SUMMER 1914-

To the average man or woman in Britain during the summer of 1914 the world carried on much as usual. The news that an Archduke Ferdinand had been murdered in central Europe meant nothing to most people, and as far as enemies were concerned they felt it a good idea to keep a wary eye on the French. Buoyant financial markets had initially shrugged off the assassination of the Archduke; there was far greater concern about the possibility of a civil war in Ireland. Certain newspapers such as the Daily Mail had been warning for years of the “German menace” but nobody paid them much attention…There was no general public fear of war or awareness that war was in the air, simply because it was not. Across the Western world, it was by and large true that ordinary people felt no apprehension. There leaders who worried — but in the winter and spring of 1914, not even they expected war to break out in the summer. The political situation in Europe in summer 1914 was the most peaceful there had been for several years. There was an almost complete lack of international tension. The matters concerning the man on the’ Clapham Omnibus’ were Irish Home Rule with a real threat of civil strife, universal suffrage votes for women, and especially mass industrial unrest from syndicalist unions . The Great Unrest, between 1910-14, (an episode totally ignored in the accepted history of the country). Everyone is taught about how the ‘progressive’ Liberal government of the time, basking in the sweet Edwardian glow of massive income inequality, cleared slums, introduced some social security legislation, and reformed the House of Lords. No-one is taught that these grand reformers were actually hated at the time. Hated by the suffragettes and hated by the working class.

There was a general idea that Britain would go to war with Germany at some point in the future with international tensions heightened by the Moroccan crises between 1905 and 1911. There had also been a trend in popular fiction for several years, in Britain, of ‘Invasion novels’ and in Germany of ‘future-war’ books, as the Anglo-German arms-race accelerated. War with Germany was accepted as inevitable by officers and the educated classes in the main, if not universally. This was despite the German-British Friendship with the close blood relations between Royal families of both empires; both sides believed that when war did come, it would be a short, ‘gentlemanly’ affair, as recent wars in Europe had been (but ignoring the bloody years-long civil war in the USA). There was also the argument that international trade was so vital to a country like Britain that any war would be quickly ended and the differences solved by diplomacy. A related argument was that modern war was so expensive that no country could afford to wage war for more than a few months. There was a strong feeling that modern European countries were too civilised to wage war against each other so again, sense would prevail very quickly and differences settled by negotiation…

When war was suddenly declared there were spontaneous outbursts of joyous patriotism as nations mobilised their forces and both sides still believed, and publicly stated, that the war would end soon. The Kaiser told his troops that they’d be, “home before the leaves have fallen from the trees,” and one German officer said he expected to be in Paris by ‘Sedan-day’, about six weeks away. Germany only stockpiled enough potassium nitrate for gunpowder for six months. Russian officers similarly expected to be in Berlin in six weeks, the British famously expected the war to be ‘over by Christmas’ and those who suggested that the war would last for six months were considered pessimists…

What they also don’t teachabout the origins of the First World War-was that the stock market panic of 1907 had caused enormous instability in credit markets and a massive ongoing crisis in banking liquidity and the fragile and untrustworthy gold standard .

Just before war broke out, Austria’s tough ultimatum to Serbia sparked both a geopolitical and a financial chain reaction. As traders and investors suddenly grasped the likelihood of a full-scale European war, with Russia taking the Serbs’ side, liquidity was sucked out of the world economy; stock markets around the world closed their doors for fear of another panic, and a drain on their cash and gold reserves.

Perhaps the most remarkable feature of the crisis of 1914 was the closure of the world’s major stock markets for up to five months. The Vienna market was the first to close, on July 27. By July 30 panic reigned on most financial markets- all the continental European exchanges had shut their doors. The next day, London and New York felt compelled to follow suit. Although a belated settlement day went smoothly on November 18, the London Stock Exchange did not reopen until January 4. The New York market reopened for limited trading on November 28, but unrestricted trading did not resume until April 1, 1915. It seems likely that, had the markets not closed, the collapse in prices would have been as extreme as it would be in 1929, if not worse. The crisis of 1907 meant that the US had prepared a system for the supply of an emergency currency to stem panic selling and bank-runs. America subsequently boomed with arm sales as the ‘creative destruction’ of war staved off the collapse of capitalism for another fifteen years…

My point is this– the First World War grew out of Imperial tensions between the ‘Great Powers’ and a rolling economic and financial crisis that started seven years earlier.  The war rescued the capitalism through the mass slaughter on the Western and Eastern fronts, ushering in new technologies, new weapons, and widespread social change- triggering revolutions across the world. No-one saw it coming, except those in power, and even they had no idea what they were unleashing. So why were ordinary people so seemingly oblivious to the coming Armageddon until just days before the outbreak of war? Perhaps because they were not informed enough to see it coming, because had they known what the next four years would bring, they may not have been quite so eager to support their leaders in the coming butchery… and we are at the same point today…

The US is currently looking to set up an anti-missile shield in Asia as China rapidly expands its forces…

For the US, a “long-term war in the Middle East will provide an excuse for the deferment and rescheduling of US debt obligations owed to nations and governments that oppose the US/Israel war in the Middle East. For the $1 trillion owed to China and many Middle East nations, this is effectively debt repudiation.

China wants to see the US weakened long-term as a world power and a major war in the Middle East will do this. They also need a reason to dump $1 trillion in US Treasury debt and an excuse to avoid the blame of the coming broader repudiation of US debt…

(Mock Chinese posters from the US ‘invasion’ propaganda film ‘Red Dawn’)

A Middle East war would avoid direct military action between the US and China while protecting both US and Chinese politicians from the coming Treasury debt repudiation, Chinese dump and global run on the dollar and Treasuries…

All sides in the coming conflict – except for the civilian populations and the soldiers maimed and killed – will win if everything goes according to plan. However, nothing ever goes according to plan in wars and this is the problem the world will face. Prolonged recession or depression, wealth and benefit confiscation throughout the EU, US and other Western democracies and the risk of a Middle East conflict spreading around the world is my fear.”



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