Shepherds, portents and Europe face-to-face in Athens  

This is pretty much off-topic (with the possible exception of the tinfoil at the end) but the Greek debt situation is kind of interesting and thus worthy of a post.

Crikey’s Guy Rundle has a look at the stand-off in Greece, as protesters rally against the imposition of austerity measures - Shepherds, portents and Europe face-to-face in Athens.

Weeks after it began, the world's press has started to pay attention to the real story in Greece -- not the wrangling in Luxembourg over the terms of a second bailout for the cash-starved nation, but the continued refusal of the people of Greece to accept the conditions going with it.

For close to a month now, Syntagma Square at the centre of Athens, in the front of the Greek Parliament, has been occupied by an insistent crowd, who have been dubbed the "aganaktismenoi" (outraged) , a term similar to that applied to the "indignados" in Spain and Portugal.

Originating from one of the mass protests organised by the powerful Greek Communist party (KKE), and its trade union formation, the "Indignant Ones" has become an autonomous event -- a multitude of people acquiring an identity beyond party or narrow formation, and positively asserting their existence separate to the state, or the client parties dependent on it.
This is the real story of the Greek, and European, financial crisis, because it is clearly the process that is driving the crisis -- the insistent refusal of the Greek people to liquidate their social life and their shared assets to serve the global financial markets.

Though the crisis is being presented as an economic one -- with breathless financial commentators following every move of the bond markets, as if it were somehow a living being -- it is nothing of the sort. It is political through and through.

Had the Greeks accepted the sort of deal the Irish accepted -- where the government buys the private sector's bad assets, i.e. the banks, through nationalisation, and sells off the public sector's good assets through privatisation -- there would be no Greek financial crisis.

The ruling PASOK party would have had the political clout to bring in an austere budget, its credit rating would not have dropped to CCC, the bond markets would have eased up a little, and the huge costs of maintaining its debt would have lowered.

That would have offered neither genuine economic improvement -- it would simply have plunged the country into an austerity-driven recession deeper than that which it is currently experiencing -- nor liberation; the opposite in fact. The country would have been laced into the logic of financial capital for good, its politics traded upwards to the empyrean realm of EU and IMF administrators by common consent.

But that was never likely to happen, for Greece is -- as the KKE and PM Papandreou noted -- the "weak link" in the EU project, and, indeed, thereby in the world financial system. The KKE said it about Greece in the way Lenin said it about Russia -- the contradictions were at their utmost there.

Papandreou stripped the sentiment of its assertive political rhetoric, and conveyed it to the apprehensive leaders of the EU as a scare-story: if you don't bail me out, I won't be able to control my crazy people. The son of a former Prime Minister, he had grown up in exile; he found it easy to represent himself to the EU as a governor of a wayward province, rather than as the head of an independent state.

There was more than a touch of orientalism in his pitch, scaring starchy Germans with wild thoughts of mad Greeks.

Yet the problem for Papandreou and the EU is that the Greeks failed to live up to the stereotype. They were neither passive like the Irish, nor aleatoric and ad hoc (but effective) like the Icelandics. Submission had been averted and crisis brought on because their resistance has been disciplined and relentless.

The anarchist black bloc and the kokoulofori (hooded ones -- the unorganised alienated youth who turn up for mayhem at large protests) may grab the headlines, but they have been the "left" margin of what have always been much larger and non-violent, though assertive, protests. Week after week they've come out, relentless.

Now such resilience is starting to pay off. Eighteen months ago, most Greeks were convinced by Papandreou to follow an austerity lead. The centre-Right New Democracy party had been in power for a decade, having come in on a promise to sweep away the corruption and clientelism of the earlier PASOK era.

But it had merely entrenched it, with different clients, and its failure had given PASOK -- Papandreou's new modernised version -- a rare, single-party victory in the elections, taking 156 seats of 300. Since then he has spent all his political capital trying to solve the problems of finance capital, and people are starting to see what the austerity programs look like.
For Papandreou, the financial crisis has become a very political crisis -- losing him the confidence of the old nationalist part of PASOK, and forcing him to seek support from other parties, and, most recently, a unity government with the New Democrats -- which might prompt a wholesale realignment of Greek politics.

Furthermore the Left's slogan -- "we won't pay for their crisis" -- has started to take hold. Narratives of fecklessness and a degree of guilt about failure to reform, appear to have been superseded by an understanding that the financial crisis is an auto-generated one.

It is not deficit spending, per se, that has pushed Greece towards bankruptcy, but the price of borrowing, escalated steadily by talk of Greece's possible bankruptcy. Now most people understand that they are being asked to sell off real assets and cut down real lives, to service imaginary entities.

Europe-wide, the Greek crisis is laying bare the nature of the EU: that it is not an expression of collective development, but an anti-democratic entity, serving financial markets through an inflexible currency, and creating a monopoly on sources of development capital.

Now that the final part of the first bailout has been agreed to pay through, and a second one guaranteed, the crisis may ease off a little (though not for Angela Merkel and the German Christian Democrats -- acceding to the second bailout will finish them politically).

But it will return, since the terms of the second bailout demand yet more austerity from a country that has already shown its unwillingness to cop to existing impositions -- and the amazing announcement from the markets that the country's credit rating won't lift, even if the total austerity package is implemented! Snide remarks by Germans that the country should sell off a few of its islands, and serious suggestions of privatising everything up to and including the Parthenon, will only double the resolve.

You would think, when people talk about privatising the Parthenon, that the nihilistic nature of capitalism would become visible to all. Apparently not. Last year, this publication was almost alone in noting the importance of the crisis, your correspondent observing:

"It is also possible that Papandreou’s remark about Greece as the “weak link" is more telling than he knows -- that the last place in Europe with a living militant, solidarity tradition, when intersecting with a technocratic post-politics, may produce something else entirely. Looking at the bright streets surrounding Syntagma, with its global chain stores -- Costa coffee, H & M, Marks and frikkin Spencers -- you can see why so many people are keen to stay with the smooth euro-vision of the central parties. But those streets lead into other streets, where there is less in the windows, and loose tiles beneath the feet, and the red flags are still flying there."

That has clearly come to pass. The EU, the euro, and through the euro, the world financial system, is having its future fought out in Syntagma square. Still, the financial journalists have not got it.

Like the shepherds outside the ancient city, watching the stars for portents, the financerati watch the changing figures on the screens to divine the future. Inside the city walls, people look to the Acropolis to remind themselves to stand for something more, and to fight for what cannot be traded away. 'tain't no coincidence, as we say, that Europe comes face to face with itself in Athens once more.

CounterPunch has an article from Michael Hudson suggesting that the Greeks have a look at Iceland's example when it comes to paying their creditors - Will Greece Let EU Central Bankers Destroy Democracy?.

Iceland belatedly decided that it was wrong to turn over its banking to a few domestic oligarchs without any real oversight or regulation over their self-dealing. From the vantage point of economic theory, was it not madness to imagine that Adam Smith’s quip about not relying on the benevolence of the butcher, brewer or baker for their products, but on their self-interest is applicable to bankers? Their “product” is not a tangible consumption good, but interest-bearing debt. These debts are a claim on output, revenue and wealth; they do not constitute real wealth.

This is what pro-financial neoliberals fail to understand. For them, debt creation is “wealth creation” (Alan Greenspan’s favorite euphemism) when credit – that is, debt – bids up prices for property, stocks and bonds and thus enhances financial balance sheets. The “equilibrium theory” that underlies academic orthodoxy treats asset prices (financialized wealth) as reflecting a capitalization of expected income. But in today’s Bubble Economy, asset prices reflect whatever bankers will lend. Rather than being based on rational calculation, their loans are based on what investment bankers are able to package and sell to frequently gullible financial institutions. This logic leads to attempts to pay pensions out of a “wealth creating” process that runs economies into debt.

It is not hard to statistically illustrate this. The amount of debt that an economy can pay is limited by the size of its surplus, defined as corporate profits and personal income for the private sector, and net fiscal revenue paid to the public sector. But neither today’s financial theory nor global practice recognize a capacity-to-pay constraint. So debt service has been permitted to eat into capital formation and reduce living standards – and now, to demand privatization sell-offs.

As an alternative is to such financial demands, Iceland has provided a model for what Greece may do. Responding to British and Dutch demands that its government guarantee payment of the Icesave bailout, the Althing recently asserted the principle of sovereign debt:

“The preconditions for the extension of government guarantee according to this Act are:

1. That … account shall be taken of the difficult and unprecedented circumstances with which Iceland is faced with and the necessity of deciding on measures which enable it to reconstruct its financial and economic system.

This implies among other things that the contracting parties will agree to a reasoned and objective request by Iceland for a review of the agreements in accordance with their provisions.

2. That Iceland’s position as a sovereign state precludes legal process against its assets which are necessary for it to discharge in an acceptable manner its functions as a sovereign state.”

Instead of imposing the kind of austerity programs that devastated Third World countries from the 1970s to the 1990s and led them to avoid the IMF like a plague, the Althing is changing the rules of the financial system. It is subordinating Iceland’s reimbursement of Britain and Holland to the ability of Iceland’s economy to pay:
“In evaluating the preconditions for a review of the agreements, account shall also be taken to the position of the national economy and government finances at any given time and the prospects in this respect, with special attention being given to foreign exchange issues, exchange rate developments and the balance on current account, economic growth and changes in gross domestic product as well as developments with respect to the size of the population and job market participation.”

This is the Althing proposal to settle its Icesave bank claims that Britain and the Netherlands rejected so passionately as “unthinkable.” So Iceland said, “No, take us to court.” And that is where matters stand right now.

Greece is not in court. But there is talk of a “higher law,” much as was discussed in the United States before the Civil War regarding slavery. At issue today is the financial analogue, debt peonage.

Will it be enough to change the world’s financial environment? For the first time since the 1920s (as far as I know), Iceland made the capacity-to-pay principle the explicit legal basis for international debt service. The amount to be paid is to be limited to a specific proportion of the growth in its GDP (on the admittedly tenuous assumption that this can indeed be converted into export earnings). After Iceland recovers, the Treasury offered to guarantee payment for Britain for the period 2017-2023 up to 4 per cent of the growth of GDP after 2008, plus another 2 per cent for the Dutch. If there is no growth in GDP, there will be no debt service. This meant that if creditors took punitive actions whose effect is to strangle Iceland’s economy, they wouldn’t get paid.

No wonder the EU bureaucracy reacted with such anger. It was a would-be slave rebellion. Returning to the applicable of Newton’s Third Law of motion to politics and economics, it was natural enough for Iceland, as the most thoroughly neoliberalized disaster area, to be the first economy to push back.

The past two years have seen its status plunge from having the West’s highest living standards (debt-financed, as matters turn out) to the most deeply debt-leveraged. In such circumstances it is natural for a population and its elected officials to experience a culture shock – in this case, an awareness of the destructive ideology of neoliberal “free market” euphemisms that led to privatization of the nation’s banks and the ensuing debt binge.

The Greeks gathering in Syntagma Square seem to need no culture shock to reject their Socialist government’s cave-in to European bankers. It looks like they may follow Iceland in leading the ideological pendulum back toward a classical awareness that in practice, this rhetoric turns out to be a junk economics favorable to banks and global creditors. Interest-bearing debt is the “product” that banks sell, after all. What seemed at first blush to be “wealth creation” was more accurately debt-creation, in which banks took no responsibility for the ability to pay. The resulting crash led the financial sector to suddenly believe that it did love centralized government control after all – to the extent of demanding public-sector bailouts that would reduce indebted economies to a generation of fiscal debt peonage and the resulting economic shrinkage.

As far as I am aware, this agreement is the first since the Young Plan for Germany’s reparations debt to subordinate international debt obligations to the capacity-to-pay principle. The Althing’s proposal spells this out in clear terms as an alternative to the neoliberal idea that economies must pay willy-nilly (as Keynes would say), sacrificing their future and driving their population to emigrate in a vain attempt to pay debts that, in the end, can’t be paid but merely leave debtor economies hopelessly dependent on their creditors. In the end, democratic nations are not willing to relinquish political planning authority to an emerging financial oligarchy.

No doubt the post-Soviet countries are watching, along with Latin American, African and other sovereign debtors whose growth has been stunted by predatory austerity programs imposed by IMF, World Bank and EU neoliberals in recent decades. We should all hope that the post-Bretton Woods era is over. But it won’t be until the Greek population follows that of Iceland in saying no – and Ireland finally wakes up.

Hudson has another column dubbing the debt crisis a new "road to serfdom" - How Bankers are using the Debt Crisis to welcome in the Financial Road to Serfdom.

Financial strategists do not intend to let today’s debt crisis go to waste. Foreclosure time has arrived. That means revolution – or more accurately, a counter-revolution to roll back the 20th century’s gains made by social democracy: pensions and social security, public health care and other infrastructure providing essential services at subsidized prices or for free. The basic model follows the former Soviet Union’s post-1991 neoliberal reforms: privatization of public enterprises, a high flat tax on labor but only nominal taxes on real estate and finance, and deregulation of the economy’s prices, working conditions and credit terms.

What is to be reversed is the “modern” agenda. The aim a century ago was to mobilize the Industrial Revolution’s soaring productivity and technology to raise living standards and use progressive taxation, public regulation, central banking and financial reform to distribute wealth fairly and make societies more equal. Today’s financial aim is the opposite: to concentrate wealth at the top of the economic pyramid and lower labor’s returns. High finance loves low wages.

The political lever to achieve this program is financial. The European Union (EU) constitution prevents central banks from financing government deficits, leaving this role to commercial banks, paying interest to them for creating credit that central banks monetize for governments in Britain and the United States. Governments are to go into debt to bail out banks for loans gone bad – as do more and more loans as finance impoverishes the economy, stifling its ability to pay. Yet as long as we live in democracies, voters must agree to pay. Governments are sovereign and debt is ultimately a creature of the law and courts.

But first, voters need to understand what is happening. From the bankers’ perspective, the economic surplus is what they themselves end up with. Rising consumption standards and even public investment in infrastructure are seen as deadweight. Bankers and bondholders aim to increase the surplus not so much by tangible capital investment increasing the overall surplus, but by more predatory means, headed by rolling back labor’s gains and stiffening working conditions while gaining public subsidy. Banks “create wealth” by providing more credit (that is, debt leverage) to bid up asset prices for real estate and enterprises already in place – assets that either are being foreclosed on or sold off under debt pressure by private owners or governments. One commentator recently characterized the latter strategy of privatization as “tantamount to selling the family silver only to have to rent it back in order to eat dinner.”[1]

Fought in the name of free markets, this counter-revolution rejects the classical ideal of markets free of unearned income paid to special interests. The financial objective is to squeeze out a surplus by maximizing the margin of prices over costs. Opposing government enterprise and infrastructure as the road to serfdom, high finance is seeking to turn public infrastructure into rent-extracting tollbooths to extract economic rent (the “free lunch economy”), while replacing labor unions with non-union labor so as to work it more intensively.

This road to neoserfdom is an asset grab. But to achieve it, the financial sector needs a political grab to replace democracy with financial technocrats. Their job is to pretend that there is no revolution at all, merely an increase in “efficiency,” “creating wealth” by debt-leveraging the economy to the point where the entire surplus is paid out as interest to the financial managers who are emerging as Western civilization’s new central planners.

Frederick Hayek’s Road to Serfdom portrayed a dystopia of public officials seeking to regulate the economy. In attacking government so one-sidedly, his ideological extremism sought to replace the checks and balances of mixed economies with a private sector “free” of regulation and consumer protection. His vision was of a post-modern economy “free” of the classical reforms to bring market prices into line with cost value. Instead of purifying industrial capitalism from the special rent extraction privileges bequeathed from the feudal epoch, Hayek’s ideology opened the way for unchecked financial power to make a travesty of “free markets.”

The European Union’s financial planners claim that Greece and other debtor countries have a problem that is easy to cure by imposing austerity. Pension savings, Social Security and medical insurance are to be downsized so as to “free” more debt service to be paid to creditors. Insisting that Greece only has a “liquidity problem,” European Central Bank (ECB) extremists deem an economy “solvent” as long as it has assets to privatize. ECB executive board member Lorenzo Bini Smaghi explained the plan in a Financial Times interview ...

The key problem is political will on the part of the government and parliament. Privatisation proceeds of €50bn, which is being talked about – some mention more – would reduce the peak debt to GDP ratio from 160 per cent to about 140 per cent or 135 per cent and this could be reduced further.[2]

A week later Mr. Bini Smaghi insisted that the public sector “had marketable assets worth 300 billion euros and was not bankrupt. ‘Greece should be considered solvent and should be asked to service its debts,’ … signaling that the bank remained firmly opposed to any plan to allow Greece to stretch out its debt payments or oblige investors to accept less than full repayment, a so-called haircut.”[3] Speaking from Berlin, he said that Greece “was not insolvent.” It could pay off its bonds owed to German bankers ($22.7 billion), French bankers ($15 billion) and the ECB (reported to be on the hook for $190 billion) by selling off public land and ports, water and sewer rights, ownership of the telephone system and other basic infrastructure. In addition to getting paid in full and receiving high interest rates reflecting “market” expectations of non-payment, the banks would enjoy a new credit market financing privatization buy-outs.

Warning that failure to pay would create windfall gains for speculators who had bet that Greece would default, Mr. Bini Smaghi refused to acknowledge the corollary: to pay the full amount would create windfalls for those who bet that Greece would be forced to pay. He also claimed that: “Restructuring of Greek debt would … discourage Greece from modernizing its economy.” But the less debt service an economy pays, the more revenue it has to invest productively. And to “solve” the problem by throwing public assets on the market would create windfalls for distress buyers. As the Wall Street Journal put matters bluntly: “Greece is for sale – cheap – and Germany is buying. German companies are hunting for bargains in Greece as the debt-stricken government moves to sell state-owned assets to stabilize the country’s finances.”[4]

Rather than raising living standards while creating a more egalitarian and fair society, the ECB’s creditor-oriented “reforms” would roll the time clock back to oligarchy. Not the post-feudal oligarchy of landlords owning land conquered militarily, but a financial oligarchy accumulating banking claims and bonds growing inexorably and exponentially, leaving little over for the rest of the economy to invest or consume.

Dan Denning at The Daily Reckoning also has a few thoughts about the Greek situation - Buy When There’s Yogurt in the Streets.

--This brings us back to Greece. Greece is just one economy and not a particularly big one, although what happens there certainly matters to the Greeks. But Greek problems become global problems because of the connectivity of the global banking sector, which is yet another product of globalisation (the globalisation of finance).

--A lot of European banks own Greek debt. And a lot of global banks own European bank debt. The toe bone is connected to the, nose bone. This is why the suits at the European Central Bank are determined to prevent a restructuring of Greek debt. It's not because the ratings agency considers a restructuring a defacto default.

--It's because if the Greek's restructure their debt and force creditors to take losses on bonds (force in the least compulsory way, of course) a precedent will have been set for every other troubled bank and sovereign bond issuer in Europe. It's not that everyone will default. It's that everyone will restructure, and in so doing, the capital of a lot of European Banks, including the ECB itself, would go up in smoke.

--"Greece could have a contagion effect,'' ECB Vice President Vitor Constancio said in Frankfurt today. "That's the reason why we are against any sort of default with haircuts and any form of private-sector event that could lead to a credit event or a rating event."

--The "credit event" would be even worse for markets. The rating event is a sideshow. The real story is whether Europe will hurtle towards taking all these losses now...or kicking the proverbial can down the road and tolerating a much weaker Euro in the process. Kicking the can down the road would mean more loans to Greece et al. by the ECB and perhaps outright bond purchases with new cash (debt monetisation).

--The Europeans have to get their act together soon. The fifth part of the International Monetary Fund's loan to Greece is due at the end of this month. But the IMF is prohibited by its own rules from releasing that money if Greece doesn't already have a year's worth of financing lined up at the time the IMF is ready to release the money. Without the money, the Greek government has about six days of cash left before it goes broke.

--The meta-story here is that everything central bankers have done since 2007 has been designed to prevent a real reckoning. That reckoning isn't moral or philosophical. It's financial. Too much unproductive debt has saddled the global economy. That debt is hard to service (globalisation has eaten into tax revenues as average incomes declined) and will likely never be paid back.

--Everyone at the ECB must know that. So why are they pretending otherwise? Well, the obvious answer is to prevent a systemic meltdown and the collapse of the Euro. The sick children of Europe-in debt and economic terms-may be forced into some kind of second-class currency. In order to save the Euro it may be necessary to destroy it.

--Or, it could be that deep down in their trans-national progressive centralising hearts, the heads of the ECB and the European Union believe the only way to achieve a more integrated political and economic union is to destroy national sovereignty altogether. If that's their goal, then they are certainly making progress in Greece, where the government has been forced to call a confidence vote and is further forced by the IMF and the ECB to implement fiscal austerity measures that are not pleasing to the Greek's throwing yogurt in the streets.

--What will happen next? Will the yogurt throwers topple the government and prevent their political masters from selling Greece into European servitude? Or do they have a choice at this point? Hmm.

--A single debtor in thrall to his banker/lender/overlord probably doesn't have much choice. The law is against him. His resources are exhausted. And after all, he incurred the debt.

--But a whole nation of debtors? Or, more specifically, a whole nation asked to pay off debts run up over generations? It seems to us they DO have a choice. They can tell the bankers to stick it where the sun don't shine...and then see what happens. And if that's what happens in Greece, you can bet it's a dress rehearsal for what will happen elsewhere.

Dan also has a jaundiced look at the revival of the internet company IPO market - Global Pump and Global Dump.

--IPOs are a way for long-term insiders to "cash out" and boost their compensation by selling the business to the public. It's true that IPO shares are usually "locked up" for a set period of time to prevent the instant flipping of the shares from the insiders to the public at a handsome instant profit.

--But the question for the investment buying public is, or should be, is the business going to be able to generate earnings for shareholders? And are the shares reasonably priced? Or are the insiders selling for a specific reason? That reason being there's more money to be made in selling shares in the business than in operating it.

--And here's a larger question to ponder over the weekend: has the coordinated reflation of stock markets by central banks since Lehman Brothers collapsed in 2008 actually been a giant pump-and-dump exercise? Were QE1 and QEII like mini-IPOS for the stock market in general, a kind of re-selling and rebranding of stocks as an asset class?

---Here's an argument: The insiders-mostly financial institutions-have used their control over monetary policy to flood the market with cheap bank reserves. Those excess reserves have been put to use in financial markets to run up stock, bond, and commodity prices and generate trading profits for banks and investment houses. The upward momentum in markets (more or less) has given anyone who can see the writing on the wall a chance to liquidate their positions into a stable market and leave the shareholding public with all the risk.

--Nefarious? Paranoid? Conspiratorial? Or just the same as it ever was?

--It's not much different than the exercise Jesse Livermore described in Reminiscences of a Stock Operator. If you're a large seller wishing to liquidate a position (the Money Power wishing to sell the assets it bought with credit it created, at no cost, for a high price) the first thing you do is become a buyer and create some buying momentum in the stock.

--Once the public begins to bank on that momentum and get back in the market with conviction, you can liquidate your position into a rising trend. Then, when the public is all in and you're all out and the Fed is set to exit the market and Greece is set to crack, you're in the perfect position to buy up all the good assets cheap, after the crash, when there are no other buyers to compete with and the streets are littered with globs of yogurt and broken bottles and shattered middle-class dreams.

--Are we at the big moment now, where the wealth transfer is accomplished? As we've said all along, the Fed needs a proper stock market crash to justify another round of asset purchases. That could mean even steeper stock falls. What will follow is an even more aggressive monetisation of government debt-or outright default.

--How will you know when the whole system has descended into farce and fraud? Look for the Facebook IPO.

Heading back to something slightly more aligned with the original theme of the post, Dan has an explanation of a term they occasionally drop in to articles at the DR - The Money Power.

--And so we return to the subject broached earlier this week of “the Money Power”. The phrase isn’t ours. And just to be clear what we’re talking about—as opposed to what other people mean by “the Money Power”—we’ll define it for you. “The Money Power” is the disparate group of financiers and bankers who profit the most from accumulating assets when they’re cheap and selling debt to the government and the public.

--The above description may not sound sinister. And it probably isn’t, at least in the sense that the ultimate aim of wealth and power through ill-gotten advantage is more or less the same goal of organised crime. It’s as old as humanity, really.

--What makes the Money Power so destructive is that it achieves its aims through the control of the price of money. This allows it to engineer a cyclical wealth transfer from the public purse to the private purse and from the Middle Class to the Bankers.

--Now normally we wouldn’t use such incendiary and populist rhetoric. And to be clear we don’t mean to suggest there’s any kind of global conspiracy by a secret and shady group of elite trans-national criminals. That would be a good story, though.

--No, what we mean is that there has always been profit in controlling the price of money. Think about it for a moment. Imagine you run a business where you can create the product you sell at no cost AND charge interest for its use. You turn your cost of capital into a rental income. That is a pretty clever trick.

--The Money Power has accomplished this trick through the artificial setting of interest rates and fractional reserve banking. With fractional reserve banking, banks can expand credit far in excess of the accumulated savings on deposit in the banking system. Through manipulating interests, the banks can make the cost of this credit appear attractive to the public.

--And indeed, for awhile, the low cost of credit—or what is also referred to here as “access to mortgage finance”—induces people to borrow so they can buy assets (stocks and bonds and houses). A vast accumulation of private debt ensues, driving up asset prices and looking rather benign.

--But then, when a crisis hits and asset values begin to fall—as they always do when they become too expensive relative to the income they generate or the value they deliver—the debts accumulated at low interest rates do not change in value. The Money Power can then buy up the assets at bargain basement prices, while tending to its debt slaves and collecting interests.

--There is a further wrinkle, too. The government! U.S. interests rates (at least short-term rates)—otherwise known as the price of money—are set by a private cartel of bankers (the Money Power). The Money Power is happy to encourage large government debts because it makes money by lending money to the government. Whether the government is borrowing money for foreign wars or domestic wars doesn’t matter.

-- The Money Power benefits from the permanent expansion of the Welfare/Warfare State because it means the permanent expansion of government debt (debt that will never be paid off, only refinanced or defaulted on). The result is the same as in the private sector, only this time the State is forced to sell assets off to the Money Power at fire sale prices. This is what’s happening in Greece now.

--And of course, this is what’s been happening in cycles for years. The advocates of debt-based money have simply sunk their tentacles into the financial life of the world more effectively now than at any other time in history. Private and public debt has exploded across the globe. Creditors earn interest on the loans they’ve made. But because of fractional reserve banking, they are able to create new product (money) out of thin air at no cost.

--It’s a great racket if you’re on the inside. But if you’re on the outside, this systematic transfer of wealth through manipulation of money and interest rates turns the economy into a boom-bust nightmare. It also impoverishes a lot of people, leaving them with no assets and a lot of debts.

Cold Fusion Now notes the Italian initiated latest cold fusion craze will "soon be made commercially available" by a Greek company - GREECE’s ANSWER TO THE INTERNATIONAL CRISIS: HYDROGEN & NICKEL EXOTHERMIC REACTION - CHEAP, CLEAN & GREEN ENERGY .

Today, there is great pessimism regarding the future energy needs of our planet. Energy will soon become universally cheap, clean and readily usable. Andrea Rossi and Sergio Focardi have discovered and patented a technology that will change the world’s energy field. This technology will be made commercially available by Defkalion Green Technologies s.a., a Greek company.

By combining Hydrogen and Nickel to create an exothermic reaction (at room temperatures and in a device that can be safely placed in households and also industry) heat is emitted on a 24-hour basis. This energy is produced at a fraction of the cost in comparison to currently available energy sources, it is clean and totally green. Furthermore, using conventional, readily available third-party technologies, the heat can also be used to produce electricity.

Defkalion Green Technologies s.a. has secured exclusive distribution rights for the entire world, except for the USA and military applications. It will start production and first distribution of its products from its factory in Xanthi for the Greek and Balkan markets, initially. Two more factories are scheduled within 2012. International sales are already strong in demand, which will spur exports.

Suffice to say, that Greece possesses 83% of Europe’s Nickel deposits, a key strategic consideration. Furthermore, at this time of the global financial crisis, Greece is faced with a golden opportunity to become energy self-sufficient, gain in employment in one of its most underdeveloped regions, as well as become a technological leader in this new scientific field.

The press conference will comprise of undisclosed to-date information relating the technology’s commercial and industrial applications, the company’s strategic placements, as well as commercial issues that are of interest not only to Defkalion’s future customers, but also to the political society of our country.

It goes without saying that such an important development also possesses a strong international dimension in many aspects.

Free Energy News notes the annual Bilderberg meeting was on recently, and after a lengthy diatribe makes a call for people to adopt decentralised energy solutions - Bilderberg Cabal Secretly Plots World's Future.

Of course the good news, is there is some in this, is that these agenda items are awakening the population and urging them to support alternative energy, to remove our dependence on these corrupt central forces of governments controlled by mega-corporations.

As multiple exotic energy technologies are starting to emerge, we have the opportunity to build communities that are less susceptible to their control. Clean, cheap, and plentiful energy will give ordinary people the personal, political, and economic power to live free from global tyrants who wish to impose their will on the world. The upcoming energy revolution will throw a wrench in the workings of many globalist plots.

* Free energy will solve the ecological threats facing our planet, including "global warming." Despite your opinion on the causes of global warming (or if it is taking place), there will be no need for "carbon taxes" when CO2 emissions start dropping due to the emerging energy technologies. The plan to extort the world and push for a one world government (in the name of environmentalism), will be stopped in it's tracks!

* Exotic energy technologies will make the Middle East irrelevant, because oil will only be needed as feedstock for plastics, fertilizer, and other similar goods. Oil will no longer be used as a fuel. This will make the idea of perpetual war in the Middle East completely illogical, even to those who previously supported such intervention.

* With abundant and cheap energy, citizens will be able to live more independently from government. Currently, the high price of energy makes the cost of off-the-grid living mostly prohibitive. However, with free energy technologies everything from transportation, home electrical generation, water desalinization or purification, and indoor gardening becomes more affordable!

The elites of the world that attend the Bilderberg meetings may have an agenda for the future, but free energy hold the potential to spoil all their plans. It's up to us to push for the immediate implementation of these game changing technologies. Soon, we will have the tools we need to make an all out push for freedom. Let's use them!