Half of a new billion dollar hedge fund from Kohlberg Kravis Roberts will be spent betting on ‘market dislocations’. The rest will be pumped into ‘stressed’ and ‘distressed’ debt. It was comforting to know that KKR expect two thirds of the fund to be gambling on disasters on the other side of the pond. But don’t get any ideas. The minimum stake is a cool five million dollars…and you have to give six months notice before pulling out…twice the hedge fund norm.

These hedge funds are the shock troopers of the Anglo-American New World Order. They are unleashed whenever some recalcitrant country needs to be taught a lesson. It’s good old-fashioned mafiosa stuff. Geopolitics and The Great Game are every bit as simple as Sir Halford Mackinder portrayed them a century ago…which is why Soviet strategists read Mackinder. The destruction of the East Asia Tiger Economies is a good example of how it’s done.

At the Asia Pacific Economic Cooperation (APEC) Summit in 1993 American officials began to demand that East Asian economies open up their controlled financial markets to free capital flows…in the interest of ‘level playing fields’. Previously the debt-free economies of East Asia had avoided reliance on IMF loans or foreign capital, other than direct investment in manufacturing plants, usually as part of a long-term national goal. Now they were told to open their markets to foreign capital flows and short-term foreign lending.

Once capital controls were eased and foreign investment allowed to flow freely in and out, South Korea and the other Tiger Economies were awash with a sudden flood of foreign dollars. The result between 1994 and the onset of the attack on the Thai baht in May 1997 was the creation of speculative bubbles in luxury real estate, local stock values and other assets. Once the East Asian Tiger Economies had begun to open up to foreign capital…but well before they had adequate controls in place over possible abuse…hedge funds went on the attack.

The first target was the weakest economy Thailand. George Soros, armed with a credit line from a group of international banks including Citigroup gambled that Thailand would devalue the baht and break from its peg to the dollar. By June the baht was floating and Thailand was in the arms of the IMF…the rottweilers sent in after the hedge funds have softened up their victim. In swift succession the hedge funds and banks hit the Philippines, Indonesia and then South Korea. They pocketed billions as the populations sank into economic chaos.

An early adopter of this approach was Margaret Thatcher. One month after the Tory Government was elected in May 1979 her Chancellor of the Exchequer Geoffrey Howe started to raise interest rates from 12% to 17% in twelve weeks while the Bank of England cut the money supply and removed the Callaghan Labour Party’s exchange controls. I had sold my house in Hertfordshire and was preparing to buy a house in Cambridge Massachusetts at the time. Overnight the complex paperwork procedures lovingly devised over several years become superfluous. Suddenly no forms were needed. None at all. There was a look of complete disbelief around the bank as it began to sink in. Years of paper shuffling had been a complete and utter waste of time.

Many years later the Thatcher/Howe Cut ‘n Squeeze approach was adopted by the IMF around the world. In England the only winners were The City of London and the oil companies. For everyone else it was mayhem. Unemployment doubled to 3 million within 18 months. Instead of capital being invested in rebuilding Britain’s rotten industrial base funds flowed out in speculation on real estate in Hong Kong and lucrative (ludicrous?) loans to Latin America.

I spent most of the day at PC-Hut working on the English text for the NCAB website and getting the Russian, Spanish, Finnish, Danish and Norwegian translators ready for a five-day delivery when they receive the English text next week. In the midst of it all the glad tidings came through from John Papworth that Edward Goldsmith had agreed to setting up the Edward Goldsmith Institute. I reminded John of the text I had created for the institute when writing copy for the Resurgence Group of Institutes. It went like this.

The political battle between locality and interests transcends any difference between the developed and undeveloped world. Indeed private affluence for the few and public squalor for the many is everywhere both a global and a local phenomenon. There are no adequate theories of locality...the wealth of villagers...and few if any sustainable examples of good town or country living for the whole community…just isolated examples of individual sane humane ecological survival in the midst of a hyper-expansionist madhouse. Without viable alternatives outside interests ride roughshod over local people. The initial aim of the Edward Goldsmith Institute is to design theoretical and practical examples for future urban and rural villages and to persuade local communities to bypass governments and authorities in setting up their own local initiatives based on the working principles developed by the institute.

Here is my Cancer horrorscope (June 23-July 22). You are sympathetic and understanding to other's problems, which makes you a sucker. You are always putting things off. That is why you will always be on welfare and won't be worth crap. Everyone in prison is a Cancer.