by Charles Hugh-Smith
At long last,
Europe's flimsy facades of State sovereignty, democracy and free-market
capitalism have collapsed, and we see the real machinery laid bare: the
Eurozone's political-financial Aristocracy will stripmine every nation's
citizenry to preserve their power and protect the banks and bondholders from
absorbing losses.
The deposit-confiscation
"bailout" of Cyprus confirms the Eurozone's fundamental neocolonial,
neofeudal structure and the region's political surrender to financialization.
Let's list what
Cyprus reveals about the true state of financial-political power in Europe:
1. The Core-Periphery terminology masks the real structure: the E.U. operates on a neocolonial model. In the old Colonialism 1.0 model, the colonizing power conquered or co-opted the Power Elites of the periphery regions, and proceeded to exploit the new colonies' resources and labor to enrich the Imperial core.
In
Neocolonialism, the forces of financialization (debt and leverage controlled by
State-enforced banking cartels) are used to indenture the local Elites and
populace to the financial core: the peripheral "colonials" borrow
money to buy the finished goods manufactured in the core economies, enriching
the Imperial Elites with A) the profits made selling goods to the debtors B)
interest on credit extended to the peripheral colonies to buy the core
economies' goods and "live large", and C) the transactional skim of
financializing peripheral assets such as real estate and State debt.
In essence, the
core banks of the E.U. colonized the peripheral nations via the financializing
euro, which enabled a massive expansion of debt and consumption in the
periphery. The banks and exporters of the core exacted
enormous profits from this expansion of debt and consumption.
Now that the
financialization scheme of the euro has run its course, the periphery's
neocolonial standing is starkly revealed: the assets
and income of the periphery are flowing to the core as interest on the private
and sovereign debts that are owed to the core's central bank and its crony
money-center private banks.
This is not just
the perfection of neocolonialism but of neofeudalism as well. The
peripheral nations of the E.U. are effectively neocolonial debtors of the core
(quasi-Imperial) banks, and the taxpayers of the core nations (now reduced to
Germany and The Netherlands) are now feudal serfs whose labor is devoted to
making good on any bank loans to the periphery that go bad.
Though we can
term the E.U. a plutocracy or oligarchy, the neofeudal structure compels us to
distinguish a class of those holding wealth and political power that is not
limited to national border: this is an Aristocracy.
Serving the
Aristocracy is a well-paid technocrat class of factotums, lackeys, toadies and
enforcers. Below this well-compensated caste of technocrats is the larger class
of debt-serfs, enslaved to interest payments on either their own debts or the
debts of others, and bound by their class powerlessness to protecting banks and
bondholders from losses.
Cyprus merely
adds an expropriation twist to this well-oiled plunder: deposits
will be expropriated directly to insure no Imperial (core) banks or bond
holders lose money on their absurdly risky loans to periphery nations and
serfs.
2. This is a supranational plunder. While commentators can wile away years debating how much Germany benefited from the euro, the real core is not national, it is supranational banks and the political machinery of the E.U. the banks have effectively captured.
The citizenry of
Germany may approve or disapprove of the Cyprus expropriation, but it doesn't
matter either way: their own serfdom to banks and bondholders is simply being
masked: the bailouts of periphery nations are transparently bailouts of
core banks and bondholders.
The
nation-states of the neocolonial periphery are simply convenient propaganda
placeholders, useful misdirections aimed at the naive and sentimental,
hollowed-out national structures propped up to mask the ugly neocolonial
reality of servitude and plunder.
3. Democracy is a fiction when no matter who you vote for, the banks and bondholders win control of the national income stream and private wealth. Democracy in Europe is a travesty of a mockery of a sham, an absurd play which is acted out as a form of blood-sport circus to distract the masses from their powerlessness and debt-serfdom.
Democracy is a
fiction when the policies protecting banks and bondholders from losses remain
in place regardless of which political party, coalition or politico is
nominally in power.
The German
taxpayers' private wealth is being expropriated via taxes to bail out core
banks and bondholders; how is this any different from the blatant expropriation
of private assets in Cyprus?
It is only a
difference in technique; the result is the same: the forced transfer of
wealth from those who earned it from their labor to banks and bondholders which
in a truly capitalist economy would be immediately forced to absorb the losses
of their leveraged, highly risky bets.
4. The ideological fiction of capitalism is dead in Europe.Capitalism is a fiction if capital that is placed at risk for a return cannot be lost.
5. Cyprus is a test to see how blatant the expropriation of private assets can become without triggering overthrow and revolution. If the furor dies down soon enough, then the same technique of expropriation will be imposed elsewhere. If the reaction is sustained and threatening to the Aristocracy, other less blatant expropriations will be tested in other neocolonies.
6. Divide and conquer is the propaganda order of the day. The Power Elites are attempting to set the serfs of the periphery against the serfs of the core, the goal being to keep both sets of serfs from realizing they are equally indentured to the core's pathological political-financial Aristocracy.
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