The Anglo-American Establishment

The Rhodes Scholarships, established by the terms of Cecil Rhodes's seventh will, are known to everyone. What is not so widely known is that Rhodes in five previous wills left his fortune to form a secret society, which was to devote itself to the preservation and expansion of the British Empire. And what does not seem to be known to anyone is that this secret society was created by Rhodes and his principal trustee, Lord Milner, and continues to exist to this day. To be sure, this secret society is not a childish thing like the Ku Klux Klan, and it does not have any secret robes, secret handclasps, or secret passwords. It does not need any of these, since its members know each other intimately. It probably has no oaths of secrecy nor any formal procedure of initiation. It does, however, exist and holds secret meetings, over which the senior member present presides. At various times since 1891, these meetings have been presided over by Rhodes, Lord Milner, Lord Selborne, Sir Patrick Duncan, Field Marshal Jan Smuts, Lord Lothian, and Lord Brand. They have been held in all the British Dominions, starting in South Africa about 1903; in various places in London, chiefly 175 Piccadilly; at various colleges at Oxford, chiefly All Souls; and at many English country houses such as Tring Park, Blickling Hall, Cliveden, and others.

This society has been known at various times as Milner's Kindergarten, as the Round Table Group, as the Rhodes crowd, as The Times crowd, as the All Souls group, and as the Cliveden set. All of these terms are unsatisfactory, for one reason or another, and I have chosen to call it the Milner Group. Those persons who have used the other terms, or heard them used, have not generally been aware that all these various terms referred to the same Group.

From the preface to The Anglo-American Establishment (1981).

Tragedy and Hope

There does exist, and has existed for a generation, an international Anglophile network which operates, to some extent, in the way the radical Right believes the Communists act. In fact, this network, which we may identify as the Round Table Groups, has no aversion to cooperating with the Communists, or any other groups, and frequently does so. I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960's, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments. I have objected, both in the past and recently, to a few of its policies (notably to its belief that England was an Atlantic rather than a European Power and must be allied, or even federated, with the United States and must remain isolated from Europe), but in general my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known. [Pg. 950.]

The argument that the two parties should represent opposed ideals and policies, one, perhaps, of the Right and the other of the Left, is a foolish idea acceptable only to the doctrinaire and academic thinkers. Instead, the two parties should be almost identical, so that the American people can "throw the rascals out" at any election without leading to any profound or extreme shifts in policy. [Pg. 1247-1248.]

Both from Tragedy and Hope (1966).

Carroll Quigley

"As a teenager I heard John Kennedy's summons to citizenship. And as a student at Georgetown, I heard the call clarified by a professor I had named Carroll Quigley, who said America was the greatest country in the history of the world because our people have always believed in two great ideas: first, that tomorrow can be better than today, and second, that each of us has a personal moral responsibility to make it so."

When Bill Clinton spoke these stirring words to millions of Americans during his 1992 acceptance address before the Democratic National Convention upon receiving his party's nomination for President of the United States, the vast multitude of his television audience paused for a micro-second to reflect: Who is Carroll Quigley and why did he have such a dramatic effect on this young man before us who may become our country's leader?

Carroll Quigley was a legendary professor of history at the Foreign Service School of Georgetown University, and a former instructor at Princeton and Harvard.

He was a lecturer at the Industrial College of the Armed Forces, the Brookings Institution, the U. S. Naval Weapons Laboratory, the Foreign Service Institute of the State Department, and the Naval College.

Quigley was a closely connected elite "insider" to the American Establishment, with impeccable credentials and trappings of respectability.

But Carroll Quigley's most notable achievement was the authorship of one of the most important books of the 20th Century: Tragedy and Hope – A History of the World in Our Time.

No one can truly be cognizant of the intricate evolution of networks of power and influence which have played a crucial role in determining who and what we are as a civilization without being familiar with the contents of this 1,348-page tome.

It is the "Ur-text" of Establishment Studies, earning Quigley the epithet of "the professor who knew too much" in a Washington Post article published shortly after his 1977 death.

In Tragedy and Hope, as well as the posthumous The Anglo-American Establishment: From Rhodes to Cliveden, Quigley traces this network, in both its overt and covert manifestations, back to British racial imperialist and financial magnate Cecil Rhodes and his secret wills, outlining the clandestine master plan through seven decades of intrigue, spanning two world wars, to the assassination of John Kennedy.

Through an elaborate structure of banks, foundations, trusts, public-policy research groups, and publishing concerns (in addition to the prestigious scholarship program at Oxford), the initiates of what are described as the Round Table groups (and its offshoots such as the Royal Institute of International Affairs and the Council on Foreign Relations) came to dominate the political and financial affairs of the world.

For the ambitious young man from Hope, Arkansas, his mentor's visionary observations would provide the blueprint of how the world really worked as he made his ascendancy via Oxford through the elite corridors of power to the Oval Office.

YouTube Potpourri: The Legacy of Carroll Quigley at LewRockwell.com

Meet the World's New Reserve Currency: The Chinese Yuan

The Bush administration has called for an economic summit to be held by the 20 largest economies sometime after the presidential elections. US and EU officials are hoping to stitch together another Bretton Woods wherein control of the global economic system was delivered to those same nations. It's likely, however, that the outcome will turn out considerably different than anticipated. Already, under China's leadership, 12 Asian nations have agreed to set up an 80-billion-dollar fund to protect their economies from currency-runs, capital flight or other financial disruptions. China has the world's largest reserves at $1.9 trillion followed by Japan at more than $1 trillion. Clearly the two richest nations will set the agenda and play a central role in deciding how best to deal with the global recession.

The November summit in Washington could produce some unwelcome surprises which were hinted at by Thailand's Deputy Prime Minister, Olarn Chaipravat, who told Bloomberg News:

"The message of this initiative is for China to consider whether or not China would open up its banking system and allow the strongest currency in the world, which is the Chinese yuan, to be the rightful and anointed convertible currency of the world."

Surely, the present financial malaise which has its roots in Wall Street and at the Federal Reserve, has demonstrated that the dollar must be replaced as the world's "reserve currency" and that America must be deposed as the de facto steward of the global economic system. Leadership implies responsibility and the US must be held to account for its failings. It's time for a change. Full Monty at Information Clearinghouse.

The Whole System is Contracting

Counter Punch Weekend | The US Treasury and Federal Reserve are now underwriting the entire financial system. The free market has been abandoned altogether. Everything from commercial paper to money markets is now backed by the "full faith and credit of the United States". Without that explicit government guarantee, the credit markets would still be frozen and the system would crash. But government guarantees do not address the real problem, which is toxic assets that must be accounted for and written down. All it does is take hundreds of billions of dollars in mortgage-backed garbage onto the nation's balance sheet and undermine the creditworthiness of the United States. Eventually, foreign central banks will see the folly of this maneuver and refuse to buy more US debt. When that happens, there will be a run on the dollar and a major dislocation in the bond market. Then, the financial system will grind to a standstill once again.

According to Fitch Ratings, the "crisis will cut growth in credit this year by 50 percent as financial firms reduce leverage, investors' appetite for risk declines, and the worldwide economy slows." When credit is less available, there's less business activity and the economy slows. Unemployment goes up and quarterly earnings go down. It's a vicious circle that starts with speculation and ends in panic. The financial system has to reestablish its equilibrium by purging the excessive credit that developed through low interest rates and lax lending standards. Financial institutions everywhere are in the process of deleveraging which is putting downward pressure on the main stock indexes and creating turmoil in the currency markets.

World Order?

Washington Post | In France, President Nicolas Sarkozy has loudly proclaimed the need to increase regulation and oversight of financial markets, vowing on Thursday to "refound the global financial system" as part of "an intellectual and moral revolution."

In Britain, Prime Minister Gordon Brown -- who has set up an economic "war room" at 10 Downing Street -- moved ahead of the United States to inject cash into private banks and is leading calls for global accounting standards and stronger oversight of international banking.

President Bush, by comparison, has been more wary in his public remarks as the crisis on Wall Street has grown into a global panic. The departing U.S. president has agreed to hold a global economic summit in Washington on Nov. 15 but has stopped short of endorsing the kind of far-reaching international proposals put forward by Brown, Sarkozy and others.

The economic summit next month will be held at the National Building Museum in Washington and will include leaders of the Group of 20 major industrialized nations and emerging markets, including China and India. The White House said three top officials will lead U.S. preparations for the meeting: Dan Price, assistant to the president for international economic affairs; undersecretary of state Reuben Jeffery; and Treasury undersecretary David McCormick.

Charles Freeman, a former Bush administration trade official now at the Center for International and Strategic Studies, said that Brown and other foreign leaders also see the crisis as an opportunity to challenge the United States' role as the leader of world's financial system.


"Sarkozy and Brown and others are attacking a U.S.-led order," Freeman said. "They're saying, 'We have to revamp this thing, and the U.S. is the problem.'"

In New York yesterday, the United Nations convened a meeting of its board of chief executives, including the heads of the International Monetary Fund and the World Bank, to coordinate a strategy for containing the crisis.
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U.N. Secretary General Ban Ki-moon urged the IMF and major central banks to set up "substantial standby lines of credit" that can be used to shore up banks in the developing world. A team of economists advising Ban have said that between $500 billion and $1 trillion is required to stabilize these banks.

"We do not yet know whether our efforts to stabilize the financial system will succeed," Ban said. "Too often, in recent weeks, financial leaders have been criticized for being too slow to recognize problems, for doing too little too late. We must act now to prevent today's crisis from becoming worse tomorrow.

Iran's Oil Price Vulnerability

BBC News | For every dollar on the price of a barrel of oil, Iran earns approximately a billion dollars a year. In the past few weeks and months, the price of Iranian oil has dropped between $50 and $60 a barrel.

The head of the Central Bank of Iran has warned that revenues could be cut by $54bn, effectively halving the country's income from oil, which accounts for the vast majority of both its export earnings and government revenue.

Petropars, a subsidiary of the National Iranian Oil Company (NOIC), has even warned that it could go into bankruptcy.

As the effect of those lower oil prices works through, Iran will face a growing budget deficit. The International Monetary Fund said in August that Iran would face unsustainable deficits should prices for its oil fall below $75 a barrel.

Mr Ahmadinejad will have the choice of cutting spending or printing more money. But with inflation already over 25% and unemployment around 10%, neither is an attractive option.

As Iran confronts the world over its controversial nuclear programme, high oil prices have been the insurance policy.

When oil was nudging $150 a barrel, it knew the world did not dare risk pushing prices even higher by imposing tough new sanctions, let alone military confrontation. That all looks very different now.

The strongest tool in the armoury of the US and Europe may be to impose an embargo on petrol sales to Iran.

If Russia blocks agreement at the UN Security Council, they could act unilaterally, or multilaterally.

Amazingly, this oil rich country is heavily dependent on petrol imports because of a lack of refinery capacity.

Iranians love their cars and any restriction on their freedom to drive will not make them happy. Low oil prices make this a distinct possibility.

At the very least, the global credit crunch means there is simply not the money in the global economy for the sort of multi-billion dollar investment that Iran needs for its oil and gas fields.

Economic Warfare?

Washington Post | Both of Russia's stock exchanges plunged about 14 percent Friday, extending a 10-week losing streak and pushing the main indexes down some 75 percent below their May highs. Regulators suspended trading in response, a measure they have adopted more than a dozen times in recent weeks, prompting one analyst to compare the exchanges to a cuckoo clock.

But the country's state-controlled television stations barely mentioned the drop or the suspension of trading. Instead, the evening newscasts have focused on the soothing statements of Prime Minister Vladimir Putin, his successor as president, Dmitry Medvedev, and their allies. The Kremlin is worried about the possibility of a run on bank deposits or a rush to convert rubles into dollars. Either could derail its strategy of using the nation's huge foreign exchange reserves to bolster the financial system. The government is especially concerned about the pressure on the ruble, which has intensified because of the falling price of oil. Despite new limits on currency speculation, the ruble weakened Friday to its lowest level against the dollar since 2006.

Though some economists have urged the government to devalue the ruble to boost exports, the Kremlin has instead been burning through its reserves -- the total fell by another $15 billion in the week ending Oct. 17 -- to support the currency.

Devaluation would make it more difficult for Russian firms to pay back the nearly $500 billion they owe in foreign debt. It would also bring back memories of the 1998 crisis and undermine the Kremlin's message that the Russian economy remains healthy.

Polls continue to show strong public faith in the ruble, with more than 50 percent of respondents saying it is the most secure currency for their savings. Confidence in the banks appears shakier, with 40 percent of depositors saying they are worried about losing their savings.

"My parents put all their savings in the bank, and we're worried there will be a default," said Dmitrina Rudik, 61, a retired government worker who was pushing her grandson in a stroller in a park. "At the same time, prices of food are getting higher and higher."

Sick Man of Eurasia?

NYTimes | Russia is in the midst of a genuine demographic disaster from which its rulers have no obvious exit strategy. Although the Russia’s fortunes (and the Kremlin’s ambitions) have waxed on a decade of windfall profits from oil and gas, the human foundations of the Russian nation — the ultimate sources of the country’s wealth and power — are in increasingly parlous straits.

Despite net immigration since the end of Communism, the Russian Federation’s population is nearly seven million people smaller today than at the start of 1992. In the post-Soviet era, Russia has seen three deaths for every two births. Despite a “baby bonus” scheme unveiled by the Kremlin two years ago and a small rise in the birth rate, deaths outnumbered births in Russia by over 250,000 in the first half of 2008.

If projections by the United Nations Population Division come to pass, Russia’s population will fall by 10 million more from now to 2020. Those same projections envision Russian life expectancy lagging ever further behind global averages by 2020 to 2025, in this view, overall life expectancy in Russia would actually be a year lower than average for the world’s less-developed countries — with the men’s expectancy nearly five years below the third world mean.

Demography may not be destiny, of course. But this is not a portrait of a successfully and rapidly developing economy — much less an emerging economic superpower.

Pawns in the Pawnshop....,

New York Times |The tribal militias, known as lashkars, have quickly become a crucial tool of Pakistan’s strategy in the tribal belt, where the army has been fighting the Taliban for more than two months in what army generals acknowledge is a tougher and more protracted slog than they had anticipated. And, indeed, the lashkars’ early efforts have been far from promising.

Even in the best of times, there are basic unwritten rules about the tribal militia in Pakistan that limit their impact.

The Pakistani military, for example, can lend moral support but cannot initiate a tribal militia, the generals said. The lashkars come with their own weapons, food and ammunition. They have their own fixed area of responsibility, and they are not permanent.

Great care is taken to make sure the lashkars do not become a threat to the military itself. “We do not want a lashkar to become an offensive force,” said one of the generals, who spoke frankly about the lashkars on the condition of anonymity. For that reason, the military was willing to lend supporting fire from artillery and helicopters but would not give the militias heavy weapons, he said.

Beyond those rules, the Pakistani Army and government have not been able to inculcate the lashkars with the needed confidence, said Khalid Aziz, a former chief secretary of the North-West Frontier Province.

Who is the World For?

More banks report threatening letters

WASHINGTON (CNN) -- The number of banks and other agencies reporting that they have received angry letters containing a powdery substance has risen to 45 in 11 states, and there could be more cases, FBI officials said Wednesday.

Wednesday's count is up from the 30 in eight states that were reported Tuesday.

The FBI, U.S. postal inspectors and state and local authorities are investigating, causing what FBI spokesman Richard Kolko called "a drain on resources" for those agencies.

"Even sending a hoax letter is a serious crime, and law enforcement will continue to work to identify and arrest those responsible," Kolko said in a statement. "The FBI and our law enforcement partners are following up on numerous leads, and if anyone has information, they are requested to contact the FBI, USPIS or local authorities."

Postal inspectors offered a reward of up to $100,000 for information leading to the conviction of those behind the hoax letters, which they said were mailed late last week.

As of Tuesday, financial institutions in New York, New Jersey, the District of Columbia, Ohio, Illinois, Colorado, Oklahoma, Georgia and Texas had been targeted by the letters. Wednesday, that list had grown to include Virginia, California and Arizona, the FBI reported.

World will tremble if Pakistan falls

The stakes could not be higher: With a rapidly increasing population of more than 150 million -- larger than that of Russia -- Pakistan is also the world's only Muslim nuclear power. But since the fall of President Pervez Musharraf earlier this year, the bitter regional, social and religious disputes that have been building for decades have exploded in public. The current government of pro-American President Asif Ali Zardari is struggling to maintain any effective presence at all in the vast North-West Frontier Province, which covers one-quarter of the country.

If the government in Islamabad goes bankrupt, then the extreme Islamist forces spearheaded by the Taliban of Afghanistan, who already enjoy broad support among the Pashtun tribes of the NWFP, will have a far greater chance to turn the great cities of Pakistan, especially giant Karachi, into chaos.

As American military analyst and UPI columnist William S. Lind has warned, Fourth Generation war -- 4GW -- non-state forces like al-Qaida benefit from undermining the structures of established states and can metastasize rapidly if a state structure collapses, especially in a vast nation like Pakistan.

The Taliban and their fellow Islamists, aided by al-Qaida, already have stepped up their guerrilla operations against the Pakistani army and police.

Also, if Zardari fell, the impact on Pakistan's relations with the United States and on Washington's ability to effectively prosecute the war on terror could be dire. Currently, U.S. and NATO forces in Afghanistan -- around 50,000 in number overall -- are supplied by air along transport corridors over Pakistani territory. If a future Pakistani government should close those corridors, the already embattled U.S. and NATO forces in Afghanistan would find their situation deteriorating rapidly.

Pakistan's leaders are also understandably reluctant to put their political future and their country's fate in the hands of the International Monetary Fund, for they realize that IMF aid is usually tied to draconian conditions requiring the slashing of government spending. In a country like Pakistan, that means cutting social programs to support the poor, including subsidizing food prices.

Full-monty at Russodaily Space War.

Gird your loins...,

"Gird your loins," Biden told the crowd. "We're gonna win with your help, God willing, we're gonna win, but this is not gonna be an easy ride. This president, the next president, is gonna be left with the most significant task. It's like cleaning the Augean stables, man. This is more than just, this is more than – think about it, literally, think about it – this is more than just a capital crisis, this is more than just markets. This is a systemic problem we have with this economy."

Biden emphasized that the mountainous Afghanistan-Pakistan border is of particular concern, with Osama bin Laden "alive and well" and Pakistan "bristling with nuclear weapons."

"You literally can see what these kids are up against, our kids in that region," Biden said in recalling when his helicopter was forced down due to a snowstorm there. "The place is crawling with al Qaeda. And it's real."

"We do not have the military capacity, nor have we ever, quite frankly, in the last 20 years, to dictate outcomes," he cautioned. "It's so much more important than that. It's so much more complicated than that. And Barack gets it."

After speaking for just over a quarter of an hour, Biden noticed the media presence in the back of the small ballroom.

"I probably shouldn't have said all this because it dawned on me that the press is here," he joked.

"All kidding aside, these guys have left us in a God-awful place," he then said of the Bush regime, promptly wrapping up his remarks. "We have the ability to straighten it out. It's gonna take a little bit of time, so I ask you to stay with us. Stay with us." Full-monty at ABC News...,

M-Valued LETS

Sketch of the Most Likely Scenario for Implementing a Post-Bretton Woods Global Monetary System Utilizing m-Logically-Valued Exchange Units based on Quantum Principles of Self-Organization (circa Spring 1998, Saigon)

This site is devoted to all and everything associated with the notion of m-logically-valued monetary units and their applications to LETS, local exchange trading systems. Definitions of scope are broad and shall include: m-valued logic (e.g., fuzzy logic, Lukasiewicz logic); theory of monetary instruments; related quantum theoretical issues; applications technologies (hardware and software); research and development; the involved strategic planning issues; real politik of insinuating m-logically-valued exchange systems into the prevailing Newtonian institutionalization; quantum accounts of self-organization as they apply to questions of monetary theory; autopoiesis and its graphical representation systems; metaphors in theoretical biology, biometeorology, oceanography, and related sciences of multiscale dynamical systems; applicability of complexity theory to monetary systematics; history of any and all related subjects. Definitions of exclusion are narrow and shall be determined only by the propensity of any given contribution to elicit ennui.

Hypertext markup language is one very small step for mankind in the direction of employing m-valued logics. Free associations once were pristine logical accommodation schemata by virtue of animistic “identity transparency”. We are inspired by this fact and will embody that inspiration as complete disregard for conventions of binary logical thought -- though we will make no active effort in crass display of such unrespect.

Prehistoric Economics

Click the picture

The Idiots Who Rule America

Our oligarchic class is incompetent at governing, managing the economy, coping with natural disasters, educating our young, handling foreign affairs, providing basic services like health care and safeguarding individual rights. That it is still in power, and will remain in power after this election, is a testament to our inability to separate illusion from reality. We still believe in “the experts.” They still believe in themselves. They are clustered like flies swarming around John McCain and Barack Obama. It is only when these elites are exposed as incompetent parasites and dethroned that we will have any hope of restoring social, economic and political order.

“Their inability to see the human as anything more than interest driven made it impossible for them to imagine an actively organized pool of disinterest called the public good,” said the Canadian philosopher John Ralston Saul, whose books “The Unconscious Civilization” and “Voltaire’s Bastards” excoriates our oligarchic elites. “It is as if the Industrial Revolution had caused a severe mental trauma, one that still reaches out and extinguishes the memory of certain people. For them, modern history begins from a big explosion—the Industrial Revolution. This is a standard ideological approach: a star crosses the sky, a meteor explodes, and history begins anew.”

Our elites—the ones in Congress, the ones on Wall Street and the ones being produced at prestigious universities and business schools—do not have the capacity to fix our financial mess. Indeed, they will make it worse. They have no concept, thanks to the educations they have received, of the common good. They are stunted, timid and uncreative bureaucrats who are trained to carry out systems management. They see only piecemeal solutions which will satisfy the corporate structure. They are about numbers, profits and personal advancement. They are as able to deny gravely ill people medical coverage to increase company profits as they are able to use taxpayer dollars to peddle costly weapons systems to blood-soaked dictatorships. The human consequences never figure into their balance sheets. The democratic system, they think, is a secondary product of the free market. And they slavishly serve the market.

Chris Hedges brings the heat once again, full-monty at Truthdig.com

The United States, Europe and Bretton Woods II

French President Nicolas Sarkozy and U.S. President George W. Bush met Oct. 18 to discuss the possibility of a global financial summit. The meeting ended with an American offer to host a global summit in December modeled on the 1944 Bretton Woods system that founded the modern economic system.

The Bretton Woods framework is one of the more misunderstood developments in human history. The conventional wisdom is that Bretton Woods crafted the modern international economic architecture, lashing the trading and currency systems to the gold standard to achieve global stability. To a certain degree, that is true. But the form that Bretton Woods took in the public mind is only a veneer. The real implications and meaning of Bretton Woods are a different story altogether.

Excellent historical summary - full-monty at Stratfor.com

Godwin's Law

Godwin's Law (also known as Godwin's Rule of Nazi Analogies) is an adage formulated by Mike Godwin in 1990. The law states:

"As a Usenet discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one."

Godwin's Law is often cited in online discussions as a deterrent against the use of arguments in the reductio ad Hitlerum form.

The rule does not make any statement whether any particular reference or comparison to Hitler or the Nazis might be appropriate, but only asserts that one arising is increasingly probable. It is precisely because such a comparison or reference may sometimes be appropriate, Godwin has argued that overuse of Nazi and Hitler comparisons should be avoided, because it robs the valid comparisons of their impact. Although in one of its early forms Godwin's Law referred specifically to Usenet newsgroup discussions, the law is now applied to any threaded online discussion: electronic mailing lists, message boards, chat rooms, and more recently blog comment threads and wiki talk pages.

Gears Just Grinding.....,

In this 28th edition of the GEAB, LEAP/E2020 has decided to launch a new global systemic crisis alert. Indeed our researchers anticipate that, before next summer 2009, the US government will default and be prevented to pay back its creditors (holders of US Treasury Bonds, of Fanny May and Freddy Mac shares, etc.). Of course such a bankruptcy will provoke some very negative outcome for all USD-denominated asset holders. According to our team, the period that will then begin should be conducive to the setting up of a « new Dollar » to remedy the problem of default and of induced massive capital drain from the US. The process will result from the following five factors studied in detail further in this GEAB:

• The recent upward trend of the US Dollar is a direct and temporary consequence of the collapse of stock markets

• Thanks to its recent « political baptism », the Euro becomes a credible « safe haven » value and therefore provides a « crisis » alternative to the US dollar

• The US public debt is now swelling uncontrollably

• The ongoing collapse of US real economy prevents from finding an alternative solution to the country's defaulting

• Strong inflation or hyper-inflation in the US in 2009?, that is the only question.

Studying the case of Iceland can give an idea of the upcoming stages of the crisis. That is what our team has been doing ever since the beginning of 2006. This country indeed provides a good illustration of what the US and the UK should be expecting. It can be considered – and that is what most Icelandic people do today – that the collapse of Iceland's financial system came from the fact that it was disproportionate to the size of the country's economy.

Financially speaking, Iceland thought of itself as UK, in the same way as, financially speaking, UK thought of itself as the US and the US thought of themselves as the entire world. It is therefore quite useful to study the case of Iceland in order to understand the course of events that London and Washington will follow in the next 12 months.