Seems like almost every country in the world is now selling
its debt (or is it buying debt? What's the "euro-debt markets", anyways?.) Apparently Turkey
just raised 1 billion this way.
Why can’t countries in Africa, which supply all the metal
that make up today’s Apple computers, or places like Nepal, which supplies the
world with semi-precious jewels and pashmina scarves, do the same, and print a
few billion dollars a year for free?
According to this article, there’s someone out there saying:
you guys can issue debt and we’ll buy it. You guys can’t.
According to the same article quoted above: The euro debt market is so far open only to
investment grade-rated, frequent issuers, says SocGen's Cherpion. Lowly rated
or debut issuers, from Africa for instance,
are unlikely to find takers.
Seems like these higher authorities, arrayed like a pantheon
of Roman gods, doling out the cash are:
JPMorgan's EMBI Global or CEMBI
And SocGen’s Cherpion
Now who are these folks?
Cherpion, who sounds like a Harry Potter character (yes,
that bearded guy in the underground who guards the gold and hands it out to his
favorites) is “Managing Director, head of global bond syndicate
at Societe Generale.”
Notice the word “syndicate”—usually found in
association with “Criminal syndicates” and the like.
Now what are these bonds, anyways? Apparently
its these papers that countries issue and from which money magically springs
forth. That is reserved only for white people, because the rest of the world
doesn’t get Cherpion’s approval to issue it. In countries like Nepal, people are forced to work as bonded
laborers in the Gulf or Malaysia
for 1/100th of the salary because they don’t have these elaborate
methods of generating free cash for their government and people.
Now lets go on to JPMorgan’s EMBI Global or
CEMBI. According to Rimes.com:
J.P. Morgan’s Corporate Emerging Markets Bond Index (CEMBI) is a global,
liquid corporate emerging markets benchmark that tracks U.S.-denominated
corporate bonds issued by emerging markets entities. The corporate CEMBI is a
liquid basket of emerging markets corporate issues with strict liquidity
criteria for inclusion in order to provide replicability, tradability, robust
pricing and data integrity.- CEMBI countries include: Asia (China, Hong Kong, India, Malaysia, Singapore, Taiwan), Europe (Kazakstan, Russia, Ukraine), Latin America (Brazil, Colombia, Jamaica, Mexico, Peru), Middle East (Israel) and Africa (Egypt)
- CEMBI sectors include: Banks, Industrials, Oil, Retail, Telecom, Utilities, and Metals
Basically,
JPMorgan CEMBI is another syndicate that is set up to decide which economic and
business ally gets some of the 10 billion free dollar notes the USA prints
every month. Note the inclusion of Israel
and Egypt,
but I don’t see any other Middle Eastern country. Note China and Malaysia—important
as allies and business partners which continue to suck up the resources and
exploit labor of neighbouring countries and which spit out everything from
metal to wood in processed form that the USA then “buys” at super cheap
rates. With its billion dollar notes, of course.
The
world is clearly more unequal due to the existence of these syndicates and economic
entities that continue to suck up vast amount of the world’s resources through
opaque means and incentives for the benefit of the few. Capital by itself has
become suspect—clearly the rich countries are just churning out this stuff
(whether dollar or euro) with abandon, and the unsuspecting Third World
continues to handover their coffee, sugar, chocolate, timber, precious metals,
oil, and gems everything else in between for those pieces of paper. Remember
the exchange that occurred between the Europeans and the Native
Americans—tobacco and useless beads for an entire continent. Nothing much has
changed, in many ways.
There
has to be a conscious rebalancing of
global trade and labor relations in this century, that much is clear. What form
that will take may herald the end of the most exploitative of economies, mainly
that of Europe and America, for more balanced trade relations towards Asia,
Africa, Eastern Europe, Latin and South America. It is clear some of it is
already happening automatically—a country like the USA cannot keep printing trillions
of dollars each year and not expecting that to have an inflationary impact on
its economy.
The
American attempts to destabilize Ukraine may have the opposite
consequences that they intended-suddenly the BRICS have become aware that the
dollar may no longer be necessary as an intermediary currency. America
may have been a “Safe Haven” in the 1940s—it may even be a safe haven as long
as its opaque financial wizardry continue, but ultimately there’s going to be
an accounting of its actual assets and liabilities. Psych-ops has worked for
the past century in keeping the currency liquid. But what now? The rebalancing
of the world’s economic inequalities may, ironically, have begun from a
miscalculated attempts to beat down the Russians, by the very economy that kept the economic status
quo firmly in place for the last century.
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