Moon of Alabama Brecht quote
July 03, 2020

On Its Way Into Poverty Lebanon Is At The Crossroads

Lebanon is drifting towards hyperinflation and armed strife.

The main reason is the deflating of a Ponzi scheme with which the governor of the Central Bank enriched Lebanese business banks and politicians.

Since December 1997 the rate of the Lebanese pound has been fixed at 1507.5 pounds per U.S. dollar. The country needed dollars to import food, fuel for its electricity plants and pretty much everything else. As Lebanon exported little but some hashish and ran a large budget deficit it needed other ways to continuously acquire dollar. Tourism from the Gulf states brought some foreign currency and a large number of expatriates sent parts of their incomes home. But neither was enough to pay for everything Lebanon imported.

The Central Bank started to increase its interest rate for dollar holdings to attract more of them. The business banks set up dollar accounts for their customers and offered some of the highest rates around the globe. Money came in. The business banks lent those dollars to the Central Bank at ever higher interest rates.

Importing companies went to the Central Bank and exchanged their Lebanese pounds into dollars so they could pay for the goods from abroad. Whenever their were too few dollars in its vault the Central Bank increased its interest rates to attract more of them. It ended up offering above 20% for U.S. dollar accounts.

In the normal economy it is the Central Bank that is paid interest by the business banks. In Lebanon the scheme reversed and insanely  enriched the owners of the banks. Meanwhile the local manufacturing and farming economy could not compete with the steady stream of cheap goods that came into the country. It remains underdeveloped.

The war on Syria and Saudi discontent with Hizbullah's role in Lebanon hit the tourism business. Some people started to ask questions about the high interest rates. In August 2019 the scheme broke down. A parallel market rate developed. Continuous financial pressures from unsustainable sovereign debt, a high trade deficit and deposit outflows had become too much.

Finally the truth came out. There were no more dollars in the Central Bank's vaults. The dollar loans from the business banks to the Central Bank can not be paid back - at least not in dollars. The dollar denominated saving accounts with the banks can only be paid out in Lebanese pounds. The banks simply deny people access to their dollar accounts. Their current worth is now some 15% of their original value.

In 2018 the much lauded Lebanese banks had nominal assets in excess of 360 percent of Lebanon’s GDP. Today hardly any are left.

The Lebanese pound has crashed to today's exchange rate of 1 dollar for 9.500 pounds. Hyperinflation has set in. Today a chicken cost double as much as 10 days ago. Many people are ruined. Their life savings are gone. Crime has already increased. There will soon be hunger.

But the Lebanese bankers and politicians are still in denial:

Lebanon has been in talks with the IMF for a $10 billion bailout to overhaul its economy after its local currency lost some 80% of its value on the black market. The government drafted what it called a rescue plan that estimated losses incurred by the central bank and local lenders at 241 trillion pounds ($69 billion), based on an exchange rate of 3,500 to the dollar, compared with the official peg of 1,507.50. But the currency reached 9,500 per greenback this week.

The central bank and the lenders, the government’s main creditors, countered with estimates of their own. Banks put forward a proposal for state asset sales valued at $40 billion so that the government could repay what it owes. The central bank, known as Banque Du Liban, argues that a different accounting approach shows a surplus rather than a loss.

Lawmakers then tried to consolidate the figures to a lesser number, also stalling talks with the IMF. The disarray was exacerbated when two key economy officials resigned in protest over how politicians were handling the crisis.

Central bank Governor Riad Salameh, Finance Minister Ghazi Wazni and the head of the banking association met Thursday and discussed ways to agree on figures, a sign that officials and the main stakeholders have finally decided to reach a middle ground.

Riad Salameh, who has led the Central Bank since 1993, needs to be fired. The bank owners must be expropriated. Together they ran a Ponzi scheme that has made millions dirt poor. Those in the know about it got out before anyone else. Their money is now safe in Switzerland or elsewhere.

Unfortunately the U.S. embassy is protecting the Central Bank governor. The government can not touch him. It is also unable to reform.

Meanwhile no imports are coming in. Electricity is available only 4 hours per day. People are staring to kill themselves:

Two suicides in Lebanon on Friday, apparently linked to the country's deepening economic downturn, have sparked a new wave of criticism over the government's mishandling of the crisis.

A 61-year-old man from the eastern region of Hermel shot himself on the sidewalk of a bustling Beirut shopping street in broad daylight, leaving a note and his clean criminal record at the scene.

The note referenced a popular revolutionary song that mentions hunger, suggesting his suicide was linked to the economic crisis that has been ravaging livelihoods across the country.

"He killed himself because of hunger," the man's cousin screamed as the security forces carried away the body.

The U.S., Israel, the Saudis and their Sunni allies in Lebanon are using the situation to press for a new Lebanese government. The Shia Hizbullah, which together with its allies has significant influence in the current one, is pressed to make room for Saudi and U.S. allies.

As many Syrians had money in Lebanese banks the crisis in Lebanon extends into Syria. The U.S. also increased its sanctions on Syria. The Syrian pound has fallen as much as the Lebanese one.

Fortunately Syria and Hizbullah have friends. The Russian ambassador to Syria has said that his country is ready to provide help. Iran has likewise offered support:

Iran has agreed with the government of Damascus to put at its disposal goods worth one billion dollars, as Iran supplies the basic needs of its Syrian ally for food and fuel.

In response to the Lebanese current crisis, Iran is prepared to open a line of credit to Lebanese companies similar to the one it provides Syria, worth one billion dollars.

Today Hezbollah has dozens of gasoline stations, under the name of al-Amana, and pharmacies, called al-Murtada, and other companies authorised and capable of receiving goods and shipments from Iran and sells them at much reduced price even to that part of the public that is not supportive of Hezbollah. If Israel and the US believe they can stop this process, Hezbollah will not hesitate to use military force, imposing a new Rule of Engagement. Bombing targets in Israel may be necessary to ensure the arrival in Lebanon of fuel, foods and medicine.

Hizbullah will use the support from Iran to gain further goodwill and influence in Lebanon. Unfortunately there are signs that the other side prepares for war:

Sam Heller @AbuJamajem - 15:07 UTC · Jul 2, 2020
.@AlakhbarNews: Syrian army interdicts truck of weapons at Homs border, while Lebanese military intel detains the Hermel-area arms dealer meant to deliver it to Tripoli. Separately, three men with military training arrested heading from Idlib to Tripoli.

Tripoli, in the north of Lebanon, is a stronghold of Sunni Jihadis. While these were previously under Saudi influence recent incidents have led some to believe that the Turkish secret service MIT is now involved with them.

Thirty years after their long civil war the various Lebanese clans and sects are still ruled by the same old structures and by the same delusional people who are unwilling to consider any real change.

The economic crisis will be hard on the Lebanese people. But the crisis is also a chance to for once eliminate the sectarian structures and to reform the now import dependent economy.

The current political system will either implode to be replaced with something sensible or it will explode into a new civil war. Outside force seem to prefer the latter option while the people of Lebanon would be better off with choosing the first.

Posted by b on July 3, 2020 at 17:03 UTC | Permalink

Comments

Are people moving their wealth into bitcoin?

Posted by: Maracatu | Jul 3 2020 17:15 utc | 1

Any which way you slice this, it means the end of Lebanon. It will be interesting to see how it gets carved up ultimately. It's a sign of things to come in the Middle East. In 20 to 30 years, the population of the Middle East will decrease by 70%. Current population levels are not sustainable. It will be ugly and the rivers will overflow with blood in lieu of scarce water.

Posted by: 450.org | Jul 3 2020 17:21 utc | 2

@2 What are you ranting about? Hariri has been kicked out. The Saudi influence is waning and once the Takin effect does the same to the US, Lebanon/Syria will come out of this stronger as
Iran and Russia are there. Hamdoulilaye..

Posted by: Lozion | Jul 3 2020 17:53 utc | 3

thanks b.... the world needs a world currency - not a usa currency that dictates everything for it's own purposes...

your quote "Unfortunately the U.S. embassy is protecting the Central Bank governor. The government can not touch him. It is also unable to reform."

this is because the whole central bank system is a glorified ponzi scheme not accountable to anyone locally... it is another archaic institution set up after bretton woods that needs to be taken down.. what has happened to lebannon is the same fate that awaits other countries - and ultimately the usa...

bitcoin sounds like another ponzi scheme.............

Posted by: james | Jul 3 2020 18:27 utc | 4

same deal with the uk refusing venezuala it's gold or getting around it by saying guaido - the usa-uk non elected rep - can have it... more fucked up ness... if these 2 warmongering countries can't go to a literal war, they will do a financial war... they have the tools at their disposal - central bank system...

Posted by: james | Jul 3 2020 18:31 utc | 5

@3 Tarkin effect..

Posted by: Lozion | Jul 3 2020 19:03 utc | 6

"eliminate the sectarian structures"
Well, as good as your analysis is on the subject of the Lebanon crisis.. But to expect that the middle east will be able to overcome its main pillars of tribalism, sectarianism and power/violence, is deeply naive of the nature of those societies.

There surely is a small minority of intellectuals in Lebanon as in other middle eastern countries, that would follow this analysis of yours and would be able and willing to overcome those archaic mindsets.
But the huge majority in middle eastern countries is deeply tribal and deeply sectarian/religious (not in a correct theological way, but in a way of identity, culture and customs).

The only real options for any sort of progress (not nessecarily good progress) in the middle east is either Islamism or Nationalism (with a Pan-Arabic undertone maybe).
And even those ideologies could only hold societies together with contious and ruthless vionlence and despotism.
Or the combination of both ideologies muslim sectarianism and nationalism, as Erdogan is doing it.

Its either one of those (or both) ideologies enforced violently, or a sectarian and tribal quamire for any middle eastern country.
And neither alternative is a good one IMHO, unable to bring the region into this century.

There is a reason why nations like China have risen from poverty through only its own hard labor, and why no middle eastern country even saturated with Oil has been able to bring its socities together and into this day and age.
The tribalism and sectarian Islamism is too deeply engraved into the mindset of the huge majority. And nothing short of many decades to come will be able to change that. Only as i said before, a brutal regime of either Islamism or Nationalism. Which also is no solution to transform them into coherent, solidaric, humane and egalitarian societies.

Posted by: DontBelieveEitherPr | Jul 3 2020 19:05 utc | 7

@ 7 dbep.. would be interesting to hear what nassim taleb has to say on it... he has the background and cultural perspective..

Posted by: james | Jul 3 2020 19:19 utc | 8

@7

"eliminate the sectarian structures"
Well, as good as your analysis is on the subject of the Lebanon crisis.. But to expect that the middle east will be able to overcome its main pillars of tribalism, sectarianism and power/violence, is deeply naive of the nature of those societies."

Excuse me, but that sounds like typical US claptrap...

Posted by: donten | Jul 3 2020 20:27 utc | 9

DBEP @ 7:

The "tribalism" and "sectaranism" that you see in Middle Eastern societies is, in the case of Lebanon, a product of former French coolonial divide-and-rule policies in which France deliberately favoured Christian communities and allowed access to better education and employment opportunities, and a share of political power, at the expense of Muslim communities and Shi'a Muslims in particular.

The way current Lebanese politics operates with particular positions preserved for particular religious groups, and the legislative institution's balance of power among different religious communities and the parties representing them based on an outdated census done back in the 1930s are throwbacks to that colonialist divide-n-rule mentality.

Posted by: Jen | Jul 3 2020 20:47 utc | 10

@7. Rather a pessimistic view of prospects. Nationalism and pan Arabism have a much better chance of success in modernising and unifying the populations in the Arab world and combatting the sectarianism which is partly foisted upon the region by rulers, reaction to foreign influence and the gaping wound that is the lack of justice for Palestinians.
It was what Nasser tried to do but failed because of opposition from the West and the kingdoms and sheikhdoms in the region he failed.
The major problem also is the dependence on oil and the unequal distribution of power it creates.Major dependence on oil has meant a concentration of power and money in the hands of the rulers and the lack of development of industries and unionisation and other social developments. The west sees no reason to try to encourage a change and neither do the rulers.

Posted by: Orage | Jul 3 2020 21:02 utc | 11

I get the impression that its the bankers at the core of this problem. Sectarianism is the smokescreen. Sounds familiar don't you think?

Arrest the bankers, sequester their entire wealth and assets and same across their families who benefited. Make life hell in any country that hides their stolen wealth. The people of this earth need to end the immunity of these parasites.

Bankers understand summary justice.

See the Saudis solution: round them all up into a central building and make the matter clear to them that every dollar is brought home to the government. Worked for MBS, and not squeak from the west.

Do it Lebanon.

Posted by: uncle tungsten | Jul 3 2020 21:10 utc | 12

Posted by: DontBelieveEitherPr | Jul 3 2020 19:05 utc | 7

You telling me the middle eastern people can't live and grow like westerns(culturally and economically)?Why they should?What tribalism you talking about?The tribalism established and fuelled by the empire?Or the problem is the fake idea of Islam that zionists created in the minds of the sheeps throughout the years?Or maybe the occupation and destruction of secular regimes together with a systematic fragmentation carried on by the usual thugs has something to do with Middle East situation?Maybe an illegal violent state of settlers has something to do with exasperation of people?Probably yes.

Posted by: LuBa | Jul 3 2020 21:22 utc | 13

LuBa #13

Surely the middle east peoples can live and grow as free people. I am not sure the 'western model'is the only course to cultural and economic freedom. It too has been colonized by thieving cheating banksters.

We have learned much over the centuries wherever we reside and one thing is for sure: the manipulation of coinage is a serious matter yet to be dealt with.

Marx and Engels attempted to develop a theoretical framework for that reckoning and to a large extent succeeded. More recently Michael Hudson has examined and revealed much of the twisted shenanigans of the banksters and their slaves. Listen to this podcast for example.

I am confident that in time the peoples of the middle east will establish a barrier to the incessant meddling, first they have to see through the smokescreen.

Posted by: uncle tungsten | Jul 3 2020 22:40 utc | 14

i have to agree with others comments here on @7 dbep comments, especially jens comments that i always appreciate hearing... thanks..

Posted by: james | Jul 3 2020 23:08 utc | 15

In addition to my post above on the middle eastern remedy for their bank enslavement. Michael Hudson says the following in relation to the pandemic and the 'act of god' in destroying the global economy:

I have written quite a bit about Bronze Age archaeology in the ancient Near East. That is where the Act of God stipulation originated. It appears in the Laws of Hammurabi c. 1750 BC. The problem that the Babylonians had to deal with was what to do when there is a flood, a drought, warfare or a pandemic. What should be the rules when, suddenly out of nowhere, cultivators and the citizenry on the land are rendered unable to grow and harvest crops, out of which to pay the debts that they have run up during the year and are falling due. They owe the taxes, sharecropping or other rent that could not be paid.

Hammurabi was quite specific about how to handle this situation. Paragraph 48 of his Laws said that there would be a debt and a tax amnesty when the weather god, Adad, created a flood or otherwise prevented debts and other obligations from being paid. If the storm god floods the lands, the debts and rents don’t have to be paid. A fresh start was made under conditions of balance for the next crop season.

There is the solution for Lebanon - sure it will destroy the elite.

They are few, we are many.

Posted by: uncle tungsten | Jul 3 2020 23:28 utc | 16

@ Posted by: DontBelieveEitherPr | Jul 3 2020 19:05 utc | 7

While I agree that Islamism is a cancer that must be extirpated from humanity once and for all, I disagree it is the case of the present Lebanese crisis.

The Lebanese crisis is fruit of the most modern techniques and doctrines of the monetarist school from Chicago (led by Milton Friedman). You can bet the men responsible for this scheme are all very wealthy, well educated gentlemen, probably raised in Oxbridge or the Ivy League.

Lebanon's present crisis is a very liberal (neoliberal), very modern, very cutting edge problem. It has nothing to do with medieval Arab tribalism.

Posted by: vk | Jul 4 2020 0:46 utc | 17

People here are always talking about how the US controls everything through its financial power.

Well, that applies to Lebanon, too. b's analysis clearly shows that the US influenced the Lebanese bankers to make Lebanon an import economy. The question is: Why (other than the US making money off the scheme as well)?

The answer is the usual: Israel. Israel wants Lebanon. Or more precisely, the want Lebanon fractured into a failed state, just like they do the rest of the Middle East. They want the water, they want the gas fields off shore, and they want Hezbollah gone, so Israel can get the US to attack Iran without having to worry about Hezbollah's missile arsenal derailing the Israeli economy.

So this has also been the US' goal, which is why they've been ramping up sanctions on Hezbollah for the last couple years. They have also roped in the EU:
Germany bans Hezbollah and launches police raids to find suspected supporters

And this, back in 2019:
Hezbollah added to UK’s list of terrorist groups

The entire goal of this process is to gin up a war between Hezbollah and Israel - with the US taking part. Or if that is considered too risky, due to Hezbollah's ability to derail the Israeli economy via its missile arsenal, then perhaps the idea is to start another civil war inside Lebanon which will devastate the country and perhaps cause the UN to authorize another US "responsibility to protect" operation a la Libya (and what was intended for Syria until Russia stepped in and prevented that operation.)

One can only hope Russia and Iran see this threat clearly and step in with enough resources to derail the US/Israeli plan. Because of the seven countries General Wesley Clark said he was told were on the neocon hit list, the only two not yet under direct military attack are: Lebanon and Iran.

Posted by: Richard Steven Hack | Jul 4 2020 1:18 utc | 18

And then there's this...

Lebanon's Foreign Minister Summons U.S. Envoy as Her Hezbollah Comments Draw Ire


Shea said Lebanon is reeling from years of corruption of successive governments and accused Hezbollah of siphoning off government funds for its own purposes and of obstructing needed economic reforms.

All part of the plan... Israel has been running non-stop articles claiming Hezbollah has tried to block the IMF bailout, that Hezbollah is using the pandemic to gain power, that Hezbollah is losing power, etc., etc. This is being coordinated with the US as the Shea article shows.

Posted by: Richard Steven Hack | Jul 4 2020 1:41 utc | 19

RSH #19

The mendacious trio of UKUSAI at it again. Methinks perhaps the reason for Ghislaine Maxwell custody is either because of the current land theft in Palestine or an even larger theft in both Palestine and Lebanon.

Either way land theft is the main game these days. I gather it was about in the past as well.

Posted by: uncle tungsten | Jul 4 2020 2:18 utc | 20

vk @ 17, oh baloney with your 'isms'! You seem to dismiss all cultures of an historical nature, ethnic groupings, as a negativity, which I am sure is offensive to those who are set deeply in their traditions. This is what makes nations strong, diversity and the unique traditions of their forefathers. It is not some refusal to adapt to modern ways, a homogeneity, imposed upon them by those more powerful from the outside. All I know about Lebanon is the beautiful cedars of Lebanon mentioned in the Bible, but b is highlighting here that the problem is a financial one, not cultural and definitely not ethical -- and we should know well by now what is causing that.

Thanks b for including tiny Lebanon in the pattern we are seeing worldwide. I remember that Putin had to be cautious in dealing with Russia's central banking system - it can't be overthrown in a moment of revulsion, but he appointed his financial minister to a high position because it was extremely important to face the crisis head on. We haven't done that in the US, so once again we are in no position to lead in this matter, even if we wanted to.

Posted by: juliania | Jul 4 2020 2:40 utc | 21

@21 juliania

Well said. Very sane. Thank you.

Posted by: Grieved | Jul 4 2020 5:42 utc | 22

The increasing urbanisation of many ME societies is doing for the old tribal structures. Clan leaders derive their power from their control of clan assets - land, harvests, bulk grain purchases, water, gas etc.

Once families move into cities as much as both parties may want the old arrangement to continue, it becomes unsustainable as individual families become more reliant on one particularly difficult to accumulate asset - cash.
Something many families did not need much of when they were part of a rural agrarian economy.

Sure many Lebanese will move back to family holdings in the short term as it will become that or starve, but in the long run the one thing ME families put most emphasis upon education, won't be accessible out bush. Many families will return to cities & regional centers as soon as they can.

It is this more evolutionary than forced change to ME culture which is the most pervasive and likely to be the most successful.

Hopefully the love of family will prevent the old social structures from completely dying out.

Hezbollah are going to have to keep playing this smart.
They have been doing so thus far, as they understand how urban life and concentration on nuclear family rather than extended family attracts young people in particular to consumerism & its baubles.
But all is not lost, young Lebanese haven't seen Hezbollah in action against the zionists, many of 'em won't share the respect, but if Iran can keep the gas pumping & China can keep some of the baubles arriving, there is no reason why it shouldn't be Lebanon with its banking expertise (remember before the UAE & Qatar it was Lebanon who were the bankers to the ME) which is the central point for an alternative to SWIFT & its usurious methodology.

More nations must join to build the escape velocity, the real problem seems to be states which require foot in both systems.
Depositing or withdrawing money in a new system in such a way that it also changes the numbers in the SWIFT system is an incredibly difficult problem - especially over an extended period with amerika's "sanction them all" bullying.

Posted by: A User | Jul 4 2020 7:57 utc | 23

The problem with Lebanon is the ridiculous political system that is imposed on it by the West, it has to have all the religious factions take political positions, that's why they can never agree on anything to benefit the population accept when it comes to lining their pockets they always agree. I'm so glad my father saw the writing on the wall whilst we were young kids before the war kicked off and we migrated. Until Lebanon has a Secular Government it'll never be prosperous.

Posted by: Shue | Jul 4 2020 10:28 utc | 24

Only slightly off-topic since the goal of taking down Lebanon is to get a war with Iran...

Report: Israeli cyberattack caused Iran nuclear site fire, F35s hit missile base

That last is highly unlikely, or Iran would have already fired back at Israel. However, it will be interesting to see how a cyberattack caused that level of damage.

Arabic media: Israeli cyberattack struck Natanz nuclear facility

I like how these idiots use the term "struck" like it was some sort of frickin' missile...

This could go bad really fast, unless Iran limits its retaliation to an equivalent computer hack. Even then, Israel could use that as an excuse to escalate. However, as I've said before, Israel can't really afford to start a war with Hezbollah still not under control.

Iran threatens retaliation after what it calls possible cyber attack on nuclear site

Posted by: Richard Steven Hack | Jul 4 2020 10:45 utc | 25

@11

At one time, that was certainly true and what the Arab nations needed to develop independently from European, American and Russian connivances. But that was a different time. Think of time as a curve. Development is an integral part of the curve. Resources are a constraint. When Nasser promoted Arab Nationalism, it was at a point on the development curve where resource constraints were not a consideration. All that has changed. Resource restrictions coupled with severe environmental degradation to include climate change means the development prospects of the Middle East are increasingly limited and soon enough will be non-existent simply because parched, barren deserts cannot and will not support modernized industrialized cultures. Bedouins will inherit once again, nay reclaim via modernity's capitulation, what was once their birthright.

Posted by: 450.org | Jul 4 2020 12:32 utc | 26

Capharnaüm, the movie, says everything about the mayhem that is Lebanon, or almost everything. Nerval's Travel to the Orient is interesting too for that matter. The role of the Uniates in the division of the Christian churches there played was certainly as bad as the French mandate and French neo-colonialism since then on.

Posted by: Mina | Jul 4 2020 12:37 utc | 27

Now I understand the source of all confusion here about the "Arabism" question.

You're all presupposing the Middle Eastern countries still retain much of their old tribalist (medieval) system. This is entirely false.

Unless you're talking about Afghanistan or the remote areas of Central Asia, you cannot talk about a primitive tribal system at all.

All the present nations in the Middle East are capitalist. They function in the normal capitalist way, they are subject to all pressures of a capitalist world, and are thus subject to all cycles of capitalism. They are full-fledged capitalist, modern nation-States.

I find it funny when pro-capitalists talk about the failure of socialism by giving the example of Eastern Europe. To them I reply: what about Subsaaran Africa, Latin America and the Middle East? They are a monument of the failure of the capitalist system, its inability to "nation building".

I know it is hard for people from the First World to put it into their heads, but it's true: capitalism has failed. It is not destined to be the system that will bring "the end of History". No amounts of walking through the boulevards of Paris, Milan, Tokyo, London, Berlin and New York will change that.

Posted by: vk | Jul 4 2020 13:36 utc | 28

The solution for Lebanon: destroy the elite. They are few, we are many.by: uncle tungsten @ 16
It is the use of the governors to manipulate the governed that allows this kind of thing to happen.

The banksters have divided 8 billion humans and sorted them into 256 nation states to enable the elite to manipulate the people within the nation states. The governed are like cells in a tissue matrix..the elite flow goods, services and cash when it suits the elite, and restrict the flow of goods, services, and cash when it does not. To eat, do as commanded.

The outcome of manipulation is detectable at this time in Lebanon. But not long ago it was Greece under the same kind of human right quenching, destroy everything, manipulative filth. Victim of manipulation status is a bystander problem; unless those not yet affected come to the aid of those who cannot help themselves, the bystander will soon be manipulated by the Banksters into victim status.

Posted by: snake | Jul 4 2020 13:59 utc | 29

vk
'religions' in Lebanon function very much as tribes;
in the Christian villages, anyone one has a remote cousin who is a priest will vote for whoever the Church calls to vote for.
how do you distinguish that from tribalism?
same with Sunnis, who'll vote for a Sunni, and for Shiites, who'll vote for a Shiite, except for a handful of seculars (other marxists have had enough and probably left).

Posted by: Mina | Jul 4 2020 15:18 utc | 30

We have 7.7 billion people in a collapsing ecosystem.
The question is, are going to survive?
Should of stayed at our historical range over the last 200,000 years at 1-10 million. Except for that near extinction 70,000 years ago, it seemed to work.

Posted by: Duncan Idaho | Jul 4 2020 15:44 utc | 31

Indeed. But left unsaid is the demographic pressure in Lebanon. It's hard to say exactly because there hasn't been a national census there since 1932, but I've seen estimates that the population of Lebanon doubled in the last ten years.

Lebanon doesn't have a lot of land or resources. When the population doubles in just ten years, this puts massive pressure on the economy. Think of all that would need to be built. And in a place like Lebanon, with limited water, if you double the population you can't just double the number of wells: you would have to make massive investments in water recycling plants etc. A doubling of the population might require (at least) a quadrupling of the installed infrastructure. In just ten years. Which the Lebanese can't afford. It's not that it would be impossible for Lebanon to have an economy that could handle the current number of people in comfort. It's that it was not possible for them to achieve that in just ten years starting with what they actually had to work with.

"The more the merrier" - what utter rot. A massive increase in the population absolutely requires massive increases in economic growth and infrastructure just to keep even, but does not guarantee that it will automatically and magically occur. How can adding a bunch of penniless refugees automatically and instantly cause water treatment plants and factories and schools etc. to spring up from the sand? You may say, well if the Lebanese had a more capitalist economy they could - but leaving aside the fact that no society without an open frontier has ever accommodated such a rapid population increase without widespread misery, a rapid population increase doesn't automatically cause the political system to become perfect either, does it?

Bottom line: Malthus was right. But the mainstream press will never report on this, because the rich love cheap labor, and anything that might result in people making progress and improving their standard of living means more expensive labor and lower profits for the elite...

Posted by: TG | Jul 4 2020 15:54 utc | 32

@ Posted by: Mina | Jul 4 2020 15:18 utc | 29

Tribalism has nothing to do with ideological schism. When I talk about a tribal system, I'm essentially referring to hunther-gatherer system or, at most, a pastoral system.

Lebanon is a full-fledged capitalist modern nation-state. It has a Central Bank, it has a formal private property legal architecture on the capitalist fashion (liberal democracy). It has formal trade and diplomatic ties with other capitalist nation-states in the modern, Westphalian conventions. It has a capital and a trade accounts like any other normal capitalist country. It is 100% capitalist.

The only difference Lebanon has with, e.g. France, is the historical and geographical circumstances. On a purely economic, structural sense, the Lebanese State is indistinguishable from any other capitalist State (aka liberal democracy or Western Democracy).

Posted by: vk | Jul 4 2020 16:28 utc | 33

" The banksters have divided 8 billion humans and sorted them into 256 nation states to enable the elite to manipulate the people within the nation states. The governed are like cells in a tissue matrix.. "

Would you prefer that there be only one nation even more easily subverted and ruled over ? Isn't that what the elite want in the first place ?

Posted by: Fog of War | Jul 4 2020 16:35 utc | 34

Does Lebanon print its own money debt free ? Why not ?

Posted by: Fog of War | Jul 4 2020 16:36 utc | 35

@DI 30
Its not an open thread but I'm a fan of past civilization/disaster theories. Sounds like u got one. Got a link or synopsis or a finger to point while I drinks beers in me garage?

Posted by: PleaseBeleafMe | Jul 4 2020 16:52 utc | 36

@FoW 34
Lebanon is import dependant and export poor and therefore needs us dollars for trade. Printing your own money(Lebanese pounds) doesn't help except inflate the currency.

Posted by: PleaseBeleafMe | Jul 4 2020 16:57 utc | 37

vk,
since you live in Brazil, how would you call it if every person of Portuguese descent was voting for someone of Portuguese descent, every Italian for an Italian or a Catholic, every German for a German or a Protestant, every Indian for an Amazonian, every Carribean for a Carribean, etc?
And what does that have to do with capitalism? Aren't the Sauds tribal in their ruling the countries with a number of families and clans, against the minorities? And aren't they capitalist as well?

Posted by: Mina | Jul 4 2020 17:03 utc | 38

Having said that, the ppl who have been on the streets for +6 months before the just-on-time epidemy are precisely against this sectarianism and tribalism; and for once, a lot of Christians are against their own politicians and bankers on that.
But that does not mean that in villages you are not obliged to vote "tribally" so as to allow some power to your sect/clan. And indeed this is imposed by the devilish constitution installed by the French, and which worked so beautifully that it was exported to Iraq by the US.

Posted by: Mina | Jul 4 2020 17:08 utc | 39

Lebanon is also being deliberately starved of access to us dollars. No goods and useless pounds whose geographical neighbours are either hostile or not much better off with a large external population. Weapons and mercenaries of all brands incoming... Sounds like a pressure cooker.
How much assistance can Lebanons allies give it seemingly indefinitely with so many empty mouths and hands? Another refugee wave europe?

Posted by: PleaseBeleafMe | Jul 4 2020 17:25 utc | 40

@ Posted by: Mina | Jul 4 2020 17:03 utc | 37

But this has nothing to do with the USD recycling scheme that was happening in Lebanon. It wasn't free elections that brought Lebanon down, but one single banker (from the Central Bank) and a coterie of capitalists.

The religion of the banker and the capitalists are irrelevant here.

And this do happens in Western Democracies. We all know of the candidate of the Japanese colony in Brazil (who has a guaranteed mandate in the legislative purely for that fact), or the guaranteed Cuban-American congressman from Florida (purely because of the Cuban colony and Latino community). Or, to be more enlightening, the guaranteed/folkloric legislator from the petite-bourgeoise - ever present in every Western European country.

These kinds of sectarism are irrelevant to the reproduction and domination of capitalism. In fact, it helps it, as it keeps those living fossils of the distant past neutralized while real power (Armed Forces and the means of production) are kept in the hands of the capitalist class.

Posted by: vk | Jul 4 2020 17:39 utc | 41

" Printing your own money(Lebanese pounds) doesn't help except inflate the currency. "

Seems to work fine for China and worked great for the third Reich. Has Lebanon's Rothschild controlled central bank done any better ? What about Japan's ? USA's ? and so forth .................

" Lebanon is import dependant and export poor and therefore needs us dollars for trade "

Then it shouldn't exist as an independent nation. You either make everything you need, or you export enough to purchase whats necessary.

Posted by: Fog of War | Jul 4 2020 17:41 utc | 42

Good analysis, b - many thanks.

Sayed Nasrallah has spoken to this issue. On June 16 he said that Lebanon is in crisis because the US is acting to starve the country of US Dollars. He shows - and as we can see clearly - that the starvation of dollars equates to a starvation of the people. He says that Hezbollah will not let this happen.

Mysteriously, Nasrallah reveals that Hezbollah has its own plan to defeat the plan to starve the people of Lebanon, but doesn't say what.

Nasrallah said that Hezbollah will not allow the United States to starve Lebanon and its people, and that his group had a “grave equation” of its own that it may activate in response to this American economic war.
- Nasrallah: US choking Lebanon, Hezbollah will respond, Iran/China on standby

As is Nasrallah's wont, he never lies or exaggerates, but he also doesn't reveal what cannot be said at the time. All of his claims are always operational intelligence, and everyone in the ME listens when he speaks.

Personally, I suspect we'll never see this "grave equation" enacted, because I think China and Iran are completely determined - and have the tools - to defuse the situation before that critical point is reached. One can only wonder what it means, and to what extent Hezbollah would take over the government if the people were starving.

Posted by: Grieved | Jul 4 2020 17:55 utc | 43

@23 A User - Depositing or withdrawing money in a new system in such a way that it also changes the numbers in the SWIFT system is an incredibly difficult problem

It may be getting vastly more easy, with the development in China of its Digital Yuan. This is blockchain technology but not a new cryptocurrency - it's the real Yuan, a product of sovereign China, but on largely proprietary technology. It can now be exchanged anywhere in the world without using a bank as intermediary.

We've discussed here before, and recently, how the overturning of a system is best done by creating a replacement for it and simply letting the old system become irrelevant. China has quietly been doing this very thing, over 20 years of development.

This June 28 article by Chris Faure at the Saker offers an excellent tour of the landscape, explaining not only what China's digital Yuan is, but also what its revolutionary aspect is:

What is China really doing with its digital Yuan?

I would argue that the digital yuan is a part of the 5th plank of the Belt and Road process of facilitating cross border investments and supply chain cooperation (perhaps not openly stated).
As to decoupling from the USD:
We now have clear precedence set on the decoupling part of FinTech and other organizations. It is no longer a big deal to decouple from empire.

Faure makes clear that ownership of a financial platform is a value in its own right. China is owning the new one that will replace that of the US. Godfree Roberts chimed in with a comment that China owns 90% of the IP in the system underlying the digital Yuan, and that the US is 20 years behind the curve.

It seems possible now - although I haven't experienced this directly myself - that any individual can securely transact and exchange money throughout the world using the Yuan, with only a phone and no other system.

Sometimes the future is easy to see, simply by stepping out today's open door.

Posted by: Grieved | Jul 4 2020 18:05 utc | 44

Earth Beings Globally are in an extinction process. "Flesh trading/culling" is a heinous practice that's been ongoing for eons. "Grow the herd, and cull the herd!" Experiments on Americans?!! One of countless numbers of species "humans" in the lab of "Matrix" venue. What is the answer~solution to evolve sinister own species' cannibal insanity? The east has a practice to enlighten our brain, raising the percentage from a single digit IQ to a higher %, of course the practice must be practiced and therein lies the rub ... "Cultivation Of Nine Houses". Grounding superconscious energy, vital! Tai Chi, Chi Gong, Yoga, Meditations and Five Elements Whole Foods~Grow Gardens. "Be Like Water".
MOA knows, Dreamer Dreams, Dreamer is the Dream & serves our humanity.

Posted by: BiloxiM | Jul 4 2020 18:26 utc | 45

As far as I understand it from my Lebanese friends, it's mainly a banking crisis, as b says. The wealthy in Lebanon - and they are or were very wealthy - got caught with their money invested in Lebanon, because the interest rates were better, and now they can't get their money out (in dollars).

It is not a societal problem - sectarian (religious communities) or tribal. Though the fixed nature of community relationships (established by the French in order to keep the Christians in power, not the West in general) makes the problem difficult to recover from.

I'd be surprised to hear that anyone in Lebanon, and particularly not the wealthy, bothers paying taxes. One reason why the state is so weak. But permanent conflict in government makes it impossible to take real action, as could happen in the West.

I would think that Israel too is trying to stoke up the problem, as a way of being rid of Hizbullah. That would not be that well thought out, as Hizbullah are a rural people, able to live off their land. If they got really desperate, they might let off their missiles, and that would be catastrophic for Israel.

There's also Syria. It seems that a lot of wealthy Syrians had their money invested in Lebanon, for the same reason. And now there's hunger in the government areas in Syria, they say.

Posted by: Laguerre | Jul 4 2020 18:29 utc | 46

@FoW
Lebanese currency has no value for others if there are no products for Lebanon to export.
As b has been pointing out Lebanon was relying on various sources to obtain dollars but that's dried up.
Unlimited currency is irrelevant if u have no products to purchase. Lebanon has been printing money to compensate and by trying to make it's currency more attractive ( interest rates) but it's producing inflation.
Your last paragraph makes sense but that is the nature of the world we live in. Schemes to allow the unallowable. Lebanon is very complex and as a nation state incredibly unique. How it still has managed to exist must say something about it.
Don't know if I helped u but you're making me think and I'm bored so thank u.

Posted by: PleaseBeleafMe | Jul 4 2020 18:39 utc | 47

In fact it might have been better if the wealthy Lebanese or Syrians had kept their money abroad. In that case they would have been able to continue to pay their servants and subordinates, in the feudal style they have, and the money would have trickled down. They've been caught off-base.

Posted by: Laguerre | Jul 4 2020 18:46 utc | 48

A lovely article by Bel Trew on the sufferings of foreign women servants in Lebanon. At least they're not being thrown off balconies, as used to happen according to the Angry Arab. Now they're just abandoned unpaid in front of their embassy, without passport. They're not very nice, the wealthy Lebanese.

https://www.independent.co.uk/news/world/middle-east/lebanon-economy-coronavirus-domestic-migrant-workers-kafala-a9600506.html

Posted by: Laguerre | Jul 4 2020 19:05 utc | 49

Hey VK,

cool ideas.

Economics were, by and before Adam Smith and the like, understood in terms of history, not institutions.

//

If Lebanon is something not, then its being arabic. Thats what I heard.

Posted by: answer to vk | Jul 4 2020 19:41 utc | 50

- Lebanon is currently suffering under DEFLATION (NOT Hyperinflation)because A LOT OF money has fled the country. The rising prices are the result of a falling Lebanese pound.
- The moment the lebanese central bank and/or the government start (literally) printing money then and only then Lebanon will see Hyper-Inflation.
- This is only a prelude to what is going to happen in more arabic countries. The elites of those countries don't seem to care about the fate of their population(s). They only care about their own (financial) situation. Do combine that with a population that has grown at a very fast rate in the last say 6 decades and one can imagine what's in store for the entire Middle East in the coming years. And then the US simply can't do anything to stem or surpress the multiple uprisings in the Middle East. Here the arabic countries are reaping what they have sown in the latest 4 to 5 decades. Not a pleasant outlook for the (near) future.

Posted by: willy2 | Jul 4 2020 19:43 utc | 51

The only country on Earth that can print money without suffering any inflation is the USA.

And, even the USA cannot do that any time, any circumstance it wants. That's because the Triffin Dilemma guarantees its currency will lose purchase power in the long term, as inflation is converted into deindustrialization.

That's why the USG has just begun to print money now, after the pandemic crisis, and not before that. The pandemic ended any hopes of what still remains from the American neoliberal elite that Q.E. (quantitative easing) would work. The clowns exited the stage only to give way to sacrificial lambs - the MMTers - who may enter History as the economics school that destroyed the American Empire. If that turns out to be the case, that would be unjust: the MMTers are a symptom, not the cause, of American decline.

Posted by: vk | Jul 4 2020 19:54 utc | 52

@w2 50
You've confused me as b has demonstrated that the Lebanese pound has inflated vs the dollar. If dollars left or were confiscated then I fail to see as to how this could be deflationary?
U admit to inflation due to a fall in the lb but isn't the link a result of Lebanon having to print money?

Posted by: PleaseBeleafMe | Jul 4 2020 20:56 utc | 53

Grieved @ 42:

I am betting that for years already in Lebanon, there have been two parallel economies, one for the rich and one for the poor. The one for the poor is what Sheikh Nasrallah refers to: it is probably based on the charities and social welfare programs that Hezbollah runs for its members and their families, for the families of Hezbollah martyrs amd those allowed to fall into poverty by the Lebanese govt because it mostly exists for the benefit of the rich.

This seems similar to what exists in Iran, where the poor are helped by charities owned by the IRGC, the Supreme Leader Grand Ayatollah Hossein Ali Khamenei and some sections of the military among others. In that country, the rich and the middle classes are being squeezed by US sanctions and the Rouhani govt's neoliberal policies - but the Iranian poor don't appear restive, contrary to what we'd expect. The US govt is looking and probing for every opportunity to destabilise Iran, and seemingly not finding enough.

It seems that the French divide-n-rule policies that benefited the Christian Lebanese and set them on the path of easy wealth have come back to bite them. Their escape plans of using their dual nationalities (Lebanese + whatever country they have family and business connections with) won't help because their money is now worthless and their bolt-holes will impose COVID-19 quarantines on them.

Posted by: Jen | Jul 4 2020 21:02 utc | 54

@PleaseBeleafMe #53 It's quite possible to have inflation (measured in Lebanese pounds) and deflation (measured in USD) simultaneously.

Posted by: BillB | Jul 4 2020 21:03 utc | 55

Thanks b. A dribble of Syria as well.
Please b, as with the Egypt thread, you are more and more predicting WAR as a solution to humanity’s problems. Please, let’s cool it with the war talk. You are not American, are you? Anyway, looks like the Nile water situation is being resolved diplomatically led by Africa, not US. No war as predicted.

The more we think in a binary way of war or nothing as a way to solve our problems, the less human we become.

Posted by: Sakineh Bagoom | Jul 4 2020 21:07 utc | 56

Fog of War @ 41:

By your definition of sovereign nations, there are very few independent nations and the majority of states in the UN including at least one or two permanent members of the UN Security Coincil are complete failed states.

Posted by: Jen | Jul 4 2020 21:09 utc | 57

@vk

The Lebanese situation is a nice microcosm of the financialization phase of a capitalist cycle and it is particularly telling that b's piece had nothing to say about the real economy in Lebanon other than that it is being hollowed out by this decoupling of finance from production. Value creation has evaporated.

BTW You're spinning your wheels trying to get folks here to understand Marxian analysis. Your point that ME states are all thoroughly capitalist economies in a late financialization is spot on. The rest is ideological superstructure, like everything else in the world that prevents class consciousness from realizing itself (MAGA, etc).

Posted by: Patroklos | Jul 4 2020 22:28 utc | 58

Posted by: Grieved | Jul 4 2020 17:55 utc | 42 As is Nasrallah's wont, he never lies or exaggerates, but he also doesn't reveal what cannot be said at the time. All of his claims are always operational intelligence, and everyone in the ME listens when he speaks.

Agreed. Nasrallah is one of, if not the, smartest people in the Middle East. He leads Hezbollah with the same sure hand that Putin leads Russia. I hope he's aware that in the next Israel-Lebanon war, he'll be fighting the US as well and has a plan for that.

Posted by: Richard Steven Hack | Jul 4 2020 23:08 utc | 59

Posted by: Grieved | Jul 4 2020 18:05 utc | 43 What is China really doing with its digital Yuan?

Very interesting article. I've only in the last year gotten into using Bitcoin, forced to by one of my Internet service suppliers dropping debit and credit cards in the US. At first I bought Bitcoin from persons on the Localbitcoins.com site. Then that became difficult due to new regulations on that site which caused most of the cash deposit sellers to leave. So I found a Bitcoin ATM in the convenience store a block over. Then the last time I went there the machine was "out of bitcoins", whatever the hell that meant. So I found an online service that takes debit cards for Bitcoin.

Point is that dealing in cryptocurrency has been a hassle compared to using the banking system debit cards. But I can see it getting easier as cryptocurrency use spreads. I can well believe that China has made it easier. I've read before that tourists in China have a hard time buying anything with cash because almost everyone in China uses a credit card.

From my point of view, credit and debit cards are a security risk if one is operating outside the law - to easy to track and requiring a lot of hoops to jump to create the identities needed to use them (aside from prepaid cards paid for with cash.) A cryptocurrency makes it easier to store and move funds outside the surveillance system - although as my experience with Localbitcoins shows, using any actual legal service is going to be controlled and surveilled by the state and the operators of the system themselves. But it's possible to use cryptocurrencies in a completely un-surveilled way (aside from the transactions themselves being visible on the blockchain.) But that still requires careful planning and hoop jumping.

Hackers have managed to steal millions of dollars of Bitcoin from their owners by compromising the systems used to conduct the transactions, rather than the transactions themselves. In fact, this is probably the current best way to get rich by hacking. And that is not likely to be improved so much as to prevent such things. The safest way to use cryptocurrencies is to have personal control of the system used to access the cryptocurrency system. Your computer or phone needs to be as secure as feasible, your access to the Internet random and encrypted, the funds stored in a hardware wallet, etc.

But for "normal" people, something like the Chinese system will make it much easier to use a cryptocurrency. But the state will continue to have surveillance measures enacted to try to control criminal use of the system. How successful that will be is problematic.

Bottom line: Such a system will be better than the current banking system for normal users - but just as controlled. And probably just as valuable to the financial elite as the current system.

Still, it takes down the US control of the financial networks, that is likely to be a net plus.

Posted by: Richard Steven Hack | Jul 4 2020 23:41 utc | 60

@biilb 54
This makes sense. dollars in Lebanon r rarer so the purchasing power of available dollars has risen (deflation).
Think u sorted it out. Thanks.
Economics has always been a voodoo science to me and how the different systems interact and compete and manipulate each other should be reformed. Obviously it's way too complicated and involves way too many middle men at present.
The digital currency revolution is possible if people have faith in it. I don't! The infrastructure for it is 4th world. Until some entity invests a mere few billion into the venture (a gamble but peanuts to some arse) of creating an available ATM network for example and advertising the service then everyone will be hesitant. It hasn't caught on to the rich old folks in other words.
@SB 55
I'm predicting war. I'm not predicting war as a solution. There's a difference that I'm assuming can be explained if you're a non native English speaker. My tone can be dark I guess at times but it's not because I want to see harm come upon anyone on this earth. Egypt has a western border it can now possibly concentrate it's energies upon. Making war more likely possible now that a resolution of the Nile issue seems to have occurred?
No I'm not American, I'm a newf!

Posted by: PleaseBeleafMe | Jul 5 2020 0:29 utc | 61

i'm leery of bitcoin. seems like a situation where you need a good understanding of the risks and rewards.

Posted by: pretzelattack | Jul 5 2020 0:32 utc | 62

@ pretzelattack | Jul 5 2020 0:32 utc | 61 who wrote
"
i'm leery of bitcoin. seems like a situation where you need a good understanding of the risks and rewards.
"

People need to understand the difference between the technology behind bitcoin and what China is doing and understand that bitcoin and its kindred not created by sovereign governments are just another form of fiat currency owned privately.

As to the technology behind bitcoin and more to what China is doing, I suggest folks go study about permissioned versus permissionless blockchain methodologies. It is my understanding that China is creating a currency backed by permissioned blockchain technology.

Permissionless Bitcoin today is what the Dutch tulip mania of the late 1630's set the standard for.

Posted by: psychohistorian | Jul 5 2020 1:02 utc | 63

nassim taleb on bitcoin jan 2018 https://medium.com/opacity/bitcoin-1537e616a074

i am curious his present thoughts on lebannon as that is where he grew up..

Posted by: james | Jul 5 2020 1:29 utc | 64

re Grieved | Jul 4 2020 18:05 utc | 43

The saker article does nothing to refute my original statement "Depositing or withdrawing money in a new system in such a way that it also changes the numbers in the SWIFT system is an incredibly difficult problem".

Sure digital yuan can work effectively when systems change over to it, but it is the changeover process when large entities such as nation states and big corporations need to be operating across both types the USD or the DY (digital Yuan) is where the problem is.
amerika may have allowed France to settle 20% of its China debt in DY so it can have a good look at the flow of the system. The rest of the foreign transactions have been tiny, $14 million is petty cash for mining corporation Rio Tinto.

AS I said during implementation of an alternative reserve a system that records transactions in both the new alternative and the USD will be required as both nations and corporations will not be able to track & record cash flows otherwise.
The moment that any nation or corporation begins to use the DY for general regular international transactions, whatever institution is assisting in this will be told to cease & desist or it will lose its SWIFT status.
Even if an entity tries to develop an enlarged version of what happened in France and diverts a mass of wealth away from a SWIFT based financial institution into a DY based one, there will still have to be a point of intersection somewhere between the two systems.
The last two decades have been a lesson in the greed & unreasonableness of the slugs in control of the USD reserve. Any slight infraction results in fines, criminal convictions and ultimately sanctions. Any intersecting entity will be punished by amerika, as well as the next step in the SWIFT transaction ie whatever bank or national reserve which helped facilitate the transaction.
amerika is going to come down really hard on those who seek alternatives.
Some will resist, but this is banking, home of the globe's greedheads, it is inconceivable that many in that game will rush to join the queue named "divested of all wealth by amerika".

A solution will come, but only after a massive amerikan meltdown. Coronavirus just isn't big enough. War is the most likely opportunity and who wants that, other than amerika who thus far have always been careful to divide then isolate opponents before waging war.

For a war that permits the construction of an alternative currency, amerika would have to be at war with a sizable proportion of nations.
Eventually that will happen, and another reserve currency will evolve but when it does, that creation of a reserve is going to seem to be a minor issue for most humans.

Posted by: A User | Jul 5 2020 2:02 utc | 65

@60

My post was directed at our host, b. NO one else.
thanks.

Posted by: Sakineh Bagoom | Jul 5 2020 3:26 utc | 66

@SB 65
My apologies. I have my beer goggles on. I'll do pushups.

Posted by: PleaseBeleafMe | Jul 5 2020 3:58 utc | 67

@RSH @59 most people in China pay with their mobile phones, not credit cards. WeChat payment is ubiquitous, non-contact scanning of QR codes, very fast, convenient and secure. Visitors have problems because you cannot get cash into the system easily, officially, without a Chinese bank account. This may or may not be a deliberate preemptive choke point.

The genius of this system is that there is no charge to the person paying or the person receiving money, for transactions of any size, so why would anyone choose to use an old-fashioned credit card that siphons off a few percent, a 19th century bank transfer, or even dirty inconvenient cash? It’s not like you’re going to be without your phone.

A few years ago a Chinese company wanted to buy a US PayPal-like company and they were blocked. It will be interesting to see if foreign transfers into the system are blocked by foreign governments using some excuse (national security, banking regulations, etc.)

Posted by: BillB | Jul 5 2020 5:31 utc | 68

@James 4

"the world needs a world currency - not a usa currency that dictates everything for it's own purposes..."


It is not clear if this is your quote, or was originally in the article (I can't seem to find it now). Either way, please, God - no!

The Euro is a fine example of how not to run a transnational currency. A world currency would be even worse. Either you use the euro model, and have worldwide imbalances breaking everything, or you have a world currency with transfer payments from rich to poor countries. The opportunity for corruption, monopolistic practices and wealth extraction would be colossal.If you thought our current system was madness, just wait and see what the bankers could do with a single worldwide currency.

The obvious solution should dollar collapse happen would be to return to gold, which isn't remotely perfect either.

Messy and disorganised is probably better than elite-controlled, top-down enforced currency control.

Posted by: C | Jul 5 2020 6:42 utc | 69

@Beleafme (post #52):
- A LOT OF people fail to grasp the concepts of Deflation, Inflation & HyperInflation.
- Inflation is defined as an increase of money & credit/debt.
- Deflation is defined as an decrease of money & credit/debt.
- One shouldn't look at PRICES.
- A LOT OF money has fled Lebanon and that's why the currency has fallen and import prices have risen (as a result of a falling Lebanese pound). So, Lebanon goes through Deflation and NOT (Hyper-)Inflation.

Posted by: Willy2 | Jul 5 2020 6:48 utc | 70

...
Please b, as with the Egypt thread, you are more and more predicting WAR as a solution to humanity’s problems. Please, let’s cool it with the war talk...
...
Posted by: Sakineh Bagoom | Jul 4 2020 21:07 utc | 55

I wouldn't describe b mentioning the word "war" as advocating for conflict. Nor would I call it 'war talk' which, for me, means recommending a military solution.

I come to MoA because b's analyses probe the undercurrents of a given situation. Since the main reason anyone probes a political situation is to form a basis for making predictions, then it would be silly to go to all that trouble and not mention a possibility of war, if that's what the tea-leaves indicate to the researcher.

I can't recall a single instance of b advocating for a military solution in ~10 years of lurking here :-)

Posted by: Hoarsewhisperer | Jul 5 2020 6:52 utc | 71

Nobody I think is doubting the role of financialization in the Lebanese problems. Lebanon was the Switzerland of France, just as Andorre or Monaco are, and as Luxembourg is for Germany, Singapore for the UK and the rest of the world, etc.
But when you stay in Lebanon and see the local wealthy making money by betting against their own currency (at least that was the case a few years ago) by keeping an eye on the currency market and buying/selling Lebanese pounds vs dollars almost to the second, you really wonder what is going on. Ultra-nationalism the Iranian way or the Russian way seem, alas, to be the one solution, but you can't apply that to a sectarian society.

Posted by: Mina | Jul 5 2020 8:05 utc | 72

The best solution for a massive financial conundrum is a massive war. War is great for business, always has been. War is a racket, war is good, etc. Lebanon is a basket case of competing factions, sects, and faiths, and their constitution supports this. There was an odd moment in the sun in the 1950's and 60's but then sectarianism reasserted itself and it all went tits up in '75.

Posted by: wow_signal | Jul 5 2020 9:29 utc | 73

Posted by: Hoarsewhisperer | Jul 5 2020 6:52 utc | 70 I wouldn't describe b mentioning the word "war" as advocating for conflict. Nor would I call it 'war talk' which, for me, means recommending a military solution.

This is Bagoom's standard troll approach. He does the same thing with me. I predict a war with Iran, he swoops in to insult me as allegedly *wanting* a war with Iran - which is the last thing I want.

Ignore him. He's an idiot.

Posted by: Richard Steven Hack | Jul 5 2020 10:44 utc | 74

Posted by: BillB | Jul 5 2020 5:31 utc | 67 @RSH @59 most people in China pay with their mobile phones, not credit cards.

Than you for clarifying what goes on. I was relying on memory of an article read some time ago.

Posted by: Richard Steven Hack | Jul 5 2020 10:46 utc | 75

Richard Steven Hack @73

I suspect that Sakineh Bagoom may not be an idiot and is instead someone whose English skills might be more limited than many other posters. Some of that poster's responses, and in particular the ones where the poster is attacking you, look much more like the product of someone who has misunderstood the posts at a basic language level rather than a conceptual one. There are many posters here whose native language is not English, and I have traveled enough in places where I am the one unskilled in the local lingo that I am comfortable overlooking such misunderstandings as I have been the source of a few myself. Seemingly casual discussion of the potential for war can be interpreted as advocacy of war by people struggling to decode the language of the discussion. This is entirely different from the twisted morons who, for instance, assert that people owning guns for home defense actually want kill. That latter case is legitimate stupidity and deliberate misunderstanding to protect a critically flawed and "identity politics" poisoned ideology by delusional middle class folks leading sheltered (from reality) lives. I don't think Sakineh Bagoom is in that category.

Posted by: William Gruff | Jul 5 2020 12:33 utc | 76

@23 A User

"Depositing or withdrawing money in a new system in such a way that it also changes the numbers in the SWIFT system is an incredibly difficult problem - especially over an extended period with amerika's "sanction them all" bullying.

You would have to explain how this is a problem. SWIFT is a system for messaging between financial institutions. It is not involved in clearing and settling between banks, and banks do not keep track of their claims on each other through SWIFT. While SWIFT is the dominant system for exchanging financial messages (such as payment orders), and it's difficult to create a new system that is as robust and widely accepted, there's no instrinsic reason why banks couldn't send payment orders to each other through a different system (by telephone, by fax, by e-mail, through a blockchain, through physical exchange of a piece of paper etc.).

That is indeed what has happened internally in Russia. A majority of their banks now use the domestic SPFS system instead of SWIFT for financial messages. These banks are still (for now) connected to SWIFT. Whether the payment order is sent through SWIFT or through SPFS, its contents are instructions to credit and debit certain accounts in the receiving bank.

For example, bank A has a customer who wishes to send $1000 to an account at bank B. It then sends a payment order instructing bank B to credit this account with $1000, and to charge bank A's account balance at bank B with $1000. Bank A now owes bank B $1000, and this is what was recorded in bank A's account at bank B. The balance between bank A and bank B is later settled through their respective accounts at the central bank.

All the accounts in question are exactly the same - and they change in the same way - whether the payment orders are sent through SPFS or SWIFT. In other words, there is no separate "SWIFT system" of accounts that is somehow untouched because a payment order was sent through SPFS or some other system, rather than through SWIFT.

Posted by: Eric | Jul 5 2020 12:44 utc | 77

James (and others):
Nassim Taleb, Lebanese, expat in NYC since the civil war, former trader, and definitely no foe of liberal economy or capitalism, has sounded the alarm for some time and, for the last year and more, has said things quite close to B's post. Basically, the banks and rich people's deposits should be voided and Lebanese people should get as much as possible of their money back. Salameh is a crook who should be fired and put on trial. US should stop fucking with the country for political gain and stop protecting the wealthy elite who looted the country, because this elite is mostly opposed to Syria, Iran and Hizbullah. His takes on the Levant are quite interesting since he's Christian, his family got trashed by Hafez el-Asad and suffered through the civil war, yet he's not quite closer to Hizbullah and tends to defend Syria's government, considering that their opposition is mostly murderous Sunni jihadis that would be worse for their country (and specially for Christian minorities).
Hopefully, massive violence and war can be avoided. This country has suffered way too much for the last 50 years.

Posted by: Clueless Joe | Jul 5 2020 13:15 utc | 78

Posted by: William Gruff | Jul 5 2020 12:33 utc | 75 Some of that poster's responses, and in particular the ones where the poster is attacking you, look much more like the product of someone who has misunderstood the posts at a basic language level rather than a conceptual one.

I'm inclined to doubt your view of him. He may have misunderstood my purpose in discussing the potential for an Iran war, but in that case he should be aware that I have explicitly denied that repeatedly. His reaction has been to giggle inanely and keep repeating the question "how will the war end" (as if I would know, and apparently he thinks he does but never says what that is), as if he intended to make a point - but never does, and further engages in repeatedly talking about 77 virgins or some BS.

I think I know when I'm being trolled. Given that aside from his post to b, most of the time he only comes here when I've posted something on Iran.

However, if your view is correct, then I suggest someone with adequate knowledge of both Farsi and English explain to him some of the English language. If he doesn't know what's being said here, then he needs to shut up until he does.

Posted by: Richard Steven Hack | Jul 5 2020 14:27 utc | 79

Posted by: Sakineh Bagoom | Jul 4 2020 21:07 utc | 55 Please b, as with the Egypt thread, you are more and more predicting WAR as a solution to humanity’s problems. Please, let’s cool it with the war talk...
...

Given that grammatically correct English sentence, I can't accept that he doesn't know perfectly well that I don't want war with Iran. He assumes that since I've been flogging the possibility for the last 14 years, at goingtotehran.com, and antiwar.com and here, that this indicates that I want the war to happen. But I've repeatedly said I don't, and I have listed the bad things that are likely to happen if it does occur. I find it hard to believe that he doesn't understand that. It's clear to me that he does and doesn't care.

In any event, if he wants a civilized discussion, I'm prepared to have one. But he's going to have to leave off the 77 virgins bullshit and stop writing like he's a giggling idiot.

Posted by: Richard Steven Hack | Jul 5 2020 14:33 utc | 80

Posted by: Hoarsewhisperer | Jul 5 2020 6:52 utc | 70
I can't recall a single instance of b advocating for a military solution in ~10 years of lurking here :-)
Thanks for the reply Hoarsewhisperer.
I’ve known b for almost the same period and I most definitely agree with your assertion.
b used to come down and mingle amongst us, here and elsewhere.

Now, I don’t know how you describe the first sentence in the post.
“ Lebanon is drifting towards hyperinflation and armed strife.” This is a prediction. No?
I’m not saying he’s advocating. Just predicting a war. When you start an argument with war, there is not so much to climb down on. War, as always, should be an element of last resort.

Posted by: William Gruff | Jul 5 2020 12:33 utc | 75
I don't think Sakineh Bagoom is in that category.

Thank you, for your defense WG. As I said above, let’s not show our teeth, except for smiles.
Your post made me wonder. How would I categorize myself. I’ll have to think about that. Not liking labels, it will be extremely hard.

As for being an “idiot” that RSH would like you to believe I am, YES, most definitely.
The difference between him and me, is that, he wakes up everyday thinking today would be a good day for my decade+ long dream to come true. In his case, prediction and advocation have no meaning. Let’s just get the thing started already. Lollipop licked.
I don’t know what happened to him in Viet Nam — he did say he served. When my friend came back from Nam, he said: “they prepared us for the carnage, they made us blood hungry. And that, just doesn’t go away.” He was having a very tough time becoming a civilian again, and I, just not up to the task of his rehab. Just lent a good ear for him to vent.
What does evaporated blood look like? That’s the form that Iranian baby’s blood will be in.

President Hack, play the game that I laid out for you. Pull the trigger, please.

Posted by: Sakineh Bagoom | Jul 5 2020 15:10 utc | 81

Sakineh Bagoom @81

I would just like to be clear; you do know that predicting a thing does not in any way show support for that thing, don't you?

Let us look at an example. Let us assume we are all on an airplane. Our host, b, looks out the window of the airplane and observes that we are flying straight for the side of a mountain. Our host points out that if this trend continues we may all be in for some hurt. Richard Steven Hack, having apparently survived a very similar plane crash before, states agreement that unless the airplane changes course that bad things are going to happen.

Do you, Sakineh Bagoom, believe that either individual in the above example is saying that they want the crash to happen? Or perhaps you are saying that by acknowledging that we are about to have a crash they are causing that crash to happen? I ask this because there are many people in the United States who have a metaphysical way of looking at the world in which by acknowledging a fact you are showing your support of that fact, or even making that fact become reality, whereas if you deny that fact then it will cease to be reality.

In other words, do you believe that there is a physical world that exists independently of our subjective opinions about that world? Or do you believe that the world is directly shaped by thoughts? Will the airplane on a deadly course fly safely through the heart of the mountain if we force ourselves to believe there will be no crash? Or will the airplane crash into the mountain regardless of what we force ourselves to believe it will do?

I will provide a more realistic and concrete, real world example. This belief that thoughts directly create reality is pervasive in the American racism problem. In Chicago (and most other major American cities), a very large majority of murders are committed by young Black American men. Despite this being an indisputable fact, a great many Americans believe that if you pretend that this fact isn't true then the murders will not have happened. From within this perspective everyone who acknowledges what is happening in the real world are then causing those murders, and thus they are racists.

This issue is basically the difference between two philosophical traditions. On one hand is philosophical "Idealism", in which the world we perceive comes into existence directly due to ideas that we form in our heads; that is to say our minds are separate from the physical world, and we think the physical world into being.

Opposed to this is philosophical "Materialism", which is based upon the notion that the world exists independently of our thoughts about it, and in fact the universe would continue to exist even if all humans died tomorrow; that is to say our thoughts are the products of our material brains, which themselves are parts of the material world.

Does matter arises from thoughts or do thoughts arise from matter?

For Materialists, understanding the objective world is necessary to consciously change that world, and to understand that objective world we must discuss it as it really exists rather than as we want it to be. For philosophical Idealists, we would have to think about the world only as we want it to be. To me it seems obvious that our host, and the poster Mr. Hack, are philosophical Materialists, and for them pretending that the world is something other than what our perceptions tell us that it is doesn't serve a purpose. They do not acknowledge the possibility of a war because they want that war to happen, but rather because they believe that in order to change the course we are on we need to discuss and understand the objective reality of our current situation. Philosophical Materialists do not see a point in pretending that there is no risk of war when the evidence they see suggests that the risk is very real.

Do you believe that if we were to close our eyes to the evidence of approaching war and pretend it cannot happen, then there will be no war?

Posted by: William Gruff | Jul 5 2020 17:11 utc | 82

@ 76 william gruff.. if you want out of a hole, quit digging... twas an impressive mischaracterization wrapped inside your post there.. it was what you asserted which is why people called you on with regard home invasion earlier.. now, if you want to change it - fine.. clearly you were stung by it, but it was based on what you said if you go back and look.. ps - i like you post @82... good analogy... i personally saw nothing wrong with what @ 56 sakineh said... clearly he doesn't know b is not american...regardless, i like your analogy..

@ 78 clueless joe... thanks for the perspective...

Posted by: james | Jul 5 2020 18:16 utc | 83

I know that I didn't say so earlier, but this is an excellent article (and timely).
Thank You.

Posted by: Joshua | Jul 5 2020 18:57 utc | 84

Do you believe that if we were to close our eyes to the evidence of approaching war and pretend it cannot happen, then there will be no war?
Posted by: William Gruff | Jul 5 2020 17:11 utc | 82

WG, I do know this, when you are supposed to perish, you will. Your plane analogy reminded me of another plane analogy I use, as a way saying when your time is up. You gotta go.
Flight 243 — only one person got sucked out of the airplane. The rest survived.
Aloha Airlines Flight 243 — https://en.wikipedia.org/wiki/Aloha_Airlines_Flight_243

Posted by: james | Jul 5 2020 18:16 utc | 83
clearly he doesn't know b is not american.

I do know b’s not American. I was using the question rhetorically (saying: you are not American, are you?), as the Americans are the most warlike people. — here is their president, Carter, saying so.
https://www.commondreams.org/views/2019/04/18/jimmy-carter-us-most-warlike-nation-history-world

I also see that, overnight it seems, mendacious RSH, turned into a peacenik — that he doesn’t want such a war. Now, that’s a laugher.

Posted by: Sakineh Bagoom | Jul 5 2020 19:55 utc | 85

Throw the USA ambassador out of Lebanon, she is a duplicitous louse.

Posted by: uncle tungsten | Jul 6 2020 6:22 utc | 86

Posted by: Sakineh Bagoom | Jul 5 2020 15:10 utc | 81
(Thanks for the reply Hoarsewhisperer @ #71)

And thank you for your acknowledgement, however I clearly failed to properly explain what I objected to in your well-intentioned, but clumsy and undeserved, criticism of b's conclusion. It's quite simple.

You wrote "you are more and more predicting WAR as a solution to humanity’s problems."

b has never even hinted that war is a solution to humanity's problems.
That's just you trying to put words in b's mouth.
Over at Xymphora that sort of careless self-indulgence could get you banned for life.
I don't think you're a troll but I do think you should be more careful about accusing people of holding opinions which they clearly do not.
Do you understand now?

Posted by: Hoarsewhisperer | Jul 6 2020 8:12 utc | 87

Sakineh Bagoom @85: "...the Americans are the most warlike people."

Yes, that is very true, but Americans all live in a delusional fantasy world in which they are pleasant and peaceful and it is the rest of the world that is warlike and filled with threats and danger. It is with the best of intentions that Americans murder by the millions across the globe. They are completely convinced that they are working for peace when they are building for war. When they launch their wars it always comes as a complete surprise to Americans because they delusionally thought that what they were doing was creating peace.

This is why we MUST talk about war.

To this day most Americans do not realize that they started all of the big wars on the planet since WWII. They think they were just peacefully visiting Korea when the North Koreans inexplicably attacked them. Americans think that they were likewise just paying a friendly visit to Vietnam when for no reason at all they were attacked by the North Vietnamese. Americans are sure that they meant no harm when they invaded Iraq. Americans are sure that the destruction of Yugoslavia was caused by the Serbs just waking up one day and deciding to murder their neighbors. Why? It must have been because the Serbs are just bad people. Who knows why bad people do what they do?

Americans are all completely disbelieving when you tell them that Libya was the most advanced country in all of Africa before America destroyed that country. They are certain that their bombs didn't really change it much. Those were expensive bombs, after all. Smart bombs! America's smart bombs don't destroy countries, they help countries!

Americans believe all of these things, even when it is obvious that these things are not true. They cling to and defend these delusions because to do otherwise would require them to face their true barbarity. This is why we need to talk about war with Americans. We need to tell them that when they send their ships to the Persian Gulf, that isn't to create peace but to create war. Likewise they are trying to provoke war when they send their ships to the South China Sea, and we need to tell them that. We need to remind them at every opportunity that they are posturing for war. We cannot allow them to fool themselves into believing that they are really just creating peace. When they lie to themselves that they are just trying to help we must call out that lie, otherwise they will be "surprised" when they start another war.

That is actually what most of the non-troll posters here try to do when they discuss war.

Posted by: William Gruff | Jul 6 2020 9:45 utc | 88

b has never even hinted that war is a solution to humanity's problems.
That's just you trying to put words in b's mouth.
Over at Xymphora that sort of careless self-indulgence could get you banned for life.
I don't think you're a troll but I do think you should be more careful about accusing people of holding opinions which they clearly do not.
Posted by: Hoarsewhisperer | Jul 6 2020 8:12 utc | 87

Thank you for the response Hoarsewhisperer.
I don’t know how to interpret the first sentence in the posts that I mentioned.
Perhaps ‘armed strife’ and ‘two wars’ don’t mean what they say. I’ll have to consult an encyclopedia.

human problem 1 — Poverty Lebanon
first sentence in the post — Lebanon is drifting towards hyperinflation and armed strife.

human problem 2 — Nile water distribution.
human problem 3 Libya as related to Egypt.

first sentence in the post — By next month Egypt will probably be fighting two wars.

I didn’t put any words in b’s mouth, as you can see.
Anyway, it’s up to b to decide whether to ban me — for life. I don’t think I’ve made a careless self-indulgence, as you put it.

Posted by: Sakineh Bagoom | Jul 6 2020 12:34 utc | 89

Posted by: William Gruff | Jul 6 2020 9:45 utc | 88

Posted by: Sakineh Bagoom | Jul 5 2020 19:55 utc | 85 I also see that, overnight it seems, mendacious RSH, turned into a peacenik — that he doesn’t want such a war. Now, that’s a laugher.

Mr. Gruff, you see what I mean now? He's not interested in a civil conversation. He assumes he knows my state of mind much better than I or you do. Whereas all I have to do is point at his very clear statement to understand his state of mind.

'Nuff said on this topic.

Posted by: Richard Steven Hack | Jul 6 2020 13:00 utc | 90

Here is how mendacity works.

He introduces the 77 virgins. And yes, he’s bombing my arse.

War with Iran is inevitable. And when it happens, I will be waiting here for your abject apology (assuming some US bomb hasn't sent your ass to your 77 virgins.)
Posted by: Richard Steven Hack | May 28 2020 22:40 utc | 128

I respond, correcting the 72 NOT 77 virgins
Posted by: Sakineh Bagoom | May 28 2020 23:45 utc | 131

He then complains that I’m the one stuck the 77 virgins. Even though I corrected him. Just wants to be red neck repeating 77.

but never does, and further engages in repeatedly talking about 77 virgins or some BS.
Posted by: Richard Steven Hack | Jul 5 2020 14:27 utc | 79

straight out of Dick Cheney’s play book. Provide an article to a paper, then reference the said article, saying the paper said so.

Here is engagement for you: you will not see your dream come to pass in your lifetime. No amount technology (transhuman shit) will protect you from dying. I’ll be here to provide that ‘abject apology’ when the war does start — posthumously.

Posted by: Sakineh Bagoom | Jul 6 2020 18:17 utc | 91

Part of the problem now is that the population of Lebanon has increased significantly over the past 10 years. A large number of them are refugees from Syria.

An intentional side effect when activating the Syrian civil wars all those years ago?

Posted by: JohninMK | Jul 6 2020 19:12 utc | 92

@81

Let’s just get the thing started already. Lollipop licked.

I have no dog in this fight, but I have to ask, with all this mention of Lollipops, are you Kojak by any chance?

Licktalottapuss

Posted by: 450.org | Jul 6 2020 21:23 utc | 93

@93

Nah, gotta love Kojak. Stavros too.
This happens to be a long running dispute between RSH and myself. It's been on-going for over a decade.
He's the - bomb, bomb crowd. I'm the - there won't be none - MAD is MAD crowd.
When I finally proved to him that there won't be any war -- see early June postings, around the 4th I think, I stole the lollipop he's been licking for over a decade. War with Iran, that is.

Posted by: Sakineh Bagoom | Jul 6 2020 22:06 utc | 94

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