Delhi 91, India.
22 October, 2010
* *
*NDC Seminar-**'ROLE OF FORCE IN STRATEGIC AFFAIRS' **Decline and Fall of
the West** !*
I had made an observation for comments by the presiding deity led by Sir
Lawrence Freedman (involved with Chilcot Enquiry that I have written about
as the usual British whitewash) in the session before lunch, on 21 October.
I had compared the current decades to end 16 century East West confrontation
when the Eastern power the Ottomans , successors of Aryans, Arabs
,Mongols,Tatars ,Turks etc had reached the maximum overstretch upto the
gates of Vienna .Europe , and then the US at head after WWII, had rolled
back eastern armies ,colonized and still exploits the nations of the east
.After the collapse of the USSR in 1990, West and Nato installed pro-west
rulers in Ukraine (,Yushchenko, removed early this year), in Georgia and use
of base in Kyrgyzstan , but now the shift has begun for the decline (and
fall) of the west .USSR collapsed because of high defense expenditure .US
now spends $700 billions as much as the rest of the world put together ,but
its armed are forces caught in a quagmire in Iraq , with Tehran now calling
the shots in Baghdad.(with acting Iraqi PM Maliki in Iran for help)
It may be recalled that after centuries of warfare between the Byzantine and
Persian empires , both were exhausted .Then the Beduins from the deserts of
Arabia ,with the new egalitarian ideology of Islam conquered almost all
their territories .Moscow collapsed , now what about Washington?!
This was not seriously dealt with by the Chair .I had then left.
Unless we take into account the coming fast decline of the West ,India
cannot formulate any realistic strategic policies .India's strategic
community is still ruled by US –UK theories and writings and propaganda and
remains beholden to pre October 2009 era ( decline announced by the
collapse of Lahman Brothers and Merryl Lynch , basically the financiers have
always ruled the world ).
On the subject of economic and financial decline and possible fall of the
West here is my last piece on the subject. It has URLs of my articles about
the decline of the US led West with a piece Decline of the American Century
dated 11 Sep 2002 .
Take care Gajendra Singh Tel 43034706 Delhi
* FOUNDATION FOR INDO-TURKIC STUDIES
*
Tel/Fax ; *43034706*
Amb (Rtd) K Gajendra Singh
Emails; Gajendrak@hotmail.com
A-44 ,IFS Apartments
KGSingh@Yahoo.com
Mayur Vihar –Phase 1,
http://tarafits.blogspot.com/ <http://tarafits-archives.blogspot.com/>
Delhi 91, India .
11 May .2010
*The Looming Mother of all Economic and Social
Crisis<http://www.mwcnews.net/focus/analysis/2405-k-gajendra-singh.html>
*
http://www.mwcnews.net/focus/analysis/2405-k-gajendra-singh.html,
http://www.boloji.com/analysis2/0596.html,
http://intellibriefs.blogspot.com/.../looming-mother-of-all-economic-and.htmletc
*"Keynes's collective work amounted to a powerful argument that capitalism
was by its very nature unstable and prone to collapse. Far from trending
toward some magical state of equilibrium, capitalism would inevitably do the
opposite. It would lurch over a cliff,"* --- Hyman Minsky.
On Thursday, May 6, 2010, ninety minutes before the end of the trading day,
the U.S. stock market almost melted down. The Dow Jones Industrial Average
dropped nearly 1,000 points. The market recovered before the end and closed
down 348 points, or 3.2%, like a giant 747 narrowly averting a crash
landing, but the questions of the day are: What happened? And what does it
mean?
Said Robert Reich on his blog on May 6, "at this point no one knows why.
Some say it was a sudden burst of worries about Greece's debt and the
increasing possibility of a default that might cause a run by global
investors. Others point to a "trading error." Giant high-speed computers
generate millions in trade based on instructions embedded in computer
programs designed to move fast enough to beat everyone else."
Again on Friday, May 7, Dow fell another 140 points in a wild trading day.
The decline wiped out US market gains for the year. The Dow closed down to
10,380!
*World's capital markets: an out-of-control computerized Casino!*
"Regardless of why it happened, it's further evidence that the nation's and
the world's capital markets have become a vast out-of-control casino in
which fortunes can be made or lost in an instant—which would be fine except
for the fact that most of us have put our life savings there. Pension funds,
mutual funds, school endowments—the value of all of this depends on a
mechanism that can lose a trillion dollars in minutes without anyone having
a clear idea why. So much of the market now depends on computer programs and
mathematical models that no one fully understands, so much trading is in the
hands of a few people whose fat thumbs or momentary carelessness might sink
the economy, so much of global wealth now depends on who can move their
money quickest at the slightest provocation—that we are toying with
financial disaster every day. The luck or foolishness of a few traders, and
inside knowledge and information that some possess and others don't,
combined with ultra high-speed computers, put us all at the whim of a system
whose risk is way out of proportion to any public benefits," concluded
Reich.
*Greek Sickness Infects EU -PIGS to Slaughter*
The austerity plans and the bailout packet for Greece which have adversely
dented the ruling coalition of Chancellor Angela Merkel's party in the just
concluded regional elections in Germany, because Berlin has to foot the
bill, would spread around Europe and beyond. It believed that the debt of
five EU members Portugal, Ireland, Greece and Spain (PIGS) totals around
$3.9 trillion. Britain's debt is larger than any one of them.
Well-known US economist and political activist Lyndon H. LaRouche, Jr.
voiced strong condemnation "the British swine have once again imposed a
1923-style hyperinflationary collapse on modern Germany, with the
trillions-dollar bailout scheme imposed on the Euro zone this past weekend.
Only the immediate enactment of a Glass-Steagall law could prevent the
United States itself from falling into the same fate now destined for
continental European victims such as, above all other targets for total
destruction, the Federal Republic of Germany."
*Bank of England Chief King paints a disastrous future for the country*
London's financially precarious position, which has been known for quite
some time, was further unveiled by Edmund Conway, the Economics Editor of
the Telegraph, UK. Conway revealed that US economist David Hale, who
recently met with Mervyn King, Bank of England boss, was told by the latter
that, "whoever wins this election will be out of power for a whole
generation because of how tough the fiscal austerity will have to be."
Edmund Conway went on to further expose the untenable crisis awaiting UK:
*"…no one yet comprehends just how tough the next five years will be. For
obvious reasons: we have not experienced anything like it in our lifetimes.
We have been insulated from the full pain of the financial/economic crisis
so far by unprecedented low interest rates and by the bank bailouts. At some
point, the anaesthetic will wear off and we will face a period of austerity
that may well make the ruling party so unpopular that it effectively becomes
unelectable for decades. There will be strikes; there will be stagnation;
there will probably be a double dip of some variety. But this time the pain
will be unmistakably imposed by the politicians."*
This analysis was further strengthened by former British minister, Michael
Portillo, who said that the "financial crisis ravaging Britain would take 20
years to resolve, but the next five years would be critical!"
The Institute for Fiscal Studies had earlier warned that all three parties
were hiding the full details of their plans to cut the deficit from voters.
It said that the scale of cuts following the election could be the deepest
since comparable records began just after World War II.
*"Instability is an inherent and inescapable flaw of capitalism."*
Hyman Minsky, a hitherto obscure macroeconomist, who saw what was coming,
predicted, decades ago, almost exactly the kind of meltdown that is
hammering the global economy.
Minsky believed in capitalism, but he also believed it had almost a genetic
weakness. Modern finance, he argued, was far from the stabilizing force that
mainstream economics portrayed: rather, it was a system that created the
illusion of stability while simultaneously creating the conditions for an
inevitable and dramatic collapse.
Minsky's vision might have been dark, but he was not a fatalist; he believed
it was possible to craft policies that could blunt the collateral damage
caused by financial crises.
In his writings, Minsky looked to his intellectual hero, Keynes, arguably
the greatest economist of the 20th century. But where most economists drew a
single, simplistic lesson from Keynes--that government could step in and
micromanage the economy, smooth out the business cycle, and keep things on
an even keel--Minsky had no interest in what he and a handful of other
dissident economists came to call "bastard Keynesianism."
Instead, Minsky drew his own far darker lessons from Keynes's landmark
writings, which dealt not only with the problem of unemployment, but with
money and banking. Although Keynes had never stated this explicitly, Minsky
argued that Keynes's collective work amounted to a powerful argument that
capitalism was by its very nature unstable and prone to collapse. Far from
trending toward some magical state of equilibrium, capitalism would
inevitably do the opposite. It would lurch over a cliff.
*Minsky's "Financial Instability Hypothesis"*
In the wake of a depression, he noted, financial institutions are
extraordinarily conservative, as are businesses. With the borrowers and the
lenders who fuel the economy all steering clear of high-risk deals, things
go smoothly: loans are almost always paid on time, businesses generally
succeed, and everyone does well. That success, however, inevitably
encourages borrowers and lenders to take on more risk in the reasonable hope
of making more money. As Minsky observed, "Success breeds a disregard of the
possibility of failure."
As people forget that failure is a possibility, a "euphoric economy"
eventually develops, fueled by the rise of far riskier borrowers--what he
called speculative borrowers, whose income would cover interest payments but
not the principal; and those he called "Ponzi borrowers," whose income could
cover neither, and could only pay their bills by borrowing still further. As
these latter categories grew, the overall economy would shift from a
conservative but profitable environment to a much more freewheeling system
dominated by players whose survival depended not on sound business plans,
but on borrowed money and freely available credit. Once that kind of economy
developed, any panic could crash the market. The failure of a single firm,
for example, or the revelation of a staggering fraud, could trigger fear and
a sudden economy-wide attempt to shed debt.
*"Minsky Moment"*
This watershed moment - later dubbed the "Minsky moment" - would create an
environment deeply inhospitable to all borrowers. The speculators and Ponzi
borrowers would collapse first, as they lost access to the credit they
needed to survive. Even the more stable players might find themselves unable
to pay their debt without selling off assets; their forced sales would send
asset prices spiraling downward, and inevitably, the entire rickety
financial edifice would start to collapse. Businesses would falter, and the
crisis would spill over to the "real" economy that depended on the
now-collapsing financial system. (Note: the write up on Minsky has been
extracted from "Why Capitalism Fails"by Stephen Mihm in the Boston Globe of
14 September, 2009.)
*"Humanity faces the most serious crisis in modern history."*
In a book titled "The Global Economic Crisis, the Great Depression of the
XXI Century," edited by Prof Michel Chossudovsky and Andrew Gavin Marshall
(to be released by end May), over a dozen distinguished economists and
writers, Ellen Brown, Tom Burghardt, Michel Chossudovsky, Richard C. Cook,
Shamus Cooke, John Bellamy Foster, Michael Hudson, Tanya Cariina Hsu, Fred
Magdoff, Andrew Gavin Marshall, James Petras, Peter Phillips, Peter Dale
Scott, Bill Van Auken, Claudia von Werlhof and Mike Whitney look under the
glittering facade of western Capitalism and reveal a complex web of deceit
and media distortion which serves to conceal the workings of the global
economic system and its devastating impact on people's lives.
Despite the diversity of viewpoints and perspectives presented within this
volume, all of the contributors ultimately come to the same conclusion:
humanity is at the crossroads of the most serious economic and social crisis
in modern history.
The economic recession is deep-seated in all major regions of the world,
resulting in mass unemployment, the collapse of state social programs and
the impoverishment of millions of people. The crisis—in tandem with a
worldwide process of militarization, a "war without borders" led by
Washington and its NATO allies—is intimately related to the restructuring of
the global economy. The global financial architecture sustains strategic and
national security objectives of the US-led West and their powerful business
elites which control and dominate the functions of civilian government.
This book explains how the Federal Reserve (a private body), the Council on
Foreign Relations, the Bank for International Settlements, and corporate
boardrooms on Wall Street take far-reaching financial transactions routinely
from computer terminals linked up to major stock markets, at the touch of a
mouse button.
"The meltdown of financial markets in 2008-2009 was the result of
institutionalized fraud and financial manipulation. The "bank bailouts" were
implemented on the instructions of Wall Street, leading to the largest
transfer of money wealth in recorded history, while simultaneously creating
an insurmountable public debt."
This process of economic decline is cumulative. The payments system of money
transactions is in disarray. Payments of wages are no longer implemented,
credit is disrupted and capital investments are at a standstill. Meanwhile,
in Western countries, the "social safety net" inherited from the welfare
state, which protects the unemployed during an economic downturn, is also in
jeopardy.
*The Myth of Economic Recovery*
While the existence of a "Great Depression" on the scale of the 1930s is
often acknowledged, it is veiled by false claims: "The economy is on the
road to recovery". (The US recovered from the 1930s depression by the
booming economic industrial production during and posts WWII, when it had a
vibrant and expanding industrial economy with European powers dependent on
it–a process carried on after the War's end, which shifted the financial
centre from London to Wall Street.)
The financial meltdown is not simply composed of the housing real estate
bubble--which has already burst--but there are many more bubbles, all of
which dwarf the housing bubble burst of 2008.
Regarding the so called economic recovery, already in early 2010, the
"recovery" of the US economy has been predicted and confirmed through a
carefully worded barrage of media disinformation. The social plight of
increased unemployment in the US has been scrupulously camouflaged.
Economists view bankruptcy as a microeconomic phenomenon. The media reports
on bankruptcies fail to provide an overall picture of what is happening at
the national and international levels. When all these simultaneous plant
closures in towns and cities across the land are added together, a very
different picture emerges: entire sectors of a national economy are closing
down.
Public opinion continues to be misled as to the causes and consequences of
the economic crisis, not to mention the policy solutions. People are led to
believe that the economy has a logic of its own which depends on the free
interplay of market forces, hiding the role of powerful financial actors who
pull the strings in the corporate boardrooms and have willfully influenced
the course of economic events.
*"The American Dream" morphs into a nightmare for the majority*
The relentless and fraudulent appropriation of wealth is upheld as an
integral part of "the American dream", a means of spreading the benefits of
economic growth. A myth becomes entrenched that "without wealth at the top,
there would be nothing to trickle down." This is pure hogwash.
Media disinformation largely serves the interests of a handful of global
banks and institutional speculators who use their command over financial and
commodity markets to amass vast amounts of wealth. The "bank bailouts",
presented to the public as a requisite for economic recovery, have
facilitated and legitimized a further process of appropriation of wealth.
With inside information and foreknowledge, major financial players, using
the instruments of speculative trade, have the ability to fiddle and rig
market movements to their advantage, precipitate the collapse of a
competitor and wreak havoc on the economies of developing countries. These
tools of manipulation have become an integral part of the financial
architecture; they are embedded in the system.
*The Failure of Mainstream Economics*
The economics profession rarely addresses the actual "real world"
functioning of markets. Theoretical constructs centered on mathematical
models serve to represent an abstract, fictional world far removed from
reality. By failing to examine the interplay of powerful economic actors in
the "real life" economy, the processes of market rigging, financial
manipulation and fraud get overlooked. The concentration and centralization
of economic decision-making, the role of the financial elites, the economic
thinks tanks, the corporate boardrooms: none of these issues are examined in
the universities' economics programs. The theoretical construct is
dysfunctional; it cannot be used to provide an understanding of the economic
crisis.
Economic science has become an ideological construct to camouflage and
justify the New World Order. The powers of market manipulation which serve
to appropriate vast amounts of wealth are rarely addressed. And when they
are acknowledged, they are considered to belong to the realm of sociology or
political science. This means that the policy and institutional framework
behind this global economic system, which has been shaped in the course of
the last thirty years, is rarely analyzed by corporate hired economists.
*Poverty and Social Inequality*
The global political economy thus enriches the very few at the expense of
the vast majority. The crisis has contributed to widening social
inequalities both within and between countries. Under global capitalism,
mounting poverty is not the result of a scarcity or a lack of human and
material resources. The structures of social inequality have, quite
deliberately, been reinforced, leading not only to a generalized process of
impoverishment but also to the demise of the middle and upper middle income
groups.
Bankruptcies have hit several of the most vibrant sectors of the consumer
economy. The middle classes in the West have, for several decades, been
subjected to the erosion of their material wealth. It exists in theory,
built and sustained by household and other debts. With the demise of the
civilian economy, the development of America's war economy, supported by a
whopping near-trillion dollar defense budget, has reached new heights. As
stock markets tumble and the recession unfolds, the advanced weapons
industries, the military and national security contractors and the
up-and-coming mercenary companies (among others) have experienced a thriving
and booming growth of their various activities.
*War and the Economic Crisis*
Wars lead to the impoverishment of people at home and around the world. The
provision of essential goods and services to meet basic human needs has been
replaced by a profit-driven "killing machine" in support of America's
"Global War on Terror". While the poor are made to fight in Iraq and
elsewhere, wars enrich the upper class, which control industry, the
military, oil and banking. "Western nations, particularly the United States,
spend hundreds of billions of dollars a year to murder innocent people in
far-away impoverished nations, while the people at home suffer the
disparities of poverty, class, gender and racial divides."
An outright "economic war" resulting in unemployment, poverty and disease is
carried out through the free market. In the last twenty years, the global
"free market" economy has brought poverty and social destitution to the
lives of millions of people. Instead of tackling the impending social
catastrophe, Western governments, to serve the interests of the economic
elites, have installed a "Big Brother" police state, with a mandate to
confront and repress all forms of opposition and social dissent. George
Orwell's 1984 are being created in USA.
The economic and social crisis has by no means reached its climax, and
entire countries, including Greece and Iceland, are at risk. One need only
look at the escalation of the Middle East Central Asian war and the US-NATO
threats to China, Russia and Iran to witness how war and the economy are
intimately related.
*The Decline of the West and a Depressing Scenerio*
In the blog Global Guerilla, John Robb, writing on The Decline of the West
states, "the current sovereign debt crisis is another battle in a war for
dominance between "our" integrated, impersonal global economic system and
traditional nation-states. At issue is whether a nation-state serves the
interests of the governed or the interests of a global economic system.
The global economic system is winning. The 2008 financial crisis, the first
real battle of this war (as opposed to the early losses in skirmishes in
Russia, Argentina, the Balkans, etc) was a resounding defeat for
nation-states. The current crisis in the EU will almost certainly end with
the same results.
When this war ends, and it won't be long, the global economic and financial
system will be the victor. The nation-states of the West will join with
those of the global south, mere shells of states that serve only to enforce
the interests of the global economic system. More market-states than
nation-states, citizens' incomes will fall to developing world levels (made
easy to due highly portable productivity), and wealth will stratify.
Regulatory protections will be weak. Civil service pensions will be erased
and corruption will reign. The once-dominant militaries of the West will be
reduced to a small fraction of their current size, and their focus will be
on the maintenance of internal control rather than on external threats. The
clear and unambiguous message to every citizen of the West will be "you're
on your own."
It will fragment society and lead to perpetual stagnation/depression,
endemic violence/corruption, and squalor. New sources of order will see the
rise of the criminal entrepreneur, whether they are the be-suited corporate
gangster or the gang tattooed thug. For in the world of hollow states
(without a morality that limits behavior) and limitless connectivity to the
global economic system, these criminal entrepreneurs quickly become
dominant, violently coercing or corrupting everyone in the path to their
enrichment. (In former socialist states of east and central Europe, local
and migrant mafias form an important segment of the new ruling elites.)
*Recap *
The author has kept a watch and written about the decline and fall of US
hegemony since 11 September, 2002, when a declining US empire appeared at
its most dazzling, like the afternoon sun past its prime.
*The decline of the American Century* Sept 11, 2002 Atimes:
http://www.atimes.com/atimes/Middle_East/DI11Ak06.html
*The US Empire –Beginning of the End Game* 24 Nov, 2006
http://www.informationclearinghouse.info/article15729.htm
*The Decline and Coming Fall of US Hegemony* March 30, 2008
http://www.uruknet.de/?p=m42600&hd=&size=1&l=e
-- An editorial titled 'Collapse of U.S. economy' in Belleville
Intelligencer of 27 Feb, 2008 confirms the by now generally accepted ill
health of US economy. Harry Koza in the Globe and Mail recently quoted
Bernard Connelly, the global strategist at Banque AIG in London that the
likelihood of a Great Depression is growing by the day. Martin Wolf of
U.K.'s Financial Times cited Dr. Nouriel Roubini of the New York
University's Stern School of Business, who outlines how the losses of the
American financial system will grow to more than $1 trillion, an amount
equal to all the assets of all American banks.
The next domino to fall will be credit card defaults, and after that...who
knows? There are so many exotic funds out there, with trillions of dollars
in paper--or rather computer-screen money--and all about to disintegrate
into nothingness. Over the next couple of years, scores of banks that have
thrived on these devices, based on quickly disappearing equities, will fail.
The most frightening forecast so far comes from the Global Europe
Anticipation Bulletin (GEAB), "The end of the third quarter of 2008 will be
marked by a new tipping point in the unfolding of the global systemic
crisis. In the United States, this new tipping point will translate into -
get this - a collapse of the real economy, (the) final socio-economic stage
of the serial bursting of the housing and financial bubbles and of the
pursuance of the U.S. dollar fall. The collapse of U.S. real economy means
the virtual freeze of the American economic machinery: private and public
bankruptcies in large numbers, companies and public services closing down."
We are not experiencing a "remake" of the 1929 crisis or a repetition of the
1970s oil crises or 1987 stock market crisis. What we will have, instead, is
truly a global momentous threat - a true turning point affecting the entire
planet and questioning the very foundations of the international system upon
which the world was organized in the last decades."
*Western Military-Capitalist Civilization in Disarray* September 25, 2008
http://www.uruknet.de/?p=m47513; http://www.boloji.com/analysis2/0386.htm
"Credit easing does not and cannot substitute for earnings, wages or tax
revenues."---Max Fraad Wolff
"The [US] financial system is out of control and has led the economy into a
wildly turbulent sea of heavily leveraged speculation. … The road ahead is
dark and unknown." Steve Fraser author of" Wall Street: America's Dream
Palace."
"Before the US economy can truly begin to expand again, the savings rate
must rise to pre-bubble levels of 8pc--$2 trillion of household debt must be
eliminated",---Economist David Rosenberg
*Corporate Culture and Greed Sink the American Republic* 17 May, 2009
http://www.boloji.com/analysis2/0442.htm
"Over-grown military establishments are. Under any form of government
inauspicious to liberty, and are to be regarded as particularly hostile to
republican liberty."--George Washington (1732-1799), First US President.
"It is part of the general pattern of misguided policy that our country is
now geared to an arms economy which was bred in an artificially induced
psychosis of war hysteria and nurtured upon an incessant propaganda of
fear." --General Douglas MacArthur, Speech, May 15, 1951
"[The] conjunction of an immense military establishment and a large arms
industry is new in the American experience. . . . In the councils of
government, we must guard against the acquisition of unwarranted influence,
whether sought or unsought, by the military-industrial complex. The
potential for the disastrous rise of misplaced power exists and will
persist." --Dwight D. Eisenhower (1890-1969), 34th US President, Farewell
Address, Jan. 17, 1961
*Confirmation of Pressure on Dollar and US* *Decline* 8 October, 2009
http://www.boloji.com/analysis2/0493.html
And finally,
Falling Empires and their Currencies Rome, France, England and the USA Part
2: From England to the United States of America Rolf Nef January 16, 2007
http://www.financialsense.com/fsu/editorials/2007/0116.html
*K Gajendra Singh, Indian ambassador (retired), served as ambassador to
Turkey and Azerbaijan from August 1992 to April 1996. Prior to that, he
served terms as ambassador to Jordan, Romania and Senegal. He is currently
chairman of the Foundation for Indo-Turkic Studies. Copy right with the
author. *http://tarafits.blogspot.com/<http://tarafits-archives.blogspot.com/>
Take care Gajendra Singh Tel 43034706 Delhi
--
Man would indeed be in a poor way if he had to be restrained by fear
of punishment and hope of reward after death." --
Albert Einstein !!!
http://www.scribd.com/doc/22151765/History-of-Pakistan-Army-from-1757-to-1971
http://www.scribd.com/doc/21686885/TALIBAN-WAR-IN-AFGHANISTAN
http://www.scribd.com/doc/22455178/Letters-to-Command-and-Staff-College-Quetta-Citadel-Journal
http://www.scribd.com/doc/23150027/Pakistan-Army-through-eyes-of-Pakistani-Generals
http://www.scribd.com/doc/23701412/War-of-Independence-of-1857
http://www.scribd.com/doc/22457862/Pakistan-Army-Journal-The-Citadel
http://www.scribd.com/doc/21952758/1971-India-Pakistan-War
http://www.scribd.com/doc/25171703/BOOK-REVIEWS-BY-AGHA-H-AMIN
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