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John Frum And The Cargo Cult Of Debt

Politics / Global Debt Crisis 2013 Oct 06, 2013 - 01:13 PM GMT

By: Andrew_McKillop


Wikipedia tells us the Melanesian cargo cult called John Frum arose in the late 1930s, in Vanuatu which was then known as the New Hebrides. The movement was heavily influenced by the existing cult practice of worshipping Keraperamun, a god associated with Vanuatu's highest mountain, Mount Tukosmera. Here, we can already wheel on the Japanese cult of calling anybody friendly and worthy “Fuji San”, or my soul brother Fuji – named for Japan's Mount Fuji which has magical powers. 

Can Japanese debt be built higher than Fuji? According to prime minister Shinzo Abe the answer is yes, yes and yes. Placed end-to-end in the form of Japanese 100-Yen banknotes, its present national debt can already cover a round trip to the Moon!

Back in Vanuata the problem wasn't national debt – they had a complicated inflation-free system of corals and shells as different types and series of moneys. Those possessing the highest-value series wielded traditional power. How do you over-print and overissue sea shells and corals?  The John Frumsters, in some versions of the local Vanuatu story, claimed they had repeatedly seen a person called Manehivi appearing in Western dress and calling himself John Frum. Under this alias, he promised the natives houses, clothes, food, and sea transport to islands containing the highest-value and rarest sea shells and corals. They could become powerful if not rich almost overnight!

Not surprisingly, this particular John Frum cult, which spread across Melanesia by the end of World War II, also included the promise made by John Frum to believers that all white people, including missionaries would disappear from the New Hebrides, and all their possessions would revert to native people. Adding a touch of the more recent al-Qaeda cargo cult, some versions of the John Frum cult said that for Melanesians to benefit from the New Millenium, they would have to reject all trappings of European society. This started with Western education, Christianity, European work practices – and identified European money as an especially evil influence.

The John Frum cult had and has many local variants. In Papua New Guinea, for example, the cult rapidly grew during the Japanese military occupation of northern New Guinea because local John Frumsters had preached and predicted that airborne flying machines would drop prized goods like corned beef and rifles on a seemingly random basis. The local cult therefore moved on to building model landing strips and parachute drop zones. In other parts of Melanesia the cult progressed through making extreme sport contests a part of its ritual. Elsewhere it progressed by preaching and then building novel seaborne craft able, in theory, to sail anywhere and bring back high value shells.

One of the first things that invading American military forces did when driving out the Japanese military from Melanesian islands was to construct air bases. Runways, control towers, hangers, and all of the other things involved in a military air operation were the first priority. The first planes to land were cargo planes bringing all of the necessary stuff to maintain the military presence. Food, clothing, medicine, construction materials, and other merchandise not directly combat-related were included as a necessary part of the shipments. Much of these materials were shared with the local populations, starting with John Frumsters whose cult had predicted this would happen. US military personnel were specifically instructed to be generous with the locals whenever it was possible.

The cult went viral. Throughout Melanesia, especially in Papua New Guinea building landing strip shrines with model aircraft and control towers became a major feature of the practice. The American air war in the region had delivered unprecedented wealth to the indigenous populations, who also quickly learned to use disused shipping containers and damaged airplane carcasses to build more seaworthy vessels, firstly to improve their fishing catches. The age-old spectre of starvation, the main prop to existing and competing traditional religions and cults, was kicked away. Very important to the cult, the Americans simply disappeared at the end of the war – as John Frumsters had predicted.

This cult concerns all developed countries, and almost all emerging economies, today. It can be called Stimulus Spending – and is a cargo cult.

Melanesian cargo cults completely inverted the role of aircraft and landing strips. The cargo cult practitioners built the strips, however rudimentary, believing this would firstly create airplanes carrying cargo, and then entice or force them to land. They built things for which there is no actual need, hoping that their mere existence would mysteriously create or enable wealth to come from on high.

The Keynesian version as applied in China, for example, features the construction of dozens of all-new cities in far-flung regions on the belief or hope they will somehow, almost instantly be filled with energetic and industrious people and commercial ventures. But nothing happens. Spain after the collapse of its ultra-keynesian housing and property bubble, in 2008 now has endless thousands of unoccupied, finished and part-finished houses, apartments and property, with no inhabitants.

The often frenetic, always farcical Global Warming crisis “agenda” is used to justify huge spending on the green energy wet dream, creating ever more energy supply capacity despite national energy demand being stagnant or in decline. Great men such as Bill Gates and Al Gore claim that geoengineering must be used right away and at fantastic cost, to fend off the damaging and pitiless warming of the planet that fossil energy is causing. So we must have more fossil-plus-green energy supply capacity because - of course “only during the transition” - the fossil capacity will go on being used.

The money spent on feel-good Stimulus cult goods, services and even entire new industries is never conceived as being possibly used somewhere else in our economy, to create goods and services for which there is an existing real demand. The magic of debt makes this nonsense possible.

The problem is we have the bill to pay for the money borrowed, with no visible means to pay it off. People did not flock to urban areas during the Industrial Revolution because there were pretty roads and smart high speed bullet trains and shiny airplanes to bring them to the cities. The roads and the improved transportation infrastructures were built later because of the economic activity that preceded them, not as an enticement to create the economic activity.

Melanesian cultists who had rapidly moved to accept the John Frum cult previously believed in wealth and money systems where different series and types of money, in the shape of shells and corals, was always available but never in surplus. Besides, those who held the highest-value series only wielded traditional power. In the keynesian version untold wealth but no power flows to the bankster, broker and trader fraternity – because as they say at the stoke of the Talk button, they obey mysterious “market forces” which oblige them to gamble the chaff money they receive free of charge, on the casino tables of high finance. And lose it while enriching themselves, of course.

The Keynesian borrow-and-spend cargo cult, in the de-industrialized debt-based consumer societies holds that money printing, in the US case $85 billion-a-month handing it straight over to the banksters and Wall Street, will magically trickle down to the bottom 97% of the population. With no surprise this doesn't happen, as anyone sane who lives in the real world could have predicted.

My rich and lucky neighbor buying a Porsche and a bunch of stuff made in China does not generate income for me unless I work in a Porsche car plant or (even worse) a Chinese sweat shop, or if I own shares in Porsche and WalMart or maybe Shanghai-listed stocks. Since at least 97% of persons in developed countries do not assemble things in Germany or China, and at least 97% don't own enough shares in any company to generate meaningful income, the Keynesian cargo cult is an abysmal failure at “stimulating” the economy.

For building up debt mountains higher than Mounts Fuji or Tukosmera it is a vast success. How we repay them is just not explained by Keynesians except by their dance-round-the-fire singsong party, where Magical Growth rises from the campfire alongside the roasted chicken kebabs, as we shimmy to an editorial rant from Paul Krugman.

Whether its the US Fed, Europe's ECB, the Bank of Japan, the Bank of England or the Indian and Brazilian central banks the first trick was to inflate housing through the roof – but the roof fell in. The trick's rationale or philosophy, or fond hope was that greedy homeowners would infect the whole population with their greed-for-more, and generate a so-called "virtuous cycle". This virtuous or evil cycle would rack up home prices and lead to millions of homeowners rising above water and having “positive equity” – which they would then use to buy a Porsche or Chinese stuff, and blitz the rest on the stock market until it collapses, when the banksters decide to pull the plug.

And you thought we were less stupid than Melanesians?

By Andrew McKillop


Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2013 Copyright Andrew McKillop - 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 advisor.

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