The naked face of hedge funds

The naked face of hedge funds

Richard Murphy
May 1st, 2009

Chrysler is in administration because Hedge Funds refused trio do a deal on the debt they were owed. As President Obama said:

While many stakeholders made sacrifices and worked constructively, I have to tell you some did not. In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none. Some demanded twice the return that other lenders were getting. I don’t stand with them. I stand with Chrysler’s employees and their families and communities. I stand with Chrysler’s management, its dealers, and its suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars. I don’t stand with those who held out when everybody else is making sacrifices.

Quite so.

This is why hedge funds harm the rest of the world. They believe their claim on capital makes them different from the rest of the world. Wrong, wrong and wrong again. It does not.

A little humility helps. Hedge funds might have to learn it if they are to have any place in the world of the future.

Ilo, 200 milioni di disoccupati nel 2009 (+10%)

Ilo, 200 milioni di disoccupati nel 2009 (+10%)

Entro la fine dell’anno i disoccupati nel mondo potrebbero essere quasi 200 milioni, 18 in più rispetto ai 180 milioni del 2007 (+10%). Ma a causa della crisi economica, i senza lavoro in più nel mondo potrebbero arrivare anche a 51 milioni di unità in più rispetto a tre anni fa. Lo prevede l’Organizzazione internazionale del lavoro nel rapporto “Global employment trends” presentato oggi a Ginevra.

L’Ilo sottolinea inoltre che il numero dei “working poor”, i lavoratori poveri, ovvero quelle persone che pur lavorando non sono in grado di provvedere alle proprie famiglie potrebbe arrivare a 1,4 miliardi di persone (il 45% di tutti i lavoratori dal 40,6% registrato nel 2007). Sarebbero inoltre in crescita anche gli impieghi precari: secondo l'Organizzazione internazionale del lavoro nel 2009 i lavori 'vulnerabili' potrebbero riguardare il 53% della popolazione occupata crescendo in modo significativo rispetto al 50,6% del 2007.

“Il messaggio dell'Ilo - ha detto il direttore generale dell'Organizzazione, Juan Somavia – è realistico non allarmistico. Siamo di fronte a una crisi globale del lavoro. Molti governi sono consapevoli e stanno intervenendo ma sono necessarie azioni internazionali più decise e coordinate per evitare una recessione globale”.

Quanto all’anno appena trascorso, l'aumento più consistente di disoccupazione rispetto al 2007 è stato registrato nei paesi sviluppati e l'Unione europea (dal 5,7% al 6,4%) con un numero di senza lavoro cresciuto di 3,5 milioni di unità (toccando quota 32,3 milioni di disoccupati). I tassi più alti di disoccupazione sono sempre in Nord Africa (10,3%) e Medio Oriente (9,4%), i più bassi sono sempre in estremo Oriente (3,8%).

"American Casino" tracks crisis from Main to Wall Street

Reuters, Thu Apr 30, 2009

By Kristina Cooke

NEW YORK (Reuters) - When U.S. film-maker Leslie Cockburn began filming a documentary on the economic recession in January 2008, the crisis was just beginning to unfold.

In the year Cockburn and her husband Andrew followed the stories of struggling homeowners in inner-city Baltimore, the global financial crisis redrew the landscape of Wall Street, froze credit markets and prompted large-scale job losses and foreclosures.

"We've done a lot of war reporting overseas and for us to realize we were probably in the midst of the biggest story of our time at home was incredible," said Cockburn, who has covered conflicts from Afghanistan to Haiti.

Cockburn had been reading economist James K Galbraith's "The Great Crash, 1929", and said in an interview she saw parallels in the cracks appearing on Wall Street in 2007.

"It was clear it wasn't going to get better in a few months so we decided to take the plunge and start filming almost immediately," she said.

The feature-length film shifts between Wall Street, Baltimore and suburban California -- or, to use its casino terminology -- between the gamblers and the chips.

Cockburn said she hopes the film, which debuted at the Tribeca Film Festival, will give viewers a better understanding of what caused the economic crisis and its consequences.

After starting with a primer on how subprime mortgages and derivatives fueled the crisis, the film shifts in pace and tone, moving to inner-city Baltimore and suburban California.

There, through personal stories and interviews, the film addresses how risky bets made on Wall Street ravaged the lives of home owners and neighborhoods.

To show how interconnected the troubles on Wall Street and the rest of America are, the film-makers track Baltimore high school teacher Denzel Mitchell's mortgage through to Wall Street bank Goldman Sachs.

One early review from Variety magazine said the material was "cogent" but the movie as a whole, "never escapes a small-screen feel."

(Editing by Alan Elsner)

Lo scandalo derivati finisce sull'Economist

Milano/ Lo scandalo derivati finisce sulle colonne dell'Economist

AFFARI ITALIANI, Giovedí 30.04.2009 16:31

ESCLUSIVO/ TUTTE LE CARTE

Lo scandalo Derivati, emerso a Milano grazie alla tenacia di Davide Corritore, arriva sull'Economist. Anche sull'autorevole periodico inglese il caso riscuote molto interesse. Non a caso visto che le quattro banche indagate per truffa avevano stipulato il contratto per gli swap della Madonnina in lingua inglese e in base al diritto britannico. Un particolare non da poco, visto che tra i firmatari dell'accordo, sponda meneghina, c'era anche Elfo Butti. Che, davanti ai magistrati spiga di non capirci un h della lingua inglese LEGGI L'ARTICOLO DELL'ECONOMIST Davide Corritore (Pd), ecco l'uomo che ha messo in ginocchio le banche straniere sui derivati

Tutte le carte, tutte le testimonianze. Choc. Perché le quattro banche - secondo l'ipotesi accusatoria - avrebbero truffato il Comune di Milano. Ma il Comune di Milano aveva le competenze per difendersi? E chi ha voluto fortissimamente l'operazione? Affaritaliani.it si è procurato il decreto di sequestro emesso dal Giudice per le indagini preliminari Giuseppe Vanora. Carte scottanti, con parole pesanti. Un esempio, a pagina 25, è la testimonianza di Elfo Butti, all'epoca dei fatti Direttore centrale del settore Ragioneria, Finanza, Patrimonio e Tributi: "Per quanto mi concerne direttamente, affermo che non sono affatto un esperto in operazioni in strumenti derivati. Non ho mai trattato questa materia e non sarei in grado di farlo tutt'ora - precisando poi, a domande - Non sono in grado di interloquire in lingua inglese, dal momento che le mie conoscenze al riguardo risalgono ai tempi della scuola. Avevo informato il dott. Porta del fatto che non avevo alcuna conoscenza in materia di derivati e che non parlavo l'inglese". Peccato che il contratto sia stato redatto in inglese.

Angela Casiraghi, direttore del settore Finanza, Bilancio e Tributi, rincara la dose: "Il dott. Porta, come ho detto, ha voluto questa operazione, l'ha diretta, coordinata e velocizzata. Posso certamente affermare che la gestione complessiva dell'operazione ha fatto certamente capo a lui in tutti i suoi aspetti".

Swiss bank refuses US tax request - BBC

Swiss bank refuses US tax request

UBS is the largest bank in a famously secretive system

Switzerland's largest bank, UBS, has asked a US court not to go ahead with a tax case involving more than 50,000 US customers with Swiss accounts.

UBS told a federal court in Florida it would violate Swiss laws on banking secrecy if it provided the information on its clients.

The US suspects 52,000 Americans of using UBS accounts to hide almost $15bn of assets and unpaid taxes. (more)

Bankers made 'astonishing mess' - BBC

Bankers made 'astonishing mess'

Northern Rock was the first bank to show signs of problems ahead

The effects of the continuing banking crisis will be felt for generations, a committee of MPs has warned.

The Treasury committee, in its second report on the crisis, said it had been caused largely by the banks' own reckless behaviour.

"Bankers have made an astonishing mess of the financial system," said committee chairman John McFall.

The MPs supported the various attempts of the government to bail out the banks and the shore up the banking system.

But they criticised banks for increasing their charges and fees to small business borrowers. (more)

Sonia Alfano e le dimissioni del Procuratore di Reggio Emilia

Blog di Beppe Grillo - 30 Aprile 2009

Le interviste del blog: Sonia Alfano

Sonia Alfano e le dimissioni del Procuratore di Reggio Emilia
(11:38)

Riporto l'intervista a Sonia Alfano sulle dimissioni di Italo Materia, Procuratore Capo di Reggio Emilia.

Testo:
"Qualche ora fa si è dimesso il Procuratore Capo di Reggio Emilia Italo Materia, lui ha affidato la sua lettera di dimissioni alla stampa e in questa lettera molto forte, dai toni molto provocatori, ha sottolineato che la responsabilità è mia. Mia perché nei mesi scorsi, a suo parere, l'avrei attaccato leggendo alcuni atti processuali che lo riguardano.
Io, da anni, faccio un'attività di informazione e testimonianza in moltissime città d'Italia e ho fatto questa stessa cosa a Reggio Emilia nel mese di settembre del 2008. Andai a parlare a Reggio Emilia soprattutto per rendermi conto di persona e per capire l'interessamento dei cittadini reggiani rispetto a un problema per me fondamentale che è quello delle infiltrazioni nei territori più ricchi, soprattutto in quelli del nord est.
C'è stata una cosa che mi ha colpito: il 2 ottobre, se non sbaglio, l'onorevole Angela Napoli aveva depositato un'interrogazione parlamentare nella quale si interrogava su come fosse stato possibile per la Ciampà aggiudicarsi un appalto dal momento che gli era stato ritirato il certificato antimafia.
Io mi ricordai del nome di questa ditta perché l'avevo incrociata leggendo alcune carte e devo dire che anche io mi sono insospettita perché ho notato un particolare silenzio, soprattutto da parte dell'attività inquirente di Reggio Emilia considerato che proprio a Reggio Emilia la ditta Ciampà continuava ad operare.
Nel momento in cui mi è stato detto che il procuratore capo di Reggio Emilia era Italo Materia, nome a me molto conosciuto in quanto magistrato messinese, stessa provincia dalla quale provengo io, mi sono chiesta se il suo silenzio fosse frutto di una leggerezza o superficialità; cosicché nel mese di ottobre 2008 organizzai insieme a Salvatore Borsellino l'ennesimo incontro con la cittadinanza reggiana proprio per discutere di queste ultime vicende.
Fu invitato anche il procuratore Italo Materia il quale non si presentò. In quella stessa data lessi alcuni stralci di un verbale processuale, che si è concluso nel gennaio 2008 con la condanna di Giovanni Lembo e Marcello Mondello, due magistrati della procura di Messina. Giovanni Lembo, nella fattispecie, è amico di Italo Materia.
Io fui subito attaccata dal procuratore Italo Materia il quale disse che ero un corvo, che ero arrivata a Reggio Emilia su commissione, che ero andata là ad attaccarlo per chissà quale motivo, e la stampa mi bersagliò. Rimasi in silenzio per non alzare i toni della polemica però mi ripresentai la volta successiva per leggere parti di questo verbale.
Il dott. Italo Materia qualche anno fa, insieme al dott. Lembo, hanno redatto una relazione nella quale veniva chiesto se a parere loro c'erano gli estremi per continuare a far usufruire di benefici di legge, il regime di protezione, un falso pentito. Mi riferisco a Luigi Sparacio, boss dell'omonimo clan messinese.
In questi verbali viene chiesto a Materia in base a che cosa lui abbia rilasciato questo parere positivo, lui dice che l'ha fatto in base ad alcuni pareri di altre procure distrettuali siciliane, fa riferimento alla procura di Messina e dice che per la procura di Messina Sparacio addirittura pare avesse dato utilissime rivelazioni, poi leggendo gli atti processuali si capisce che non è così.
Per l'esattezza gli viene chiesto, a Materia: “lesse mai le dichiarazioni dello Sparacio?” “no”. “Seppe mai che le dichiarazioni dello Sparacio, almeno su certi soggetti che venivano indicati come partecipanti al gruppo dello stesso Sparacio, erano contingenti con dichiarazioni di altri collaboratori di giustizia?” “Si, che ci potesse essere un contrasto si, credo di averlo saputo”. “Quando l'ha saputo e da chi?” Risponde: “certamente l'ho saputo nell'ambito mio, diciamo istituzionale, all'interno di quel parere che dovevo esprimere. In quel parere, se ben ricordo, furono trasferiti meccanicamente quelli che erano i risultati delle informazioni richieste dalle altre procure”.
Però andando oltre ci si rende conto di come, per la procura distrettuale di Messina, lo Sparacio non sia assolutamente credibile e nella fattispecie viene citato una riflessione della procura distrettuale di Messina e al termine di questa riflessione, che trovate anche pubblicata sul sito dei familiari delle vittime della mafia, e si dice: “Mi chiedo, dott. Materia, da cosa si desume o avete ritenuto di desumere che la procura di Messina abbia ritenuto utilissime le notizie fornite dallo Sparacio?” Non solo non c'è una risposta ferma e netta, però io vorrei andare oltre ed è quello che secondo me è più particolare: viene chiesto a Italo Materia quante volte lui abbia visto lo Sparacio, e lui risponde: “Guardi, una prima volta l'ho visto credo nel 1984-1985 quando ci fu a Messina il primo maxiprocesso. L'avrò visto, che so, tre o quattro volte”. “Dove l'ha visto?” Lui risponde: “L'ho visto alla procura nazionale”. “Solo alla procura nazionale?” “Certamente non andavo a casa sua a fargli visita”. "Siccome una fonte di questo processo, e lo stesso Sparacio, ci ha detto che una sera siete andati a cena assieme volevo capire se questo dato risponde al vero." Risposta - "Escludo nel modo più categorico di essere stato a cena con Sparacio. C'è un passaggio che però è a metà strada tra quello che lei mi dice avrebbe detto Sparacio, cene con Sparacio nessuna, mai, nel modo più assoluto. Un giorno con il collega Lembo andammo, come spesso capitava anche con altri colleghi, a mangiare in una trattoria che è vicino la Procura Nazionale e in quella trattoria arrivò Sparacio che si sedette al tavolo." Domanda - "Con voi altri?" Risposta - "Solo questo ma nessuna cena ci tenevo a precisarlo sullo sfondo elemento di colore che mi è estraneo."
A seguito di questo, io penso che siccome il dottor Materia è stato paragonato a Falcone – e io al corvo – per quanto mi risulta non credo che Giovanni Falcone, e tantomeno Paolo Borsellino, siano mai andati a cena con pentiti o con falsi pentiti o altro. Intanto mi piacerebbe sottolineare questo primo passaggio. A un certo punto per riprendere l’intervento del pubblico ministero in quel processo:
"Vuole raccontare con maggiori particolari questo pranzo che avvenne. Cioè una volta lei ha detto che si recò insieme al Dottor Lembo a mangiare nei pressi penso della Direzione Nazionale e ad un certo momento arrivò Sparacio e che cosa avvenne, si ricorda con più precisione, cosa disse Sparacio? Salutò lei e il Dottor Lembo immagino e poi?" Risposta - "No, se ricordo bene Sparacio doveva essere interrogato da qualche collega di Reggio Calabria." Domanda - "Cioè vi disse: Sono qui perché devo essere interrogato da un collega di Reggio Calabria?, una cosa del genere?" Risposta - "Più o meno, almeno questa fu l'impressione che ebbi io." Domanda - "Dico: disse lui “Mi siedo” o qualcuno lo invitò a sedersi, fu lei, fu il Dottor Lembo a invitare lo Sparacio a sedersi a quel tavolo?" Risposta - "No, io certamente non avevo titolo, credo che fu proprio Sparacio che chiese di potersi sedere. Questo è quello che ricordo io." Domanda - "E il Dottor Lembo gli disse “Va bene, non c'é problema”? Risposta - "Non c'erano problemi, certo, non furono fatte diciamo difficoltà." Domanda - "Si ricorda di che cosa si parlò durante. La cena?" Risposta - "No, no, certamente non si parlò di vicende giudiziarie." Domanda - "Ma era accompagnato dal servizio centrale di protezione lo Sparacio?" - Visto che era un pentito, un falso pentito - Risposta - "No, non credo, solo, solo era." Domanda - "Si ricorda che periodo poteva essere? Abbiamo detto lei sta fino al 1997. Era poco prima del periodo in cui … Quindi più vicino al 1990?" Risposta - "Al 1996."
Ora come avete visto io ho riferito a voi le stesse parole che ho riferito qualche mese fa a Reggio Emilia che sono le parole del dottor Italo Materia. Beh. Dimettersi e dare la colpa a me, mi sembra una scusa.
Lembo fu condannato il gennaio dell’anno scorso dal Tribunale di Catania a cinque anni per favoreggiamento mafioso. Mentre fu prescritto il reato di abuso d’ufficio.
Negli anni passati, sempre la procura di Messina, è stata molto al centro di questo tipo di atteggiamenti. Quello che adesso è il procuratore generale della Corte di Assise e di Appello, il dottor Cassata, negli anni precedenti ha trovato perfettamente normale fermarsi nella piazza di Barcellona e colloquiare con la moglie del boss Gullotti. Che in quel periodo era latitante. E quando questo è stato è stato attenzionato dai carabinieri che lo hanno visto e ne hanno fatto una relazione, il dottor Cassata non ha trovato di meglio da fare che minacciare questi carabinieri perché non facessero questa relazione. Ma una cosa che ancora è ancor più grave ed è di queste ultime settimane, circa un mesetto fa, è arrivata alla procura di Messina una lettera anonima. Il mittente diceva che il boss Gullotti a suo parere era stato assolto da tanti delitti che aveva commesso e che per uno in particolare, che probabilmente non aveva commesso, era in carcere. In questa stessa lettera il mittente rivendica la sua amicizia con il figlio di un boss e il cognato di un altro boss. Per l’esattezza con il dott Rugolo, figlio del boss Ciccino Rugolo, e cognato del boss Gullotti. Questa lettera viene respinta dalla Corte che si occupa del processo Mare Nostrum e allora a questo punto arriva un fax alla Procura di Messina. Questo fax è firmato dal dottor Olindo Canali, che è un p.m. della Procura di Barcellona Pozzo di Gotto (ME), e il dottor Canali dice che quella lettera anonima è sua. La rivendica.
Ora io non so se in altri paesi accadano cose del genere. Che un pubblico ministero mandi delle lettere anonime. Ma ancora più grave, io non so se in altri paesi, dopo che accade questo, c’è il silenzio più totale. Io mi aspetterei per questa persona intanto, nella migliore delle ipotesi, una espulsione dalla magistratura, un processo penale che vada fino in fondo e accerti le sue eventuali responsabilità. Ma soprattutto, quello che sta facendo negli ultimi giorni il dottor Canali anziché chiedere che l’autorità competente faccia luce, ha chiesto di essere trasferito in un’altra procura.
A questo punto mi chiedo per quale motivo alcuni magistrati vengono trattati in una maniera, come è successo ad Apicella, e come è successo a Clementina Forleo e altri magistrati – se fanno gli interessi dei cittadini italiani – e altri vengono promossi in questa maniera. Forse, io penso che il Ministro della Giustizia – o dell’ingiustizia, a seconda di quello che vogliamo pensare - dovrebbe dare non solo una risposta, ma dovrebbe mandare qualche ispezione in più in alcuni tribunali, come quello di Messina e quello di Barcellona. Potremmo mandare delle email per chiedere che le ispezioni vengano mandate soprattutto in quelle procure dove latitano, alcune volte, non solo i delinquenti, ma anche la giustizia." Sonia Alfano

Falsifying Bank Balance Sheets

Falsifying Bank Balance Sheets
-- Posted Monday, 27 April 2009 Source: GoldSeek.com

Antal E. Fekete
Professor of Money and Banking
San Francisco School of Economics

Our title is borrowed from a caption of the Chicago economist and monetary scientist Melchior Palyi (1892-1970) writing on the fiscal and monetary legerdemain of the U.S. government in his Bulletin #401, dated February 27, 1960, as follows.

Faking balance sheets legalized

A corporation publishing faked balance sheets would be barred from every stock exchange. It may even face criminal prosecution. The objective is to protect the public against fraud. But exactly the same fraudulent practice has been legalized in so far as commercial and savings banks, and life insurance companies are concerned. They can carry government bonds on their books at par value. A $1,000 bond may be quoted in the market at $800 or less; the balance sheet of your bank will still show it at $1,000. The purpose of this regulation, adopted by all federal and state supervisory agencies and by the Securities Exchange Commission as well, is to give those bonds a sacrosanct status and guarantee against paper losses. Thereby they are promoted to an absolutely safe and “liquid” status. The bank examiners count the bonds of the federal government, whatever their maturity and actual market price may be, as prime liquid assets, just like cash. The more bonds in the portfolio, the more liquid is the bank by the examiners’ standards, — never mind the paper losses.

It is small wonder that the banks purchase long term federal obligations, thereby creating a market for them. The result is that with rising interest rates and declining values of medium- and long-term securities, the modest capital and undivided surplus of the banks – reserves against losses – are impaired. In the case of quite a few banks the entire capital and all reserves have been lost. In some cases, even a part of the deposits has been wiped out... (more)

More Mortgage Madness

By Kai Wright

This article appeared in the May 18, 2009 edition of The Nation.

April 29, 2009

Veronica Gallon went and got her gun. This was just the kind of thing she and her husband, George, had left the north Jacksonville ghettos to avoid: some guy banging and rattling the door in the middle of the night, like a crazed killer or God knows what. Veronica wasn't having it. So she grabbed her gun and plopped down on the front room rug.

"I was in my PJs, looking at TV and getting ready to go to bed for work," she recalls. She doesn't answer her door at night, so at first she just ignored the knock. "Then the knock becomes a banging," she continues, her voice rising. "I peep out the blinds, and I see this white guy," she explains. "I could see him, but he couldn't see me." She noticed his car was idling, with the driver-side door standing open. "Whatever he came to do, he was gonna do it and jump!" (more)

Germany contracts 6pc as bank 'deposits' fall

Germany contracts 6pc as eurozone bank deposits fall at fastest rate since Depression

Germany has slashed its growth forecast, admitting in an embarrassing volte-face that the economy will contract by 6pc this year in the worst recession of any major country in the Western world.

By Ambrose Evans-Pritchard
Independent, 30 Apr 2009 (more)

Exports of German goods, including cars, have collapsed
(because people don't have their fair share of money to
buy the goods that they produce... Ha ha ha! Morons.)

Recession could spark riots and civil disorder

Recession could spark riots and civil disorder, minister warns

By James Chapman
Daily Mail, Last updated at 1:02 AM on 30th April 2009

Riots could threaten society as a result of the economic downturn, a Government minister has warned.

Unrest may spill on to the streets with cars and buildings set alight amid 'naked competition for jobs', unless urgent action is taken to tackle the effects of recession, Hazel Blears said.

The Communities Secretary explained how riots in Brixton and Birmingham in the Eighties and Nineties showed the power of recession to 'fracture community spirit'.

Warning from the past: Britain could see a repeat of the 1981 Brixton riots, above

Already, several senior Labour MPs, including the former welfare minister Frank Field, have warned that the recession raises the prospect of unrest.

But Miss Blears is the first Cabinet minister to reinforce the message publicly.

'Economic recession has the power to do one of two things to a society,' she told Community Service Volunteers last night.

'It can either drive people apart, with an increase in distrust between individuals, more naked competition for jobs, and a fracturing of community spirit.

A police van is pictured blazing on Railton Road as rioters look on during the Brixton Riots of April 1981

'We witnessed this in the 1980s and early 1990s, and at its most extreme, it culminated in cars and buildings burning on the streets of Brixton, Birmingham, and Liverpool.

'Or economic recession can be the catalyst for communities to come together, for neighbours to construct new forms of collaboration, and for citizens to discover new reserves of courage and kindness.'

Miss Blears is proposing that Britain adopt a version of the U.S. Community Investment Act, in which financial institutions plough a share of profits into communities.

She believes the Government should give residents power to collaborate on lifting areas out of economic decline.

Prelude to more violence? G20 protests showed how much public anger there is

Seen as a keeper of the Blairite flame in the Cabinet, Miss Blears made an impassioned plea for ministers to let go of the levers of central control.

They were right to use the state's power to protect jobs, homes and businesses, she said.

But citizens given more control over their affairs 'make good decisions... act with fairness and compassion, and work together to solve problems'.

Solution: Hazel Blears says volunteers must be given more resources to stop communities being driven apart

The outcome of the recession would depend on Labour's willingness to 'create space' for local projects, added Miss Blears, setting out plans to transfer to community groups disused buildings such as shops and leisure centres.

She also proposed a duty on councils to respond when petitioned by a fixed proportion of voters, and set out plans for 'participatory budgeting', in which residents are given powers to allocate part of public budgets.

'My conviction is that our route through this recession must be characterised by greater devolution of power, and more opportunities for communities to take control.'

Recession meant all public spending would have to be justified, she added.

This year a report warned Britain was not immune to the danger of serious social unrest and public disorder following the economic crisis.

Globally, in the next two years, bouts of social unrest are likely to disrupt economies and topple governments, the Economist Intelligence Unit said.

It named 95 countries as being at high or very high risk. The UK's risk was rated as 'moderate'. In previous years, western Europe would almost automatically be 'low risk'.

Tory communities spokesman Caroline Spelman said: 'Hazel Blears talks about community empowerment to combat recession.

'This is exactly what David Cameron and the Conservative Party have been calling for for years.'

City bankers on course for £7bn in bonuses

• Payouts running at about half the level of last year
• 'Alarming' figures show no awareness of crisis – Cable

• Ashley Seager
• guardian.co.uk, Thursday 30 April 2009 00.05 BST

City bankers are to reap nearly £7bn in bonuses this spring even though the government has been forced to pump tens of billions into the banks to prevent them collapsing. (more)

The fractional reserve fraud: still 'unseen'...

The Limits of Economic Garbage

By The Mogambo Guru

04/30/09 Tampa Bay, Florida I was pretty sloshed as I put another shot of tequila to my now-benumbed lips, but the same thought kept going through my whirling head: Total Fed Credit (also referred to as Federal Reserve Credit), zoomed $70.3 billion last week! Yikes! $70.3 billion of new credit appeared, as if by magic, in the accounts of banks in One Freaking Week (OFW)!

And this is not, of course, new money. Instead, this is Fed credit, which the Federal Reserve admittedly creates out of thin air at their whim and gives to the banks, but which BECOMES money when somebody borrows money from a bank.

And how much money can be created out of this Fed credit? Almost unlimited amounts, since the amounts of money that the banks must keep on hand as reserves against this new “unlimited amounts” of new money and loans is, apparently, zero! Hahaha! “Fractional banking” indeed! Hahaha! What as fraud! (more)

[One may ask if the Judges are so corrupt that they can't see the fraud? Yes, they are !]

Kucinich, Zarlenga Say Monetary Reform Needed Now

Kucinich, Zarlenga Say Monetary Reform Needed Now

By John Tiffany

According to Rep. Dennis J. Kucinich (D-Ohio) U.S. monetary reform is urgently needed: “It is long past time we look at the implications of . . . the privatization of money created by the 1913 Federal Reserve Act, the bank fractional reserve system and our debt-based economic system. Unless we have dramatic reform of monetary policy, the entire economic system will continue to accelerate wealth upwards. I am currently working on drafting legislation for an ‘American Monetary Act’ to address these and other issues in order to protect the economic well being of America.

“The U.S. government has been turned into an engine that accelerates the wealth upwards into the hands of a few. . . . And now, the American people are about to pay the price of the collapse of the $513 trillion Ponzi scheme of derivatives. Yes, that’s half a quadrillion dollars.”

AFP covered a special presentation on the American Monetary Act in Washington on April 23, hosted by Kucinich and the American Monetary Institute, the premier organization for monetary reform in America.

Kucinich’s lovely wife Elizabeth introduced the speaker, Stephen Zarlenga, director of the institute, who has been described as the man who knows more about money than probably anyone else in the United States, and going back in history to the times of the ancient Spartans and the Roman republic.

At one point Zarlenga handed around to the audience a coin from ancient Rome (probably about 225 to 217 B.C.) called an aes grave, made of bronze and weighing about 274 grams. This, he explained, is an example of how money should be made, issued by the state, not by a private bank such as the Federal Reserve, and having a value assigned by law, rather than intrinsic value like gold or silver coinage. (Rome did produce gold and silver “bullion” coins, but only for trade with foreigners, not for use inside Rome.)

Zarlenga showed numerous slides to make monetary science clear to the audience, a mixture of the general public and congressional aides and interns. He pointed out that there has never been true monetary reform in America, which would consist of three elements:

1.) We need to nationalize the Fed;

2.) Banks would no longer issue credit into circulation as “money”;

3.) The government would spend new Treasury notes into circulation, to pay for needed infrastructure construction and repairs.

Until now, every attempt at real reform in America has been strangled in the cradle. Past voices for monetary sanity such as those of Reps. Louis McFadden and Jerry Voorhis were silenced.

Monetary reform has failed on a number of occasions in various countries when the reformers failed to implement all three of these elements, Zarlenga warned. For example, Britain nationalized the Bank of England in 1946, as William Temple called for in 1942, but because banks were allowed to continue to create money, within a few years everything was back to “business as usual” in Britain, and the British people enjoyed little benefit from the reform effort.

The one organization that has a reform program that is comprehensive and free of outside influence is the American Monetary Institute, which drafted the American Monetary Act. The act may be found on the Internet at: http://www.monetary.org/amacolorpamphlet.pdf .

AIG Execs Under Criminal Investigation

April 28, 2009

The troubles at AIG continue to hold the headlines, as investigators are now digging into whether Joseph Cassano, the former head of London-based AIG Financial Products, and two of his top deputies--EVP Andrew Forster and Connecticut-based managing-director Thomas Athan--committed securities fraud and other federal crimes, reports the Wall Street Journal and CBS News.

Investigators are also looking at multiple ways these executives may have misled the company's auditors and investors about the value of derivatives the firm sold, people familiar with the case told WSJ. In particular, federal prosecutors are focusing on a December 2007 investor presentation in which Cassano said write-downs tied to the swaps had reached an estimated $1.6 billion, which is now under question. (more)

Declarations for Holy War Against Germany (1933)

Some of the Declarations for War Against Germany

“Judea Declares War on Germany! Jews of all the World Unite! Boycott of German Goods! Mass Demonstrations,..!”
These were all headlines in the Daily Express on March 24, 1933.

“The Israeli people around the world declare economic and financial war against Germany. Fourteen million Jews stand together as one man, to declare war against Germany. The Jewish wholesaler will forsake his firm, the banker his stock exchange, the merchant his commerce and the pauper his pitiful shed in order to join together in a holy war against Hitler's people.”
- Daily Express, March 24, 1933.

“Each of you, Jew and Gentile alike, who has not already enlisted in this sacred war should do so now and here. It is not sufficient that you should buy no goods made in Germany. You must refuse to deal with any merchant or shopkeeper who sells any German-made goods or who patronises German ships or shipping.... we will undermine the Hitler regime and bring the German people to their senses by destroying their export trade on which their very existence depends.”
- Samuel Untermeyer, in a Radio Broadcast on WABC, New York, August
6, 1933.
Reported in the New York Times, August 7, 1933.

Joining with Samuel Untermeyer in calling for a war against Germany, Bernard Baruch, at the same time, was promoting preparations for war against Germany.
“I emphasised that the defeat of Germany and Japan and their elimination from world trade would give Britain a tremendous opportunity to swell her foreign commerce in both volume and profit.”
- Baruch, The Public Years, by Bernard M. Baruch, p.347 (New York: Holt, Rinehart and Winston, 1960).

Samuel Untermeyer was a Jewish leader and close friend of presidents Wilson and Roosevelt. Bernard Baruch was a presidential adviser to Wilson, Roosevelt and Truman.

“This declaration called the war against Germany, which was now determined on, a 'holy war'. This war was to be carried out against Germany to its conclusion, to her destruction” (Diese Erklärung nannte den Krieg gegen Deutschland, der nun beschlossen sei, einen heiligen Krieg. Dieser Krieg müsse gegen Deutschland bis zu dessen Ende, bis zu dessen Vernichtung, geführt werden).
- Dr. Franz J. Scheidl, Geschichte der Verfemung Deutschlands.

“War in Europe in 1934 was inevitable.”
- H. Morgenthau, Secretary of the U.S. Treasury, Hearst Press, September, 1933
(also quoted in “The Palestine Plot” by B. Jenson, p. 11).

“For months now the struggle against Germany is waged by each Jewish community, at each conference, in all our syndicates, and by each Jew all over the world. There is reason to believe that our part in this struggle has general value. We will trigger a spiritual and material war of all the world against Germany's ambitions to become once again a great nation, to recover lost territories and colonies. But our Jewish interests demand the complete destruction of Germany. Collectively and individually, the German nation is a threat to us Jews.”
- Vladimir Jabotinsky (founder of the Jewish 'nationalist' group, Irgun Zvai Leumi) in Mascha Rjetsch, January, 1934 (also quoted in “Histoire de l'Armée Allemande” by Jacques Benoist- Mechin, Vol. IV, p. 303).

“Hitler will have no war (does not want war), but we will force it on him, not this year, but soon.”
- Emil Ludwig Cohn in Les Annales, June, 1934 (also quoted in his book "The New Holy Alliance").

“We Jews are going to bring a war on Germany.”
- David A. Brown, National Chairman, United Jewish Campaign, 1934
(quoted in “I Testify Against The Jews” by Robert Edward Edmondson, page 188 and “The Jewish War of Survival” by Arnold Leese, page 52).

“We want to bring about a deep hatred for the Germans, for German soldiers, sailors, and airmen. We must hate until we win.”
- Lord Beaverbrook, quoted in “Niemals!” by Heinrich Goitsch.

“There is only one power which really counts. The power of political pressure. We Jews are the most powerful people on earth, because we have this power, and we know how to apply it.”
- Vladimir Jabotinsky, Jewish Daily Bulletin, July 27, 1935.

“Before the end of the year, an economic bloc of England, Russia, France and the U.S.A will be formed to bring the German and Italian economic systems to their knees.”
- Paul Dreyfus, “La Vie de Tanger” May 15, 1938.

On the 3rd of June, 1938, the American Hebrew boasted that they had Jews in the foremost positions of influence in Britain, Russia and France, and that these “three sons of Israel will be sending the Nazi dictator to hell.”
- Joseph Trimble, The American Hebrew.

“Germany is our public enemy number one. It is our object to declare war without mercy against her. One may be sure of this: We will lead that war!”
- Bernard Lecache, the president of the “International League Against Racism and Anti-Semitism,” in its newspaper “Droit de Vivre” (Right to Life), 9 November, 1938.

“The war now proposed is for the purpose of establishing Jewish hegemony throughout the world.”
- Brigadier General George Van Horn Mosely, The New York Tribune, March 29, 1939.

“I wish to confirm in the most explicit manner, the declaration which I and my colleagues made during the last months, and especially in the last week: that the Jews "stand by Great Britain and will fight on the side of the democracies." Our urgent desire is to give effect to these declarations. We wish to do so in a way entirely consonant with the general scheme of British action, and therefore would place ourselves, in matters big and small, under the co-ordinating direction of His Majesty's Government. The Jewish Agency is ready to enter into immediate arrangements for utilizing Jewish manpower, technical ability, resources, etc.”
- Chaim Weizmann, President of the World Jewish Congress, Head of the Jewish Agency and later President of Israel, the London Times, September 5, 1939, and the London Jewish Chronicle, September 8, 1939.

“The millions of Jews who live in America, England and France, North and South Africa, and, not to forget those in Palestine, are determined to bring the war of annihilation against Germany to its final end.”
- Central Blad Voor Israeliten in Nederland, September 13, 1939.

“Stop talking about peace conditions! Break Germany in pieces!”
- The Daily Herald, No.7426, 9 December, 1939.

“The Jews, taken collectively, view this war as a holy war.”
- The Daily Herald, No.7450, 1939, quoted in “Reichstagsbrand, Aufklärung einer historischen Legende,” by U. Backes, K.H. Janßen, E. Jesse, H. Köhler, H. Mommsen, E Tobias.

“Even if we Jews are not physically at your side in the trenches, we are morally with you. This war is our war and you fight it with us.”
- Schalom Asch, Les Nouvelles Litterairres, February 10, 1940.

“In losing Germany, Jewry lost a territory from which it exerted power. Therefore it was determined to re-conquer it.”
- Louis Marschalko, “The World Conquerors : The Real War Criminals.”

“The World Jewish Congress has been at war with Germany for seven years.”
- Rabbi M. Perlzweig (head of the British Section of the World Jewish Congress), Toronto Evening Telegram, February 26, 1940.

“The Second World War is being fought for the defense of the fundamentals of Judaism.”
- Rabbi Felix Mendlesohn, Chicago Sentinel, October 8, 1942.

“We are not denying and are not afraid to confess that this war is our war and that it is waged for the liberation of Jewry... Stronger than all fronts together is our front, that of Jewry. We are not only giving this war our financial support on which the entire war production is based, we are not only providing our full propaganda power which is the moral energy that keeps this war going. The guarantee of victory is predominantly based on weakening the enemy forces, on destroying them in their own country, within the resistance. And we are the Trojan horses in the enemy's fortress. Thousands of Jews living in Europe constitute the principal factor in the destruction of our enemy. There, our front is a fact and the most valuable aid for victory.”
- Chaim Weizmann, President of the World Jewish Congress, Head of the Jewish Agency and later President of Israel, in a Speech on December 3, 1942, in New York.

“Played golf with Joe Kennedy (U.S. Ambassador to Britain). He says that Chamberlain stated that America and world Jewry forced England into World War II.”
- James Forrestal, Secretary of the Navy (later Secretary of Defense), Diary, December 27, 1945 entry. Forrestal knew and wrote about the perfidies. The U.S.S. Forrestal is named after him.

Economic euthanasia: lawyer committed suicide

Kilpatrick Stockton's Mark Levy Dead in D.C. Office

Marisa McQuilken
Legal Times
April 30, 2009

Mark I. Levy

Updated -- 4pm: Mark Levy, Washington, D.C.-based counsel and chair of Kilpatrick Stockton's Supreme Court and Appellate Advocacy practice, died in the firm's D.C. office Thursday morning, the BLT has confirmed with lawyers both inside and outside the firm.

"We in the legal community are losing someone who is hard to replace," says solo practitioner Dennis Gingold, who has worked with Levy and calls him one of the district's finest appellate lawyers. "This is a tough time."

According to Metropolitan Police Department officers near the firm's offices at 607 14th Street N.W., a male individual committed suicide this morning at the 600 block of 14th Street N.W.

A man who works in the building, but not at the firm, told the BLT that by 7:45 Thursday morning, two ambulances and a fire truck were on the scene.

After the firm initially limited its comments to confirming an attorney death in the D.C. office, Kilpatrick Stockton co-managing partner Bill Dorris issued the following e-mailed statement through a firm spokesman:

With sadness we confirm that Kilpatrick Stockton attorney Mark Levy died this morning. Mark Levy was well known and highly respected for his successful appearances before the Supreme Court of the United States. We offer our deepest condolences to his family, friends and colleagues. Out of respect for his family, we cannot offer additional comments at this time.

Above the Law posted an internal e-mail sent to firm employees Thursday morning, stating that the Metropolitan Police Department was responding to "an unconscious male with a gunshot wound to the head on the 11th floor."

The Fulton County Daily Report, a Legal Times sibling publication, reported Wednesday that Kilpatrick had laid off 24 associates and counsel across U.S. offices.

More details to come as the story develops.

This article first appeared on The BLT: The Blog of Legal Times.

See also:

Kilpatrick Stockton Lays Off 24 Lawyers

Derivatives Hit Austrian Railroad With Record Loss

Derivatives Hit Austrian Railroad With Record Loss (Update1)

By Zoe Schneeweiss

April 29 (Bloomberg) -- OeBB-Holding AG, Austria’s state- owned railroad company, reported a record 966 million-euro ($1.3 billion) loss after writing down the value of derivatives that went awry.

OeBB’s 2008 loss compared with a profit of 42.4 million euros a year earlier after the company wrote down the entire 613 million-euro notional value of synthetic collateralized debt obligations. The Vienna-based company, which bought the contracts from Deutsche Bank AG in 2005 and 2006, is appealing a February court ruling dismissing a claim that the lender didn’t disclose the risks associated with the derivatives.

State-owned companies and local authorities from Germany to Italy reported more than 1.13 billion euros of losses on derivatives that allow buyers to speculate or protect against risk, leaving taxpayers to pick up the tab.

“There was a climate that pressured publicly owned companies to look for creative ways to finance themselves,” said Thomas Hofer, the Vienna-based owner of H&P Public Affairs, which advises political campaigns. “They were given the feeling of being financially negligent if they didn’t invest in derivatives.”

Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in interest rates or weather. CDOs, which package other bonds and loans into notes of varying risk and yields, are losing money as their holdings get downgraded.

‘Didn’t Fully Disclose’

“Deutsche Bank didn’t fully disclose all the risks attached to the CDOs,” Bettina Gusenbauer, an OeBB spokeswoman, said in a phone interview from Vienna.

The derivatives and the risks were fully reviewed with OeBB, a Deutsche Bank spokesman, who declined to be identified, said in an e-mail. OeBB initiated the transaction, not Deutsche Bank, the e-mail said.

Taxpayers shouldn’t “have to pick up the bill for speculative investments,” said Susanne Enk, a spokeswoman for Austria’s Federal Ministry of Transport, when asked about OeBB’s investment.

OeBB’s CDOs package credit-default swaps tied to debt including asset-backed securities and company bonds and expire between 2013 and 2015, the company said. OeBB made provisions on the securities of 420 million euros in 2008, and 157 million euros the year before, it said today.

‘Precautionary Measure’

The provisions are a “precautionary measure,” OeBB Chief Financial Officer Josef Halbmayr said at a press briefing in Vienna today. “We’ve taken all relevant measures to ensure that deals of this kind won’t take place again,” he said.

Credit-default swaps are derivatives used to protect against debt losses or speculate on credit quality, and pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to meet its obligations.

Municipal authorities across Europe are reporting losses from derivatives since credit markets unraveled in the slump triggered by the collapse of the U.S. subprime mortgage market in August 2007.

Milan’s financial police seized 476 million euros of assets from UBS AG, Deutsche Bank, JPMorgan and Depfa Bank Plc this week in an investigation into alleged fraud linked to the sale of interest-rate swaps, which are designed to protect buyers against losses caused by fluctuations in borrowing costs.

The city is suing the banks after losses on derivatives purchased in 2005, and alleges the lenders misled municipal officials on the advantages of the securities. Officials at the banks declined to comment, as did a spokesman for Milan’s city council.

Interest-Rate Swaps

In Germany, the Wuerzburg Regional Court ordered Deutsche Bank in March 2008 to cover a third of the 2.6 million euros city utilities lost in interest-rate swaps bought from the lender. A court reduced a loss claim against Frankfurt-based Deutsche Bank in July by the city of Hagen, Germany, to 1 million euros, from 47 million euros. Both decisions are being appealed.

A Deutsche Bank spokesman said the bank disclosed all risks and informed the municipalities “comprehensively” when selling derivatives in Germany.

“Swaps are like anything else where there’s a sophisticated seller and a simple-minded client,” said Anthony Neuberger, Professor of Finance at Warwick Business School in Warwick, England. “Anything complex can have effects that are different from those anticipated.”

French local authorities are susceptible to buying derivatives because the country’s rules are lax, according to a July report by Fitch.

French Rules

“The French rules, which do not limit the risk taken by local authorities using structured debt, favored the growth” of derivatives, the ratings company said.

About 25 percent of the 132 billion euros of debt owed by local public administrations in France was tied to derivatives as of January, according to Christophe Parisot, a Fitch analyst in Paris.

French Budget Minister Eric Woerth said in February that structured finance holdings don’t pose “a systemic financial and budgetary threat.”

“Structured credits are proposed only to certain clients with significant borrowings and with teams capable of following them,” Dexia SA, which received a 6.4 billion-euro bailout last year by France, Belgium and Luxembourg and which is the biggest lender to local governments, said in a January report to clients.

Derivatives Banned

Losses on derivatives led some European governments to ban local authorities or state-owned companies from investing in derivatives.

The U.K. High Court ruled that about 3.2 billion pounds ($4.7 billion) of swap contracts entered into by Hammersmith and Fulham Council were unenforceable in the 1980s. The 1997 Local Government (Contracts) Act banned investment in the derivatives, according to a spokeswoman at the Department for Communities and Local Government.

Polish municipalities can’t use derivatives, according to local-government Web site bazagmin.pl, which cites the Finance Ministry’s May 2008 interpretation of the Law on Public Finances.

In Finland, “city fathers learned it the hard way -- there’s no speculation” in the derivatives market because, “in the previous recession, some municipalities speculated on currencies” and lost, said Reijo Vuorento, planning manager at the Association of Finnish Local and Regional Authorities.

Wall Street, Banks, and American Foreign Policy

Wall Street, Banks, and American Foreign Policy
By Murray N. Rothbard, Center for libertarian Studies, 1995

Introduction by Justin Raimondo

Murray Rothbard's 1984 analysis of modern American history as a great power struggle between economic elites, between the House of Morgan and the Rockefeller interests, culminates in the following conclusion: "the financial power elite can sleep well at night regardless of who wins in 1984." By the time you get there, the conclusion seems understated indeed, for what we have here is a sweeping and compressed history of 20th century politics from a power elite point of view. It represents a small and highly specialized sample of Rothbard's vast historical knowledge coming together with a lifetime devoted to methodological individualism in the social sciences. It appeared first in 1984, in the thick of the Reagan years, in a small financial publication called World Market Perspective. It was printed for a larger audience in by the Center for Libertarian Studies in 1995, and appears in 2005 online for the first time. Theoreticians Left and Right are constantly referring to abstract "forces" when they examine and attempt to explain historical patterns. Applying the principle of methodological individualism— which attributes all human action to individual actors—and the economic principles of the Austrian School, Rothbard formulated a trenchant overview of the American elite and the history of the modern era. (more)

GLOOM, DOOM AND DEMOCRACY

GLOOM, DOOM AND DEMOCRACY by Brother Gregory Williams April 30, 2009 NewsWithViews.com The last thing people want to read is another article on gloom and doom. Sure, the world is poised on the brink of one of the worst economic collapses in history. Sure, people are losing their jobs, businesses, homes and even their life savings, followed by hyperinflation to get what's left. Sure, political leaders have sold the people out to special interests. But lets look on the bright side. (more)

UE: istituti di moneta elettronica

Risoluzione legislativa del Parlamento europeo del 24 aprile 2009 sulla proposta di direttiva del Parlamento europeo e del Consiglio riguardante l'avvio, l'esercizio e la vigilanza prudenziale dell'attività degli istituti di moneta elettronica, che modifica le direttive 2005/60/CE e 2006/48/CE e che abroga la direttiva 2000/46/CE (COM(2008)0627 – C6-0350/2008 – 2008/0190(COD))
(segue)

MONETA MONDIALE UNICA? TREMONTI, SI' MA...

CRISI: MONETA MONDIALE UNICA? TREMONTI, SI' MA CON DOPPIA CIRCOLAZIONE

(ASCA) - Roma, 30 apr - Una moneta unica mondiale? Perche' no, ma prevedendo una ''doppia circolazione''. E' la posizione del ministro dell'economia, Giulio Tremonti, che giudica ''di straordinario interesse'' l'idea del governatore della banca della Cina. In effetti, e' stato il Fondo Monetario Internazionale ad introdurre il tema dei cosiddetti 'diritti speciali di prelievo' attraverso una specie di 'moneta sintetica' uguale per tutti i Paesi e il governatore della Cina si e' detto d'accordo. Il tema e' stato discusso nella presentazione del libro di Tommaso Padoa Schioppa 'La veduta corta''.

Tremonti ha spiegato che ''il mondo e' unico, il mercato e' unico. Possiamo avere monete diverse?''. Il Ministro ha pero' fatto presente che ''in Paesi come il Canada e il Belgio, la parola 'paniere' non sarebbe capita''. Ma una ''soluzione'' si puo' trovare. E cosi' il ministro ha lanciato la proposta di una ''doppia circolazione'', con qualche allusione alla vicenda dell'euro. Seduto accanto a lui, Padoa Schioppa, componente del board della Bce ai tempi dell'introduzione dell'euro, ha mostrato un atteggiamento piuttosto freddo. ''E' meglio avere una moneta unica mondiale per denominare le transazioni mondiali e, raso terra, conservare le nostre vecchie e nuove monete per le operazioni locali''.

lsa/cam/rob

Italy backs idea of new global currency

• Reuters, Thursday April 30 2009

ROME, April 30 (Reuters) - Italian Economy Minister Giulio Tremonti backed on Thursday the idea of a new global currency for international transactions, while keeping existing currencies for domestic use.

Tremonti applauded a proposal made last month by China's central bank governor Zhou Xiaochuan to create a new global reserve currency, but he said this should not mean the end of existing domestic units.

"The Chinese governor's idea is of extreme interest, an idea that evokes a single world currency," Tremonti said at a book presentation in Rome, adding that it may nonetheless be too complicated for ordinary citizens. "It would be better to have dual circulation, a global currency for international operations and local currencies for local operations," Tremonti said.

The Real Source of Prosperity is You

The Real Source of Prosperity is the Human Soul

by Richard Cook, April 30, 2009

This page contains my blog on current events from the perspective of monetary and economic reform. This is a huge topic that connects with the material presented in my new book, We Hold These Truths: The Hope of Monetary Reform. To order the book, please contact my publisher, Tendril Press. Order Here

Since I began to write on economics and monetary policy I have argued that we should abolish our bank-centered, debt-based monetary system and replace it with a system where credit is viewed as a public utility. This would lead to money controlled by the people’s elected government and issued both for common needs, such as education, health care and infrastructure, and as a citizens’ dividend reflecting our fair share in the bounty of our producing economy.

With such reforms a decent living could be assured for everyone on the planet. But neither this nor any other reform would be the cause of our prosperity. Rather good public policy can only be a reflection of the goodness, faith, honesty, commitment and trust of the virtues that lie within the hearts and souls of “We the People.” From an economic standpoint, the monetary system should reflect the productivity of the economy, its ability to produce goods and services, and the need to move those goods and services in trade. But even this productivity originates with the creative spark within ourselves.

If we manifest positive qualities, we will naturally create systems and institutions that assure our sustenance. If, on the other hand, we are selfish, mean-spirited, and wracked with greed and fear, we will create dysfunctional systems and institutions like many of those we are afflicted with today. We will create a world where the biggest and most ornate building in town is a bank run by officers and shareholders who make their living through usury and debt-extortion. Surrounding the bank will be a police station, a prison, and a military base. The finest homes in town will belong to the executives of these institutions. The rest of the population will be ranked according to their usefulness to the system with an unemployed underclass available to fight society’s wars.

But if we want the world to change, we all need to work at being better and more complete and balanced people. Only then will we have a right to hold others to account. And I do mean work. We need to find those qualities within ourselves that reflect light, peace, harmony, and love, then bring them to birth through action. As Jesus said, we need to “love our neighbor as ourselves.” But he also drove the money-changers from the temple. He stood for both peace and justice.

Who then is this “ourselves”? It is who we really are. Our primal being. It is that naked sense of peace and goodness that comes from living in the Now, as Eckhart Tolle describes it. That is where our real prosperity comes from. The feeling of happiness just to BE, not lost in regret for the past or worry about the future, is what counts on a day-to-day basis. When we experience this state, we will want others to experience it also. Then the world will change once and for all. Then we will have Heaven on earth. Economic and monetary reform will then take place naturally without any kind of struggle. Credit viewed as a public utility will be part of any such reform because it corresponds to natural law, the law Jefferson referred to when he wrote the Declaration of Independence. Another key aspect of natural law is that human beings can only reach their potential in an environment of social, political, and economic freedom.

Some readers do not like spiritual references when reading about economics. If it bothers you, I apologize. But man is above all a spiritual being, not just a thinking animal, as the Founding Fathers understood. Of course we must continue to promote social and economic reform so people will understand there is a better way and not be discouraged or seduced by the antics of the evildoers.

Here’s a quote from Eckhart Tolle’s The Power of Now: “For example, many people are waiting for prosperity. It cannot come in the future. When you honor, acknowledge, and fully accept your present reality—where you are, who you are, what you are doing right now—when you fully accept what you have got, you are grateful for what you have got, grateful for what is, grateful for Being. Gratitude for the present moment and the fullness of life now is true prosperity. It cannot come in the future. Then, in time, that prosperity manifests for you in various ways.” (p. 86-87)