Moon of Alabama Brecht quote
May 05, 2016

One Way The White House Manipulates

A portrait of Obama's spokesperson and policy guru Ben Rhodes explains how government propaganda works. This part is about selling the Iran deal to the U.S. public:

As Malley and representatives of the State Department, including Wendy Sherman and Secretary of State John Kerry, engaged in formal negotiations with the Iranians, to ratify details of a framework that had already been agreed upon, Rhodes’s war room did its work on Capitol Hill and with reporters. In the spring of last year, legions of arms-control experts began popping up at think tanks and on social media, and then became key sources for hundreds of often-clueless reporters. “We created an echo chamber,” he admitted, when I asked him to explain the onslaught of freshly minted experts cheerleading for the deal. “They were saying things that validated what we had given them to say.

When I suggested that all this dark metafictional play seemed a bit removed from rational debate over America’s future role in the world, Rhodes nodded. “In the absence of rational discourse, we are going to discourse the [expletive] out of this,” he said. “We had test drives to know who was going to be able to carry our message effectively, and how to use outside groups like Ploughshares, the Iran Project and whomever else. So we knew the tactics that worked.” He is proud of the way he sold the Iran deal.

You can replace the "Iran deal" with "regime-change in Syria", "Russia's aggression" or some big trade deal the White Hosue wants to push through. It works the same way with every issue. Some experts in some (well paid) thinktanks get fed some juicy bits, they go out to cheerlead clueless reporters who then write whatever validates the various White House claims.

It is all test driven and works. Unless of course people have time and energy to inform themselves through other than the usual sources. Only few are able to do so.

Posted by b on May 5, 2016 at 19:19 UTC | Permalink

« previous page

Nobody | May 8, 2016 3:11:06 AM | 98,

When the butcher calls on me on June 5th to get his $110, the amount of money in circulation is not reduced by $110. The butcher has it.

Posted by: MRW | May 8 2016 12:05 utc | 101

@98 nobody, 'The fraud is making Governments borrow money when they have the sovereign right to use seignorage to fund their deficits (if they have their own currency, and no it doesn't mean that taxes are not required)'

I agree absolutely. Creating New Money. No reason why the financiers should be allowed to take a piece of every dollar in circulation, their three-card monty game, lending funds by creating bank deposits that show up in their reserves that then allow them to rinse and repeat included. The last scam is much bigger than the game at treasury. Their goal is to insert themselves as creditors collecting interest in the middle of every transaction on earth. They are economic parasites, and we need to eliminate them. Banks should be restricted to lending funds they have on deposit, leave the creation of credit to governments, who can do so cost free.

Posted by: jfl | May 8 2016 12:06 utc | 102

Thanks, Formerly T-Bear.

Posted by: MRW | May 8 2016 12:08 utc | 103

@Nobody | May 8, 2016 3:11:06 AM | 98,

Well I certainly agree with this (which you appear to as well):

"The idea that a sovereign nation should have to apply to an individual to maintain it's credit is patently ridiculous"

Which makes me wonder how you could make this statement:
The fraud is making Governments borrow money when they have the sovereign right to use seignorage to fund their deficits (if they have their own currency, and no it doesn't mean that taxes are not required).

You have the causation wrong. You need to start at the beginning.

Let me say this one more time:

The US federal government SPENDS FIRST. Its sovereign right. That [spending] creates brand-new interest-free money in the economy. Government money does not come with an offsetting liability. It’s called “debt” because the federal government has to “account” for it, so it’s accounted for on the right side of the ledger. . .under the Liabilities column. But no citizen has to pay it back. It’s ours to keep.

Banks cannot create new interest-free money. They create credit money. Just as I created credit money when I gave you the IOU for $110. Or you create new credit money everytime you use your credit card. But we all have to pay those debts back, and with interest.

All credit money nets to zero (0) across the system. All credit money has offsetting liabilities. When you pay the money back, you extinguish the debt.

Not so government money (aka base money). When the government spends, it creates the currency in the real economy. It creates new money.

Posted by: MRW | May 8 2016 13:05 utc | 104

@ MRW | May 8, 2016 9:05:58 AM | 104

Anthropologist David Graeber's recent book: "Debt: The First 5,000 Years", ISBN 978-1-61219-419-6 has a superior narrative on the origins of both credit, debt and currency (a.k.a. money) that is factually based, unlike the 19th century conjectures (barter systems) that most economic theories are based. Credit (and debt) predate currency in the archeological records now available. Graeber's thesis eliminates much of the confusion now darkening economic understanding and take a lot of the dismal out of economics. Fantastic reading as well if that is important.

Posted by: Formerly T-Bear | May 8 2016 13:49 utc | 105

@Formerly T-Bear | May 8, 2016 9:49:08 AM

Graeber’s book is great. The whole barter system nonsense was made up out of whole cloth in the late 19th C, as far as I know. Forget the guy’s name. And people fell for it because they were enamored with the whole noble savage idea and thought anyone with a dark skin could only count to 10.

Me: side comment.
99.99% of Americans, today, who even understand what double-entry accounting is have no clue that it was the brilliant Islamic scholar Ibn Khaldun who invented accounting in the 11th or 12th C. Hell, Americans have no clue that it was Black Muslim North Africans who introduced culture, science, mathematics, jurisprudence, architecture, astronomy, historicity, literature, civil engineering, libraries, universities, and navigation to a dark, dumb Europe. What Islamic Science did between 700 AD and 1500 AD advanced the world like no other period on planet earth. But they’re all towel-heads now, aren’t they? Christians rewrote their history and claimed all their inventions for themselves. (Incidentally, that's why the black slaves brought to America, almost all Muslims, were banned from learning how to read or write--the Islamic edict to acquire knowledge--for over 200 years; they’d find out their history.)

Look at the Sumerians. 5500 years ago, according to historical records, they used clay tablets to record credit and debits in all their trades and agricultural sales, That was 1800 years (!) before the Greeks created the first coin in the temples.

But the best in recent history is Benjamin Franklin. He was the king of fiat money. The fiat was based on landholdings. Ever see this article? Benjamin Franklin And the Birth of a Paper Money Economy
It’s a good read. All the gold bugs today who clamor for the wisdom of the Founding Fathers know nothing about this.

Posted by: MRW | May 8 2016 15:47 utc | 106


Read Kalecki's Fable. Short and sweet.

Posted by: MRW | May 8 2016 16:05 utc | 107


You are wrong at multiple levels. Money is fungible, that's a key part of it's utility, so there is no difference between base money (which you somehow elevate since it's been created by the Federal Govt.) and credit money, once created they are the same.

The Federal Govt has borrow money to cover it's deficit, it does not spend interest free money into the system, and that's the key point, the absolute fraud.

The US did not go off the gold standard in 1932 (or whenever FDR went into office) what happened was that gold was confiscated from US CITIZENS only and the dollar was revalued, upwards obviously. look up Jim Traficant's congressional speech on the matter or watch his last interviews on youtube (but he doesn't elaborate on what he said in congress it was more than likely was a factor in his imprisonment, and he kept quiet about it since). Following this there was a "gold window" at the federal reserve and any non-us citizen could go up to and exchange US dollars for gold. Why it would be necessary to exclude US citizens from this??? This window was closed by Nixon (and you can find that announcement on youtube) and this was immediately followed by the oil "shortages" car-less days etc. which lasted for about 10 years (so what was the reason why the window was closed? DeGaulle had something to do with it) and then something happened in the late 70's early 80's which fixed it, what was that?

And lastly on the 5th of June the butcher tore up your promissory note which I had previously used (as if it was ( = fungible)) as real money. Paying down credit reduces the money supply, economic fact called deflation.

So tear up a few more floorboards and check out DeGaull's beef, Traficant's speech in congress, and if you watch Traficant's last interview he drops a few other nuggets as well about the topic of this thread, manipulation of the mind.

Posted by: Nobody | May 8 2016 17:53 utc | 108

|@ MRW | May 8, 2016 11:47:40 AM | 106

§ 1) It would seem less complicated to say that barter was the pre-existing condition and build a mythology upon that when certain knowledge does not exist. Look at the advancements in archeology, geographical exploration, etc. that were accomplished that period continuing until today. The number of reports concerning colonists going native puts suggestions of solely racist based mentality on shaky grounds as well as significant numbers learning native languages of the governed, although there would be significant portions having exactly that mindset, they were not usually at the vanguard of academic inquiry. So I slightly disagree with your ending as to why barter which dates back to Adam Smith's "Wealth of Nations" as I recall.

§ 2) If things a person had knowledge or familiarity with were drafted, most people these days would have a near blank parchment designated mostly "Tierra Incognita"; the result of an educational system in its final stages of decline. Reading early essays of Eric Blair (a.k.a. George Orwell) should be required reading for any studying to put letters after their name - he addresses some interesting observations on the decline of standards which are evident today. An interesting history by Barry Cunliffe, "Europe Between the Oceans: 9000 BC - 1000 AD", Yale University Press, ISBN 978-0-300-17086-3 that sheds significant light on European pre-historic and historic developments that predate the Renaissance. Aforementioned "Debt: …" is a good companion read to this.

§ 4) Thanks for the link, it appears to be quite informative although anything associated with the University of Chicago scholarship elicits an automatic suspect warning flag. Dr. Franklin made a number of trips across the Atlantic trying to negotiate with Parliament and the government ministers to ease the restricting effects of what was government policy now referred to as mercantilist. Adam Smith focused intently on this period in his "Wealth of Nations" as well which can be read as a tract tracing faults of the prevailing mindset mercantilism grew from. The biographies I have read of Dr: Franklin have reported more the political side rather than the economic so your link should be enlightening. Thanks.

Would append that the destruction of history that is flavour of the day will leave nothing available to mount a point of leverage to restore lost knowledge needed to conduct public affairs. It is as if belief in belief will provide sufficient protection - William Golding's tribe is nigh, Piggy take care.

Posted by: Formerly T-Bear | May 8 2016 19:24 utc | 109

This guy sounds like he is to the White House as Moon of Alabama is to the Kremlin.

Posted by: Louis Proyect | May 8 2016 22:53 utc | 110

@ all, especially mrw.. i am just here to learn.. i was reminded of an experience i had yesterday which will sum up my position on learning the in's and out's of money and finances here today.. a friend who is not a musician, but has always been drawn to music asked me if i would be receptive to writing a song for him based on a theme he had that he thought he could share with my - either by singing it, or feebly sharing it via a piano he has.. i said that i could do this for him.. he is 70 and believes he doesn't have the time to learn all that he needs to learn in order to compose a song which he would like to do..

i find myself in a similar position with regard to learning all the in's and out's of finance.. i look out on the world and 'believe' rightly or wrongly, that the system is rigged and doesn't benefit certain people or countries at the mercy of other people or countries.. as i said - it is a belief, so i am happy to be shown how i am wrong in this belief.. as i said before, i see the whole thing as a giant ponzi scheme, with the imf, world bank and bis working to perpetuate a system that doesn't favour the planet or have much in the way of any redeeming qualities.. i am mostly thinking of how to make a system more egalitarian - so one could accuse me of being an idealist or optimist, but not a realist.. i really believe for us to move forward on the planet, the present financial system in place has to be replaced with something different..

so here is my question, which i am not expecting an answer for.. how do those of you who feel you have a better understanding of world finance suppose this is going to come about, assuming for a moment you entertain me by going along with my subjective viewpoint on world finance? thanks in advance and especially to mrw who has always been a gentleman in trying to hold my hand and walk me thru this topic since we have had the conversation.

Posted by: james | May 8 2016 22:56 utc | 111

lol yuk yuk... you are now showing us how important you believe b's threads and commentary to be, in spite of the pale you try to cast in making this comparison..

Posted by: james | May 8 2016 22:58 utc | 112

@104 MRW, 'That [spending] creates brand-new interest-free money in the economy. Government money does not come with an offsetting liability. It’s called “debt” because the federal government has to “account” for it, so it’s accounted for on the right side of the ledger. . .under the Liabilities column. But no citizen has to pay it back. It’s ours to keep.'

Government spending is not interest-free as the treasury issues attest. Apparently you count it as interest-free because the interest is rolled over when it comes due, just as is the principle. Your stance seems to be, 'Hey, we're never going to repay any of this, therefore it's not debt', but that is in contradiction to the foundation of our economic house of cards as presently constructed. Our present dispensation is nothing but hot-air and bullshit.

Is 'money' a medium of exchange, a vehicle of credit, or a store of value? The answer is yes to all those questions, and treating 'credit' as distinct from the other two-faces of the goddess is flim-flam.

I don't know if it's yourself or us you're trying to convince of the solid basis for the present 'economic science' dispensation, it sounds as though you're in it yourself up to your ears, at least.


the guy's name was Adam Smith, according to Graeber.

@111, james

Wall Street Has Taken Over the Economy and is Draining It

LONG: Where does this lead us? What’s the roadmap ahead of us here?

HUDSON: ... Basically, financiers – the 1% – are going to pry away the public domain from the government.

LONG: Well I think most people, without understanding economics, would instinctively tell you they think that’s what’s happening right now, in some way.

HUDSON: Right. As long as you can avoid studying economics you know what’s happened. Once you take an economics course you step into brainwashing. It’s an Orwellian world.

Take it from Michael Hudson, james, who is an empirical economist, don't waste your time listening to the priests expounding the official dogma.

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
― Upton Sinclair, I, Candidate for Governor: And How I Got Licked

Posted by: jfl | May 8 2016 23:42 utc | 113

@113 jfl.. thanks.. i am bright enough to know that much, which essentially gets me in trouble, but thanks regardless.. i know the world is full of tricky and deceit and there is no shortage of it with the high priests of finance/economics... even a blind person once presented with the accounting hanky panky leading into 2008 could see this, and that is only one of the more recent examples.. that no one is held accountable other then the little people also speaks volumes.. thanks for the reminder and quotes regardless.. i want to know the way out.. at this point i will listen to anyone, especially if they start from the position of knowing the system is rigged..

Posted by: james | May 9 2016 0:47 utc | 114

jfl 62

in case u havent noticed,
msm has been gloating ecstatically, china is gonna have the largest christian community in the world soon !!

7000 ngo + 1billion brainwashed religious nutjobs = omFg, china is kaput !


i just chance upon your post !

Posted by: denk | May 9 2016 1:33 utc | 115

@115 denk, ' china is gonna have the largest christian community in the world soon ! '

I read about the catholics' role in China, what made the 'boxers' 'rebel', in Pierre Loti and elseewhere; read about the catholics in Long Bow in Fanshen by William Hinton; when I got to Chiangrai I discovered a booming catholic school, an 'educaional enterprise' ... founded by the remnants of the KMT from Burma. When CIA support for General Cash Your Check waned in the 1960s-70s they moved into Thailand.

It's no surprise to me to hear that, in the midst of the bourgeois revival in the Plutocrats Republic, the catholics ... no doubt evangelicals as well, from the looks of your snap ... are reviving as well. Probably the evangelicals and their prosperity cults, just like in LA CA USA ... la causa? China is like Vietnam, they won the war, built a great society, and then collapsed. Two steps forward, fifty years of progress, then one step back, 25 years of the capitalist roaders. I would be surprised if there weren't another revolution in China soon. The 'communist' party seems afraid of just that eventuality, I hear they are the ones behind the xtian revival? Snakes of the World, Unite!?

We need leadership. Let the heroes of the Chinese revolution rise again, and lead on! They don't need to kill the xtians, just see that they - as the bourgeoisie - are out of power.

Posted by: jfl | May 9 2016 15:55 utc | 116

@Formerly T-Bear | May 8, 2016 3:24:23 PM | 109,

Adam Smith wasn’t American. I should have clarified: I was talking about when the idea of barter entered the American lexicon by an American writer/speaker.

Thanks for the link, it appears to be quite informative although anything associated with the University of Chicago scholarship elicits an automatic suspect warning flag.

No shit. We think alike. ;-) I probably recoil faster than you. Spidey sense on Red Alert.

As for American knowledge of history? Ready for a little comic relief while you clean your desk? I see you spell ‘flavour’ the British or Canadian way. If so, you might not be able to see this in your region. And the American humor might strike you as jejune/jejeune.
Assume the position 101 2006

Posted by: MRW | May 9 2016 20:55 utc | 117

and in related monetary news - "US will never default on debt 'because you print the money' – Trump"

true enough so long as everyone wants to hold us$, or is forced into holding them - see oil exchange mechanism, imf and etc for the later part..

Posted by: james | May 9 2016 21:07 utc | 118

@Nobody | May 8, 2016 1:53:01 PM | 108

there is no difference between base money (which you somehow elevate since it's been created by the Federal Govt.) and credit money, once created they are the same.
Call the US Treasury and see if that flies.

Or pick up an explanation by the former Deputy Secretary of the Treasury Frank Newman: Freedom from Federal Debt. 2013. 87 pages.

Or read Michael Hudson’s explanation of the difference between “interest-free money” (his term) and credit money (his term).

The Federal Govt has borrow money to cover it's deficit, it does not spend interest free money into the system, and that's the key point

You’re confused. Read Newman.
any non-us citizen could go up to and exchange US dollars for gold.

Jesus. I don’t know how many times I have to explain this. (Formerly T-Bear is right.) The USA was off the gold standard domestically starting in 1934, and internationally starting in 1971.
which fixed it, what was that?

Jimmy Carter deregulated natural gas, but it took the power companies three years to retool. Reagan got the credit.
Paying down credit reduces the money supply, economic fact called deflation.

Paying off your loan creates deflation? Are you drinking? Paying down credit extinguishes the debt not the asset (eg: paying off a mortgage). It doesn’t reduce the money supply; it nets to zero. Big diff.

Did you bother to read Kalecki’s Fable that I linked to? Doesn’t look like it.

Posted by: MRW | May 9 2016 22:11 utc | 119

@jfl | May 8, 2016 7:42:05 PM | 113

Government spending is not interest-free as the treasury issues attest. Apparently you count it as interest-free because the interest is rolled over when it comes due, just as is the principle.

Apparently you count it as interest-free because the interest is rolled over when it comes due. No, I don’t.

"Government spending is not interest-free as the treasury issues attest."

ONE MORE FUCKING TIME. This is the order in which things happen and you don’t understand it.
(1) Government spending comes first which creates new interest-free dollars in vendor bank accounts across the country. Vendors don’t have to pay that money back; it’s the federal government provisioning itself. The act of government spending creates the currency, or creates new money in people’s accounts.

(2) THEN, because the real economy is now swimming in new money, the US Treasury issues treasury securities in the exact same amount as the spending two weeks to a month later to mop it up (via the private sector’s desire to save) and restore the money supply to balance. The US Treasury does this after the fact.

The Federal Reserve economists call this “reserve add before reserve drain."

The US federal government does not borrow from the private sector. Why would it need to? It issues the currency. It does, however, offer to pay interest to the private sector that buys treasury securities. Good deal for the private sector. Habit from WWI.

Posted by: MRW | May 9 2016 22:25 utc | 120

@jfl | May 8, 2016 7:42:05 PM | 113

The US Treasury issues treasury securities to help the Federal Reserve maintain the overnight interest rate, or Federal Funds Rate (FFR). Way too technical to explain.

Posted by: MRW | May 9 2016 22:27 utc | 121

@ MRW | May 9, 2016 4:55:48 PM | 117

Your link entails Adobe update which I refuse to install on any machine I control - Adobe = Betamax, so that link joins BBC, something unseen.

Feel free to use any of the following should the opportunity arise: Chicago School of Economic Phrenology; Harvard School of Business Chicanery; London School of Economic Ledger-demesne (Bill Black's thingy)/Legerdemain (minting: ledgerdemain). These scour the glister from some academic pretence, I find.

In the beginning American english had been used, but as the country lost its collective mind, British orthography supplanted with Hibernian English superior still. The difference between 'the auld sod' and 'the old sob' is rapidly diminishing.

Would amend the difference re racial prejudices as motivation more a matter of nuance in § 1) above; cultural-centricism certainly played a significant part in world-views.

Posted by: Formerly T-Bear | May 10 2016 5:13 utc | 122

@james | May 9, 2016 5:07:38 PM | 118,

true enough so long as everyone wants to hold us$

The fact that the US can’t default on any debts denominated in its own currency is not tied in any way, shape, or form to whether anyone wants to hold USD or is forced into acquiring them. It’s directly tied, instead, to the fact that the US issues its own currency. It can therefore afford to buy anything priced in USD.

The issue of whether other countries are forced into holding USD is because the USD is the reserve currency. Other countries would want them for things they must purchase in USD, like oil. That is, as long as the Saudis and other producers demand payment in USD.

Posted by: MRW | May 10 2016 5:37 utc | 123

@ 123 MRW

Should a sharp focus on the economic history leading up to the 1929 Crash and subsequently the Great Depression, followed by the early stages of WWII and in the effect of British financing the original U.S. war investment out of London's accumulated wealth that was the basis of J.M. Keynes' ideas for both an international bank as well as an international economic development agency coupled with the financing of British war debt after the war's termination all conjoined in what were the pre-negotiations and ultimately Breton Woods agreements. Keynes knew from his analysis that the depression was the direct result of U.S. economic policy - the unintended consequences of the economic mercantilism pervading the U.S:foreign exchange policy in particular. Breton Woods as finally agreed had substituted U.S. political considerations in a distorted mirror form of Keynesian economic theory; Keynes' written record has suggestions to this view. Breton Woods worked throughout the lifetime of New Deal based administrations, sunsetting with the L.B. Johnson and nightfall with the Carter administrations through the instrument of foreign and military aid that alleviated the affects of the U.S. foreign trade surpluses. The Nixon administration's termination of the gold standard changed everything, effectively terminating the pseudo Keynesian Breton Woods as well. No real economic theory has replaced even the facsimile Keynesian Breton Woods and is not likely given the distortions popular history now overwhelms intelligence with - trickle down, supply side economic rubbish works on plumbing only if liquidated. Now the future is all there is, make the most of it with what you are given.

Posted by: Formerly T-Bear | May 10 2016 8:20 utc | 124


" .... as long as the Saudis and other producers demand payment in USD" You left off ..... at the point of a gun.

and those that don't go the way of Ghadaffi.

Posted by: Nobody | May 10 2016 9:03 utc | 125

@Formerly T-Bear | May 10, 2016 4:20:11 AM | 124,

"pseudo Keynesian Breton Woods." Exactly. james has been asking me above to respond to his views on the IMF and the World Bank--both created by Harry Dexter White at Bretton Woods over Keynes’ objections--and I’ve been debating whether to get into this but it’s too much ‘inside baseball’ to address the history of it. None of it makes sense, however, unless you get into the history.

In light of your comment @124 you might find this interesting, and enjoyable. I uploaded this yesterday, or the day before, on another blog. It will probably be there for another week; it’s a free upload site so who knows.

it’s APPENDIX - Why Keynes’s Ideas Were Never Taught in American Universities-PAUL DAVIDSON.pdf from Davidson’s 2009 book, The Keynes Solution: The Path to Global Economic Prosperity. A NYC commenter on one of the Amazon websites for Davidson's book wrote that the Appendix was worth the price of the book alone.

Davidson says that what people thinks are Keynes’ ideas are nothing of the sort; that few have read The General Theory, and even fewer know what Keynes was talking about, including leading US economists. Davidson’s Appendix is an indictment of American economics academia in professing to know what they are talking about; but moreover, Davidson uses recent historical data to show they lied about about Keynes to advance and protect their own reputations.

Check out Davidson in this short youtube (7 min) explaining Keynes’ objection to the ergodic axiom:

Davidson gave a lunchtime talk to a bunch of undergrads at the Univ of Chicago for an hour about his book, which was where I first encountered Davidson. Davidson mutters under his breath every once in a while how uneducated they are, and by the end when he asked them, he realizes he failed to convince them of Keynes’ worth. But the talk is fascinating. If you’re a Keynes’ aficionado, worthwhile.

I own both the Kindle and hardcover versions of Davidson’s book. I created the pdf of the Appendix myself using the open source ebook Calibre software on the Kindle copy. I did it entirely for my own use, and not to violate any copyright. I use open source Skim to annotate my PDFs; Acrobat's annotation capabilities are substandard for my purposes, and I find Kindle’s annotation feature restrictive.

Posted by: MRW | May 10 2016 14:18 utc | 126

@Nobody | May 10, 2016 5:03:41 AM | 125,

You left off ..... at the point of a gun.

Which is also an analog for taxes. ;-)

Posted by: MRW | May 10 2016 14:23 utc | 127

@ 126 MRW

Paul Davidson's ""The Keynes Solution: The Path to Global Economic Prosperity"" ISBN 978-0-230-61920-3 (Palgrave McMillan) is found in my library just following Vol. XXX - Index for Collected Writings of John Maynard Keynes (mostly from original printing). That is quickly followed by Machiavelli's ""Discourses on Livy"" (but that is another story). The story I recall was the lecturer who had a seminar with Keynes but had never read Keynes' ""The General Theory"" when he gave lectures introducing Keynes work to Harvard, so a defective seed was planted and a weed grew, who could have known. IIRC it was Samuelson who also admitted not having any understanding of Keynes as well. Says loads about the Duhmerican educational system with just those two; probably why MMT has the problems it has lodging between unhearing ears. Makes teaching heterodox economics almost a devotion. I had thought to respond to James but thought the better of it, not being qualified to have anything more than an opinion - sometimes only a considered one; and would suggest James with his questions start reading qualified sources such as J.M. Keynes and take the time to understand what the great thinkers have to say themselves. Many times a stray remark will open up new worlds for the reader of original work that reading about the writer just doesn't convey. I shall leave James to your mentoring, I put the ISSBN so that something can be found from many sources for just that reason.

Posted by: Formerly T-Bear | May 10 2016 16:36 utc | 128

@123 mrw.. thanks... you've answered by part of my question by stating the "USD is the reserve currency", although explaining what it is the reserve currency for, aside from oil, or buying usa products, would tell everyone much more.. i believe this is also a design of the imf and world bank - settlements in us$ at present oil is denominated in USD only.. why is all that? - bretton woods..

i agree with @125 nobody's view of all this being fairly mob like - we'll make war if it isn't maintained - although it would be nice to have it explained via the idealistic methodology - it's democracy and on the side of good... sorry, i have to split, or i would sharpen this up a bit@

Posted by: james | May 10 2016 17:40 utc | 129

@ james | May 10, 2016 1:40:08 PM | 129

The $US became the reserve currency at the end of WWII because of three factors, one was because the U.S. had the largest and strongest economy in the world; second was because the U.S. financed much of the Allies and held immense debts worldwide on their books, the debts payable only in dollars; and third, the U.S. had sufficient gold reserves to more than back their currency without restriction that allowed the U.S. dollar to stand in for gold itself as security of the highest order as every dollar held was indeed redeemable in gold (only through foreign central banks though). Thus dollars were sound currency for international trade being as if not more liquid than gold itself which had only marginal sufficiency to meet worldwide requirements. Foreign central banks could easily accumulate and store dollars where gold supply wasn't enough to fill international needs adequately. Oil was denominated in dollars because of the dollar's gold connection demanded for international trade, which lasted until Nixon ended that connection, the first oil emergency that quadrupled the price of oil was the direct result of the U.S. pushing the value of the dollar well below the producing price of oil with predictable results to the price of oil (here two monstrously gigantic monopolies met and clashed). A serious study of the history of the era is required and a grounding in economics 101 will help clarify as well as assist in drawing conclusions about what has since transpired.

Posted by: Formerly T-Bear | May 10 2016 19:01 utc | 130

@james | May 10, 2016 1:40:08 PM | 129,

You (rhetorical you: country, person, business) are either the issuer of the currency, or the user. Think teeter-totter.

You have to compartmentalize how you think about this so that you can think correctly about how each acts EVEN THOUGH THEY both USE THE SAME LANGUAGE.

For monetarily sovereign countries like yours or mine:

Users of a currency act one way. For example, for every creditor, there must be a debtor on the other side. It all nets to zero over the range of the society, as credits are given and debts are paid.

For the issuer of that same currency, it is the complete opposite. There is no offsetting debtor--no liability--on the other side. The issuer creates the currency by spending into the society’s economy. Its citizens do not need to pay it back!

Both sides use the same word “debt” to describe what they are doing. But debt means the opposite depending on who is using it.

The users have to pay their debts back, with interest.

The issuer’s “debt” is the country’s equity, its wealth. If citizens 'pay back the national debt’ to the issuer, the citizens will not have one red cent in their pockets. The only reason why the govt uses that word is because it’s an accounting term that dictates where the govt accounts for its actions--records them--on the balance sheet. That’s all. Nothing more complicated than that. No conspiracy. And that recording/ accounting is done on the right side of the ledger under the Liabilities column. So they call it “debt.” Duh.

Until your mind can put all this stuff into two silos, talking about the IMF and World Bank and what those fucks are doing is not seeing the forest for the trees. You’re obsessing over something that you can’t even fix (if you could) because you don’t see the basic structure.

Posted by: MRW | May 10 2016 19:02 utc | 131


The user is everything that is non-federal government: state and local governments, banks, businesses, households, foreign governments, foreign banks.

The issuer is the federal government.

Posted by: MRW | May 10 2016 19:12 utc | 132

Provinces are users.

Posted by: MRW | May 10 2016 19:15 utc | 133

@130 formerly t bear.. thanks.. i get that, although russia never signed onto the b woods agreement which throws a monkey wrench into it.. what i don't get is how it was allowed to continue - favouring one nation at the expense of all the others who didn't want to be subservient to it? that is the part i don't get.. just seems like might makes right to me with all the rationale for why it is, after the fact and avoiding this 'elephant in the room' - military clout..

@131-133 mrw.. thanks for going over it.. you might be right in your last comment @131.. i suppose i am a byproduct of following the financial meltdowns beginning sometime around the late 90's - with the world currencies debacle and etc... if you have loans denominated in us$ and you are a country like thailand or any of those asian financial flu countries - you are screwed.. why do it? i don't know that they have a choice due the fact they are ''developing'' nations as defined by the imf.. on the other hand a country like canada - so long as they keep the debt in canuck$ can avoid the crazy ass fluctuations in the exchange rate... the exchange rate is another financial ponzi scheme game that eats into all this as well..

i get it about the debt being irrelevant if it has to do with the us or any country able to make it's own currency so long as they don't borrow in us$... what i don't get is the heavy handedness that i see happening that i think is the big reason for these wars on the planet - ensuring countries play by daddy us$ warbucks or else... until that changes, we are all screwed..

thanks to both of you - for trying to help educate me..

Posted by: james | May 10 2016 19:59 utc | 134


hey i see pl might be throwing in the towel at sst.. that would be a shame, even if he did ban me for the appearance of my 'economic determinism' comments.. i didn't even know what it meant.. had to look it up! pissed him off at any rate, enough to ban me.. i think he was throwing the towel in back then which is why this latest development makes a lot more sense to me.. i wish him well.. it is a good website with many intelligent people commenting on it.. it would be a shame to see it disappear.. hopefully those folks might migrate over here...

Posted by: james | May 10 2016 20:03 utc | 135

- MRW - can't remember if you ever saw my comment of appreciation to you for recommending that book - 'mistakes were made - but not by me'.. great book.. thank you again for that book suggestion i read over at sst..

Posted by: james | May 10 2016 20:04 utc | 136

@ james | May 10, 2016 3:59:36 PM | 134

My final reply before using up my bandwidth OT quota. The Soviet Union had representatives at Breton Woods who were reporting back to Moscow. It is likely given the differing economic systems, their observations did not translate well if at all. It wasn't expected that the Soviet Union would become a signatory anyway given the cited systematic incongruities as well as a near absence of economic exchange, what little there was could be covered by the Soviet's large gold holdings to obtain what little the Soviets could not produce on their own. Breton Woods was a voluntary organisation, no compulsion other than advantage of membership was required, therefore your remark about monkey wrench is without meaning. Breton Woods ostensibly set up a financial resource bank (International Monetary Fund) for members' national central banks and an economic development resource organisation (World Bank). Alice's Wonderland had met its match with Washington's organising skills in Breton Woods but you will need to find a factual history written by the participants and draw your conclusions from their reports made contemporaneously. The further you go from original sources the more likely nonsense pertains.

Posted by: Formerly T-Bear | May 10 2016 20:38 utc | 137

@137 ftb... monkey wrench is really in reference to my own general view of an agreement that includes or excludes other countries who at a later point have to participate in the game - i call it a game as that is how i see it - of exchanging with others on an international level.. meanwhile the imf and wb further consolidated the set up which works like a casino where it is very difficult to go against the house.. i see it as a giant ponzi scheme, although one would never read about it in those terms..

i am presently reading a book called "paris 1919" written by margaret macmillan.. there is a chapter early in the book titled 'russia' page 63-82.. in this short chapter one quickly picks up how russia and how it fit into the grand scheme of things going further back to the treaty of Versailles has been set in stone from a much earlier time where 'the west' (for lack of a better term) were involved in making decisions such as the carving up of nations - mostly all along economic interest lines with no thought for an appreciation of acceptance of diversity, or ethic differences.. very arbitrary would be a good way to describe it..

while we can't correct the wrongs of the past, we need to acknowledge them and make room for alternative views which are inclusive as opposed to exclusive.. i see the usa/west grasping at controlling the institutions as a means of clobbering others over the head if they don't conform to the written and unwritten agenda.. that financial sanctions are a precursor to military actions is no coincidence.. perhaps it is time folks understood how unequal our world is on the financial level and made an attempt at changing it for the better, as opposed to demonizing those who don't fit into it, or are not privy to the special status accorded them by it..

at present the financial world is a ponzi scheme.. i stand by that.. until more acknowledge it and attempt to address the inequality to it all, we continue to be screwed here..

Posted by: james | May 10 2016 20:50 utc | 138

ps - having the international courts stacked in your favour doesn't hurt either given how local courts act like kangeroo courts in developed countries - usa being a good example with this - Iran will sue US over decision to give terror victims $2 billion from frozen funds.. the wheels are coming off the system, even if folks want to keep riding in the same car.. as smoothie says on the other thread - getting to a multi-polar world might be very tricky here..

Posted by: james | May 10 2016 21:04 utc | 139

further to the

Posted by: james | May 10 2016 22:14 utc | 140

hit the wrong button!
further to the question of russia after 1919, an interesting historical and recent bit of revision tells a different tales then how the russian people see it.. much of this has to do with the means of making financial payments which some will find interesting here if interested in knowing the set up to the 1932-32 famine and how it came about - finances and who controls what being at the root of it as well..

Who Organised the Famine in the USSR in 1932-1933? link here..

Posted by: james | May 10 2016 22:17 utc | 141

Once upon a time there were threads with individual topics at MoA ...

A Longwinded and Winding Rhodes

The task of selling the Iran deal to the press was rather easier than one might expect, since, according to the 38-year-old Rhodes, “The average reporter we talk to is 27 years old, and their only reporting experience consists of being around political campaigns. That’s a sea change. They literally know nothing.”

The question now being asked around town is: what is it that Rhodes knows, exactly? What we know (or at any rate can safely surmise) is that the boy wonder of the NSC was unaware that his interlocutor, Samuels, was one of the Iran deal’s most outspoken (or unhinged) opponents, making the “rational” case for bombing Iran. [1]

Per Samuels: “Bombing Iran’s nuclear facilities is the surest way for Israel to restore the image of strength and unpredictability that made it valuable to the United States after 1967 while also eliminating Iran as a viable partner for America’s favor.” Uh-huh.

Samuels rather deviously used the Rhodes profile to grind that axe once more, and attempts to paint proponents of the Iran deal as dupes of the Rhodes spin machine. If Rhodes took a perhaps three-minute break from channeling the voice of the President, he might have been better prepared for Samuels, made less a fool of himself, and refrained from impugning the integrity of a very fine journalist like Al-Monitor’s Laura Rozen.

Did Rhodes know what Samuels was up to or did he succumb to the all too common of Beltway delusion of believing in one’s own omniscience?

[1] David Samuels, "Why Israel Will Bomb Iran. The rational argument for an attack", Slate, 9 April 2009,

So, who was sucker-punched? Ben Rhodes? or the NYTimes readership, again? or both?

Posted by: jfl | May 10 2016 22:55 utc | 142

@142 jfl.. my apologies for altering the flow of the specific thread.. not intentional and i usually pay attention to it, but got caught up in what i felt was an important conversation on financial matters..

Posted by: james | May 11 2016 2:08 utc | 143

@ james | May 10, 2016 4:50:07 PM | 138

Addressing the fictions you have floating in your head isn't what reality is about, nor is there anything I can say to reply to your questions - you are on your own, good luck, you did have some good questions that deserve being answered but if you have the answers already, you have wasted my time and effort, a mistake I shall not make again. Best to your searches.

Posted by: Formerly T-Bear | May 11 2016 4:47 utc | 144

@143 james

I'm as guilty as your are! More of an observation on all of our activity than any one of ours'. Frankly, I think MRW is a troll.

Obama Heads to Hiroshima; Won’t Apologize for US Nuking City

Obama is going but will absolutely “not apologize,” according to White House officials, who say the visit is intended to be “forward-looking” and focused on America’s commitment to nuclear disarmament.

I consider this strongarm manipulation. about as strong as it gets. Yeah, we nuked you. We'd do it again if we thought it in our interests to do so. Whadda ya gonna do about it? Nothing.

Posted by: jfl | May 11 2016 7:26 utc | 145

@144 ftb.. okay thanks for your response here.. i am sorry you feel and see it this way. we look at things differently due a different temperament probably... my questions are sincere and my response(s) are too..absent answers, i have opinions..

@145 jfl.. thanks! i have never viewed mrw in that context..

Posted by: james | May 11 2016 15:15 utc | 146

jfl @145

Yeah, in 1945 dropping the bomb(s) was "forward looking" as it was a demonstration to the Russians of US power.

Today, not apologizing is "forward looking" as it is a demonstration to BRICS of our utter contempt for humanity.

<> <> <> <> <> <> <>

Whether he apologizes or not, this would be a good opportunity to talk about the dead-ends that corrupt elites lead their people into. But that would hit too close to home for Obama.

Posted by: Jackrabbit | May 11 2016 15:41 utc | 147

jfl | May 11, 2016 3:26:30 AM | 145

Frankly, I think MRW is a troll.

Troll for what? Or whom?

Posted by: MRW | May 12 2016 6:32 utc | 148

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