Monday, 9 July 2012

Financial crossbreeding.

By August Pointneuf

Politics is that pie slice of human behaviour which can be looked at as behaviour under constraint.

Economics is another pie slice - human behaviour which can be reduced to digital markers. It cannot be regarded as independent of the broad behaviour of humans, and must conform to the behavioural rules of human activity. Because economics can be reduced to mathematics is has another role. It can be used as an instrument to understand complex societal behaviour overall.


The Euro was created in an attempt to “unify” the financial patterns of the diverse groups of Europe. That illustrated the inherent folly of the politicians in the European Union. When a single monetary unit was imposed across a wide spectrum of societies the naive fumbling the political engineers assumed that human behaviour could be permanently changed by diktat.

But they failed to understand that economics was only a small outward feature of overall human behaviour. Finances cannot be manipulated independently of that. The political fatal assumption was that the underlying behavioural variances of different groups and nations could be forced into a universalized “economic” behaviour by imposing a “universal” currency.

From the outset it was not conceptually possible that a Thessalonian goatherd could be expected to behave - socially, culturally and economically - in the fashion of a banker in Bonn. By even attempting to force this, the European Union demonstrated its political gaucherie.

It is true that human humans can be changed by external forces, but only temporally, and only by suppression. Human behaviour is far too intricate and complex to be remodeled by muscle.

It is no coincidence that when the controlling politicians of Soviet Union and the Nazis wished to show their power they used parade-ground disciplined demonstrations of military manoeuvres to express their authority. After the parade the participants, of course, reverted to their previous behaviour.

A universal currency should represent a consistent value to all its users. It should display value parity. But it is an economic truism that the value of a currency should reflect the productivity of the user group, (when compared with a “marker” currency). Said another way any currency is expected to possess”productivity parity”

Currency values are therefore secondary to (and are determined by) the behaviour of the population which issues that currency. It cannot be the other way around: A currency cannot determine the behaviour of a population.

But the nations which were persuaded to use the Euro were highly varied. They had different resource mixes, differing population ages and various levels of socialism. The per capita savings and concepts of wealth (which included the willingness to rely on promissory notes, i.e. borrowing on the premise that it expected those borrowings to be honoured) differed. Most important, productivity differed.

In the complex equation which is Europe, inequality of productivity exists. Therefore the value of the euro (expressed in terms of the interchangeable bonds) cannot reflect equal value parity. Any currency is ultimately committed to reflect the productivity of that individual national culture. Equality of productivity has never (indeed will never) happen in the European Monetary Area because of the very varied societal behavioural patterns of the nations –which are now in stressed bondage.

As a result Greeks pay a higher interest rate to lure purchases. Greek bonds, although denominated in Euro therefore cost less. The Germans, on the other hand, do not need to lure investors; instead investors clamour for their bonds because they believed that their money would be safer with the Germans then it would be with the Greeks.

Since a Greek Euro denominated bond now has less value than German Euro bond, a Greek Euro is now worth less than a German Euro.

Bizarre? Yes, but only because of the bizarre underlying fallacy that the behaviour patterns of different groups could be economically forced into synchrony.

Devaluing money from an unproductive country (i.e. causing its bonds to devalue) moves money from that country (making it more poor) to another (making it more rich).

Now that the Euro has been seen not to hold consistent value parity it can only be doomed to a relentless downward spiral of inconsistent value.

Since it will not be possible to force lasting conformity on the variety of societal groups that use the Euro, the euro must fail.


Any attempt to separate economic behaviour from the broader field of universal human behaviour is folly.

Changes in monetary value of nations put on show the underlying differences in cultural and behaviour as expressed by their diverging "economics".

Since politics and economics overlap they can offer parallel messages. The EU’s predictable failure as a monetary system now presages an equally predictable failure of its political union.

Thus where differing peoples are ordered, by political directives, to behave in “universal” fashion the same catastrophic cascades can be expected to occur politically.

The most important of these political directives, by the European Union, is that varied populations have been ordered to tolerate alien cultural distinctions and “ignore” obvious differences whether these are racial, linguistic, cultural or behavioural. People are forced - by law - to transgress the natural interface between different communities, obliging them to suppress their instinctive, protective reactions.

This social perturbation, if forced union continues, will be the same as shown in the economic model - widening divergences accelerating into an avalanche of chaos. The endpoint will be conflict and societal destruction.

This predicts that ultimately the entire European Union is politically doomed.


End note: the EMA seems never to have learned that while the Germanys were divided (and socio-economically different) the “official” exchange rate was one Ostmark to one Westmark. Reality forced the (empirical and realistic) black-market rate to six inferior Ostmark to one Westmark, Helmut Kohl lured voters in East Germany by promising – misleading to engineer his re-election - that reunification would permit a one-to-one exchange of Marks. This another political legerdemain succeeded only to have repercussions which still reverberate: West Germans continue to pay for that political chicanery.


bupkiss o'toole said...

Little Brother offered the following critique of the current financial crisis.

"One of the chief, on-going objectives of our Department of Obfuscation has been to disguise the true nature of money. On the surface it is held to be a medium of exchange....which is true as far as it goes.

However, at a deeper level it is essentially the quantification of power. And so it is not incorrect to say that the actors in the current drama are essentially power players and that banking and finance are their game. Their recent successes have been unprecedented.

In the history of power grabs I dare say there has been nothing as powerful, pervasive and cost-effective as the imposition of the debt-generated fiat money policy. This has been one of the most incredible scams in world history.

It would not be much of a stretch to say that the globalist bankers control all the money in the world since they control its amount and distribution. They also have the ability to manipulate and call in debt at will.

As a result, entire economies can be expanded, contracted and collapsed, purely as a matter of policy.

Little did they know that when they ceded this power to the bankers the government put itself and its citizens in perpetual bondage.

Unfortunately, as is inevitably the case, the lack of ethical and moral restraint by the power addicts has led to our present difficulties."

Anonymous said...

But what about Ireland?

Yorkshire Miner said...

I live in Holland right on the boarder with Germany. I come out of my door turn left and walk 20 yards and I am in Germany. Belgium is no more than 10 minutes away by car. When they brought in the Euro ten years ago it was a God send for me no more having three different sets of currency in my purse. I said at the time that it wouldn't work, and it doesn't and wont work for what it was intended to do and that was cause a political union. While technically it is a failure personally it has been nothing more than a wonderful success. When Holland and Germany joined the Euro it was a devaluation of there currencies. which has given them a competitive edge for the last ten years. Unemployment is still very low compared with the rest of Europe. This will only change when we leave the Euro and revert back too the Guilder and the Mark because the market will then bid the up while we are still in the Euro Germany and Holland will stay competitive and with it lower unemployment. This is something that the pundits miss when they go on about the problems that the Euro has caused Greece Spain and Ireland they forget that for some the Euro has been a very good thing.

Anonymous said...

"Since a Greek Euro denominated bond now has less value than German Euro bond, a Greek Euro is now worth less than a German Euro."

Yet another demonstration for the willfully obtuse of what happens when you mess with reality.

George Pal

Anonymous said...

@ Yorkshire miner I also live in the Netherlands and I disagree with you.
Unemployment is dreadful here ! many young people are struggling even after graduation to find work, there is nothing, I know many, and many young graduates are emigrating. In fact 100.000 ethnic Dutch have emigrated out of Europe since 2005 (validated by emigration agencies research yourself)Why, if it is so great here?

Rusty Mason said...

What liberals fail to understand is that Greece is like it is because it is filled with Greeks, China is like it is because it is filled with Chinese. The same with Africa, Mexico, et alia. Culture comes from the people who created it. Change it and the natives will eventually change it to suit their abilities and leanings.

Unknown said...

'Why do Americans and their too willing British allies not realise that the liberal democracies that evolved in a small part of northern Europe among small groups of racially homogenous peoples cannot be just imposed on what are Third World tribal societies?'

Very well said. The largest tribe always bosses the others when a democratic system is imposed upon tribal peoples. A clue might have been how non-whites often vote tribally in the West.