Debt, in
becoming perpetual, is transformed into an income that feeds capitalistic
parasitism. Regardless of the debt being the one subscribed by us, or the one
labeled as public and endorsed to us by the political class, by order of the
financial system.
Contents
1 – From
currency to debt and the role of the State
2 – How to
build debt and its meek acceptance
3 –
Capitalism does exist, it is best not to forget
4 – The
role of States in the financial system’s fattening
+++++ooo+++++
1 – From
currency to debt and the role of the State
There has been a long epoch where debts
were part of the naturally occurring exchanges between people seeking to
satisfy their needs, within the interaction context amongst members of the same
community, and where usury was not part of their way of thinking. Debts were part of the natural imbalances within the
community, and had no role as differentiating and autonomous elements of
domination of creditors over debtors; credits as assets and debts as
liabilities.
The emergence of money, materialized
into salt or shells, was later focused in precious metals – mostly gold – that,
given its inalterability, corresponded to the search for stable and acceptable
goods, being easily transportable for exchange with other goods. The very material nature of money prevented
its movement in a wider commerce scope and the safety of its possessors in the
event of robbery; it was common that kings, in their war journeys, would carry
coffers with the royal treasure and, in case of financial difficulties, would
devalue the currency by replacing part of the gold by silver or copper.
In China, before the X century, and in
Italy, in the XIII century, where there was a great density of commercial
relationships with distant parties, there was a generalization of the use of
documents that certified the deposit in a bank of a certain amount of gold, which
guarantied the withdrawal by the bearer in another bank, thus being
transmissible titles. After the end of
the period of abundant gold, brought from the gulf of Guinea by the Portuguese
and ransacked in Mexico by the Spaniards, and given the huge development of
distant trading inherent to the European colonial expansion, the conclusion was
reached that there would not be enough gold deposited in banks to correspond to
the value of the transacted goods, which would weaken depositors’ trust in
banks.
The States, in the XIX century, in order
to endow the monetary systems with the populations and businesses’ general
trust, imposed the paper money issuing monopoly – the bills in use today – by
issuing banks, without however ensuring those bills’ convertibility to gold.
So, by issuing bills without a counterpart other than the population‘s trust,
the issuing banks and the States potentially assumed a debt they could never pay; and so that no one could question the
trust in the issuing bank/State, by demanding the conversion of those bills to
gold, the States come to decree those bills’ inconvertibility to gold, thus
assuming to be debtors incapable of paying their debts, in gold or by any other
means.
The United Kingdom canceled the pound’s
convertibility to gold in 1931 because the gold was in accelerated migration to
the USA where, in 1934, all the banks were forced to deposit their gold in the
Treasure in exchange for certificates. In 1944, at Bretton Woods, all of the
currencies became referenced to the dollar, the only convertible currency, at
the price of US $35.00/ounce (1 once = 31,104 g), this reference having been
altered in 1968 by Nixon to the amount of US $42.22/ounce, in response to the
USA’s corrosive external deficits, to the Vietnam war, and to France’s purchase
of gold in exchange for dollars.
Finally, in 1971, the dollar convertibility to gold was cancelled,
leaving all world currencies without any real reference other than the
population’s trust and acceptance of bills as transaction, savings, and
speculation instruments. Even the
fiction of a relationship between gold and the dollar ended up disappearing in
1976, leaving the Federal Reserve with total liberty to print bills without any
other value than the generalized acceptance of its buying power. This means that when a central bank issues
currency, it is issuing a debt certificate that it hands over to the banking
system for placing into the society, within the scope of that mechanism:
a) the central bank creates a value from nothing, bearing
in mind that, if it is in excess within the context of the circulating
currency, that value will lead to inflation, and if it is insufficient it will
promote the rise of interest taxes, hindering business. The circulating
wealth’s value, the conjuncture, and the transaction rate within the society
have to be taken into account.
b) the central bank hands over that value to an ordinary
bank, which deposits a debt document with the assigning central bank;
c) the commercial bank will hand over the equivalent value
to several clients, within the scope of what is known as a credit multiplier,
as will be explained later.
In this way, a credits and debts cascade
is generated without it being anchored in any savings, and being totally
dependent upon the existing trust in the original monetary issue. The final receivers, private individuals and
enterprises, play an essential role in this cascade when they transform their
debts into goods and, in fact, provide a basis for the whole chain; labor is
therefore at the foundation as the only and real originator creator of value.
That artificial and artful mechanism is
present in the quantitative easing used by Draghi at the ECB; a
monetary issue that will treble the balance of the Euro Zone’s central bank,
from one (in 2014) to three billion euros in 2016, with the particularity that
commercial banks, in order to hold financial
assets for their businesses, frequently hand in, as a guaranty, public
debt bonds, thus indirectly financing the states issuing those bonds, mostly
those of the EU’s south periphery.
This ECB policy is a time bomb. Firstly
because it is not generating debts’ devaluing inflation, notably of the public
ones; secondly because issuing currency aggravates public debts which, by
nature, are financially unpayable
and unsustainable from a social point of view in countries such as
Greece and Portugal; and, finally, because the monetary mass keeps ballooning
the, so called, financial markets’
speculative bubble, which will inevitably burst, the only missing piece is
knowing when.
Let us move on to the account of a Portuguese
curiosity in the XIX century.
On November 27, 1880, the English
magazine The Economist was mentioning
the instability of the markets: “European
monetary markets are becoming tired, and not without reason, of Portugal’s
constant new loans solicitation” and, five years later, it pointed out: “In Portugal’s own interest it would be
preferable that its indebtedness facilities would be restrained now”. The
European Commission and the Eurogroup are the most recent members of this
financial lineage.
The bankruptcy, in 1890, of the Baring
Brothers (118 years later the same happened to another family business, owned
by the Lehman brothers) the City’s premier financial partner of the Portuguese
government, caused it, in order to face the situation, to transfer £1 million
in gold from the Bank of Portugal to London, considerably reducing the
Portuguese reserves. The ensuing
financial crisis was compounded by the British Ultimatum, both being
demonstrations of how much worth the Portuguese sovereignty, praised by
nationalists and patriots, has been; the republican revolt of January 31st
1891 was a well-timed exploitation of the situation. In the middle of the
crisis the “The Economist” used a very modern terminology on its February 6th,
1892, edition: “For a long time now it
has been evident that the country (Portugal) was living above its means… An
expressive reduction of the debt obligation is inevitable…”. “Holders of Portuguese debt must consent to a
decrease of their rights, by force of the circumstances”.
As it is easily seen, imperial England
was dealing with its Portuguese half-colony with the appropriate dignity; just
as it happens today with the Bruxellois oligarchy. After so many years having
passed, the inequalities amongst the several European areas remain; but the
admission of the annulment of a substantial part of the debt is not present
within the political circles because it would entail the shrinking of the
financial system’s size and deep changes in its functioning, notwithstanding
the fact of that same revocation’s inevitability and pertinence, even if it is
silenced – eppur si muove.
2 – How to build debt and its meek
acceptance
Within the Portuguese politics (and not
only) there is a marked conservatism preponderance (also) in what regards debt
in general and public debt in particular; this attitude, of falsehood,
meekness, or ignorance, sets up a curtain that hides debt’s deep meaning and is substantiated in three
ways:
a)
the failure to regard debt – public or private – as an
instrument built by capitalism for capturing peoples and lives;
that thought does not even graze the political class members’ meninges, in
particular those of the segment that boasts being the working class defender;
b)
not much visibility is given to those opinions that
challenge the debts’ legitimacy, given the prevailing pride of “not being a
deadbeat”, a pride which is in complete disharmony with the corruption
practices in place in the occidental European country which got the bronze
medal in that championship;
c)
debt is observed with resignation, in an economist[1]
way, with the political class’ opinions being divided into “we obediently pay”
and “we obediently pay but we’d
appreciate some small favor”.
3 – Capitalism
does exist, it is best not to forget
In order to overcome its accumulation
difficulties, the highly globalized capitalism, grounded on an acerbic
competition between multinational corporations, causes a fierce fight for the
planet’s resources which transforms large areas into war and environmental
devastation scenarios.
Its existence has been based on the
pressure over labor costs, and the need to invest in the production of goods
and services in order to beat the competition, as elements to increase capital
accumulation. As will be seen further ahead, the increasing financial aspect of
everything has been pushing that accumulation with the creation of
capital-money in a totally deregulated way, as in the golem[2]
tale, where the monster created to bring security is inadvertently released and
threatens the whole planet’s social structure.
Ø In the competition for selling goods and services, labor costs’
depreciation, in terms of the effective salary, as well as the prolongation of
working hours, are essential policies, in total contradiction with the productivity that technological
development has afforded. Besides that, the global production dominated by the
multinationals is segmented because of, amongst other reasons, the exploitation
of the so called competitive advantages, where low labor costs, undignified
conditions, and the meager rights imposed on the workers are included. In
summary, each degree of working skills is, intrinsically, a market within the
context of a globalized “labor market”. In the following graphic, the salaries’
stagnation in the USA industry showcases that tendency.
The same can be seen in Portugal where, for the last 25 years, the slow
and progressive loss of importance of the work compensation relatively to other
income, exposes the lack of claiming ability of the workers, bounded by
partisan syndicate bureaucracies.
Remunerações = Earnings PIB = GDP
Huge pouches of unemployed and
sub-employed are, thus, created, workers without papers, poor or precarious, in
addition to pensioners pressed by the ongoing hijacking of the accumulated
deductions towards the social security systems. Large segments of workers in
stupefying and underpaid bureaucratic functions are also created, as is the
general norm in a bureaucracy. They fill military and police apparatuses
without any function other than preventing threats to the power of the capital;
judicial and fiscal systems mired down in crime cases, ordinary conflicts,
collection, fines and penalties; the multinationals gigantic administrative,
marketing or sales apparatuses, replicated in small and medium enterprises;
surveillance functions in public buildings and places; data handling; etc.
This context of pressure over
labor wages, in order to guarantee low production costs for goods or services,
does not result in a sufficiency that satisfies the invested capital´s
reproduction needs, as required to keep pace with the competition, which gives
rise to the known tendency to lower the profit margins; nor is an adequate
demand for buying of those goods or services created, even if urged by an
invasive publicity.
Ø In addition to those elements dealing with salaries and other labor
related aspects, there is another essential element that blocks capitalism –
the lack of investment. On the one hand, the pressure on labor prices favors
the generation of profits, but the competition and the technological evolution
demand productivity gains, demand investment, mergers and acquisitions between
companies which, however, do not avoid the tendency to the low profit margins,
even when eliminating operators. Actually, in the great majority of the
activity sectors, the domination of a few enterprises can be seen, with the presence
of other, smaller ones, where salaries and profits are lower as are the
investment capabilities; the situations of free competition between small
enterprises are very few, as described by Adam Smith.
Before the recent neoliberalism domination, the discussion
was about the German and Japanese models (to which the soviet’s state
capitalism could be added), the integration of the big industry and the national banking capital,
with the creation of the financial capital, a designation coined by Hilferding
in 1910[3]
and later adopted by Lenin. That formulation was touted as a counterpoint to
the Anglo-Saxon management model, that separated those sectors so that the
banking capital and the financial institutions in general would be free from
the bonds of financing the industrial sectors and their management, and could
very flexibly dedicate themselves as title holders, intervening in enterprises
namely in mergers and acquisitions, which are followed by “downsizing”,
redefinition, and dimensioning actions
and that, in rule, include dismissals. Evidently, it is the Anglo-Saxon[4]
originated version which has been predominant as an ingredient of
neoliberalism.
As is natural to capitalism, capitals tend to move to
those businesses that can maximize their profitability, as compared to other
activities. From a profitability point of view, the financial system stands out
through financial, real estate, or goods (the “commodities”) speculation, from the armament industry or several
traffics such as migrants, drugs, organs, weapons… with several ad hoc fiscal benevolence formulas being created, the well-known offshore addresses, in the heart of the
most sacred of current times’ liberties – that of capital movements.
The financial “investment” being more profitable than
investing in the production of goods and services, the majority of capitalists
prefers to place their peculium on those so called financial markets with have
more flexible applications, faster profits accounting, instantaneous even,
rather than acquiring modern equipment, trying to beat the competition, risking
the emergence of technological changes, habits, fashions, etc. before the
equipment is technically or financially amortized, when it is known that the
commitment with that equipment cannot easily be brought back to a money-capital
status. This contrasts with the conversion of capital invested in the financial
roulette which is easy, instantaneously doable, decided by computer algorithms.
In the chaotic crisscrossing of several action lines,
the satisfaction or not, thereof, of natural human needs is a random variable
which keeps busy the forecast institutes[5] armed with powerful computers,
dozens of Nobel prize laureates, courts of college professors, and of whose
results we have already given a few
examples. Folks, it only matters if it has
employability, as they say in the neoliberal neo-language.
Ø With the populations’ current income scarcely satisfying their needs,
namely of those deriving their income from work, it becomes even scarcer when
one needs to find “in the market” the satisfaction of one’s elementary rights,
such as housing; and, additionally, to correspond to the consumption appeals
disseminated by the media – namely
cars, travel, fashionable household appliances. As a consequence, the financial
system generally facilitates credit and its lasting formulation, debt, as a
mechanism to capture future income, eventually for life; because, in
capitalism, people themselves are considered goods, the debt mechanism
transforms a person’s life into capitalist property.
Several elements are part and parcel of that
internalization of debt as a trivial need. One is the house buying debt, since the neoliberals handed over the
fulfillment of that elementary
need to the blessed market, to the joy of banks and the public corruption
involved in that process; and to the supreme misfortune of those that, having
become unemployed, lost their houses but kept part of their debt.
The other element is made up of debts with very high
interest rates, to satisfy consumption needs, the short term debts from credit
card use, in addition to commissions and several fees which banks are allowed
to levy, even if having a bank account with associated cards is, in fact, a
state imposition. Acceptance of the normality of having a debt is a form of
ideological capture by Capital.
As the private debt is circumscribed to one
individual, a family, a company, the risk is relatively high, even with
guarantees, because, in the case of default, it is of little value for the
financial system to seize houses and companies, since it aims not to manage
devalued real estate or recover more or less bankrupt companies. Those
guarantees mainly are a debtor’s gag because, in the case of default, they
promote the debtor’s ruin.
In Portugal, during the nineties, banks held credit
rights over many bankrupt companies’ land parcels and factories, so they
channeled them to real estate projects, transforming the losses into new
credits with high profit margins; never did they act to recover them as
industrial enterprises. They simultaneously stimulated a housing boom, which the State and the political class never
took care of, as well as the drift of public and public-private investment
towards highways and pharaonic endeavors such as Expo-98 and football stadiums.
4 – The
role of States in the financial system’s fattening
During the eighties the global financial
system, with the IMF/World Bank at its head, forced the so called Third World
countries to take on debt as a means to prey upon, privatize, and integrate
those countries into the global market, to the detriment of any of those
peoples’ well-being logic, and enlisting the local political classes to that
end, resorting to brutal dictatorships when needed (Chile, Brazil,
Argentina…) Because extreme poverty was
the rule in many of those countries and the middle class was not numerous (or was
in an accelerated process of losing purchasing power,) substantial indebtedness
by families was not viable; and the enterprises of the third-word matrix were
either public or had foreign capital.
This highlights the importance of
peoples’ capture by the State and its oligarchies, civilian or military, with
the setting up of enormous public
debts. Within this context, through fiscal punishment, the State transfers
income from the poor – without any capability to access bank credit – to the
financial system… via public debt. In the aged European societies, the
pensioners, for instance, are not a population segment with the capacity for a
(bigger) indebtedness but everyone has seen, through the fiscal load, a part of
their income captured as a contribution to pay the public debt’s obligations.
Contrarily to what is said, the
nation-states do no go bankrupt because they always have a population compelled
to finance the debt trap, as they cannot massively escape and because there is
a fiscal and judicial repression mechanism to force payment; in extreme cases
the creditors will accept losses, as in the case of Greece in 2012, or
reschedule the debts, easing the nearest instalments and burdening the midterm
payments. Thus, it is much more appealing to the financial system to accept
public debt bonds without getting directly involved in indebtedness or in
collecting from populations with difficulties, therefore using the states and
the political classes for that intermediation. In other words, the financial
systems develop mechanisms for the creation of perpetual revenues on their
behalf through the generation of public debt, and each political class fulfills
their role of distributing it by the population, the task of internally and
unevenly mutualizing the debt, of course.
In Europe, in the case of the EU or of
the Euro Zone’s dismantling, as well as of lonely exits from those
institutions, the identity based isolationism would facilitate the financial
system’s purpose of creating perpetual income in the form of debt. If it has
not been possible until now to build platforms for the erection of a solidary
union of the European peoples, each nation-state entrenched within its borders,
their flag on the castle’s keep and circulating their own
currency, would
become a much easier prey for the globalized financial capital, its boycotts
and blackmailing.
Wittingly or not, the “patriotish”
drifts held by Le Pen and its metastases spread throughout Europe, if they
prevail, will bring wide smiles to the face of the global financial capital,
and their protagonists will accept the role of peoples’ hangmen with a ferocity
that the gangs enrolled in the PPE or S&D have not used until now. It
should be recalled that the Weimar Republic, even with the assassination of
Rosa Luxemburg and Karl Liebknecht, fell far short of the III Reich’s assassin
barbarity.
4.1 – Bill
Clinton put the monster on the loose
The financial system’s drift from
productive activity towards autonomy immensely benefited from Bill Clinton’s
revocation, in 1999, of the Glass-Steagall law promulgated by Roosevelt in 1933
in order to guarantee a stable connection between savings and investment and
avoid the systemic contagion of the speculation activity. Without the
separation of commercial and investment (read: speculation) banks, money would
be able to grow in an unheard-of way, without limitations, with commercial
banks also being able to join speculation and, in this way, compromising not
only their role in financing enterprises but also the private deposits and, in
result, all of the planet’s economic activity, since truly national systems have
ceased to exist[6].
For instance, in 2013 the Deutsche
Bank’s
liabilities
regarding derivatives were worth about 16 times the German GDP, rendering this
bank too big to fail and placing it
under the loving protection of Merkel and Schauble. The global debt, public or
private, was computed by the IMF as $152 billion of which $50 billion are
states’ responsibilities – equivalent to 225% of the world’s GDP (contrast with
Footnote 5 on page 8). Hence,
the sum of public debts was equivalent to 75% of the global GDP, 133.7% in the
Portuguese case.
On the other hand, both companies and
private citizens also found in the speculative voluptuousness ways to increase
their capital and savings, benefiting from the higher margins available in the
financial area as well as of their titles’ conversion easiness to and from
money. In this way, the “normal” economy of goods and services production was
incorporated into the financial capital’s logic, seeking to obtain high yields
in order to get credit at interesting rates and, thus, maintain the constant
appreciation of their stock exchange’s quoted titles, royally paying
their upper management with “stock
options” so that they would show interest in the title’s appreciation.
Let us suppose that a bank accepts a
deposit in the value of 1000, knowing that during the deposit’s term it can use
that money minus a fraction of, say, 10% as required by the central bank. Thus, the bank can loan 900 to a client who,
for instance, will use it to make a purchase through a debit card and that
money goes to the vendor’s account. The
initial 1000 has been converted into a deposited total of 1900 and a granted
credit of 900, this exercise being repeated as many times as needed, where the
second deposit can be the base for an 810 loan, and so on. Hence the banks’
zeal to be part of the companies and people’s transactions in order to capture
a maximum volume of deposits to be multiplied as credits, knowing that only a
residual part of the global deposits’ volume returns daily to private
pockets. This mechanism is known as
credit multiplier and is the banks’ privilege; a private individual is unable
to act in the same way.
This scheme works whenever depositors
trust their bank, or the set of banks, as keepers of their money because, when
this trust fails, a rush to the banks can ensue, with the insolvent banks
keeping their doors closed and guarded by the police (Argentina) or it can lead
to a limitation on money withdrawals being imposed, as happened in Greece in
2015, where an unusual situation occurred when more money existed in peoples’
hands than in banks’ deposits. The fear of unexpected financial crises leads
States, in collusion with the financial system, to reduce as much as possible
the possession of physical money by people, and even to entertain the thought
of making all money
virtual.
After credit granting operations like
those exemplified before, a bank can pick a set of those credits and divide
their sum total into several titles which are then made available to the market
and acquired by elements of the financial system itself - securitization. The
original creditor relinquishes part of the profits it collects from the
effective debtors, in exchange for recovering the major part of the loaned capital
and being able to use it again, in this way starting a new credit chain. The
buyers of those titles will, in turn, use them together with others of
different provenances and proceed with other title conversions; this
multiplication is in the form of a Ponzi pyramid, a conman who, in the last
century’s eighties, had a replica in Portugal: D. Branca. As can be seen, this
formula increases the obligations’ volume in an unparalleled way, generates a
tangle of debts articulated as a card castle that, when it collapses, hits the
peoples through the loss of their savings, their jobs, and the imposition of
austerity plans by the political classes which, acting as proxies for the
financial system, are willing to use the public funds to lessen the latter’s
losses. In this instance, the banks’ salvation is realized through bail-ins or bail-outs,
designations that represent, respectively, the sacrifice of the share-holders
or of the general population, forced by the State to participate in the
recapitalization done by the service vector, the political class, which,
naturally, does not ask the population weather it is willing to help a bank in
difficulty.
It can also be deducted that, beyond the
first links in the chain of titles issued in the title conversion operations,
each taker knows whom they were bought from but knows nothing of the operations
included in the preceding phases; and knows even less about the identity or
solvability of the original debtor. If one of more default situations by the
original debtors does exist, the original loaning bank will support the loss,
leaving the waterfall unaffected. The problem arises in a crisis situation if
many debtors fall into bankruptcy or unemployment, ceasing payments, and if the
guarantees become devalued, preventing the bank from recovering the outstanding
debt; this is what happened with the famous subprime
in the end of 2007, which were very high risk loans granted to poor families,
enticed by financial institutions insinuating that their houses were
gaining value and that they could increase their debts by using them as
guarantee. Until one day…
Following the financial crisis of
2007/08, and despite its violence, States and the financial system did not
implement the announced measures for reducing banks’ size and debt volume, more
regulation, less complex derivative products, etc. The scare entered a shocked
state with the survival of the speculation machinery that sustains today’s
neoliberal capitalism, then went away, but contemplates with apprehension the
sky’s leaden color.
The aforementioned survival spirit,
associated with the taming of the political classes and the absence of
significant social contestation, lead instead to the growth of the banking
system and debt, with no slowdown in mergers and capital concentrations, which
surpass even the ones of before the crisis, and to 45% of the transactions
happening far away from the majestic
regulators’[7] noses
which, by that same reason, would be better named as strainers. According to
the same source, global debt ascends to 285% of the GDP and shares’ prices grow
without any correspondence with enterprises’ performance, as a consequence of
the careless issuing of financial means by the central banks, “the typical
outcome of which is a burst”.
Additionally, it is asserted that the risk to the Fed and ECB
supervisors, that hold public or private debt equivalent to 13% and 9% of the
USA and Euro Zone GDPs, respectively, is enormous. To that end, the same article considers that
exiting the very low interest rates conjuncture is necessary, but also that it
will be dramatic if this is not accompanied by a notable income growth for
families and enterprises. And that looks very difficult to happen because the
growth of interest rates, when linked to issuing smaller monetary volumes,
causes accrued difficulties to enterprises and larger state debt obligations.
(to be continued)
[1] This economics view,
which is completely tuned with the capitalist development compendiums in their
current neoliberal version, finds a liminal assertion in the resolution Project
456/XII (2nd) dated 19/2/2012, presented to the Portuguese Republic
Assembly by the Communist Party and aiming to renegotiate the public debt, from
which the following precious statements are lifted:
· “… as the Communist Party has always said, the
consolidation of the public accounts and debt reduction has to be obtained with
economic growth…” (page 2) which means that, in Portugal, people will have to
work more and more without any consideration being given to changing the relationship capital/labor, ways to redistribute income,
etc.;
· “Renegotiate debt is, after all, to guarantee its
payment, which will not be possible without the generation of wealth” (page 3);
that means, if we’re to be good boys and girls we’ll pay forever the debt we
are forced to assume, we will become your dedicated tenants. In really there is
no wealth creation that does not become a rent on behalf of the financial
system, the restructuring becoming, if it happens, a mere supermarket gift;
· The “complete and rigorous determination of the debt’s
dimension … to be carried on by the Finance Ministry and the Bank of Portugal”;
in reality, one is trusting the impartiality, the love of the people of the
PSD/CDS coalition lead by the psychopath Passos, to evaluate debt, as if it
were the sole consequence of ill devised agreements rather than the setting up
by the financial system of a capture machine of the European periphery’s
peoples. It should be recalled that the PSD leader Passos Coelho, before
winning the elections and in a trip he took across Europe to present himself,
mentioned to Angela Merkel that he would order a debt audit, an idea that the
Chancellor immediately rejected.
· The IAC – the Initiative for a Citizen Audit –
appeared towards the end of 2011, under BE’s auspices, and was launched with
pomp and circumstance with the presence of lofty foreign technicians and the
usual useless personas from the Lusitanian unitary intelligentsia. In May of
2013, the IAC declared its complete collapse by means of a proposal that would
be laughable, if it were not absolutely reactionary.
[2] The golem as
interpreted by António Negri and Michael Hardt in “Empire”
[3] We do not use this
meaning for financial capital, which we find overtaken by reality. We prefer to
consider it as a set of shares, bonds, securities, shareholder positions,
derivatives, and other instruments, transacted inside or outside of stock
exchanges, hold by an opaque and mutable set of enterprises, funds, mere
acronyms of offshore registrations, which hold goods or services producing enterprises, simple goods (the commodities) and insurance or
transportation contracts as instruments of speculation, always with a logic of
generating and accumulating capital.
[4] On this dichotomy
between capital arrangements see “Capitalism against Capitalism” by Michael
Albert (1992).
[5] Even elements of great importance to the
understanding of reality are subject to great discrepancies which reveal the
gauging deficiencies of problems’ dimensions. The “Emerging Markets” magazine
recently placed the non-financial public and private debt at $162 billion as
compared to $152 billion pointed out by the IMF. However, the magazine also
added the financial entities’ debt ($54 trillion) – that the IMF does not take
into account – which places the global debt at the $216 trillion level, about
327% of the global GDP; that means more than three years of the wealth
generated by the world population!
[6] However, every time a
bank risks collapse, the bank’s hosting country people are the ones that are
called to contribute to cover the uncollectable credits turned to losses which,
in turn, force a recapitalization or bankruptcy as was exemplarily seen in the
cases of BPN, Banif, or BES, in Portugal or, in a more extensive way, in Spain.
In other words, the profits are joyously transferred to offshores; as for the losses, those stay at home.
[7] Carlos Costa shined
in the BES and Banif cases, just as Vítor Constancio had
won, in the BPN case, enough prestige to get a vice-presidency seat at the ECB.
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