June 11, 2015

Jihadist Ideology and Strategy – not understood by the West

Published first time 2007

The Key to Jihadist Ideology and Strategy
By: Lawrence Auster
FrontPageMagazine.com | Monday, August 16, 2004

When trying to explain the Islamists’ global campaign of mass murder, both liberals and conservatives, despite their fierce mutual disagreements, make the same underlying mistake. People on the anti-war left believe that Al Qaeda attacked us because we’re imperialist, or because we’re racist, or because we don’t do enough for Third-World hunger (yes, there are people who actually believe the hunger argument; most of them are Episcopalians). By contrast, many people on the pro-war right, especially President Bush, believe that the Islamists hate us for our freedoms, opportunities, and overall success as a society. In other words, the left believes that the Islamists hate us for our sins, and the right believes that they hate us for our virtues. Both sides commit the same narcissistic fallacy of thinking that the Islamist holy war against the West revolves solely around ourselves, around the moral drama of our goodness or our wickedness, rather than having something to do with Islam itself.

A very different perspective on the Islamist challenge comes from Mary Habeck, a military historian at Yale University. Speaking at the Heritage Foundation on August 13, Habeck said that the various jihadist groups base their war against non-Moslems on the Islamic sacred writings, particularly the Sira, which, unlike the Koran, tells the Prophet’s life in chronological sequence. Using Muhammed as their model, the jihadis live and think and act within paradigms provided by the stages of Muhammed’s political and military career. According to Habeck, this internally driven logic of Islam, and not any particular provocation, real or imagined, by some outside power, is the key to understanding why the jihadis do what they do.

The first stage or paradigm is Muhammed’s early life in Mecca, a non-Islamic society where no Islamic way of life is possible, and where Moslems are powerless and oppressed. The second paradigm is the hejira, the escape from Mecca to Medina, a new place that is more pure and where a true Islamic society and state can be founded. After this Islamic state is formed, the third paradigm kicks in. This is jihad, organized violence against non-Moslems for the purpose of building up the wealth and power of the Islamic community and bringing the world under a single Islamic state. Jihadists conceive and rationalize their own activities in terms of these paradigms. Thus when Osama bin Laden left Saudi Arabia for Sudan, and when he later left Sudan for Afghanistan, he saw those journeys as corresponding with the hejira, leaving a corrupt land, where he was powerless, for a more pure Islamic place from which jihad could be waged.

In addition to the three stages in the growth of the Islamic community culminating in jihad, there are three basic approaches to waging jihad, called collectively the Method of Muhammed, that various Islamist groups respectively adopt toward the ultimate goal of establishing the world-wide rule of Islam. The jihadis’ choice of method depends on whom they see as their immediate enemy in that larger struggle; each jihadist group, moveover, is defined by which of these methods it adopts. The first method is to fight the Near Enemy prior to fighting the Far Enemy. The Near Enemy is anyone inside Islamic lands, whether it is an occupier or someone who has taken away territory that used to be Islamic. The second method is to fight the Greater Unbelief—the major enemy, which today is the United States—before the Lesser Unbelief. And the third method is to fight the Apostates first, and then the other Unbelievers. Apostates are false Moslems, people who call themselves Moslems but aren’t, a group that includes secularist Moslems such as Saddam Hussein as well as Shi’ites, who are considered heretics.

It is these notions, deeply embedded in the jidadis’ reading of the life of Muhammed, and not determined by what is happening in what we think of as the real world, that determine their major strategic directions and whom they choose to kill. For example, the terrorists who murdered 190 people in Madrid on March 11, 2004 did not target Spain because of its involvement with the U.S.-led Iraqi reconstruction; the group had been planning the Madrid attack for two years, going back to before the American invasion of Iraq. They attacked Spain because it was the Near Enemy—a formerly Islamic land that they hoped to win back for Islam. Similarly, regarding the all-important question whether the Wahhabist Osama bin Laden would have been willing to work with the secularist Apostate Saddam Hussein in an attack on America, Habeck says it is entirely possible, because bin Laden believes that his primary enemy is the Greater Unbelief, the United States, and therefore in the short term he would cooperate with an Apostate such as Hussein. Then, after America had been finished off with Hussein’s help, bin Laden with the enhanced power and prestige gained from that victory could redirect the jihad back at Hussein and other Moslem Apostates.

The key point is that, while specific actions by the West might provoke the jihadis to greater attacks, their fundamental strategic and military decisions are not determined by anything done by the United States or Europe or by other major enemies of Islam such as the Hindus, but rather by which Method of Muhammed each jihadi faction follows, and each of these strategies has its own internal rationality, though it is not a rationality that makes sense in non-Islamic terms.

The same is true for Wahhabism itself, says Habeck. Wahhabism began in the 18th century when there was no Western colonial power in the Islamic world; it was not set off by any Western intrusion into the Moslem lands. Similarly, the contemporary Islamist idea that America is the center of all that is evil in the world, making America the “Greater Unbelief”, was conceived by a Moslem scholar between 1948 and 1951 when he was residing in the United States. This was decades before the U.S. had any large-scale involvement with Israel, and decades before its culture spiraled downhill, though, from the point of view of that visiting Moslem, America was already quite decadent at that point and ripe for destruction.

What is most striking in the Method of Muhammed is the utter absence of any transcendent notion of morality. Unlike in traditional Western religion and philosophy, where God or the Good is the measure of human actions, in Islamism (which after all is simply a pure form of Islam) the measure of human actions is the shifting power tactics and military strategies of a desert brigand and war leader.

Lawrence Auster is the author of Erasing America: The Politics of the Borderless Nation. He offers his traditionalist conservative perspective at View from the Right

Recommend this site

What the West Needs to Know (wait 25 sec.):

April 23, 2015


One key issue during the immigration era

If you prefer a pdf-version: http://www.lilliput-information.com/growth and immigration.pdf

Economic real growth:

Welfare must be financed either collectively through taxes or by private insurance, while the countries must be able to maintain and even develop their technological skills, because welfare funding sources originate from earnings. The value of the profitable production creates wage basis and tax basis, of which welfare can be funded either privately or collectively. There are no other sources.

More production to meet demand for consumption is the problem, it appears to be valid. More production requires more resources. Germany is not self-sufficient in energy resources, the UK is not in agricultural products and food, Norway has focused mostly on financial investments and homely infrastructure improvements, but invested very little of the wealth in real production outside the oil industry. What you are not self-sufficient must be purchased abroad. With econo-mies in a near standstill, there is no solution in sight that can be exchanged enough goods and services to be able to support twice as many welfare payments and by no means 3-4 times as many as in Germany and the UK.

Real growth in Norway, Germany, UK and Denmark was respectively 0.6, 0.5, 1.7 and 0.4 per cent. in 2013. Real growth is the growth in the profitable production adjusted for inflation. In the EU28, the overall real growth of 0.1 per cent. in 2013. And in the first quarters of 2014 even real stagnation.

Can sufficient difference or margin be realized by a lower level of production, implemented production in earning companies might continue at the lower level, also in terms of employment, if the best alternative is worse. The latter is not the case when we look at the situation in most of the welfare-ridden European countries. Passive return outside the production line or production abroad may be preferable. Therefore, the purchasing power flows to private capital outside the production line or out of the country. The labor-intensive company relocate in these years, and it did not come as a surprise here in recent years. It began with the increased international competition already from the end of 1970s. US and UK took the first steps to adapt to this inevitable development.

Businesses/companies do not invest due to price margins, but due to sufficient profit-making price/cost margins. The problem is not one-dimensonal, but at least two and often multi-dimensional. The economic reality is that it is the manufacturers who drive the economy forward in any country, the savings are con-sidered to be fuel in the process. Private consumption and government consumption produces nothing but maintenance of production equipment with no new initiatives, state debt (especially in a foreign dependent country like Denmark) and waste.

What consumers give out or expect from the future make no walk in the economy, but consumption maintains as mentioned the apparatus, possibly to sleep; the second has never happened and will never happen. Sometimes we hear economics commentators report that the cost of private consumption represents so many percent of the total demand. It has no other meaning than that private consumption rises even more damage to the immediate funding problems countries face with and draining the undertakings to the capital. The country’s leaders are still of the opinion that their initiatives will work regardless it never happened.

October 1996: The 1000 major Danish companies are planning to invest 45 bill. kr. and create 50,000 jobs outside the country for the next 5 years (1997-2002), reported in the study done by Monday Morning Weekly. It was the very beginning to discouragement at home. There are worrying feature at all levels of the country’s competence pyramid. Denmark to focus on creating jobs with high knowledge content. There is no future in low-wage production and ditto jobs. They will greatly move abroad caused by globalization of markets (ie competition) , as it is impossible to protect themselves against with anything other than by trade restrictions. It was 18 years ago. Workers of free travel for work is almost entirely relevant in Europe. High-IQ immigration from Southeast Asia began to USA and UK in the 1980s, and there is no more to get.

”30 percent of school leavers do not get a professional education and training (1996). Large unemployment. Criticism of content and effect of the adult educations. Increasing criticism of the folk school results. High-tech and knowledge-intensive environments is not only created in businesses, but the basis is created in the research, vocational schools and already in the early years of teaching. Knowledge intensive jobs is an end product where the quality of what goes on in preschools and elementary school, also plays a role, and in what can be called Denmark’s competence pyramid. It beginns down at the pre-school, creches, then comes Primary school, so working without business skills training, upper secondary and vocational education, higher educa-tion, public and private research, production methods in business and finally business products” (Monday Morning Weekly wrote)

November 5, 2014 survey shows Entrepreneur Of The Year, the number of companies with strong growth in Denmark has fallen by 16 percent in one year. It’s the same companies that create new jobs.

The basic problem is that we simply have no other nature granted in Denmark to do good than salt, lime, clay, a little oil, a little gas, a little farming and beaches if we do not educate ourselves by the market and IQ dictates and provides production results of our knowledge. Everything else should be purchased abroad. But sooner than many imagine it will not do to buy raw materials and other things abroad because we have become so expensive even with our goods and even much lower educated compared to earlier when goods prices are taken into account, fewer and fewer will buy the products that come out of it from here. Denmark has simply been dormant (with a few notable exceptions in business) since the beginning of 1980s under the successive governments that have promised this and that; Unfortunately, without really knowing the consequences of what they were doing prematurely and what they did not do in time.

The real economic downturn (the lack of growth in production) due to competition on wages, other labor costs and a sea of charges, leading the labor-intensive productions away to low-wage areas or to knee and closure. Since we can not compete in the same productions with wages that are 8-10 times lower than under the Danish taxation-welfare-wage level, was a conversion of programs, productions and industries essential. This situation of wage competition will be in effect for many years to come, and the transition has been neglected the first least 35 år.The tax base is simply being eroded while the reflag and closures continue with increasing speed. In addition a dominant immigration has been accepted from high-fertile low-IQ countries/regions, of which half or less than half are suitable for training and labor: The following percentages of the foreign origins are unfit for work and education in Denmark (DK), Ty (Germany), No (Norway) and in the United Kingdom (UK):

                                                                            Percentage of foreign origin not skilled for work and education
1 January 2014 48.5 to 52.8 per cent. of all immigrants and their children in Denmark had a foreign origin in countries with less than IQ90 on average (depending on choice of birth rates in the projection model for IQ). That is, more than half are not suitable for education and work in Denmark. With IQ average of 90 or less in a group, regardless of ethnic background less than 50 per cent of the individuals in the group is suitable for education and work demonstrated by Arthur Robert Jensen (1923 to 2012). With the new projection of 6 April 2015 and proposed birth rates (CBR) of Alsagerskolen: The percentage of foreign origins with IQ less than 90 grew from 39 to 59 per cent. from 1980 to 2015 and continues steadily to 66 in 2058 and 71 per cent. in the 2072.

Government debt has to be settled at least kept strictly under control in Germany, England and Denmark, and in addi-tion growing aging problems to become bigger and bigger throughout Europe with additional public expenditure on older upheld the approach to the working ages increasingly deteriorated due lack of births. The problem with the lack of births over Europe was created by pervasive welfare systems elitist promoters (not citizens). Since the effects of which turned out to mainly lack of population reproduction, the same responsible felt the need to consider the most fertile immigrants to come. The ideology promised just the elite that education was simply a matter to anyone who came here.

A country like Norway might make such an idea real due its oil fund and the country’s huge outstanding debts, but it did not. Every country has to create an active future, a dynamic business and educational development with demand generation and earnings purposes. Otherwise welfare can not be financed in the long run. UN warned against the taxation financed higher education with free access already known in Danish Perspective Plan II in 1974. The listed problems, Europe cannot solve at the same time by changing some of the items on the finance laws, cut a little here and there, order some more payment instruments issued and thus create nominal or only inflation growth, so the increase in production display similar to real growth, but is nothing more than nominal growth equivalent to inflation or less. This will just worsen the problems and slow down/make it impossible to do any conversion. It is the traffic that is driven so far in this country. Not only Denmark is threatened by the killing stagflation (stagnation and inflation at the same time), but also the other European countries with a few exceptions. With negative growth for three consecutive years, while the go-vernment debt increased with the increase in domestic consumption has been running and was started with the so-called financial crisis as a result. The expansion must therefore be ensured by production life to get a solution that is not tempting inflation-prone.

The production process in all its ramifications consists of a myriad of complex stages in earnings. The total combined cost of all these stages/levels of labor exceeds the cost of consumption in the traditional sense significantly. As an illustration, one could imagine the value of the total fixed capital stock gradually put into final consumption; it will only take place over several years. US consumer spending was estimated at only about 8.5 per cent producers’ cost of production factors and other producer goods already a lifetime ago. That is, almost 12 times greater than private consumption (here almost 12 if 8.5 per cent carefully assumed). What is spent on consumption – private and public – come from the production, while production comes from capital (including the cost of factors of production, in which wages would include central), as in the first part comes from savings. Therefore, it is the case that more savings the more ca-pial is formed and accumulates in order to produce, and there can then be consumed more. One could abide by the following fact: government spen-ding and private consumption do not stimulate, but drain the economy. This is true whether you find these expenses and/or consumption righteous.

EDP created international competition from the 1970s – a comparable if not similar competition upheaval in the 1800s was better prepared.

The agricultural crisis in the 1800s was in one way bigger and more important for Europe because absolute dominance of agricultural activity in the occupational structure at the time when the cheap grain from the United States, because the hard steel-manufacturing process via the bessemer method and the puddling sub-process became possible, resulting in super sturdy rails and thus just because of that far low freight rates from the US Midwest in 50-tonne trucks for disembarkkation ports. 1800s European agricultural crisis was also larger than we today might imagine, but at the same time the initiatives for the necessary restructuring chan-ges (including for livestock production) in Denmark were taken by the farsighted/lucky leaders who began agrarian reforms in the 1700s. This time the responsible has not been willing to listen to farsighted and insightful, but guided blindly by an ideology devoid of rational sense.

Inventions promote living conditions – ideologies hinder them.

J. E. Vig, M. Sc. (Economics)

11 December 2014 and 6 April 2015

January 13, 2015


1 million on the streets of Paris with 50 Heads of State and Government in front. It is a new kind of modern solidarity, it is called. But solidarity with whom? First, the subjects in the streets a few days in a row. Next, the elite, the top and new crowds in the streets.

It was the effect of the heinous crime. There is jubilation in Islamist circles. One thing is the extended time span which the actions take place over this time with a distribution of attacks on several points, then police several days hunting, and especially law enforcement demo, then follows the popular self-adoration flæberiet and false feeling Ministry for exhibition in the streets, and finally which crowns the work met 50 heads of government up. They traveled to Paris and posed, mostly in dark clothing, but with clearly changing approach to it passed, to photography and TV footage. The celebration, solidarity, universal human rights, sadness, common feelings, at least the political privacy, intimacy, they were all together, together. If leaders lived up to attitude training among the subjects even with mutual grip of embrace so we do not know much. In any event, two of them in front was not motivated to embrace, for sure.

July 7, 2005 attack on London’s innocent inhabitants had little in common with cartoonist attack in Paris. There was the 2005 attack with bombs on both a double and three commuter trains:

The first explosion happened in subway stations between Liverpool Street and Aldgate East.
The second explosion occurred on the underground between King’s Cross St. Pancras and Russell Square.
The third explosion occurred in the subway at Edgware Road.
The fourth came in a double-decker bus at the junction between Tavistock Square and Woburn Square.
52 civilians were killed and more than 700 were injured

Wider use of terror had already begun in 2005, so the effect could be seen more and more in the media. Another special effect that not many with Western habit of thinking realized in 2005: Exactly Edgware Road was in capita terms in 2005 incredibly concentrated with Middle Easterners and Africans – I stayed there randomly about an hour just a week before the bombing and also saw the golden giant saber in front of storefronts to the regular café with hookahs. Just to kill in areas with high concentration of like-minded or many of the same religion roused to battle and war engagement among potential recruits. This agrees with the Islamist thinking. To kill their own are less worrisome. universal rights here quite a different content. And the reactions to the terrorist attacks in Paris has only one effect on the terrorists’ behavior, they roused.

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April 6, 2014


November 27, 2012



Palestinian Kids


(These are the images they show :)

(These are the images they DON’T show:)

Please help to show these pictures to the world.

October 31, 2012






J. E. Vig, October 2012

October 30, 2012

Europe Schaffs Sich Ab

Turks in Germany gives no meaning if Germany has to compete internationally


Turks in Germany/Türken in Deutschland

57 procent of questioned have private income/”57 Prozent der Befragten verfügen über ein eigenes Erwerbseinkommen…”
“Almost every second Turk in Germany shows, moreover, to have real estate in Germany and Turkey. Any third party operative like immovable property in Turkey. “These values underpin the desire of many Turks after a security in the event of return to their homeland …”/
Even of those who received transfers in Germany, more than a third of real estate, 16 percent in Germany and 27 percent in Turkey could./
“Fast jeder zweite Türke in Deutschland gibt überdies an, Immobilienbesitz in Deutschland bzw. der Türkei zu haben. Jeder Dritte verfüge dabei über Immobilieneigentum in der Türkei. „Auch diese Werte untermauern den Wunsch vieler Türken nach einer Absicherung für den Fall der Rückkehr in ihr Heimatland…”
“Auch von denjenigen, die in Deutschland Transferleistungen erhielten, hätten mehr als ein Drittel Immobilienbesitz, 16 Prozent in Deutschland und 27 Prozent in der Türkei.”

Half of Turks are not skilled – The German avr. IQ is 99:

November 30, 2011


He is the president of EU

Pat Cordell tries to report the truth about what happens, and what you have to do

The common budget that Pat Cordell mentions has been decided last spring:


August 15, 2011


The first alternative is bankruptcy States Collection without foundation, the other can lead to war

‘Who will pay’ (?), the situation in the shortest form in Euroland. We have not concealed anything in regard to this from the euro’s introduction. And we do not fear the Danish Law of Jante. It went, as we previously indicated it would.

The top in France who demanded DM Mark abolished and stopped the originally planned tough Euro to accept the reunification of Germany is now home to have the debt and deficits in France looked after – a strong Euro would have been impossible in Europe because it was bound to be the ruling-remedy of something too different.

The German state-debt amounted to 78.8 percent of gross domestic product (GDP) in 2010, where the arbitrarily chosen politician-made limit in the Maastricht Treaty and further confirmed in the newly agreed EU’s stability – and growth pact is decided the highest 60 percent of GDP.

Without a strong real economy behind the euro it is no surprise that it’s exchange-rate should be down without someone to pay, defending currency speculation or euro as a Petro-Euro. It remains up. Why? New-mercantile currency floating in oil with Europe’s the real economy in stand still, does not seem as possible way to go1). We have not yet reached the deficits and losses on loans to the old Eastern Europe, several countries admitted as EU members. EU member countries thereby plus nation-states alone even in addition has secured quite-out-the-hemp-loan arrangements including housing loans in Eastern Europe with various banks as intermediaries.

Euro and its primary tasks: to assume that the common compulsory money unit should reflect the real economy of Europe and suit this, we have apparently misunderstood. Similar to Spain’s disastrous management of the gold experience in Latin America in 1500s, it seems that the euro at the best neo-mercantilist view via trade settled in euro, for example oil trade from the Middle East for much of the globe should form the generating momentum, causing the necessary change in Europe with more than 20% unemployed and excluded (officially 9% unemployment) and a huge and growing debt, of which it is almost impossible to draw an unambiguous picture anymore. Jean Monnet – one of the ancestors to the EU project – claimed precisely in 1950s that the compulsury single currency would be used to lift a political union in full scale in place. It was the form, not content, that counted, we can note.

If for example one of the Maastricht convergence requirements for example dealing public debt, which must not exceed 60% of GDP, effectively has validity, the consequence would be that the half to two thirds of countries would not meet this requirement by without accepting stabilization crises with IMF’s intervention. This can be extracted from the real information, which escapes from time to time.

Under Mercantilism, which historically ended with the Napoleonic wars, very simple methods were used to acquire wealth. Today it is so conceived that economic stability and development are measured by a price index a debt ratio by a exchange rate or at a different ratio. I.e. when, for example, some quantitative standards are met, so this is a stable currency, stable economy and stable development are secured (with reference to the five completely arbitrary convergence criteria originally included in the Maastricht Treaty). Economcs stability and development include the dynamics of the capital formation, security of the investment process, knowledge and competences acquisition, new technology and high productivity and economic real economic growth in a country, to its leaders can be said to take voters seriously. All this can not be obtained or estimated based on some static concept, a key figure or five for that matter.

France and most other countries was originally opposed to the so-called stability pact that could have ensured that central bank acted as the old German Bundesbank and held the reins completely tight, but from a different starting point than that of today. It was decided at the Dublin Summit in December 1998 to drop Stability Pact and in the years 2002 and 2003 France came out with too large deficits of public finances in relation to the Maastricht rules and Germany just as for the past more than five years.

The battle for who should appoint the president of the ECB was decided in Dublin. It was France. The German Bundesbank was very out of pace with the German political, financial and industrial elite. In contrast, the bank was very popular in the German public opinion. Therefore, the politician former Bundeskanzler Helmut Kohl was very hard pressed between the German and French political Establishment. The French Socialists have built their requirements for euro in the subsequent treaties. Now with Kohl completely gone and the current German Chancellor (in 2011) is even a Centralist. EU has in turn recommended a German as head of IMF (International Monetary Fund). Kohl also had to eat that there could be purely automatic sanctions against a country that has sustained losses.

Now is required (after Amsterdam) 2 / 3 of the weighted votes of the active participating EMU countries to make sanctions when it goes wrong in a country. France had also approved a so-called Stability Council and thus a direct political role led into the monetary policy by that example formulated exchangerate-guidelines for the euro now. It’s quite crazy. France has secured the former French Finance Minister Christine Lagarde as managing director in IMF. If this indicates that France now exert its influence equally in the ECB and in the IMF (President Jean Claude Trichet), it certainly was perhaps an idea to have a check of the French economy. It looks like more inflation have to be expected in the future, but we can say with this any absolute certainty.

Introduction of the pure (economic) stability pact without countries in order their real economies, leads expectedly to real political instability. And can money quantity is not discussed over the entire euro zone, because it must be determined by a tough ECB, then the consequences for certain areas immediately be so insanely hard, that there is political instability. Not only Italy, Spain and Greece are examples where the way has been shown. This is not a proposal for flexible euro money, but a demonstration of the euro’s impossible integration in the EU.

To relieve the pressure, you can introduce that the more strong-going countries must “deliver some means from their public finances or even commit to this in advance”. But the problem is that nobody can or will or should do so to the less well-country, Spain, Italy, Belgium, Greece, Portugal, Poland, and that is exactly what the recent confirmation of the Stability and Growth Pact prescribes. This tightening political steering instruments, and the citizens of individual countries and thereby their politicians cannot agree to this. The next step may in consequence be the function of taxation to be transferred to the EU. This means initially in plain Danish that public expenditures should be managed crown for crown throughout the euro zone from the EU. This is common fiscal policy. Under this assumption the very little extravagant actions must quickly be closed in for, but also many others.

When you were judging by the declining DM and the increasing Italian lire in 1997-1998 market might get the impression that there was talk about a soft manageable euro at its establishment. There was simply unknown, but colossal Italian lire-volume should have ‘a forever defined’ euro exchange rate in July 1998 (so they said). How could this be possible? Since the exchange rate for Euro was reported to public in advance, speculators began to speculate of cource, especially when national currencies drove on for some time.

Already in 1996 one could foresee the consequences if Germany, France and England would take over Italy’s huge debt mountain at a time – it has happened apparently, we wrote back then, but could not know because we did not know debt figures. It would simple has destroyed the euro from the beginning and led ECB to also take care to guarantee the solvency from then onwards for both Italy, Spain, Portugal and Belgium and all the other violent debt burdened participating countries such as Greece, and what else could to be expected to introduced as EU-members in Eastern Europe in general. Therefore it happens now.

With the many new deficit countries inside, there would also be created an alliance with Amsterdam Treaty voting weights, which could put pressure on the ECB and get it to act as though it still has control over the monetary policy without it really does. Reel EMU severity by the book multiplied by three or four is what should be expected now if it is to succeed in creating economic stability in the current situation – without a strong leverage from outside.

Thus loosing the political stability is status quo and it is likely to be, and disappointment of the project will then lead to resistance to the whole euro project. Therefore they still act ‘as if’. The fear of competition inhibits rationality: globalization trivializing means the unrestricted movement of markets, including capital market. This globalization many argue destroy the democratic welfare state and the nation state. It does so only because we have no longer an international monetary system to prevent it. Free movement of capital undermines the ability of states to regulate. Especially in terms of employment. Wage pressure and cuts may intercept what threatens to be lost of jobs, particularly by outsourcing. Global financial markets are not subject to any self-regulatory competition mechanism, and induces crisis to crisis – Asia, Mexico, Russia and country in Latin America – if there is no order in the real economy. Crises will deepen because of the many debt securities, which amplify the difference between the nominal and real values of the nations. And all because you have chosen to supply the measuring tape instead of using the measuring tape to measure.

It gets worse when all the state leaders continue net borrowing more and more. Crises sharpen the social pressure with needed for cuts. The pressure leads either to dissolve the democratic welfare states, to dissolve itself into interconnected defense the blocks (blocks as the currency Euro, Dollar, Yen and Renminbi-zones) or fall back in the old enemy images that characterized the nation in advance or in a combination of both scenarios. With the dissolution of the democratically founded national and social state globalization triggers itself eventually, because it can not stand for their countries’ populations/voters have to carry larger and heavier loads without any security for himself to be covered against the worst.

Euro-Union is the prototype of this development. Its thinly disguised double-motive was a) fear of dollar dominance and competition, and b) fear of the new reunified Germany with the D-Mark-regime.

Anxiety are always based on a false analysis. Non U.S. dollar threatens Europe’s market shares in world trade, but Europe’s lost knowledge-, competence- and technical-terrains and especially Europe’s inertia with reforms and innovations are concerned. Not Deutschmark hardness and strength prevented the development and integration, but from the “Maastricht” the goal was abolition of the Deutschmark, and it has happened. The rationale was that just the Deutschmark should have driven the current euro-participating countries then into a string negative developments aimed at reforms and social limitations. Alone these fallacies and incorrect assumptions permits no realistic expectations a hard euro. Inflation is preprogrammed. Then blow more air in and let it float in the oil first, but the collapse thereby becomes even greater. All participants member-states are deeply indebted and running all at a loss. Already at the euro start the national governments were loosing their management instruments (exchange rates, interest rates, money amount and flexible budget) to ensure monetary values and regulation of labor and the social- and ecological standards which the same politicians had introduced.

Structural and competitive differences will without elasticity from the state be offset by the market. There must be real exchange rates, but definitely not in the euro-design, i.e. with a compulsory common currency, be course it can’t bear the structural differences that characterizes Europe simultaneously.

The main battle is now the labor market, social and ecosystems. The labor market suffers from the middle class is reduced, salary and social competition from workers in the southern EU-poverty zones, and there is an inevitable liquidation of the previously existing (national) unions’ rates and the minimum standards for the social level. The market is sweeping them away, employers rely increasingly on their threat potential in moving production to very favorable (salary, social, tax, eco-cheap) EU-zones and even to Asia. Wage rates, social standards and environmental requirements in Euroland will have to harmonize downwards. Social Democrats, Folksocialists and the trade unions claimed them, but also other people’s naive belief that these things finally could be improved by a signature on the Maastricht treaty. In Euro-Union labor and social policy finally wave goodby – and it happens in full connection to/acceptance of Social Democracy, Folk Socialists, the trade unions and others believers.

March 2007: http://danmark.wordpress.com/2006/05/25/euro-float-in-oil/

Union is suitable as it looks only into submission – Islam means submission

Euro-Union is not a mean towards globalization triggering the employment crisis. There is nothing special about the nature of this ‘globalization’, it newspeake; international competition is the right word. Euro-Union reinforces the power of capital and state powerlessness in the role that could do something about unemployment without having the necessary tools. It is “progress”towards the 19 century (here, an attempt was also the right management tool), not towards the 21 century.

Euro-Union is no counterbalance to the antisocial tendencies of globalization, as incompetent analysts from the left side view, it enhances them further. It obliges to adapt working life to the money economy that take commands. The European Central Bank (ECB) may lead full common-policy for at first 12 since 15 and 16 differently structured countries in the euro zone, without they can take back to the exchange rate as equalization valve. In order to prevent capital from leaving the euro zone, the central bank raise interest rates or simply centralist prohibit the export of capital (as in the Soviet), but this reduces activity and increases unemployment even more. Such a union can only end the states themselves in conflict from which no help is to find – unless it gets extended to a transfer union or a federal state with public financial equalization between the old and new participating countries, something like patchwork U.S. or the German Federal republic, but without the Deutschmark.

Once the transfer of these models in the Euro-Union proves impossible or meets much resistance the question arises: Are there plausible alternative models that can save the peace? As it is now running: Europe and the Arab world has already begun to work together economically in a de facto alliance that it was pre peeped in North-South Dialogue from 1968 and the European-Arab dialogue from mid 1970s. Egypt, Jordan, Morocco and Tunisia decided in 2006 to setting up free trade zone, and Algiers, Lebanon, Mauritania, the Palestinian Authority and Syria were invited to participate in the great free trade zone.

Egypt may be on to becoming an Islamist state, expected to be fully occupied in free trade group. However, the EU has negotiated with all 10 Maghreb countries, part of the so-called Barcelona Process about the cooperation between the EU and its neighbors around the Mediterranean to the south.

The ultimate goal of this Barcelona Process is to establish closer ties by-touching trade and social issues (immigration!) as well as political (islam!). This must after the politician-proclaimed lead to the creation of the Euro-Mediterranean Free Trade The zone of 27 countries. It is possible that European productions in the future must take place in North Africa, Middle East and Eastern Europe, until they have come up, and we have come way down. It is a matter of people here find themselves in it.

February 4 2010: Pressure er mounting across the Atlantic as Greece, Portugal and a handful of struggling countries that use the euro have to two pay-off mountains of debt accumulated from years of profligate spending.

February 13 2010: Axel Weber, president of Germany’s Bundesbank, warned that German economy will contract this year (2010). It did with 1,7%, after 2009 with -5,2%.

The latest: Spain’s Unemployment rate reached 20% in the first quarter (of 2010), doubles the euro zone’s March average. Euro-zone inflation, mean while, rose to the highest rate since December 2008. The official Unemployment Rate!

1) “Ever since the continents started interacting politically well 500 years ago, Eurasia has been the world power center “(opening book” The Great chessboard ” 1997, by Zbigniew Brzezinski). Eurasia is all land east of Germany and Poland, the stretches all the way through Russia and China to the Pacific. It includes Middle East and most of the Indian subcontinent. The key to control Eurasia, says Brzezinski, is control over the Central Asian republics. And key to control over the Central Asian republics is Uzbekistan.

He also notes clearly (p. 53) that “any nation that had become dominant in Central Asia would directly threaten the ongoing U.S. control of oil-resources in the Persian Gulf.” By reading the book it becomes clear why the U.S. had a motive to take over the $ 300 billion Russian assets in 1990-ies, destabilize Russian currency (1998) and to ensure a weakened Russia would have to turn to the west, to Europe in order to survive economically and politically, instead to look south to Central Asia. A dependent Russia would lack the military, economic and political influence to penetrate and influence in the region and the weakening of Russia may explain why Russian President Vladimir Putin has been a willing ally of U.S. efforts to date.

A New Monetary System

M. Sc. (Economics)  Joern E. Vig, 14 August 2011

Mark Steyn on “After America,” London Riots and Keynesian Culture: Scribecast, the
Podcast of the Center for Media and Public Policy

August 13, 2011


Professor (emeritus) dr. phil. Helmuth Nyborg has recently achieved research results that are fully accepted and admired internationally – but not in Denmark – caused by the politically correct elite who does not accept all differences depending on to which side they come out.

Some and hopefully still more Danes find this childish – as they realize that such a peculiar sets of concepts are certainly not valid since the logic is abused and certainly will disappear in the long run.

You have an abstract to his research results here where you also can read/buy the article:

The decay of Western civilization: Double relaxed Darwinian Selection





Part 1: http://www.youtube.com/watch?v=zU6ZCBLC0ME

Part 2: http://www.youtube.com/watch?v=OZQjAHSPY7s

July 26, 2011

Very Popular Video On Exponential Calculation In An Easy Way – But Something Does Not Add Up When It Comes To What Is Illustrated

This video gives me associations: http://www.youtube.com/watch?v=F-QA2rkpBSY


Exponential growth: Population – Energy + this supplement:


All the production that is labor intensive and often also the most energy consuming is being outsourced now. What remains is the company cars, private cars and what is left of household energy consumption. In the West we will use much less energy in the future and finally nothing, as you will see below.

So energy consumption here has certainly not the consequence that we should lower the Western birth rates, as suggested in the video, because the West’s energy-consumption according to the video is much too high (it looks like a reprise of the arguments from the Club of Rome: ‘Limits to Growth’ in 1970s). The consequence is simply that Western populations are becoming extinct regardless of everything else and leave the area for immigrants and their descendants from areas with lower average IQ than here. But before that happens, do we will watch a dramatic decline year by year basically.

Demography is a terrible calculation, and it is logical, consistent and almost irreversible in reality it is used on together with the birth-giving women.

Exponential growth is one thing, the curve inverted, you could call exponential ‘shrinkage’. And such a public funded and privately consumed so-called welfare to accelerate the time of death closer and closer every minute. A welfare system is also just partially introduced in the U.S. that has just hit the debt ceiling. Oh, my God!

The war may continue in Europe – the old playground. I type ‘continue’ because it has been going on for years. It began again in the West in the financial systems, as with fault-immigration and the corresponding lies, and then in the stakeholder countries in the Middle East and North Africa.

But basically we are being destroyed by inflation and indebtedness made by mad and deeply naive, even over appraising politicians.

The current central issue is quite another than the West’s energy consumption:

With an official Western fertility in Western Europe at 1.38 – even some what lower, as I have shown – it will take at least 80 years (3-4 generations) to change the fertility back to the required 2.05 (not 2.1 or 2 , 11, 2.05 is probably because infant mortality has just been reduced to the bottom in the West). And in that period (80 years), we can not keep the area with the aging, which also occurs as a result of the protracted fertility decline … .. without very drastic measures.

The only adequate birthgiving peoples descend from areas with low average IQ compared to IQ here, and the same with their descendants born in the West. We definitely can not use them fully in productive activity due to of our even increasing need for IQ, because the wage-intensive productions have just outsourced to low-wage-areas. Where you find low wages and average high IQ, development combined with little developed, privately financed welfare, they will not emigrate when it goes well, and it would, as I mentioned, not do any good here if they did, the fertility is still too low.

Welfare systems and fault-immigration, which was set finally 40 years ago are accelerating the deroute even more, because immigrants on average is af load with a considerabely more than 3 times more of the welfare-yield for just 5-7 years more in the West, then the system goes kaput, at least here because pensions and housing benefits are not to be financed to retired people with anything that is a priority almost as high. It is that simple.

We have even counted at least two generations from now before there probably will be Western Europeans, with enough resistance to halt and reverse the influx of lower average IQ. Western Europeans (as we have experienced several times)  will then prefer their greatgrandfather’s generation for the grandparents’ and the parents’, because in the first, after all, were a few that made an effort to correct madness up …. , Western Europeans will anyway be a minority in just two generations from now, given continued immigration, and even a considerable minority of the young / younger ages  in 40 years. It is not the relative size that makes it, necessarily.

Whether the international monetary system can be designed in time, properly with real exchange rates and hence the zero-inflation as one alternative and dictates as a second, before we become totally disabled by immigration from areas with lower average IQ than here is an open question. They presumably chooce the precious metal coin basic, although it is purely a historical relic related specifically to the emerging industrialism’s frenetic growth: So there is something to speculators too.

Greater instability could easily come soon, for it is easier than the perpetual negotiation of conflicting interests with fewer an fewer opportunities for consensus and simultaneously increasing the creeping low inflation to keep the madness going combined with zero or negative real growth, while more and more anxious subjects will show themselves. With great instability perhaps we get some things put in place.

This can not be understood by but a small minority, some reject my English (you should try Danish), others because they think they live in an imaginary world, and still others because they do not understand logic. Now, 128 is not always preferable to 1-3.

J. E. Vig, Denmark, 26 July 2011

July 18, 2011



European tax-funded recruitment offices for labour in the capital Praia in Cape Verde (islands) in West Africa in 2009, and in Mali, West Africa also opened a similar office in October 2008. There is no real growth in Western Europe. But the Lisbon Treaty the EU has committed to purchase 50 million more non-western immigrants in addition to at least 50 million already funneled into. There are also tax-financed job-enlistning-offices at several locations in Eastern Europe to invite Eastern Europeans to Western Europe.

Source: http://www.express.co.uk/posts/view/78180/50million-invited-to-Europe

In Denmark non-Westerners consumed 30-35% of the total welfare in 2010, meant to replace the earned income and pensions, when you left work or missed work / you were excluded from labourforce after unemployment. The percentage has been calculated taking into account all tax payments along with irrefutable facts provided by the public, government’s Welfare Commission.

Sources: Welfare Commission 2005     Information about Denmark 2010

In Sweden  ‘foreign born’ consumed 60-75% of social expenditures in 2010. Taxes were not included in the calculations, but otherwise the rates are very much in line with shares in Denmark. If anyone with a foreign background were included it would have been considerably higher percentages. Two generations of ‘born in’ Sweden, but called Swedish, though they certainly have a foreign background.

Sources: Affes Blog    Central Statistical Bureau

In Norway, the immigrants consumed 60 billion nkr. of the welfare schemes at a little more future unemployment the Norwegian version of the Danish Employers’ Confederation claims. The same source claims there are nearly 300,000 immigrants in Norway. In Denmark, the officially number 1 January 2010 was 540,000 and 561,000 the first January 2011. In Denmark foreigners officially cost 20 billion ddk. yearly. Unemployment and exclusion from the labour market are much smaller in Norway compared to Denmark. So fewer immigrants with lower unemployment costs after the reported almost three times more per year in Norway. Source: Brochmann-utvalget

I wonder what’s going on? No, we know what is going on.

In Denmark, immigration actually costs more than 10 times more than the officially announced, namely 30-35% of all welfare expenditure in 2010 that was 752 billion ddk totally,  i.e. 225-263 billion ddk. What is it in just those circumstances that makes Denmark more solid than Greece, which first and foremost is ‘for sale’ on bonds somewhere (?), maybe along with Italy?

On 30 June 2011, we read Ralf Pittelkov report on the cause of Greek tragedy. First EU ‘responsibility back to Greece’s accession in 1981, then to Greece’s own risk. For this last particular: “… The responsibility lies, of course, especially in Greece itself. The economy is marked by a sweltering high and ultra inefficient public sector, widespread corruption, a grotesquely flawed tax system and a lousy productivity … ”

It is so typical Danish, not one bit better than the so-called senior economists in banks, each day give their views on the economy, including the euro and European integration. Only one way, and it goes just keep coming, and when the road then turns out to be a blind, and they even have overlooked the sign that signaled just that, then the opposite way, so it goes just keep coming. Indeed we must be in breath, the worst of us, but all along we kept nice and quiet, for all the world. Politicians would lose face.

If the thought has occurred to them that conditions what repair readiness concerns that Denmark has the world’s largest consumption relatively to production, in no way better, rather worse a few years to come. The agencies’ inefficiency is given the same, corruption takes many forms – it can show itself as unhealthy, excessive nepotism and lack of competition (in a small, easily manageable country) in the clearest – and the taxes and thus wages are the highest in the world. This is achieved no matter the remaining business productivity. Resources are a little lime, a little clay, a little salt, a little gas, a little oil … and for a short time even a little IQ.

Denmark 2-4 years more before it looks like Greece

We wrote something about the pyramids – maybe inverted pyramids:  http://danmark.wordpress.com/2011/07/14/hojt-pa-en-gren-en-krage-knald-eller-fald-fredag-eller-snarere-i-naeste-uge/

Ebbe Vig, Information about Denmark: They are trying to put Europe deserted for the parent Europeans, Arabs have to pay European States’ debt, and fill the area with immigrants from the Middle East and Africa. It all happens with agreements with hosts of other than of European populations. It can not be said to be wise. When it is not wise, then you can very easily get to the assessment that it is stupid. Evil is easier to adjust to, because you often can adapt to it. Stupidity is unpredictable concerning both decisions and actions.

This is confirmed by a German who uses Denmark as an example in a major review of the planned Eurabia. Already in 1980s, we were informed that Denmark is used as a pilot country. It was reported by a chat participant from one of the blessed savior of agencies on a strategy course: http://michael-mannheimer.info/about/comment-page-1/ # comment-1359

May 23, 2011

‘Von’ Trier and palms of Cannes

The selfnamed ‘von’ Trier is naturally on the folk-replacer team, but only by words, because he’s too stupid. He gets public Danish krones to hire expensive movie stars. What comes out of it, is absolutely nothing of format. Especially his deliberately shaken, handheld camera work testifies to his lack of skill, but it also destroys people’s brains to look at. ‘It’s simply brilliant’.

When the entire media Denmark hills dolt up and argue over reaction toward the reacting, then it is because the point 1 the  media Denmark hates Danes and Denmark and 2 they simultaneously try to make him and us believe he himself above the earth, but notice, only when just the Danish viewers are present in the monopoly-media-cirkus. Trier is in his own imagination absolutely beyond earth (some would say in the clouds where nothing can be seen or heard from the Earth ) because it has gone well for too long with his shit. It is precisely such characterizing dolts who childishly/youthful crave for love and apologies, but only so long as they are taken seriously.

You Americans and English do not know the figure ‘Herbert Schmidt’ from the Danish film ‘Matador’, I think (but just wait*), and there was not a dry eye when he traveled to the civil war in Spain, and especially not when he returned to the Hitler-occupied Denmark and would perform plays. The ideology is the 68-model-like, it is Trier and it is Herbert Schmidt, when they’re on the winning team. You can not be the sole ruler in so many ways. You can try to be evil or good. The self-indulgent is always bad. It is that simple.

Von Trier, Von Leth, McDuck, von Madsen and the others ‘vonner’ among new-nobles of spirit amoebas. They permit themselves everything, and can do anything on public support, and God’s grace and comfort to the dissidents in upstart-denmark, who say: ‘He has no clothes on’.

Reply from Sallieri to Mozart on Mr Summer in the film Amadeus: ‘He has yet to achieve mediocrity’.

And who is this Herbert Schmidt?

*He is Bertold Brecht :

When ideology and reality does not match

“…Would it not be easier
In that case for the government
To dissolve the people
And elect another?”

(Bertold Brecht)

Until they reach their end-solution (I heard in England last year):



May 18, 2011

The Norwegian Employers Association calculates almost as badly as I do

‘The Norwegian Employers Association calculates almost as badly as I do’

Source: http://www.nho.no:80/article23322.html

Næringslivets Hovedorganisasjon in Norweigh has publiced a press release that almost is something ‘not suited for the net’ under the system with information that totally (let’s say) undermine the official Danish immigrants’ costs. Twice the Danish official reports and also recently estimated the costs to less than 20 billion DDK yearly. Now the Norwegians have calculated the costs concerning immigrants’ load in Norweigh to about 60 billion N.kr.

[take into account that our total public budgets are at least 20-30 times smaller than the budget of USA]


It is more than most peculiar taking into account that children born in Norweigh and naturalized is not included in the calculation (that alone shows that 60 bill. N.kr. does not do it), that has become custom all over the Western hemisphere. Add to that a much smaller number of immigrants and their children in Norweigh compared with the number in Denmark. In addition immigrants in Norweigh much more often are employed compared with those in Denmark.

Danish net expenditures concerning immigrants

Precisely five years after we began the blog:  http://Danmark.Wordpress.com   

Thank you Norweigh: http://www.youtube.com/watch?v=LUtiIMZIVOU

May 18th 2011,

 J. E. Vig, M. Sc. (Economics)

March 11, 2011

A Short Era Of New-Mercantilism


Three Steps Forwards Two Backwards
Petroeuro In The World Economy, And What We Really Need

“So-called hard euro is lighter than oil, that is the reason why it floats”
Choose a German version


Recommend this file

From monetary system via dollar-dominans to floating nominal currencies

The domain of dollar extends

The dollar seceded from the gold


IMF – debt-crises

How USA dealt with its debts-increase

The US-world-reserve-role changing

Japan in debitor’s trap

Euro and European Union

Euro and its primery objectives

Fear of competition narrows the rationality

Euro-Union and globalization

Two suppliers of internaitonal monetary means

The need for introduction of real currency rates

More English files characterised by more contents than of form

From monetary system via dollar dominans to floating nominal currency rates:
The international system of payments after WW2 that USA and Britain actual decided, while the war was going on, in 1944 in Bretton Woods, New Hampshire, USA, tranformed the dollar to a so-called reserve currency; most of the worldtrade was agreed upon in dollars. Central banks all over the world kept a considerable reserve amount of dollars in order to be able to protect the national currency when too much imbalance in foreign trade occurred, and other currencies were expected to be measured secured in terms of the dollarvalue. The value of dollar was connected directly to the goldprice, $35 per ounce fine gold. The dollar dominans in the world trade alone implied even larger dollar reserves in the central banks all over the world. The Marshall Plan after the war secured the rebuilding of Europe; but it actually did not cost USA a cent, because the dollars (-bills) obviously are much cheaper to provide than other goods and services. When dollars returned by the accounting for goods and services in USA they made trade impacts on the American economy, otherwise they did not. But almost none of them returned. At the same time USA could import almost unlimited and pay with more dollars that did not return either. Large amounts of dollars that piled up for example in consequence of the positive result of the balances of trade were invested in interest-bearing and currency secured American government bonds and other assets. With this system the leading economic power was tempted to accept large deficits on balance of trade equalized by missuse of the means of payment via this issuing of money. The result was that US received the foreign goods for free. This arrangement simply could not continue in the long run or could it? Without going into details, inflation and state-debt was introduced as an obvious possebility among the professional politicians, who did not worry particularily about nation and tradition, and certainly did not know the hard conditions. Devaluations on behalf of the nation, and the initiatives of the state itself were also included in this dismantling, and devaluations in cooperation with IMF came like af thief in the night in a row of cases, because the really needed of necessity had to be done in time to prevent this vicious spiral to continue in the nations: Finance crisis upon finance crisis around the globe.
It was certainly not new phenomenons that were introduced by the Bretton Woods System. At the peace conference, the Wienna Congress in 1815 and the bankructcy of Denmark 1813 followed a devaluation of 90%. The collapsed monetary system from 1944 that has not yet been replaced by a new one actually had some bad temptation for the politicians built in depending on the character of the leading figures. Of other decicing impacts in the long run the following have to be mentioned:

  • Dollar and petrodollar dominans in international trade with artificial values at home and abroad – totally independent ofthe real domestic economy
  • Competing European euro-system based upon an official approved politician-phantacy on the former German stability and growth, now among indebted nations with adjustment turned downwards via wage rates and minimum standards of ecology and of social level.
  • The way to real economic recovery of Europe was prevented, in addition the unlimitation of the markets was encouraged without any self-regulating mechanism of competition directed out of the euro-zone, and combined with a clossusish lack of competition in the other markets except for the market for disguised subsidies to a too expensive structure
  • Indebted nations around the globe after two generations

An explosion of the amount of means of payment and speculation that would not be possible without the built in defects originating the from birth of the Bretton Woods System, to such a degree that the real economies in the nations are totally secluded from the system of international payments, that they were meant to protect in order to protect the nation

The domain of the dollar extends:
On the other hand the arrangement was binding for USA, externally, in the world of realities characterized by practical rebuilding of production-capacity, markets and defending efforts under the Cold War. And the rest of the world could redeem dollars at the goldsprice as required, granted that USA as an economic superpower was able to secure the dollar-value settled in gold. USA was the only country to guarantee and carry out the redemption of dollars for gold as it had the largest gold-reserves. Western Europa quickly recovered, and the growth lead to large European export surpluses that at the same time created an dollar-accummulation in the export countries. As early as in the 1960s France began to redeem dollars for gold, and others followed. At same time USA was engaged in the Vietnam War and elsewhere. This brought the deficits on the public finances in an uninflated heavenward flight of the time. In 1967 the drain of the gold-reserves in USA and Bank of in England in Britain to a critical point. That France and other Eruopean countries definitely according to the agreement increased the redemtion of dollars for gold brought the dollar under pressure, given that the goldprice measured in dollars continuing was kept unchanged. It was expected that USA would devaluate the price of the dollar in relatively to gold with a continuous bigger and bigger pressure from the demand for gold, and also from USA’s deficit on the balance of trade plus the still unfinanced war-deficits on the domestic public budget. At the same time most of European countries gradually “dyed their money issuing in dollar-green”, and they also began the inflationary growth that went into stagnating production and employment with still higher inflation to end up with a rate of short interest of 21%. This was indeed the characteristic economic consequences of the welfare that substituted wealth in Scandinavia in the 1970s.

Dollar seceded from gold:
In 1971 Britain also began side by side with France to order redemtion of dollar for gold. Instead of contnuing towards a predictable collapse of the market USA left the redemtion of gold in august 1971. That actually meant that the international monetary system built up a little on gold but much more on dollars dismantled as forseen by almost everybody (among others the Norwegian negociators in Bretton Woods), and the world changed to the system with floating nominal rates of currency[1].You may also call this international financial anarchy, if you have understood that the grocer of that time could not sell the scales, and still claim to supply his freshly ground weighed coffee.

OPEC is a cartel that agrees upon a common oil price and distribute quotes of production-capacity among each other. OPEC was founded by Iran, Irak, Saudi Arabia, and Venezuela September 1960 (later on more countries joined) with the clear objective to “coordinate and unite” the oil policy in the member countries. After the Teheran Conference 1971 (where the price-settle-initiative was tranfered from the oil companies to the exporting governments) the buyer’s market for oil closed down. Now the need for a floating dollar rate emerged, if the economic worldpower USA – still with trade deficits – should not lose ground. October 1973 OPEC sent price on the oil to the sky with rise of 400%, and at the same time imposed an embargo that forbid shipping of oil to every country that had supported Israel in the “Yom Kippur War” against Egypt, and OPEC reduced the production with 25%. USA had previous reached an informal agreement with Saudi Arabia that the country could invest in USA, if USA assisted Saudi Arabia develop its economy. Apart from the tremendous oil prices-rises – there was another smaller one in 1979 – there was nothing catastrophic in the oil countries requiering more for their oil, when the reserves were limited. The profits earned by sale of oil accounted in dollars floated into bank accounts in Britain and USA, when the OPEC-countries simply could not find a better investment for the petrodollars right away. The problem arising was to allocate the money back into the productive circulation – recycle petrodollars -, now that the West rode on wave of combined stagnation and inflation at the same time. This new phenomenon – the Philip-Curve moved, but not until reality gave inspiration to loosen the premises of the theory – was caused by issuing of money-units, irreversible increases in wage rates and deficit on the public budget. [The reason why was not the oilprice rises even though that was persistently claimed (for 10-15 years) – if not it could be claimed that so-called crisis followed from the heavenward fligt of the oil prices had to be renamed to the normal state. So-called euro-dollar-bonds were issued and became the guarantee foundation for private lending from private banks to the Third World with the Bretton Woods organizations – IMF and the World Bank – in a the role as mediators. The developing countries could not provide money to the more expensive oil from other sources[2].
Petrodollar were the foundation of a huge number of hopeless lending-arrangements, and thereby also the propellant for at lot of debt-crises in the 1980s, and in the 1990s also among more developed nations in Latin America, Asia and Europe. Who created the risks, and who transferred these risks, and who had to bear the resposibility in the end?
In February 1945 USA made an agreement with the Saudi king about military protection of Saudi Arabia, if USA was given priority to the oil sources of the country. Even though the oil occurences were nationalized in 1976 ARAMCO (an association of Arabic and American companies) was controlling the production and the markets for oil outside Saudi Arabia. Surplus of petrodollars was invested in American government bonds. This market is obviously a power potentiale in the hands of the world’s leading millitary power. An example: In 1980 Iran’s and Libya’s assets in USA was confiscated, and recently organzations dealing with international terrorism suffered the same fate.

IMF – Debt Crises:
With the organization of IMF – International Monetary Fonds – a link in the international monetary- and ledingsystem, it often was a merciless fight of debt collection against weak founded states in the Third World. It was underlined from a few sources that the yearly new borrowing in Western Europe actually was bigger that the total debt of the developing countries in the 1970s. If we take the question of creditworthiness: the single states that decided the agreement of the Bretton Woods System paid in money, but most were given guarantees[3] in the foundations of IMF on behalf of the nations’ taxpayers, and in accordance to how large an economy the nations represented, so the responsibility for the many lending-dispositions in private banks, particulary to the states in the developing countries was rather often in quite another place than the initiative. How these lending-arrangements and other international arrangement was established, you can among others read in Frederick K. Listers ‘Decisi­on-Making Strategies for international Organisations: The IMF Model’, Denver, USA 1984.

How USA dealt with its debts-increase:
About 70% of world trade is contracted in dollars. Oil is the most important good in the world, all countries have to get oil, and if they do not have oil they have to buy it, for dollars. That has been the reality for the last 40 years. Recycling of petrodollars have simply been the price that USA have requiered of the oil producing countries for having USA to tolerate an oil exporting supplying-cartel OPEC since 1973. For about two decades USA’s deficit on balance of foreign trade has increased most of the time. Today it amounts to about 25% of the American Gross Net Production (GNP) or about $2.5 (European) billions or $2.5 (American) trillions. In 1988 the balance of trade was in balance, and at this time USA was a creditor nation. Since 2002 the yearly public deficit has been $450-600 (American) billions, or 4.5-6.0% of GNP compared with 1.3% of GNP in 2000, when both federal and the states’ deficits are incounted. Russia and Asiatic central banks in China, South Corea and Japan have bought American government bonds and other assets in accordance with more than 60% of the total public domestic deficit, for more than 1 trillion the last three years to keep up the dollar against Asiatic currencies that actually reduces the domestic issuing of monetary means substantial compared with what it must have been without the Asiatic demand and everything equal. It also appears from the fact that inflation is apparently still under control (in spite of the fact that inflation has a delay before it reach full strenght), and the employment is rising substantial in the fall of 2004. November 24th 2004 the dollar hit the lowest point compared with Yen for the last 9 years and the lowest point compared with Swiss francs for the last 4 years. China began selling dollars of a substantial amount November 27th 2004.
In the first half of 2004 more than $201 billions assets were bought up by foreign central banks. Of these are $180 billions American government bonds. In Japan are large parts of the bonds placed as security for Japanese banks that otherwise would have gone bankruptcy, more below. In the case China, it is the result of a large new export of price-competing goods to USA, for example outsourced American, and also Chinese productions that result in the large accumulation of dollars. They are invested in American government bonds and real investments outside China. The currency rate of Chinese yuan is linked to the dollar rate – and this is not just an implication of the buy up of government bonds. This means that the yuan without the US-bonds perhaps would have been in the same boat as USA, when the dollar may fall further. A still continuing fall of about 20% or more of the dollar would lead to a fall in the stock market prices, and also lead to higher dividends, when foreign entries move investments away. 40% of the American government bonds are owned by foreigners, like 25% of the business bonds, and 13% of the US ordinary shares. Behind the placement of the US-debt you also have to take into consideration that China’s demand for energy for the industrial sector is expected to be dubbled in the next 15 years, and the Chinese demand for electricity is expected to dubble in the next 10 year, and to be multipied with four before 2019. Until now USA has been the only country that can increase its purchasing-power on the world market by issuing more dollar-notes. The US-import is about 50% or in dollar-terms or $310 billions more produced produkts than USA export (yearly). That put the country in a special situation, characterized by both power and vulnerability. Without this central, very peculiar status of the dollar and a consequent and constant flow of capital-investments from the whole world, the country would quickly heel over in a catastrophic crisis of balance of payments.

The US-world-reserve-role changing:
From November 2000 Iraque began to settle its oil sale in euro, and at the same time it converted the reserve-foundation “Oil for Food” with $10 billions to euro after an agreement with UN. Between 2001 and February 2003 almost the entier Iraqi oil export was paid in euro, about $30 billions. In the same period the euro increased relatively compared with dollars with 30%. Saddam Hussein had already offered concessions of oil extration to France, China, Russia, Brasil, Italy and Malaysia. Saddam Hussein had until then only used Eruopean banks to the limited sanction program, “Food For Oil”. He awarded the Palestinians with 1 billion euros in 2000. A short time later EU awarded the Palestinians with 90 million euros as a subsidy to show its friendship with the Arabic World, if Israel canceled its payments at that time. A few days later the European Investment Bank made an agreement to lent Syria 75 million euros after eight year with sanctions of have been shut out from making businesses with this country. A little earlier, August 2000, EU donated 1.7 million euros as a subsidy to Eritreans, Etiopeans, Somalis and repatriated asylum seekers from Yemen after the war with Etiopia and famine. Subsidy from EU in euros again: not long ago the Italian Prime Minister Berlusconi proposed an European version of the “Marshall Plan” which he characterized as a generous act to rebuild Europe. He proposed to give the Palestinians a help of a value of 6.2 billion euros in a period of five years.[These last things are included to characterize the motives and the understanding of the situation among the promoters.] From November 2000 to November 19th 2004 dollars decreased relatively to euro with 34.5%, from December 1st 2002 to November 19th 2004 with about 23.5%. A lower rate of dollar made the dubbled result, by lowering the enormous deficit on the balance of payments (an improved balance of trade and an improved balance of the flow of investments), and improve the competitiveness of the exporters that would result in higher investment, and higher employment in these exporting businesses. I addition a lot is pointing in the direction that the petrodollar adventure has ended caused by the increasing import in the oil producing countries, and the reduction of the relative share of OPEC in the total oil export.
Iraque has the second-largest known reserves of oil among the nations of the world. 45% of EU’s oil import comes from oil sources of the Middle East, 80% of Japan’s comes from the Middle East, that has 60% of the world’s known reserves. USA is not dependent on those oil sources. The shift to petroeuro that is mentioned by few is predicted to have huge effect only if Great Britain and Norweigh introduce euro that would result in North See “Brent” and the Norwegian oil supply being settled in euro. Shortly after Iraque’s move, Jordan began bilateral agreements with Iraque. August 2002 Iran converted more than the half of its currency reserves in Forex Reserve Fund to euros, and China also began to convert some of its currency reserves from dollar to euro. At the same time Russia dubbled the stock the Russian Central Bank of euro to 20% of the total $48 billions. An Iranian senior speaker of the oil industry Javad Yarjani noticed in a speech to the Spanish Ministry of Finance that “it was possible with a increasing trade between the Middle East and the European Union, and that it could be suitable to settle prices in euro. This would create more ties between these blocs of trade with an increasing trade, and at the same time promote a very needed European investment in the Middle East.”
The British Empire was brought on even keel via the need for Britain to import food, when the domestic agriculture was driven out by the industri. The American Empire may be brought on an even keel via the need for USA to import manufactured goods, when the domestic production was driven out by the financial services.
While the dollar has decreased since 2000 the price of oil settled in dollars has increased. The euro-price of crude oil remained almost the same in the four years period. It just don’t seem logic that this result should occur of simple by chance, and it does not seem to be a surprise either that others could begin supplying a dominant reserve currency. The money plans of EU has not been held entirely top secrete. It is most likely to be a result of considerations of thoroughly planning and design. It also seems as if OPEC react to the dollar depreciation in a most natural way; by increasing the oil price precisely to the point in accordance with the lost they would had to bear is removed.

Japan in debitors trap:
The rate of Japanese yen has decreased 5-7% a year compared with euro from 2001 to 2004, notice, a relative decrease to dollar of about the half. This means a yearly depreciation that makes Japanese products more expensive in Japan, and the country is far from being selfsufficient with food and energy. Japan has stagflation and did not get through the last stockshare-bubble-crash in Asia in 1997, because the banks in Japan continued to throw new money after bad money with guarantee of the government, mostly based on American government bonds. February 10th 2002, Observer notes: Japanese consumers flock round the banks to convert the quickly depreciating yen to gold bars. There is fear for the banksystem to collapse, when the deposit guarantee of the government is being removed in Mars. We wrote in 1999 that Japan-government tried to reuse the Japanese economic policy from 1920-1927: to issue billions of yennotes and new credits with which the banks bad loans could be bought up, the assets then had to be overestimated much like in the Weimar Republic in Germany. Now it unfortunately was I the period 1920-1927, where Japan handled precisely the same problem just as wrongly as now in the late 1990s that it would have the one to refer to, if we had to learn from experience. It is not true that history repete without further. But if leading figures use the same false way thinking on the same problem (for example as an act of bad faith), then the superstitious are tempted to believe that history repete.[And it is not totally false, apart from the fact that ignorance’s blind fate must be classified in categories of belonging to an earlier or the coming middle age.] Such a incomprehensible policy was really carried out, also concentrating at negative rates of interests and guarantee of the state for the banks to get the prices to rise “by stimulating the production in this way” in the misunderstood Keynesian way. The falling yen has really got helplessly stuck in a debt trap. The public debt is $5 trillions, a little less than the debt of USA that November 19th 2004 got its borrow-limits increased to $6.4 trillions. More state-debt is continuing contacted at still higher settled prices, even though it just increases the debt. The debt trap is closed, and there is no easy way out. Japan which regardless is an important industrial nation is also a substantial importer of oil. Japan’s surplus of trade from sails of cars and other products was used to import oil settled in dollars. The surplus was invested in American interest bearing government bond and other assets. The government of Japan owns 15% of the American Treasury assets. G-7 was founded to secure Japan and Western Europe within the dollar system. From time to time in 1980s statements about the three currencies – dollar German mark and yen – emerged from different Japanese sources that they should divide the world’s role of reserve under the floating nominal currencies. Until now the dollar remained the dominating.

Euro and European Union:
European Union with common compulsory money units, and a constitution is being established among EU’s 25 member-states now. That it is difficult to obtain adequate consensus among the Europeans about the common compulsory money unit is perhaps unnecessary to state. To establish an European monetary union right now, where all European countries are indebted more than ever – apart from perhaps two European countries outside EU -, dominated by unsatisfactory activity and employment anywhere in EU, and even negative growth in the three leading countries, France, Germany and Italy for the second, perhaps for a third year is more than a feat; it is an artificial, ideological construction. The national currency sovereignity has been abolished in the eurozone. The objective is obviously price stability and growth in the eurozone. For years we were lead to understand – in the open – that the currency reform guaranteed price-stable growth, even though the rules about the new currency in the Maastricht-treaty (for example: article 104C) tells something quite different; particulary concerning the newinvented, partly inconsistent and irrelevant so-called claims of convergency that can be overruled, if the Council of Ministers does not estimate the offence to been substantial. The countries – France and Germany – that put these claims into the treaty were the first to offence the rules about deficits, and the relative magnitude of state-debt compared with GNP – they did not even honor this selfchosen claim either without several manipulations with the respective budgets (redemtion of gold and seeling of pension duties) in both the countries, Germany and France, when they invite other countries to qualify for joining the monetary union on the same conditions. In 2004 it continues in Germany with selling of the pension duties of the civile mail-servants.

Euro and its primery objectives:
To assume the common compulsory money unit in any way should reflect the real economic in EU, and serve the union we obvious have misunderstood. Corresponding to Spain’s fatal administration of the gold extracted in Latin America in 1500s it looks as if the euro in the best Mercantilistic way via trade settled in euro for example oil from the Middle East is meant to generate the moment that created change in a Europe with not less than 20% unemployed (official 9%) or expelled, and an enormous state-debt that you no longer can make an unambiguous sketch of. Jean Monnet – one of the founding fathers of project – exactly claimed in the 1950s that the compulsory monetary unit would be used to make the union real in full scale. It was the form, before the contents that counted, we can conclude. If for example one of the Maastricht claims of convergence about the magnitude of the state-debt that must not exeed 60% of GNP should have meant anything serious, between the half and two thirds of countries could not have met this claim without to accept crises of stability. So much can be extracted of those real informations that are released time after time. Apart from Mercantilism that according to history ended with the Napoleonic wars stability and development cannot be measured as an index of prices or some procent-figure. Or when some quantitative standards have been registered, then you can talk about a stable currency (with reference to the five Maastricht-claims of convergence). Stability include the dynamics of the capital formation, security of the investment process, economic growth, education and new technology and high productitiy in a state to claim that its leaders have taken the voters and the nation seriously. All this cannot be obtained or be calculated as some simple static concept. France and the most of the other countries were against the so-called stability pact that could have secured that the central bank acted like the old German Bundesbank, and kept the reins tight, but from quite another starting point. It was decided at the summit of Dublin in December 1998 to drop the stability pact, and France made too large deficits on the public finances in both 2002 and 2003 compared with the Maastricht provisions. The struggle about who should point out the president of ECB (European Central Bank) ended with France. The German Bundesbank was out of step with the German political, financial and industrial elite. But the bank was very popular in the German public opinion. Therefore the politician Helmuth Kohl was very hard pressed between the German and the French Establisment. The French socialists had built in their claims to the subsequent treaties. Now Kohl has gone, and the new German kanzler is a centralist himself. EU has in return recommended a German as leader of IMF. Kohl also had to eat that there were no more talk about pure automatic sanction against a country that makes continuing deficits. Now the claims is activated (according to Maastricht-treaty) when 2/3 of the weighed votes in the actively participating EMU – countries vote for sanctions. France also got approved that a so-called stability-council, and at the same time a directly political rolle built into the monetary policy so that for example guiding lines for the euro currency have to be fomulated politically now.
In addition to introduce the pure (economic) stability pact without order in the member-states’ economies would lead to real political instability. If the amount of money and credit cannot be debated in the whole eurozone, because it has to be decided by a hard ECB, the consequences would be so terrifying hard in some parts the union that political instability would inevitable be the result. Italy and Greece are obvious examples.
To defect this you can then introduce the more well-going countries to hand over “some surplus” from the public finances or “commit themselves to this in advance” (but the problem is that no state can or will do so) to the bad-going Italy, Belgium, Greece, Portugal and Poland. This means on plain English that the public expenditures have to be controled euro by euro in the whole eurozone. This is common financial policy. On that assumption every extravagant expenditure, and a lot more will certainly be stoped.
If you should judge by the falling D-Mark and the rising Italian lira in 1997-1998, the markets had to have the impression that a soft euro was being established. There was a completely unknown but collosal amount of lira that should have an eternal determined rate in euro in July 1998. How this could happen without a soft euro, would be intereting to have explained, and there were lots of other problems pointing in the same direction.
Already in 1996 you could foresee that the euro would be a so-called junk-currency – that was what the speculators called it -, if Germany, France and Britain should take over the Italian enormous mountain of debt. This would lead to result that ECB had to guarantee the solvence of both Italia, Belgium, and all the other heavily indebted member countries, for example Greece, and the countries that could be expected to join EU in the Eastern Europe at that time. In this way an alliance would be created that would press ECB, and get it to act as if it still controled the monetary policy without really doing this. That was what happened. Real EMU-stringency after the book multiplied by three or four is what should be expected, if we assume economic stability should succeed in the present situation – without a strong lever from outside. But this would imply the lost of political stability as the relations are and may be expected to develop, and the disappointment with the whole project would lead to even more resistance against the project. That is the reason why they still act as if.

Fear of competition narrows the rationality:
Globalization means the unlimited mobility of markets included the capital market. The globalization will destroy the democratic society and the welfare state, many maintain. The only reason why is lack of an international monetary system that would have prevented the worst. The total mobility of capital undermine the abilities of the states to regulate. Especially the concern for the labor market: Untercuting and cutbacks have to absorbe what threats to disappear of jobs, among other things by outsourcing. The globale markets of financing are not subject to a regulating mechanism of competition, and they causes crisis upon crisis – Asia, Mexico, Russia and Latin America. The crises will become deeper caused by the paper-mountain of the state-debt that widening the difference between nominal and real values in every community in the long run. And because you have chosen to sell the tape measure instead of using the tape to measure with according to its purpose. It gets worser when all the leaders of the states continues to borrow net more and more. The crises tighten the social pressure with requirements of cutbacks. The pressure of the crises either lead to the dismantling of the welfare states or change them into linked defending blocs (currency blocs like euro, dollar, yen or renminbi-zones) or relapse to the old enemy-pictures that characterized the national states earlier, perhaps a combination of both scenaries. With the dismantling of the democratic founded national- and social state the globalization releases itself at last, because the politicians cannot stand for that the populations/the voters of their countries have to bear heavier and heavier burdens just to offset the worst.
Euro-Union is the prototype of this development. Its bad hidden dubble-motive is a) fear of the dollar-dominans and –competition and b) fear of the united Germany with matching D-Mark-regime.
Fear always build on a false analysis. The US-dollar does not threaten the European market shares of the world trade, but Europe’s lack of knowledge, technique and initiative, especially Europe’s inertia when comes to reforms and renewels. The hardness and the strenght of the D-mark did not prevent the development and the integration of Europe, but the since “Maastricht” the aim was abolishment of the D-mark, and that has then happened. The explanation was that D-mark should have driven the countries in the eurozone (now) into a tight negative development against reforms and with social limitations. Alone these fallacies and false assumption do not allow any realistic expectations about a hard euro. The inflation was programmed in advance. It is perhaps possible to blow more air into it by leting it float in oil at the beginning, but the collapse is then going to be even bigger. All member countries are deeply indebted, and all of them run with deficits.
The national governments lost their instruments of management right at the beginning of the euro (currency rate, interest rate, amount of money and flexible budget). They can no longer secure the values of the money, and regulate the labor market, and the social- and ecological standards that the same policians had introduced. Differences of structure and of competition will with governmental suspension be equalized by the market. The battlefield number one is the labor market now, and the social and ecological systems. The labor market suffers from the diminishing of the middle class, the wage rate and social cost competition originate from the workers in the southern and eastern EU-povety-zones, and an inevitable liquidation of the decided national union-wage rates and the minimumstandards of the social level till now. The market sweeps them away, the employers uses more and more their potential of threat that is to move their productions to especially favourable (wage rate, social- and ecologic cheap) EU-zones. Wage rates, social standards and claims of environment in Euroland have to be harmonized downwards. It is the naive imagination of socialdemocrats, the folk socialists and unions that these things must be better after they have signed the Maastricht-treaty. In Euro-Union the social policy has resigned forever – and it is happening with full accept of the socialdemocrats, the folksocialists and unions.

Euro-Union and globalization:
Euro-Union is not the remedy against the employment crisis of globalization. There is nothing special about this globalization; that is an apophthegm; international competition is the right word. Euro-Union strengthens the power of the capital, and helplessness of the state in the role where nothing real can be done to the unemployment without to have the needed instruments. It is a progress towards the 19th century (here the instrument of ruling were searched too), not towards the 21st century. Euro-Union is not even a counterbalance against the unsocial tendenses in the globalization, as the incompetent analysers from the left maintain; it strengthens them further. It simply forces the working life towards the monetary commandos. The European Central Bank (ECB) has to pursue the totally same policy in the 12 different structure countries, without the possebility to resort to the equalizing of the nominal currency rates. To prevent the capital from leaving the eurozone the central bank will have to increase til interest rate; but this decreases the activity and rises the unemployment further. Such an union must end in the conflicts among the states, from which there is no no help to find – if the euro-union is not rebuilt to a transferunion or an federal state with public equalizing between old and new member states, something like the patchwork USA or the German Federal Republic, but without the D-mark. When the transmission of these models show themselves impossible or they meet resistance the question arises: Are there alternative models that can save the world peace? As it runs now: Europe and Arabic world has already begun to cooperate economical, as it was forecasted in North-South-Dialog from 1968 and the European-Arabic Dialog from the midd 1970s. Egypt, Jordan, Marocco and Tunesia decided last year to establish a zone of free trade[4], and Algeria, Libanon, Mauretanien, the Palestinian authority and Syria are being invited to join this big zone of free trade. Egypt is expected fully admited in this group of free trade. However EU has negociated with 12 Miditerranean countries as a part of the so-called Barcelona-Process about cooperation between EU and its neighbors around the Miditerranean towards south. The aim in the long run with this Barcelona Process is to establish tighter bond of trade and social questions as well as of political kind. This will lead to the creation of the Euro-Miditerranean-Freetrade-Zone consisting of 27 countries in 2010.
It is possible that the European productions in future may be transferred to North Africa, the Middle East and Eastern Europe, until they come up, and we are put totally down. It is a question if the populations submit to that.

Two suppliers of internationale monetary means:
With the last European-monetary move – if it is an experiment of establishing of the euro as a possible reserve currency or currency for price-settling to some extent in line of the American dollar – no real lift of Euro-Union will happen. “If the occasion should arise there would be to ice cream booths on almost the same bathing beach. The difference to the metaphor is that the booths are supplying monetary means to be able to live on the products of other countries instead of supplying more ice creams, and employ its own working force to produce more products and more services. The climate of investment is far better in the dollarzone of the beach, and the other products and services are far more competitive in the dollarzone. The European Central Bank is organized to prevent euro from falling; it has no means to prevent euro from rising. If ECB are going to issue more subsidy-euros that are covered by the real economy, the economy is further twisted. The deficits on the public finances in the two leading countries of euro-union are of the same magnitude, when compared relatively with GNP, like the corresponding in USA, about 4% against 4,5-6%. But here you have to take into consideration that the whole here is threathened by deflation, if the euro increases 20% further, because the growth in the three leading countries in the eurozone is close to zero. The dollarzone can expect a tremendous improvement of its tradebalance. If this zone is perhaps going towards a more sound value of the dollar, it tempting to propose the single lacking arrangement. A common instrument to prevent crisis upon crisis, deeper and deeper, and at the same time secure that the monetary means are used to what truly is their only useful aim. The classical economists, for example David Hume and John Stuart Mill proved in the 1700s that without order in the monetary relations, there will not be any order in the markets of products. Without an international order of money and credits that is in the interest of the big trading countries, it will go wrong.

The need for introducing of real currency rates:
The ruling monetary system until 1971 was not the agreement that the chief-negociator of England maintained for a long time was best to be chosen. To protect against crises and inflation J. M. Keynes showed an internationalt emission-agency with an international monetary unit that was not fully negotiable. It could be bought for gold, but not the other way round. Only if the states of their free will stop the inflation-orgies and the state-borrowing or devaluate (by compulsory) or let the money amount and the credit be ruled by others, it is possible bring harmony into the international system of payment, Keynes maintained. The incitament to speculation is removed at the same time. A monetary measuring instrument without banknotes to determine real currency rates, and it is certanly not suitable to force out national currencies.
Real currency rates are the present nominal currency rates corrected for inflation. We have seen in the last half of 1900s that inflation is a distinctly harmful phenomenon. If inflation had made a country’s products lesser competitive, the country could just devaluate the nominal currency rate relatively to all other countries, and in this way benefit by the lower price of its export products, and higher prices of the import products; the exhange-relations to other countries has then been changed. Regardless if this trafic had to be repeated to have any effect – except for inflation – it was the way countries used to go not long time after The Second World War and the reparation.
There must a possibility for countries to make inflation for limited periods, caused by some structural or developing matters that have to be arranged. Such a possibility must excist, but in such way that other countries are not harmed by this inflation. The country that need inflation have to devaluate at once in advance. It is easy to incount inflation into the currency rate. By this are all other countries protected against inflation, and also against deflation, where the negative growth can lead to standstill, if the right monetary intervention are not carried out in time, as we saw it the 1920s and 1930s. No national currency must be brought into the international monetary system. We have had a much similar system under the so-called gold-coin-basic that was especially connected to the appearance of industralism, its early development, and the worldtrade via City, London. Goldstandard (a looser system) became the pivotal point, but the gold was at the same time a good of trade and therefore it did not have a settled value in itself, but the price was decided by supply and demand from the central banks, lastly a politically decided. An international monetary unit a little corresponding to the ECU – originaly the voluntary European currency unit emitted from an independ organ; it could be exchanged when needed, but for the present aim just a unit of account. A unit of account in an published, settled amount, and at a settled price, an account and reserve unit. No saleable instrument that get impacts from any supply or demand. And international arena where both debitor and credit have to pay interest on loans with the new reserve unit as guarantee, so we prevent lending out at random, and if it does go wrong, ordinary people should not be cheated every time, and it should also prevent crises of finances from overturn one deloping or misinformated country, one upon the other. You can call it a nationalbank of the world as a foundation for the international trade. It is simplicity that everyone can understand: we cannot control the national/international markets of currency from a national central bank, if the international montary unit is for sale, and thereby has become a multi-lend of all national currencies.
I knew that when I was 21 years old in 1971, and USA ”left the gold” as it was expressed, but selfconfidence grow with experience. I learnt little of economics that offered me a more solid ground to argue from.
And we perhaps have to go through another catastrophe before the leaders understand, what their predecessors did definitely wrong, or were lead to make definitely wrong from their in many respects marionet positions.

Supplementary readings:
Economics of Tide:
Big recessions and recoveries in the 20th century : http://www.lilliput-information.com/economics/tida.html (part 1)

Big recessions and recoveries in the 20th century (including the role of private company with anonymous ownership):http://www.lilliput-information.com/economics/tidb.html (part 2)

Goldstandard in all combinations:

Gold as an international unit of account for values – a historical statement: http://www.lilliput-information.com/economics/gol1/gol1.htm (part 1)

Gold as an international unit of account for values – a historical statement: http://www.lilliput-information.com/economics/gol2/gol2.html (part 2)

Keynesianism, the misused of J. M. Keynes theories:

J. M. Keynes’ theories, the moment that actual inspired the last dependence: http://www.lilliput-information.com/economics/keyne.html.

November 27th 2004,

M. Sc. (Economics) Joern E. Vig, Denmark,

[1] We remember how the nominal rates of currency sometimes were devaluated by one country or a group of countries at the same time. We were sure it must be some kind of advanced swindle with the values. We wondered that the other countries accepted it, but we did not fully understood the consequence of fraud then, to all of us. Other arguments than the need for working capital were certainly used.[3]The roles were exchanged from the beginning, The World Bank was no bank, but a foundation, and the foundation was a bank, so let’s describe the first: ”With a share capital of $10 billion distributed among 100,000 shares that should be taken over by the member-states participating in the maintenance of the bank (mine: that certainly was not a foundation neither from the beginning or later on). Admission to this was given to states, that were members of The International Monetary Foundation, but later on other states were given admission too. That was the reason why only $9.1 billion of share capital was supplied at the founding meeting. 20% of the capital should be paid in, of which one tenth in gold (in reality then just 2%), occupied countries could postpone a quarter of payment in gold for 5 years. The main task of the bank was via (mine: private) lending or guarantees to promote the reparation after the war og hereby contribute to the delopment of the international trade and increase the productivity and living standards in the long run. Direct lending should be effected, if the borrower could not achieve a private loan or a gurantee on fair conditions. The management of the bank should be organized after the same principles as the principles in the International Monetary Foundation.” The former Danish Prime Minister Viggo Kampman wrote so as a civil servant in 1944. The italicized originates from the present author. [4]Free-trade-considerations usually result in more than free trade, when we look behind the political rhetoric, and let the experience count.

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