Logo Land Values Research Group: Economics as if location matters Photo

Tuesday, February 03, 2009:

Cuckoo Economics

Or Making a virtue of parasitism, by Gavin R. Putland (November 5, 2005)

New preface

The original version of Cuckoo Economics was released on October 19, 2005. Following suggestions from my colleagues, I distributed an “abridged” edition of the essay on October 31 (letting my readers decide whether it was a trick or a treat) and November 5 (the quadricentennial of the Gunpowder Plot, hence a fitting occasion to consign something to a bonfire). The abridgment began with the following teaser/abstract:

By deliberately confusing assets that can be produced with assets that can only be acquired, modern economics laid the ideological foundation for unemployment, poverty, inequality, and the looming global depression.

Make that the present global depression. Officially, the USA entered recession in December 2007. John Williams at Shadow Government Statistics (SGS) would dispute that assessment. “Have you ever wondered,” he asks, “why the CPI, GDP and employment numbers run counter to your personal and business experiences?” He answers that definitions of economic statistics have been changed many times, usually with the effect of making the latest figures look better. In particular, inflation is understated, and this is one factor causing GDP growth (which is discounted for inflation) to be overstated, as the following graph shows.

Chart of Growth in U.S.Gross Domestic Product (GDP)

The SGS curve shows U.S. economic growth peaking at a slightly negative value in late 2005, then heading rapidly south. I mention this because section 11 of the essay is headed “The Great Depression of 2006–?” implying a starting date of 2006 and an unknown finishing date. By SGS's figures, I called the depression too late, at least in the USA. By official figures, I called it too early. In either case, calling a depression within a couple of years of the correct time was not doing too badly, especially when, according to the official line, it wasn't going to happen at all.

Sections 8 and 11 of the essay correctly predicted that recession would be brought on by the collapse of the global property bubble. Section 11 entertained the idea that a collapse of the U.S. dollar could trigger the property crash, but gave another scenario “If, on the contrary, the U.S. property bubble bursts of its own accord...” which it did. The predicted fall of the U.S. dollar is yet to materialize.

In the endnotes, one link has been added and others updated, and separately listed URLs have been replaced by hotlinked titles. Three new endnotes [4a,9a,9b] have been added. But otherwise the text and formatting are the same as on Bonfire Night, 2005.

Gavin R. Putland, February 3, 2009.


 1.  Bird brains
 2.  Counterfeit “capital”
 3.  Bait and switch
 4.  The preferred enemy
 5.  “Natural” unemployment
 6.  All-devouring rent
 7.  “Free” trade
 8.  The cause of recessions
 9.  The U.S. dollar bubble
10.  Rogue states
11.  The Great Depression of 2006–?
12.  Summary


1.  Bird brains

The history of life on earth is the history of gene wars: the genes that survive longest are those that are best able to propagate themselves. To call this survival of the fittest is pointless because fitness has no meaning apart from ability to survive.

The European cuckoo, for example, lays its eggs in the nests of other birds and thereby enlists the labor of other species in the propagation of its own genes. This behavior impedes the continuation of those species whose nests are used, and does not assist the continuation of the class of birds as a whole; but it assists the propagation of the cuckoo's genes, and no other consideration affects the measure of “fitness” of those genes or of the behavior that they produce.

If birds were endowed with conscience and reason, they might think it inequitable to use other birds' labor without compensation. They might perceive that if such exploitation is permitted, it reduces the incentive to build nests and feed chicks. They might conclude that birds should serve their own interests in ways that add to the total welfare of birds instead of merely subtracting from the welfare of others. So, if all birds were subject to one government, would not that government make a law against laying eggs in the nests of other birds? Not if the history of human government gives any guidance!

2.  Counterfeit “capital”

The assets known as the “means of production” fall into two categories:

  • Assets that taxpayers can neither create nor destroy nor move out of the taxing jurisdiction may be called land-like assets or site-like assets (where a site means a piece of ground or airspace, including any attached rights to erect buildings on that ground or into that airspace, but excluding any actual buildings).
  • The rest — that is, assets that taxpayers can move and/or destroy and/or refrain from creating — may be called house-like assets.

By this terminology, house-like assets used as means of production include not only buildings and other fixed structures, but also industrial and commercial equipment of all kinds (fixed or movable) and stock in trade. The great classical economists from Adam Smith (1723–1790) to Max Hirsch (1853–1909) called such assets capital. Because the production of house-like assets adds to the total wealth of humanity, and because the profits from such assets are an incentive to produce the assets, capitalists advocate the private ownership of house-like assets and the private appropriation of profits derived therefrom.

Land-like assets include not only sites, but other natural resources (which cannot be created by human effort), statutory monopolies and limited licenses (which can be created only by governments), and the so-called natural monopolies enjoyed by providers of networked services such as electricity, gas, water, railways, and (at the time of writing) telecommunications [1]. Returns on land-like assets, net of the demands of labor and capital, are known as economic rent [2]; owners of such assets constitute the rentier class. The term “rentier” should be understood as functional rather than personal, because the same person may perform more than one economic role. (For example, one man may be a worker and a capital owner and a rentier — and, under present arrangements, may lose more in the first two roles than he gains in the third.)

From the viewpoint of taxpayers, land-like assets cannot be produced, but can only be acquired. Such acquisitions do not add to the total assets of humanity. Furthermore, while the returns on labor and capital applied to a land-like asset are incentives to apply that labor and capital, the return on the asset itself (net of the demands of labor and capital) is not an incentive to do anything except acquire the asset; indeed, the party acquiring the asset need not be the one applying the labor or capital. Therefore the argument by which capitalists rightly defend the private ownership of house-like assets and the private appropriation of the returns on house-like assets is not applicable to land-like assets. But they apply it anyway!

3.  Bait and switch

Because land-like assets by definition are protected from competition, the returns thereon are high and increase in line with economic growth, giving the owners both the motive and the means to fight for the retention of “their” economic rents. In the late 19th century, when economics was becoming established as a separate academic discipline, rentiers were well represented on the trustee boards of certain prestigious American universities, whose endowments, moreover, consisted chiefly of land grants. And there was no academic tenure: professors who did not do the bidding of their paymasters could be fired without process or redress.

So the language of economics was corrupted so as to conflate land with capital, economic rent with profit, and acquisition with production, in order to obscure the advantages of a selective tax on land-like assets [3]. As the unit of heredity is the selfish gene, which is no less “fit” if it propagates purely at the expense of other genes, so the unit of economic analysis became the selfish entity (individual or firm), which was no less praiseworthy if it prospered purely at the expense of other entities. It was as if the cuckoos, being relieved of the burden of building nests, had used their discretionary time to convince other birds that any restriction on the laying of eggs in other birds' nests would discourage the building of nests!

By calling itself neo-classical economics, the new pseudo-science masqueraded as the successor, though in fact it was the usurper, of the classical tradition. Within a generation it became the new orthodoxy.

4.  The preferred enemy

The obvious winners under the neo-classical paradigm were the rentiers; for if land-like assets were capital, then capitalism, which demanded private ownership of capital and private enjoyment of profit, implicitly also demanded private ownership of land-like assets and private appropriation of economic rent.

The other winners, whether by accident or by design, were communists! For if land was nothing but capital, then communism, which began by demanding expropriation of land, was obliged in the name of “consistency” to demand expropriation of all forms of capital, enabling the revolutionaries to eschew intellectual distinctions between categories of assets and stir up the masses by appealing to crude envy.

The conflation of land with capital did not precede these developments in capitalism and communism, but it offered a false conceptual framework that was willingly adopted by both rentiers and communists to entrench their respective positions and deny the existence of any intermediate position. It was as if the cuckoos, in order to protect their legal right to lay eggs in other birds' nests, had colluded with a gang of avian revolutionaries who wanted to expropriate all nests and raise all chicks in common!

5.  “Natural” unemployment

As the rentiers and their economists have forbidden heavy taxation of economic rent, governments are compelled by default to impose punitive taxes on work, investment, employment, and the consumption that sustains demand — in short, on everything that capitalism professes to encourage. All these taxes socialize the fruits of individual effort — as communists recommend. They also increase the cost of hiring a worker at a given standard of living, and consequently tend to increase inflation or unemployment or both. Central banks fight the inflationary tendency by raising interest rates (or otherwise restricting credit) to discourage hiring and consumption, causing yet more unemployment, in order to maintain unemployment at the so-called natural rate, which the neo-classicists define as the minimum unemployment rate that causes sufficient downward pressure on wages to yield stable inflation.

Thus, for the neo-classicists, unemployment is not an evil to be avoided, but the price of ensuring that rentiers can enjoy their economic rents with minimal interference from the tax authorities.

Obviously politicians cannot admit the “need” for a certain rate of unemployment. They must always pretend to want full employment, and will be judged on their success in reducing unemployment during their terms of office. Given that the central bank will maintain unemployment at the natural rate, the actual rate cannot be reduced except by reducing the natural rate. And if, due to opposition from the rentier class, the natural rate cannot be reduced by shifting the tax burden onto economic rent, the only remaining method is to make life more difficult for the unemployed, increasing the desperation of the unemployed to get jobs and of the employed to keep them, so that the same downward pressure on wages can be obtained with a smaller number of unemployed. Having a smaller number of more desperate unemployed does not reduce the overall severity of the problem, but makes the statistics look better. Hence we see “mutual obligation” policies including one or more of the following:

  • Idlers are compelled to seek jobs and consequently take jobs from people who want to work.
  • Job-seekers are compelled to submit certain quotas of job applications per week. This keeps them busy, forces them to incur expenses, and artificially intensifies the competition for jobs — the implication being that the scarcity of jobs, by itself, does not cause sufficiently cut-throat competition.
  • Unemployed people are compelled to “work for the dole” and submit quotas of job applications. They are not hired as ordinary employees to do the same work for the same hours at the same cost to the government — because if they were, they would no longer have to apply for other jobs.
  • The dole is cut off after a certain time.

To defend such policies, governments must cultivate the myth that unemployment consists in unwillingness to work, whereas in fact unemployment, by definition, is an oversupply of willing workers relative to the available jobs. Here it may be instructive to note that the closest human analog of the cuckoo is the man whose illegitimate children are supported by the husband of his mistress. Etymologically, “cuckoo” and “cuckold” ought to be synonymous. Yet it is the husband of the adulteress, not her partner in adultery, who is called the cuckold!

6.  All-devouring rent

No worker can live, and no enterprise can trade, without occupying space on the surface of the earth. Yet all the usable space is owned. So the rents and prices of land are competed upward, and the returns to labor and capital are consequently competed downward, until the returns to labor (net of the cost of access to residential land) are reduced to the minimum for which workers will “consent” to acquire skills, work, and raise the next generation of workers [4], while the returns to capital (net of the cost of access to commercial land) are reduced to the minimum for which the financiers will consent to save and invest. Every direct improvement in the condition of the working class or the employing class is competed away in the land market, so that the ultimate benefit accrues not to the nominal recipient, but to the cuckoo in the nest: the land-owning class.

That is why the ever-increasing sums handed out in wages, welfare, charity, and industry assistance never seem to be enough. But because the real reason is not widely understood, the rentiers and their economists can easily blame the nominal recipients for allegedly squandering the assistance given to them. It is as if the cuckoos, having laid their eggs in other birds' nests and taxed all the birds to help feed the cuckoo chicks, explained the host birds' lack of reproductive success by accusing them of wasting the food!

The effective demand for land-like assets tends to increase due to population growth (which increases competition for use or acquisition of assets), economic growth (which increases capacity to pay for the assets), and improvements in technological infrastructure (which increases the amenity of certain types of assets, especially sites). But, as the assets are land-like, this additional demand cannot be offset by additional supply. So land-like assets tend to appreciate in real terms. This causes speculative demand for land-like assets as individuals and corporations buy assets in the hope of reselling them for higher prices, or try to save money by early acquisition of assets that they intend to use later. The speculative motive raises prices because all buyers must compete with the speculators. Worse, assets held by speculators are likely to be unused or underused because the owners are not yet ready to use them, or because the owners wish to avoid commitments that would fetter their ability to sell at the most opportune times. This effect raises not only prices, but also rents, as not only buyers but also renters must compete with the speculators.

A sufficiently heavy tax on the holding of land-like assets requires the owners to use the assets efficiently in order to generate sufficient income to cover the tax. That is enough to eliminate the price and rent premiums caused by the non-use and under-use of speculatively held assets. In this case — and only in this case — the benefit to workers and owners of capital is not competed away in the land market, because it arises from reduced competition for land!

Rentiers and their economists agree that such a tax is a bad idea, but disagree as to the reasons. Some, who seem never to have looked out the window of a bus or train, flatly deny that the culture of speculation leads to non-use or under-use of land. Others pretend that such non-use or under-use is socially desirable in that it prevents any initial use that would interfere with conversion to a higher use at the optimal time, as if the initial use were not desirable in itself, and as if the higher use would not interfere with conversion to a still higher use at a still later time — yea, as if the cuckoos were helping other birds by giving them time to become better parents!

7.  “Free” trade

The neo-classicists claim that income tax is compatible with “free” trade because it is “non-discriminatory” between domestic and international transactions. Never mind that the tax on export income raises export prices as if it were a tariff in every country of destination of those exports. Similarly, they claim that a value-added tax (VAT) or goods-and-services tax (GST) is compatible with “free” trade because it is finally paid in the country of consumption and is “non-discriminatory” as regards the country of origin. Never mind that the VAT/GST on imports raises their prices as if it were a tariff. Never mind that the same tax inflates export prices through its compliance costs and its influence on the cost of living, hence wages. Never mind that as long as taxation is “non-discriminatory” by the neo-classicists' definition, trade can be taxed to the point of prohibition and still be considered free!

In fact, all taxes on house-like assets impede trade and raise prices by discouraging the production of such assets, while all transaction taxes impede trade and raise prices by discouraging transactions.

The only taxes that do not impede trade or raise prices are holding taxes on land-like assets. The economic rents of such assets are not incentives to produce anything. So as long as the holding taxes take no more than the annualized economic rents, they cannot restrict the supply or raise the price (or hire or rent) of any product or asset.

Hence, by collecting more of its public revenue from holding taxes on land-like assets, and less from other taxes, a country can make itself more competitive. This of course would compel other countries to do likewise. So the rentier class and its economists are constantly on guard to ensure that no country is the first to take this step; they know that the price of freedom (from the need to work for a living) is eternal vigilance [3, pp.237–260].

8.  The cause of recessions

In a rational market, the capitalized (or “lump-sum”) value of a land-like asset is the discounted present value of the future rent stream. (That is, the capitalized value is the lump sum that would yield an interest stream equal to the rent for the same risk, or the sum of the future rental payments individually discounted for time and risk.) But the market is not always rational. When assets of a certain type are conspicuously appreciating, people want to buy them. In so doing, they accelerate the rise in prices, inducing more people to buy the assets, and so on, causing a speculative bubble — that is, a state in which prices are decoupled from rents and are supported solely by the circular argument that prices will continue to rise. Eventually the illusion becomes unsustainable and the price rise slows down, which takes away the alleged justification for current prices, and so on, until prices dive back to earth: the bubble “bursts”. But eventually the natural appreciation of land-like assets leads to a new bubble in the same asset class. So the market for any land-like asset class is cyclic.

A bursting bubble in a particular asset market has two counteracting effects. On the one hand, it drives investors away from that asset class and, by default, towards some other asset class that may also be susceptible to bubbles. On the other hand, those who have invested heavily in the collapsed market have to reduce their expenditure, and some become insolvent. As one agent's expenditure is another's income, and as one agent's debt is another's asset, a chain reaction ensues, reducing the funds available for investment in other asset markets, possibly causing them to collapse, and so on; these are the ingredients of a recession. After an isolated bubble-burst, the former effect tends to dominate; thus the stock-market crash of 1987 led to a land bubble. But after a second burst in quick succession, the cumulative belt-tightening and bad debt tend to cause a recession; thus the land burst of 1989 led to the recession of 1990–91.

In short, a burst in one asset market interferes with the cycles of other markets, sometimes pushing them out of synchronism by encouraging bubbles, and sometimes drawing them into synchronism by triggering further bursts (and a recession). This mutual interference, complicated by external shocks, makes it difficult to discern the autonomous cycles of some asset classes, and causes irregularities in cycles that can be more easily discerned. The clearest cycles are the residential land cycle (typically 9 years in duration) and the commercial land cycle (typically 18 years) [4a]. A bursting land bubble is the most reliable single predictor of a recession; in particular, the global recessions of 1974–5, 1981–2, and 1990–91 were heralded by bursting “property” bubbles, i.e. land bubbles [5].

A sufficiently heavy holding tax on land-like assets would prevent recessions by preventing speculative bubbles. If the tax were based on capitalized values or changes in capitalized values, it would force speculators to consider the tax implications before bidding up prices. If based on changes in annualized values, it would directly reduce the changes in after-tax rents that translate into speculative gains; in particular, if it were to take all real increases in rental values, it would prevent real increases in capitalized values and thereby entirely eliminate the speculative motive.

The first years of the 21st century were marked by a global property bubble. The inevitable burst began in Australia in early 2004. It has spread to the British Isles and Europe, and in due course must reach the United States. Although this global bubble was confined to “housing” (i.e. residential land), it was the biggest asset bubble in history in terms of the combined GDPs of the affected countries [6] — and that measure fails to account for the number and economic weight of the countries involved. The bigger the bubble, the bigger the burst. The bigger the burst, the bigger the recession.

But even that is understating the problem.

9.  The U.S. dollar bubble

As the money supply is controlled directly or indirectly by government, money is a land-like asset and a component of the so-called interest of money is economic rent. This economic rent accrues to those who merely possess money. What of those who also create it?

For half a century the U.S. dollar has been the de facto international currency. Importers need reserves of dollars to pay their suppliers. Central banks need reserves of dollars to protect their currencies. Poor countries must borrow dollars to get capital, and must earn dollars to service their debts. Hence the growth in international trade causes growth in the global demand for U.S. dollars, allowing the U.S. to export dollars — which cost nothing to produce — and receive real goods and services in return. That is how the U.S. manages to import 50 percent more goods and services than it exports. When the exported dollars are invested, they can be invested only in U.S. assets, creating a demand for U.S. Treasury Bills without high interest rates, and inflating the price/earnings ratios of U.S. property, stocks, and bonds. This inflow of investment creates a surplus on the capital account, which balances the deficit on the current account (including imports, exports, interest, rent, and dividends).

The U.S. dollar is also the dominant currency — and until November 2000 was the exclusive currency — for international trading in oil. Therefore any increase in the global demand for oil or the price of oil causes a corresponding increase in global demand for the U.S. dollar and boosts its value, protecting the U.S. economy against the inflationary effect of higher global oil prices and allowing the U.S. to increase its trade deficit. Hence the reinvestment of exported dollars in U.S. assets is sometimes called recycling of petrodollars.

One consequence of this recycling of petrodollars is that the value of the dollar is out of proportion to its earning capacity (interest on dollars, or yields on other dollar-denominated assets). That is one characteristic of a bubble.

After 1971, when the U.S. dollar ceased to be backed by gold, the dollar's position as the world currency became increasingly dependent on its use in the oil trade, so that the argument supporting the dollar became circular: dollars would buy oil because oil exporters would accept dollars because dollars would buy other products because exporters of other products would accept dollars because dollars would buy oil! Valuation by circular argument is another characteristic of a bubble.

One thing that could burst the bubble is a credible alternative to the dollar — such as the euro.

10.  Rogue states

Iraq began selling oil for euros instead of dollars in November 2000. When Iraqi oil exports resumed after the U.S.-led invasion, payments were again in dollars [7].

Iran expressed interest in the euro from 1999, and had converted most of its currency reserves to euros by late 2002. In 2003, Iran began accepting payment in euros for oil exports to Europe and Asia. In mid 2004, Iran announced that it would establish a euro-denominated international oil bourse (exchange), which is now due to start trading by March 2006 [8,9,9a]. George W. Bush named Iran in his “axis of evil” in January 2002. If Bush's speech was designed to revive the flagging fortunes of extremist candidates in Iranian elections, it could hardly have been more successful: on October 26, 2005, Iran's newly elected President Mahmoud Ahmadinejad, quoting the late Ayatollah Ruhollah Khomeini, declared that “Israel must be wiped off the map” [9b].

Since September 2000, Venezuela and 13 other Latin-American countries have entered into barter agreements whereby Venezuela sells oil for goods and services instead of dollars. In April 2002, editorials in the U.S. media welcomed news of a coup against Venezuela's elected President Hugo Chavez; but the coup collapsed after two days [10,11]. In mid 2005, Venezuela decided to move its currency reserves out of U.S. banks and liquidate its investments in U.S. Treasury securities. By early October, about 60 percent of its reserves had been converted to euros [12].

The U.S. may threaten Iran and Venezuela; but if Russia and Norway start selling their oil for euros, the U.S. will have to take it on the chin.

11.  The Great Depression of 2006–?

Given that the value of the U.S. dollar must fall, nobody wants to be the last sucker holding dollars. Therefore any perception that the crash is imminent will trigger selling of dollars in an effort to pre-empt the crash. That selling will amplify the perception, causing more selling, and so on; so the perception will become reality. Moreover, the rush to sell dollars will extend to dollar-denominated assets, including U.S. property, stocks, bonds, and bills. So the burst of the dollar bubble may be the trigger for the expected burst of the U.S. property bubble — among other things.

If, on the contrary, the U.S. property bubble bursts of its own accord, the falling value of this class of dollar-denominated assets will reduce the attractiveness of holding dollars. Worse, the recession precipitated by the property burst will bring down other dollar-denominated asset markets. If the initial collapse of the U.S. property market is not enough to prick the dollar bubble, the ensuing collapse of other dollar-denominated asset markets will certainly be enough, and the dollar crash in turn will drive further selling of dollar-denominated assets.

In either case, there will be a multiple burst involving not only the global property bubble, which is already deflating outside the U.S., but also the U.S. dollar bubble and every other asset bubble that has been pumped up by recycled petrodollars. The bigger the burst, the bigger the recession.

12.  Summary

In short, the neo-classical economy works like this. The supplies of certain assets, including land, are not within the control of taxpayers. The returns on such assets (economic rent) are not due to any activity of the owners (rentiers) and therefore could be taken for public revenue, by means of holding taxes, with no ill effects. But this option is rejected. Instead, governments impose taxes penalizing everything that the neo-classicists profess to encourage. These taxes deter employment and feed inflation. Central banks fight the inflation by raising interest rates, causing more unemployment, for which the politicians' remedy is not to create more jobs (which would defeat the efforts of the central banks) but to intensify the competition for the few jobs that are available. Meanwhile, the opportunity to speculate on land-like assets creates a permanent artificial demand for those assets, causing permanent price premiums and rent premiums exacerbated by periodic speculative bubbles, which burst causing periodic recessions. One of these overpriced land-like asset classes is residential land, for which working people must pay out of wages that have been depressed by the deliberately engineered scarcity of jobs, eroded by income tax, and devalued by indirect taxes. Unemployment, poverty, and housing stress are the price that must be paid so that rentiers can continue to enjoy the economic rent that they do not produce. This is the prize for which the Cold War was fought, the End of History, the capitalist Nirvana.


(Links updated February 2009)

[1] A networked service is a monopoly in the sense that any new competitor wishing to serve its first customer must either replicate the whole network, which is prohibitively expensive, or connect to the existing network on terms dictated by the owner or governed by regulation; none of these options admits free and fair competition.

[2] The so-called “rent” of real property comprises the rent of the land plus the hire of any building(s) attached to the land; only the former is economic rent. The so-called “rent” of a vehicle is not economic rent, but a return on capital.

[3] M. Gaffney, F. Harrison, and K. Feder, The Corruption of Economics (London: Shepheard-Walwyn, 1994; 271pp.); Gaffney's contribution (pp. 29–164) is available online as Neo-classical Economics as a Strategem against Henry George.

[4] Of course workers can hardly refuse to acquire skills and to work. But nowadays they can easily refuse to raise the next generation of workers if the future for workers looks bleak. That is their biggest bargaining chip.

[4a] These cycles would have been better listed in the reverse order, because the latter is clearer. The 18-year cycle is related to land, including commercial land. But the asset class underlying the shorter “business cycle” is more variable. The Australian residential land market peaked in 1981 and brought on the subsequent recession; but the downturn of 2000–1 was related to the stock market, and the peak in the residential land market (as noted in the longer version of this essay) was overdue if one accepts a 9-year residential cycle.

[5] Concerning the theory that recessions are due to high oil prices, suffice it to say that (i) there were recessions before there were oil shocks; (ii) the recession of 1990–91 started before the oil shock that allegedly caused it; and (iii) in the words of Alan Greenspan, “we create these elaborate models for policy responses and we put in oil prices [but] they don't create a recession in the models” [answer to a question from the International Monetary Conference (London, June 8, 2004), transcribed by Ashley Seager and quoted in Fred Harrison, Boom Bust (London: Shepheard-Walwyn, 2005), p.65].

[6] “The danger of a global house-price collapse” and “The global housing boom”, The Economist, June 16, 2005.

[7] William Clark et al., “U.S. Dollar vs. the Euro: Another Reason for the Invasion of Iraq”, Project Censored, 2004, #19; 5 refs.

[8] William Clark et al., “Iran's New Oil Trade System Challenges U.S. Currency”, Project Censored, 2006, #9; 5 refs.

[9] Cóilín Nunan, “Petrodollar or Petroeuro? A new source of global conflict”, Feasta Review, No.2; 32 refs.

[9a] In December 2007, Iran stopped accepting U.S. dollars for oil. After numerous postponements, the bourse eventually opened on February 17, 2008, to trade oil, gas and petrochemicals in multiple currencies.

[9b] Although the initial translations of many of Ahmadinejad's remarks, including this one, were subsequently disputed, it remains clear that Ahmadinejad represents a relapse towards extremism; only the severity of the relapse is in doubt.

[10] Hazel Henderson, “Globocop v. Venezuela's Chavez: Oil, Globalization and Competing Visions of Development”, April 2002.

[11] Duncan Campbell et al., “Bush Administration Behind Failed Military Coup in Venezuela”, Project Censored, 2004, #12.

[12] Gregory Wilpert, “Venezuela's Central Bank Confirms it Deposited $20 Billion in Swiss Bank”, Venezuelanalysis.com, Oct.5, 2005.

    Return to Contents