Wednesday, July 04, 2012 – by Staff Report

WestLB is almost gone. The bank that embodied many of the problems of Germany's Landesbanken sector – combining excessive international ambition with repeated crises brought on by poor risk controls – is to close for business this weekend after a deal with European Competition authorities. Its demise is the biggest realignment for many years among the Landesbanken, the publicly owned regional banks frequently regarded as one of the weakest links in the German banking system. WestLB will be broken up and its identity inherited by Portigon, a financial services provider that will not do banking business. The asset base of the Landesbanken sector has shrunk from some €2tn in 2007 to about €1.5tn and will be reduced further when WestLB and its €168bn of assets are excluded. – Financial Times

Dominant Social Theme: If only the government could print money, everything would be better.

Free-Market Analysis: It is ironic that as Germany's public banking sector continues its realignment (see above excerpt), various forms of public banking become more popular on the English-speaking Internet.

What most do not realize about the argument that paper money can provide the solution to modern banking ills is that this argument was originally made by fascists. During the early-to-mid 20th century, fascist states pioneered a poisonous mixture of corporatism, fiat money, racism and command-and-control economies that led inevitably to swollen military-industrial complexes.

The recent Supreme Court decision on Obamacare is in line with this sort of economic approach. The "corporatist" model is, in fact, the model that modern elites have quietly adopted for the West in the 21st century, though fortunately the Internet has exposed it.

Apologists for fascism and for Germany's statist economy often claim that Germany's pre-war monetary system with its low interest rates and pathological overprinting of money created blossoming prosperity. But when one examines Germany's "miracle" closely, it becomes clear that it was mostly brought about via extraordinary expansions in Germany's military-related expenditures.

Command-and-control economies often do well initially. The Soviet Union surged forward under Stalin and Japan's pre-war economy did well, too. Mussolini first adopted a statist gold standard but eventually printed so much that currency apparently surged some 18-fold during the war.

Takahashi Korekiyo, the "Japanese Keynes," tried to contract the Japanese economy in the mid-1930s after initiating a classic inflationary bubble. As a result, he was murdered by the nation's nascent military industrial complex. (Monopoly fiat money ALWAYS enhances militarism ... and "war is the health of the state.")

Ultimately such economies run out of vitality because they are based on state control of industry. This does not seem to be well understood, in the US especially, where paper-money pundits are growing in popularity. People are determined to believe for some reason that giving politicians the ability to print vast amounts of unbacked money is a potential panacea.

There are a number of websites now calling for politicians to print money within the context of a monopoly franchise. Some of these websites promote US Greenbackerism or Georgism or even the Marxist-oriented cult of social credit.

Terms like "usury" and "banksters" are increasingly common along with the observation that the world is run by "private bankers." In fact, this is quite a misnomer because most of the central banks around the world are in some sense certified and provided credibility by the public sector.

In fact, the idea that the state can do any better job of printing money than some other alternative is ludicrous. India, China and Brazil all have terrible price inflation – and China's boom/bust cycle is so bad that its leaders have taken to building entire empty cities.

Meanwhile, those who speak of usury usually neglect to mention the state and increasingly destructive levels of taxation that may cost people far more than even the most usurious practices. In fact, an argument can be made that it is monopoly central banking that creates the conditions for abusive compound interest. Get rid of central banking to get rid of abusive debt-based practices.

One asks in vain how those who believe in paper money issuance will ever figure out how much money is too much. There are no answers, of course, because only the market can decide how much is too much, either through the laissez faire emergence of gold and silver backed money (NOT a gold standard) or privately-backed competitive money generally. In the latter case, gold and silver would surely emerge as preferred, competitive alternatives as they have throughout history.

Neo-National Socialists like to proclaim that Abraham Lincoln was a great patriot because he tried to rid the US of money power. But anyone can see that somebody who murdered a million of his fellow citizens is not a hero. Lincoln was surely backed by the very "banksters" that the Neo-Socialists like to consign to damnation. See here: "Did Jefferson Davis Work for Money Power? ... Was the Civil War a G..."

Hitler was likely a creature of the great dynastic banking families as well. It is simply a fact that the global elites maintain control by creating wars and that they control both sides of a war. Hitler was surely backed by the global elites just as Lincoln was.

Neo-National Socialists want to pretend that Hitler was NOT funded by Wall Street, just as the Russian Reds and Mao were. But this is an obvious misreading of history. Just because Reed claims the USSR was funded by the global elites does not mean that Hitler was not.

Neo-National Socialists want to use fascist-style economics and are disguising their intent by using terminology such as public banking and Georgism and social credit. In fact, many proponents may not even understand the antecedents.

But it is simply a fact that these sorts of economic ploys ultimately end in massive state control. Elements like the Fabians counted on this, which is why this devious British group supported social credit. People simply do not know the antecedents of the current "paper money" craze on the 'Net. But the roots lie with outfits like the Fabians and the global elites in general.

Continue reading: http://thedailybell.com/4053/Poison-of-Neo-National-Socialist-Publi...