Hari Om, I am migrating my blog from www.samirsinh-dattopadhye.blogspot.com to www.aniruddhafriend-samirsinh.com. The old blog will be available for a week for old references and thereafter it will be redirected to new blog

Wednesday, 25 July 2012

Bapu's (Aniruddhasinh) Write-up on 'Financial Terrorism'


My blogpost of 17th July 2012 about the book that Bapu (Aniruddhasinh) gifted me, mentioned the article 'Financial Terrorism' written by Bapu (Aniruddhasinh) for the Marathi weekly, 'Lokaprabha' (issue dated 22nd August 2003). A comment from one of my friends includes a request to make the article available. So here is the English translation of the article: 

In the Marathi folklore there is a popular rhyme (somewhat on the lines of a limerick), that urges the rain to come, on the promise of giving it money; the money proves to be virtual, and yet the rain poured heavily. 

Even today, one comes across little children singing this rhyme with the same intensity that the children of yesteryears did. However, one equation in the rhyme that is difficult to figure out is, how is it that the rain gets charmed by the virtual money, money that is actually materially non-existent and gives such an abundant response? Not only that, the question that gradually grows on one’s mind is what exactly is virtual money? It is precisely this ‘reverse equation’ that has, today, become the key to the arithmetic of global finance. This realization has dawned on many social scientists and economists over the past three decades. How many of us, today, are aware of the horrifying fact that, in time to come, ‘virtual’ money will be the real money and real money will cease to exist? Here, I am not at all referring to black money and white money. The thought that has been going on in my mind is about the very existence of currency. Globalization has virtually condensed the world into a tiny village and it is in this context that the question arises as to whether poor and weak nations will be able to sustain their independent existence. Whether, at the bare minimum, they will be able to survive, has indeed become the most vexing question. Although it is high time that we addressed this issue, we find it more convenient to look the other way. This is indeed most unfortunate and can have destructive consequences in time to come. 

The entire global map underwent a significant change in the first fifty years of the twentieth century; firstly on account of the two world wars and secondly due to the rapid technological development. An inevitable consequence of the Second World War was the decline in the age old dominance of England and Germany. USA and Russia, the two new superpowers, became increasingly powerful. In the second half of the twentieth century the socialist revolution in the Soviet Union became increasingly perverted and socialism was reduced to mere tokenism. The superiority of the Soviet Union came to an end with its collapse due to the break up of the member states into independent countries. Not only that, there has been a resurgence of capitalism in China and the breakaway nations of the erstwhile USSR. Due to these aforesaid reasons, USA has become the world’s only powerful capitalist country and undisputed king. An important aspect of note is that the US has very cleverly avoided fighting any wars on its own soil. As a result, it never had to undergo the sufferings of its devastating consequences. Arms dealing and financial manipulations have made the US an increasingly powerful country. The US has basically five objectives for perpetuating its status as a global superpower:  

1. Not allowing any competitor to emerge - and towards that end, either ensuring that Europe, Japan, Brazil and India are under their financial control or contriving to keep them under the constant threat of war (India and Pakistan) by seeing to it that they are engaged in crossing swords with one another.
2.  Conspiring to divide India and China on the same lines as Russia.
3. Using the United Nations Organisation to legalize its own selfish agendas.
4. Bringing all oil producing countries under its control in order to secure its own business interests.
5. The Iraqi people had to undergo untold misery on account of the economic sanctions imposed upon it. Once a prosperous country, from 1990 onwards Iraq began sliding towards the depths of poverty. Its per capita income reduced drastically from USD 3,500 to USD 400 by the year 2000. After making repeated pleas, in order to tide over the acute shortage of foodgrains and the resultant starvation deaths, in the year 1996, Iraq was finally granted concession of obtaining foodstuffs and foodgrains in exchange for sale of oil at cheaper rates. According to the estimates of United Nations Children’s Fund (UNICEF), even before the war had commenced, more than half a million Iraqi citizens had perished due to starvation. Three hundred thousand of these comprised of children below the age of five. Saddam was cruel, but the cruelty of the US was no less; quite on the contrary, it was more frightening. 

Wars are always fought between two countries or two groups of countries. However, USA has, after the Second World War, on the backing of an all round technological advancement, used globalization for its own benefit, and in the process also conspired to ensure that no other country has it own independent financial and cultural existence. USA’s financial empire, upto this moment, has spread to every single country of the world. The bygone era of colonialism has now been replaced by USA’s newfound financial imperialism, which will reduce to tatters every individual’s self-esteem. It must be noted that the International Monetary Fund (IMF), United Nations, World Bank and World Trade Organisation (WTO) are all headquartered in the US. The US stock markets are today dominating the markets of many a country. Prior to the Second World War, all financial dealings were limited to the needs of the country. International trade and the global marketplace functioned on the concept of limited cooperation. But now it appears as if the control over the flow of capital of all the countries is centred around one location. Since the year 1965, transnational companies have increasingly come in the forefront. Developing and poor countries had no choice but to accept these multinational entities; because had they not done so, who would provide capital for their businesses?
Since these companies possess enormous amounts of financial muscle, they are in a position to bring any other established business down to its knees and then acquire them. They also have the capacity to expand into new businesses and in the process achieve speedy financial consolidation.

With the new financial equations established by the US over the past five decades, and due to changes brought about by it in the area of global finance, nearly 70% of the countries of the world have increasingly fallen into the debt trap. 

In the year 1971, USA officially brought about changes in its monetary policy. The U.S. Federal Reserve brought an end to the inter-linking between its currency (dollar) and the gold held by the U.S. government. As a consequence, from then on, the production of currency came to brought about through a new ‘vicious' process called ‘Bank Loans’. This new poison weakened the currencies of all countries, who had trade relations with the US, due to which they were forced to change their monetary policies so as to bring them in sync with the stand taken by USA.

As a result, today finance is no longer equated with national wealth; the equation of finance with debt has come to stay. Nowadays, whenever a country seeks to globalise its financial arrangements, the fresh currency that is circulated is entirely through the means of bank loans. Once this arrangement comes to be accepted, from then on, the gold reserves, industrial production and national efforts, cease to be the means of generating finance. Not only that, even the deposits of customers in banks also cease to be the means of generating finance. The efforts of the workers and the production capacity merely serve to redistribute the capital ‘created’ by the banks. It is when a bank sanctions a loan and ‘credits’ the loan amount to the account of the borrower, that the real currency is generated and mind you it is out of nothing and nothing alone that this wealth is created. What does this mean? It means that before the loan was sanctioned, the loan amount was not in existence at all. It is commonly accepted that the currency is considered to be circulating in the economy only when the loan amount availed is spent by the borrower. 

Now the question that arises is regarding the repayment of the debt. When the debt is repaid out of the proceeds from the output of the borrower (?), that’s when the currency that was created at the time of creation of the borrowing, be it yen or dollars, ceases to exist. In reality the money which is used for repayment of the borrowing exists neither with the banks nor in fact anywhere at all; and certainly not in circulation. The money equivalent to the amount to be used for repayment of the debt is actually removed from circulation. What this means is that when the situation is conducive for repayment of the borrowing, people actually repay their loans and thereby reduce the amount from circulation. In such a situation it is but natural that a fiscal deficit is created and so is the share of everyone in the same proportion. This itself provides the answer to the following questions:
1. Why are workforce levels constantly required to be reduced?
2. Why are the returns always less in proportion to the work input?
In today’s financial system, there is only one alternative that has remained for making good the monetary gap - debt. As a result, in order for developing countries to become debt free, they have to, time and again, resort to borrowings. Because of the constant debt burden, there is not enough money available for circulation and when the debt is repaid the money which was temporarily in circulation is removed from the financial system. However the interest accrued on the borrowings is not made good leaving an uncompensated deficit in the system. What this implies is that today’s financial system is operating under a scenario of ‘inadequate capital’. Consequently, there is a cut-throat competition between nations for accumulating dollars. One who is the most selfish, unscrupulous and ruthless is the winner; the rest have no chance of survival. As a result, corporate spendings are aimed at gaining control over the marketplace through unscrupulous means, rather than for the benefit of the customer, in terms of price and quality of goods. 
Poor and developing nations are allowed to progress by the developed nations, only to the extent that they provide the marketplace for sale of goods produced by them. USA’s policy has been to continuously exploit the poor and developing nations under the garb of providing aid and support to them.
The new monetary systems that America set up in 1971 came to be known as “Debt Dollars”. As a consequence of this new financial system, many of the state owned businesses are going into liquidation. Multinational companies of many countries are spreading their net across developing countries on a large scale and creating a monopolistic situation. This they achieve by keeping the prices of their products at abnormally now levels, against which the domestic companies are unable to compete; and once they gain a monopolistic hold on the market, they then raise the prices of the same products to abnormally high levels. Gradually the global markets are increasingly coming under the control of these multinational companies, who in turn are controlled by the American financial system. The US Government is but an agent, who is willing to go to any length to ensure that the American companies flourish and at any cost. In such a situation, the Government of any country would be at the mercy of these monopolistic companies. This, in turn, means that Governments of these countries are no longer independent. Are these countries eventually going to be suppressed under the remote control of the US?

India has, of late, opted for liberalization in the sphere of inflow of foreign and capital investments. However, in doing so, if proper attention is not paid to the framing of the right policies that give valid scope to competition in business, the multinational companies, with their monopolistic designs, will ensure that very little monetary benefit will come India’s way. This is what India should be fully aware of and guarded against. After 1983, the per capita income of the unorganized sector has been falling in comparison to that of the organized sector. Further, during the same period, the per capital income of the rural population has been increasingly falling, in comparison to that of the urban population.
With the onset of globalization, lofty claims were made as to how all countries would benefit financially and how there would be all round development. However, that does not seem to be happening. Quite on the contrary, due to globalization there has been an enormous loss both in the human resources as also natural resources. In the process of the illogical pursuit of profit by all countries, the deterioration of the environment is taking place at a dangerous pace.
Due to the depletion of the ozone layer in the atmosphere, deforestation, extinction of many species, the genetic mutation in the various species of bacteria and viruses as also global warming and changes in rainfall brought about by globalization, within a span of 100 years the population of the world will be reduced to that of a village.
Due to globalization and USA’s financial imperialism, whatever political, social and cultural rights people had come to acquire through various social movements, are now being destroyed. 

A significant impact that financial imperialism has had, not only in India but in other countries as well, is the decline in the labour movement. It is true that the labour movement in India, which was, once upon a time, running very smoothly, did assume a destructive form for some time. Thereafter, from 1980 onwards, we have got to see the pathetic sight of the weakening of all labour organizations, or rather labour organizations being rendered weak. A democratic form of government as also a democratic social setup, both are essential for the all round development of a country. However, without individual freedom democracy cannot remain unblemished and that is the ultimate truth.
It is the urgent need of today’s times to create a common man who is aware of his social and national rights and to teach him to develop his senses towards his social and national duties. This is because USA’s financial imperialism is now slowly winning over the culture of every nation and the day is not far off when every country’s culture would have been Americanized to a large extent. It must be clearly borne in mind that in the process of achieving financial progress, if the basic human values are set aside, any development arising therefrom can only have destructive consequences. 

Post the Havana conference held in April 2000, a historic incident took place. Apart from other nations of the world, opposition starting building up against globalization within America itself. However, unless we, the common people, do not very properly understand this problem, this danger will keep hovering around and keep making preparations for the destruction of the entire earth.

The original Marathi article is as under:

19 comments:

preeti potnis said...

hari om and shriram Dada....this information is very apt for the current extreme situation....indeed the 'real 'money will take no time to turn into 'virtual' money...and according to this Book. .indeed Bapu is warning us all to play safe for the future......

Srijanee Dmello said...

Hari Om Dada. The idea of making money out of nothing always scares me. A lot of things in the world today seem to generate money, without any true value to it. That is one of the reasons I am very wary of the share market, it all feels so virtual. This article is such an eye-opener. I have always felt that US is a global bully and nothing less. Shree Ram so much for translating it, and putting it up on your blog. The situation seems so grim, what can we as the common person do to avert this Dada? We always will look at the cheaper option to purchase, when we have the option, should we avoid that and buy local products instead?

Sameer Iyer said...

Hari Om Shri Ram Dada for sharing such an important article. Bapu is making everyone aware of the problems that every person will face in the coming future and how one should be prepared for it. Thank you Dada for the English translation. SHRI RAM!!!

Aniket Gupte said...

Hari om dada and Shreeram for sharing such an important article. Once again the undoubted mastery and command of My Lord, My Bapu has been proved. The article gives an indepth analysis of the Financial Terrorism based on the facts which each and everyone has conveniently chose to forget. The US which has been the root cause, now cries foul for any Financial Terrorism done by others. It imposes sanctions and norms thereby weakining the economy of the country as done in case of Iraq.
This article's accuracy can be seen even today if the Euro Crisis is looked upon. The ever detiorating Euro Crisis is leading the world into a Great Depression once again.
We need to be careful in our own lives while indulging in spending and also hope that India's economic forms hold the country strong enough to face the depression wave.

sachin rege said...

Hari Om Dada!

Indeed an insightful and guiding article by Bapu! We, too busy with our daily routine life, hardly come to terms with the fact that there is more than just meets the eye. What we 'see' is just the tip of an iceberg! And then, at the end, our position becomes like that of the 'titanic' about to collide with the iceberg - the 'unseen'. And that we have not 'seen' the unseen is our fault, not the unseen's.

Here Bapu, through this simply-worded but painstakingly written article, makes us aware of the unseen and warns us about the dangers thereof.

Shreeram for sharing this beautiful article with us!

CURRENT said...

Hari om Dada, Shree Ram for translate & shar article on your blog.

subharaman said...

PP Bapu has given a lucid and erudite understanding of the financial and economic situation existing then. Now it is no different. The ripple effects of 2007-09 depression still lasts. Many people lost jobs including myself. I was working for the no.1 multinational american pharmaceutical company at that time. It was due to Bapu's grace that I have come back in my previous company which is okay with me right now. The devastation of the financial crisis of various economies still continues. In European Uncion itself several countries coined with pun called "PIGS" comprising of Portugal, Italy, Greece and Spain which are in deep trouble. Other minor economies are also in good measure of trouble. Germany which is the largest economy is also under heavy debts. Today's newspaper informs that the trade deficit of a higly developed country like Japan has reached record heights. 2 days back it was reported that Microsoft had recorded its first loss in a quarter in the last 26 years!. Banks pumped in trillions during 2008 and thereafter to revive economies, revive production, revive demand and employment. All these revival package appears to have melted in commodities like Gold which has touched all time high, Oil which went up to $150 plus and other metals, minerals etc. Lot of money went into the stock markets,Real estate, futures and options etc. Hardly any money came to service and manufacturing sector to generate employment and demand. The trillions of dollars which America printed all these years to buy cheap goods from China and continuting to do so without any asset backing is hitting the world very hard. China' trade surplus is again invested in the treasury bonds of America [over 3 trillion dollars]. In India the situation is grim. There is a grumble of failing monsoon which may lead to drought. People are still losing jobs. Money which went into real estate and land are blocked. People are unable to unlock these assets. There is a grim wait and watch battle going on. Job market is grim. Lay offs are common these days. Mid term poll wind is blowing. Stock markets are oscillating directionless. No one knows what to do. Everyone is waiting and watching. Watching who is going to light the match stick first. Hari Om

Vidula Samudra said...

हरी ओम दादा, लेख खरच खूप सुंदर आहे आणि जबरदस्त आहे... अर्थकारण विषयीचा इतका सखोल माहिती देणारा लेख मी आज पर्यंत वाचला नाही...
हा लेख आपण प्रसिद्ध केल्या बद्दल मनपासून आभारी आहे...

Priyamwadaveera said...

Hari OM.
How very frightfully true... "preparations for the destruction of the entire earth"
Requesting Bappa to guide us here. I am sure this is a MUST for everyone so as to bring smiles back to our MOTHER EARTH.
Regards,
Priyamwadaveera.

Swapnil said...

Hari Om Dada,

We are grateful to you for this valuable sharing. This article shows that P. P. Bapu has taken so much of efforts to bring these things to our notice. This needs lots of study and deep thinking. In current situation we can see these things happening. Financial crisis is already in Europe and can cover all over world at any time.

Dada, please keep sharing such valuable thoughts of P. P. Bapu. Shri Ram.

Sunny Sand said...

Shree Ram Bapu! Shree Ram Dada! Indeed in His own lucid style Bapu has put across a complicated concept in a facile manner. The Global Imperialism by US is clearly on the wall. PP Bapu's Ram Rajya programs like Rural development and related works are one big step towards countering this.

Each phase has its own life and the steps initiated by Bapu will surely go a long way to bring down the span of this capitalistic influence of US.

Only thing for us is how we get aligned in this.....

Regards,

Sandeepsinh Mahajan

RAJEEV KADAM said...

Hari om Dada,

It is seen that the article was written by Param Pujya Bapu in August 2003, almost a decade before. It covers not only the prime the aspects of 'Financial Terrorism' but all contemporary important issues connected to finance, financial imperialism, globalization, development of nation, labour movement, essentials of democracy and most importantly, human values. Undoubtedly, Bapu had written this article out of his urge to educate common man & to make him alert about the alarming situation which would affect all. This is very evident from the concluding lines of the article:

"It is the urgent need of today’s times to create a common man who is aware of his social and national rights and to teach him to develop his senses towards his social and national duties"

"However, unless we, the common people, do not very properly understand this problem, this danger will keep hovering around and keep making preparations for the destruction of the entire earth."

Dada, unless you had shared it on your website, it would have been difficult for us read and revisit what Bapu had said. Shreeram for sharing this vital article, an eyeopener.

The most important thing for me is that this alarming situation and the situation creators are not unknown to the persons who are well-known & experts in this field. But only Bapu had shown the courage to write it so openly for the benefit of common man.

Shreeram

RAJEEVSINH KADAM.

I Love My INDIA said...

Hari Om Dada really thanks for sharing one of the old but still APPLICABLE article of P.P.BAPU...We can see the versatality and study of Bapu for Worlds betterment..

sunilsinh bahl said...

Hari Om, Dada. This is with reference to your blog post of July 25, 2012 regarding our beloved Bapu’s article on ‘Financial Terrorism’. I would like to comment as under:

Firstly, the article is lucidly written and analyses the situation in detail and in a unique manner. It was an eye-opener then (2003) and even now. Many thanks for the translation. My Bapu knows all and He wants His children to be aware.

Secondly, let us look at some definitions. ‘Capitalism’ means an economic and political system in which a country’s trade and industry are controlled by private owners for profit. To ‘capitalise’ means to take advantage of and/or to convert into or provide financial capital. ‘Terrorism’ means intimidation in an attempt to achieve political aims. Thus, in a sense, extreme capitalism can be construed as a form of financial terrorism.

Thirdly, let us see what is happening to the US economy. Philosophically speaking, it is a universal truth that what goes around, comes around. The military interventions in Iraq and Afghanistan and the subprime mortgage crisis have taken their toll. The following extract is from a recently published US daily (Economy in Crisis, May 30, 2012)

“The United States is facing economic disaster on a scale few nations have ever experienced. Most people are unaware of the easily observable signs of this crisis, where it came from and how to stop it. While we persist in our superpower mentality, we have quietly become a second-class country in many respects.

We no longer produce what we need to sustain ourselves, we import much more than we export, and we are selling off our assets and taking on massive debts to sustain a standard of living we can no longer afford. Not only was this not the way we became a superpower but it is a sure way to lose this status.

The game plan of our international competitors is to render us completely dependent on foreign production, innovation and financing. In losing domestic self-sufficiency, national security and leverage – our foreign affairs will suffer greatly.

We are failing even to acknowledge predatory foreign trade practices undermining U.S. industry. Instead we encourage U.S. manufacturers to design, engineer, and produce in third world markets like Mexico and China.

While our regulatory and tax systems have unnecessarily raised domestic business costs, the fundamental cause of the present crisis is three decades of extremely detrimental U.S. trade and globalization policies.”

Simply put,lessons have to be learnt, by individuals and nations.

Hari Om
Sunilsinh Bahl

Unknown said...

Shree Ram..for sharing Bapu's article..and eye opener..for common man...

Vijay V Gurav said...

Hari Om Dada,

What an article... Having understand the fear....This month we have seen Obama Administration criticizing India's economic fundamentals.They are clearly pressurizing India to change FDI in retail...Only PP Bapu can save India and its people...therefor our news paper Pratyaksha remains our true friend in time to come...

shyamkant M said...

Hari Om Dada...Shree Ram for sharing the article.
We certainly had forgotten it in our daily routine. Interestingly recently came across a youtube video "ZEITGEIST 2: ADDENDUM" (http://www.youtube.com/watch?v=1gKX9TWRyfs) which explains how US economy generates money,work and its impact of world, which P.P. Bapu has already highlighted in his article.

Unless Bapu had written it, its beyond our capacity to understand all this .I think expert in the field would also find it difficult to comprehend.

Shree Ram.

Jyotsna M said...

Hari om Samir Dada ! Shree ram for sharing such a wondrful article with us. It was indeed an eye opener

The article enlightens on the major crisis which US is trying to percolate across globe including India. Nonetheless, its Bapu who could through his hard core study and indepth knowledge to could judge the situation way before in 2003 and caution us on the same. Its time for each of us to be aware and then take an appropriate decision

Shri Ram !!!

Anant Gawali said...

Hari Om Dada ,
Thanks a lot for sharing this insight from our dear Bapu. It is His love and akaran karunya out of which Bapu penned this article for the benefit of we all (his children). This is a striking example of Bapus study of everything that happens in this world, his sharp observations, vast knowledge of worldly affairs.
indeed the world today is in a fearful state ,waiting and hoping for some miracle which will put things in the right place, knowing inside that nothing of sorts is going to take place.
We are really fortunate to have a Sadguru like Bapu who takes so much pains in reiterating multiple times and so well in advance of things to come.Not only that He also goes to great pains in making sure that all his children learn the art of fighting these difficult times by getting all sorts of upasanas, seva's and poojas done from us.
ShreeRam
Anant Gawali