WHAT RICE SHORTAGE? SACKLOADS CAN FILL MOUNTAINS!

Bro. Erle Frayne D. Argonza

[Writ 03 May 2008, Quezon City, MetroManila]

Good day, Fellows!

You see, if you’re going to beg (panic buy) from any rice trader in Cagayan Valley (northern Philippines) for some rice, accompanied by your melancholic look like as if all rice will disappear from Earth very soon, the stunned trader would most likely say, “you’re asking only for a few rice? By golly we got mountain loads of them here!” “What? You say there’s a shortage of rice? Tell that to the Marines! What a Big Lie, this shortage!”

 

Development partners, peace builders, this is the latest news update I got on the ground. A structural  engineer up north, who contracts projects for the Department of Agriculture, laughed with guffaws about the ‘shortage lie’ as he narrated to me his fresh reportage passed on to him by traders. There’s plenty of rice to last for months, for Christ’s sake!

 

Look at what the organized chaos had done so far here in Manila and other regions. It had made the poorer more pathetic as they have to line up for supposedly cheap rice, made to believe as they are by public relations Pied Pipers that rice is going to run out soon. We’re almost near to stampedes here already, thanks heavens there’s still some dignity left among our poor folks they won’t stampede for rice alone. They would do that for a Wowowie TV program that promises to turn them into millionaires overnight, but to stampede for 5 kilograms of rice? Hello! Our folks are too civilized to buy that bullet.

 

To continue, listen to what some traders said: “Kabayan, how tragic this shortage lie had done not only to our poor but to us traders. We got so huge stocks in the warehouses, but now we cannot just bring them to Manila for unloading, afraid that no retailer might buy them because suddenly their wholesale prices are sky high. So now even our pockets have to wait for the more stable days. Sad!”

 

That’s the real picture at ground-level, Partners in development & peace. THERE IS NO RICE SHORTAGE. The shortage was stage-managed. Whether the theatrics was designed overseas and spilled over here, or that it’s only a domestic script is something worth investigating. Our intelligence community should get busy getting to this business of pinning down who staged managed what.

 

Meantime, the Thailand & Company (states) that cartelized rice recently has done an act that now seems reactive. It is pure and plain panic, disguised as anything worth the ‘rationalization’ of the rice sector. True, for a time this measure can stabilize rice price and bring it down a bit. But now, this company has to prove itself worthy to the global community that its cartelization effort—state-sponsored, using the nation-state as mediating instrument—will make rice available to rice-consumers at relatively reasonable (note: cheap is out of the question) and sustained supply.

 

If the Thailand & Co will fail to meet global expectations, its member-states will be stoned with fiery embers of public wrath. And that is because, by placing themselves in the line of fire between the global consumers (who were the ‘victims’ in the shortage game script) and the global financiers-speculators (the real culprits in the criminal rise of price rice and stage-managed shortage), the national cartels will be the vent object for public ire. And there it goes, the real culprits go unnoticed and unpunished.

 

The real story of the price fluctuations in grains and foods in general is that many hedge funds and related financiers decided to park their money a bit in food for their commodity futures operations, eventually driving prices higher up. The reason being that it’s safer to park and earn money in food, period. Look at how the hedge funds were burnt out by their over-exposures to the subprime housing in the USA, that’s enough a precedent for the same financiers to go to safer investment havens. Or else the various global stakeholders will focus their eyes on these gung-ho derivatives investors and ‘burn them at stake’ (criminalize in world courts, regulated via new global treaties and instruments).

 

And that’s where price stabilization would start later: regulate speculative finance, take down the ‘virtual economy’ based on predatory speculation, dismantle global monopolies, return to fixed currencies backed up by the gold standard, tax cross-border financial transactions, and so on. Quite a wish list for now, true. Crisis after crisis will bring us to their galvanization…and, returning to the ‘real economy’, there’ll be enough grains, cereals, staples for all the earth’s peoples.

A NEW GLOBAL FINANCIAL ARCHITECTURE IS MOST EXIGENT

 

Erle Frayne D. Argonza

 

[Writ 23 March 2008, Quezon City, MetroManila]

 

From the early 1970s through the 1990s, the massive liberalization of the international financial system was executed with such dynamism, radically altering thus the international financial landscape. Look at the result of this gargantuan liberalization today: global economic catastrophe.

 

New Nationalism, in collaboration with old nationalists, socialists, and ideologies that articulate the interests of marginal sectors, argues for the immediate reform of the international financial system. It had to be admitted by everyone else that the system failed, it simply cannot be sustained under a regime of liberal capital, monetary and related financial policy regimes.

 

Both the USA and EU economies today are particularly affected by the failure of financial liberalization. The ‘virtual economy’ had taken over their respective domains, they were so badly de-industrialized notably the USA’s that there may no more be a semblance of once flourishing industrial economies there, their infrastructures are rotting and collapsing, and now the final death blow to their economic wellness had come as recession ravages like uncontrolled forest fire there.

 

On the international level, the problem can be addressed by convening at once the legitimate delegates of states, with market and civil society groups serving as observers. The task is to immediately reform the rotten international financial system, and concur a new global financial architecture. A ‘New Breton Woods’ would be apt as a label for this effort (to borrow from the economist Lyndon LaRouche).

 

The most urgent agenda is the re-examination of national currencies, return of the gold reserve standard or equivalent, institution of better regulatory mechanisms both of cross-border and  national levels, immediate economic recovery by provision of long-term low-interest rated financial instruments or ‘white knight’ finance, and clipping the predatory powers of greedy financiers such as hedge funds and ‘vulture funds’ operators.

 

A special topic would be the stock markets of each nation or region. It is now time to reform the stock markets, which have been used by greedy elements to loot national coffers and the public of direly needed financial resources. If the stock markets can’t be reformed, then the option for them is to face increasing ‘guerilla finance’ by groups that will seek to establish direct links between the market players who seek new capital funds and the potential investors from among the general public. In which case, if the latter succeeds, the stock market is out to die a painful dinosaur’s death, ditto for all those predatory stock traders whose role will become extinct overnight.   

 

The fundamental contention for the reform package, culled from the New Nationalism article, is reflected below.

 

Reform the international financial system.

 

The global financial system is indubitably a homestead of predatory financiers. Usury and global speculation, the masterpieces of financiers, are the enemies of nations. Usury in international finance is at an all-time high, raising questions about the legality and moral propriety of   current lending practices. Incidentally, the said financiers are the ones who exercise the clout within the International Monetary Fund and the World Bank, whose chiefs have always been CEOs from the bank headquarters of the financiers. The said banks have always acted out as the marketing agents of financial cartels, even as many nations that have followed the austere ‘structural adjustments’ imposed by them have been reduced to paupers.

 

It is high time for ‘white knights’ to appear in global finance, lending money accordingly for developmental and investment purposes at very low interest rates (lower than 1.5% annually) and at very long-term payments (25-50 years). Such institutions are now beginning to appear, but creditors remain cautious about their moves. Such institutions are autonomous from the power orbits of the Western financial cartels, are well niched in Asia (e.g. China), and appear to be creditor-friendly.

 

The reform though should go beyond the ‘white knight’ route. We must actively participate in Asia’s establishment of its own monetary fund and a single-currency regime, and take a leading role if opportunities allow. It may prove beneficial yet to re-institute a regime of gold reserve standard, which should back up the Asian currency. This same monetary fund will then serve as the regional ‘white knight’ that will provide credit to nations in need in the region and continent. The actions will also accelerate the economic cum political integration of the ASEAN and the economic integration for the entire East Asia, steps that will further stabilize the national economies and continuously sustain their respective growth. Meanwhile, a regional currency can stabilize soon enough upon its launching, that it would be a difficult job for criminal financiers to manipulate it, such as the success of the ‘Euro’ now exhibits to the globe.

 

Still another key intervention measure is the control of predatory speculation through a ‘Tobin tax’ on cross-border currency and related purchases (J. Tobin’s proposal in the early 70s). A tax of 0.75% alone on the current cross-border exchanges, which amounts to $300 Trillions annually, would generate $2.25 Trillions. The said money will then be used to fund the operations of international organizations such as the United Nations, UNDP and authentic international NGOs for social development purposes. The money can also be used by ‘white knight’ financing institutions of international scale. This set of actions will then induce reforms in the other institutions, with chain reaction effects leading to declining speculation in the long run, as the oligarchic  bankers/financiers adjust their rates to more competitive rates in the face of challenges coming from global ‘white knights’.

NATIONAL BANKING & FINANCIAL-MONETARY REFORMS

Erle Frayne D. Argonza

 

[Writ 23 March 2008, Quezon City, MetroManila]

 

Who really is in control of a country’s central bank? Is the Bangko Sentral ng Pilipinas really in the hands of the people of the republic, under the guidance of the Constitution of the Republic? How come we cannot even see a shadow of any of the Letters of Intent of the International Monetary Fund that were supposedly deposited in the central bank here?

 

National banking has to be strengthened, the sovereignty of the Constitution over the banks have to be re-asserted here, and in other countries where this is applicable. I would quite say it strongly, that the Bank for International Settlements, the central banks that comprise it, and the IMF-World Bank group do not represent the interests of nations and marginal groups at all. They are appendages of the global financier oligarchy and remain to be weak vehicles under the direction of financier families and figures lurking in the shadows.

 

Look at how the Bangko Sentral ng Pilipinas had been systematically looted in the past, and who knows the trend continues till these days. For serving the interests of global oligarchs well, the core officials here conceal eventualities of looting under the cover of doctored accounting reports. We don’t even know any more the exact quantities and values of gold reserves here. There was massive looting of gold bars here, and who knows the trend continues.

 

There is no transparency concerning the monetary-financial-capital markets and institutions in the country and others. This had been clearly established by so many studies done in the past. Instituting transparency alone isn’t enough to strengthen these institutions.

 

The re-assertion of the central banks’ sovereignty must be done without reserve. In the Philippine case, it is the IMF that has been in control of our central bank and monetary authority. In the USA, the top financier families are the ones who really own and control the federal reserve there.

 

Where necessary, the need to institute financial-capital-monetary controls must be undertaken. Also, there must be a strong consideration for instituting an Asian Monetary Fund here, with an Asian currency backed up by gold reserves. The return to the gold standard, though in revised form, should be strongly studied and considered.

 

Without such reforms, the currency of a nation will always face the risk of being attacked by predatory underworld criminal groups tasked by their financier sponsors to destroy the same currency. Destroy a nation’s currency, and you will destroy the nation as well. Keynes and the Old Nationalists were clear about this, a contention that was amplified by the economic collapse of the Weimar republic, which saw monstrous hyper-inflation, and the scourge of depression that struck the economic giants UK, USA and Germany then.

 

This essential contention of nationalist economics must be re-echoed and re-studied. Its application though must be revised to suit the emerging context. For instance, the viability of instituting a regional currency, as exemplified by the Euro, has become a regular staple of monetary reform.

 

The excerpts from the New Nationalism article regarding the matter is reflected below.

 

Strengthen national banking and the monetary system.

 

Economic stability at all levels demands the strengthening of a national banking system, and concomitantly the strengthening of monetary system with sovereignty-backed parameters and rules. First and foremost of monetary missions is the re-assertion of the powers of the Constitution of the Republic over the Bangko Sentral ng Pilipinas. Needless to say, the country today faces a weak national bank, and necessarily a weak monetary system engendered by it. Sovereignty questions impede the effective operations of national banking in the country, as indicated by the excessive meddling of the International Monetary Fund, acting as agent of the global financial cartels, in the Bangko Sentral’s operations. The first step should be a thorough investigation by the Congress of the Republic to determine precisely who owns and controls the Bangko Sentral, and conduct related oversight functions to assess the entire consolidated assets of the said bank inclusive of unaccounted precious metals.

 

Should there be a need to institute maximum monetary controls, the national bank should be mandated by the Congress precisely to exercise such controls through a regime of currency controls, where found warranted. In no way should our national currency be subjected to attacks by predatory financier speculators, as what the latter have been doing from the mid-1997 onwards. Money is the lifeblood of the economy, and rendering our money under a regime of free exchange rates and free trade leaves us extremely vulnerable to the machinations of such greedy forces, further weakening our national economy. Monetary controls are the best antidotes to the ailment of a weak currency. Were it possible to revive a system of gold reserve standard, then let such a strategy be studied and enforced, to ensure stability in monetary concerns and the currency markets.

 

The interest rate controls should likewise continue, but the state must see to it that the rate regimes are within the bounds of sovereignty parameters, representing thereof the national interest and the subsidiary interests of the various social sectors. And, should conditions warrant, our national bank should be among the key initiators for constituting new supra-national institutions, such as an Asian Monetary Fund, thus signaling our participation in reforming the entire financial & monetary system (see below). Our involvement in an Asian Monetary Fund could be a fitful strategy to finally exit from the International Monetary Fund, further strengthening our national banking and monetary system.