The Greek Tragedy

This blog post puts the EU and Greece excellently into the general debt perspective of our system, with central banks and governments as its key players, in a mortal embrace.

Remember: the money supply of a nation consists of

  • Cash issued by government as notes and coins – interest-free – raising seigniorage as income
  • Credit issued by banks at interest.

The budget deficit of a government consists of the difference between income and expenditure.

Government income consists of taxation and borrowing, since seigniorage has more and more decreased and is being ignored in general budget figures.

  • In the UK, the hole of the budgetary deficit is filled by …
  • Public Spending Borrowing Requirment (PSBR).

I.e. the tightening of public debt spirals is built in; with every annual budget – according to seemingly “good” and even “golden” fiscal rules.

And that means: dependency of governments by supranational bureaucracies such as the EU. Euroland is the first of such “world regions” that the Single Global Currency Association and other questionable groupings of the global financial elite are advocating.

The mortal embrace between banks and governments

London Firm was Created to Route Cash

This article in the Wall Street Journal shows how the “funny money” that banks create out of thin air as “financial products” and “derivatives” is short of a farce, if not con and fraud, or “legal forgery” as one author describes it.

However, we’ve come to realise that the Rule of Law is not in place.

Whereas you have to subscribe to read the full article in the Wall Street Journal, the Gold Anti-Trust Action Committee (GATA) has published it here.

Robin Hood comes to Westminster

Robin Hood comes to WestminsterNumbers count, also for the Robin Hood Tax:

* 250,000 video views

* 112,000 Facebook fans

* 58,000 YES votes

* 28,000 people who signed up to a campaign.

    With a view to a general election in the UK, it will also be interesting to see how many MPs will be supportive of the Robin Hood Tax and how many won’t.

    As a first step, a briefing will be held on February 24th. The campaigners have made it easy for you to ask your MP to attend. Go here.

    The second step is to get your MP to sign Early Day Motion 913.

    Goldman Sachs faces Robin Hood Tax vote-rigging claims

    I am clearly still not sufficiently cynical: as one of the founding organisations of the Robin Hood Tax I’ve done my best to promote it and am watching the Yes / No vote on their site. Hence I was amazed to see the increase of NOs and appreciated the way that those at the helm responded.

    Now I’m glad to see that they not only identified the tracks back to Goldman Sachs but also informed the media.

    Here’s the article in the Daily Telegraph.

    However, German Radio reported that Italy wants to introduce the Robin Hood Tax – albeit in 2008, and by taxing the oil industry! Bellissimo!!!

    Robin Hood Tax to be launched on Wednesday at 0.05am

    The Robin Hood Tax is the UK version of the Tobin Tax which was at the beginning of ATTAC in France ten years ago.

    As an anti-poverty campaign, it is more pragmatic than the economic theories of Tobin Tax definitions or the political demands of the Attac network.

    Supported by a coalition of 48 organisations, the Robin Hood Tax campaign spells out what the income should be spent on.

    And in the spirit of our times, it uses Twitter and YouTube.

    The video is set to private until the launch which is set to 0.05am in parallel with the 0.05% tax that Robin Hood wants to take.

    However, Mervyn King, the Governor of the Bank of England, dismissed the idea of a Tobin Tax only recently, according to the FT.

    Robin Hood tax offers a way to deal with our pressing problems – A letter from some of the initial supporters in The Guardian

    Of course, the Robin Hood Tax does NOT get to the root of the evil I’m trying to address. But it’s bound to capture people’s imagination!

    Updates here!

    Big number games

    Unless one grew up in Italy when prices were in large numbers in Lira, large numbers require getting used to. Being confronted by them in headlines makes us switch off.

    But comparing big numbers is possible. For example, the Wikipedia entry on the public debt in France mentions:

    • 1 457 billion Euros of public debt in 2009
    • 252 billion Euros of tax income in 2008.

    The government had 5.8 times more income from borrowed than from taxing.

    The American budget and national debt consist of big numbers, too:

    • the national debt is $12.3 trillion
    • interest payments in 2009 consisted of $383 billion
    • these payments are 32% of the debt!

    Here’s the page where I found the data. It contains one chart, a few pithy explanations and lots of links. Plus the quote by Thomas Jefferson: “Information is the Currency of Democracy.”