Truth: The First Casualty of Economics, Banking and the Ukraine

By: David Hague | Thu, Apr 3, 2014
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Dear Reader, I opened my eyes and stared at the hard packed dirt that substitutes for grass in Paris's famed Tuileries Garden. I struggled to raise my head and peer over the lip of the Grand Bassin Octagonal. My eyes were greeted with the majestic view of the Louvre, basking in the warm early morning glow of the unseasonably hot sunshine that had Parisians reaching for their sunscreen in the middle of March. I struggled to overcome the explosions occurring inside my head, the result of the three bottles of Andezon, Cotes-du-Rhone Syrah [an impertinent, cheeky and inexpensive red wine] I had consumed after last night's International Economic Symposium held at the uber-swank Hotel George V Paris.


My behavior was quite understandable and forgivable

Before you judge me harshly for drinking myself into a stupor and passing out in the Tuileires Garden let me share with you what the world's greatest economists and bankers postulated about the current state of our global financial system, economic progress and political environment at last night's meeting. I suspect, Dear Reader, that what you are about to learn will convince you that my behavior, rather than being deplorable was quite understandable and forgivable. I will explain how the word 'Truth' is now merely hollow collection of letters with no meaning.


How to keep a straight face when discussing economics in public

The 415 attendees at last night's meeting filled the Georges V's captivating and majestic Salon Vendome to capacity. The topics for discussion for the conference were as follows:

  1. Global Debt and Money Printing,
  2. The Ukraine
  3. The Banking System
  4. How to score a cushy job as a talking head on a major media outlet
  5. How to get a tenured position at a university [with a decent pension plan]
  6. How to keep a straight face when discussing economics in public


It was the discussion of the first three points that caused me to reach for my medication

Obviously the majority of the conference would focus on points 4 and 5 and 6. Personal enrichment was always a 'hot topic' at these sessions. However it was the discussion of the first three points that caused me to forego my usual medication [American as Apple Pie, Jack Daniels] and reach for the cheeky French wine I mentioned earlier. [I was in Paris after all].


Something to be scraped of the bottom of one's shoe

Dear Reader, as part of my commitment to be honest with you most of the time, I should clarify that my attendance at the conference was not as an invited guest. As you may know my career as an Economist/Journalist/Barista has had its challenges. My continued attempts to expose the lunacy and danger of our current economic and banking strategies had turned me into a pariah within the community of bankers and economists. I am shunned at all gatherings of financial luminaries. Rather than with a smile and a handshake, my fellow economists and bankers greet me with a derisory smirk. Generally, my colleagues make me feel as if I am something to be scraped off the bottom of one's shoe. Last night, in order to attend the conference I had secured a temporary job with the George V as an usher. My assignment was to help the economists navigate the theatre style setting of the Salon Vendome and stagger to their seats. This simple task was made ever so difficult for the attendees as a result of the copious amounts of alcohol consumed at the magnificent dinner, sponsored by one of the many industry lobbying firms hoping to curry favor with the economists. While food had been served at the dinner it was clear that the attendees had found their sustenance in the libation the hotel provided. One of the sommeliers indicated to me that 1500 bottles of Emmanuel Rouget Cros Parantoux Vosne Romanee Premier Cru [1985, $800 USD/bottle] had been consumed at dinner.


It's a Rich Man's World

As I watched the world's foremost economists stumble their way to their seats like a barrel of immature orangutans, I had no reason to doubt the sommelier. The lights dimmed, Abba's classic hit 'Money, Money, It's a Rich Man's World' blasted over the sound system. [This particular song is the adopted 'National Anthem' of the world's Bankers and Economists.] The keynote speaker took the stage.


My old friend and BFF Gustavo Laframboise-Pierre

Dear Reader, words cannot describe my stupefaction when the key note speaker turned out to be none other than my old friend and BFF, Gustavo Laframboise-Pierre. Gustavo is the esteemed Director of Global Statistical Creation at the European Central Bank [ECB]. Gustavo and I had significant 'history' together. For many years he had been my principal bookie 'back in the day' on Wall Street when I made obscene amounts of money selling all manner of noxious, toxic [triple AAA rated of course] subprime mortgage pools to unsuspecting investors. At the same time Gustavo plied his bookmaking from the comfort of his previously enjoyed 1995 Honda Civic, usually parked conveniently on Hanover Street to better serve his Wall Street clientele. Sadly most of my earnings were depleted by the compulsive bets I made with Gustavo.


Gustavo's non-existent moral compass ensured that he excelled

In any event Gustavo's life changed forever, when a senior member of the ECB, while in New York to visit his paramour placed, with Gustavo, a staggeringly large and incorrect wager on the outcome of the 2010 World Cup. The only way the debt could be settled was to offer Gustavo a highly paid sinecure with the ECB. Because Gustavo lacked morals, ethics, and the ability to discern right from wrong, it was decided that he would become the ECB's Director of Global Statistical Creation. His job was to fabricate statistics that would support the fantastical and bizarre monetary policies being implemented by Central Banks on a global basis. Gustavo's non-existent moral compass ensured that he excelled at his job. It was Gustavo who created words and terms like Ring fencing, quantitative easing, whatever it takes, 'tapering', to help put a benign spin on the actions of Central Banks.


Overture, Dim the lights, this is it, the night of nights [with apologies to Bugs Bunny]

A hush overwhelmed the room as Gustavo approached the microphone. [Well, to be accurate the sound of random snores indicated that a number of economists had succumbed to the effects of the libation they had enjoyed with dinner.]


How to pretend to believe what one is saying

Gustavo confidently began his presentation: Ladies and Gentleman welcome to the 2014 International Economic Symposium. Before I address the important issues of protecting our pensions, how to become a talking head on television and how to pretend to believe what one is saying when talking with the media, I am required to discuss some notional economic issues. This will ensure that our sponsors our able to claim the cost of this gabfest as a tax deduction. I ask your patience and indulgence as I discuss some economic matters before we get to the 'good stuff'.


Profligate, permanent, ponderous and profuse

Gustavo moved on to next section of his presentation: He lectured to the economists: First on the topic of banking and the economy I am pleased to announce that Global Government Debt has now reached 53 trillion dollars. This could not have been achieved with your help. Had the leading lights of the economic community not been willing to suspend common sense and proclaim, in lecture halls, newspapers, interviews, books and on television that profligate, permanent, ponderous and profuse government debt was the road to permanent prosperity, there would have been a disaster. Internal studies completed by Central Banks indicate that had the world governments decided not to gorge themselves on debt, over 100,000 bankers and economists would have lost their jobs. It is a testament to your influence, and might I say, your keen interest in self-preservation that made it possible to avoid the devastating impact of bankers and economists losing their jobs.


I had become a 'cautionary tale'

Need I remind you, that if any of you are tempted, by your conscience, or concern for the 99% or your base interpretation of right and wrong, to publicly expose the inevitable disastrous end game of global debt accumulation, you will be shunned, you will be an outcast, and you will be ridiculed, destined to rejoin the 99%. As he said these chilling words, his gaze turned in my direction, followed by the stares of everyone in the Salon. A soft spotlight captured me in its glare as I leaned against the wall. Clearly I had become a cautionary tale for all economists and bankers. I was being used as a threat to the bankers and economists in attendance. Do as we say or you too, could become David Hague. Yikes! I must admit Dear Reader, this hurt me, but not as much as the Doobie I had been smoking while listening to Gustavo. When the spotlight captured me I had surreptitiously held the doobie behind my back. It was now burning my fingers. Mercifully the spotlight was finally shifted back to Gustavo and I was able to extinguish the remainder of the burning Sinsemilla.


Special mention goes to economists and bankers in Canada

He continued his remarks; you have all been outstanding in your ability to anesthetize the public into accepting runaway debt. Special mention goes to economists and bankers in Canada who were able to shift the public's attention from a billion dollars wasted on a non-existent Gas Plant in Ontario to a debate regarding the Mayor of Toronto's pathetic yet ultimately inexpensive behavior.


This conference would be held in the cafeteria of a newly renovated Alcatraz or the Bastille

The second landmark event achieved recently was the Federal Reserve's ability to run their balance sheet over 4 trillion dollars reflecting their leadership in the area of money printing. Once again, this milestone could not have been reached without your help. Had economists chosen the path less travelled and used their influence to describe in detail the inevitable consequences of runaway money printing we would not be here today. In all likelihood this conference would be held in the cafeteria of a newly renovated Alcatraz or the Bastille. Yesterday, the newest member of our banking elite announced that the Federal Reserve would remain accommodative for a very long time. Kudos to Janet Yellen for acquiescing and acknowledging that money printing is not a strategy it is now a way of life. On behalf of the 1% let me simply say thank you.


Can you say 'Risk on'

Gustavo smiled at the room as he announced the momentous news that margin debt, [based on figures released yesterday by the New York Stock Exchange], has reached an all time high. He observed, as you know ladies and gentleman the smartest minds in the world work in the financial industry. They have collectively recognized the genius of our approach to monetary policy. Not only are they willing to bet their own money but they are willing to bet other people's money as well. They have finally heard our message that we Central Bankers have got their back. There is complete confidence in the banking system that we will inflate the market forever. Furthermore Wall Street understands that if there is a minor hiccup such as the notional 'Financial Crisis of 2008' we Central Bankers, and our acolytes in government will step in and bail them out. I encourage you to beg, borrow or steal [just kidding, he snickered] and invest all your money in the world's stock markets. They are headed to infinity and beyond!


A huge roar of laughter overwhelmed the room

Moving on let me briefly discuss the Ukraine. As you know the Ukraine owes western banks around 65 billion dollars. Between the International Monetary Fund, European and American banks, much of this money was made available to the Ukraine in the last 6 years. The purpose of the loans was to help the people of the Ukraine. A huge roar of laughter overwhelmed the room. Everyone knew that the money loaned to governments never benefitted the people. It was stolen, siphoned, purloined, or dissipated by commissions, bribes, finder's fees and just plain sticky fingers. All 'the people' were left with was the debt. One would need a team of archeologists to find any benefit enjoyed by the people of the Ukraine resulting from the vast sums of money borrowed on their behalf.


It would be problematic, to say the least

Once the laughter died down Gustavo continued, it is very important that we keep the World's attention focused on the issue of 'Democratic Process' in Ukraine. It would be problematic, to say the least if the public ever realized that the only motive for caring about the Ukraine was to protect European and American banks. The virtuous loop of money travelling from banks and International Agencies to the Ukrainian Government, then to be siphoned from the Ukrainian Government's pocket into the hands of the Oligarchs and thus back to the western banks in the form of deposits must be allowed to continue. Imagine what the impact on the stock market and the luxury housing market would be if this tsunami of money stopped flooding through our banks. The room collectively shuddered at the thought. Gustavo continued, what is occurring now is a classic win-win situation, the bankers win and the Oligarchs win. [I thought to myself, if you included the Ukrainian people it would be the classic win-win-lose situation, as the people of the Ukraine will be forced to live in penury for generations due to this 'virtuous' monetary and fiscal policy.]


Once again the audience erupted in laughter

The western banking community has observed with great consternation that Russia is attempting to unilaterally, undemocratically, reshape the map of this region by annexing Crimea. They are attempting to infringe on the sacred and sovereign territory of the Ukraine. We cannot condone such a gesture, which will ultimately disrupt the free flow of capital held by Crimean, Ukrainian and Russian Oligarchs into western banks. Once again the audience erupted in laughter and derision. Gustavo stifled his own laughter at his own 'Bon mots'.


Borders in Europe, like socks, are changed almost daily

He continued, borders in Europe, like socks, are changed almost daily. Borders in Europe have changed 2,308 times over the last thousand years. At the same time the Great Powers have imposed, changed and re-imposed borders throughout the world whenever their diplomats or geologists have discovered something of value. The hard part, as always is putting a palatable spin on the dislocation to ensure that members of the 99% will sacrifice their blood and treasure to achieve the required change. The peace, prosperity, freedom and tranquility enjoyed by Africa, the Middle East and the Indian Subcontinent is a testament to the skill and foresight of the Great Power's ability to wisely reshape the world. Throughout these tumultuous changes I am pleased to report that not one banker or economist ever lost their job or their fortune due to political upheaval. Once again you should be commended for your contribution to this singular achievement.


During the break there will be an open bar

Finally, let be briefly comment on our banking system before we take a two hour break. I am empathetic to the exhaustion you feel after I have required you to concentrate on economic matters for 15 minutes. During the break there will be an open bar. He continued, I am pleased to announce that 6 years after the so called 'financial crisis' we have achieved a 100% protection rate that back in 2008 was thought to be unattainable. Remarkably we have been able to ensure that not one banker or economist has been charged, fined, jailed, fired or inconvenienced despite the fact that under our watch we made 15 trillion dollars disappear.


This collateral damage is a necessary consequence of progress.

The net worth of the 1% has now exceeded pre-crisis levels. Sure there have been some wars, civil strife, famine, and unemployment as capital is stolen, misallocated, and wasted. This collateral damage is a necessary consequence of progress. We have been able to ensure that no new laws limiting banks behavior have been implemented. Stress tests and capital requirements for banks have been completely eviscerated to accommodate bank behavior that enriches the banks in the short term and will require more bailouts in the future. Banks are 'good to go' as we prepare for the next crisis. Once again, give yourself a pat on the back. Your ability to foist absurd yet plausible rationale on all your public communication ensures that the public will willingly acquiesce to whatever the next idiotic iteration our policies espouse.


There would be an open bar

The audience leapt to their feet to provide Gustavo a standing ovation. Dear reader, I have attended enough of these meetings not to be fooled by the applause. They were not acknowledging the wisdom or insights provided in Gustavo's speech. Rather the economists were expressing their enthusiasm and approval at Gustavo's remark that there would be an open bar during the break.


Straight into the Bermuda Triangle

There you have it. Dear Reader the inmates have taken over the asylum. Our financiers, economists and bankers have set sail on a course straight into the Bermuda Triangle. That the ship will reach land some day is indisputable. That it will land badly is incontrovertible. The 99%, who seem to have adopted the Ostrich as their 'National Bird' would be well advised to ponder these matters to prepare for the consequences of our current economic policies.


I made my purchase

As the audience, energized by the end of the presentation and excited at the thought of an open bar jumped over chairs and tripped over each other to get to the bar I asked the sommelier where I could acquire some cheap wine. Following his directions I made my way to a local market and made my purchase.


It is only fun until somebody gets hurt.

With three bottles of wine in hand I settled into one of the comfy chairs surrounding the Grand Bassin Octagonal in Tuileres Garden. Our current economic and banking strategy reminded me of something our mothers used to say to us when we were growing up. [Usually in reference to playing with matches, scissors, darts or other sharp implements] Our mothers told us "It is only fun until somebody gets hurt." I thought about the future we were leaving our children. Maybe we can extend and pretend long enough to ensure the repercussions of our economic and banking strategies land on our children's heads rather than our own. Perhaps we can ensure that it is not us but our children who are required to 'pay the piper'. I consumed the wine, toasted the Eiffel Tower, visible in the distance and fell into a blissful sleep.

 


 

David Hague

Author: David Hague

David Hague
Funny Business

David has divided his time unequally for the last 30 years between the financial services, education, writing and comedy. He has spent time in financial services as an investment adviser, financial planner, sales trainer, corporate entertainer, and as a teacher of investment courses. He has also taught numerous financial courses. His work in comedy includes numerous corporate events and performances at comedy clubs. His background allows him to seamlessly move between the business world, higher education and the world of comedy and sometimes, to bring the two worlds together.

David can be reached at davidhague@rogers.com

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