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Foreword
A book like this can benefit from a guiding metaphor — like a handle to grab. The Paul Krugman con is appropriate. Economist Paul Krugman, according to the mainstream media, won the 'Nobel Prize in Economics.' However, there is no such prize. The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was created in 1968 and passed off by the Swedish Central Bank as a true Nobel in an effort to save the dismal reputation of economics. "It's most often awarded to stock market speculators," one of the Nobel heirs claimed. Robert Merton and Myron Sholes won it for their formula valuing derivatives to minimize risk. Nine months later, their firm LTCM nearly imploded global bond markets and required an emergency intervention.
The bank managed to slip the prize in with those created by Alfred Nobel. They did it to get scientific validation and wrest control from democratic processes — a relentless central bank strategy in all countries. Scientists are miffed but the public is none the wiser. That's the way it is with central banks in particular. Most non-insider experts more or less despise them as a renegade force that has seized control, but the public is treated to a steady diet of propaganda and little understands the intense debate. Far worse, they have no idea that the stakes could not be higher.
Modern economic theory is useless. In fact, it is dangerous. The global economy is undergoing a paradigm shift. Mainstream economists see the series of crises (real estate bubble pop, banking crises, sovereign debt problems) as external — problems stemming from various participants and their inability to properly manage their situation in the overall context. Economics, as it is said, is very useful as employment for economists. In the real world, the theories are mismatched and worsen the situation. The problems are not external, nor are they a series of isolated events. The problems are the early warning signs of the failure of the global monetary system. We are witnessing a worldwide paradigm shift. The current way of doing things is crumbling. The process is not reversible, nor can it be stabilized at a lower level. The imbalances are too large. It can be slowed somewhat, and has been. It can also be broken apart to let separate pieces fail without dragging the entire system down as rapidly. This is meeting with little success, however. The globalized system is quite integrated. It is failing as a whole, but few people see this.