venerdì 15 luglio 2011

GLOBAL FRAUD: GLOBAL HOPE

GLOBAL FRAUD: GLOBAL HOPE

An Address to the International UFO Congress
Fort McDowell Resort, Scottsdale, Arizona
Saturday, February 26, 2011
by
Hon. Paul Hellyer, P.C.
Former Canadian Minister of National Defence




The world financial system is a total fraud. It is one gargantuan Ponzi scheme, no better than the one Bernie Madoff used to swindle his friends and neighbors, and thousands of times worse if you add up the total number of victims it has ripped off over countless generations.

The principal difference between the two schemes is that Madoff was acting outside the law while the international banking cartel has persuaded generation after generation of monarchs, presidents and prime ministers to provide legislative protection for their larceny.

The banks Ponzi scheme is alarmingly simple. They lend the same money to several people or institutions at the same time and collect interest on it from each. What the banks really lend, however, is their credit, and what they take back in compensation for that privilege is a debt that must be repaid with interest.

The number of times they lend the same money is called leverage. The practice is as old as the hills but for our purposes we can start with the goldsmiths of Lombard Street in London, England, who accepted deposits for which they issued certificates redeemable on demand. They paid their depositors a nominal interest rate on the understanding that they could lend the money to their customers at higher interest rates. They soon found that they could lend more than they had in their vaults because only a few depositors came in to redeem their gold or silver at any one time. It was a scam. It was illegal. Nevertheless they got away with it for a long while and the scam was legitimized when the Bank of England was chartered to help King William finance his war. Rich people subscribed £1,200,000 in gold and silver, as capital, to found the bank, which then was lent to the government at 8 percent. To show his appreciation the King allowed the bank to print £1,200,000 in banknotes and lend them at high interest rates. In effect, the bank was allowed to lend the same money twice – once to the government and once to the people.

Over the years, due to the avarice of the banks and the complicity of the politicians, that ratio has increased dramatically. In the early days of the 20th century, federal chartered U.S. banks were required to keep gold reserves of 25 percent. That means they were allowed to lend the same money four times. I remember when Canadian banks were required to maintain a cash reserve of 8 percent. That means they were allowed to lend the same money 12½ times.

Today, thanks to Milton Friedman’s irrational flip-flop from being a proponent of 100% cash reserves to the opposite extreme of zero reserves, and the adoption of his ideas by the major central banks of the world in 1974, multiples have increased dramatically – in some cases to as much as 20 to 1 or more. Banks only keep enough cash to meet day-to-day demands for those few customers who go in and request it, and consequently the fraud is virtually total.

The system works this way. Suppose that you want to borrow $35,000 to buy a new car. You visit your friendly banker and ask for a loan. He or she will ask you for collateral – some stocks, bonds, a second mortgage on your house or cottage or, if you are unable to supply any of these, the co-signature of a well-to-do friend or relative. When the collateral requirement is satisfied you will be asked to sign a note for the principal amount with an agreed rate of interest.

When the paperwork is complete, and the note signed, your banker will make an entry on the bank’s computer and, presto, a $35,000 credit will appear in your account which you can use to buy your car. The important point is that seconds earlier that money did not exist. It was created out of thin air – so to speak.

The banking equation is a species of double-entry bookkeeping where your note becomes an asset on the bank’s books, and the new money that was deposited to your account is a liability. The profit for the bank comes from the difference between the low rate of interest, if any, you would be paid on your deposit if you didn’t spend the borrowed money immediately, and the much higher rate you would be obliged to pay on your note – the technical term is “the spread.”

At some point, however, you have to pay off your note and any interest owing. And not only you but everyone else who has borrowed “money” from banks – including governments which, by the way, own the right to print money but that have irresponsibly handed the right over to an elite group of private bankers. Anyone who defaults is in big trouble. Individuals who default will have the assets they pledged as collateral seized by the bank. A government that is in danger of defaulting, will be forced to borrow from the International Monetary Fund, which will then tell that government how to run its affairs including cutting back on services and selling off public assets to the international vulture capitalists.

In reality, then, the banks have turned the world into one humongous pawn shop. You hock your stocks, bonds, house, business, rich mother-in-law or country and the bank(s) will give you a loan based on the value of the collateral.

A world system where all the money is created as debt is a perpetual disaster in the making. It is like a giant balloon that the banks pump full of debt. The balloon gets larger and larger until the debt load becomes too heavy to carry, and then it is like a balloon with a pin stuck in it. The system crashes and thousands or sometimes millions of innocent people lose their jobs, homes, farms and businesses.

Almost any high school student should be able to see that any monetary system based on debt creation is totally insane. The total world debt, mathematically, is always tending toward infinity – and there is no possible way of paying it off. The real money (legal tender) to do so doesn’t exist. And the real economy that depends on cash to grow shifts into low gear whenever the supply of credit money dries up.

Not surprisingly, there have been 25 recessions and depressions in the United States since 1890. In several cases, including the Great Depression of the 1930s and the current Great Recession, the evidence indicates that the meltdown was anticipated by a few insiders who helped trigger the catastrophe.

In the wake of the Great Depression, the U.S. Senate Banking and Currency Committee Report that became widely known as the Pecora Report on the Practices of Stock Exchanges, indicated that there were insiders who benefitted from the crash. “Legal chicanery and pitch darkness were the banker’s stoutest allies,” Pecora wrote in his memoir. Similar allegations were evident in Charles Ferguson damning documentary “Inside Job,” relating to the 2007-2008 meltdown. These reports, and other historical evidence prove beyond any doubt that much of Wall Street is rotten to the core. It has become one gigantic millstone around the neck of both the American and world economies.

The collateral damage from the recent meltdown has been staggering. The U.S. Bureau of Labor estimated that 8.4 million jobs were lost in the U.S. alone. Most countries experienced similar dramatic losses. The reduction in asset values worldwide has been estimated at $20 trillion U.S. dollars, yet not a single one of the culprits is in jail. You would think that someone would have had the decency to launch a class action for at least $10 trillion against every individual and every organization that contributed to the catastrophe in any way.

It boggles the mind that a system so vulnerable to manipulation would ever have come into existence in the first place. The evolution did not happen by accident. It was not guided by the mythical invisible hand of Adam Smith. On the contrary, for more than a century-and-a-half, it was engineered by the barely visible hand of the Rothschild family and its allies, and since World War II by the Rockefeller family. The two dynasties combined forces to exercise influence on many fronts sheltered by the cloak of secrecy established by the Bilderberg Group.

The long term influence of the banking cartel is incalculable. Their biggest coup was the establishment of the Federal Reserve System in the United States. The big New York banks really didn’t like the idea of genuine competition, so a small group held a secret meeting at the private resort of J.P. Morgan on Jekyll Island, off the coast of Georgia. Their scheme, devised by Paul M. Warburg, and subsequently adopted by Congress, is a legal private monopoly of the U.S. money supply operated for the benefit of the few under the guise of protecting and promoting the public interest.

It is a tribute to the skill of the international bankers that they were able to draft a bill, revise it, change its name and make the few window dressing compromises necessary to get it adopted by Congress just before Christmas when quite a few Representatives must have been dreaming of sugar plum fairies instead of exercising due diligence. Only Charles Lindberg Sr. seemed to grasp the essence of what was going on.

To put it bluntly, the Congress transferred its sovereign constitutional right to create money to the sole custody of a group of private bankers. The magnitude of the hoist is unprecedented in the history of the world – the numbers now are in the high trillions.

Soon after the bill was passed the magnitude of the tragedy began to be recognized. William Jennings Bryan, who acted as Democrat whip, later said: “In my long political career, the one thing I genuinely regret is my part in getting the banking and currency legislation (Federal Reserve Act of 1913) enacted into law.” President Woodrow Wilson, just three years after passage of the Act, wrote: “A great industrial nation is controlled by its system of credit. Our system of credit is concentrated (in the Federal Reserve System). The growth of the nation, therefore, and all our activities are in the hands of a few men…. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world.” But the bill was not repealed; almost 100 years later the sell-out is still the law. This makes you wonder what the people’s representatives have been doing to earn their salaries.

The people in charge of the original deception were very far-seeing. They realized that when future governments had to borrow from them they would need a constant income stream to pay the interest on the bonds. So they persuaded the government to introduce income taxes, first as a temporary measure, but later permanently, so it would be able to meet its obligations to the bondholders. In fiscal year 2005 total individual income taxes in the U.S. totalled $927 billion. Of that amount $352 billion, or 38%, was required just to pay interest on the federal debt. The figure would be higher now.

The banksters, as they were often called, then decided that an independent press might catch on to the chicanery. Oscar Callaway is reported in the Congressional Record of February 9, 1917 as follows.

“In March, 1915, the J.P. Morgan interests, the steel, shipbuilding, and powder interests, and their subsidiary organizations, got together 12 men high up in the newspaper world, and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press of the United States… They found it was only necessary to purchase the control of 25 of the greatest papers. The 25 papers were agreed upon; emissaries were sent to purchase the policy, national and international, of these papers; … an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies, and other things of national and international nature considered vital to the interests of the purchasers [and to suppress] everything in opposition to the wishes of the interests served.”

It has been suggested that the Bilderberger Group may have taken a leaf from the Morgan precedent to protect their interests in the late 20th and early 21st centuries. That is impossible to prove because its members are sworn to secrecy, and the press won’t report on its meetings. Could it be mere coincidence that the monetary system, the downside of globalization and the decades-long cover-up of the extraterrestrial presence and technology (especially the clean energy sources that would impact the value of oil stocks), the three subjects of most direct beneficial interests of the banksters, are the three subjects that are avoided like the plague by the mainline press?

I am not willing to go so far as to say that the men behind the international banking system are evil men because their thoughts are private. But Sir Josiah, later Baron Stamp, a former director of the Bank of England, has given us a rare snapshot of the truth.

“Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create money, and with a flick of the pen they will create enough money to buy it back again. However, take that power away from them and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain the slaves of Bankers, and pay the cost of your own slavery, let them continue to create money.”

In the latest meltdown of 2007-2008, the Fed acted quickly to prevent the Ponzi pyramid from collapsing completely. It printed trillions of dollars to bail out the banks and a few industries that were highly indebted to banks.

But what did the Fed do for the taxpayers whose money was so wildly diluted to save the banks? Nothing! They were left to fend for themselves. Millions of people lost their jobs, their farms, their houses, their hopes, and their dignity as a result of circumstances beyond their control. The taxpayers bailed out the banks, but got nothing in return.

The same is true of governments who came so quickly to the rescue. As a result of the meltdown their revenues were decreased so they were forced to incur or increase their deficits, as well as to start cutting back on essential services.

The Fed pretended to be helping stimulate the economy by reducing interest rates to near zero. It would be an interesting exercise to find out what happened to all of this low-cost money. It would be a good subject for Congressional attention. How much did the banks use to buy up domestic and foreign assets at fire-sale prices? Was any of it used by financial institutions to try to corner world food markets and raise prices at a time when millions are starving?

No doubt some taxpayers did take advantage of the low interest rates available but were they warned about the old bait and switch game? Anyone who acquires assets with cheap money runs the risk of losing their property when the Fed ultimately raises rates. It’s all part of the boom-bust cycle inherent in our infinitely silly monetary system.

The Economics Profession

What does all this have to say about the economics profession? What it really says isn’t fit to print. Someone once said that if you put 20 economists in a room you will get 21 opinions.

That is not my experience. If you get 20 economists together they are likely to give you one stock answer, or at most two. And if there is one dissenter he or she is likely to be drowned out by the 19, squawking like a flock of parrots the words memorized from what their professors taught them.

I have witnessed this herd-like mentality firsthand. When I was first elected to the House of Commons in 1949 there were only a handful of Keynesians in Ottawa. Twenty years later nearly everyone was a Keynesian including, I am told, Richard Nixon.

At that time there were only a few monetarists around. But they spread like mushrooms and soon dominated the economic landscape. It reached the stage when Keynes was anathema, and it was almost impossible to get a tenured position in a school of economics unless you were part of Milton Friedman’s monetarist revolution.

Apparently little if any thought was given to the possibility that neither Keynes nor Friedman had got it right. The former was a bit closer to reality than the latter, but both theories foundered on the rocks of one inescapable truth. Both assumed that the economic system is self-correcting, yet more than two centuries of experience has demonstrated clearly that it is not! Someone has to be at the tiller charged with steering clear of the shoals and rocks of economic disaster and that person has to be someone who is responsible to the people and not the self-serving boom-busters.

(...)

Global Hope

If you get the impression that the world is going to hell in a hand basket you have heard me correctly. But it doesn’t need to be so. There are remedies but they involve massive change in the areas discussed – none of which are even on the political radar at present. There is light at the end of the tunnel but, as Sir John Quinton, a former chairman of Barclay’s Bank said, “Bankers sometimes look on politicians as people who, when they see light at the end of the tunnel, order more tunnel.”

What we are really talking about is restoring democracy to countries that not only claim they have it, but also take pride in trying to export it, even though they don’t really qualify as democratic as defined in the dictionary. In Webster’s it is: “government in which supreme power is vested in the people and exercised by them or their elected representatives.” To begin, Wall Street has been the dominant power in the U.S. for decades, and still is. Add to that the fact that the Commander-in-Chief of the Armed Forces, the President of the United States, does not have the security clearance for a number of projects controlled by troops under his command, and you have to conclude that the U.S. is not really a democracy.

The same can be said about Canada, the United Kingdom, Germany and myriad countries that are really puppets of the International Financial System. In each case the real interests of citizen voters is subjugated to the demands of international finance.

There is a sad irony in reading U.S. history of the pre-revolutionary and revolutionary days. Historians often attribute the revolution to the tax on tea. On the other hand, “[Benjamin] Franklin cited restrictions upon paper money as one of the main reasons for the alienation of the American provinces from the mother country.” The U.S. won the revolutionary war but then lost the next critical one when it adopted the British banking system instead of pursuing the better model their provinces had been experimenting with.

For the U.S. now to inflict the British practice on countries around the world, using the International Monetary Fund and World Bank as enforcers, is comparable to the King’s edict that gave birth to the United States. So the financial chains of oppression have to be broken and freedom restored to citizens everywhere.

It’s time to forget the tea party and address the critically important issues facing the U.S. and the world. All of these issues are non-partisan by definition and deserve the attention and support of all genuine patriots without distinction of race, color, religion or political affiliation – both in the U.S. and worldwide. We must unite to preserve and enhance the beautiful satellite that is our birthright.

An Agenda for Action

The first and most urgent project is to clip the wings of the bankers and democratize the money-creation function. In the U.S. the Federal Reserve System must be abolished and its alleged function of regulating the money supply be assumed by the federal government or an agency under its direct control. The most powerful and valuable tool in the economic arsenal must be available to the representatives of the people who can be held responsible for their success or failure.

Some monetary reformers recommend that governments create 100% of new money in a debt free form, greenbacks or equivalent. In the interests of a fast and smooth transition I am suggesting that a ratio of 34% government-created money to 66% bank-created money would work satisfactorily. Banks would be required to maintain 34% cash reserves against their deposits.

The important thing is that governments must immediately create the large sums necessary to balance their budgets and get their economies running at maximum output again. I am talking about an infusion of perhaps $10 trillion U.S. dollar equivalent to start and more if needed to get economies up to speed and to reduce unemployment worldwide by at least half, with the creation of millions of new jobs.

Is this likely to cause massive inflation, as the financial cartel will immediately allege, because it is one of its longest running and most successful bugbears? The answer to their phony phonetics is a resounding “no.” As any economist should know, it is the amount of money that is created that influences prices, and not who prints it. So as long as governments limit what economists call “the multiplier effect” there will be no problem.

Certainly the present system has been inflationary. A 1950 U.S. dollar is only worth 7.5 cents today. A common sense monetary system should produce better results than that. So there is no reason why the banking system should not be fundamentally reformed – at once!

There are four other actions that I think we, the people of the world should demand of our politicians.

1. A law must be passed at once to prohibit all politicians, candidates for political office and political parties from accepting money from any financial institution as well as make it a criminal offense for any such institution either directly or indirectly to offer it.
2. World leaders must adopt a 10-year time frame to reduce greenhouse emissions by 90 percent.
3. That will only be possible if the U.S. discloses its knowledge of the ET presence and technology, and what has been accomplished in 60 years of back-engineering.
4. The U.N. should declare 2012 the year of forgiveness and reconciliation – a new era of cooperation and (agape) love between races, tribes, religions, nations, and regions both mondial and intergalactic. We have so much to learn from our star visitors in many areas including medicine and food production.

So the U.S. must relinquish its privileged position as the center of “the loop” as part of a new kind of leadership in creating the better world we all dream of.

International Finance vs. The People of the World

None of this vision of a just and peaceful world will be possible unless the all-pervasive power of the international banks has been broken. In 1999 I wrote a book in which I said the next world war would be between the banks and the people of the world. There have been skirmishes for centuries and, so far, the banks have always come out on top. They are now taking advantage of the recent meltdown, and the resulting sovereign debt crisis to line up their heavy artillery including the International Monetary Fund, the World Bank, the Federal Reserve System and the Bank for International Settlements for a final conclusive battle.

As always the aim of the game is to rob the people of the world of their sovereign right to govern their own affairs, and to entrench the power of the international banks, their elite industrial allies and a small cabal of military insiders who run the world as their private fiefdom. The word “unjust” is too small a word by far to describe what they are up to.

If any skeptics think I am overstating the case don’t take my word for it. Go to www.victoryfortheworld.net and read some of the books that can be used as references. A hundred pages of The Web of Debt, for example, setting out the history of money, will probably be enough to make you sick at your stomach. I stopped reading it at night because if often made me so angry I couldn’t sleep.

I entered politics more than 60 years ago because I thought recessions were quite unnecessary. They were monetary phenomena with a relatively easy fix. I have made hundreds of speeches on the subject and convinced a few thousand people. But never the movers and shakers. And the mainline press were less than helpful. They were so jaundiced that they were not interested in a maverick speaking truth to power. So it was always a case of David vs. Goliath, to use a Biblical analogy.

Now, for the first time, the power exists to turn the tables and go for the jugular. The internet is providing power to the people that they have never enjoyed before. The young people of the world, in concert with the thousands of their parents and others who care about the state of the world can use the power of social networking to effect a miracle on their own behalf and that of succeeding generations.

The valiant people of Tunisia and Egypt have shown the way by achieving what was believed to be impossible. We share their euphoria. At the same time they, and we, must acknowledge that it is only the beginning. Real freedom will only be possible when they have escaped from the tyranny of international banks, and Wall Street is no longer able to manipulate the price of their daily bread.

A good start might be to distribute a million copies of this speech and translate it into a number of languages. Then the rising generation can bombard the barricades through their social networks. Regime change is not necessary except for leaders who refuse to see the light. But concerned citizens of the world should band together and rattle the cages of all federal politicians. Tell them bluntly that they must vigorously support the above agenda or face inevitable defeat at the next election. It is a simple message, but the only one they understand.

At a press conference on March 29, 2001 announcing the U.S. was backing out of the Kyoto Protocol, President George W. Bush said, “A friend is someone who tells you the truth.” That is what I have been doing today. It is a message of global hope for every race, color, religion and nationality in the world and of peaceful relations with visitors from other realms.

About Paul Hellyer

Paul Hellyer is one of Canada’s best known and most controversial politicians. First elected in 1949, he was the youngest cabinet minister appointed to Louis S. St. Laurent’s government eight years later. He subsequently held senior posts in the governments of Lester B. Pearson and Pierre E. Trudeau, who defeated him for the Liberal Party leadership in 1968. The following year, after achieving the rank of senior minister, which was later designated Deputy Prime Minister, Hellyer resigned from the Trudeau cabinet on a question of principle related to housing.

Although Hellyer is best known for the unification of the Canadian Armed Forces and for his 1968 chairmanship of the Task Force on Housing and Urban Development, he has maintained a life-long interest in macroeconomics. Through the years, as a journalist and political commentator, he has continued to fight for economic reforms and has written several books on the subject.

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A man of many interests, Hellyer’s ideas are not classroom abstractions. He was born and raised on a farm and his business experience includes manufacturing, retailing, construction, land development, tourism and publishing. He has also been active in community affairs including the arts and studied voice at the Royal Conservatory of Music in Toronto. His multi-faceted career, in addition to a near-lifetime in politics, gives Hellyer a rare perspective on what has gone wrong with world economies.

News stories related to the World Bank and IMF

A selection of news stories related to the World Bank and IMF, brought to you by the Bretton Woods Project:


Defaulting rescued Argentina. It could work for Athens too
http://www.guardian.co.uk/business/2011/jul/10/european-debt-crisis-argentina-imf
Guardian, 10 July 2011

Egypt: Provisional governments should not accept IFIs' conditionalities
http://www.socialwatch.org/node/13334
Social Watch, 7 July 2011

China Agrees To Erase Portion Of U.S. Debt

China Agrees To Erase Portion Of U.S. Debt If Americans Dress Up In Costumes And Perform Silly Dance For Them

The Onion, JULY 14, 2011 | ISSUE 47•28

Chinese president Hu Jintao said Americans should begin thinking of dance steps now.
BEIJING—In what it's describing as a magnanimous gesture toward an economy in decline, the Chinese government announced Monday it would forgive a portion of the staggering U.S. debt if Americans agreed to dress up in costumes and perform silly dances for their amusement.

With his nation holding $1.16 trillion in federal bonds and the U.S. showing no signs of ending its dependence on foreign credit, President Hu Jintao told reporters that allowing Americans to ease their fiscal burden in proportion to the number and quality of colorful dance numbers they perform is a mutually beneficial arrangement for both countries.

"Our great nation has generously agreed to decrease the considerable financial obligations of the United States," said Hu, standing before an enormous rack containing elaborate dance attire such as sequined vests and metallic lamé pants. "All we ask in return is that Americans put on outfits such as these and amuse us with buffoonish little kicks and twirls, preferably while slapping their big fat tummies. The U.S. will receive much needed debt relief, and China will enjoy watching the graceless flailing of decadent capitalists."

Addressing Americans directly, Hu continued: "In the seconds it will take you to object, your nation will slip hundreds of thousands of dollars further into our debt. That will mean 50 more of your countrymen having to put on a George Washington costume with a skirt and prance around with big smiles and heavily rouged cheeks while we pelt them with bits of your worthless currency from the windows of the Chinese embassy."

While Hu offered few specific rules to govern the debt-reduction scheme, he did provide a number of guidelines that he said would affect the amount deducted. Large, ambitious routines—the entire population of Ohio dressed in bright green leotards doing a high-stepping jig with Big Macs stuffed in their mouths, for example—could shave $20 billion from the debt in a matter of minutes. Meanwhile, smaller groups of Americans and even individuals could do their part by dressing up as cancan dancers and performing a kick line in front of the Vietnam Memorial, or by painting the Mandarin character for 'gorilla' on their faces and jumping up and down on their desks at work like "great big immoral apes."

Hu added that the dollar value of all dances could be increased by incorporating chants such as "I have no work ethic," "Look at what our pathetic democracy has done to us," and "I am so fat I must drive an SUV to go purchase a prostitute" into the routine. Conversely, acts may be disqualified entirely if professional dancers are employed or if participants do not seem suitably engaged in their performance.

Hu later confirmed that wearing brightly colored hats with bells on them could only help.

"All dancers will be required to demonstrate an exceptional level of commitment," said Hu, adding that, should a very large American dress up in a form-fitting outfit with his stomach hanging visibly over his waistband, and then pass out from physical exertion while his overweight children dance around him, an extra $12 million would be instantly knocked off the tab. "It will be insufficient to go through the motions. Any dancer who hand jives without proper rehearsal and a big smile is wasting his time."

"That is especially important," Hu added. "We want nice, big smiles from America."

Although any U.S. citizen is eligible to participate in the program, dances performed by members of the armed forces or practitioners of Tibetan Buddhism will be considered more valuable. Persons holding high office in the federal government stand to make the largest financial impact, especially, Hu said, if all 535 members of Congress perform a Yiddish bottle dance during his next state visit.

"I do not savor what I am going to do this evening," said a solemn President Obama, sitting at his Oval Office desk in the tiger-striped scoop neck he will wear for a salsa performance expected to cut the American debt by a whopping $30 billion. "I know that my partner, Speaker Boehner, shares my reluctance, but that we will both do what we must for the financial well-being of our country."

"But let me be clear," added a defiant Obama, the beads on his lacy sleeve jiggling as he emphatically pointed at the camera. "The United States will never dance for any nation on earth more than once. There will be no encore."

Eurocrisis: We saw it coming

We saw it coming

the radical left predicted the Eurocrisis before the 20th Century was out
in:

The European ruling elite likes to pretend that the crisis afflicting the Eurozone countries was something both unforeseen and unforeseeable, the result of circumstances beyond its control deriving from the subprime loans crisis in the United States and its knock-on effects. This is a lie. In fact, the events which have led to the current crisis, and to consequences such as the effective abolition of democracy in Greece and Portugal, mass civil unrest in numerous member states, and the onset of what will surely be prolonged stagnation, were foreseen by numerous economists, political commentators and activists, and elected politicians. Most, though by no means all of these latter-day Nostradamuses, came from the radical left.
The ruling elites of the United States and the European Union, as well as the political right in general, exercise control through a range of instruments, and important amongst these is the generation of historical amnesia. So historical knowledge becomes in turn a weapon of resistance. A little history, then:
On the eve of the introduction of Euro notes and coins in 2001 Ewout Irrgang, at the time a young economist and activist of the radical left Dutch Socialist Party (SP), now a Member of Parliament and the party’s financial spokesman, was interviewed by the SP monthly, the Tribune, and had this to say:
The introduction of the Euro is no small thing. We are dealing with the biggest monetary experiment in world history. Twelve extremely varied economies will go over, in one fell swoop, to the same currency ….. Introduction of the Euro means not only that we will be paying with the same currency, but also that there will be a single monetary policy. There is a single European central bank, which from Lapland to Sicily will operate the same rate of interest. The rate of interest is the principal means whereby the economic temperature is regulated. If the economy is going badly, you lower the interest rate so that the motor can run a little faster. If there’s a threat of overheating, you raise interest rates to cool it down. In all of these extremely different economies the stove will be stoked to the same level of heat and the temperature will be determined undemocratically and adjusted to the situation in the biggest countries, Germany, France and Italy. That will create irrevocable problems, problems which will be scarcely solvable.
The SP had resisted the Euro’s introduction from the time it was no more than a gleam in the eye of Europe’s leading multinationals, whose interests it was designed to serve. Longstanding party leader Jan Marijnissen had this to say about the plan for a single currency as early as New Year’s Day, 1997:
With the loss of our guilder we are losing more than folklore. We are losing our say in the area of monetary policy, and everything which depends on that. With the Euro in place, the Guilder would be gone and our control of monetary policy would disappear in the direction of the European Central Bank in Frankfurt.
The transfer of monetary power to the European Union cannot be interpreted otherwise than as giving up an important part of national sovereignty. As a former president of the Dutch national bank, M.W. Holtrop said in 1963, "Money is an attribute of sovereignty. If a country gives up its currency, it loses a little of itself.”
The Europe of 1997 is not a country, it is not a nation with which people can identify, a place where they feel themselves to be understood. They have nothing really to do with it, whether or not political leaders decide that we will have a monetary union from 1999 and a single currency from 2002. Europe is only a geographical concept, an abstraction in fact. There is no European people, no European language, no European culture.
At roughly the same time as Marijnissen was penning these words, the second edition of Spectre, the paper magazine which preceded the on-line Spectrezine, published an editorial under the heading ‘EMU’s true feathers’ in which we warned that
…if governments and national banks give up the economic leverage they gain from an ability to determine their own levels of spending and borrowing, if they can no longer decide interest or exchange rates, they will have only one means left to maintain or enhance competitiveness: your wages, your pensions, your welfare rights, your children’s education, will all have to cost less.
The same issue carried a paid ad from Tom Megahy, who died a couple of years ago, but who was at the time a Member of the European Parliament. Until 1999, when the Blairites purged the European Parliamentary Labour Party of all critical elements, Tom was one of perhaps a dozen Labour MEPs who provided a voice in Brussels for the vast majority of British working people who are hostile to the European Union’s neoliberal economics and undemocratic politics. The ad was an act of solidarity, not only with Spectre’s ideas, but with myself. One of Spectre’s co-founders, I worked at the time as Tom’s parliamentary assistant. Again, the ad accurately predicted that ‘EMU’ – the Economic and Monetary Union, whose planned single currency had yet to be named – would ‘deprive the government of vital tools to address immediate and long-term economic difficulties’, ‘create unemployment in countries and regions deemed to be “uncompetitive” (and)… put downward pressure on wages and working conditions, as such areas attempt to regain competitiveness’. It would, in addition, ‘undermine social security and welfare systems’, and ‘hand control over vital economic decisions to unelected bankers’.
These dire predictions have been borne out since 2008, as the banks and their obedient servants in governments and in Brussels have dragged the whole of Europe into an unprecedented economic crisis. Mediterranean member states, and Ireland, have been worst hit. Because they cannot devalue their currencies, their exports have slumped. Falling exports mean lower economic growth and thus reduced government revenues. Governments struggling with budget deficits fell further into debt, encouraged by the low interest rates which were a result of the Euro.
Of course, as any helpful Europhile will remind you, some of Greece’s problems were created by Greeks. Greece is indisputably one of the most corrupt countries in Europe. Greek workers and those who operate very small businesses, however, put in the longest hours in the EU for the lowest rates of pay outside the new member states which joined in 2004 and 2006. Pay increases in the last decade have made some inroads into this, yet they have been below the level of productivity gains. The Greek people are in other words in the vast majority of cases the victims of corruption, rather than its perpetrators.
Since their currencies were abolished and entered the euro at overvalued rates (which they were assured were necessary to counter the threat of inflation), peripheral economies like Greece have acquired massive deficits. Growth, as in the US, has been based on consumption financed by debt and speculation. Although wages have been subject to downward pressure in the peripheral countries too, restraining influences have not prevented the wage gap between Germany and Greece and the others from narrowing, again adversely affecting the poorer countries’ competitive position.
This has occurred despite the EU's much-vaunted 'European Employment Strategy', which has encouraged greater labour market flexibility, precarious contracts and part-time and temporary work. This, and a number of EU measures and European Court of Justice rulings, have weakened organised labour, adding to the Euro’s downward pressure on pay and conditions.
It would be a huge error to imagine that any of this demonstrates some sort of incompetence or pig-headedness on the part of the EU elite. The Euro was created as an instrument to attack the economic, social and political gains of working people, accumulated over two centuries in the most bitter struggles. What is happening in country after country, starkest of all in Greece, Ireland and Portugal, but also – just as visibly to anyone who is paying attention - in Britain, is nothing less than the opening salvos of a new, more intense and more dangerous phase of class war.


Steve McGiffen is Spectrezine’s editor and was a co-founder of both Spectrezine and Spectre, its paper predecessor. He has worked both for Tom Megahy and for the Dutch Socialist Party.

Agenda for a New Economy

Agenda for a New Economy

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How can we build an economy that works for all of us? David Korten lays out his vision in this special serialization of his latest book, Agenda for a New Economy. (From YesMagazine)

The Story of a New EconomyThe Story of a New Economy
by David Korten
David Korten: We’re in the midst of a contest of competing stories—one fabricated to serve the interests of Empire; the other an authentic story born of the experience and aspirations of ordinary people.
A Crumbling Cultural StoryA Crumbling Cultural Story
by David Korten
David Korten on the unraveling of the myth that underpins our economic behavior.
The Next American Revolution?The Next American Revolution?
by David Korten
David Korten: What America's current movement against corporate power can learn from that time we overthrew a king.
How the Left and Right Can UniteHow the Left and Right Can Unite
by David Korten
David Korten: If we'd stop tearing each other apart, we might see an opportunity to win back our democracy from the rich and powerful.
Mapping Uncharted Economic Waters Mapping Uncharted Economic Waters
by David Korten
David Korten: We're trying to fix the economic crisis with the same thinking that created it. Next time, we can be prepared with a map to something better.
The Great Stock ScamThe Great Stock Scam
by David Korten
David Korten: Stock sales are supposed to help finance dividends or productivity improvements. But the numbers tell a different story.
But What About My 401(k)?But What About My 401(k)?
by David Korten
Credit cards, mortgages, insurance, retirement: How to fulfill our basic financial needs (and find real security) without Wall Street.
7 Ways to Stop Wall Street’s Con Game7 Ways to Stop Wall Street’s Con Game
by David Korten
David Korten’s suggestions for stopping phantom wealth speculation.
Making a Living (Economy)Making a Living (Economy)
by David Korten
David Korten: We're wasting our resources subsidizing a war economy, sprawl, and consumerism. What we could do differently in a living economy.
The New Economy: Design for LifeThe New Economy: Design for Life
by David Korten
David Korten: Can we design a self-correcting society?
Living Economies: Learning from the BiosphereLiving Economies: Learning from the Biosphere
by David Korten
David Korten: How we humans can redesign our failing systems by turning back to nature—and learning to live by the rules of life.
The World of Our DreamsThe World of Our Dreams
by David Korten
David Korten: Our world is made up of diverse populations—but really we all want the same things out of life. It's time we put our common dreams into action.
Our Human NatureOur Human Nature
by David Korten
People often justify greed as simply human nature. Why our economic policies need to reward our caring, cooperative sides instead.
Greed is Not a VirtueGreed is Not a Virtue
by David Korten
David Korten: Profit-centered market fundamentalism has become a national religion.
The End of EmpireThe End of Empire
by David Korten
David Korten: Wall Street’s days are numbered. Ours need not be.
A System Designed to CrashA System Designed to Crash
by David Korten
David Korten on why a money system dependent on constant growth can't last.
Phantom Wealth and False ExpectationsPhantom Wealth and False Expectations
by David Korten
David Korten: It's time we stop expecting money to grow on Wall Street—and start putting people to work creating real wealth to meet real needs.
On the Origin of CorporationsOn the Origin of Corporations
by David Korten
David Korten: How the buccaneers and privateers of days past came to be the Wall Street profiteers of the present.
War Against the Middle ClassWar Against the Middle Class
by David Korten
David Korten: Why is the middle class shrinking?
Clueless Economists, Smart EcologistsClueless Economists, Smart Ecologists
by David Korten
David Korten: To successfully address climate change and extreme poverty, the ecology paradigm must replace the traditional economics mindset.
A Real-Market AlternativeA Real-Market Alternative
by David Korten
As we look for solutions to our current economic crisis, the relevant distinction is no longer between capitalism and communism, but rather between Wall Street and Main Street.
Good Debt, Bad DebtGood Debt, Bad Debt
by David Korten
David Korten explains the logic behind a debt-based money system—and why it isn't working in the United States.
Money From Nothing?Money From Nothing?
by David Korten
Many economists and financiers believe it's possible. But what looks like magic is really illusion.
System Failure? Look UpstreamSystem Failure? Look Upstream
by David Korten
Why it's important to address our economic problems at their Wall Street roots.
The Illusion of MoneyThe Illusion of Money
by David Korten
Real wealth or phantom assets? David Korten explores the difference between the kind of wealth that makes life better and the phantom wealth created by financial speculation.
David Korten: My Defection StoryDavid Korten: My Defection Story
by David Korten
How I came to challenge the legitimacy of the institutions I once served.
The Missing VisionThe Missing Vision
by David Korten
David Korten begins a blog series outlining his Agenda for a New Economy.
The Big Picture: 5 Ways to Know if You’re Making a DifferenceThe Big Picture: 5 Ways to Know if You’re Making a Difference
by David Korten
In this special pre-publication excerpt of the 2nd edition of Agenda for a New Economy, David Korten explains how we can help live the new economy that we need into being.