Opinion (David Galland, Casey Research): “Lost in all the noise, however, is any recognition that the US monetary system – and by extension, that of much of the developed world – may very well be on the verge of collapse. Falling back on metaphor, while the world’s many financial experts and economists sit around arguing about the direction of the ship of state, most are missing the point that the ship has already hit an iceberg and is taking on water fast.

“Honestly describing the current monetary system of the United States in just a few words, you could do far worse than stating that it is ‘money from nothing, cash ex nihilo.’

“That’s because for the last 40 years – since Nixon canceled the dollar’s gold convertibility in 1971 – the global monetary system has been based on nothing more tangible than politicians’ promises not to print too much.

“Unconstrained, the politicians used the gift of being able to create money out of nothing to launch a parade of politically popular programs, each employing fresh brigades of bureaucrats, with no regard to affordability…

“Given the role the US dollar plays as the world’s de facto reserve currency – with all major commodities priced in dollars, and dollars forming the bulk of reserves held by foreign central banks – the dismal shape of the US monetary system spells trouble for the global monetary system.

“It is worth noting that the dire condition of the United States now leaves it in the same muddy wallow as Europe’s desperate PIIGS.

“Desperate, debt-laden governments around the globe – the bulk of their reserves composed of fiat US dollars and euros at risk of going up in smoke – turn to the only thing they know, printing more money and issuing yet more debt. The global monetary system cracks and heads toward failure with no workable alternative on the horizon.

“Governments, corporations and investors alike are caught unprepared in the downward spiral of failing fiat currencies and are wiped out by a combination of frantic currency debasements, higher taxation, exchange controls and worse. Social unrest spreads, with the public paradoxically demanding that governments do more, not less.

“That’s because all the world’s major currencies are at risk, simultaneously, as the issuers engage in a dangerous race to the bottom. As the monetary system moves inexorably toward terminal debasement and collapse, the results will be catastrophic for the unprepared.

“Importantly, while the list of historical attempts to re-jigger the US monetary system have, to this point, more or less succeeded in kicking the can a bit further down the road, the sheer scale of today’s government obligations has driven us into a box canyon, with no way out. As the government’s debt and spending obligations are mathematically impossible to resolve, it is now a certainty that a lot of people are going to wake up one morning to the reality that they are a lot poorer than they thought.

“Fortunately for those now paying attention, the collapse of a monetary system doesn’t happen in a flash. It is a progression, like the spiral of water down a drain. Thus, while no one can predict exactly when the downward spiral will accelerate out of control, there is still time to prepare.”
[59013]

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Opinion (Francois Fillon, French Prime Minister, from itar-tass.com): “The summit in Brussels led to a compromise. The ultimate rejection of the possibility to exclude any country from the euro zone is among its achievements. But the acceptance of an anti-crisis plan is a step towards the unity of the EU, the first convergence of French and German economies.”
[59152]

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Opinion: (Michael Khazin, an economist, from km.ru): “Modern political and economic life is largely determined by internal and external contradictions. The modern political class refuses to recognize the existence of the crisis. The politicians are ready for anything, but on condition that their position and profits are not hurt in any way.

“In the last ten years the politicians fought with courage against any personal responsibility, whereas a crisis is always a responsibility. The crisis brings about leadership changes, but in the last ten years all the leaders where appointed by financial magnates, thus there was no one to pass the reins of leadership on to… Financial magnates determine our politics…

“The demand to maintain the system in which the present financial and political sector are dominate doesn’t allow for exiting the crisis. It is forbidden for the elite to even talk about the existence of the crisis. Any economic advice must be coordinated with a large number of lobbyists organizations.

“In other words, the present situation of the economy and the financial system is simply not understood. But the fact that people in such responsible positions allow themselves to speak nonsense tells us about the situation in the world more than any numbers: “When the gods want to punish people, they take away their reason.”
[59000]

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Opinion (from theeconomiccollapseblog.com): “George Soros: ‘Financial markets are driving the world towards another Great Depression with incalculable political consequences. The authorities, particularly in Europe, have lost control of the situation.’

“PIMCO CEO Mohammed El-Erian: ‘These are all signs of an institutional run on French banks. If it persists, the banks would have no choice but to delever their balance sheets in a very drastic and disorderly fashion. Retail depositors would get edgy and be tempted to follow trading and institutional clients through the exit doors. Europe would thus be thrown into a full-blown banking crisis that aggravates the sovereign debt trap, renders certain another economic recession, and significantly worsens the outlook for the global economy.’

“Attila Szalay-Berzeviczy, global head of securities services at UniCredit SpA (Italy’s largest bank): ‘The only remaining question is how many days the hopeless rearguard action of European governments and the European Central Bank can keep up Greece’s spirits.’

“Stefan Homburg, the head of Germany’s Institute for Public Finance: ‘The euro is nearing its ugly end. A collapse of monetary union now appears unavoidable.’

“EU Parliament Member Nigel Farage: ‘I think the worst in the financial system is yet to come, a possible cataclysm and if that happens the gold price could go (higher) to a number that we simply cannot, at this moment, even imagine.’

“Carl Weinberg, the chief economist at High Frequency Economics: ‘At this point, our base case is that Greece will default within weeks.’

“Goldman Sachs strategist Alan Brazil: ‘Solving a debt problem with more debt has not solved the underlying problem. In the US, Treasury debt growth financed the US consumer but has not had enough of an impact on job growth. Can the US continue to depreciate the world’s base currency?’

“International Labour Organization director general Juan Somavia recently stated that total unemployment could ‘increase by some 20m to a total of 40m in G20 countries’ by the end of 2012.

“Deutsche Bank CEO Josef Ackerman : ‘It is an open secret that numerous European banks would not survive having to revalue sovereign debt held on the banking book at market levels.’

“Alastair Newton, a strategist for Nomura Securities in London: ‘We believe that we are just about to enter a critical period for the eurozone and that the threat of some sort of break-up between now and year-end is greater than it has been at any time since the start of the crisis.’

“Ann Barnhardt, head of Barnhardt Capital Management, Inc.: ‘It’s over. There is no coming back from this. The only thing that can happen is a total and complete collapse of EVERYTHING we now know, and humanity starts from scratch. And if you think that this collapse is going to play out without one hell of a big hot war, you are sadly, sadly mistaken.’

“Lakshman Achuthan of ECRI: ‘When I call a recession…that means that process is starting to feed on itself, which means that you can yell and scream and you can write a big check, but it’s not going to stop.’”
[59004]

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Question: When there is a disaster or a war, people unite and help each other, they take in people who are hurt, and it’s as if there is mutual guarantee between us. How can we explain that mutual guarantee should simply be between us and not against some third party?

Answer: I think that now our interdependence will be revealed not because some disaster unites us. In the past we felt our mutual guarantee under the pressure of threats around us, and so we clung together, like nuts in a bag. We didn’t want to unite, but the bag held us together, and as we had no other choice, we had to exist inside one bag.

Today things are different. Today we are facing nature, the upper force, and not some corporeal enemy that surrounds us and can be killed and destroyed. Nature shows me that I depend on and am tied to everyone else. If I just lived next to some enemy, it wouldn’t be a problem. The point is that I am totally dependent on him. I am so dependent on him that I can do him no harm. As I harm him with my hatred, I inflict harm upon myself.

A system of interdependence is being revealed to us everywhere in the world and with regards to everything. In every situation that I cause someone harm, I harm myself in return. This is how the general integral system is revealed. Essentially, every person in the world is part of me, and through him I feel all the evil that comes back to me.

Doesn’t Germany want to dump Greece or to be cut off from it? But it can’t! They can’t just “cut off” Greece, Italy, or Spain because there is already a connection that makes them dependent on everyone. You can’t just hate others because by your hate you are simply “shooting yourself in the foot.”

This is unprecedented, and so everyone feels so helpless not knowing what to do: “I hate his guts, but I can’t even touch him because of the blow that will immediately come back to me.” We can’t “fix” the situation by breaking up our connections. It is impossible!

If I harm someone, the harm will come back to me in much greater magnitude than if I harmed myself. It’s also the same in the opposite direction: If I do good for others, the goodness comes back to me 613 times more compared to the starting point, meaning instead of Nefesh of Nefesh, I receive the Light of NRNHY.

So I shouldn’t say or think evil things about anyone, not even half a word. It’s better to curse myself. This will become clear to everyone. This is how globalization will oblige us to change.

To reach this by ourselves, we will have to go through a long way of suffering, while the wisdom of Kabbalah reveals this to us much more quickly.
[59057]
From Lesson 1 at Arava Convention 10/27/2011

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Question: A few days ago we held a wonderful dissemination action of giving out newspapers. People immediately started reading them with great interest, which made us extremely happy. How can we retain that happiness and bring it to the December convention?

Answer: We are living in a big world which is rushing toward a new state. People are starting to understand that something has gone awry even though they’re not exactly sure what that is. Every person is yelling about his own concerns, and that is natural. That is how we are built: From the youngest age, we do not even suspect what we are really crying about. People are sounding calls for equality and social justice; the only problem is that everyone has their own idea of justice.

However, the pressure will continue growing and expanding. We will see how the relationships between nations and civilizations will add fuel to the fire and it will get even hotter.

For us, this is a completely clear sign that we have to start acting. With time, people won’t simply wait for new materials from us. They will feel that Light is flowing here, that this is where life lingers. Right now they are inspired by the lively, warm, smart words that are helping them figure out what is happening and to gain at least a slight understanding of what they want, what they are yelling about. By reading about it, they are making an order of things inside of them. A person felt bad, and now he understands exactly what the problem is, what he should aspire to, and what he should be watchful of.

In essence, we are “formatting” or building people from within. But this is only good for a start. Back in your day you were also brought to Kabbalah by a certain inexplicable desire. But then comes a period when the Light has to appear. It is what will bring the changes. We cannot drag this out for too long because otherwise the Light will become revealed in the opposite form, as disasters, epidemics, and other catastrophes on a global scale. A long time ago, the prophets wrote about how dangerous this path is.

Therefore, we have to take care of the Light that reforms. This Light only comes from unity, which does not exist in our world. After all, we are animals, but if we unite the points in our hearts, not our bodies, but precisely these particles of the Creator, our spiritual aspirations, if we try to weld them into one, then we evoke the Light that reforms. It is contained or concealed inside of this unity.

Once this Light appears, it will unite us. Then our dissemination will shift to a new level. It will no longer be newspapers and websites, but we will become revealed in people from within. Without understanding why, they will start asking questions about mutual guarantee and Kabbalah, and will start to look for us under the guiding influence of the Light. You came to the group accidentally, as it were, and likewise, they too will turn around, not exactly in our direction, but in the right direction nevertheless.

The world is moving forward more and more swiftly. And that is a huge mass of people. On one hand, they are feeling worse and worse, and on the other, a good solution is starting to take shape before them. Therefore, the upcoming convention will have to unite our points and reveal the Light which will pour out of us like a spring of living water and fill the whole world. That is exactly what we must achieve.

We have to prepare in such a way that the convention will become a flash of Light, a breakthrough of the spiritual force which will aim the world toward goodness with one blow. Then we will immediately feel how the world is changing, right during the days of the convention and onward.
[59314]
From the 4th part of the Daily Kabbalah Lesson 10/31/11, “The Love for the Creator and Love for the Created Beings”

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Opinion: (Barack Obama, the US President [my comments are in brackets]): “When leaders of the largest economies meet next week in France, our citizens will be watching for the same sense of common purpose that allowed us to rescue the global economy two years ago from a financial crisis that was sparked by years of irresponsibility.

“Because of the co-ordinated action the Group of 20 took then, the global economy began to grow again. [The crisis was not overcome, it was only concealed. It continues to develop only to flare up even stronger.]

“Still, progress has not come fast enough and today the global recovery remains fragile. [It is not recovering, but falling apart—if we dare to face the truth.]

“Our challenge is clear. [It is not clear, judging by what the President says next.] We must stay focused on the strong, sustainable, and balanced growth that boosts global demand and creates jobs and opportunity for our people. [This can never happen; the bubbles have burst, and excess production will need to be stopped.] This requires action in several areas.

“First, as the world’s largest economy, the US will continue to lead. The single most effective thing we can do to get the global economy growing faster is to get the US economy growing faster. That’s why my highest priority is putting Americans back to work. It’s why I’ve proposed the American Jobs Act [a plan to increase the number of jobs]… It’s why I signed landmark trade agreements with South Korea, Colombia and Panama….

“At the same time, we’re building on the nearly $1,000bn in spending cuts agreed this summer.

“Second, the crisis in Europe must be resolved as quickly as possible. This week, our European allies made important progress on a strategy to restore confidence in European financial markets, laying a critical foundation on which to build.

“Given the scope of the challenge and the threat to the global economy, it is important for all of us that this strategy be implemented successfully – including building a credible firewall that prevents the crisis from spreading, strengthening European banks, charting a sustainable path for Greece and tackling the structural issues at the heart of the current crisis.

“Third, each nation must do its part to ensure that global growth is balanced and sustainable so we avoid slipping into old imbalances. For some countries, this means confronting their own fiscal challenges. For countries with large surpluses, it means taking additional steps to support growth. For export-oriented economies, it means working to boost domestic demand.

“Avoiding old imbalances also means moving ahead with financial reforms that can help prevent another financial crisis. In the US, we’re implementing the strongest reforms since the Great Depression. Across the G20, we need to make sure banks maintain the capital they need to withstand shocks, and there needs to be greater oversight and transparency to avoid excessive risks, especially with regard to derivatives.

“Finally, the G20 nations must deepen co-operation on the range of global challenges that affect our shared prosperity. We need to move ahead with our commitment to phase out subsidies for fossil fuels and transition to 21st-century clean-energy economies.” [It’s an old-fashioned approach that does not take into consideration the new integrated world and the fact that we can’t increase excessive and unnecessary production. It shows a lack of understanding of the need to study the new integrated, interconnected world and to restructure our life to suit its laws.]
[59155]

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Opinion: (Alexei Kudrin, Russia’s Finance Minister): “The world economy faces a lost decade of low growth even though it is still possible to stave off another global recession, Russia’s finance minister was quoted as saying on Saturday. ‘We are probably faced with a lost decade. It is already obvious that growth rates are going to be low,’ Alexei Kudrin told Russian reporters on the sidelines of the G20 finance ministers meeting in Washington. ‘The fight with a fading of growth is going to take many years, most likely 5-10 years,’ added Kudrin.”

My Comment: If there are no extraordinary events, wars, or disasters, the economy will never grow again, and the world will gradually realize that man was created not for unrestrained pursuit of elusive happiness in wealth, power, and fame, but for reasonably limited consumption and unlimited spiritual growth.

In the name of what should we hope for the continuing growth? The rich get richer, the poor get poorer! The crisis is not financial, but of the world we have created. Either the Finance Minister does not understand it, or he is stretching the truth….
[59027]

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Opinion: (Nouriel Roubini, Professor of Economics at New York University): “This year has witnessed a global wave of social and political turmoil and instability…

“While these protests have no unified theme, they express in different ways the serious concerns of the world’s working and middle classes about their prospects in the face of the growing concentration of power among economic, financial, and political elites. The causes of their concern are clear enough: high unemployment and underemployment in advanced and emerging economies; inadequate skills and education for young people and workers to compete in a globalized world; resentment against corruption, including legalized forms like lobbying; and a sharp rise in income and wealth inequality in advanced and fast-growing emerging-market economies.

“The increase in private- and public-sector leverage and the related asset and credit bubbles are partly the result of inequality. Mediocre income growth for everyone but the rich in the last few decades opened a gap between incomes and spending aspirations. In Anglo-Saxon countries, the response was to democratize credit – via financial liberalization – thereby fueling a rise in private debt as households borrowed to make up the difference. In Europe, the gap was filled by public services – free education, health care, etc. – that were not fully financed by taxes, fueling public deficits and debt. In both cases, debt levels eventually became unsustainable.

“Firms in advanced economies are now cutting jobs, owing to inadequate final demand, which has led to excess capacity, and to uncertainty about future demand. But cutting jobs weakens final demand further, because it reduces labor income and increases inequality. Because a firm’s labor costs are someone else’s labor income and demand, what is individually rational for one firm is destructive in the aggregate.

“The result is that free markets don’t generate enough final demand. In the US, for example, slashing labor costs has sharply reduced the share of labor income in GDP. With credit exhausted, the effects on aggregate demand of decades of redistribution of income and wealth – from labor to capital, from wages to profits, from poor to rich, and from households to corporate firms – have become severe, owing to the lower marginal propensity of firms/capital owners/rich households to spend.

“The problem is not new. Karl Marx oversold socialism, but he was right in claiming that globalization, unfettered financial capitalism, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct. As he argued, unregulated capitalism can lead to regular bouts of over-capacity, under-consumption, and the recurrence of destructive financial crises, fueled by credit bubbles and asset-price booms and busts.

“To stabilize market-oriented economies requires a return to the right balance between markets and provision of public goods.

“Any economic model that does not properly address inequality will eventually face a crisis of legitimacy. Unless the relative economic roles of the market and the state are rebalanced, the protests of 2011 will become more severe, with social and political instability eventually harming long-term economic growth and welfare.”

My Comment: Like all economists, Roubini tries to save the economy, meaning the connections between different parts of society in their mutual exchange of valuables, without considering that the structure of society has changed, and from egoistic connections between everybody, there emerged new connections of complete mutual dependence between all countries, organizations, and people.

None of today’s economists is able to consider such mutual dependence because no one has this model of the world within himself. For this, a person has to be at the level of “love thy neighbor.” Only then, sensing this system within, he or she will be able to understand, simply and naturally, how to trade, communicate, connect, distribute, exchange goods, and so on, which is what the world economy has to describe.

Therefore, Marx warned that the transition to the new economy must go hand in hand with raising the moral level of people, who will be able to implement this. Baal HaSulam wrote that we should sit on a school bench and study. And only to the extent of our inner transformation, we will be able to understand the state we find ourselves in and see the degree of our interconnection. Then we will be able to act in concord with these natural relationships revealed between us.
[59038]

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In the last couple of days our daughter organization ARI Research Institute sent out letters to all decision makers dealing with pressing economic problems of the crisis. The intention of the ARI Institute was to remind that the crisis and its resolution do not root in financial and economic policy but rather in an increasingly stronger interdependence of the entire humanity. We are unable to influence this growing interconnection. The only solution is to educate people, to support this “involuntary” network of connection, to see it as an opportunity for our future prosperity, and to teach the public about integral behavior.

The letter is presented below.

Dear Sirs,

The ramifications of the escalating global financial crisis undermine the economic and social stability, and even question the sustainability of the government in many countries. Many who have lost their jobs and/or their life savings are beginning to lose faith in your ability as leaders to provide them with financial security or even viable solutions for the future. In the midst of global uncertainty, the bonding exemplified by the various protest movements temporarily consoles the dissatisfied. At the same time, it creates a perilous dynamic which unabated will lead to expanding and intensifying unrest.

Moreover, the global interdependence and decades of economic excess has rendered conventional fiscal and monetary solutions ineffective. As a result, the national debt is relentlessly inflating, hampering your ability to continually offer meaningful solutions to the social and economic challenges we face.

In such a reality, unemployment rates will rise drastically, leading to more social unrest and protests, which will in turn present a real threat to the stability of countries, and of the entire international social, economic, and political systems.

To maintain the government’s stability, we believe that unemployment should be treated as an issue that requires immediate and specific attention. We respectively suggest that bold action is now required to stem the cycle of decline in which we find ourselves. To achieve this, we propose that a national emergency mechanism be established, with the following goals:

• Integrating unemployed people in an ongoing study framework (to be detailed below), which will be regarded as “employment”;
• Preventing publicly displayed idleness, bitterness, and mass demonstrations and protests;
• Providing unemployed individuals with tools for rejoining the workforce;
• Providing scholarships that cover basic needs and a dignified life, subject to participation in the study framework;
• Repairing the dignity of the unemployed by “upgrading” the social status of the unemployed from that of “outcasts” to that of persons pursuing “enhancement” of their social and professional skills;
• Enhancing empathy with the state and social cohesion, especially now in times of crisis.

The contents in the study framework[1] for the unemployed will include, among other topics:

• Personal finance. This will allow for dignified subsistence under the possibilities that the scholarship for the unemployed permits.
• Learning to live in conditions of uncertainty. This will include maintaining the solidity of the family unit, with a special emphasis on parenthood, enhancing and maintaining mental and emotional soundness, and the development and improvement of social skills.
• Educating people about the consequences of the tightening connections among individuals, firms, and countries, how they affect people’s basic needs, and our daily reality on the national and international levels. Each person will be expected to realize that in the global era, all of us—ordinary citizens, the wealthy and powerful, and policy makers—are in the same boat.
• Providing the necessary social skills for a sustainable existence in an interconnected world: social solidarity, consideration of others and of the environment, and balanced and reasonable consumption.

Such a crisis-borne education mechanism will ease people’s minds, thus providing the government with the necessary timeframe for coping with the global challenges, and will secure national and international stability.

As an educational organization that cooperates with organizations at the highest level, we would welcome an opportunity to consult with you and to provide the required tools and expertise to implement our plan.

Sincerely,

The ARI Institute
www.ariresearch.org

[1] All contents will be taught in an engaging manner, through a virtual environment, using games, quizzes, social activities, and so forth.
[58960]

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