martedì 8 novembre 2011

Benjamin Fulford 11-8-11…”Paradigm lost as the Western Oligarch’s lies unravel”


Benjamin Fulford 11-8-11…”Paradigm lost as the Western Oligarch’s lies unravel”… “The criminal cabal is caput”

This timely information from Ben tells us that the cabal is finished, and any dark news we may see out there is like “reading Axis news reports of imminent victory late during World War 2″. It’s an attempt to hide the truth of what’s really happening.
Perhaps the most exciting part of this is the last sentence, where he says, “The official go-ahead has now been given for a new International Economic Planning Agency. It’s motto will be “we turn dreams into reality.”” Sounds like a good deal to me.
Of course, apply Higher Discernment to Ben’s articles. Also, David Wilcock just commented that he will be coming out shortly with a transcript of Ben’s New Zealand interview. It’s enlightening to read David’s comments about what Ben has stated in his interviews.
Highlights
  • The criminal cabal is caput. Events this week and next will provide ample proof of this.
  • Both behind the scenes and in public, the world’s law enforcement agencies continue to close in on the criminal cabal from all directions.
  • The big lawsuit expected next week against the cabal has now obtained as evidence something known as the Book of Maklumat.
  • This evidence is icing on the cake in a lawsuit that will prove the private owners of the Federal Reserve Board stole this money and have been using it illegally for over 50 years.
  • That is why the illegal “trading platforms” that were being used to steal this money have been shut down.
  • …the European fascists do not have the money to help Italy, Ireland, Portugal, Spain and the five Baltic states… the government of Ireland has already asked the European bankers to prove Ireland is in debt to them…
  • Although the G5 and Israel threaten to ignite World War 3 by attacking Iran, that is a suicidal bluff. The commanders of the US, Chinese and Russian militaries will not let this happen.
  • Kissinger last week… tried to orchestrate a series of assassinations in the hope of somehow turning the situation around. This writer was once again last week targeted by people hired by Kissinger… Kissinger has been told to back off and his orders are not being obeyed.
  • Obama is no longer expected to be able to complete his term as President because of the various legal actions against his regime.
  • The official go-ahead has now been given for a new International Economic Planning Agency. It’s motto will be “we turn dreams into reality.”
—————————————————————————
Paradigm lost as the Western Oligarch’s lies unravel
by Benjamin Fulford, November 8, 2011
These days, reading some of the Western corporate propaganda media, you get the feeling you are reading Axis news reports of imminent victory late during World War 2. The reality people can see with their own eyes contradicts their reports so much that only a diehard rump of the most thoroughly brainwashed now really believes the propaganda. No matter what wishful thinking headlines they conjure up about the IMF coming to the rescue, or the Feds printing more dollars or FRN’s coming to the rescue, the fact of the matter is that the cabal that hijacked the world’s financial system has lost. The criminal cabal is caput. Events this week and next will provide ample proof of this.
Both behind the scenes and in public, the world’s law enforcement agencies continue to close in on the criminal cabal from all directions. The big lawsuit expected next week against the cabal has now obtained as evidence something known as the Book of Maklumat. This is a book that details the historical ownership of much of the world’s gold by a group of Asian royal families. They also have copies of the original cash certificates and evidence of how this money was transferred to the custodianship of the Government of United States for the use on behalf of the international community. This evidence is icing on the cake in a lawsuit that will prove the private owners of the Federal Reserve Board stole this money and have been using it illegally for over 50 years.
That is why the illegal “trading platforms” that were being used to steal this money have been shut down. That, in turn, is why the International Monetary Fund, the European governments and the Federal Reserve Board have been powerless to stop the ongoing crisis affecting the G5 group of terrorist states (France, England, Italy, Germany and the United States), as well as their armed camp known as Israel.
Although these governments have threatened Greece’s government into stopping a referendum on the Euro, they cannot take their threats to the bank. The fact is that the European fascists do not have the money to help Italy, Ireland, Portugal, Spain and the five Baltic states. Furthermore, the government of Ireland has already asked the European bankers to prove Ireland is in debt to them, show where the money came from, prove that it is real and prove they have the legal rights to it. This is something they cannot do which is why Ireland is not in the headlines. It is also one of the reasons they have shut down Ireland’s Vatican embassy.
Although the G5 and Israel threaten to ignite World War 3 by attacking Iran, that is a suicidal bluff. The commanders of the US, Chinese and Russian militaries will not let this happen. These rogue G5 leaders are, of course, terrified because they know they have committed countless crimes against humanity (e.g. hundreds of millions of murders since World War 2 ended). It may still be possible for most of them to obtain forgiveness via a truth and reconciliation committee but the window of opportunity is shutting fast.
One man who has now put himself beyond the pale is Henry Kissinger.
Kissinger last week desperately tried to orchestrate a series of assassinations in the hope of somehow turning the situation around. This writer was once again last week targeted by people hired by Kissinger.
However, Kissinger has been told to back off and his orders are not being obeyed.
“President” Obama, for his part, was the subject of severe verbal attacks at last week’s G20 meeting in France. He was told the United States was in far worse shape than Europe and that he had a lot of the blame for that, according to sources at the meeting. Obama is no longer expected to be able to complete his term as President because of the various legal actions against his regime.
In Japan, meanwhile, there has been a lot of rumbling under the surface.
Senior Japanese right wing sources say that a group of Colonels in the Japanese Self-Defense forces are plotting a military coup d’etat. Their plan is to put in former Prime Minister Shinzo Abe as their leader. Abe, of course, is linked to the Moonies, who in turn have a ranch next to the Bush ranch in Paraguay. They are also linked to the international drug business.
Needless to say, these misguided Colonels have been educated and are now realizing that no matter how honorable their wish to help Japan might be, they were about to be manipulated by the very people who helped ruin Japan’s economy.
Another move in Japan came as US CIA and Pentagon types told power broker Ichiro Ozawa to permanently cease his plans to try to take over the government if he wished to stay alive. Ozawa is not trusted because of both his Rockefeller and cabal connections.
It is also worth noting that Emperor Akihito is suffering from “Bronchitis,” and has thus “temporarily” handed over control to crown prince Naruhito, according to the Royal Household Agency.
The official go-ahead has now been given for a new International Economic Planning Agency. It’s motto will be “we turn dreams into reality.”

Eurozone About to Collapse--How Will it Impact the US?


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Is the Eurozone About to Collapse--and How Will it Impact the US?

The fate of the US economic recovery rests in part on whether Europe can keep its intertwined banking and debt crises from spiraling into full-fledged financial contagion.
 
Photo Credit: AFP
 
 
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 The following article first appeared on the Web site of the Nation. For more great content from the Nation, sign up for its email newsletters. 
After days of drama-filled meetings, in late October eurozone leaders announced the latest “comprehensive” rescue plan. Although it was an improvement over earlier efforts, this package, too, came up short in that it failed to calm the markets and offer the eurozone a path back to economic growth. And without growth, there will be many more months of crisis.
The stakes are very high. The fate of the US economic recovery rests in part on whether Europe can keep its intertwined banking and debt crises from spiraling into full-fledged financial contagion, which would deal a damaging blow to an already fragile US economy. Yet the United States has little influence over European policy. Not only is Washington’s advice viewed with suspicion in Berlin and Paris (Europeans still rightly complain about the economic shock visited upon their economies by the collapse of Lehman Brothers); with austerity-drunk Republicans in charge of Congress, the United States can’t do much to help rescue Europe.
After days of drama-filled meetings, in late October eurozone leaders announced the latest “comprehensive” rescue plan. Although it was an improvement over earlier efforts, this package, too, came up short in that it failed to calm the markets and offer the eurozone a path back to economic growth. And without growth, there will be many more months of crisis.
The most we can do at this point is draw the right lessons from the crisis for our economy and try to nudge policy in the right direction (while encouraging the Federal Reserve to support Europe’s efforts at stabilization). Indeed, there is a danger that we will only compound the problem with bad advice and inappropriate policy. So what are the most essential lessons to draw from the crisis?
First, this is not principally a crisis of runaway social spending or even a government debt crisis, although it has become one for some economies. Contrary to what is often asserted, many of the countries in trouble did not have irresponsible fiscal policies, as Martin Wolf of the Financial Times has noted. Greece did, but Spain and Ireland ran budget surpluses before the crisis and had very low levels of government debt. Ireland’s debt was a mere 12 percent of GDP, while Spain’s was 31 percent, well below Germany’s 53 percent. Italy had a high debt-to-GDP ratio but a very modest budget deficit. As much as anything, these economies were victims of a credit boom and bust born of too cheap interest rates and excessive lending, followed by an especially severe recession and a financial panic. The lesson here is not about the importance of fiscal consolidation but the dangers of credit and asset bubbles that are often the product of weak financial-market regulation and of imbalances, in this case between the core European economies, which ran current-account surpluses, and peripheral deficit countries, which absorbed those surpluses.

The second lesson is that governance matters. Europe’s problem is not too much government but too little. The reason the eurozone has struggled so mightily with the threat of financial contagion—whether it be organizing an orderly Greek default or assembling a stability fund of sufficient size—is that it does not have the government institutions needed to act decisively and quickly enough to calm the markets. If the eurozone had had a common treasury it would have been able to assemble an adequately resourced European Financial Stability Facility much earlier, avoiding the run-up in interest rates. Or if the European Central Bank had been a true lender of last resort, it would have been able to stanch market speculation by buying sovereign bonds more aggressively or by guaranteeing future sovereign debt.
Yet the myth persists that Europe’s problem has been too much government and too much intervention. Ironically, conservatives who complain the most about government are the very ones who want to turn the United States into a eurozone (without the social welfare state) by destroying our fiscal union and by unduly tying the hands of the Federal Reserve (although some democratic reforms may be called for).
The third lesson is that austerity is counterproductive, and that “expansionary austerity” is exactly what it would seem—a dangerous oxymoron [see Ari Berman, “The Austerity Class,” November 7]. Germany’s view is that the crisis was caused by excessive government debt, built up over the past decade or two, and that market “confidence” and economic growth can be restored only through fiscal consolidation involving steep spending cuts and tax increases. But as common sense would have suggested, imposing austerity measures has killed off growth in much of the peripheral economies while pushing the eurozone economy as a whole closer to recession.
This lesson is, of course, most stark in Greece, where the eurozone austerity program has set in motion a vicious downward cycle of recession and debt, whereby austerity leads to recession, which in turn produces even larger deficits and debt, which in turn prompts calls for more austerity. The IMF expects Greece’s economy to contract by 5.5 percent in 2011; meanwhile, its projected budget deficit has increased to 9.5 percent from 8.6 percent, despite harsh public spending cuts and tax increases. Portugal and Spain are also in danger of being pushed into the debt trap. US advocates of expansionary austerity should take note.
Finally, adjustment must be a two-way process. The euro-zone’s austerity policies are not the only reason European economies are heading toward recession. The monetary union itself is also at fault, because it has put deficit economies in a straitjacket as constraining as the gold standard was during the Great Depression. In order to restore growth and fiscal sustainability, these economies must improve their competitiveness—but they must do so without using an independent exchange rate. And without the ability to devalue their currency, the only way for eurozone economies to regain competitiveness in the short term (structural reforms take longer) is for wages and prices to fall. But that, of course, means an even greater drag on growth, not to mention greater political instability, which can destroy any prospects for recovery.
The best way to offset the contractionary effect of adjustment would be to make it a two-way process: for Germany and other surplus economies to pursue more expansionary policies while the peripheral economies gradually bring down their deficits with more growth-friendly policies. After all, the imbalance between the core surplus economies and the periphery economies was one of the principal causes of the crisis to begin with. But rebalancing runs contrary to Germany’s deeply held philosophy of fiscal rectitude, as well as its export-oriented economy. Without such adjustment by Germany and the other core economies, however, the entire burden falls on the debtor economies, increasing the likelihood that rescue efforts will fail.
If adjustment proves impossible inside the eurozone straitjacket, there are two longer-term alternatives: permanent financing of debtor economies via a fiscal union, which would entail automatic transfer of resources from wealthier parts of the eurozone to poorer regions, or a eurozone breakup. In the meantime, the best we can hope for from Europe is a chronic low-grade crisis with slow growth. This makes it even more important that we heed the lessons of the crisis. We must choose strong government with robust public-investment and growth-oriented Keynesian economics, and avoid the false allure of small government and expansionary austerity.
Sherle R. Schwenninger is a senior fellow at the World Policy Institute at the New School University and director of the Global Economic Policy Program at the New America Foundation.

lunedì 7 novembre 2011

Why so serious ?

domenica 6 novembre 2011

How Goldman Sacked Greece

Lazy Ouzo-Swilling, Olive-Pit Spitting Greeks


Or, How Goldman Sacked Greece

by Greg Palast for In These Times 
Greece

Here's what we're told:

Greece's economy blew apart because a bunch of olive-spitting, ouzo-guzzling, lazy-ass Greeks refuse to put in a full day's work, retire while they're still teenagers, pocket pensions fit for a pasha; and they've gone on a social-services spending spree using borrowed money. Now that the bill has come due and the Greeks have to pay with higher taxes and cuts in their big fat welfare state, they run riot, screaming in the streets, busting windows and burning banks.

I don't buy it.  I don't buy it because of the document in my hand marked, "RESTRICTED DISTRIBUTION."

I'll cut to the indictment:  Greece is a crime scene.  The people are victims of a fraud, a scam, a hustle and a flim-flam.   And--cover the children's ears when I say this--a bank named Goldman Sachs is holding the smoking gun.

********


This is an adaptation of an excerpt from Vultures' Picnic, Greg Palast's new book, out next week, an investigator's pursuit of petroleum pigs, power pirates and high-finance fraudsters. Read the first chapter or just get the book here. 

******** 

In 2002, Goldman Sachs secretly bought up €2.3 billion in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece.

Goldman took a huge loss on the trade.

Is Goldman that stupid?

Goldman is stupid—like a fox. The deal was a con, with Goldman making up a phony-baloney exchange rate for the transaction.   Why?

Goldman had cut a secret deal with the Greek government in power then.  Their game:  to conceal a massive budget deficit.  Goldman's fake loss was the Greek government's fake gain.

Goldman would get repayment of its "loss" from the government at loan-shark rates.

The point is, through this crazy and costly legerdemain, Greece's right-wing free-market government was able to pretend its deficits never exceeded 3 percent of GDP.

Cool. Fraudulent but cool.

But flim-flam isn't cheap these days: On top of murderous interest payments, Goldman charged the Greeks over a quarter billion dollars in fees.

When the new Socialist government of George Papandreou came into office, they opened up the books and Goldman's bats flew out.  Investors' went berserk, demanding monster interest rates to lend more money to roll over this debt.

Greece's panicked bondholders rushed to buy insurance against the nation going bankrupt.  The price of the bond-bust insurance, called a credit default swap (or CDS), also shot through the roof.  Who made a big pile selling the CDS insurance?  Goldman.

And those rotting bags of CDS's sold by Goldman and others? Didn't they know they were handing their customers gold-painted turds?

That's Goldman's specialty.  In 2007, at the same time banks were selling suspect CDS's and CDOs (packaged sub-prime mortgage securities), Goldman held a "net short" position against these securities. That is, Goldman was betting their financial "products" would end up in the toilet. Goldman picked up another half a billion dollars on their "net short" scam.

But, instead of cuffing Goldman's CEO Lloyd Blankfein and parading him in a cage through the streets of Athens, we have the victims of the frauds, the Greek people, blamed.  Blamed and soaked for the cost of it.  The "spread" on Greek bonds (the term used for the risk premium paid on Greece's corrupted debt) has now risen to — get ready for this--$14,000 per family per year.

Euro-nation, the secret Geithner memo, and the Ecuador connection

Why did the Greek government throw its nation's fate into Goldman's greasy hands?  What the heck was in the "RESTRICTED" document? And why did I have to take it to Geneva, to throw it down in front of the Director-General of the WTO for authentication, a creepy French banker I otherwise wouldn't bother to spit on, and then tear off to Quito to share it with the grateful President of Ecuador?

To give you all the answers would require me to write a book.  I have:  Vultures' Picnic--in Pursuit of Petroleum Pigs, Power Pirates and High-Finance Fraudsters.

It's really quite important to me that you read it, that you get it now.  That's a funny statement, I suppose, from an author.  But if you've been reading my stories in The Guardian or watching my reports on BBC Newsnight, you've gotten the facts; but I really want to let you inside the investigations, to cross the continents with me and follow down the leads so that you can get a full picture of The Beasts.  The Beasts and their trophy wives, intelligence agency go-fers, political concubines and bone-breakers.  And besides, it's enormous fun when it's not scary as sh*t.

********

Here's a taste of Chapter 12 - The Generalissimo of Globalization - from the film-enhanced eBook edition.  [And more on the 1% Greece-ing us, check out the upcoming issue of In These Times.]



 

Note:  I will be in Chicago for In These Times on November 29, part of our 15 city tour that begins this coming Sunday, November 13, in Portland, then moves to San Francisco, LA, San Diego, Denver, Boulder, New Mexico, Albuquerque, Chicago, Madison, New York, DC, Houston, Burlington, and Atlanta. Find out more info here. 

*** 

Greg Palast is the author of Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores, which will be released on November 14 by Penguin USA. 

Pre-order it now!
For more information about Palast's brand new book and his book-signing events in your city, go towww.VulturesPicnic.org
 

Subscribe to Palast's Newsletter and podcasts
Follow Palast on Facebook and Twitter

GregPalast.com 

Let banks fail



6 NOVEMBER 2011 - 13H38  


Key lesson from Iceland crisis is 'let banks fail'
A man takes money from an automatic teller machine in Rejkjavik, 2008. Three years after Iceland's banks collapsed and the country teetered on the brink, its economy is recovering, proof that governments should let failing lenders go bust and protect taxpayers, analysts say
A man takes money from an automatic teller machine in Rejkjavik, 2008. Three years after Iceland's banks collapsed and the country teetered on the brink, its economy is recovering, proof that governments should let failing lenders go bust and protect taxpayers, analysts say
AFPThree years after Iceland's banks collapsed and the country teetered on the brink, its economy is recovering, proof that governments should let failing lenders go bust and protect taxpayers, analysts say.
The North Atlantic island saw its three biggest banks go belly-up in the October 2008 as its overstretched financial sector collapsed under the weight of the global crisis sparked by the crash of US investment giant Lehman Brothers.
The banks became insolvent within a matter of weeks and Reykjavik was forced to let them fail and seek a $2.25 billion bailout from the International Monetary Fund.
After three years of harsh austerity measures, the country's economy is now showing signs of health despite the current global financial and economic crisis that has Greece verging on default and other eurozone states under pressure.
"The lesson that could be learned from Iceland's way of handling its crisis is that it is important to shield taxpayers and government finances from bearing the cost of a financial crisis to the extent possible," Islandsbanki analyst Jon Bjarki Bentsson told AFP.
"Even if our way of dealing with the crisis was not by choice but due to the inability of the government to support the banks back in 2008 due to their size relative to the economy, this has turned out relatively well for us," Bentsson said.
Iceland's banking sector had assets worth 11 times the country's total gross domestic product (GDP) at their peak.
Nobel Prize-winning US economist Paul Krugman echoed Bentsson.
"Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net," he wrote in a recent commentary in the New York Times.
"Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver," he said.
During a visit to Reykjavik last week, Krugman also said Iceland has the krona to thank for its recovery, warning against the notion that adopting the euro can protect against economic imbalances.
"Iceland's economic rebound shows the advantages of being outside the euro. This notion that by joining the euro you would be safe would come as news to the Spaniards," he said, referring to one of the key eurozone states struggling to put its public finances in order.
Iceland's example cannot be directly compared to the dramatic problems currently seen in Greece or Italy, however.
"The big difference between Greece, Italy, etc at the moment and Iceland back in 2008 is that the latter was a banking crisis caused by the collapse of an oversized banking sector while the former is the result of a sovereign debt crisis that has spilled over into the European banking sector," Bentsson said.
"In Iceland, the government was actually in a sound position debt-wise before the crisis."
Iceland's former prime minister Geir Haarde, in power during the 2008 meltdown and currently facing trial over his handling of the crisis, has insisted his government did the right thing early on by letting the banks fail and making creditors carry the losses.
"We saved the country from going bankrupt," Haarde, 68, told AFP in an interview in July.
"That is evident if you look at our situation now and you compare it to Ireland or not to mention Greece," he said, adding that the two debt-wracked EU countries "made mistakes that we did not make ... We did not guarantee the external debts of the banking system."
Like Ireland and Latvia, also rescued by international bailout packages and now in recovery, Iceland implemented strict austerity measures and is now reaping the fruits of its efforts.
So much so that its central bank on Wednesday raised its key interest rate by a quarter point to 4.75 percent, in sharp contrast to most other developed countries which have slashed their borrowing costs amid the current crises.
It said economic growth in the first half of 2011 was 2.5 percent and was forecast to be just over 3.0 percent for the year as a whole.
David Stefansson, a research analyst at Arion Bank, told AFP Iceland hiked its rates because it "is in a different place in the economic (cycle) than other countries.
"The central bank thinks that other central banks in similar circumstances can afford to keep interest rates low, and even lower them, because expected inflation abroad is in general quite (a bit) lower," he said.

sabato 5 novembre 2011

Icr the Sub Prime Crisis Pgs 10-17-2007

Icr the Sub Prime Crisis Pgs 10-17-2007

The collapse of Democracy

Greece – The collapse of Democracy
By David Malone , 04 NOVEMBER 2011

Whatever happens today in Greece one thing seems clear, our leader’s disdain for democracy is now blatant and clear.

The Greek finance Minister, Mr Evangelos Venizelos was in favour of his Prime Minister’s call for a referendum until he went to the G20 at which point he suddenly saw things differently and came out opposing it.

Mr Venizelos is not the people’s minister for controlling finance. He is Finance’s Minister for controlling the people.  And his first duty has been to make sure the people of Greece are not allowed to have any say in the austerity/bail-out plans being forced upon them by foreign powers.
Will Papandreou be forced from government? If he does not resign then his opponents will force a vote of confidence and the banks will do all in their power to make sure he loses and has to go anyway.  Whether he goes by resigning or losing a confidence vote, either way the world’s financiers and banks may hope that the ‘problem’ of the referendum will then go away.  It was Papandreou who offered it.  If he is no longer in power then ‘his’ offer, they will argue, goes with him.

What I think will happen then is that an election will be called in place of the referendum.  That way it will not be a clear vote for or against the austerity and bail outs.  The people’s will, will have been gagged.

To replace the referendum with an election will be a major victory for those who do not want the people to have a say.  ‘They’ being the Troika and the big banks.  But more important than the election, I think, is what they will push through before, between now and any election.  I think we will see a coalition government, as is already being talked about, and that government’s job will be to ‘suggest’ that before the election an expert ‘Commission’ should be set up.  They will talk about it in terms of being a non-partisan, national unity panel whose job, they will say, will be to remove from the destabilising hurly burly of party politics, those vital decisions which must be made by experts unswayed by partisan political considerations’.  That is the sort of language I fully expect to hear.

Of course what it will in fact be is a putsch. It will see the removing of the very decisions which are of most concern to the Greek people from the democratic process. The ’Commission‘ will in fact be a unelected cabal who will be Greece’s de facto governors.  Not ‘government’ but governors.  Because if any such ‘Commission’ is created and given the powers over Finance and Debt that I expect, then Greece will have become a vassal subsidiary of the financial system.  It will be run by and for the banks.  The Greek government will be there to wear authentic costumes and pose for the tourists except when it is required to inflict a little pain on those who might need reminding of their place in the new post democratic Greece Plc.

They will I expect make reference to America’s Joint Select Committee on Deficit Reduction, now known as the Super Committee.  But unlike that Committee, which I regard as dismal and already on the path leading away from Democracy, the Greek ‘Commission’ will be answerable to no one in Greece itself.  Who it is actually answerable to will, I expect, be left vague and confused. It will be ‘advised’ by and submit reports to, the ECB, to the IMF and no doubt to some part of what is left of the Greek system of self-government.  But the reporting to perhaps the Finance Ministry will be more symbolic than real.

Of course none of this has happened yet.  And I hope I am proved laughably wrong.  But I fear we are seeing the Beta testing of the new Post Democratic structures that we will be told are to be ‘managed’ by those expert enough to be trusted to do so rather than, as they used to be, ‘governed’ by those now considered ‘unqualified‘ to do so – you and me.

The reason I say Beta tested is because I think this arrangement I have hypothesised about is what they will definitely ‘need’ and want to have in place for Italy post Berlusconi.  And I think they would very much like to be able to say, when they need to impose it in Italy, that it is … ‘extending’ would be a good word for them I think – extending to Italy a ‘mechanism’ which has already been seen to have ‘brought’ stability to Greece.

Courtesy of David Malone - http://www.golemxiv.co.uk
David Malone is the author of the book Debt Generation. You can read and listen to excerpts from his book here: http://www.debtgeneration.org/index.php

venerdì 4 novembre 2011

Local Money: An American Tradition



Local Money: An American Tradition Is Reborn As Economy Weakens

The Huffington Post. 11/2/11 02:03 PM ET
Bernalbucks
Ever since the crash several years ago, Americans have felt precarious about the nation's economy and the value of its currency. Money seems to take inconceivable, abstract, and even magical forms, traveling around the world at lightning speed with little oversight and obvious mismanagement.
We have little control over it -- the value of our currency is tied to conditions well beyond our control. It moves in directions that most of us are vehemently opposed to. We trusted that the banks, Congress, the Federal Reserve, corporations and Wall Street are managing money responsibly on our behalf, particularly retirement funds and mortgages, but lately that trust has been broken. In response, the concept of localcurrencies have drawn interest from Occupy and other economic resistance groups as an alternative to state-controlled money.
Since the Federal Reserve Act of 1913 there has been a relative monopoly on money issuance by private banks through the Federal Reserve, which has drawn criticism from groups like the Monetary Reform Institute. But for most of America's history, citizens used local currencies to meet their needs through local business, which often produced their own money. Before the Civil War, there were thousands of local currencies, and during the Great Depression they made a comeback, with hundreds of currencies used by the unemployed in particular.
Local currencies generally develop for one of two reasons -- the desire for local economic control (for a variety of reasons, from democracy to sustainability to social justice,) and a scarcity of national currency. In the current situation, both reasons weigh heavy.
When designed well and appropriately for the specific context, local currencies can boost a local economy and reward important work that needs to be done. Where national currency is not available because of overall scarcity or there is not enough market value for the work, local currencies can create real, tangible wealth we can see and control. Investing in community currency means investing in your community's health for the long haul, and therefore your own security and happiness.
When money is spent in chain stores, national currency leaks out of the local economy electronically to their headquarters elsewhere. Community currencies prevent this leakage of resources and energy to entities beyond our control and recirculate local wealth through the multiplier effect an average of three times more wealth (45 cents on the dollar for local currencies compared to 15 cents on the dollar for federal currency recirculating). They support local business by providing more loyal customers, increasing local employment and buffering them from the shock of a boom-bust economy. While currency experts are working on interchangeable currency platforms on an international scale, alternative currencies function as complements to support the local economy, not competitors with the national currency, which is currently more ubiquitously useful.
While the economy remains in recession, poverty rises, and local businesses shut down, social innovators and social service organizations are inventing new kinds of currencies all over the world. Here are some of the most exciting examples:
In the tiny country of Switzerland, the WIR Bank is a nationally circulated complementary currency by a cooperative of Swiss small- and medium-sized businesses that issue credit to each other based on rating and collateral. With over 60,000 member businesses, WIR currency circulates the equivalent of 1.65 billion Francs annually, helping small business get off the ground or expand, and allowing them to compete with international businesses and make it through tough times. It provides loans when national currency has dried up. GETS is a similar mutual credit B2B currency, with much more versatility, coming out of the UK and spreading to business networks in the US, like Green America and Vermont Businesses for Social Responsibility.
Across Europe and Africa, thousands of LETS (Local Employment Trading Systems) like Community Exchange Systems and Community Forge provide local businesses, the self-employed, the underemployed, the creatively employed, and many radical idealists with a digital currency to organize and lubricate the informal economy. LETS are similar to commercial bartering systems, but use complementary currencies in an almost immeasurable variance of forms and structures, designed and controlled by the local community to meet its needs without money. LETS often consist of an online directory of goods and services offered by individual members and businesses and an accounting system. LETS credits are more abundant form or currency as a member can earn as many credits as they have time to work for, rather than waiting for scarce dollars to be available from bank accounts. Greeks in the midst of economic crisis have adopted a LETS currency called TEM, which has a Craigslist like directory and a digital and check-like currency form.
One specific and popular variance of LETS in the US and UK is called a Timebank. Timebanks have special qualities that make them particularly useful to the poor and underprivileged. They value everyone's hours equally, intentionally fund community service and development work that it often unfundable, and they operate more like a relationship-driven gift economy than a currency, with generosity the rule. Some have a reputation system built in to encourage good behavior. Timebanks tend to share core values that everyone's life and work are valuable, that everyone should be cared for equally, and that reciprocity and caring are key to a healthy economy. Timebanks have proven superior to money in applications such as senior care, disabled peer support and childcare and nonprofit service provision.
In New York and Montpelier, Vermont, and St. Louis, Timebanks have received large government grants to facilitate mutual assistance care for the sick and elderly in a more economically sustainable than the government can facilitate, as well as creating community amongst socially isolated people. The Visiting Nurses of New York Timebank conducted a study demonstrating remarkable impact in facilitating new friendships across cultures and languages and improving self-reported mental and physical health. Timebanks in their modern form originated in the '80s, but only recently took off, now numbering in the hundreds. They were also popular during the Great Depression amongst hundreds of thousands of members of unemployed associations that created a self-sufficient parallel economy, getting most of their needs met and orchestrating manufacturing, education, and more through exchange of hour credits, like the UXA. International Timebank organizations include OS CurrencyTimebanks USAhOur World, andTime for the World.
Whereas Timebanks and LETS have not yet succeeded in capturing a significant portion of the formal economy, community paper scrips have stepped in to fill the need. Berkshares and Ithaca hours are two successful versions of local scrip invented in the U.S. to support local business. Berkshares are a discount community currency backed by $USD that are widely accepted by businesses and banks in the Berkshires region of Massachusetts. The scheme is similar to the German Chiemgauer, which is a regional paper currency with negative interest built in (through required expiration renewal stamps). The Chiemgauer has succeeded in encouraging local import replacement businesses, like apple production, driven by flood of local currency that businesses accumulate from customers and only spend at other local businesses. Ithaca hours are issued by a nonprofit for membership, providing the goods and services based on trust in community, as well as transportation - the hours are accepted by the local transit authority.

Other scrips or paper currencies are popping up across the country from Corvallis Hours, to Detroit Cheers, to the Washington D.C. Potomac and Sand Dollars (New Earth Exchange) in Santa Cruz, CA. Many can't get off the ground with out financial support, while other struggle along until their currency is worth valuable services or goods. Credit card forms of business-backed currency that function more like local business rewards or discount cards are gaining ground to compete with the modern efficiency of digital money, like Sonoma Go LocalBernal Bucks and the City government initiative, the Oakland Acorn -- all in the progressive nexus of Northern California. Both Bernal Bucks and Sonoma Go Local are planning on using their reward funds to support local business development when conventional loans are unavailable or at too high interest. Many local currencies also make grants to nonprofits.
In Brazil, over 50 community banks have drastically reduced poverty by issuing their own paper and credit card currencies based on the Banco Palmas model. Palmas are issued into circulation to fund community and infrastructure development projects and as small business loans and personal loans, dispersed based on community reputation rather than capital or collateral. They are run by community-based organizations. Local businesses and nonprofits directly incubated from Palmas advance the lives of youth, women, the poor, and artists. Palmas type currencies now help many Brazilians meet most of their needs locally, and invigorate the local economy with a charge of currency and employment. Palmas have proven so successful in alleviating poverty that they are now supported by the Brazilian national government. Venezuela has been experimenting with the Palmas model and it is widely promoted by the Chavez government.
Still in use today, Argentina's grassroots currency initiative, called the Red de Trueque, emerged to provide a third of the country with a means of exchange for basic needs during its economic crash in 1999, when large banks frozen resident's accounts and fled the country with currency. Woergl, Austria provides a brief but inspiring example of a municipal issued currency that pulled the city out of an economic crisis during the Great Depression. It functioned by spending into circulation depreciating local currency backed by public works, providing a dramatic 30% unemployment relief rate in in one year. It was crushed for its wild success by the national government as a grassroots threat to the national currency.
Instead of placing faith in the "economic experts," these currency projects are built on faith in community and the creation of real wealth. When carefully designed, they can be a source of community empowerment, prioritizing caring relationships and community values ahead of profit as well as and generating meaningful employment at local businesses. As shops shut down around us, municipal governments cut services, and the unemployed fall through the widening crevices in our economic system, perhaps its time we take our economy into our own hands. As these projects demonstrate, democratically controlled local money can be a powerful tool in shifting economic power and transforming the economy into a more loving and sustainable one.
For more information about local currencies, see the SF BACE libraryCommunity Currency Magazine, and the Complementary Currency Database.
Mira Luna is a San Francisco-based community activist working to create alternative economies in the Bay Area and beyond. Her article was originally published at http://shareable.net/blog/local-money-creates-real-wealth-outside-the-bubble