Shock Doctrine?
I've been reading the book, "The Shock Doctrine" by Naomi Klein. It's primarily about the Friedman economic theory of Monetarism and the Unregulated Free Market system he proposed, and the methodology that was used to "install" the system on an unwilling population. According to the book, there is/was all kinds of skulduggery and evil thieving going on, caused by these "NeoLiberals (NeoConservatives in the US) as they forced countries to borrow from them after precipitating crisis in the nation.
I'm only a bit over half-way through this 466 page book (plus references and source citations) but it so far seems well worth the read..
I can understand how a country with fiat currency that allows a Central Bank to control that currency and monetary policy could end up broke and deep in debt. (We in the US are heading in that direction ourselves.) That's the entire purpose of a Central Bank and of Fiat Currency. But what I CAN'T understand is how the victim country allows the IMF et al to con them into agreeing to pay off that old debt plus paying back the new "bailout" money!!!
Nope. If it were me, I'd just say, "Ooops! We spent too much and now we're broke. Can't pay off those bonds and such you money-people bought. sucks to be you. Oh... we're going to call our NEW currency the 'Gottchabuck.' and we are going to get rid of the Central Bank that drove us to this end." (Central Banks and fiat Currency are both evil)
Why don't they just DEFAULT on their debt? What's to stop them? It's done all the time. Brazil used to do it regularly. they'd "revalue" their money a time or two, and then default on it and create a new currency. (Brazil has been addicted to inflation and debt for over 50 years.) Anyone who thinks that they wouldn't be able to borrow anymore in the future after doing that doesn't know how the world works. You'll NEVER have better credit than the day after you file for bankruptcy! As for sovereign nations - tell me the financiers and bond companies wouldn't be lining up at the bank to buy your NEW bonds after you default on the old ones!
And you wouldn't have all that old debt weighing you down with the high interest rates the IMF charges, and you wouldn't have to sell off National Assets to the Big Money Boys to pay the debt & the interest.
As to economic systems - We know Keynesianism doesn't work. And given the greed of humanity, it's a pretty safe bet that unregulated freemarket won't work either, being just the other side of the same coin. To my way of thinking, the only workable system would have to be regulated free market system. We know that properly regulated free market economics works. How do we know? Because in 1933 and subsequently, that's what FDR somewhat reluctantly installed and it did a bang up job of running the US economy through good times and bad, and turned the USA into the wealthiest nation in the history of man, and managed to churn that wealth between rich and poor fairly effectively.
The US Economy started to unravel when Nixon abrogated the Bretton woods Treaty and went off the gold standard - allowing the free printing of fiat currency by the FED.
So... why would "leaders" of a nation do this ugly thing promoted by the Shock Doctrine crowd to their people and their nations?
I'm only a bit over half-way through this 466 page book (plus references and source citations) but it so far seems well worth the read..
I can understand how a country with fiat currency that allows a Central Bank to control that currency and monetary policy could end up broke and deep in debt. (We in the US are heading in that direction ourselves.) That's the entire purpose of a Central Bank and of Fiat Currency. But what I CAN'T understand is how the victim country allows the IMF et al to con them into agreeing to pay off that old debt plus paying back the new "bailout" money!!!
Nope. If it were me, I'd just say, "Ooops! We spent too much and now we're broke. Can't pay off those bonds and such you money-people bought. sucks to be you. Oh... we're going to call our NEW currency the 'Gottchabuck.' and we are going to get rid of the Central Bank that drove us to this end." (Central Banks and fiat Currency are both evil)
Why don't they just DEFAULT on their debt? What's to stop them? It's done all the time. Brazil used to do it regularly. they'd "revalue" their money a time or two, and then default on it and create a new currency. (Brazil has been addicted to inflation and debt for over 50 years.) Anyone who thinks that they wouldn't be able to borrow anymore in the future after doing that doesn't know how the world works. You'll NEVER have better credit than the day after you file for bankruptcy! As for sovereign nations - tell me the financiers and bond companies wouldn't be lining up at the bank to buy your NEW bonds after you default on the old ones!
And you wouldn't have all that old debt weighing you down with the high interest rates the IMF charges, and you wouldn't have to sell off National Assets to the Big Money Boys to pay the debt & the interest.
As to economic systems - We know Keynesianism doesn't work. And given the greed of humanity, it's a pretty safe bet that unregulated freemarket won't work either, being just the other side of the same coin. To my way of thinking, the only workable system would have to be regulated free market system. We know that properly regulated free market economics works. How do we know? Because in 1933 and subsequently, that's what FDR somewhat reluctantly installed and it did a bang up job of running the US economy through good times and bad, and turned the USA into the wealthiest nation in the history of man, and managed to churn that wealth between rich and poor fairly effectively.
The US Economy started to unravel when Nixon abrogated the Bretton woods Treaty and went off the gold standard - allowing the free printing of fiat currency by the FED.
So... why would "leaders" of a nation do this ugly thing promoted by the Shock Doctrine crowd to their people and their nations?