‘Global finance capitalism is a fraud’

‘Global finance capitalism is a fraud’
Iceland can be viewed as a successful example of a country that is breaking away from global financial capitalism, a system designed to drive countries forever into debt, Rodney Shakespeare, Professor of Binary Economics told RT.

RT:Do you share this optimism about Iceland's financial recovery?

Rodney Shakespeare: Iceland is quite right to make an upright challenge to the global financial system. Unless you say that you are going to throw it out the window, they will always succeed in creating money out of nothing, lending to you with administration cost and interest, lending it for anything except the real economy. Lending it for anything except the spreading of the real economy and putting you into debt. And the debt becomes repayable.

You must rely on your own national bank for your own uses, for your own real economy and for the spreading of it. And if you don’t do that, you’ll be trapped in debt in the same way that …. well, you’ve got Greece, you’ve got Iceland, you’ve got every country in the world trapped in increasing debt and all that happens is  that they increase the levels of the debt and smash the populations down.

We need a revolt against this global financial system and in its own way Iceland is setting a reasonable example.

RT:But at a cost? It’s not as good as it sounds – inflation skyrocketed, while the local currency became much weaker. Is it really as good as it sounds?

RS: The bottom line is what you do with the financial system which acts on the real economy which actually creates things and services. Finance capitalism does nothing of this sort. It is essentially a theory and a device which succeeds in putting debt on the population and sucking the debt up to that one percent elite.

What really matters is whether in fact the economy has got to work efficiently which in fact involves everybody in the society. Global finance capitalism does not do that. It is collapsing on the ever-increasing weight of debt which is made worse of course by the enforced austerity.

A view of the Investment bank Straumur Burdaras's headquarters in the financial district of Reykjavik (Reuters / Ingolfur Juliusson)

Global finance capitalism is a fraud and its time is up. And it is also time that we recognize that and start to go for a new system.

RT:Back in April, Icelanders voted out the government responsible for the post-crisis recovery, returning the parties responsible for the pre-Crisis boom - Why is that?

RS: That is because people yet do not have a clear understanding of what is at fault, which is the center of all this and what is the way forward. The thing you have to understand is that countries have to come back to their own national bank and have nothing to do with the IMF or the World Bank, and certainly not to borrow from foreign creditors who are only out to put them into debt.

They go on repaying the principle of a loan forever more, over, and over, and over again. People have to go to a new paradigm of thinking and if they don’t, they will end up being crashed forever more.

RT:If Iceland's doing so well - why is there no foreign appetite to invest in its economy?

RS: I have to disagree that foreign investment is important. You use your own national bank for your own investment. If you have to buy technical information and expertise, that is another matter. But you must never keep borrowing from abroad, because ultimately that is going to be the source of your weakness.