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Greece And The Endgame Of The Neocolonial Model Of Exploitation
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
With the bankruptcy of Greece now undeniable, we've finally reached the endgame of the Neocolonial-Financialization Model.
We all know how old-fashioned colonialism worked: the imperial power takes physical control of previously independent lands and declares its ownership of the region as a newly minted colony.
What's the benefit of controlling colonies?In the traditional colonial model, there are two primary benefits:
1. The imperial power (the core) extracts valuable commodities and low-cost labor from its colony (the periphery)
2. The imperial power sells its own high-margin manufactured goods to the captured-market of its colony.
This buy low, sell high dynamic is the heart of colonialism, which can be understood as one example of the The Core-Periphery Model (June 11, 2013).
The book Sweetness and Power: The Place of Sugar in Modern History is an excellent history of how this model worked for Great Britain.
The tensions this model generated in the colonial elites of America are brought to life in Tobacco Culture: The Mentality of the Great Tidewater Planters on the Eve of Revolution.
This traditional model of colonialism was forcibly dismantled in the 1940s-1960s. Former colonies established their political independence, a process that diminished the wealth and global reach of former colonial powers.
In response, global financial powers sought financial control rather than political control. This is one dynamic of what I call the Neocolonial-Financialization Model (May 24, 2012), which substitutes the economic power of financialization (debt, leverage and speculation) for the raw power of political conquest and control.
The main strategy of financialization is: extend cheap credit to those with limited access to capital. Those with limited access to capital will swallow the bait of cheap credit whole, and willingly agree to penalties, high interest rates, etc.
Then, when the credit expansion reaches levels that cannot be supported, the lenders demand collateral and/or favorable trade and financial concessions.
These tactics have been well-documented in books such as The Shock Doctrine: The Rise of Disaster Capitalism and Confessions of an Economic Hit Man.
But the economic pillaging of former colonies has limits, and as a consequence the global financial powers developed the Neocolonial Model, which turns these same techniques on one's home region.
Thus Greece and other capital-poor European nations were recognized as the periphery that could be exploited by the core, and the euro was the ideal tool to financialize the economies of nations which could never have generated credit/housing bubbles without the wide-open spigots of cheap credit flooding their economies.
In Neocolonialism, the forces of financialization are used to indenture the local Elites and populace to the financial core: the peripheral "colonials" borrow money to buy the finished goods manufactured in the core economies, enriching the Imperial Elites with A) the profits made selling goods to the debtors B) interest on credit extended to the peripheral colonies to buy the core economies' goods and "live large", and C) the transactional skim of financializing peripheral assets such as real estate and State debt.
In essence, the core banks of the EU colonized the peripheral nations via the financializing euro, which enabled a massive expansion of debt and consumption in the periphery. The banks and exporters of the core extracted enormous profits from this expansion of debt and consumption.
Now that the financialization scheme of the euro has run its course, the periphery's neocolonial standing is starkly revealed: the assets and income of the periphery are flowing to the core as interest on the private and sovereign debts that are owed to the core's central bank and its money-center private banks.
Note how little of the Greek "bailout" actually went to the citizenry of Greece and how much was interest paid to the financial powers.
This is not just the perfection of neocolonialism but of neofeudalism as well. The peripheral nations of the EU are effectively neocolonial debtors of the core, and the taxpayers of the core nations are now feudal serfs whose labor is devoted to making good on any loans to the periphery that go bad.
Neocolonialism benefits both the core's financial Aristocracy and national oligarchies/ kleptocracies. This is ably demonstrated in the recent essay Misrule of the Few: How the Oligarchs Ruined Greece.
With the bankruptcy of Greece now undeniable, we've finally reached the endgame of the Neocolonial-Financialization Model. There are no more markets to exploit with financialization, and the fact that the mountains of debt are unpayable can no longer be masked.
At this point, the financial Aristocracy has an unsolvable dilemma: writing off defaulted debt also writes off assets and income streams, for every debt is somebody else's asset and income stream. When all those phantom assets are recognized as worthless, the system implodes.
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I'm just putting this out there ...
https://abravanel.wordpress.com/2008/06/15/pasok-the-great-jewish-politi...
Goldman Sachs sits on top of the shitpile and is a front for the global shylocks.
Greek economy received 8% of the money... as for the rest
Where's the loot, yids?
Shylocks work in Mordor.
Oh, it's solvable.
WWIII
Financial drug dealers.
Reminds me, I gotta go listen to some old Steely Dan- Kid Charlemagne.
Don't forget that the Greeks pledged their gold reserves as collateral against a prior round of Trioka financing, folks
http://www.zerohedge.com/news/greece’s-lenders-have-right-seize-national-gold-reserves
So, not everybody looses equally if they don't pay.
And yes, supposedly the shiny's held at the BoE, FRBNY and BoFrogs
Or sonethin' like that. But ya' know, if the Big Banks like Goldilocks are on the lending side of the trade, they ain't gonna go home empty handed
It's always about the gold.
Has been since the time of the good old Annanuki
Brilliant and yes, so true. I predict another golden age is coming.
Without a host, how will the parasites survive. It will be a holocaust.
Prion spores can lay dormant for a long, long time before the host body notices them. Once symptoms of "Mad Cow" become evident, it is too late.
The spores will simply go back to being dormant after the host dies, waiting for a new host.
There's a lot more left to loot. The pattern is that we pick up tab, socializing failures. Until that trend is broken it's pillage time.
What the Greeks needs some more low interest loans and top it off with a trip to a new Brad Pitt movie to feel good, rinse and repeat. They got ya coming and going and they got us just as good in the States. All people at work talk about is whatever crap (Viking whatever) is pushed on them on TV, nothing more.
Point for holding physical gold. if they had it at their own vault it wouldn't be so eazy to just seize it.
LOL, no need for old Steely Dan, I have hotter music for ya
http://pinoyistics.blogspot.com/
There I fixed it for ya...
Awful. I can't believe I clicked on that. I gotta go wash the gay away.
You know ZH has made the big-time when it gets spamed by gay filipino music blogs... FFS, what has the world come to?
Is there gas in the car? Yes there's gas in the car! -- S. Dan
This whole game will implode badly.
Hold it hold it hold on a minute, "folks"
CNBS said (some time today) that an agreement was close.
#ouchthathurtspleasedontstickyourelbowin
We Neocolonialized some folks.
And just when I thought that phrase had been done to death, new life is breathed into it.
just lock it
its the full circle
this is the milking the system at its peek
its over
Not until the bankers begin feeding on each other, again...
Goldman Sachs says they didn't cook the books on Greece - it wasn't GS's fault, honest!.
8% is a bit high in terms of an estimate... maybe its 8% if you count how much politicians got in kick backs from the banksters for passing defunct laws.
In any case 20ish billion is chump change.
A 92% write down of debt for Greece would probably tempt her to stay in the Euro.
If this Greek administration "folds" and gives up and lets the banksters continue on the bailout whoring circle jerk of money laundering of Greece, you can be sure to see a revolution in Greece the next morning and the country will completely destabilize, the people will see it as the government has betrayed them completely and they will violently remedy the situation, it will be painted as a complete sytemic failure of the political structure of the country and the entire country will be forced into a reboot scenario.
New govt, New Currency, New govt format, New everything.... and since a New govt will not be responsibled for the debts of the Old govt... right now you still have the entity of the greek government that was in debt running the show, that entity can be abated and bankrupted and a new entity can pop up as the new govt of Greece.... new laws new constitution etc... not possible to hold a new govt to the debts of the old . . .
Just some middle class economics. Ask our leader Zero and the boys in DC.
If you are interested in drones check out this site http://pickyourdrone.com/
Which one can remotely drop a payload?
Silly rabbit, the drone IS the payload... Disposable tech and all that jazz...
The Federal Reserve now protected by drones and robots. Banks too.
Always define your risk.;-)
The British empire was reduced from a global hedgmony in the 19th-early 20th century because?
it wasn't reduced, British still has 15 countries only official, including Canada, Australia, etc.
My little unlearned , Eastern European friend. The British empire spaned all 5 continents until the first World War.
The British pushed back the French in Northern Africa, and the Spanish in Eastern South America.
I enjoy your comments, but you might want to brush up on your Western history.
Eastern history is a my/story to me.
I know western history as good as eastern, but many western people don't know western history because west are telling too much lies.
Lies about Iraq, Libya, Syria, Ukraine. You don't even know who are owners of Federal Reserv, but it is western bank. You don't need to have british flag under government nowadays. USA have American flag under Ukrainian security Service but Britanian people are smarter. British is not so great as it was, but it is not a small country in Europe.
West is very selective in the history. He is telling about good, but they admit bad thing only if you put their noses in it.
Ukraine is good example. Who are talking about Yanukovych safe agreements with western ambassadors? West shreded them in the same day.
You need to read more good books about history first
War.
The headshot was losing South American export markets, to the US, during WWI.
A lost generation in Flanders fields was just the icing on that cake, already baked.
.. Suez 1956
Deal was sealed by then.
The deal was sealed when the FED was created and took control over America. The FED wasn't competing with BoE or anybody else. The FED was "IT". The bank to rule the world. 2 major wars financed with FED paper did the rest to establish that.
I guess the Brits really figured this out when the FED (America) didn't support the French/British effort in Suez. The FED used its proxy in Israel instaed. British PM Eden stepped down over this.
It cost too much to hold on to. The coercion of the locals was spendy, but managable. The other wannabes raised the costs too much. The Romans blew through cash being bigshots and maintaining control, then petered out. How is that US defense budget holding up?
LOL, so ver true...
so just relax
http://pinoyistics.blogspot.com/
nice article charles!
When all those phantom assets are recognized as worthless, the system implodes.
yo, no cash flow! ouch. moar loans at the point of a barrel.
oh, we are civilized, thats right.
if the pen retains its' power.
thinking something other than ink will flow.
so be it, shall we call it the great down draft!
the epic bubble of all. math is a bitch bitchez...
Look at little Greece's answer to the problem!
And if something should happen with that outside agreement it's "lose lose' for the EU!!!
After all. What are they going to do? Blow up a few buildings and blame it on ISIS or Russia?!!!
No is the most powerful word for the Greeks.
It's tough to say "no" with an enormous, uncircumcised German cock stuffed down your throat.
When you're fucked no matter what decision you make and are backed into a corner, every animal will bare it's teeth in defiance and aggression... Is Greece really any different? It will be a pleasure to watch the western globalist's dream of a 1-world system falter, then die a horrible death as the EuroZone dissolves into thin air and bankers fall from the sky...
Fully expecting to see many western cities ABLAZE this summer.
Fully expecting to see many western cities ABLAZE this summer.
ZH, we can only wish that this was true! Centuries old roots will not let go so easy.
Sell a few really nice Greek islands - with babes - that should balance the books and then tell the EU to go F**K themselves
But, but, they took the euro's, now must pay!
brahahahahahahahah!
Good luck boys.
It would be funny if it wasn't for the real suffering endured by the little people, as always.
So what are the EU's options? Send in NATO troops to occupy and loot Greece?
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Web Cam whores make that much? I'm shocked...
Their German pimps make that much. The Greek whores are paid in liquid protein; all they can swallow.
Web Cam whores! Ha! HA! HA!
How is Greece in any way a victim here? The Greeks need to be pissed at their own politicians who cut these deals and line their own pockets.
Well tehy are and that is why Syriza became elected
So the core reaches the point where it must continue to lend to the periphery to ensure repatriation of it's investment. Snake eats tail. Hunted becomes hunter without intention or shot fired. It may even become clear to the masses. Resources may become less appealing if our illustrious leaders are forced to acquire (steal), process, and market them PERSONALLY.
Initially he defines colonialism as forced take over. But the credit is 'offered' or 'extended'. It is not forced upon the Greeks, or any others that take cheap credit. You don't have to be an expert economist to know there are eventually consequences to borrowing, as in you have to pay it back, maybe when it is demanded. You're not saying that Greeks are stupid, are you? Only 8% of the bailout went to the Greek people? It was the greek people that spent the original loaned money that required the bailout in the first place. The problem here is Greek socialism.
ah you're really stretching things this time ZH...Greece exploited? Lmao....sure which perfectly explains the 55 retirement age, 13th month of free salaries...stuff even the US and Germany dont have.
There is real colonialization, Jews in Israel say...there is real exploitation, Apple in China....but Greece???!!! ROFLMAO
It is because of what you say explains why Greece is the first domino to fall. The exploitation is real. Sure. Irresponsible borrowing is part of the equation. When prudent standards in lending are not part of the equation then it is the lenders who face the music.
Initially he defines colonialism as forced take over. But the credit of the neoColonialism is 'offered' or 'extended'. It is not forced upon the Greeks. You don't have to be an expert economist to know there are eventually consequences to borrowing, as in you have to pay it back, maybe when it is demanded. You're not saying that Greeks are stupid, are you? Only 8% of the bailout went to the Greek people? It was the greek people that spent the original loaned money that required the bailout in the first place. The problem here is Greek socialism.
To pretend that it is anything other than what it is is not intellectually disingenuious but beyond risible. Austere times ahead for sure, dominos all lined up to cascade. Neofuedalism of sorts ahead in the end. Are NATO countries going to forclose on themselves for their masters or are the people going to finally pull it together ? Good luck on it's current trajectory & azimuth of dearth & doom.
This article has a bunch of incorrect ideas at work that seem to be popular:
-'The core doesn't exploit the pheriphery by selling cheap goods to them and thereby indenturing them': In a proper market, the pheriphery importing too many goods would automatically adjust wages lower to balance things out again. BUT NO! You can't have lower wages in Europe. So instead they distort the market by running a current account deficit, and presto, debts are too high. Which of course would never have happened if rates had not been suppressed in the first place, in the name of 'price stability'. That's the dumbest objective ever anyhow.
-actually I stop right here because this guy clearly is just picking up on cheap propaganda and not doing his research.
The article is not so wrong: the EU is a ponzi scheme that continously requires the inclusion of new members which expand credit capacity by their entrance and consume and invest until free debt capacity is zero. Then the straw fire gets cold and a new member is required. The countries are left with a pile of irrepayable debt. The ponzi can run as long as new members are joining. The EU is now encountering problems with their lastest candidate Ukraine......
There are no more markets? Perhaps! The EU is working on the Ukraine but difficulties arose unexpectedly........
a couple of years ago i took a moto trip to portugal. i hadn't been there for ten years. when i rolled into lagos, i was stunned at the new high rise landscape; it was unrecognizable. i asked my self how could this have happened? where did this real estate boom get the financing?
well , its obvious now. empty buildings and unpaid rents and construction / real estate bankruptcies are programmed in. the banks walk away clean if they time it right and they all know it.
well..that's only if the bag holders of the bail out don't say 'fuck off' pay your own loans back. why are we on the hook for this financial rape?
oh yeah..didi i mention that lagos now sucks shit. don't go there if you want a quaint olde european holiday.