Best of the Week
Most Popular
1.War on Cash, Bank of England Planning Hyper QE, Scrapping Cash for Digital Currency - Nadeem_Walayat
2.Stock Market End Run Smash Crash Looks Imminent... - Clive_Maund
3.Europe Refugee Crisis, UK to Repatriate 120,000 Hungarian Economic Migrants Back to Hungary - Nadeem_Walayat
4.The Great Deflation Will Destroy All Bubbles – These Too - Harry_Dent
5.Deflation Signals Abound for U.S. Dollar, Forex Markets and Commodities - Rambus_Chartology
6.U.S. Housing Market Two Outs in The Bottom of The Ninth - James_Quinn
7.Poland, Czech, Slovakia and Hungary Refugee Hypocrisy After Flooding UK with 4 Million Economic Migrants - Nadeem_Walayat
8.The Two Real Reasons Crude Oil Prices Are Currently Slipping - Dr. Kent Moors
9.R.I.P. Interest Rates - Andrew Snyder
10.Steps from a Deep October Stock Market Selloff - Bob_Loukas
Last 5 days
Theresa May Declares War on Immigration - Conference Speech Full Transcript - 6th Oct 15
Is Russia Plotting To Bring Down OPEC? - 6th Oct 15
Target Date Funds As Aid In Retirement Investment Portfolio Design - 6th Oct 15
Stocks Bear Market Apocalypse Imminent Crash Gets Nuked Again - 6th Oct 15
Redesigning Internet and Facebook to Explore Their Full Potentialities... - 5th Oct 15
Nightshades Curb Your Enthusiasm - 5th Oct 15
U.S. Recession Watch, High-Yield – Rising Defaults - 5th Oct 15
The Social Challenge to Find Humanity in Capitalism - 5th Oct 15
Fed Interest Rate Hike: "I don't care. It doesn't really make much of a difference" - 5th Oct 15
Gold Rose 2.2%, Silver Surged 5.4% After Poor Jobs Number On Friday - 5th Oct 15
Gold, Silver Precious Metals: a Critical Week Ahead - 5th Oct 15
Stock Market Correction Still in Force - 5th Oct 15
Gold Price Change in Character - 5th Oct 15
Putin’s Blitz Leaves Washington Rankled and Confused - 4th Oct 15
More Selling for Stock Market, Gold? - 4th Oct 15
Gold And Silver – A Reality Check - 3rd Oct 15
Stock Market Primary IV Still, or Primary V Underway? - 3rd Oct 15
The Oil Industry’s Day of Reckoning - 3rd Oct 15
U.S. Interest Rate Hikes Keep On Slippin' Into the Future; Treasury Yields Sink Again - 3rd Oct 15
China's Stock Market Crashing; Time for Panic or Restraint - 3rd Oct 15
SPX Stocks Bulls Struggle to Regain the Upper hand... - 2nd Oct 15
The Two Faces of Stock Market Volatility - 2nd Oct 15
Money Supply and the Fed’s Serious Inflation Risks - 2nd Oct 15
Stock Market How Bad Can This Get, And How Fast? - 2nd Oct 15
A Worrying Set Of Recession Signals - 2nd Oct 15
Negative Jobs Report Sents SPX, TNX Lower - 2nd Oct 15
Don't be Fooled by the Recent Equity market Rallies. Its a Bear Market, Stupid! - 2nd Oct 15
US Bond Market - How to Fix This - 2nd Oct 15
Survival Secrets from Colorado Resource Investing Front Lines - 2nd Oct 15
What Two Risks From Rising Interest-Rates Could Each Trigger A New Global Crisis? - 1st Oct 15
Stock Market S&P 500 Volatility-Based Price Probability Range - 1st Oct 15
Dow Stock Market About To Crash Like October 1929? Get Your Physical Silver - 1st Oct 15
Stock Market Negative Expectations Once Again - Will It Break Down? - 1st Oct 15
Advice for Biotech Investors: 'Hold Your Powder' 'til Winter - 1st Oct 15
Best Short-Term Commodity Market Opportunities - Video - 1st Oct 15

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

Elites Deterrence is Dead

Politics / Eurozone Debt Crisis May 19, 2012 - 11:42 AM GMT

By: Ashvin_Pandurangi


Best Financial Markets Analysis ArticleWith Greece potentially on the brink of exit from the Eurozone before year's end, a lot of analysis out there has turned to what the consequences of such an event would be, and, specifically, what punishment Greece would receive from the EU and other international organizations, such as the IMF and perhaps even NATO. The general line of thinking here is that Europe will make such a devastating example out of Greece that no one else will dare to question the status quo setup ever again. While Greece is dragged down the Green Mile in shackles to its final destination, all the other prisoners will watch with an unmistakable sense of dread, and the ceiling lights will ominously flicker as the "juice" is turned on, electro-frying Greece into a crispy black corpse.

October 23, 1909. New York. "Duelling with wax bullets." Paintball 1.0. 5x7 glass negative, George Grantham Bain Collection.

In a recent Telegraph article by Ambrose Evans-Pritchard, the views of analysts at Bank of America and HSBC are outlined, and they just so happen to fit in very nicely with the above narrative (one that will only become more common in the coming weeks). First, they say that global markets will rally on a Greek exit due to the massive response it precipitates by the ECB, Fed, BOJ, EU and other Eurozone governments - coordinated currency swaps, ECB interest rate cuts, ECB QE, Fed QE, SMP purchases of Spanish and Italian bonds, capital injections into Euro area banks and a "pan-European system of deposit guarantees", among other things.

They are relying on the quite cliched argument that BAD = GOOD in this market system, since the centralized authorities will unleash every tool at their disposal when the going gets rough. The other critical part of this bankster-floated narrative is that the Euro area will become better, faster and stronger once Greek is thrown overboard and left as chum for the sharks. Not only will the central institutions manage to prevent systemic contagion via the tools listed above, but the remaining member states will be scared shitless and will therefore do whatever they are told to do in exchange for remaining shackled to the new and improved Eurozone.

Here is a short passage from the Evans-Pritchard article (he is referencing the views of David Bloom, currency chief at HSBC):

Global banks see market rally on Greek exit

Mr Bloom said the ECB is playing a game of chicken by waiting until it has secured maximum compliance from EMU's wayward states before coming to the rescue. "Once again it is holding everybody over the edge of the abyss until they scream for mercy," he said.

A currency union without the encumbrance of Greece would be viewed as a stronger bloc by investors, but much would depend on events in Greece itself.

If a return to the drachma proved to be a "ruinous experience" for the Greeks – as HSBC expects – if would mightily deter Portugal, Spain, and other from such temptation.

The worst outcome for euro and monetary union would be a double whammy where the authorities fail to control EMU-wide contagion, yet Greece somehow manages to claw its way out of crisis and make a success out of a devalued sovereign currency, as Argentina did after breaking the dollar-peg in 2002.

The world according to HSBC is simple here - the European people are destined to wake up from the EU nightmare if Greece exits and manages to do well for itself (naturally), especially if the other Eurozone members follow in its footsteps and start planning for a new, anti-Euro, anti-bankster beginning. In order to avoid such a pleasant outcome, Europe must hope that both financial and psychological contagion is squashed immediately by the globalist institutions, and Greece is kicked in the skull so hard and so swiftly that it never recovers from the blow. Banks like BoA and HSBC want the head of Alexis Tspiras on a pike, bandied about from country to country as a stark reminder not to cross the callous elites whom they serve, and they also want everyone else to believe such tactics will be effective as the Final Deterrent.

I am here to remind you, though, that the reality of our situation is NOT what they would have you believe. Their arguments may be convincing when framed in a world of stability and expansion, but they completely break down in our current era of instability and contraction. The functions of Michel Foucault's "discplinary society" and Guilles Delueze's "control society" are rapidly becoming obsolete, as the institutions of global society can no longer leverage and arbitrage the peoples' fear and willful ignorance against them. In short, and for all practical purposes, the large-scale civilization's strategy of achieving conformity and normalcy through deterrence is dead.

When the Greek people finally exit the EZ, and if/when they are made to SUFFER at the Cross for their "sins", the Spaniards, Italians, Portuguese and Irish (and eventually, the French, British, Germans, Americans) will look on and realize that the Cross is not such a bad fate when compared to the tons of flesh that will be demanded by the globalist elites in perpetuity. In the short-term, it is quite possible that the bankster propaganda-and-punishment cycle succeeds in quelling further internal dissent within the Eurozone, but any such success will amount to nothing more than castles made of sand on the shores of a ravaging sea. As the tides of popular resistance continue to turn and grow with force, these castles will eventually crumble.

The Spanish are already suffering unemployment rates just as severe as those of Greece (25% of population, 50%+ of youth population), and their economy has been locked out of credit markets at just about every scale (households, businesses, regional governments). When Greece is ousted and the Eurocrats ride in to Madrid on their white steeds with promises of conditional backstops and bulletproof memorandums, it will be almost too late. No one will believe that the Powers That Be in Europe can do anything more for the people of Spain than they did for the people of Greece (bankrupt them and leave them to die).

This death of deterrence is as clear in the criminal justice system of the developed world as it is in the economic and geopolitical spheres of the Eurozone. Once a large enough portion of a population has been financially, socially and psychologically reduced to rubble, it becomes exponentially more difficult to scare it back into "playing by the rules". I mentioned in the TAE comment forum that the death penalty does not act as much of a deterrent to criminals in U.S. states which also carry the penalty of life in prison without parole (an assertion that has been studied to death by criminologists), but this issue goes much deeper than that.

The threat of state and/or federally-sanctioned punishment in EVERY realm of society is losing its credibility as time goes on and the pain of the disenfranchised masses festers like an untreatable infection. This is why Iran will never back down from their ability to pursue nuclear energy/weapons technology in the long-term, no matter how many theaters of war the Western powers decide to open up in the Middle East. It is why the growing police states in the West will always encounter some significant force of resistance, no matter how many people they assassinate or imprison without due process in FEMA camps or other pre-planned destinations. Yes, there will no doubt be many people who end up submitting to status quo out of fear (perhaps a status quo disguised as "something else"), and will continue to actively or passively support it.

Still, it is undeniable that a percentage of the masses will choose to defect/resist - a percentage that will surely make the globalists quiver in thier boots - because the other choices they are left with are dreadful and degrading beyond imagination. This is also why the Cold War era, game-theoretical fantasy of Mutually Assured Destruction will no longer function coherently in the near future. That is a scary prospect, but one that we must learn to live with. When pushed into extreme situations, and backed into corners with no apparent way out, people will resort to desperate and extreme measures for their perceived survival.

It is all part and parcel of an industrial, imperial, global capitalist system that has entered its terminal stages of decline - stages which will present us with grave threats, frightening prospects and unique opportunities. The traditional deterrence narratives spun by the elites will only work for as long as we choose to empower them; to validate them as persuasive arguments (like AEP does), rather than the putrid propaganda that they really are. Banks like BoA and HSBC, and, lately, analysts such as AEP, have been thoroughly immersed in this global propaganda campaign being waged for ALL the marbles, whether they know it or not (I suspect many of them do).

We must recognize, point out and discredit their myths every chance we get, because they already gained a huge head start in embedding them within our political culture. If we choose to believe that minority pockets of people on this Earth hold unparalleled amounts of power over individuals, families, communities and societies, then they will keep us deterred from freedom until it is much too late. But the reality that the elites want to see materialize is NOT the reality that they will get - if only we remember to always accept the truth and reject everything else which sullies its name.

Ashvin Pandurangi, third year law student at George Mason University
Website: (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

© 2012 Copyright Ashvin Pandurangi to - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2015 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History