Financial crisis - it's crashing again and The time of change

Financial crisis - it's crashing again
by Thomas Walter
[This article posted on 3/16/2023 is translated from the German on the Internet, Finanzkrise - es kracht schon wieder | marx21.]

Weather lightning in Silicon Valley: the crisis is lurking everywhere. Without the state, the financial system can no longer exist. This will have not only economic, but also political, social, possibly even military consequences. A commentary by Thomas Walter

What happened? To the multiple crisis (Corona, war, climate, inflation) now comes a financial crisis. The "Silicon Valley Bank" (SVB) is bankrupt. The state rescues the money that the customers - Silicon Valley companies - had invested there.

SVB had invested the savings of its clients (companies) in government bonds - with low interest rates at the time. Now with inflation, interest rates on the financial markets rose. There are now new government bonds on the market with higher interest rates. The old bonds with the still low interest rates that the SVB had therefore fell in value. The SVB could have sat this out. At the end of the term, it would have gotten the full value.

Silicon Valley in crisis

But corporate customers wanted to withdraw their savings now because of the general crisis. But Silicon Valley Bank couldn't raise the money. After all, the bonds had fallen in value.

To raise the missing money, SVB wanted to sell new additional SVB shares. "Psychologically", this led to panic. Now everyone wanted to withdraw all their savings. The SVB was broke.

Fraud is part of the business

Speculators had previously bet on a collapse of the SVB joint stock company and have now made over a billion dollars from these bets. Perhaps among those winners is super capitalist and Trump supporter Peter Thiel. He kindly warned SVB clients a few days ago: something could go wrong with SVB....

State as savior of the capitalists

U.S. President Biden has state-guaranteed savings deposits at Silicon Valley Bank and several other bust banks in hopes of stemming the panic. Before that, an "aggressive campaign by Silicon Valley billionaires and financial investors" (FAZ) had put on strong pressure. Silicon Valley is in California, and California is an important state in U.S. elections.

It is the usual ritual: politicians, experts and the media calm down. Suddenly, the markets are criticized as "irrational". Pundits marvel at the "incredible recklessness."

The elites argue about whether central banks should continue to raise their key interest rates despite teetering banks. On the one hand, higher interest rates flush higher profits onto banks' balance sheets. On the other hand, the old securities that are still yielding the old low interest rates are losing value. Banks that have such securities, like the SVB, are in "trouble".

The Solomonic solution of the central banks is currently to raise interest rates. This increases bank profits. The banks that get into trouble in this way are targeted by the central banks to be helped with money.

The U.S. government has also come to the rescue because SVB's corporate clients were high-tech firms that are strategically important in the economic war with China. Central banks will do anything to reassure the financial world. But the financial and high-tech sectors are battered, weakening the U.S. and global economies.

European banks also teetering

In Europe, the major Swiss bank Credit Suisse has now had to be rescued by the Swiss central bank. This bank had attracted attention in the past for laundering money for the Bulgarian mafia and for money flowing to corrupt politicians in Mozambique.

There will be arguments about why only banks and companies are "saved", but not the workers. If there are layoffs and lost wages, there will be social unrest. But there is also the danger that the U.S. government and its allies will militarily expand imperialist conflicts in order to divert attention from economic, political and social problems.

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The time of change

Both dystopia and utopia are within reach.
By Gustav Viktor Śmigielski
[This article posted on 3/16/2023 is translated from the German on the Internet, https://www.rubikon.news/artikel/die-zeit-des-wandels,]

The way we have lived together so far is on the verge of checkmate. Crises are coming at shorter and shorter intervals. To global excess mortality and the war in Ukraine are added earthquakes, government crises, chemical accidents, factory fires and extreme weather events. Which of these are genuine accidents or natural cataclysms and which are deliberately man-made is the subject of countless speculations. Gustav Viktor Śmigielski himself has lost track. He does not know what is true and what is not, it has become far too complex, and he has no choice but to rely on his feeling and to guess. What technologies the rulers of this world have at their disposal and how they are used against us, which ruling class actors form interest groups, who cooperates, who fights each other, and where intrigues prevail, is what commentators on Telegram argue about in endless battles. In some discussion groups, unread messages accumulate in five figures within a few days. Interesting sources are often shared there, which is why our author tends to scroll through the news on the fly. Some of our fellows metamorphose into real information warriors, who have made it their mission to provide us with news by creating Telegram groups, which Śmigielski calls "information slingers." The amount of channels and the information they contain are so enormous that no ordinary person can encompass them all. A group name on Telegram sums it up: "Too much info - too little time." Despite this confusion, or perhaps because of it, we can say one thing with certainty: The world is changing!

At the latest after writing something with the chatbot ChatGPT, you can get a sense of what Klaus Schwab means by the fourth industrial revolution and how serious the changes are that are coming to our society. The leaders and rulers of our planet are aware of the coming change in a big way and are trying to shape it according to their visions, which, simply put, provide: "More power, more rights, more resources for us, less for the rest."

Klaus Schwab had a hard time hiding his excitement when, with a clenched fist and in his German-accented English, he told the audience at the 2022 WEF meeting during his opening speech, "The future doesn't just happen, the future is built by us."

"The future is built by us": Klaus Schwab kicks off World Economic Forum 2022 Davos

And they are already busily shaping the rules of society cleverly in their favor: No registration of internal combustion cars from 2035 within the European Union. Small-series car manufacturers with a production volume of less than 10,000 new cars will be exempt - which can be understood as a backdoor for the production of exclusive automobiles. Similar exemptions exist in CO2 trading for luxury yachts and private aircraft, whose owners do not have to buy emission rights, even though their yachts and jets emit considerable CO2 and devour vast amounts of resources in general. It is the plebs who must learn to do without.

Everyone is now talking about the so-called "15-minute cities". They are touted to us with the triviality that everything we need can be reached within a 15-minute radius on foot, by bicycle or by bus and train. While this is already the case in many cities, they cleverly conceal the fact that they ultimately want to limit freedom of movement. If you can already reach everything in close proximity, why would you want to leave your habitat? In Oxford, England, a pilot project was started last year and street barricades were erected to prevent car traffic. The residents, however, knew how to defend themselves against this and removed them without further ado in night-and-fog actions.

What are we actually fighting against?

Many rebels and freedom fighters see the attempt of the "elites" to take over world domination as a reflection of "communism" or "socialism", which they have learned to hate. To be sure, they are right that world domination will be accompanied by a planned economy, and that the attempt made in the East to create a propertyless collective society has failed miserably. But do they also understand why this attempt failed? Indeed, this should be considered from two different points of view: On the one hand, from the point of view of the failure of a utopia, and on the other hand, from the point of view of the failure of a dystopia.

Dystopia

A centralized, totalitarian and thus dystopian society failed primarily because the technological means were lacking, especially within information technology and surveillance. Socialist rulers were unable to monitor the economy and its actors in real time and react quickly.

However, a turnaround took place within the last two decades that could now overcome these weaknesses. The surveillance of the Internet and the accumulation and processing of information scooped up by the economy and accumulated and analyzed via smartphones and other Internet-enabled devices now allow essential sectors of society to be monitored and controlled. It is reasonable to assume that advanced artificial intelligence could play a crucial role in this.

Today's rulers now have the opportunity to achieve successes in a planned economy that the socialists of the time could only dream of.

Utopia

The utopian goal could not be achieved because the socialist rulers did not want to hand over their power to the communes, which were ultimately supposed to administer themselves through democratic processes. They failed to make the transition from socialism to communism. The necessary decentralization never took place because the absolute power they had acquired was far too tempting to relinquish. It clouded the senses of the newly created ruling class and made them lose sight of the original goal. Unfortunately, this can be observed all too often: As soon as a person occupies a somewhat elevated social position, he tends to become arrogant, to speak to his subordinates "from above," to demonstrate arrogance, and to use his power immorally.

"Power corrupts, absolute power corrupts absolutely" - Lord Acton.

A utopian society will have learned to decentralize power, to keep it manageable and thus controllable, instead of creating supranational institutions and conglomerates whose size and financial power detach them from any democratic control. Just look at the European Union and its institutions: In Brussels, an estimated 25,000 lobbyists besiege and work the deputies and commissioners, bribing them in many ways and presenting them with prefabricated laws, which only need to be waved through. We ordinary citizens have virtually no influence on the decisions made in Brussels.

In the municipality, life is different. Municipalities are levels of administration that are characterized by their limited number of people in a geographically defined local area. Besides self-government, self-sufficiency is the main characteristic of a commune. People know each other, respect and help each other, but - and this is important to mention - observe and control each other. In communes it is much more difficult to act out unvirtuous and immoral behavior patterns, as they would quickly lead to being excluded from the community.

Community, not hierarchy, is the concept around which a utopian society is built.

Interestingly, we experience similar things in spiritual teachings. It is not the "I" but the "we" that leads us to salvation. Jesus said in Matthew 18:19-20:

"Where two of you are made one on earth, why it is that they should ask, it shall be done for them of my Father which is in heaven. For where two or three are gathered together in my name, there am I in the midst of them."

Another wise saying goes, "Heaven can only be entered together."

There is also a parable worth mentioning about the difference between heaven and hell: for this, imagine a long, beautifully laid table at which all the people are seated together. The situation is such that the elbows of the people are stiffened and thus they cannot feed the delicacies that lie before them on the table to their mouths - that is hell. In heaven the same situation prevails, only that there people feed each other.

All these statements and parables are meant to draw our attention to the necessity of overcoming the ego, which has outgrown our divided mind and uncontrollably controls all our lives. Therein lies the key both to our personal salvation and to the long-awaited, social peace. How will we manifest this here on earth if it is not also anchored in the foundation of our society? It is indispensable to promote the spiritual training of man from an early age.

Helping to shape the change by creating clear rules

Resistance is growing, not only from ever-increasing discontent, but also from an ever-increasing number of people who feel alienated from society. High energy costs, a generally turbulent economic situation, and shady political decisions are now causing the middle class to stumble. It is a development that Klaus Schwab foresaw in an interview as early as 2016, and more than a few believe that it is wanted by the ruling class. After all, the middle class is the class that still has political power and uses it in its own interests.

Many of them are afraid of losing in the near future what they have built up over years, sometimes over generations, but refuse or do not think of getting to the root of the problem, for example by putting limits on private property.

It is a form of hypocrisy to cling to a liberal economic order based on private property, and then complain when you are displaced or taken over by the private property of others.

People want to build a business, they want to become employers, but they refuse to accept the consequence that there are bigger, better, faster, and above all more ruthless entrepreneurs than they. They build hierarchies in which clear authority to issue directives is established, but whine when they realize that they are subordinate to a much larger hierarchy in which they are at the mercy of others.

And so we manifest in our way of doing business the many small wars that we wage among ourselves, which always end up in a big war. So we have to give answers to the question how much private property is appropriate and at what point something can automatically no longer be private property. Is it okay to be the owner of more than one residential property? Is it okay to be the owner of more than one automobile? Is it okay to be the owner of something that several people have worked on together? Or does that something then automatically become common property? Is it okay to demand consideration based solely on a title of ownership? And if so, how often? Endlessly? These are questions to which we must provide new answers, offer fair solutions, and draw new boundaries.

Perhaps at some point we will learn to turn the tables and address the statement "You will own nothing and you will be happy" to Klaus Schwab, his consorts and superiors. Let's make them tremble by no longer recognizing what they call their property and declaring it to be common property. The primary concern here is productive capital. But to do this, we ourselves must learn to rise above entrenched patterns of behavior by first naming them and then pointing out their insanity and ridiculousness. Here's an example:

The hoarding of gold

It is tragic and at the same time highly interesting to take a closer look at some of our behavior patterns. For example, the hoarding of gold: How, other than insanity, can it be explained that man goes to so much trouble to get hold of this rare metal, only to bury it underground again afterwards?

Man builds machines with the help of which he moves tons of earth, he enslaves and inflicts considerable suffering on his own kind, even kills in small as well as large wars, in order to get this shiny metal, which finally ends up in large parts in the form of ingots in underground vaults. Storage, combined with protection, causes additional, immense expense that man takes upon himself, only to have another man not take these ingots from him to store in another vault buried deep underground. If there is a highly developed, extraterrestrial civilization, which could observe this madness, this behavior causes with it probably no more than head shaking and perhaps some pity.

It has been proven for 50 years now that we do not need gold to carry out barter transactions. The gold standard of the American dollar was lifted in 1971 after several countries decided to exchange their dollar reserves for gold at the previously fixed price of 35 dollars per troy ounce. The threat of a sell-off of U.S. gold reserves loomed, prompting then-President Nixon to pull the emergency brake and unceremoniously cancel the U.S. dollar's gold peg. Since then, it has not been considered necessary to build a currency on the so-called gold standard. What for? Basically, both the precious metal and a banknote are just a tool for exchange. Gold, by virtue of its rarity and the impossibility of producing it, was suited to carry a function of preserving value. Nonetheless, we have proven that we don't need gold to organize a monetary system; just a fair set of rules that are enforced.

Do not lose optimism

The phenomenon just described illustrates quite well the insanity that affects a large part of humanity and which - taken to its logical conclusion - will lead our society into the abyss. Whether it is the hoarding of gold or of something else, or whether it is the illusion of possessing something, plays only a subordinate role. If you look at the state of society like this, the struggle seems hopeless. However, I would like to assure everyone that it is not so.

We just have to be careful that in the fight against injustice we do not turn ourselves into what we have set out to fight. We must be careful not to let ourselves be controlled by the ego, whose goals are fixed and will always produce the same results as before. History teaches us how heroic resistance fighters often mutated into dictators when they were seduced by the power they had previously defied. However, let us preserve optimism, with the certainty that good can withstand any form of evil, just as light eradicates the forms of darkness.
Gustav Viktor Śmigielski is a philosopher and author. He studied finance and accounting in Wroclaw and is on a quest to find answers to life's existential questions - with success!Read more

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