Unemployment is a global problem … In South Africa this summer for the Global Forum hosted by Fortune, Time, and CNN in Cape Town, I was in a car driving northwest from Johannesburg in the pale winter sun, marveling at an endless landscape, when we suddenly came across what can only be described as a rural slum. It was the sort of place into which African workers had been cruelly decanted under the apartheid regime: row upon row of tin shacks, a few miserable roadside markets, kids trying to flag us down to sell soccer scarves and oranges. We didn't stop. It was a reminder that amid all the optimism about South Africa's prospects – and the justified plaudits for its hosting of soccer's World Cup – the nation has deep structural problems. The official unemployment rate is 25%; in North West province, where we were driving, only 35% of the working-age population has a job. Even allowing for a significant informal economy, those are staggering numbers. Little wonder that South African officials say weak "labor absorption" (a fancy way of saying growth is not generating enough jobs) is their key economic challenge. – Fortune
Dominant Social Theme: The West needs to try harder.
Free-Market Analysis: Western command-and-control systems are worldwide now. In fact, of course, this is a dominant social theme: "The West's economic perspective is a global one because of its efficiency and it is necessary to deal with it in a global way."
We disagree with this perspective. While the West may have a dominant economic model, this does not mean from our point of view that it is the best one or the only one. The West's model seems based on the discovery by a shadowy, ruling elite that they can print unlimited amounts of money and force other cultures to accept that system at the point of a metaphorical gun.
We can see this process at work in Iraq and Afghanistan. In both countries the Anglo-American elite has seemingly orchestrated invasions based on confronting the terror-purveyors that caused 9/11. Yet there is no direct evidence (that we know of) that either Iraq or Afghanistan were substantively involved in 9/11, while most of those that the FBI accused of taking part were Saudi Arabians.
It seems to us that the reasons for invading Iraq and Afghanistan were flimsy. But what has taken place in these countries since then is not at all flimsy. The Anglo-American axis and NATO have attacked hard, have reconfigured the sociopolitical fabric of these two countries and most importantly are in the midst of installing huge armies in both countries. The political establishment is dependent in both cases on these armies, which is one reason why the Western press itself can run so many articles about high level politicos begging Western troops not to leave.
In any event, along with installing a compliant bureaucracy and an army to support it, Western powers inevitably install the West's mercantilist central banking system as well. Both Afghanistan and Iraq will emerge (if the West has its way) from the violent process with mini-Anglo-American cultures. Women will be empowered (to work long hours away from the children); a federal income tax will be levied to fund the various corrupt practices of the central government and its patronage mechanism; and, finally and most importantly, a central bank will begin to spew money at the behest of the BIS, IMF and other Anglo-America financial authorities.
This is how the Anglo-American dollar reserve currency has taken hold. The dollar became widespread after the devastation of World War II and subsequent Anglo-American-designed Bretton Woods agreement. Since then, with various setbacks, it has been propagated via still more violence and nation-state destabilization. Installing the dollar around the world is one mechanism that the Anglo-American elite has used to gain a global advantage. But Bretton Woods itself designed a global infrastructure that the Anglo-American elite has put to good use.
The chief driving economic mechanism of the Western elite is the mercantilist, fiat-money central bank. The booms and busts of this enterprise drive Western economies toward fuller employment but then, during busts, create significant unemployment. In fact, the current Great Recession is not just another hiccup on the way to a gigantic, global recovery but a fundamental failure of the dollar-reserve fiat currency that the power elite has promoted for over a century. The result of this failure has in a sense bankrupted the citizenry of the West, the banking establishment itself and now, as the Great Recession unrolls, governments too.
How did this happen? When (fairly modern) central banks successfully penetrated the West at least 100 years ago, the great distortion of money and the economy began. We have written of this in the past and called it "Dreamtime." When vast money flows surge into the economy, people begin to believe they can have anything they want. They put money in the stock market, sell their generational farms, buy urban houses and change jobs. But then the money flows out and stocks go down, houses are forfeit, jobs are lost and suddenly even food is problem.
Sometimes the central bank can reflate but often it cannot do so, or not enough to prevent a contraction of the economy. And thus, like a boa constrictor, in stages, the central banking economy swallows the private economy. The banking sector itself, midwife to the central bank, waxes fat on the larger misfortune. The economy is continually centralized. Money and power flow to those who stand in the shadows behind the central banks and the Swiss-based BIS. Only certain elite-affiliated corporations thrive and every time there is a downturn more and more jobs are lost and government is empowered.
Ideally, from an elite point of view, this process might have continued until it forced a kind of inevitable global centralization of employment, property and authority. But as we continually point out, the Internet has come along and interrupted the various promotions that have surrounded the central banking mechanism and confused the reality of its destructive grasp. More and more "get it" – and as they do, the mechanism itself is increasingly paralyzed. Bold steps cannot be taken because the distrust and anger are too high.
What is left today after a century of Western economic depredations and globalization of the mercantilist central banking/dollar denominated economy? It has not likely proved an adequate substitute for what came before. There may have been poverty in tribal Africa but one has trouble believing that 70 percent of the African workforce had no way of finding sustenance. The European and American unemployment rates supposedly stand at 10 percent – but those numbers can easily be doubled as bureaucracies always lie about unemployment statistics. And certainly as the Great Recession drags on, these numbers may go up further.
The problem with central banking is that it leaves ruin wherever it goes. Currently, China is enjoying a boom and the central banking system there is being presented as a success. It is not. Eventually the hyper-stimulation of paper money that has produced so much growth will wane and the Chinese will emerge, blinking and bawling into the dawn of a new and far more painful reality. This is the fate of all who are exposed to mercantilist central banking economies. It has nothing to do with race or intelligence or industriousness. Central banking lifts economies up, then sets them back down, bleeding and wounded. In the process, more and more are "unemployed" and more "jobs are not coming back."
It is a cruel hoax. "Change" becomes the watchword because of the "creative destruction" of fiat money. Society is tortured. Parents can leave little or nothing to their children. Financial reversals are commonplace. Money loses values and then the pain is compounded by money scarcity and high interest rates that bankrupt even more. Central banking does not support employment or civil society. It is in fact an UNEMPLOYMENT system. It is an INFLATION manufacturing system. It is profoundly disruptive.
It is fortunate in our view that the Internet came along when it did to explain the system more fully to an ever-widening audience. We would tend to believe that the system's fiat-banking globalization will go a good deal more slowly as a result. We have predicted a return of some sort of gold standard – or more hopefully a private gold and silver standard. We have noticed lately there is much more chatter about such an occurrence and that the Federal Reserve apparently has some contingency plans along these lines.
We have been writing such things for more than a decade now and predicting their occurrence because of the inevitable degradation of elite memes. It is happening in our view even faster than we expected due to a combination of the current economic collapse and the availability of Internet information. We would tend to believe these trends, which are like great sluggish currents, will not be easily reversed and that the power elite will be forced to step back as it has before.
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