring the effects of compound interest - was a precondition of the crisis occurring. Another lopsided dogma may be the belief that consumption is the key to economic growth - ignoring the centrality of *production*. Instead, the tenured witch-doctors think more spending is always the answer, and will even destroy people's savings in order to enact their crackpot cure.

Perhaps in the long run, Volcker's high American interest rates of 1981-1982, and Modi's demonetization of 2016, mark the beginning and the end of an ideological epoch uniquely friendly to financial capitalism. Volcker's recession, meant to chase away the last remnants of 1970s stagflation, was the beginning of neoliberalism. Modi's demonetization may actually have some positive effects, but it coincided with the victory of Trump, who promises to replace neoliberal globalism in its land of origin, and hence throughout the world system, with mercantile nationalism. So perhaps this is the last hurrah of the neoliberal nomenklatura, as well as the start of something new.

The new shape of the world

Trump and Putin in America and Russia, Xi and Modi in China and India.

In Europe, May and Merkel may be joined by Le Pen.

Erdogan's Turkey is filling the void left by the collapse of the Islamic State.

Meanwhile in Goa

"BRICS are the real Security Council now" -- me

US politics V

It's said that President Trump would be an American Berlusconi; but what about President Hillary? I'm thinking a feminist Putin, with the entire establishment behind her (e.g. neocons and neoliberals), and the opposition weak and divided (e.g. post-Trump Republicans). Indira Gandhi might also offer a precedent.

Turkey II

What happened in Iraq and then in Syria, is that the central governments lost control of the Kurdish and Sunni Arab regions, which then began to link up across the national borders, in pursuit of Kurdistan and the new caliphate, respectively.

Once the Iranian nuclear deal was done, a little over a year ago, Russia then intervened to save the Syrian state. But now we have a new intervention, by Turkey. It's been said that the failed coup was meant to stop this from happening; and now it's rumored that Turkey wants to play a role in the liberation of Mosul, in Iraq, from the Islamic State.

And so it has occurred to me: what if Erdogan plans to rescue the Sunni Arabs, and crush Kurdish independence, by simply occupying those territories? He always believed that Turkey should again become the big power in the region. Before the Arab spring, the plan was that Turkish leadership would solve the region's problems through economic development and Islamic brotherhood. During the spring, Erdogan bet on the victory of the revolutions and said that Assad must go.

When Russia intervened, it looked like that strategy had failed, and perhaps it did. Erdogan came close to losing power entirely. But he survived, purged the "Gulenists", and still feels free to attack the US, the EU, and the UN at will. He has become the Duterte of the Middle East - without the bad language; but insisting on strategic autonomy for his country.

US politics IV

This weekend's glimpse of Hillary's support system reminded me of the last days of Eva Peron. And the strange metal object that fell from her clothes? My first thought was of "a cone of bright metal, the size of a die".

Australia

Pauline Hanson is the real leader of the opposition. And as elsewhere in the West, "globalism" is the new "neoliberalism".

Turkey

So it looks like there was an attempted coup in Turkey. Amidst all the other issues - Erdogan vs Gulen, Kurdish separatism, EU membership (unlikely after Brexit) - I will guess that the core issues here are secularism and the future of NATO.

France just saw another Islamist attack on symbols of the republic (the Bastille Day massacre in Nice). Europe is trending towards rightwing populism and European institutions will probably take on a new identity. One ingredient of European identity is as a bastion of Christian civilization; another is as inventor of secular modernity. The Turkish military aren't Christian, but they were secular, whereas Erdogan's AK Party is Islamist.

Meanwhile, I'm sure Russia would love to see Turkey out of NATO; and Saudi Arabia's "Islamic military alliance" does represent a different bloc that Turkey could join. And even if Erdogan has given up on the Syrian Islamists, I doubt that he will want to just fall in line with whatever Plan B is devised in America - especially since that currently involves support for Syrian Kurds.

Three theses

1) China, India, and the Islamic world are the center of world affairs. The troubles of the US and the EU are the troubles of the former center.

2) The magnitude of chaos following the Brexit vote is a symptom of the fact that for years now, those countries have been "managed democracies" governed by a new transnational elite, in which all political questions were decided by negotiations within this elite.

3) This is just a preview of what's coming later this year, when America finally votes.

Money in American politics

Latest example. But I wonder... how often do the donors get their money's worth? I am not denying that they must do so, to some degree. It's just - if one person is getting donations from dozens of plutocrats and giant corporations, they're not going to be able to satisfy all of them, right? So maybe, some of the time, it's more like: donation is the price of admission. If you donate, then we'll give you a hearing, we'll make sure you get to be part of the process.

US politics III

Today's scenario: Trump wins, Obama pardons Hillary, the Sanders movement lives on.

War of the leaks

Intelligence agencies gather information, especially secret information. They bug bedrooms, they hack databases, they recruit traitors. Wikileaks was unusual in that it made its secret information available to the whole world, via the Internet. It seems clear that Russia, perhaps the most accomplished country when it comes to traditional spycraft, was nimble enough to recognize the potential of Wikileaks and built a relationship with the organization. Snowden was escorted to Russia by Wikileaks' Sarah Harrison; Assange himself had a regular show on Russia Today. It would not surprise me if the TPP drafts were supplied to Wikileaks by Russian intelligence.

The instantly famous leak of legal and financial secrets from the Panamanian firm Mossack Fonseca, has the appearance of an American counter-gambit. MF itself may be a CIA asset, now being sacrificed. What better way to gather intelligence on who uses the offshore world, than to be the middleman yourself? The exact objective is a little unclear to me, but it's probably a move in the unipolar-vs-multipolar conflict over the shape of the world system. Pax Americana is a liberal international order in which justice is defined and administered by institutions based in America and Europe. Associations like BRICS, SCO, and OBOR threaten to establish a rival paradigm of international order. We shall see if the MF leaks have only propaganda value, or whether they are a stepping stone to something more.

Libya

Gaddafi was the real caliph.

US politics II

How about: Clinton-Sanders vs Trump-Fiorina.

The popular support is with Sanders, but I think Clinton is mercurial enough to absorb this new movement.

As for Trump, I know he dissed Fiorina; but he could use a West Coast ally.

Soros on deflation

I found a recent interview with the Lorenzo de Medici of color revolutions, George Soros.

Soros and Trump have something in common - for billionaires, they are both unusually open about their political ambitions. Trump, rather than be a string-puller behind the scenes, has decided to cut out the middleman and become president himself. And Soros is openly a political ideologue, not just a political financier.

In any case, I am logging this interview because of his macroeconomic theses, particularly for what he says about deflation.

US politics

It seems we have a left-wing populist supported by the people, a right-wing populist supported by himself, and a bunch of centrist candidates supported by the banks. (When I say support, I mean dollars, not votes.)

OBOR versus T3

OBOR is China's "One Belt, One Road" plan. T3 is America's triad of new economic treaties (TPP, TTIP, TiSA).

In a world where WTO talks are stalled, but bilateral and regional trade deals proliferate, OBOR versus T3 is the geoeconomic new world order.