The 2ndlook Gold Report – 2010

Buy gold … young man!

2ndlook has proposed to all and sundry, to buy gold for the last 20 months. Interestingly, a Chinese-blogger-online financial advisor, with some fan-following, going as Maoxian says, “I’d wager $20 that no one can show me an audited trading record for any system that has traded GLD since its inception that has beaten simply buying and holding GLD since then.”(errata – an American blogger, and not Chinese).

Now, 2ndlook is not a hedge fund, or a financial advisor! And will not pretend to be one either. But 2ndlook will take a 2ndlook, and put a context and perspective that others will not. And answer your question, “Is it the time to buy gold!”

How far and how high will gold go? Some history before that.

Nixon and Kissinger - 1972 (Courtesy - nytimes.com)

The Nixon Chop

On August 15th, 1971, ‘Tricky Dick’ Nixon emerged from Camp David, on an evening television show, and announced the end of dollar redemption against gold.

For the 10 years, France had been redeeming gold, even sent a French warship to escort gold from US to France. On August 13th, 1971, Britain also made an official request for dollar-redemption – and Nixon shut the door on that possibility.

And that was the end of Bretton Woods Agreement!

Dollar anchor shifts – from gold to oil

Over the next 10 years, the world saw severe stagflation (economic stagnation + price inflation). Gold prices zoomed from US$35 an ounce to US$800 an ounce.

Gold does not have any price-correlation is traditional wisdom! Correlation like inverse, perverse, reverse, positive!

From 1980, President Ronald Reagan, in the next 8 years, persuaded his Middle East allies to pump out more oil – cajoling, mixed with threats – ranging from the Iran to US-led increase in oil production. The resultant drop in oil prices cooled down inflation, strengthened the US dollar.

Surplus revenues from oil-sales by Middle East oil producers, were used to fund US deficit. By 1990, surplus petro-dollars vanished, with the drop in oil prices, and the increased cost of running welfare states in the Middle East.

In the last decade, it was the turn of the Chinese and the Japanese to prop up the dollar.

IN China, many people refer to the dollar as mei jin, or “American gold.” Government officials, businessmen and people on the street all use the term. So if a Chinese person tells you that he owes you 100 American gold, don’t expect a big fortune, because he’s planning to pay you $100.

US has been able to find lenders to bridge their deficit for more than 50 years. From the 1950s to 2010. Europe till the 70s, Middle East up to the 90s, Japan and China, till 2010!

Can the US find another target to fund their deficits.

The collapse of Soviet Union

In the 70s, with out-sized gains in oil, platinum and aluminum prices, the Soviet economy became a powerhouse, funding anti-US regimes across Africa, South America, Asia and the Middle East. Soviet Russia, one of the largest gold producers in the world, made windfall gains.

The expansion in subsidies by the USSR in the 1970-1990 period to its allies and sympathetic regimes created a huge pressure on Soviet finances. A simultaneous drop in oil and gold prices in the 1985-1995 period severely dented Soviet export earnings, leading to the economic collapse of the Soviet Union. In USSR’s economy, after WWII, commodities like oil, natural gas, metals (like gold, platinum, uranium) and timber accounted for 65%-80% of Russian exports.

Reagan managed to increase oil production, decrease Soviet earnings - and create an economic crisis in the USSR! (Cartoon by David Horsey from seattlepi.com).

Gold sales by central banks

The Central Bank Gold Sales Agreement, further dented gold prices, 1995 onwards. Gordon Brown, the then British Chancellor of the Exchequer, has been under pressure to ‘reveal’ details of British gold sales during this period.

The (British) bullion was sold in 17 auctions between 1999 and 2002, with dealers paying between $256 and $296 an ounce. Since then, the price has increased rapidly. Yesterday, it stood at $1,100 an ounce.

Dark stories are told that this was stolen gold during WWII, going around as the Yamashita gold, the Nazi gold, with marginal characters like Edmond Safra, playing an important role. It is suspected that the Soviet Union unloaded a lot of gold during the glasnost and perestroĭka period under Gorbachev.

The upshot of this was that for the first time in modern history (1800-2000), ‘declared’ gold reserves of governments across the world, reduced to a historic low of 20% of total global reserves.

The Great Collusion

By the end of The Great Depression, and the start of WWII, public sector (all the Governments of the world) owned some 50%-65% of the gold in the world. That is now reduced to less than 20%.

Will the State(s) sit back and allow the citizenry to become so independent – and the State to become ‘powerless’?

Improbable!

Global conclaves on economic matters (the G20 Summits, WTO Summits, the Copenhagen Summit) are getting organized easily and often. A global, mass nationalization of gold to ‘save the global economic system’ may be called for! Instead of warring with each other, Governments may decide to collude and jointly loot their respective citizens in a coördinated manner!

Was the US crackdown on Swiss banks a precursor to the global gold nationalization?

Central Banks own ≈20% of the world’s gold

Central banks the world over, claim to own something over 30,000 tonnes of gold – about 20% of the world’s total gold stocks. Officially, that is. Some of it is double counting. The most obvious example is IMF gold.

Most of IMF’s gold reserves are actually pledge papers by founder-member countries that they will pony up the gold. A book entry. This pledge was covered by a back-to-back with a reverse sale agreement by the IMF back to the pledgor -called ‘restitution agreement’ in IMF lingo.

The Bretton Woods agreement gave birth to IMF and World Bank (Pictured above: Treasury Secretary Henry Morgenthau speaking at the opening of the Bretton Woods conference on July 8, 1944.; picture credit - nytimes.com).

The hoax of IMF gold

Of the 3005 tons which is held by IMF at ‘designated’ depositories (meaning pledgor central banks), 2600 is covered by the restitution agreement. Of the balance, 403 tons, only some 191 tons remains with IMF. In fact, IMF does not have any gold – apart from 191 tons.

What it has, are pieces of paper that various central banks have given, ‘promising’ gold to the IMF – and this ‘promised’ gold was held in safe custody by the pledgor-central bank on behalf of the IMF.

Is this the right gold price

Estimated global economic output is some US$70 trillion. Gold is now ruling at some US$1200-1250 (per ounce). Total global reserves of gold (private, public, central banks, et al) are estimated at 130,000-140,000 tonnes. In dollar terms, the value of gold stock is US$5.0-5.5 trillion.

Gold futures (Image Source - Wall Street Journal).

If all the liquid capital in the world is measured in gold, then the total capital to output ratio turns out to be 1:14 ratio. For every 1 unit of gold, there are fourteen units of economic production (US$5 trillion of gold gives an output of US$70trillion). Of course, to make this liquid capital productive, other forms of capital are also required – namely land, buildings, factories, technology, education, healthcare, et al. Those could also be similarly valued – and added to the gold capital in the form of gold. Currency would become proxy for gold – and hence all currency units will be ignored as store of capital. Looking at the past, adjusting for inflation,

Gold is still at half the peak set in 1980, after adjusting for inflation. Then, prices rose to $US850, equal to $US2266 today.

If one were to measure gold as a proportion of global /national economy, it may give us a better idea about where gold is headed. Looking at it from this perspective, the upside for gold is definitely less than 100%. Based on current pace of liquidity creation – that is printing of Euros, dollars, yuan, yen, rupees, that various governments are printing. In Western markets, it is seen that

The yellow metal remains in a $1220-$1260 channel for the time being, and is still showing a Kilimanjaro-sized 975 tonne pile of long positions standing and casting a…long shadow in the market.

and … gold revealed some ‘disconcerting’ technical signals on the price charts and that in coming days ‘prices may not ‘necessarily strengthen.’

These weak signals, are largely due to some expected dampening in demand from India during June to September, in the generally slack monsoon season (though not quite so, last year).

Helicopter Ben is using his famous 'printing' technology!

Gold shortage!

There have been many reports about shortage of gold – in coins and bars form. Now this is strange.

In India, there is no such talk or shortage! The probable reason is that in India, gold lumps are also accepted by customers – without hallmarking! The jewellers, assayers and valuers are dime a dozen. Hence, gold fraud by the trade can be easily detected – especially in raw gold. Not to mention, that there are ‘dharam-kantas’ in every town and village across India – which does gold assaying for free.

In jewellery form, however, there is rampant mis-declaration of purity. So, buying gold in India is, as of now, not a problem!

Due to this ‘shortage’ in some Western markets, for sometime gold futures were cheaper than gold for physical delivery. The US mint and the Perth mint in Australia have suspended coin sales – supposedly, as they were swamped by orders, and demand.

Let us look at old mining and productions figures, to get some context.

All the gold in the world

Annual global gold production at some 2200 tons, is itself seen as an issue! Gold mining companies are “digging deeper to extract dwindling reserves, with mines in South Africa extending as far as 3.8km down” Apart from having to dig deeper, the other issue is “Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia.”

China, Australia and the 16 other largest mining nations averaged weekly output of 42.3 tonnes last year, researcher GFMS estimates. Even though prices have fallen 5.8 percent to $US1177.10 from a record $US1249.40 an ounce May 14, the median prediction in a Bloomberg survey of 23 traders, analysts and investors is that it will reach $US1500 by the end of the year.

Investment, including bars and coins, almost doubled to 1901 tonnes last year, exceeding jewellery demand for the first time in three decades, according to GFMS. Jewellery will jump 19 per cent to 2100 tonnes this year and industrial use 8 per cent to 398 tonnes, Sydney-based Macquarie Group says.

The gap in demand and supply is being met by scrap sales.

In Southeast Asia, scrap sales, which are routed through Australia and sold on to India, are already up.

“When gold gets to these sorts of levels, Southeast Asia gets interested in dishoarding,” said Nigel Moffatt, treasurer at the Perth Mint in Australia. “We’ve been seeing it now for some weeks.”

Which way the wind blows?

With the world’s largest private reserves of gold, and as the world’s largest consumer of gold, India has a significant role to play in gold prices.

The Bloomberg poll of 23 traders (linked and extracted above), gives a consensus estimate of some US$1500 an ounce.(31.1034768 grams). Which translates to about Rs.21000-23000 per tola (10 gm) range. Dollar rupee exchange rate will also make a difference. That is an appreciation of about Rs.3000-5000 – some 15%-25% from current prices (Rs.18,100-18,500 range). A strong and stable gold price during July-September period could easily see gold cross 21,000 by October. A weak 3 quarter, will corner gold to the 20,000 barrier.

In another post, Maoxian remarks,

Two years ago when I wrote the post, Jim Sinclair’s Crazy Bet, I annoyed the tinfoil hatters. One commenter wondered where a pajama blogger dude sitting in a crappy little Third World apartment would get the money to take a million dollar bet.

I thought it was time for an updated post/chart given the Greek drama and Euro crisis. Recall that Sinclair’s wager was: “Gold will trade at USD $1650 before the second week of January 2011.” Price could still make it there, but looking at the chart, it seems as improbable to me now as it did back in 2008.

Will Government’s scam people out of gold

Let us deconstruct this price upmove.

A US$1650 gold price @Rs.50 to a USD price means some Rs.26,500 per tola. At that rate, in Jan 2ndweek, we are talking about a 45% appreciation in 6 months. Take gold at US$1650 @Rs.42 to a USD, translates to about Rs.22,300 per tola.

At about 21,000-23,000, Indian consumer buying is likely to be anemic – and investment demand from OECD+China will have to make up for weak Indian demand. At Rs.26500 per tola, the Indian consumer may start selling gold – and we may see a small replay of the Hunt Brother’s silver saga in gold. Scrap sales of gold out of India may dampen prices much.

The third scenario may see gold at about 33000-36000 per tola. To do this the Indian rupee must trade at Rs.60 to a dollar, to get Indian consumers to part with their gold. Like the successful scam by Winston Churchill-Montagu Norman between 1929-1939 to loot the Indian peasant of his gold.

We may see a variation on that play!

Related articles

• The gold rush is on – and the clock is ticking (independent.co.uk)
• Gold standard (bbc.co.uk)
• Gold reaches all-time high of $1,457 per ounce (telegraph.co.uk)
• Mexico bolsters its gold reserves (bbc.co.uk)
• Factbox: Gold milestones on the road to record highs (reuters.com)

70 years later, RBI remains true to its DNA

An bankrupt West is a bad economic model to follow. RBI in the last 3-5 years has shown some independence in policy matters - finally. (Cartoon courtesy - bhra.files.wordpress.com). Click for larger image.

there is a curious aspect to the Indian economic System (defined as commentators, policy makers, and academicians). The System systematically thinks in a skewed fashion, and unlike any other System in the world. In particular, it is trigger happy to bring the economy to a screeching halt by raising interest rates, but asleep at the wheel when the economy is in desperate shape — e.g. confidence at historic lows, industrial growth at zero, and exports diving over a cliff. (via Surjit Bhalla: Lazy banking at its finest).

It is not so curious Mr.Bhalla. You only have to look at the history of RBI formation and its objective. Fact is RBI has not outgrown its colonial DNA.

April Fool Joke – The RBI

On April 1st, 1934, while the ‘Squeeze India’ campaign was under execution – and being choreographed by Montagu Norman, Neville Chamberlain, Winston Churchill and Lord Willingdon, RBI, India’s banking authority was set up. From that April Fool’s day till now, RBI character has not changed. It remains isolated, out of touch with the India – and looks at India through colonial viewing glasses.

First things, first …

RBI and the Colonial India Government initiated many reports on the ‘condition’ of the Indian economy. Based on these reports, they passed many of the laws restricting money lending activities. These reports – Central Banking Enquiry Committee (CBEC) report (1929) and its associated Provincial Banking Enquiry Committee reports (of Assam, Bombay, Burma, Ceylon, Central Provinces, Bengal, Punjab, et al) of which the Madras Provincial Banking Enquiry Committee (MPBEC) report is cited by lazy academics and out-moded bureaucratsas authoritative – even in post-colonial era.

Western economies have been hiding their economic stagnation for the last 10 years by handing out loans to voters, industry and banks. For how long can this system work? Cartoon by Michael Ramirez. Click for larger image.

Based on these reports co-ordinated by the RBI, Debt Conciliation Acts were passed between 1933 and 1936 by the governments of Assam, Bengal, Central Provinces and Berar, Madras and Punjab; the Punjab Regulation of Accounts Act (1930) and the Debtors Protection Acts of 1935 and other such burdensome laws buried the money lender in mountains of paperwork and licenses. These laws required money lenders to comply with extensive and prolonged compulsory licensing and registration – and extensive recording of transactions and accounts.

What these laws achieved was what was desired – a license for police and other ‘inspectors’ to start an extortion racket from money lenders (these days called corruption). A bureaucrat from colonial Punjab, Malcolm Darling (1925) shedding crocodile tears stated “the Indian peasant is born in debt, lives in debt and dies in debt” became a by line for tarring the money lender – while the cause was extractive, colonial revenue practices.

Options foreclosed

While the world was reeling under a crisis of the Great Depression, these restrictions on money lending foreclosed the liquidity option for the Indian peasant, which would have averted the gold outflow from India and the impoverishment of the Indian peasant. With this legalized persecution, money lenders’ activities were curtailed all over India.

RBI joined in this hounding of the money lenders – which continues to this day. The Bengal Burma link of the ages was broken. Chettiar money lenders were thrown out of Burma. From being a granary of Asia, Burma started declining – and there was no rice for exports. Result – The Bengal Famine of 1943. Tally – 40-50 lakh deaths. Similarly, the role of Chettiars in Singapore was wiped clean.

Subhash Chandra Bose's diplomatic initiatives left the British War efforts nervous and anxious. (Image sources - hindustantimes.com). Click for source image.

After the fall of Singapore, and the rapid Japanese advance, with Subhash Chandra Bose in the vicinity, a revolt by Bengal would have had catastrophic effect on the colonial administration. Howard Fast, in his novel ‘The Pledge’ believes that the Bengal Famine was deliberate creation – possibly to weaken the local population.

Elephants in the room

Firstly, the answer to your curiosity cannot come from the West. And since, the Indian English press (especially), depends on the West for cues, they miss out some vital elements. For instance, how the Indian economy was used to meet Britain’s Post WW1 liabilities. To ‘dampen’ gold demand for India, the Indian rupee was put on fixed overvalued rate vis-a-vis the sterling.

Indian exports crashed, imports ballooned. Indian accounts would be settled at ‘official’ silver prices, with inflated silver released by the US under the Pittman Act. Gold prices were deflated – and Indians would therefore have to pay more in gold. Thus with with a combination of inflated silver price, deflated gold price, high interest rates and an overvalued Indian rupee, the Indian economy was strangled. Few Western writers or books identify this – unwittingly, or deliberately.

RBI was a pawn in this game – and it remains true to its DNA.

India funded the post WW1 recovery

The mechanics and the development of this plan are laid out in a better book, John Bullion’s Empire by By G. Balachandran. This book traces how much of India’s poverty was a result of economic policies between the two World Wars co-ordinated by these four central bankers.

On October 27th, 1931, the Ramsey Macdonald led “National” Government (Conservatives and Liberals coalition, fearful of the rising Labour Party) in Britain won a huge majority of 554 MPs of 615. The economic crisis of September 1931 (misnamed as the Indian Currency Crisis) was a result of this economic policy which reduced Indian economic activity – resulting in bankruptcy of the Colonial India Government.

Parallel Great Depression era problems in the US, the Weimar Republic problems – and other issues pushed this ‘National’ government to ram through a series of measures (page 130-131) that inflated silver prices, depressed gold prices and raised interest rates in India. The Indian rupee was pegged at a high exchange rate vis-a-vis the sterling. Indian exports crashed. To ensure that Indian farmers had no options, Indian money lenders were regulated and licensed into paralysis. Further the Lees Mody Pact, gave few options to the Indian producers.

Indians were paid, with inflated and abundant silver stock, instead of gold. This silver was the same silver released by the Pittman Act. The silver buffer solution to the gold drain to India was seen as the “only buffer to protect Western gold reserves against the Indian drain (was) a silver buffer.” Of course, later the British Raj decided to settle Indian debts with promissory notes – and not even silver. It was this Indian ‘sacrifice’ which enabled the recovery of the West.

The yawning trench between talk and walk makes Western economiuc theory suspect.

Crash in silver prices

New mines and increased silver production saw a crash in silver prices. US silver coinage was being depreciated due to increasing supplies of silver. On the other side, Britain had a large debt due to WW1. Britain and America stuck a deal at the cost of the Indian subjects of the British Raj. The US passed the Pittman Act which mandated silver sales at more than a dollar per ounce – double the 50c per ounce prevailing price of silver. Britain agreed to settle all Indian debts with silver. Gold prices were deflated. Interest rates in India were increased. Restrictions on gold imports on were placed and gold demand in India was ‘normalized.’

Impoverishment of India

With crashing exports and increased imports, the Indian citizenry had no option but to pay for all essentials and taxes with gold. As a quid pro quo, for this silver for gold scam, the US lent gold to Britain in 1926, which allowed Britain to revert back to the pre-War old standard.

Done over the protests by Gandhiji, trade bodies and merchants and threats of resignation by the Viceroy and his Executive Council , the resulting ‘money famine’ (page 155) had the Lord Willingdon ecstatically say ‘Indians are disgorging gold’ (page 156). Neville Chamberlain pitched in with his classic statement “The astonishing gold mine that we have discovered in India’s hordes has put us in clover.”

Looking back, it was clear that this achieved nothing but the impoverishment of India. In 1948, Montagu Norman had to admit that with these maneuvers “We achieved absolutely nothing, except that we collected a lot of money from a lot of poor devils and gave it to the four winds.”

The RBI was a vital element of this plan.

Ceterus paribus …

Today, in similar situation, the RBI, a colonial era body, continues with these colonial anti-Indian policies. They keep ever-greening and recycle colonial policies. Old laws with new labels and different wordings are made – with the same intent. Kill the money lender. While all this was happening, Indian agriculture and the peasant suffers.

The tragedy is that RBI is not alone. The IAS (a successor to the ICS) and the Planning Commission are the other two. Compare that with the brilliant track record of modern Indian regulators and organizations like the SEBI, TRAI.

Related articles

• The British Salt Tax. How Damaging? (quicktake.wordpress.com)
• How British Raj Ended Thugee in India (2ndlook.wordpress.com)
• Desi Nostalgia For British Raj (quicktake.wordpress.com)

The Great Unease

From the 1954 - 2010 - Indians are the most optimistic. Cartoon by RK Laxman, Times of India.

Global consumer optimism surveys routinely show anxiety, unease, dread in Europe and USA. This sense of unease should be absent considering the prosperity levels, the best health-care systems, a welfare state, guaranteed unemployment benefits, their technology, their currency and their democracy.

The Indians and Chinese routinely are more optimistic – which should not happen considering the low income levels. Fancy theory apart, to my mind, it is the ‘sword fatigue’ in response to constant exposure by Western Governments (to which they are exposed) which causes this low optimism.

Medieval – Renaissance Europe

16th century Europe – specifically, Spain and Portugal. The last of the Moors had been driven out of Spain. The Christian standard was flying high. The Papal Bull divided the Earth (for the Europeans) between Spain and Portugal. White Christian rulers of Spain, Isabella and Ferdinand, set historic standards in persecution and extortion. More than a million Jews were killed, crucified, burnt alive; their properties confiscated and distributed. Columbus returned to enslave the American Natives – and subsequently, work them to death.

New chapters in bloodshed were being written by conquistadors like Vasco Nunez De Balboa, Francisco Pizarro, Juan Ponce de Leon, Hernando de Soto, Hernando Cortez, et al. Not to forget the search for El Dorado led by, “above all, that prince of monsters Lope de Aquirre, colour the pages with the darkest hues of bloody emprise.” In South American memory, Francisco de Carvajal, the “demon of the Andes” remains alive. These real-life monsters set new standards in brutality, slavery and genocide.

Europe in the sixteenth century was “obsessed with questions of language, and especially so in Spain and its recently conquered American Empire“ (emphasis mine). This was driven by

what Marshal McLuhan called “the hypertrophy of the unconscious,” a phenomenon he associated with periods of revolution in media technology: the advent of print in the 16th century created a great need for sensational materials to be broadcast, and this need caused ideas that formerly had been only lurking in the dark recesses of men’s minds to come floating to the surface.

One of the great bestsellers of the 16th century was the Histoires prodigieuses of Pierre Boaistuau (Paris, 1560), a sort of Renaissance Ripley’s Believe-it-or-not containing marvelous tales on everything … Seventeen of the Histoires forty tales are about monsters, a fact that may explain why the book was republished anywhere from ten to twenty two times and translated into Dutch, Spanish and English. (from Popular culture in the Middle Ages By Josie P. Campbell).

Spanish literature of the Renaissance

From this hotbed of ferment, a representative of this period was Calderon de la Barca (1600-1681), the Spanish writer. Growing up in a Spain, a 100 years after the Conquistadors, benefiting from the twin advantages of fresh memory and hindsight – “a century of Janus, facing backward, towards the rise of the Spanish Empire … and forward, toward its decline.” His more than a 100 plays and writings represent significantly, 17th century Spain – and even Europe.

There is probably no word that is more characteristic of Calderon de la Barca’s art than monstruo, “monster.” Rare is the play in which the word does not appear several times … (from Celestina’s brood By Roberto González Echevarría).

Calderon’s play about Semiramis, the Assyrian Empire builder, showed her in a monster mode – her hybrid character the most masculine modes and the most feminine, a monster of destruction and creation”. And Calderon was not alone. The fertile growth of monsters gave birth to a new study – teratology, the study of monsters.

“Monster lore truly becomes “popular culture” only with the Renaissance … Fresh works on the subject of teratology are written by Italians, Germans, and Frenchmen. The foreruuner of the modern newspaper, the broadside were bought at street corners and at fairs by the barely literate masses. The great reformers Luther and Melanchthon used the broadside medium to popularize their propagandistic and anti-Catholic versions of two of the most famous monsters of the Renaissance, the Monk-calf of Freiburg and the Pope-ass of Rome. (from Popular culture in the Middle Ages By Josie P. Campbell).

Some of Calderon’s plays dealt with the proselytization of the Native Americans – like his play, La Aurora En Copacabana (Dawn in the Copacabana), described as a play about “the conquest and conversion of the Indians in Peru”

The success of the conquest, therefore, is attributed to (Christian) faith which is valued as mans greatest gift to the world … Thus (Christian) conquest becomes a form of colonisation with the purpose of imposing religion and culture on a land “que habitan inhumanos” (512) and is in need of redemption and education. Finally, the play tries to harmonise irreconcilable contradictions which lie at the bottom of colonial discourse. (texts in parentheses mine).

With this idea, must be seen something important. That is the important element of “the escape of the monster.” In the … Monster Theory, Joel Cohen has remarked that the monster always escapes. Now combine the three elements – the newly acquired colonies of America, the proselytization (or otheriwse, the genocide) and the escape of the monster. These were the ‘monsters’ of colonialism.

A very interesting play by Calderon was La vida es sueño (Life is a dream). It tells the story of Segismundo, the Prince Of Poland, who was destined to be a monster. To forestall the prophecy, Segismundo was imprisoned by his father from the time of his birth. In adulthood, released from prison to test the prediction, Segismundo fulfills the prophecy. As a analyst of Calderon’s work summarizes,

Affirming a “better reality,” Segismundo’s message speaks as well to all of Europe: the “new European man” is the real monster. (from The subject in question By C. Christopher Soufas).

200 years after Calderon, HG Wells, in the The Island of Doctor Moreau, foretold Joseph Menegle’s experiments rather well.

Onshore genocide – The Roma Gypsies

Apart from the Jewish persecution, less known is the the persecution of the Roma Gypsy, which continues till date. In Europe, kidnapping children was considered legal for most of 1500AD-1750AD. On one condition – you had to kidnap Roma Gypsy children! More than 25,000 children kidnapped. No problem. Everybody sleeps peacefully at night. Switzerland was doing this till 1973!

Roughly, between 1500 to 1750, it was legal in Europe to hunt human beings. Yes! Just like hunting for deer in India, or hunting buffalo in Africa or fox-hunting in Britain. Yes! You could hunt human beings. As long as the humans you hunted were Roma Gypsies. In Europe you could be hung to death if you committed the crime of being born – between 1500AD-1750AD! Born as a Roma Gypsy!

Europeans, in the their age of Enlightenment and Renaissance, (1500-1750) could just pick up human slaves – yes, own them like cattle and furniture, if you found one! As long as they were Roma Gypsies. Later you could also sell them for profit!

Ship owners and captains in Europe’s Golden age, (1500-1750) could arrange galley slaves for free. No wages, no salary. You just had to feed them. Use them, abuse them, flog them, kill them, drown them. You could do anything – as long as they were Roma Gypsies.

What set off the Roma Gypsy Genocide

In 1420, a 60 year old man, blind in one eye took charge – and took on the might of the Roman Church and Roman Emperors.

Jan Zizka.

Over the next 12 months, he became completely blind. In the next 15 years, Zizka (and other Czech generals) defeated, many times, the combined armies of Germany, The Roman Church and others. His military strategy was studied for the next 500 years. Thereafter, the myth of military might of the Church was broken forever.

Jan Zizka allied himself with the Taborites (the radical Hussite wing). Zizka made Tábor in Bohemia into an armored and mobile fortress – the Wagenburgs.

Interestingly, a 100 years after the Hussite Wars, the European persecution of the Roma Gypsies began in full earnest. And during WW2, the Vatican joined with the Nazi collaborators, the Ustashe,  to extort gold and the genocide against the Roma Gyspises.

Military success

Zizka ranks with the great military innovators of all time. Zizka’s army was made up of untrained peasants and burghers (townspeople). He did not have the time or resources to train these fighters in armament and tactics of the time. Instead they used weapons like iron-tipped pikes and flails, armored farm wagons, mounted with small, howitzer type cannons.

Roma Gypsy Wagon Caravan

His armored wagons, led by the Taborites, in offensive movements, broke through the enemy lines, firing as they rolled, cutting superior forces into pieces. For defense, the wagons were arranged into a tight, impregnable barrier surrounding the foot soldiers – the Wagenburg (the wagon fort), as they came to be known. The wagons also served to transport his men. Zizka thus fully initiated modern tank warfare. Zizka’s experience under various commanders was useful. At the Battle of Tannenberg (1410), Zizka fought on the Polish side , in which the famed German Teutonic Knights were defeated.

Coming back …

Who were the major users of the wagons in Europe then (and now?) Answer – The Roma Gypsies.

Who were the people who could pose spiritual and ecclesiastical questions to the Vatican? Answer – The Gypsies, with their Indian heritage, were not not new to spiritual dialectics (contests, discourse and debates). For instance, Mani, and his adherents, an Indic teacher of Buddhist thought, known to Christians as Manichean thought, were the nightmare for Christianity till the 15th century. When Mani called for overthrow of slavery, the Vatican at the Council of Gangra, re-affirmed its faith in slavery. European minds were occupied with the questions raised by the Hussite reformers.

Some think they (the Waldensians) had held them for centuries; some think they had learned them recently from the Taborites. If scholars insist on this latter view, we are forced back on the further question: Where did the Taborites get their advanced opinions? If the Taborites taught the Waldenses, who taught the Taborites?

Who were the people who could help the persecuted Waldensians, the Bogomils, the Cathars to escape persecution and spread out across the Europe? Answer – The Roma Gypsies – in their wagons. The same Gypsies, had earlier pioneered the Troubadour culture in the Provence Region, which provoked the Albigensian Crusade by the Vatican.

Prokop Coat Of Arms

And who was the King of the Taborites? Answer – An entire clan of leaders who called themselves as Prokop (The Shaven /Bald; The Little and The Great) were the military leaders of the Taborites.

The word and name Prokop have no meaning in any European language – except in Sanskrit, where it means vengeance, retribution, violent justice.

Mythology as History

Jan Hus initiated the Reformation in the Vatican Church. It was Jan Zizka who broke the back of Papal authority. On the back of these Czech successes, was laid the foundation of 95 Theses by Martin Luther in 1517. The British break (1533-34) with the Holy Roman Church happened due to favors by the Papal office to the Iberian Empires – in matters of trade and colonial expansion, and the impediments to divorce of Henry-VIII at the behest of the Spanish rulers.

Today, the Germans and the British are loath to be reminded about the Czech Church Reform initiatives and the defeats at the hands of the Poles and Czechs. Western historiography about the Enlightenment and Renaissance, in Britain, France and Germany, leading to the reformation is ‘mythology as history’.

Of course, the role of the Greek Orthodox Church, the Byzantine Empire in the entire Czech saga is also worth re-examining. Were the Hussite Wars, a proxy war waged by the Eastern Church against the Vatican?

Dracula, Frankenstein, Dr Jekyll and Mr.Hyde

In the 19th century came the monster story was dubbed as Gothic – and this form of story-telling matured as a craft.

A significant array of Gothic writers emerged from Ireland (from Charles Maturin, Sheridan Le Fanu, Bram Stoker, and Oscar Wilde to the contemporary writer Patrick McGrath), in a colonial situation where a Protestant minority was the colonial occupier. (from Late Victorian Gothic tales By Roger Luckhurst)

Mary Wollstonecraft Shelley (1797–1851), wife of Percy Bysshe Shelley started writing Frankenstein or The Modern Prometheus, at the age of 18, and completed it one year later. First published in London, anonymously, in 1818 by small London publishing house of Harding, Mavor & Jones – after previous rejections by bigger publishers like Charles Ollier (Percy Bysshe Shelley’s publisher), and John Murray (by Byron’s publisher). The writer’s name started appearing from the second edition of 1823 onwards. The interesting aspect, lost in popular usge, is that the monster is not named – and Frankenstein was the scientist, who brought the monster to life.

In 1886, Robert Louis Stevenson’s book, The Strange Case of Dr.Jekyll and Mr.Hyde was first published. This explored how ‘normal’ (Dr.Jekyll) human beings could become ‘evil’ (Mr.Hyde).

And in 1887, Bram Stoker, an Irish writer published his Dracula. The character of Dracula is based on Emperor Sigismund and his Order of the Dragon, who waged war against the Hussites – led by Jan Zizka. Infamous for his betrayal of Jan Hus, he sparked of the Hussite Wars, in which the Taborites (the Roma Gypsies) used wagons and gun powder for the first time in Europe. He founded a secret sect,  the “Dracul” called the Order of the Dragon.

Of course, these three are the most famous – but not the only ones. Sheridan Le Fanu’s 1871 “Carmilla“, about a lesbian vampire was another monster book of its time. An associate of Mary Shelley, John Polidori created the character of the “The Vampyre” in 1819 – on which possibly Dracula was based.

Most significantly, in 1896, was HG Well’s The Island of Doctor Moreau, which presaged Joseph Mengele – when Joseph Mengele had not even started on his higher education. A good 50 years before Joseph Mengele’s experiments were discovered by a shocked world.

The wellspring of these works is H.G. Wells’ The Island of Dr. Moreau. In this 1896 novel, a vivisectionist attempts to transform animals into men until the misshapen creatures revert and kill him, the forces of nature overcoming man’s civilizing artifices. From The Boys From Brazil (Auschwitz doctor Josef Mengele, alive and well and cloning Hitlers at a secret lab in the Brazilian Amazon) to Jurassic Park (Richard Attenborough alive and well and cloning velociraptors), Wells’ basic formula has become familiar: an island; a Frankensteinian experiment; a Faustian scientist; something gone terribly, terribly wrong. (from Requiem for the Mad Scientist By Arthur Allen, in Slate).

From the 1700-1800, while Spain was in decline, for about a 100 years, Western literary field did not see too much action on the monster front. The main action was in Haiti, where zombies, the ex-murderers, the living dead became a part of the voodoo cult.

The late Victorian era was one of the most expansive phases of the empire. Britain annexed some thirty-nine separate areas around the world between 1870-1900, in competition with newly aggressive America in the Pacific or the European powers in the so-called ‘Scramble for Africa’ after the continent was divided up at the Berlin conference of 1885. (from Late Victorian Gothic tales By Roger Luckhurst)

The last of the true great monster in popular culture came from the East. Soon after WW2, as tales of Japanese atrocities started coming out and as American atrocities in Vietnam started, Godzilla came out of Japan. But a different pressure head was building up, which gave rise to a new genre – detective fiction.

Euro-Pessimism

Between 1800-1950, Western powers killed (directly or otherwise) more than 50 million people in America (the Native Americans), Africa (the Native Africans and Afro-Americans), Asia (Indians, Chinese, Arabs). This led to a situation that every other person in the West had participated in murder or massacre. Western ambiguity towards Soviet Russia on one side, Hitler on the other – and to that add, Gandhiji’s resolute opposition to colonialism – and you have a inflammable situation.

The deluge of blood and murder caused moral anxiety and was a matter of ethical dilemma amongst common folks. The pressure valve for this was popular fiction. Identifying murderers became a form of proxy, vicarious entertainment for ordinary folks. Enter the super detectives, who pick out the murderer from a room full of ordinary people. Enter detectives like Auguste Dupin, of ‘The Purloined Letter‘ fame, who “investigates an apparently motiveless and unsolvable double murder in the Rue Morgue.”

Murder in Popular Image

A trend started by Edgar Allan Poe, whose first detective novel, Murders In Rue Morgue (1841) soon became an avalanche. Writers like Agatha Christie (Hercule Poirot, Miss Marple solving murders happening by the second), Georges Simenon (and his Inspector Maigret investigating brutal crimes), Ngaio Marsh (Roderick Alleyn), GK Chesterton (Father Brown), Raymond Chandler (Sam Spade and Phillip Marlowe) dealt with murder. Alfred Hitchcock made horror thrillers in similar themes.

Agatha Christie’s book filmed as Ten Little Indians, based on the book, initially released (the book) in Britain as Ten Little Niggers (later renamed as Then There None) gives the game away. Agatha Christie probably pre-saged the White desire to ensure that there should be none of the Native Americans left to tell the tale. The overt racism in Herge’s ‘Tintin in Congo’ made the world sit-up and note the pervasiveness of racism in detective fiction.

Jerome Delamater, Ruth Prigozy, in an essay compilation, ‘Theory and Practice of Classic Detective Fiction’, observe that Jane Marple, along with Hercule “Poirot becomes an equal opportunity detective who really believes that anyone might commit murder”. Dismissing the jaundiced view of human nature,” the writers of this book, while commenting about the detective fiction genre, do not mention slavery at all – and mention colonialism and racism once each.

The Mystery of the Dying Detective

After de-colonisation, as mass murder went underground, the detective-murder mystery books genre faded. This category was replaced by a new theme – the axis of corporation-government international conspiracies.

Conspiracy Theory – Full Steam Ahead

The new category of popular fiction are represented by Ian Fleming, Arthur Hailey, Frederick Forsyth, Irving Wallace, Robert Ludlum, Graham Greene, John Le Carre, et al. More and more contrived, each conspiracy theory writer has been ‘inspired’ by real life incidents.

While Ludlum’s international-conspiracy-plot-CIA-FBI-KGB series have worn thin, the spookiness of Le Carre’s Absolute Friends and Constant Gardner still work as novels representing the West.

Western Twins – Anxiety and Paranoia

To develop this understanding further, there are two classes of films that I wish to draw attention to.

Malignant Nature

Jaws (the shark that eats humans), Jurassic Park (mad scientists, conspiring technicians let loose man eating dinos) Gremlins and Poltergiest (things that go bump in the night). This paranoid fear of nature (and natural laws) seems to be a result of the subterranean knowledge of the way in which ecological damage and pollution is happening. These films produced /directed by Steven Spielberg (who is incomparable because as Time Magazine says, “No one else has put together a more popular body of work”)

Vindictive Humans

The other is the thinly disguised hate and prejudice films against the poor and the victimised. ‘Aliens’ needs just one small change for the films idea to become clear. Instead of LV-426, Nostromo the space ship, receives a distress call from some country in South America or Africa (or India, if you prefer). The meaning is clear when you see the movie while conscious of the fact that alien is is the word the US Government uses for people from other countries.

What Does This Mean

A US commentator Robert Putnam says that

“… We don’t trust each other as much as we used to. Trust in other people has fallen from 58 percent in 1960 to 35 percent in the mid-1990s. Our less trusting atmosphere has led us to recoil from civic life and social ties. We belong to fewer voluntary organizations, vote less often, volunteer less, and give a smaller share of our gross national product to charity (Putnam, 1995a, 1995b; Knack, 1992; 1986; Uslaner, 1993, 96-97). People who trust others are more likely to participate in almost all of these activities, so the decline in trust is strongly linked to the fall in civic engagement (Putnam, 1995a; Brehm and Rahn, 1997; Uslaner, 1997) …”

Elephants in the room

Most critics and commentators write about the phenomenon of detective fiction devoid of context – and the detective fiction as entertainment only.

One writer, Franco Moretti did half the job in book Signs Taken for Wonders: On the Sociology of Literary Forms By Franco Moretti. He writes,

“The perfect crime – the nightmare of detective fiction – is the feature-less, deindividualized crime that anyone could have committed because at this point everyone is the same.” He further writes,“Yet, if we turn to Agatha Christie, the situation is reversed.Her hundred-odd books have only one message: the criminal can be anyone …”

In his entire book he does not use the words like slavery, racism, genocide, bigotry even once. The 19th century, which was based on Western bigotry, White racism, Black slavery, and assorted genocides is unrecognised in Moretti’s books.

Running or hiding? Or it a case of feeling squeamish? Perhaps, a case of queasy stomach, Franco?

Another book, The Detective as Historian: History and Art in Historical Crime Fiction, by Ray Broadus Browne, Lawrence A. Kreiser does a better job. This book examines, the detective fiction genre, with some references to slavery and child prostitution.

How was this explained away

As the monsters increased, both in real life and literature, rationalizations were required. A person no less than Immanuel Kant, was pressed into service to deconstruct the ‘monster’, re-invent it and give it a positive spin.

The monster taken up by Kant in an aesthetic sense to refer to those things that exceed representation considers that the monstrous describes an entity whose life force is greater than the matter in which in which it is contained. Thus rather than something that malfunctions during the course of its production, monstrosity is associated during romanticism with “over-exuberant living matter” that extends itself beyond its natural borders in order to affect a much wider sphere. ((from The subject in question By C. Christopher Soufas).

In the twentieth century, Kant’s hypothesis finds an echo when Lord Randolph William Churchill, the ‘Bulldog’ declared

“I do not agree that the dog in a manger has the final right to the manger even though he may have lain there for a very long time. I do not admit that right. I do not admit for instance, that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race has come in and taken their place. (from Minorities, peoples, and self-determination By Nazila Ghanea-Hercock, Nazila Ghanea, Alexandra Xanthaki, Patrick Thornberry)

In another instance, Churchill wrote how ’superior’ Arabs, imposed on the ‘inferior’ negroes.

The stronger race imposed its customs and language on the negroes. The vigour of their blood sensibly altered the facial appearance … (from The River War By Winston Churchill).

The Debt That India Owes Britain

“British government conceded Indian self-rule, they thought this the right thing to do. What would have happened to the Koreans or the Vietnamese if a local Gandhi had tried such tactics against the brutal Japanese kempetai or the French with their mercenaries from Morocco and Senegal? It was not that Gandhi was successful but that the British were forbearing … Gandhi’s tactics only work if the other side lets it …” Christie Davies’ Blog The Social Affairs Unit.

We ungrateful oriental so-and-so

Indians are an ungrateful lot. How can we forget the British and give Gandhi all the credit.

Ever the oriental selfishness. Why can we not sacrifice ourselves for the Great British Empire? Can we even imagine that the Greatest Empire in history had anything but the milk of human kindness oozing out of Britain, at the time of granting Independence. After WW2, even though Britain was on rationing, they let us Browns go independent.

I wonder who put Jinnah onto this job?

The end of extraction

Churchill very much wanted the option of squeezing the Brown man at least a little more. Whatever little there was left of the Brown man after the Great Bengal Famine of 1943.

Clement Attlee pointed out that there was nothing left to squeeze. Attlee thought that the cost of squeezing was greater than the value of the extract. After Montagu Norman, Churchill, Lord Willingdon, Neville Chamberlain had finished with the Great Bullion Scam against India from 1925-1945. After the war was over and the Brown man was used in Africa and Europe. They let us go – and allowed us to rule ourselves.

How can we ever repay this debt?

The gift of English language

First, the great benefit of English language.

These stupid Germans, Italians, Japanese, Russians, French, Chinese – they don’t know what we know!! English is the universal language. All other super powers and developed countries (Japan, China, Russia, France, Germany, Italy) use their own languages. They could have been very successful (like India) if they had learnt English, talked English, walked English, read English, cooked English, washed English, done everything in English.

Colonial stereotypes!

I must admit, this small, little, disloyal question keeps raising its head, in my head? Why cant the British use that great English language to lift themselves from that terminal decline?

Indian industry

Can we ever forget the Lees-Mody pact which saved the Indian farmer from ruin on 28th October 1933?

The Japanese had stopped purchase of Indian cotton. Never mind that the British raised customs duty for imported Japanese cloth (increasing the cost to the consumer) to protect the Lancashire Mills, which were hurting by the Gandhian (that tricky so and so oriental) boycott.

We ungrateful Indians must further appreciate the British sacrifice and the industrial cost of conceding self-rule to India.

Within 10 years of Indian independence, the British car industry started closing down. British Steel collapsed and had to be nationalised within 20 years (Ratan Tata may revive British Steel finally). British coal mining became unviable within 15 years – and had to be shut finally. British Rail similarly collapsed. It is now making a hesitant comeback after privatisation. British capital goods industry (electrical, heavy machinery, electronics) went out of business. There is no British automotive industry worth talking about.

All due to us Indians hankering for Independence..

Colonial railways

But they did teach Laloo Prasad Yadav how to run Indian Railways profitably.

Should we complain so much, if we inherited a decrepit, run down, accident prone, investment starved railway system with outdated technology from the British? Should we be ungrateful, if this railway system was financed by Indian capital?

Even though it took India 40 years, to modernize the colonial railway system, we should be thankful. Remember, they could have uprooted the rails, and taken away the wagons and engines. After all, Indian Railways was the biggest scrap iron collection in the world at that time.

Till Lal Bahadur Shastri’s resignation – the poor Indian railway-man was routinely blamed for railway accidents – by his British, and later the Indian bosses also. It was Shastri’s resignation, that drew attention to the state of the railways. It was Madhu Dandvate in 1977 who started overhauling railway time tables – and upgraded rail travel from cattle class to IInd class.

Captive markets and raw material

What could the British do without captive markets and raw material sources?

The British let all this go – so that Indian industry could survive. British business manager taught Indian businessmen how to run business competitively – and completely ignored their own business. Today, Britain has very few of the colonial era multinationals. British (The Great Benefactors) said – Go forth, Brown man.

Some biased historians claim that the Britishers said to us Indians, “We know that you can do nothing by yourself. You are useless to us now. You are a burden to us. We have sucked you dry. But, you want to go away from our protective umbrella. Go forth and stagnate at the bottom”, at the time of Independence. I don’t believe that.

Like I don’t believe that the sun rises in the East (it is a conspiracy against us).

Are you not disappinted, Mr.Pukka Sahib?

Colonial Indian bureaucracy

We also do not appreciate their kindness towards us!

The other British legacy that we should be very grateful is our colonial bureaucracy. This colonial era bureaucracy, a permanent establishment, has been growing faster than our population – thrives by demonizing Indian politicians. Its corruption is aided by a myriad laws created by the same bureaucracy – for the benefit of Indians. In most states this bureaucracy takes up all the Governmental revenues and leaves nothing but tax increases for us.

The British never intended to benefit from these entrenched laws and bureaucracy.

One reader did point out,

“Look what happens when you let these people rule themselves. The whole of black Africa has become a basket case. The people are ripped off by their rulers, in a far worse way than they ever were under white rule. Many of their citizens long for the return of white rule and the stability that would bring. It’s just a shame they are never going to get it.
All countries in the Middle East, with the exception of Israel, are ruled by thugs who use terror and their police forces to destroy any opposition.”

Indians responded, (in a very disloyal manner), by using the same logic against the British themselves.

By this logic, the way Britain is being run, it will need to be governed by guess who – Indians. Looking at where India was after the end of the Raj – and now, it is clear who is better at governing.

Looking at the ‘decline’ of Britain (what will happen after the secession of Scotland and Wales?) and Spain, after the end of Black Moslem rule, and you know who should be ruling over Britain and Spain at least.

Whatcha say …

How disloyal Indians can be? Imagine, questioning the British themselves? How can they?!

They Didn’t Wipe Us Out – Like ‘Red Indians’ And Aborigines

Recent archaeological (available with me) evidence shows that the British were repaying our kindness. Indians “marwari” seths had lent Queen Bodicea some money about 78 AD during her struggle against the Romans 2000 years ago. The British have never forgotten that. (Only the British and I know this secret story – based on documents to which only I have access in my family custody for 2000 years).

Hence, they did not kill us Indians in the numbers that they killed (more than 10 lakh Kenyans in 10 years) in the Mau-Mau uprising. Or they did not torture and kill Indians the way they killed the Malaysians. Due to this reason, they also did not establish apartheid the way they did in Rhodesia (Zimbabwe) and South Africa. This unblemished record of the British against other people had nothing to do with Gandhiji. Gandhiji’s focus on post-colonial India, had nothing to with the existence of our statehood.

It was all the British legacy.

They let Gandhiji succeed

Just like the Whites in US of America allowed Martin Luther King to follow Gandhiji’s ideology. They have permitted the Negroes to make more progress in the last 30 years than in the previous 300 years.

Similar to the permission granted, by the White Apartheid Regime in South Africa, for Nelson Mandela to become successful. I wonder why his neighbours Robert Mugabe and Joshua Nkome were not given that permission. Lech Walesa’s success in Poland is there for all to see – after the Communist Regimes in Poland permitted these protests to happen.

Why didn’t they just kill Gandhiji

It would have been so easy. The one British failure was that they did not kill Gandhi. That job was outsourced to an Indian “coolie”. This was one thing that they could have done – but didn’t do! In my books, we should be eternally grateful to the British Colonialist for not killing Gandhiji.

PS – If all else fails, there is the path of political assassination. A few days ago, from Washington, USA, someone Googled to ask “why britishers didn’t kill gandhi“. Perhaps, that was one moment in history, when the political leaders of the Anglo Saxon Bloc were momentarily humanised.

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