World Bank - search results
WASHINGTON - March 19 - Today several Non-Governmental Organisations (NGOs) condemned a statement by the World Bank’s International Finance Corporation, IFC  which defends the record of a Honduran palm oil company, Grupo Dinant, implicated in dozens of murders as well as other human rights abuses. The IFC statement explicitly admits to supporting training for the company’s armed security guards.
The NGOs are : Friends of the Earth International, Global Forest Coalition, Global Initiative for Economic, Social and Cultural Rights, Urgewald, Rights Action, Rettet den Regenwald/Rainforest Rescue, Global Justice Ecology Project, and Biofuelwatch.
A World Bank Ombudsman  is currently investigating an IFC loan of $30 million for Grupo Dinant which was approved in 2009, at least half of which has already been disbursed.
This month, an Open Letter by 17 NGOs  and an international petition signed by over 63,000 people  have protested the loan and called on the World Bank to immediately cease their support for Grupo Dinant.
Since 2009, international human rights bodies have documented dozens of murders of peasant activists and their supporters in connection with land conflicts involving Grupo Dinant, the company’s armed security guards and Honduran military and police.
The evidence includes a fact-finding mission report by international human rights organisations in March 2011, a hearing before the Inter-American Commission of Human Rights in October 2011, an international public hearing on human rights in the region in May 2012  and a report about human rights abuses attributed to military forces in the region by Rights Action, published this month .
The recent Rights Action report confirms that at least 88 members and supporters of peasant movements have been murdered in targeted killings in the Bajo Aguan Valley over the past three years. It documents the direct involvement of Grupo Dinant’s armed security forces in the violence against peasant movements. Contrary to the World Bank’s claims that the violence ended in 2012, two peasant activists were found tortured and murdered in February 2013. 
Annie Bird from Rights Action says: “It is a serious indictment of World Bank’s role in Honduras’s land conflicts that their International Finance Corporation admits to directly engaging with the training of Grupo Dinant’s paramilitary ‘security guards’. It is not clear whether this engagement is a response to concerns over human rights abuses but retraining paramilitaries implicated in killings is never an acceptable response. The World Bank must cease such engagement and stop supporting Grupo Dinant at once.”
Almuth Ernsting from Global Forest Coalition and Biofuelwatch adds: “The World Bank’s claims that killings are being investigated by Honduran courts with full cooperation from Grupo Dinant contradict the findings of human rights missions which show a state of total impunity surrounding those murders. Such a state of impunity has been confirmed by the UN Working Group on Mercenaries. Not only must the World Bank cancel its loan but there needs to be a full investigation into their role in human rights abuses in Honduras.”
In 2011, the German development bank, DEG, cancelled a loan for Grupo Dinant due to the company’s involvement in serious human rights abuses.Yet the World Bank continues to back the company and dismiss all independent evidence, as their recent statement shows.
Jeff Conant from Friends of the Earth US adds: “The World Bank’s statement on Bajo Aguan reveals the extent of their complicity with a palm oil company implicated in some of the most serious human rights abuses in Central America today. Years after a damning audit of their palm oil funding and a supposed overhaul of their policies, the World Bank is legitimising the use of armed paramilitaries in land conflicts against peasants who are trying to reclaim their own land, dismissing a vast volume of evidence from independent fact finding missions.”
The NGOs demand cancellation of the World Bank’s loan to Grupo Dinant and an immediate full and independent investigation into the World Bank’s involvement with Grupo Dinant, which must go beyond the remit of the current Ombudsman investigation.
Part 1 of 3
Port-au-Prince, Haiti, Dec. 20 – A $61 million dollar, eight-year World Bank community development project implemented across half of Haiti has successfully repaired roads, built schools and distributed livestock. At the same time, however, Project for Participatory Community Development (PRODEP) – Projet de développement communautaire participatif – has also helped undermine an already weak state, damaged Haiti’s “social tissue,” carried out what could be called “social and political reengineering,” and raised questions of waste and corruption.
As part of an overall strategy encouraging communities to participate in the choice of development project in their regions, PRODEP awarded $17,500 grants to almost 1,500 community based organizations (CBOs) in 59 communes. But an eight-month investigation by Haiti Grassroots Watch (HGW) found that PRODEP did much more than pay for projects.
By encouraging groups to form in order to get cash grants, PRODEP contributed to Haiti’s growing status as an “NGO Republic.” The projects also damaged traditional solidarity systems and in some cases even strengthened the power of local elites.
Although HGW’s extensive fieldwork was concentrated in the Southeast, new reports by economists from World Bank – the institution that fundeed PRODEP – support the idea that the findings can be extrapolated.
In their articles and a new book –Localizing Development – Does Participation Work? – Ghazali Mansuri and Vijayendra Rao found that many “community driven development” or CDD projects tend to benefit the “wealthier, more educated” participants who are “often more politically connected” and who “tend to make decisions in community meetings.” These same “elites” can even build political support and run for office, the economists said.
Ironically, PRODEP’s national director touts the creation of new politicians.
At a press conference last July, Michael Lecorps, director of the Haitian government’s Office of Monetization of Aid and Development Projects BMPAD (Bureau de monétisation des programmes d’aide au développement) which oversees PRODEP, said: “There are a lot of people who became deputies [parliamentarians] because of PRODEP. They created platforms, they became leaders!”
While Lecorps may see the use of World Bank dollars to consolidate political fiefdoms as positive, others associated with PRODEP – even those sitting on the local community councils that oversee the projects – do not. Emile Theodore, a farmer outside the southeastern town of Bainet where HGW centered their research, deplored this construction of “political capital” as well as the sudden birth of dozens of “organizations” created solely to go after the funding.
“The fact that there was $17,500 for small projects meant that a lot of organizations got created so they could get those grants,” Theodore told HGW.
- What is the PRODEP project? What are its objectives and were they achieved?
- What do the projects look like in and around Bainet, in Haiti’s Southeast Department?
- How has the work been received by participants and staff at implementing agencies?
- What are the principal findings of the World Bank economists who warn of the dangers of “development fads”?
- What long-term harm might have been done to Haiti’s society and “social tissue”?
What is PRODEP?
In 2004, the World Bank launched PRODEP in Haiti. The work is mostly subcontracted to two international aid agencies: CECI (Centre d’Etude et de Cooperation International or Canadian Center for International Studies and Cooperation) and PADF (Pan-American Development Foundation). CECI and PADF set up technical bureaus throughout the country where staffers surveyed existing organizations and oversaw the creation of new ones.
Based in part on a similar program in Brazil, a key intent was to calm the population.
“PRODEP began after all the political turbulence in the country,” explained Rincher Fleurent-Fils, coordinator of PRODEP’s technical office for the Southeast Department, in Jacmel. “The concern was to create social peace.”
This claim is substantiated by Bank documents written in conjunction with other principal supporters and funders of the interim government that was put into power following the illegal overthrow of President Jean-Bertrand Aristide in 2004.
The Interim Cooperation Framework (ICF) – released in July 2004 by the World Bank, the United Nations, European Union and Inter-American Development Bank – is a policy document meant to guide the “democratic transition” from the illegal removal of a head of state to a democratically elected government.
“The ICF is inspired by lessons learned in similar needs identification exercises in postconflict countries, such as Afghanistan, Iraq, East Timor and Liberia,” the authors note, even though the realities of those countries differ drastically with Haiti.
In fact, the ICF can be seen as a roadmap meant to insure the Haitian people accept the unconstitutional regime change and UN blue helmet mission. The map was laid out, the document claims, with participation from the “Haitian Government” and “civil society” – but was characterized by “the strong involvement of 26 bilateral, multilateral and United Nations agencies,” in other words, “the friends of Haiti.”
Among other actions, the ICF recommended the “establish[ment] of decentralized participatory structures” since local authorities are “weak.” The ICF then goes on to call for “rapid impact” and decentralized development “interventions” outside of government structures. Instead, the would be implemented by “the specialized local national organizations using a participatory approach in accordance with models already tested in Haiti” the report reads.
“Where organizations do not exist, they will be created,” the ICF says.
Page from the ICF.
According to the World Bank’s own reports, at least 232 new CBOs were “created as a result of the project” and then built them into regional councils and federations, almost like a set of private “Communal Assemblies,” the participatory assemblies called for in the Haitian Constitution which have yet to be established. A virtual parallel state. [For more on this “parallel state,” see Story 3]
The new and existing CBOs were given training and structured into regional councils called COPRODEPs. With assistance from CECI and PADF, the new councils oversaw the submission of projects from CBOs, voted on which ones PRODEP should fund and were mandated to supervise them. The projects fell into three categories: “productive” related to livestock, agriculture, fishing, etc.; “social” such as a community stores, schools or community centers; and “infrastructure” such as bridges, roads and water systems [see PRODEP photo, below]. According to the World Bank, the projects built or rehabilitated 785 kilometers of road, 444 water distribution points and 448 classrooms, and also contributed to building or stocking other community services like health clinics.
When all was said and done, the World Bank spent a total of $29 million on 1,519 projects.
(The groups actually got less than $17,500. According to a PRODEP/PADF official, 12 percent of the $17,500 went for administration: three percent ($525) for the COPRODEPs and nine percent ($1,575) went to the technical office overseeing the region.)
An additional $32 million – more than half the $61 million budget – went for training, administration, evaluation and other costs for BMPAD, CECI and PADF staff, according to the Bank. (Because HGW was never provided a budget or a copy of the evaluation completed in June 2012, despite being repeated promised that document, it was impossible to verify how money was actually spent.)
Building “social cohesion”
The PRODEP process was far from organic.
PRODEP staff and the central government had control over which organizations were given the right to submit projects, sit on the councils and decide on projects. According to Fleurent-Fils, an organization had to have been officially recognized by both the local mayor’s office and by the Ministry of Social Affairs to qualify.
“We looked at all the groups [in a region], to see what kind of organizations they were. Are they really community organizations?” PRODEPs Southeast coordinator Fleurent-Fils explained. “Once we were in touch with them, we helped them restructure themselves so they could enter into the PRODEP system.”
PRODEP officials claim that “over 70 percent” of projects were “successful,” first of all because the concrete goals were achieved, and secondly because they created “social cohesion.” This is a term used in PRODEP documents and by PRODEP staff, such as Lecorps and like Arcène Jerome, who heads up PRODEP in the five geographic departments where PADF ran the program.
“When all of the community organizations are federated into the COPRODEP, we have achieved our goal of reinforcing organizational capacity, reinforcing ‘networking,’ meaning links between them, to create what we call ‘social cohesion,’ because as we say, the objective is to construct ‘social capital,’” according to Jerome.
But Jerome’s claims run counter to the recent findings of the World Bank economists.
In their June 2012 paper “Can Participation Be Induced? Some Evidence from Developing Countries,”Mansuri and Rao said that “there is little evidence that induced participation builds long-lasting cohesion, even at the community level. Group formation tends to be both parochial and unequal… [P]eople are induced to participate and build networks. But they do so in order to benefit from the cash and other material payoffs provided by the project.”
“Overall, projects tend to have very limited impact in building social cohesion or in rebuilding the state. They tend to exclude the poor and are dominated by elites,” the authors noted. “Induced participation – particularly when it is packaged within a project – is almost set up for failure.”
Who is right? PRODEP or the World Bank authors?
Have “social capital” and “social cohesion” been constructed? Are 70 percent of projects successful? What is “success”?
Part 2 of 3
Port-au-Prince, Haiti, Dec. 20 – A $61 million dollar, eight-year World Bank community development project implemented across half of Haiti has successfully repaired roads, built schools and distributed livestock. At the same time, however, the Project for Participatory Community Development (PRODEP) – Projet de développement communautaire participatif, has also helped undermine an already weak state, damaged Haiti’s “social tissue,” and carried out what could be called “social and political reengineering,” raised questions of waste and corruption, and contributed to Haiti’s growing status as an “NGO Republic” by creating new non-governmental organizations (NGOs). [see Story 1 for background]
Haiti Grassroots Watch took a look at projects in and around Bainet. All visits and interviews in the Southeast took place in August, 2011.
According to PADF, PRODEP funded a total of 60 projects in the commune of Bainet – six in the small coastal town itself, and six in each of Bainet’s nine communal sections.
HGW visited two in town. The first, the water purification project run by OFB (Òganizasyon Fanm Bene or Organization of Bainet Women) in downtown Bainet, and financed with a grant of 752,320 gourdes or about $19,000, was never operational, according to observers and an OFB member who asked that her name not be used.
Building housing the water purification project. It has never functioned.
“PRODEPT/PADF gave us a bunch of machinery that never worked,” she said unlocking the storefront. Inside, dust-covered machinery filled the room. Plastic bags that were supposed to be filled with purified water lay in flat heaps on the floor.
Nearby, the “OPA-net” cyber-café, was also locked up tight. Run by OPA (Oganizasyon Peyizan an Aksyon or Organization Peasants in Action) and funded with almost $20,000 according to World Bank documents, OPA-net has been shut for nearly three years now. Dusty screens, towers, chairs, desks and a dirty photocopy machine fill the tiny rented space.
A view of most of the cyber-café’s equipment.
OPA coordinator Saint-Gladys Fleuranville said the project came to halt on January 12, 2010, the day of the deadly earthquake, because the dish connecting the center to the Internet was displaced.
“It was working very well until then,” he said. “PADF has a Reinforcement Program that will help us. We are waiting for them because this is the only cyber-café in the entire community.”
Asked about the water and cyber-café projects, Rincher Fleurent-Fils, coordinator of the PRODEP/PADF technical bureau in Jacmel, acknowledged that some ventures had “a few problems” that still needed to be addressed, such as the cyber-café’s internet connection. “And,” he said, “they couldn’t pay their bills.”
Fleurent-Fils’ supervisor, Arsel Jerome who oversees the PRODEP program for PADF in five of Haiti’s departments, said he was aware that both the water purification project and the cyber-café projects were closed down.
“The way those projects began was a little amateurish,” Jerome admitted. So much so that 119 of the 700 or so projects PADF oversaw needed some kind of “correction” or “reinforcement,” he noted.
PADF’s PRODEP director, Arsel Jerome.
HGW visited four more projects in Bainet’s 9th communal section, Anba Grigri. Anba Grigri sits on the other side of the Bainet River along a bumpy, muddy and rocky road. The hamlet and surrounding hills are home to about 10,000 people who have no electricity, access to clean drinking water or modern sanitation. Farmers grow potatoes, sweet potatoes, corn, sorghum and herd cows and goats; coastal residents fish. For weeks at a time, villagers from Anba Grigri cannot reach Bainet because of the rain-bloated river. After Hurricane Isaac passed over Haiti in August 2012, the community was cut off to the east for three months.
One of the most infamous PRODEP grantees is the fishing project. The OD9S (Oganizasyon pou Devlòpman 9vyèm Seksyon or Organization for the Development of the 9thSection) got $17,500 to buy boat engines, netting, line, coolers, a generator and batteries.
Almost immediately, the organization split over how the money should be used. The fishermen prevailed, buying new engines and other materials that helped them go further out to sea and catch more fish. But there were accusations of faked receipts with inflated costs for materials and theft. The resulting fish are still being sold at regular market price, according to an OD9S member who spoke to HGW on camera but asked that his name not be used.
One of the boats built with the PRODEP money.
The fisherman also admitted that at least one engine and some of the money meant for maintenance “disappeared,” and that other gear had been lost due to “natural causes.”
“We hope PRODEP-PADF can help us so we can buy more equipment,” he added.
The Community Store of Bainet sits on the main road that runs through Anba Grigri. It stocks the same, mostly imported items that jam shelves in many small stores or “boutiques” throughout Haiti: canned goods, rice, beans, spaghetti, cooking oil, tomato paste, crackers, rum and other products. The Community Store sells its products at the same price as other local vendors and doesn’t receive much traffic. During a HGW visit, store manager Delva Henry asked a friend to “buy” something for HGW’s camera.
Delva Henry and friends hang out on the porch of the store.
“There are a lot of other stores in our communal section,” the store manager admitted. He said he was thinking of “writing a proposal” to ask for more money so that he could better stock his store, which he runs with his wife.
Community members reported that the store is no different than other markets.
“It’s a private business,” according to François Brunel, a member of OJDB (Oganizasyon Jen pou Devlòpman Bene or Organization of Bainet Youth for Development). Brunel and others reported that the store offers no credit or discounts to local residents. “It’s a success because it exists and it is functioning, but they say you have to be a member of their organization to get a little credit. I think all members of the community should benefit.”
Nearby, the Coordination of Bainet Woman (Kòdinasyon Fanm Bene or KOFAB) received a grant to set up a corn mill. HGW noted that it was up and running and appeared to be frequented by members of the community.
The mill in action.
“Before we had the mill, we had to thrash corn and sorghum with a pestle… or walk a long way,” said an elderly woman. “The mill has made things easier.”
But that’s not to say that KOFAB runs it.
“The project is a success because as you can see, it is employing me!” explained Fabien Jean André Paul who said he manages the mill business, rather than KOFAB. “From time to time I meet with the women and give them a report.”
Mill manager Fabien Jean André Paul.
Another project also produced results: goats. A peasant organization received a grant to buy goats, which reproduced enough so that almost every member of Mouvman Peyizan Kay Anwò (Houses on the Hill Peasant Movement) now has a goat.
“Before, not too many of our members had goats. Now almost everyone has a goat because our organization got the project funding,” said member Alezi Jean Bastien. “Life has improved a little bit for people because the goats are worth 2,000 or 3,000 gourdes (about $50-75) each.”
Assessments and Evaluations
PRODEP’s track record in and around Bainet is not as good as the “over 70 percent success” touted by PRODEP and PADF. Two of the Bainet projects have been closed for years, and of the six Anba Grigri projects, two – 33 percent – were barely operating.
“The projects didn’t work out the way they were supposed to,” said COPRODEP community council member Emile Theodore. “The majority of them have disappeared. You can’t find a trace of them. There are others that are run by a husband and wife, like the community store. As for the fish project, a little group of people is running that one also.”
The main reason, Theodore and others say, is that once the money is disbursed, there is little follow-up and verification.
“In some cases, it takes a while for that [supervision] to happen,” admitted Jerome. He denied knowing of any cases of corruption. “Let’s just say that sometimes there are administrative problems.”
But in the evaluations posted online, in the literature distributed at news conferences, and in interviews, PRODEP and PADF officials made no mention of any irregularities.
The most recent documents available online call PRODEP performances “satisfactory” with no more detail, although a 2010 document does note that evaluation had been a “main challenge.” But if “over 70 percent” of the projects were “successful,” by deduction somewhere between 20 and 30 percent were not, meaning that funding for some 400 projects – over $6 million – has been wasted.
PRODEP and World Bank reports do not mention whether or not people accused of corruption or waste were brought to justice or held accountable.
Despite numerous promises, HGW never received a copy of the PRODEP final evaluation that was completed in June 2012.
What HGW did discover was that the apparent lack of monitoring, verification and evaluation are not unique to Haiti. In their survey of dozens of so-called “Community Driven Development” (CDD) programs around the world, World Bank economists Mansuri and Rao noted “a pervasive inattention to monitoring systems.” They found that only 40 percent of CDD projects they surveyed had any kind of monitoring and evaluation at all.
“The majority of project managers participating in the survey stated that the Bank’s operation policies do not provide incentives for effective monitoring and evaluation,” the authors wrote.
With these kinds of numbers, does PRODEP have the right to call its project a “success”?
Part 3 of 3
Port-au-Prince, Haiti, Dec. 20 – A $61 million dollar, eight-year World Bank community development project implemented across half of Haiti has successfully repaired roads, built schools and distributed livestock. At the same time, however, the Project for Participatory Community Development (PRODEP) – Projet de développement communautaire participatif, has also helped undermine an already weak state, damaged Haiti’s “social tissue,” carried out what could be called “social and political reengineering,” raised questions of waste and corruption and contributed to Haiti’s growing status as an “NGO Republic” by creating new non-governmental organizations (NGOs).
Although Haiti Grassroots Watch’s extensive fieldwork was concentrated in the Southeast, a report by two World Bank economists supports the idea that the findings can be extrapolated.
In their articles and a new book – Localizing Development – Does Participation Work? – Ghazali Mansuri and Vijayendra Rao found that many “Community Driven Development” or CDD projects tend to benefit the “wealthier, more educated” participants who are “often more politically connected” and who “tend to make decisions in community meetings.” [See stories 1 and 2]
Thanks to PRODEP, Haiti’s “failed state” fails again
One of the most questionable outcomes of the PRODEP system is what appears to be a deliberate undermining of Haiti’s “failed” state.
For decades, development and emergency funding has mostly bypassed the Haitian state, which many foreign governments and agencies dismissed as corrupt and inefficient. There were and still are internal reasons for Haiti’s poorly run government institutions. But, as Oxfam Senior Policy Advisor Angela Bruce Raeburn recently wrote, “Understanding how the US and other international donors have bypassed the Haitian government in the past is key to understanding” Haiti’s weak state of the present.
A 2011 study from the UN Office of the Special Envoy showed that in 2007, for example, only three percent of bilateral aid, and 16 percent of multilateral aid, was “budget support,” meaning support for government ministries and programs, including communal section elected officials and their budgets.
Analysis of ODA (Overseas Development Aid) to Haiti in 2007. Bilateral donors
gave only 3 percent to support the government’s budget, while multilateral’s
gave only 16 percent.
The document states, however, that the most effective way for aid to strengthen public institutions is by channeling through them. However in Haiti “most aid is still channeled in the form of grants directly to international multilateral agencies, and non-state service providers (NGOs and private contractors).”
Deputy Special Envoy Dr. Paul Farmer prefaced the report by noting that “creating jobs and supporting the government” is key to ensuring “access to basic services.” He called on donors “directly invest in the Haitian people and their public and private institutions. The Haitian proverb sak vide pa kanpe – “an empty sack cannot stand” – applies here. To revitalize Haitian institutions, we must channel money through them.”
“Community driven development” (CDD) projects like PRODEP also work better when they work with local governments, according to World Bank economists Mansuri and Rao. But the PRODEP program deliberately channeled its funding almost exclusively to non-state service providers: the agencies CECI and PADF, and the so-called community based organizations or CBOs. [see Story 1]
What might have made more sense was to bolster Haiti’s local rural governments – the CASEC (Conseil d’administration de section communale or Communal Section Administrative Council – whose budgets pale in comparison.
Empty CASEC office in Anba Grigri.
In 2008, six CBOs in Anba Grigri received nearly $100,000 altogether, while the local CASEC had only about $6,500 for the entire year – to building a “community center,” repair a road, or host the town’s annual celebration.
Construction of a parallel government?
Even before PRODEP began, the World Bank and other donors called for the creation of organizations to “facilitate… rapid impact” decentralized “interventions” outside of local government structures. [see Story 1]
PRODEP accomplished this by working with existing CBOs and by helping create new ones, and then by offering training and support to create COPRODEP council, for which the World Bank and PRODEP implementers had even more in mind.
“The goal is for the COPRODEP to mature from a project-specific tool into a locally driven self-sustaining community institution, managing funds from multiple sources and supporting the institutional capacity of local public institutions,” according to 2010 World Bank document justifying $15 million in additional PRODEP funding.
COPRODEPS are today called CADECs” (Conseils d’Appui de Développement Communautaire or Councils to Support Community Development). PADF and CECI have been contracted to help the CADECs “in becoming independent non-profit associations that may later develop into Non-Government Organizations (NGOs) with the capacity to support local public institutions, projects, and programs,” according to the World Bank document. Local elected officials and “notables” are invited to sit on the councils, but 80 percent of seats go to CBOs.
“It’s a little revolution taking place at the departmental level today,” explained Arsel Jerome, who heads up PRODEP in the five geographic departments where PADF ran the program.
“The big challenge for us is to institutionalize PRODEP and for the CADECs to become permanent local structures that run all local community development activities.”
What could be seen as a decentralization of “The Republic of NGOs” has only reached about half of Haiti’s 140 communes, but PRODEP officials recently said they are seeking $100 million to fund a nationwidePRODEP 2.
Harm to the grassroots?
In addition to undermining local authorities, PRODEP’s method also appears to have hurt local grassroots organizations and what the World Bank economists call “organic” or “endogenous” participation, the kind of organizing and participation that drives social movements.
Elace Dirou, a farmer and member of Kòdinasyon Oganizasyon Bene (KOB) or Coordination of Bainet Organizations, lamented that “when these projects come into our communities, they actually destroy organizations. They make people become enemies. People that used to share what little they had – salt, matches, etc. – now turn their backs.
Dirou said that KOB – founded in 1990, during the euphoric days of the democratic and popular movement – abstained from participating in PRODEP when it realized the social and political reengineering that could result from the project.
Anthropologist Mark Schuller has been documenting such societal changes since 2001.
Professor at the Northern Illinois University as well as the State University of Haiti, and author of the recently published Killing With Kindness – Haiti, International Aid and NGOs, Schuller said, “ With the influx of NGOs and projects, people lose their sense of solidarity, of working together. I think this is one of the most direct effects NGOs have had here. NGOs are based on contracts, on money, on ‘what can you do for me?”
“Because foreigners are the ones helping, after a while, people even cease to believe in Haitians! They say ‘Haitians can’t do anything’ because the NGO is doing all the work in their neighborhood… It has a direct impact on peoples relationship with one another, with how they work together.”
While PRODEP documents and officials claim the program aimed to “improv[e] community governance and build social capital,” the World Bank economists who surveyed CDD projects worldwide said that was nearly impossible.
In their June 2012 paper “Can Participation Be Induced? Some Evidence from Developing Countries,” Mansuri and Rao concluded “the idea that all communities have a ready stock of ‘social capital’ that can simply be harnessed is naïve in the extreme.” They also note, in a paper a year earlier, that “participation [in CDD projects] has little effect on the exercise of voice or on community organized collective action outside the participatory structure. Instead, some evidence points to a decline in collective activities outside the needs of the project.”
“Induced participation” is not the same as homegrown. Organizations that “arise endogenously” are part of social movements, while “induced” ones tend to organize because they are seeking “cash and other material payoffs,” the authors note.
Anba Grigri saw the birth of a number of new so-called CBOs.
“Yes, there are a lot of organizations created because of what PADF is doing. They are waiting for PADF to fund them,” according to Jean Louis Nicolas, a local elected official.
CASEC Jean Louis Nicolas.
Schuller has noted the same phenomenon in Haiti’s capital.
“There are a lot of organizations founded to channel funding from ‘NGOs,’” he said. “You could call those organizations ‘fake’’ or maybe ‘pocket organizations,’ because they have a piece of paper in their pocket that says they are an organization, but for the majority of the population, they don’t really exist.”
One final negative effect noted in the Southeast as well as by Mansuri and Rao is that the people and organizations that tend to benefit the most in CDD projects in poor countries are those who enjoy privilege and power at the local level. This phenomenon is known as “elite capture,” and was listed as a risk in early PRODEP documents.
Mansuri and Rao’s survey found that in poor countries, “[a] few wealthy, and often politically connected, men – who are not necessarily more educated than other participants – tend to make decisions at community meetings.”
Like many others in and around Bainet, François Brunel, a member of OJDB (Oganizasyon Jen pou Devlòpman Bene or Organization of Bainet Youth for Development), voiced concerns that the projects and their benefits were being used to further political careers. Brunel said CBOs that won the approval of the council were those that “were in the same political group” as powerful council members.
“They made their choices with elections [inside the council], but in those elections, if you weren’t a good ‘partner’ of the council members, your project would not be chosen,” he said.
Those whose projects were funded voiced similar concerns. The corn mill employee, Fabien Jean André Paul, told HGW that organizations “had to do a kind of campaign” to make sure they got the votes they needed in order to receive their funding.
A “successful approach”?
According to Mansuri and Rao, over the past decade the World Bank has spent some $80 billion dollars on CDDs and participatory development projects worldwide. At least $61 million was spent in Haiti.
Was it and is it a success?
Yes, according to its stated objectives. According World Bank documents posted online, the projects built or rehabilitated 785 kilometers of road, 444 water distribution points and 448 classrooms, and also contributed to building or stocking other community services like health clinics.
But what about the 20-30 percent of the projects which failed? Where did the $6 million in funding money go?
More than half of PRODEP’s $61 million – some $32 million dollars – went to the agencies overseeing the project. How was that money used?
Even if the creation of new CBOs was an objective, don’t these “induced” organizations harm Haiti’s social tissue and the existing grassroots groups?
And isn’t it likely that the monetization of community work and of relationships has a negative effect, as the World Bank economists and anthropologists have claimed?
Finally, will the construction of a parallel state, a “permanent local development structure” dependent on foreign aid, contribute to Haiti’s economic development and transition to democracy?
Haiti Grassroots Watch is a partnership of AlterPresse, the Society of the Animation of Social Communication (SAKS), the Network of Women Community Radio Broadcasters (REFRAKA), community radio stations from the Association of Haitian Community Media and students from the Journalism Laboratory at the State University of Haiti.
“The powers of financial capitalism had another far reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.” —Prof. Caroll Quigley, Georgetown University, Tragedy and Hope (1966)
Iraq and Libya have been taken out, and Iran has been heavily boycotted. Syria is now in the cross-hairs. Why? Here is one overlooked scenario.
In an August 2013 article titled “Larry Summers and the Secret ‘End-game’ Memo,” Greg Palast posted evidence of a secret late-1990s plan devised by Wall Street and U.S. Treasury officials to open banking to the lucrative derivatives business. To pull this off required the relaxation of banking regulations not just in the US but globally. The vehicle to be used was the Financial Services Agreement of the World Trade Organization.
The “end-game” would require not just coercing support among WTO members but taking down those countries refusing to join. Some key countries remained holdouts from the WTO, including Iraq, Libya, Iran and Syria. In these Islamic countries, banks are largely state-owned; and “usury” – charging rent for the “use” of money – is viewed as a sin, if not a crime. That puts them at odds with the Western model of rent extraction by private middlemen. Publicly-owned banks are also a threat to the mushrooming derivatives business, since governments with their own banks don’t need interest rate swaps, credit default swaps, or investment-grade ratings by private rating agencies in order to finance their operations.
Bank deregulation proceeded according to plan, and the government-sanctioned and -nurtured derivatives business mushroomed into a $700-plus trillion pyramid scheme. Highly leveraged, completely unregulated, and dangerously unsustainable, it collapsed in 2008 when investment bank Lehman Brothers went bankrupt, taking a large segment of the global economy with it. The countries that managed to escape were those sustained by public banking models outside the international banking net.
These countries were not all Islamic. Forty percent of banks globally are publicly-owned. They are largely in the BRIC countries—Brazil, Russia, India and China—which house forty percent of the global population. They also escaped the 2008 credit crisis, but they at least made a show of conforming to Western banking rules. This was not true of the “rogue” Islamic nations, where usury was forbidden by Islamic teaching. To make the world safe for usury, these rogue states had to be silenced by other means. Having failed to succumb to economic coercion, they wound up in the crosshairs of the powerful US military.
Here is some data in support of that thesis.
The End-game Memo
In his August 22nd article, Greg Palast posted a screenshot of a 1997 memo from Timothy Geithner, then Assistant Secretary of International Affairs under Robert Rubin, to Larry Summers, then Deputy Secretary of the Treasury. Geithner referred in the memo to the “end-game of WTO financial services negotiations” and urged Summers to touch base with the CEOs of Goldman Sachs, Merrill Lynch, Bank of America, Citibank, and Chase Manhattan Bank, for whom private phone numbers were provided.
The game then in play was the deregulation of banks so that they could gamble in the lucrative new field of derivatives. To pull this off required, first, the repeal of Glass-Steagall, the 1933 Act that imposed a firewall between investment banking and depository banking in order to protect depositors’ funds from bank gambling. But the plan required more than just deregulating US banks. Banking controls had to be eliminated globally so that money would not flee to nations with safer banking laws. The “endgame” was to achieve this global deregulation through an obscure addendum to the international trade agreements policed by the World Trade Organization, called the Financial Services Agreement. Palast wrote:
Until the bankers began their play, the WTO agreements dealt simply with trade in goods–that is, my cars for your bananas. The new rules ginned-up by Summers and the banks would force all nations to accept trade in “bads” – toxic assets like financial derivatives.
Until the bankers’ re-draft of the FSA, each nation controlled and chartered the banks within their own borders. The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives “products.”
And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.
The job of turning the FSA into the bankers’ battering ram was given to Geithner, who was named Ambassador to the World Trade Organization.
WTO members were induced to sign the agreement by threatening their access to global markets if they refused; and they all did sign, except Brazil. Brazil was then threatened with an embargo; but its resistance paid off, since it alone among Western nations survived and thrived during the 2007-2009 crisis. As for the others:
The new FSA pulled the lid off the Pandora’s box of worldwide derivatives trade. Among the notorious transactions legalized: Goldman Sachs (where Treasury Secretary Rubin had been Co-Chairman) worked a secret euro-derivatives swap with Greece which, ultimately, destroyed that nation. Ecuador, its own banking sector de-regulated and demolished, exploded into riots. Argentina had to sell off its oil companies (to the Spanish) and water systems (to Enron) while its teachers hunted for food in garbage cans. Then, Bankers Gone Wild in the Eurozone dove head-first into derivatives pools without knowing how to swim–and the continent is now being sold off in tiny, cheap pieces to Germany.
That was the fate of countries in the WTO, but Palast did not discuss those that were not in that organization at all, including Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. These seven countries were named by U.S. General Wesley Clark (Ret.) in a 2007 “Democracy Now” interview as the new “rogue states” being targeted for take down after September 11, 2001. He said that about 10 days after 9-11, he was told by a general that the decision had been made to go to war with Iraq. Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.
What did these countries have in common? Besides being Islamic, they were not members either of the WTO or of the Bank for International Settlements (BIS). That left them outside the long regulatory arm of the central bankers’ central bank in Switzerland. Other countries later identified as “rogue states” that were also not members of the BIS included North Korea, Cuba, and Afghanistan.
The body regulating banks today is called the Financial Stability Board (FSB), and it is housed in the BIS in Switzerland. In 2009, the heads of the G20 nations agreed to be bound by rules imposed by the FSB, ostensibly to prevent another global banking crisis. Its regulations are not merely advisory but are binding, and they can make or break not just banks but whole nations. This was first demonstrated in 1989, when the Basel I Accord raised capital requirements a mere 2%, from 6% to 8%. The result was to force a drastic reduction in lending by major Japanese banks, which were then the world’s largest and most powerful creditors. They were undercapitalized, however, relative to other banks. The Japanese economy sank along with its banks and has yet to fully recover.
Among other game-changing regulations in play under the FSB are Basel III and the new bail-in rules. Basel III is slated to impose crippling capital requirements on public, cooperative and community banks, coercing their sale to large multinational banks.
The “bail-in” template was first tested in Cyprus and follows regulations imposed by the FSB in 2011. Too-big-to-fail banks are required to draft “living wills” setting forth how they will avoid insolvency in the absence of government bailouts. The FSB solution is to “bail in” creditors – including depositors – turning deposits into bank stock, effectively confiscating them.
The Public Bank Alternative
Countries laboring under the yoke of an extractive private banking system are being forced into “structural adjustment” and austerity by their unrepayable debt. But some countries have managed to escape. In the Middle East, these are the targeted “rogue nations.” Their state-owned banks can issue the credit of the state on behalf of the state, leveraging public funds for public use without paying a massive tribute to private middlemen. Generous state funding allows them to provide generously for their people.
Like Libya and Iraq before they were embroiled in war, Syria provides free education at all levels and free medical care. It also provides subsidized housing for everyone (although some of this has been compromised by adoption of an IMF structural adjustment program in 2006 and the presence of about 2 million Iraqi and Palestinian refugees). Iran too provides nearly free higher education and primary health care.
Like Libya and Iraq before takedown, Syria and Iran have state-owned central banks that issue the national currency and are under government control. Whether these countries will succeed in maintaining their financial sovereignty in the face of enormous economic, political and military pressure remains to be seen.
As for Larry Summers, he went on to become president of Harvard, where he approved a derivative bet on interest rate swaps that lost over $1 billion for the university. He resigned in 2006 to manage a hedge fund among other business activities, and went on to become State Senator Barack Obama’s key campaign benefactor.
Summers played a key role in the banking deregulation that brought on the current crisis, causing millions of US citizens to lose their jobs and their homes. Yet he is President Obama’s first choice to replace Ben Bernanke as Federal Reserve Chairman. Why? He has proven he can manipulate the system to make the world safe for Wall Street; and in an upside-down world in which bankers rule, that seems to be the name of the game.
Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her websites are http://WebofDebt.com, http://PublicBankSolution.com, and http://PublicBankingInstitute.org.
Filed under: Ellen Brown Articles/Commentary
The news about the Cyprus banks has been on the radar screen recently.
Somehow, the most frequently asked question is what will Russian oligarchs do about it, because it’s them who have created an offshore world of their own there.
Will they seek new offshore havens? Get the money back to Russia? Stay in Cyprus and adapt to the new realities of life on the island? In fact, the oligarchs and their money are an issue of minor importance. It all brings more serious things in focus, like, for instance, the future of world banking system that had became sick a long time ago. The Cyprus events produce evidence the system is at death’s door…
Now, about the signs testifying to the assertion.
First. The banking system has lost the makings of an entity sticking to market laws. The last financial crisis has produced ample evidence of it. The banks displayed lack of vitality. If not for states lending a helping hand, there would have been no banks anymore, they would have all gone to the wall and vanished by now. Buying out dubious bad debts, acquiring shares in capital stock, granting various stabilization loans, the US and Western Europe injected flows of money into the system.
The US has injected around two trillion dollars of taxpayers into the banking sector. In fact, it was nothing else, but the nationalization of the largest financial bodies, the Wall Street topping the list. The banks nationalization in the United Kingdom was no less impressive.
True, the nationalizations in question have not been measures of strategic scope, but rather actions of tactical level. Gradually the state has started to pull out of banking sector and the situation has by and large returned to what it was in 2007-2008. Such state intervention was called “banking socialism” in the West. A taxpayer is being made accustomed to the idea it’s him who has to bail out large banks. Everybody knows the phrase “Too Big to Die”. It is addressed to Wall Street and London City. Still, the “banking socialism” appears to be too egregious against the background of comprehensive economic liberalism and stokes protest among 90% of people.
Second. For many centuries money-lenders have lobbied banking secrecy laws. It has always been a lynchpin of Western democracy and capitalist financial system.Nowadays the banking secrecy is vanishing in the hays. US financial regulators (first of all the U.S. Securities and Exchange Commission), the US Justice Department and US Tax Services launched an attack against Switzerland, or its banks to be more precise. This country has always been known to be a bastion of banking secrecy. The attack boiled down to providing information on those who evaded paying taxes to the US government.
The struggle lasted for around three years. Switzerland gave up. The banking secrecy institute doesn’t exist anymore there. The success has inspired the United States. Foreign Account Tax Compliance Act – FATCA went into effect on January 1 2013. Actually, it requires all banks in the world to be the agents of US Tax Services. The law is an attempt to establish a direct control by the United States over world banks and financial bodies. It goes without saying, that if the attempt is a success, there will be no banking secrecy in the world anymore.
Third. Banks have stopped to make profits as loan granting institutions. It’s not a phenomenon taking place only during crisis, but rather a fact of everyday life in the days of what we call normal economic growth. The reason is simple. The United States Federal Reserve System, the European Central Bank, the Bank of England, the Bank of Japan let the printing press go in full swing after the last financial crisis. It had been considered to bea crime before. Now it is called “quantity alleviation”, sounds smart and nice to ear.
Money has become cheap and accessible. It cannot be expensive when the annual interest rates in the US and Japan are at zero level (0.25%). Abundance leads to low interest rates for commercial banks. A profit from granting loans becomes an illusion. Banks become something hard to find a definition for instead of being institutions dealing with deposits and loans as they used to be. They convert into kind of transit-distribution entities rechanneling the production of printing presses into far away corners of the world to buy real assets. First of all, I mean undercover FBI activities in 2007-2011.
It has been mentioned many a time. Let’s remember the details. The Federal Reserve System gave out $16 trillion in loans to American and foreign banks in the given period of time. According to the audit conducted in the summer of 2011, the loans were never included into the Federal System’s balance sheets. Besides, the loans were granted without the approval by Congress, as required by law. Finally, not a dime had been redeemed by the time of audit. The debts appear not to be paid back till now. Looks like colossal sums of money were directed to different parts of the world to buy assets that had abruptly lost values in the interests of the Federal System’s share-holders, that is the Rockefellers and the Rotchilds. It’s like feast in time of plague. The banks failed to become deposit-lending institutions again.
Fourth. The latest events in Cyprus serve as final symptoms of lethal disease. World banksters (they are called this way for behaving more like gangsters)have lost any shame. They have stuck the paws into the pockets of clients, ignoring such “prejudices” as national and international law. From legal point of view, the introduction of taxes on bank deposits is an encroachment on the rights of clientele – the very same private property that should be protected at any cost as they have said so many times. It’s not income taxes on deposits (a normal thing in many countries), but the partial confiscation of money that fully belongs to clientele according to the contracts between banks and customers. Nothing else but confiscation was meant according to the order given by some murky structures of the European Union; the order of this kind could have been given only by global banksters.
The Cyprus confiscation brings something to mind. For instance, the confiscation of foodstuffs by Bolsheviks in the times of Civil War in Russia. Or the order by Franklin Delano Roosevelt in 1939 demanding all gold was to be given to the state by legal entities and individuals in a month. Actually, it is banking Bolshevism what we are facing. It has corresponding features. One is ample financial flows from the state to banks; the other is the confiscation of deposits. It’s limited by Cyprus so far. But it’s just a probe to start with.
Banks lose confidence in the world. Nobody wants to deal with banksters of one’s own accord. Is it the end of world banking system? I doubt it. People can me made deal with banks. Coercion is not excluded. There is too much Bolshevism in the behavior of contemporary banksters. It brings to mind Financial Capital by Rudolf Hilferding, the book written half a century ago. Hilferding praised the bankers management skills that helped to establish the formation of a more stable “organized capitalism”. He saw little difference between this type of capitalism and socialism. The kind of socialism Leon Trotsky Bronstein dreamed of. The system of internment camps. There is a solid ground to believe the banksters have rushed to drastically reform world banking system to make it match the new world order. New world order could be compared to “organized capitalism”. Or camp socialism. Whatever you prefer.
P.S. Late on March 19 the news came the parliament of Cyprus defeated a controversial bailout proposal that would have taxed bank deposits. Still the need to drastically change the world banking system remains. Probably the attempts to impose this kind if tax will be repeated, if not in Cyprus, then in some other country. One way or another, the probe is launched. Now about the deposits. For centuries bankers have made fortune on deposits. The profit has been received thanks to interest rates. These days appear to be coming to the end. For instance, large Swiss banks started to introduce commissions for putting money in deposits. This example may be followed by bankers of other countries. The commission is actually a tax paid not to the state but to a private structure dealing with deposits and loans with government’s permission (license). No matter what happens in Cyprus, the world banking system is in for great shocks and unavoidable transformation.
The bank HSBC laundered money for drug traffickers and terrorist groups and received a slight slap on the wrist
February 14, 2013 |
Like this article?
Join our email list:
Stay up to date with the latest headlines via email.
In the latest issue of Rolling Stone, Matt Taibbi takes the Justice Department to task over settling with HSBC late last year in the “largest drug-and-terrorism money-laundering case ever.”
“The HSBC case went miles beyond the usual paper-pushing, keypad-punching sort-of crime, committed by geeks in ties, normally associated with Wall Street,” he writes, “In this case, the bank literally got away with murder – well, aiding and abetting it, anyway.”
The lengthy post details how the bank again and again flouted cease-and-desist orders from the Office of the Comptroller of the Currency (OCC) to cut ties with Islamist militant groups and drug trafficking operations in Mexico. For years, the OCC did not more than the “take deep breath, strap on its big-boy pants and . . . issue a second cease-and-desist order!”
Taibbi notes why the eventual criminal investigation ended with a fine (of “$1.9 billion, or about five weeks’ profit”) and not any jail time or fines for individuals involved:
What is different about this settlement is that the Justice Department, for the first time, admitted why it decided to go soft on this particular kind of criminal. It was worried that anything more than a wrist slap for HSBC might undermine the world economy. “Had the U.S. authorities decided to press criminal charges,” said Assistant Attorney General Lanny Breuer at a press conference to announce the settlement, “HSBC would almost certainly have lost its banking license in the U.S., the future of the institution would have been under threat and the entire banking system would have been destabilized.”
During a Democracy Now! appearance Thursday, Taibbi said, “What HSBC has now admitted to is more or less the worst behavior that any bank can possibly be guilty of.”
The Prison Industry in the United States: Big Business or a New Form of Slavery?
By Vicky Pelaez, January 31 , 2013
Who’s Faking It? Pentagon “Cyber-Warriors” Planting “False Information on Facebook”
By Soraya Sepahpour-Ulrich, January 26 , 2013…
How quickly best laid plans become passé. New world orders come, it seems, as frequently as eclipses.
The old world order (ancien régime), along with 16 million people, died during the Great European War which began on June 28, 1914 when the Austrian heir to the throne, Archduke Franz Ferdinand, was assassinated by a Serb nationalist, Gavrilo Princip, in Sarajevo. (Today he would be called a terrorist.) This assassination sent nations that had no desire to go to war into the most destructive war the world had yet experienced.
Europe at the beginning of 1914 consisted of six major empires and an assortment of minor states that the major empires didn’t care much about. The six major empires, (the Austro-Hungarian, French, German, British, Ottoman, and Russian) were ensnared in military alliances (much like the US is today) which were formed to keep the peace. The diplomats, like those today, believed that forming alliances that balanced the powers of different groups would keep them from attacking each other. The Central Powers consisted of Austro-Hungary, Germany, and the Ottoman Empire; the Triple Entente consisted of the other three. Peace, the diplomats thought was assured. What happened?
When the archduke was assassinated, the Austrians, confident in their military prowess (as Americans are today), decided to punish Serbia which was attacked on July 28. But the Serbs ambushed the Austrians at the battles of Cer and Kolubara. The Austrians were thrown back with heavy losses. Russia came to the aid of its ethnically related Serbs, and Germany invaded France through Belgium and Luxembourg. Britain came to the defense of France and the Ottoman Empire joined the war in the Balkans on the side of the Central Powers. The alliances that were to ensure the peace changed a single assassination into a massive war. When it was over, the Austro-Hungarian, the German, the Ottoman, and the Russian Empires had vanished and the United States, which joined the war late on the side of the Triple Entente had become a world player. The old world order was gone!
Woodrow Wilson, the American President, sought to create a new old world order by proposing his Fourteen Points. Wilson wanted to create separate nations out of former colonies and ensure the peace by creating a League of Nations (another peace by treaty scheme). Territorial reductions were made to Germany and Austria, a slew of new and revived nations were created in Eastern Europe, while France and Britain carved up the Ottoman Empire to suit themselves. The new old world order was just a reconfigured old world order. It didn’t last and it didn’t ensure the peace. So much for the best laid plans of diplomats.
Germany was reborn in 1933 when Adolph Hitler became Chancellor. He, too, sought to create a new world order, one dominated by a Thousand Year Reich (Empire). To that end, his policies were aimed at seizing Lebensraum (living space) for the German people by extending Germany’s borders. Austria and parts of Czechoslovakia were annexed and Poland was invaded. But alas, Poland had a mutual defense treaty (another alliance formed to ensure the peach) with Great Britain and France, so the invasion of Poland started World War II.
When it was over, Germany again was destroyed and Great Britain and France, for the most part, had had their empires diminished. The United States and the Union of Soviet Socialist Republics (Russia) found themselves at the top of another new old world order.
The victorious powers, the US, the USSR, China, Great Britain, and France tried again to ensure the peace by creating the United Nations which they attempted to keep firmly in their control by making themselves rulers of the Security Council which had a veto on all UN Activities all five nations didn’t give unanimous approval to. That was to be the new old world order. But it began to come unglued immediately. China was not represented by mainland China which had become Communist but by “Nationalist” China whose government had fled to Taiwan. Communist China soon took the Chinese seat and the two Communist nations formed a bloc while the remaining three Capitalist nations formed another. The United Nations became the Disunited Nations and has remained so to this day. This new old world order was stillborn.
Sometime after 1950 (because of secrecy, the exact date is unknown) the Bilderbergers, realizing that the old world ancient régime and all of these new old world orders were founded on nation states that kept going to war with each other, began an attempt to create a truly new world order. David Rockefeller writes,
“We are grateful to the Washington Post, the New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. . . . It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.”
“For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that’s the charge, I stand guilty, and I am proud of it”
If there were no nation states, no wars could erupt between them!
Some believe that these international bankers have succeeded in taking over the world, but it has never succeeded in abolishing nation states. In fact, there is some evidence that nation states may be disintegrating into smaller ones. Scotland is going to hold a referendum on withdrawing from England, Catalonia is talking about withdrawing from Spain, Czechoslovakia has broken up into the Czech and Slovak republics, there is talk again of secession in the US, and no one quite knows what is really happening in the Arab world. A new world order ruled by one government? Not hardly!
But things began to break down in the 1950s. Until then, wars were fought between armies supported by nation states, and their endings were foreseeable. A war ended when one army, either voluntarily or on command, surrendered. That era appears to have ended. Old world order warfare appears to have become passé.
When the second world war ended, the Korean Peninsula was partitioned into Northern and Southern sections occupied by the Russians and Americans respectively. Elections for unification were to be held in 1948 but were not; the Americans were unsure the result would favor the South. Open warfare broke out when North Korean forces invaded South Korea in June, 1950. Because the Soviet Union was boycotting the United Nations Security Council at the time, the United States and other countries passed a Security Council resolution authorizing military intervention. The war’s progress favored each side from time to time and continued until July, 1953 when an armistice was signed. Officially, the war still goes on today. The US provided 88% of the 341,000 international soldiers which aided South Korea. The Russians and the People’s Republic of China aided North Korea. The West’s army was international, and the era of never ending, wars may have begun.
After a short pause, the American hubris led the US to play one-upmanship with France. Since the end of World War II, the French had been trying to maintain its hold on its Southeastern Asian colony of Vietnam. But at the Battle of Dien Bien Phu, the French were soundly defeated and decided to give up the fight. American hubris about its military prowess made American diplomats believe that the US could do what the French could not and began to use American military resources to keep South Vietnam from being united with the North.
The Pentagon’s military minds viewed this conflict as a traditional two-nation-state one and believed that America’s military only had to defeat a primitive North Vietnamese army to succeed. They were wrong, and after twenty years of fighting, 58,000 Americans, millions of Vietnamese had died, and the Americans fled. But this war marked another first: the army that won all the battles lost the war. That had never before happened in history. Today, winning battles does not win wars. Truly a new era in warfare has begun. What the Pentagon’s commanders failed to realize was that the war was not a two state war. It was a war between an invading army and an indigenous people who could only be defeated by total annihilation. No possible way existed for Americans (or any other nation-state) to “win” this war.
But Americans are hard learners and they learned nothing from Korea and Vietnam, so after two misadventures that appeared to be successful (Grenada and the 1st Gulf War), the US led another multinational force into Iraq and Afghanistan. After eight years in Iraq and the installation of a new government, the US withdrew without achieving its goals, leaving Iraq in disarray. And after more than a decade in Afghanistan a similar outcome seems to be imminent. Like Vietnam, these wars too are not two-state wars.
They amount to invading armies battling indigenous peoples who themselves are not united and not under the control of any government, group, or commander. No surrendering army in either country will ever be found. But now there’s a new twist. The forces facing the invaders do not merely consist of local peoples. Those peoples are assisted by non-state but similarly minded multi-state actors. The people opposing the West in Afghanistan are the same groups opposing the West in Libya, Algeria, Syria, Yemen, Mali, Somalia, the Sudan, and elsewhere. People who have been subjugated and exploited by the West have begun an undeclared war on the West and westerners everywhere, and winning this war will require not their defeat but their annihilation. The West cannot do that without annihilating itself in the process.
The real new world order has emerged–the world’s downtrodden against the West and its puppet, surrogate colonial governments. These non-state but similarly minded actors will determine the course of future world history. There is now a new world order that the West cannot control, that military force cannot subdue, and that concessions cannot placate. Ancien régimes relied on military power to influence events. The true new world order renders military power effete. All it can now accomplish is kill for killing’s sake. Pure barbarity is what the promise of Western Civilization has been reduced to. What a wonderful world we have made!
World Wide Fund for Nature: Stop Greenwashing Capitalism, Start Holding Corporations to Account (Dr Rosemary...
Cheerleader for US Aggression, Pushing the World to the Nuclear Brink: Britain’s Defence Secretary...
Poisoned, Marginalised, Bankrupt and Dead: The Role of Agroecology in Resisting the Corporate Stranglehold...
Africa is the Western world’s testing ground for microchip implants, weaponized viruses and experimental...
Did you know that there is more than $28,000 of debt for every man, woman and child on the entire planet? And since close to 3 billion of those people survive on less than 2 dollars a day, your share of that debt is going to be much larger than that. If we took everything [...]
The post The Debt To GDP Ratio For The Entire World: 286 Percent appeared first on The Economic Collapse.
Yet it is Washington that accuses Moscow of invading Ukraine, of having had a hand in the downing of a commercial airliner and of ‘invading’ Ukraine based on no evidence at all – trial by media courtesy of Washington’s PR machine. As a result of this Russian ‘aggression’, Washington slapped sanctions on Moscow.
The mainstream corporate media in the West parrots the accusations against Moscow as fact, despite Washington having cooked up evidence or invented baseless pretexts. As with Iraq, Libya, Afghanistan and other ‘interventions’ that have left a trail of death and devastation in their wake, the Western corporate media’s role is to act as cheerleader for official policies and US-led wars of terror.
The reality is that the US has around 800 military bases in over 100 countries and military personnel in almost 150 countries. US spending on its military dwarfs what the rest of the world spends together. It outspends China by a ratio of 6:1.
What does the corporate media say about this? That the US is a ‘force for good’ and constitutes the ‘world’s policeman’ - not a calculating empire underpinned by militarism.
By the 1980s, Washington’s wars, death squads and covert operations were responsible for six million deaths in the ‘developing’ world. An updated figure suggests that figure is closer to ten million.
Breaking previous agreements made with Russia/the USSR, over the past two decades the US and NATO has moved into Eastern Europe and continues to encircle Russia and install missile systems aimed at it. It has also surrounded Iran with military bases. It is destabilising Pakistan and ‘intervening’ in countries across Africa to weaken Chinese trade and investment links and influence. It intends to eventually militarily ‘pivot’ towards Asia to encircle China.
William Blum has presented a long list of Washington’s crimes across the planet since 1945 in terms of its numerous bombings of countries, assassinations of elected leaders and destabilisations. No other country comes close to matching the scale of such criminality. Under the smokescreen of exporting ‘freedom and democracy’, the US has deemed it necessary to ignore international laws and carry out atrocities to further its geo-political interests across the globe.
Writing on AlterNet.org, Nicolas JS Davies says of William Blum’s book Killing Hope: U.S. Military and CIA Interventions since World War II: if you're looking for historical context for what you are reading or watching on TV about the coup in Ukraine, ‘Killing Hope’ will provide it.
Davies argues that the title has never been more apt as we watch the hopes of people from all regions of Ukraine being sacrificed on the same altar as those of people in Iran (1953); Guatemala(1954); Thailand (1957); Laos (1958-60); the Congo (1960); Turkey (1960, 1971 & 1980); Ecuador (1961 & 1963); South Vietnam (1963); Brazil (1964); the Dominican Republic (1963); Argentina (1963); Honduras (1963 & 2009); Iraq (1963 & 2003); Bolivia (1964, 1971 & 1980); Indonesia (1965); Ghana (1966); Greece (1967); Panama (1968 & 1989); Cambodia (1970); Chile (1973); Bangladesh (1975); Pakistan (1977); Grenada (1983); Mauritania (1984); Guinea (1984); Burkina Faso (1987); Paraguay (1989); Haiti (1991 & 2004); Russia (1993); Uganda (1996);and Libya (2011).
The Project for a New American Century (PNAC) is a recipe for more of the same. The ultimate goal, based on the ‘Wolfowitz Doctrine, is to prevent any rival emerging to challenge Washington’s global hegemony and to secure dominance over the entire planet. Washington’s game plan for Russia is to destroy is as a functioning state or to permanently weaken it so it submits to US hegemony. While the mainstream media in the West set out to revive the Cold War mentality and demonise Russia, Washington believes it can actually win a nuclear conflict with Russia. It no longer regards nuclear weapons as a last resort but part of a conventional theatre of war and is willing to use them for pre-emptive strikes.
Washington is accusing Russia of violating Ukraine’s territorial sovereignty, while the US has its military, mercenary and intelligence personnel inside Ukraine. It is moreover putting troops in Poland, engaging in ‘war games’ close to Russia and has pushed through a ‘Russian anti-aggression’ act that portrays Russia as an aggressor in order to give Ukraine de facto membership of NATO and thus full military support, advice and assistance.
Washington presses ahead regardless as Russia begins to undermine dollar hegemony by trading oil and gas and goods in rubles and other currencies. And history shows that whenever a country threatens the dollar, the US does not idly stand by.
Unfortunately, most members of the Western public believe the lies being fed to them. This results from the corporate media amounting to little more than an extension of Washington’s propaganda arm. The PNAC, under the pretext of some bogus ‘war on terror’, is partly built on gullible, easily led public opinion, which is fanned by emotive outbursts from politicians and the media. We have a Pavlov’s dog public and media, which respond on cue to the moralistic bleating of politicians who rely on the public’s ignorance to facilitate war and conflict.
Former US Ambassador to Ukraine John Herbst has spoken about the merits of the Kiev coup and the installation of an illegitimate government in Ukraine. Last year, he called the violent removal of Ukraine’s democratically elected government as enhancing democracy. Herbst displayed all of the arrogance associated with the ideology of US ‘exceptionalism’. He also displayed complete contempt for the public by spouting falsehoods and misleading claims about events taking place in Ukraine.
"We are now faced with a Russian leader bent not on joining the international rules-based system which keeps the peace between nations, but on subverting it… We are in familiar territory for anyone over the age of about 50, with Russia's aggressive behaviour a stark reminder it has the potential to pose the single greatest threat to our security... Russia's aggressive behaviour a stark reminder it has the potential to pose the single greatest threat to our security."
In a speech that could have come straight from the pen of some war mongering US neocon, the US’s toy monkey Hammond beats on cue the drum that signals Britain’s willingness to fall in line and verbally attack Putin for not acquiescing to US global hegemonic aims.
For years, homeowners have been battling Wall Street in an attempt to recover some portion of their massive losses from the housing Ponzi scheme. But progress has been slow, as they have been outgunned and out-spent by the banking titans.
In June, however, the banks may have met their match, as some equally powerful titans strode onto the stage. Investors led by BlackRock, the world’s largest asset manager, and PIMCO, the world’s largest bond-fund manager, have sued some of the world’s largest banks for breach of fiduciary duty as trustees of their investment funds. The investors are seeking damages for losses surpassing $250 billion. That is the equivalent of one million homeowners with $250,000 in damages suing at one time.
The defendants are the so-called trust banks that oversee payments and enforce terms on more than $2 trillion in residential mortgage securities. They include units of Deutsche Bank AG, U.S. Bank, Wells Fargo, Citigroup, HSBC Holdings PLC, and Bank of New York Mellon Corp. Six nearly identical complaints charge the trust banks with breach of their duty to force lenders and sponsors of the mortgage-backed securities to repurchase defective loans.
Why the investors are only now suing is complicated, but it involves a recent court decision on the statute of limitations. Why the trust banks failed to sue the lenders evidently involves the cozy relationship between lenders and trustees. The trustees also securitized loans in pools where they were not trustees. If they had started filing suit demanding repurchases, they might wind up suedon other deals in retaliation. Better to ignore the repurchase provisions of the pooling and servicing agreements and let the investors take the losses—better, at least, until they sued.
Beyond the legal issues are the implications for the solvency of the banking system itself. Can even the largest banks withstand a $250 billion iceberg? The sum is more than 40 times the $6 billion “London Whale” that shook JPMorganChase to its foundations.
Who Will Pay – the Banks or the Depositors?
The world’s largest banks are considered “too big to fail” for a reason. The fractional reserve banking scheme is a form of shell game, which depends on “liquidity” borrowed at very low interest from other banks or the money market. When Lehman Brothers went bankrupt in 2008, triggering a run on the money market, the whole interconnected shadow banking system nearly went down with it.
Congress then came to the rescue with a taxpayer bailout, and the Federal Reserve followed with its quantitative easing fire hose. But in 2010, the Dodd Frank Act said there would be no more government bailouts. Instead, the banks were to save themselves with “bail ins,” meaning they were to recapitalize themselves by confiscating a portion of the funds of their creditors – including not only their shareholders and bondholders but the largest class of creditor of any bank, their depositors.
Theoretically, deposits under $250,000 are protected by FDIC deposit insurance. But the FDIC fund contains only about $47 billion – a mere 20% of the Black Rock/PIMCO damage claims. Before 2010, the FDIC could borrow from the Treasury if it ran short of money. But since the Dodd Frank Act eliminates government bailouts, the availability of Treasury funds for that purpose is now in doubt.
When depositors open their online accounts and see that their balances have shrunk or disappeared, a run on the banks is likely. And since banks rely on each other for liquidity, the banking system as we know it could collapse. The result could be drastic deleveraging, erasing trillions of dollars in national wealth.
Some pundits say the global economy would then come crashing down. But in a thought-provoking March 2014 article called “American Delusionalism, or Why History Matters,” John Michael Greer disagrees. He notes that historically, governments have responded by modifying their financial systems:
Massive credit collapses that erase very large sums of notional wealth and impact the global economy are hardly a new phenomenon . . . but one thing that has never happened as a result of any of them is the sort of self-feeding, irrevocable plunge into the abyss that current fast-crash theories require.
The reason for this is that credit is merely one way by which a society manages the distribution of goods and services. . . . A credit collapse . . . doesn’t make the energy, raw materials, and labor vanish into some fiscal equivalent of a black hole; they’re all still there, in whatever quantities they were before the credit collapse, and all that’s needed is some new way to allocate them to the production of goods and services.
This, in turn, governments promptly provide. In 1933, for example, faced with the most severe credit collapse in American history, Franklin Roosevelt temporarily nationalized the entire US banking system, seized nearly all the privately held gold in the country, unilaterally changed the national debt from “payable in gold” to “payable in Federal Reserve notes” (which amounted to a technical default), and launched a series of other emergency measures. The credit collapse came to a screeching halt, famously, in less than a hundred days. Other nations facing the same crisis took equally drastic measures, with similar results. . . .
Faced with a severe crisis, governments can slap on wage and price controls, freeze currency exchanges, impose rationing, raise trade barriers, default on their debts, nationalize whole industries, issue new currencies, allocate goods and services by fiat, and impose martial law to make sure the new economic rules are followed to the letter, if necessary, at gunpoint. Again, these aren’t theoretical possibilities; every one of them has actually been used by more than one government faced by a major economic crisis in the last century and a half.
That historical review is grounds for optimism, but confiscation of assets and enforcement at gunpoint are still not the most desirable outcomes. Better would be to have an alternative system in place and ready to implement before the boom drops.
The Better Mousetrap
North Dakota has established an effective alternative model that other states might do well to emulate. In 1919, the state legislature pulled its funds out of Wall Street banks and put them into the state’s own publicly-owned bank, establishing financial sovereignty for the state. The Bank of North Dakota has not only protected the state’s financial interests but has been a moneymaker for it ever since.
On a national level, when the Wall Street credit system fails, the government can turn to the innovative model devised by our colonial forebears and start issuing its own currency and credit—a power now usurped by private banks but written into the US Constitution as belonging to Congress.
The chief problem with the paper scrip of the colonial governments was the tendency to print and spend too much. The Pennsylvania colonists corrected that systemic flaw by establishing a publicly-owned bank, which lent money to farmers and tradespeople at interest. To get the funds into circulation to cover the interest, some extra scrip was printed and spent on government services. The money supply thus expanded and contracted naturally, not at the whim of government officials but in response to seasonal demands for credit. The interest returned to public coffers, to be spent on the common weal.
The result was a system of money and credit that was sustainable without taxes, price inflation or government debt – not to mention without credit default swaps, interest rate swaps, central bank manipulation, slicing and dicing of mortgages, rehypothecation in the repo market, and the assorted other fraudulent schemes underpinning our “systemically risky” banking system today.
Relief for Homeowners?
Will the BlackRock/PIMCO suit help homeowners? Not directly. But it will get some big guns on the scene, with the ability to do all sorts of discovery, and the staff to deal with the results.
Fraud is grounds for rescission, restitution and punitive damages. The homeowners may not have been parties to the pooling and servicing agreements governing the investor trusts, but if the whole business model is proven to be fraudulent, they could still make a case for damages.
In the end, however, it may be the titans themselves who take each other down, clearing the way for a new phoenix to rise from the ashes.
Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her websites are http://EllenBrown.com, http://PublicBankSolution.com, and http://PublicBankingInstitute.org.
Finance is the new form of warfare – without the expense of a military overhead and an occupation against unwilling hosts. It is a competition in credit creation to buy foreign resources, real estate, public and privatized infrastructure, bonds and corporate stock ownership. Who needs an army when you can obtain the usual objective (monetary wealth and asset appropriation) simply by financial means? — Dr. Michael Hudson, Counterpunch, October 2010
When the US Federal Reserve bought an 80% stake in American International Group (AIG) in September 2008, the unprecedented $85 billion outlay was justified as necessary to bail out the world’s largest insurance company. Today, however, central banks are on a global corporate buying spree not to bail out bankrupt corporations but simply as an investment, to compensate for the loss of bond income due to record-low interest rates. Indeed, central banks have become some of the world’s largest stock investors.
Central banks have the power to create national currencies with accounting entries, and they are traditionally very secretive. We are not allowed to peer into their books. It took a major lawsuit by Reuters and a congressional investigation to get the Fed to reveal the $16-plus trillion in loans it made to bail out giant banks and corporations after 2008.
What is to stop a foreign bank from simply printing its own currency and trading it on the currency market for dollars, to be invested in the US stock market or US real estate market? What is to stop central banks from printing up money competitively, in a mad rush to own the world’s largest companies?
Apparently not much. Central banks are for the most part unregulated, even by their own governments. As the Federal Reserve observes on its website:
[The Fed] is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.
As former Federal Reserve Chairman Alan Greenspan quipped, “Quite frankly it does not matter who is president as far as the Fed is concerned. There are no other agencies that can overrule the action we take.”
The Central Bank Buying Spree
That is how “independent” central banks operate, but it evidently not the US central bank that is gambling in the stock market. After extensive quantitative easing, the Fed has a $4.5 trillion balance sheet; but this sum is accounted for as being invested conservatively in Treasuries and agency debt (although QE may have allowed Wall Street banks to invest the proceeds in the stock market by devious means).
Which central banks, then, are investing in stocks? The biggest player turns out to be the People’s Bank of China (PBoC), the Chinese central bank.
According to a June 15th article in USA Today:
Evidence of equity-buying by central banks and other public sector investors has emerged from a large-scale survey compiled by Official Monetary and Financial Institutions Forum (OMFIF), a global research and advisory group. The OMFIF research publication Global Public Investor (GPI) 2014, launched on June 17 is the first comprehensive survey of $29.1 trillion worth of investments held by 400 public sector institutions in 162 countries. The report focuses on investments by 157 central banks, 156 public pension funds and 87 sovereign funds, underlines growing similarities among different categories of public entities owning assets equivalent to 40% of world output.
The assets of these 400 Global Public Investors comprise $13.2 trillion (including gold) at central banks, $9.4 trillion at public pension funds and $6.5 trillion at sovereign wealth funds.
Public pension funds and sovereign wealth funds are well known to be large holders of shares on international stock markets. But it seems they now have rivals from unexpected sources:
One is China’s State Administration of Foreign Exchange (SAFE), part of the People’s Bank of China, the biggest overall public sector investor, with $3.9 trillion under management, well ahead of the Bank of Japan and Japan’s Government Pension Investment Fund (GPIF), each with $1.3 trillion.
SAFE’s investments include significant holdings in Europe. The PBoC itself has been directly buying minority equity stakes in important European companies.
Another large public sector equity owner is Swiss National Bank, with $480 billion under management. The Swiss central bank had 15% of its foreign exchange assets – or $72 billion – in equities at the end of 2013.
Public pension funds and sovereign wealth funds invest their pension contributions and exchange reserves earned in foreign trade, which is fair enough. The justification for central banks to be playing the stock market is less obvious. Their stock purchases are justified as compensating for lost revenue caused by sharp drops in interest rates. But those drops were driven by central banks themselves; and the broad powers delegated to central banks were supposed to be for conducting “monetary policy,” not for generating investment returns. According to the OMFIF, central banks collectively now have $13.2 trillion in assets (including gold). That is nearly 20% of the value of all of the stock markets in the world, which comes to $62 trillion.
From Monetary Policy to Asset Grabs
Central banks are allowed to create money out of nothing in order to conduct the monetary policies necessary to “regulate the value of the currency” and “maintain price stability.” Traditionally, this has been done with “open market operations,” in which money was either created by the central bank and used to buy federal securities (thereby adding money to the money supply) or federal securities were sold in exchange for currency (shrinking the money supply).
“Quantitative easing” is open market operations on steroids, to the tune of trillions of dollars. But the purpose is allegedly the same—to augment a money supply that shrank by trillions of dollars when the shadow banking system collapsed after 2008. The purpose is not supposed to be to earn an income for the central bank itself. Indeed, the U.S. central bank is required to return the interest earned on federal securities to the federal government, which paid the interest in the first place.
Further, as noted earlier, it is not the US Federal Reserve that has been massively investing in the stock market. It is the PBoC, which arguably is in a different position than the US Fed. It cannot print dollars or Euros. Rather, it acquires them from local merchants who have earned them legitimately in foreign trade.
However, the PBoC has done nothing to earn these dollars or Euros beyond printing yuan. It trades the yuan for the dollars earned by Chinese sellers, who need local currency to pay their workers and suppliers. The money involved in these transactions has thus doubled. The merchants have been paid in yuan and the central bank has an equivalent sum in dollars or Euros. That means the Chinese central bank’s holdings are created out of thin air no less than the Federal Reserve’s dollars are.
Battle of the Central Banks?
Western central banks have generally worked this scheme discreetly. Not so much the Chinese, whose blatant gaming of the system points up its flaws for all to see.
Georgetown University historian Professor Carroll Quigley styled himself the librarian of the international bankers. In his 1966 book Tragedy and Hope, he wrote that their aim was “nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.” This system was to be controlled “in a feudalist fashion by the central banks of the world acting in concert by secret agreements,” central banks that “were themselves private corporations.”
It may be the Chinese, not acting in concert, who break up this cartel. The PBoC is no more transparent than the US Fed, but it is not an “independent” central bank. It is a government agency accountable to the Chinese government and acting on its behalf.
The Chinese have evidently figured out the game of the “independent” central bankers, and to be using it to their own advantage. If the Fed can do quantitative easing, so can the Chinese – and buy up our assets with the proceeds. Owning our corporations rather than our Treasuries helps the Chinese break up US dollar hegemony.
Whatever power plays are going on behind the scenes, it is increasingly clear that they are not serving we-the-people. Banks should not be the exclusive creators of money. We the people, through our representative governments, need to be issuing the national money supply directly, as was done in America under President Abraham Lincoln and in colonial times.
Ellen Brown is an attorney, founder of the Public Banking Institute and the author of twelve books, including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally.
Filed under: Ellen Brown Articles/Commentary
Do you have a bank account that you don't actively use or a safe deposit box that you have not checked on for a while? If so, you might want to see if the government has grabbed your money. This sounds absolutely crazy, but it is true. All over the world, governments are shortening the [...]
Why have we turned our backs on the principles that this nation was founded upon? Many of those that founded this nation bled and died so that we could experience "life, liberty and the pursuit of happiness". And yet we have tossed their ideals aside as if they were so much rubbish. Our founders had [...]
“Greater Israel” and The “Disappearance” of Palestine: Israel is Considering the Annexation of the...
Timothy Alexander Guzman, Silent Crow News – Israeli Prime Minister Benjamin Natanyahu says that Israel can possibly annex West Bank territories because he has the support from both sides of the political spectrum, if the Peace Process had failed. He also denied any plans of “unilateral territorial withdrawals” from the West Bank. According to the Jerusalem Post, Natanyahu was interviewed by Bloomberg View and said “The idea of taking unilateral steps is gaining ground, from the center-left to the center-right.” Last December, Arutz Sheva, an Israeli-based news network reported that economics minister Naftali Bennett had proposed that Israel could annex key areas of the West Bank which includes Judea in the Southern West Bank and Samaria located in the northern West Bank (both biblical names given by Israeli’s to justify their claims on the West Bank based on religious grounds) which are dominated by Jews and place them under the control of Israeli Defense Forces. Bennett said “I favor implementation of Israeli sovereignty over the zone where 400,000 Jews live and only 70,000 Arabs.” Since “only 70,000 Arabs” live in both Judea and Samaria, then maybe the Israeli government can exile them to other Arab nations and at the same time, create a refugee crisis. The Israeli government’s idea to annex certain areas of the West Bank because there is a Jewish population already living there is absurd. The Jerusalem Post article reported what Natanyahu had said in regards to a “unilateral withdrawal” in what he described as a left-wing idea to appease the Palestinian Authorities:
Many Israelis are asking themselves if there are certain unilateral steps that could theoretically make sense,” he added. But Netanyahu appeared to dismissed left-wing ideas of territorial withdrawal from portions of the West Bank as one possible unilateral option.
He explained that Israel’s 2005 disengagement from Gaza, a unilateral plan designed to rescue a frozen peace process, had strengthened terrorist groups bent on destroying Israel and had failed to bring peace. “People also recognize that the unilateral withdrawal from Gaza didn’t improve the situation or advance peace — it created Hamastan, from which thousands of rockets have been fired at our cities,” Netanyahu said
The Prime Minister also spoke about the two-state solution and Iran’s relationship with the Palestinians when he said “The first point of consensus is that we don’t want a binational state. Another point of consensus is that we don’t want an Iranian proxy in territories we vacate.” Natanyahu is clear that they do not want a two-state solution because they only want a Jewish state to exist, nor do they want to withdraw from West Bank territories because of the so-called “Iranian threat” to Israel. Natanyahu also said that “We want a demilitarized Palestinian state that recognizes the nation-state of the Jews. How do you get that if you can’t get it through negotiations? “The Palestinians don’t agree to recognizing Israel as the Jewish nation-state, and it’s not clear to me that they’ll agree to elements of demilitarization that are required in any conceivable plan that works.” So far, there has been no success with the Israeli-Palestinian peace process since the Palestinians have made it clear on their decision not to recognize Israel as a “Jewish state”. Doing so would be admitting that their presence in Palestine has been illegitimate, therefore it would be conceding to Israel’s demands. It will also designate Jews with the right to be in Palestine. As for the Palestinians themselves, they would need permission of the “Jewish state” to live in Palestine since they do not have an innate right to do so. It would be a political disaster for the Palestinians if they agreed to such demands. It is a major condition that comes with risks if a Jewish state were to be imposed on the Palestinians. Natanyahu believes that the conditions should be considered to move forward on peace, but the Palestinians would not negotiate on Israel’s terms. He said that “The minimal set of conditions that any Israeli government would need cannot be met by the Palestinians.” The Natanyahu Government was also not happy when the Palestinian Authority decided to form a unity government including Hamas to negotiate with Israel. Natanyahu said:
No matter what the spin is about blaming Israel, do we actually expect Abbas, who seems to be embracing Hamas, to give a negotiated deal? In all likelihood, no. I hope he does, but I’m not sure he’s going to do it,” Natanyahu continued “There is an emerging consensus that we don’t have a partner who can challenge constituencies, do something unpopular, do something that is difficult. Abbas has not done anything to challenge the prevailing Palestinian consensus. In fact, he’s doing the opposite: the Hamas reconciliation, internationalizing the conflict, not giving one iota on the right of return, not giving an iota on the Jewish state. He wouldn’t deal with Kerry’s framework
According to Israel Shahak’s article, “Greater Israel”: The Zionist Plan for the Middle East”, he explains what Israel’s main objective is by expanding further into Palestinian territories and other areas of the Middle East:
The Zionist project supports the Jewish settlement movement. More broadly it involves a policy of excluding Palestinians from Palestine leading to the eventual annexation of both the West Bank and Gaza to the State of Israel.
Greater Israel would create a number of proxy States. It would include parts of Lebanon, Jordan, Syria, the Sinai, as well as parts of Iraq and Saudi Arabia.
Here is a map of Israel’s expansion into Palestine since 1946:
Palestine is slowly disappearing. Annexation by the Israeli government would result in an international backlash and a public relations disaster. It can also start a new conflict if Israel were to annex more land in the West Bank. In an opinion piece written by Gershon Baskin for the Jerusalem Post described what the consequences would be if Israel were to annex certain areas of the West Bank:
Not only will annexation of the territories bring on the wrath of the whole world, the Palestinians will never give up their nationalism and if they have no political avenue to wage their struggle in the world, they will use violence against Israel, and we will certainly feel the pain of their wrath
Israel’s intention of acquiring more land through force would not improve relations with the Palestinians or their Arab neighbors, and it certainly would not bring any peace in the foreseeable future.
Will Israel be the first cashless society on the entire planet? A committee chaired by Israeli Prime Minister Benjamin Netanyahu’s chief of staff has come up with a three phase plan to “all but do away with cash transactions in Israel”. Individuals and businesses would still be permitted to conduct cash transactions in small amounts [...]
“Greater Israel” and The “Disappearance” of Palestine: Israel is Considering the Annexation of the...
761. Oct. 6-9, speaker, Praxis Peace Institute conference, THE ECONOMICS OF SUSTAINABILITY-Emerging Models for a Healthy Planet, Cowell Theater, Fort Mason, San Francisco
760. July 29-Aug. 5. Moving Beyond Capitalism conference, San Miguel de Allende, Mexico
759. July 9, speaker, 2014 Annual Conference of the Council of Georgist Organizations, Inc., Radisson Newport Beach Hotel, near the Orange County John Wayne Airport, 9:15 a.m. PT
758. May 26, interview, Wealth DNA Radio Show, Blog Talk Radio, wealthdna.us, noon EST
757. May 10, United We Stand Festival, Pauley Pavilion, UCLA,
756. May 1, interview with Stephen Lendman, The Progressive Newshour, 9 a.m. PDT
755. April 29, moderator, Great Minds #66 with Nomi Prins, Los Angeles, CA., 7 pm PT
754. April 23, Ellen interviews Nomi Prins on It's Our Money. Listen to archive here.
753. April 21, interview with Robert Stark and Jeff Crow, Valley Talk Live, centralvalleytalk.com, Fresno, 4:30 PT
752. April 17, interview Dr. Rima Truth Reports, with Dr. Rima Laibow, 10 pm EST
751. April 17, interview with Greg Hunter, USAWatchdog.com, 11:30 EST
750. April 8, It's Our Money with Ellen Brown, interiews Kevin Zeese and Margaret Flowers. Listen to archive here.
749. April 8, interview with Alan Butler, Butler on Business, Liberty Express Radio, 11:30 AM EDT
748. April 3, interview with Stephen Lendman, The Progressive Newshour, 9 a.m. PDT
747. April 3, interview with James Banks, KGNU radio, Boulder, CO, 5 p.m. PT
746. April 2, interview, WHDTWorldNews, Nextnewsnetwork.com, 10:30 a. m. PDT
745. March 26, 1 pm PDT, It’s Our Money with Ellen Brown. Ellen interviews Prof. ROBERT HOCKETT--fascinating background material for understanding the banks' role in the foreclosure mess and the eminent domain solution. Listen to the archive here.
744. March 24, interview with Kevin Zeese JD and Margaret Flowers MD, Clearing the FOG on We Act Radio, 1480 AM Washington, DC, 8 a.m. PDT
743. March 23rd, "Banking for the People—Not for Wall Street," Agenda for a Prophetic Faith Lecture Series, Claremont United Methodist Church, 211 W. Foothill Blvd., Claremont, CA 91711, http://www.claremontumc.org/, 7 pm PT
742. Apr. 13, Interview with Chris Moore, KDKA Pittsburgh, 5 pm EST
741. March 18, 2 pm, Democratic Club, Friendly Valley Conference Room, Newhall, CA.
740. March 13, interview with Fred Smart, American Underground Network, 8 pm, CDT
739. March 12, 12 pm PDT, It's Our Money radio show with Ellen Brown, featuring Prof. TIM CANOVA on the Federal Reserve. Listen to archive here.
738. March 4, interview with Tom Kiely, INN World Report, 4:30 PST
737. Feb. 23, interview with Stephen Lendman, The Progressive Newshour, 10 a.m. PST
736. Feb 20, interview with Bill Deller, 3CR radio, Melbourne, Australia, 3 pm, PST
735. Feb. 17, interview, Strike Debt Bay Area, KPFA, Berkeley, 2 pm (?) PST
734. Feb16, interview with Gary Dubin, The Foreclosure Hour (http://www.foreclosurehour.com/the-host.html), 5 pm PST
733. Feb. 11, interview with Clint Richardson, RBN 5 pm PST
732. Feb 9, interview with Stephen Golden, DEFENDING THE AMERICAN DREAM, KABC Los Angeles, 6 am, PST Listen to the archive here.
731. Feb. 6, interview, Move to Amend Reports, http://www.blogtalkradio.com/movetoamend, 5 pm PST
730. Feb. 5, interview with Sinclair Noe, Financial Review, MoneyRadio.com, 9:30 am PST
729. January 30, interview, Kerry Lutz - Financial Survival Network, 12 pm EST
728. January 30, interview with Tom Kiely, INN World Report, 4:30 PST
727. January 29, interview on Latin Waves, 8 pm PST
726. January 28, Green Party Shadow Cabinet response to State of the Union Speech. http://www.livestream.com/greenpartyus 6 pm PST
725. January 26, interview with Stephen Lendman, The Progressive Newshour, 10 a.m. PST. Listen here.
724. January 23, interview, The Tim Dahaney Show, 12 noon PST. Listen here.
723. January 22, interview with Utrice Leid, "Leid Stories,", PRN.FM, 1 pm EST
722. January 21, interview, Independent Underground Radio LIVE, 9:15 PST. Listen here.
721. January 12, Open Forum with Green Party candidates Luis Rodriguez, Laura Wells and Ellen Brown, hosted by LULAC (League of United Latin American Citizens) 11277 GARDEN GROVE BLVD., Garden Grove, CA. 2-4 pm
719. January 8, interview, The Tim Dahaney Show, 12 noon PST. Listen here. (It's the one labelled "Take the Fed Reserve Public.")
718. Jan 7, interview, The Burt Cohen Show, 12 noon ET
717. Dec. 30, interview, Stuart Vener Tells It Like It Is, see http://stuartvener.com for stations, 11:30 am EST
716. Dec. 26, interview Dr. Rima Truth Reports, with Dr. Rima Laibow and Ralph Fucetola, 10 pm EST
715. Dec. 21, interview, KPRO Radio San Francisco, 9:30 am PST
714. Dec. 18, interview, The Power Hour with Joyce Riley, 8 a.m. CT
713. Dec. 18, interview, Unwrapped Radio, WRFG, http://www.tuneinradio.com/, 12:40 EST
712. Dec. 15, interview with Stephen Lendman, The Progressive Newshour, 10 a.m. PST, listen here.
711. Dec. 15, presentation, A Public Bank for Mendocino, at the Crown Hall in Mendocino, Ca., 7 pm
710. Dec. 15, presentation, Why We Need to Own Our Own Bank, Mendocino Environmental Center
106 West Standley, Ukiah, CA 95482, 2 pm
709. Dec. 14, presentation, Why We Need to Own Our Own Bank, Little Lake Grange, Willits, Ca. 7 pm
708. Dec. 13, interview on All About Money, KZYX radio, 9 a.m. PST
707. Dec. 13, interview, Radio Islam, WCEV 1450 AM, 12:05 pm, CST
706. Dec. 12, appearance with Doug McKenty, "The Shift," Mendocino TV, 4:30 pm PST
705. Dec. 11, interview on WHDT World News, http://NNN.is/on-WHDT, 5:30 and 11:00 pm EST. Watch the archive here.
704. Dec. 11, interview, WORT Community Radio, Madison, Wisconsin, 6:10 a.m. PST
703. Dec. 11, interview with Sinclair Noe, Financial Review, MoneyRadio.com, 10:30 PST
702. Dec. 9, UnWrapped Radio, Atlanta, 1 pm PST.
701. Dec. 9, GOHarrison, KPFK Los Angeles, 3:30 pm PST.
700. Dec. 9, interview, Air Cascadia show, KBOO radio, Portland, 10 am PST
699. Dec. 5, interview, WHDT World News TV, 2 pm PST
698. Dec. 4, interview with David Swanson, talknationradio, 7pm PST
697. Dec. 4, interview with Rob Kall, The Rob Kall Bottom-Up Radio Show, 1360 AM, 7:30 pm EST
696. Dec. 3, interview with Kim Greenhouse, It's Rainmaking Time, listen here.
695. Dec. 2, interview with Val Muchowski, Women's Voices, KZYX, 7 p.m. PST
694. Nov. 29, interview with Gregg Hunter, USAWatchdog.com, 11:30 PST
693. Nov. 16, interview This is Hell! radio show, WNUR 89.3 fm, thisishell.com/live, 11.20 a.m. EST. Listen to archive here
692. Nov. 15, interview with George Berry, The Financial News Network Show, truthfrequencyradio.com, 1 pm PST
691. Nov. 14, interview with Stanley Montieth, The Doctor Stan Show, Radio Liberty, 4 pm PSTf
690. Nov. 14, interview with Neil Foster, Reality Bytes show, Awake Radio (UK), Shazziz Radio (US), 8 pm UK time.
689. Nov. 13, interview with Bonnie Faulkner, KPFA, Los Angeles. Listen to archive here.
688. Nov. 12, interview with Tom Kiely, INN World Report, 4:30 PST
687. Nov. 11, interview, Between the Lines News Magazine, WPKN radio, Bridgeport, CT, 9 p.m. ET. Listen to archive here
686. Nov. 10, skype participant, forum at the Putrajaya International Islamic Arts and Cultural Festival, "Global Economic and Monetary Crisis: What Needs to be Done?" Putrajaya, Malaysia, 11 a.m. MYT, 7 pm, Nov. 9 PST
685. Nov. 3, interview with Stephen Lendman, The Progressive Newshour, 10 a.m. PST
684. Oct. 31, interview with Voice of Russia radio, American edition, 2:30 pm, CET (Central Europe Time.) Listen to archive here.
683. Oct. 23, interview with Daniel Estulin on RT tv
682. Oct. 16, interview with Per Fereng, KBOO radio, Portland, 11 am PST
681. Oct. 15, presentation, "The Public Banking Forum in Ireland," 7-9 PM, Hudson Bay Hotel, Athlone, Ireland.
680. Oct. 14, presentation, Cork, Ireland
679. Oct. 12, presentation, "The Public Banking Forum in Ireland," 2-4 PM, Springfield Hotel in Leixlip, County Kildare, Ireland. Information on these three events here.
678. October 4, interview with Bill Deller, 3CR radio, Melbourne, Australia, 2:30 pm, PST
677. Oct. 3, interview with Joyce Riley, the Power Hour. Listen to archive here.
676. Oct. 1, interview with Tom Kiely, INN World Report 7:30 EST
675. Sept. 29, interview with Stephen Lendman, The Progressive Newshour, 10 a.m. PST
674. Sept. 27, interviw with Kevin Barrett, AmericanFreedomRadio.com, NoLiesRadio.org:
http://TruthJihadRadio.blogspot.com, 2 pm PST
673. Sept. 19, interview, The Gary Null Show, 9:30 a.m. Pacific
672. Sept. 19, Interview on the Global Research News Hour with Michael Welch--check site for time and archive.
671. Sept. 18, interview with David Sierralupe, Occupy Radio, KWVA, 88.1 FM, Eugene
670. Sept. 15, interview with Niall Bradley, Sott Talk Radio, sott.net, 2 p.m. EST
669. Sept. 14, interview FDLBookSalon, firedoglake.com, 5pm EST
668. Sept. 10, "Turning Hard Times into Good Times" with Jay Taylor, VoiceAmerica, 12:30 pm PST. Listen to archive here.
667. Sept. 9, interview with Ken MacDermotRoe and Del LaPietro, In Context Report, 9 am PST. Listen to archive here.
666. Sept 7, interview with Valerie Kirkgaard, WakingUpInAmerica.com, 6 am, PST. Listen here.
665. Sept. 6, Interview with Al Korelin, The Korelin Economics Report, 12:30 pm PST
664. Sept. 5, discussion of how to bring public banking to Colorado on "It's the Economy, Stupid," KGNU, Boulder, 5 p.m. PST
663. Sept. 5, interview with Patrick Timpone, oneradionetwork.com, 8 a.m. PST
662. Sept. 3, interview (along with Elliott Spitzer?), "Turning Hard Times into Good Times" with Jay Taylor, VoiceAmerica, 1 pm PST Listen to archive here.
661. Sept. 3, interview with Jeanette LaFeve, The People Speak, 6 pm PST
660. Aug. 25, Stephen Lendman, Progressive Radio News Hour, 10 am, PDT
659. Aug. 22, interview with Christopher Greene, AMTV Radio, simulcast in audio/video over GoogleHangouts and American Freedom Radio, 1 p.m. PST
658. Aug. 22, interview, TheAndyCaldwellShow.com,
CalChronicle.com, 3 pm PST
657. Aug. 21, interview with Merry and Burl Hall, blogtalkradio.com/envision-this, 5 pm PST
656. Aug. 21, interview with Lori Lundin, America's Radio News Network, 10:30 a.m. ET.
655. Aug. 16, interview with Sinclair Noe, Moneyradio.com, 4 pm PST
654. Aug. 15, interview with Justine Underhill, Prime Interest, Russia Today TV, 1:30 pm PST
653. Aug 14, interview with Jim Goddard, This Week in Money, 4 pm, PST. Listen to archive here, starting at minute 32.
652. Aug. 14, interview with Mary Glenney, WMNF 88.5, 10 a.m. PST
651. Aug. 14, interview with Chuck Morse, irnusaradio.com, 8 am, PST
650. Aug. 13, interview with Thomas Taplin, Dukascopy TV, Switzerland, 9 am PST
649. Aug 7-11, Madison Democracy conference, https://democracyconvention.org/
648. Aug. 6, radio interview, INN World Report with Tom Kiely, http://feeds.feedburner.com/INNWorldReportRadio 4:30 PST
647. Aug 5, interview with Arnie Arnesen, 94.7 fm, Concord, NH, 9 am PST
646. Aug 3, interview with Diane Horn, Mind Over Matter show, KEXP radio, 90.3 FM, Seattle, 7:00 a.m. PST
645. July 31, interview with Mike Beevers, KFCF Fresno, 4:30 pm PST
644. July 28, Stephen Lendman, Progressive Radio News Hour, 10 am, PDT
643. July 2, interview with Charlie McGrath, Wide Awake News, 6-7 pm PDT.
642. July 2, interview with Arnie Arnesen, 94.7 fm, Concord, NH, 12:30 EST.
641. June 30, interview with Stephen Lendman, Progressive Radio News Hour, 10 am, PDT. Listen to archive here.
640. June 24, interview on RT tv re student debt, 10:30 am PST
639. June 17, interview on The Andy Caldwell Show, 3:30 pm PST
638. June 16, interview with Jason Erb, 5 pm Pacific
637. June 13, interview with Paul Sanford, "Time 4 Hemp-LIVE," http://www.AmericanFreedomRadio.com, 10 am, PST
636. June 6 presentation with Jamie Brown at the Mt. Diablo Peace and Justice Center in Walnut Creek. Info at Favors.org, 7 to 9 pm
635. June 1, interview with Kris Welch, KPFA Los Angeles, 10 am PST
634. May 28, interview with Malihe Razazan, "Your Call" radio, KALW, San Francisco, 10 am PST.
633. May 26, interview with Stephen Lendman, Progressive Radio News Hour, 10 am, PDT
632. May 23 interview with Simit Patel, InformedTrades.com (youtube) 3:30 pm PST
631. May 22, Thousand Oaks, 3 expert panel, "A Parachute For the Fiscal Cliff," University Village 2-4 pm
630. May 22, interview with Jack Rasmus, 11 am PST. Enjoy the interview here.
629. May 22, Guns and Butter show, KPFA, http://www.kpfa.org/archive/id/91790
628. May 14, interview with Charlie McGrath, Wide Awake News, 6-7 pm PDT.
627. May 13, live appearance on RTTV, 3 pm PST Watch it here.
626. May 8, interview with Valli Sharpe-Geisler, Silicon Valley Voice, KKUP, 3 pm PST
625. May 8, interview, the Meria Heller Show, 11 am PST
624. May 4, interview, Latin Waves with Sylvia Richardson, 10 am PST
623. April 30, Jay Taylor, VoiceAmerica, 1 pm PST
622. April 29, interview with Rob Kall, Bottom Up Radio, 9 am Pacific
Listen to archive here.
621. April 28, interview with Stephen Lendman, Progressive Radio News Hour, 10 am, PDT
620. April 25, interview, the the Dr. Katherine Albrecht Show, 5 pm EDT
619. April 17, interview with Mike Harris, rense.com, 1 pm PDT
618. April 16th, speaker, Valley Democrats United (Democratic Party of San Fernando Valley), Van Nuys, Ca. 7-9pm
617. April 13, interview with Darren Weeks, Govern America, noon Eastern, listen here
616. April 9, interview with Charlie McGrath, Wide Awake News, 6-7 pm PDT.
615. April 6, phone conference, Justice Party, http://www.justicepartyusa.org/public_banking_conference_call, 9 a.m.
614. April 5, interview, Butler on Business, 11 a.m. EDT
613. April 3, interview with Michael Welch, Global Research News Hour, 8:30 a.m. PDT
612. April 2, interview with Jay Taylor, VoiceAmerica, 12:30 PDT. Listen here.
611. April 1, interview with Brannon Howse, www.worldviewradio.com, 11 a.m. PDT
610. April 1, interview with Scott Harris, Counterpoint,
WPKN Radio, 8:30 pm, ET Listen to archive here.
609. April 1, interview with Margaret Flowers and Kevin Zeese. Watch and listen to archive here, starting at minute 50. Articles based on the interview are at Truthout.org.
608. March 31, interview with Jason Erb, Exposing Faux Capitalism, Oracle Broadcasting, 11 a.m. Pacific
607. March 31, interview with Stephen Lendman, Progressive Radio News Hour, 10 am, PDT Listen to the archive here.
606. March 29, interview, The Gary Null Show, 9:30 a.m. Pacific
605. March 28, interview with Stan Monteith, radioliberty.com, 9 pm PDT
604. March 28, radio interview, INN World Report with Tom Kiely, http://feeds.feedburner.com/INNWorldReportRadio 4:30 PDT
603. March 27, interview with Charlie McGrath, Wide Awake News, 6-7 pm PdT.
602. March 27, interview with Jack Rasmus on PRN, 11 a.m. PDT
601. March 25, interview on the Richard Kaffenberger show, KTOX, Needles, CA. 3:15 PDT
600. March 22, newly available archived radio interview, Mandelman Matters. Listen here.
599. March 22, interview with James Fetzer, The People Speak Radio, 5-7 pm PDT
598. March 22, interview , Our Times With Craig Barnes, KSFR radio, Santa Fe, 10 a.m. MST
597. March 12, interview, Crisis of Reality with Doug Newberry, oraclebroadcasting.com, 1pm EST.
596. March 11, interview with Stephen Lendman, Progressive Radio News Hour, 10 am, PST
595. March 9, Interview with Sylvia Richardson, Latin Waves, CJSF 90.1FM, 9:30 am PST
594. March 6, interview with Charlie McGrath, wideawakenews.com, 6pm PST. Watch and listen here.
593. March 3, interview with Lateef Kareem Bey, Fix Your Mortgage Mess, 4 pm PST
592. March 2, Interview with Stuart Richardson, Latin Waves, CJSF 90.1FM, 11 am PST
591. Feb. 27, interview with Jim Banks, KGNU, Boulder, 12 pm PST
590. Feb 27, interview with Sinclair Noe, Financial Review, 10 am PST
589. Feb. 25, interview, Crisis of Reality with Doug Newberry, oraclebroadcasting.com, 1pm EST.
588. Feb. 6, Interview with Phil Mackesy, This Week in Money, TalkDigitalNetwork.com, 11 am PST. Listen to the archive here: http://talkdigitalnetwork.com/2013/02/this-week-in-money-70/
587. Feb. 4, interview with Ken Rose, What Now radio show, KOWS RADIO OCCIDENTAL 107.3 FM, 11 am PST.
586. Jan. 31, interview with Tom Kiely, INN World Radio Report, 5:00 pm PST
585. Jan. 27, interview with Stephen Lendman, progressive radio
network, 10 am PST
584. Jan. 23, interview on KPFK, 8pm PST
583. Jan. 22, interview, Crisis of Reality with Doug Newberry, oraclebroadcasting.com, 1pm EST.
582. Jan. 3, interview with Mary Glenney, WMNF 88.5, Tampa, 3 pm EST
581. Jan. 2, interview, The Bev Smith Show, thebevsmithshow.net, 5 pm PST
--- 2012 ---
580. Dec. 27, video interview with Charlie McGrath, Wide Awake News, listen and watch here.
579. Dec. 24, October talk at First Unitarian Church in Portland aired on KBOO radio, http://kboo.fm/, 8:00 am PST
578. Dec. 24, interview with Ron Daniels, the WWRL Morning Show with Mark Riley, wwrl1600.com, 5:05 am PST
577. Dec. 21, interview with Andy Caldwell, TheAndyCaldwellShow.com, KZSB AM1290 Santa Barbara / Ventura and KUHL AM1440 Santa Maria / San Luis Obispo, 3:30 pm PST
576. Dec. 20, interview with Fred Smart, aunetwork.tv, 9 pm EST
575. Dec. 19, interview, Crisis of Reality with Doug Newberry, oraclebroadcasting.com, 1pm EST. Listen here.
574. Dec. 19, interview with Dr. Jack Rasmus, Alternative Visions, Progressive Radio Network, 2 pm EST
573. Dec. 17, The Bev Smith Show, thebevsmithshow.net, 4 pm PST
572. Dec. 15, interview with Stephen Lendman, progressive radio network, 10 am PST. Listen here.
571. Dec. 14, interview with Craig Barnes, Our Times With Craig Barnes, KSFR radio, 9 am PST Listen to the archive here.
570. December 9th, speaker, Mayo Arts Center (10 Mayo Street) in Portland, ME
569. Dec. 7, Vermont's New Economy conference, Vermont College of the Find Arts, Montpelier, VT, 9 am to 4 pm and reception at 4:30. $25
www.global-community.org/neweconomy to register
568. Dec. 5, speaker, Pennsylvania Public Bank Project's Forum on Public Banking, at the David Library of the American Revolution, Washington Crossing, PA, 7pm
567. Nov. 26-27, 3rd Annual World Conference on Riba, Kuala Lumpur, Malaysia
566. Nov. 22, presentation before Royal Scottish Academy -- "A Public Bank for Scotland" (here), Riddle's Court, 322 Lawnmarket, Edinburgh EH1 2PG Scotland, 6 pm
565. Nov 8, Healthy Money Summit, speaking with Hazel Henderson at 1-2 pm PST, information here.
564. Sunday, Oct. 28, Keynote Speaker; The Buck Starts Here, 2:00pm, sponsored by the Kairos Occasional Speakers Series & OFOR, Kairos Milwaukie UCC, Milwaukie, OR.
563. Saturday, Oct. 27, Keynote Speaker; OFOR Saturday Symposium: The Buck Starts Here, 10am - 3pm, Molalla, OR
562. Friday-Sunday, Oct. 26-28, Keynote Speaker; Oregon Fellowship of Reconciliation Fall Retreat - The Buck Starts Here, Camp Adams, Molalla, OR, Friday, 5pm- Sunday 12 noon
561. Friday, October 26, Invited Commentator; screening of “HEIST” (new documentary about the roots of the American economic crisis), sponsored by First Unitarian Church of Portland's Economic Justice Action Groups, Alliance for Democracy, KBOO, Move to Amend, 7:00pm, First Unitarian Church, Portland, OR
560. (Oct. 25-28, Bioneers Conference, Portland, OR)
Oct. 25, Keynote Speaker; sponsored by Portland Fellowship of Reconciliation (PFOR) and the First Unitarian Church of Portland's Economic Justice and Peace Action Groups, 7:00-8:30pm, First Unitarian Church, Portland, OR
559. Oct. 24, interview with Per Fagereng, KBOO radio, Portland, 9 am PST
558. Oct. 24, KPFA "Guns and Butter" interview. Listen to archived show here.
557. Oct. 21, speaker at BBQed Oysters and Beer Fundraiser Party for PBI, San Rafael, CA, 4 pm PST
556. Oct. 14, Live Gaiam tv interview appearance. Watch it here free at 7pm EST.
555. Oct. 12, interview with Matt Rothschild of The Progressive, 10 a.m. Central time
554. October 11-14, speaker, Economic Democracy Collaborative, Madison, Wisconsin
553. Oct. 11, radio interview with Norm Stockwell, WORT, 12 pm CST
552. Oct. 9, interview with Kevin Barrett, No Lies Radio, listen to archive here.
551. Oct. 8, interview, "Mountain Hours Revolution Radio" with Wayne Walton, on RBN, 12-1 pm PST
550. Oct. 7, interview with Lloyd D'Aguilar, "Looking Back Looking Forward", http://lookingbacklookingforward.com/, 2 pm EST
549. Sept. 26, interview with Douglas Newberry, markettoolbox.tv, 1pm EST. Listen here.
548. Sept. 25, interview with Dr. Stanley Montieth, radioliberty.com, 3pm PST
547. Sept. 24, interview with Charlie McGrath, Wide Awake News, 6-7 pm PST.
546. Sept. 22, interview with Stephen Lendman, progressive radio network, 10 am PST
545. Sept. 17 interview along with Hazel Henderson, National Teach In for Occupy Wall Street, http://www.livestream.com/owshdtv 5pm EST
544. Sept. 10, interview with Thomas Taplin, Dukascopy TV (Switzerland), 7 am PST Watch and listen here
543. Sept. 7, interview with Mike Harris, republicbroadcasting.org, 6 am PST
542. Sept. 6, interview with Douglas Newberry, markettoolbox.tv, 1pm EST. Listen here.
540. Aug 26, interview with Stephen Lendman, progressive radio network, listen to archive here.
539. August 21, interview with Charlie McGrath, wideawakenews.com. Listen to archive here.
538. Aug 20, interview with Kim Greenhouse, It's Rainmaking Time, listen here.
537. Aug 16, interview with Mike Harris, republicbroadcasting.org, 6 am PST
536. Aug. 14, interview, TheAndyCaldwellshow.com, 4:30pm PST
535. August 13, interview with American Free Press, 1 pm PST
534. July 24, interview along with Victoria Grant, The People Speak, 6pm, PST
533. July 24, interview with Kevin Barrett, NoLiesRadio.org, 9 am PST
532. July 23, interview with Charlie McGrath, wideawakenews.com, 6 pm PST
531. July 22, interview with Dave Hodges, The Common Sense Show, 7 pm PST
530. July 22, interview with Stephen Lendman, progressive radio network, 10 am PST. Listen to archive here.
529. July 19, interview with Mike Beevers, KFCF Fresno, 4:30 pm PST
528. July 10-12, Speaker, Conference on Social Transformation, Faculty of Economics, Split University, Split Croatia
527. July 10, video interview with Max Keiser, the Keiser Report, on the ESM. Watch it here.
526. July 7, Interview with Phil Mackesy, This Week in Money, TalkDigitalNetwork.com, 3 pm PST
525. July 6, video interview with Dr. Mercola, see it here.
524. June 23, Interview with Al Korelin, The Korelin Economics Report, 1 pm PST. Listen to archive here.
523. June 21, interview with Tom Kiely, INN World Radio Report, 4:30 pm PST
522. June 21, interview on the Gary Null Show, 9:20 am PST
521. June 18, interview with Ken Rose, What Now radio show, KOWS RADIO OCCIDENTAL 107.3 FM, 1 pm PST. Listen to archive here.
520. June 17, interview with Bill Resnick, KBOO radio, 9 am PST
519. June 16 interview with Stephen Lendman, progressive radio network, 10 am PST. Listen to archive here.
518. June 9, interview with Sylvia Richardson, Latin Waves, 9:45 am PST. Listen to archive here.
517. June 5, interview, Truth Quest With Melodee, KHEN radio, 7pm PST
516. June 2, interview about Web of Debt, Our Common Ground,http://www.blogtalkradio.com/OCG, 7pm PST
515. June 1, interview with Robert Stark, The Stark Truth listen here.
514. Newly available video of interview on "Moral Politics" -- see it here
513. May 30, interview, The Tim Dahaney Show, ll am PST
512. May 28, interview with Pedro Gatos, "Bringing Light into Darkness", KOOP.ORG, 6 pm CST
511. May 24, interview, Make It Plain With Mark Thompson, SiriusXM Satellite Radio, 2pm PST
510. May 20, interview, Women's View Radio, blogtalkradio.com, 10 am Central Time. Listen here.
509. May 13, interview, www.Blogtalkradio.com/fixyourmortgagemess, 4:15 pm PST
508. May 12, interview with Stephen Lendman, progressive radio network, 10 am PST Listen here.
507. May 9, seminar, Re-imagining Money and Credit, Art bldg. rm 103, El Camino college, Torrance, Ca. 5-7:30 pm
506. May 8, interview with Mike Harris, republicbroadcasting.org, 9 am EST
505. May 7, radio discussion on "The Myth of Austerity", Connect the Dots, KPFK Los Angeles, 7 am PST. Listen here.
504. May 4, interview The Unsolicited Opinion, republicbroadcasting.org, 8 am PST
503. April 27-28, speaker, Public Banking Institute Conference, Friends Center, Philadelphia. Listen here.
502. April 25, speaker Global Teach-In (globalteachin.com), 12 noon EST
501. April 17, Interview with Leo Steel, http://www.blogtalkradio.com/lasteelshoworg, 8:30 pm EST. Listen here.. 31 minutes in.
500. April 14, interview with Stephen Lendman, progressive radio network, 10 am PST
499. April 14, interview with Al Korelin, The Korelin Economics Report
498. April 10th-12th Speaker at Claremont Conference, “Creating Money in a Finite World” Claremont, CA . See video here.
497. April 5, interview , This Week In Money with Phil Mackesy (howestreet.com) 12:30 PST. Listen to the archive here.
496. April 3, speaker at COMER with Paul Hellyer, "Escape From the Web of Debt," Toronto, 7:30 pm
495. March 27, speaker on "Why are we so Broke? New ways to look at the Finances of our State and City," League of Women Voters luncheon, San Diego, 12 noon
494.5 March 24, radio interview, Mandelman Matters. Listen here.
494. March 17, speaker via skype, SCADS conference, London
493. March 15, interview with Per Fagereng, Fight the Empire, KBOO radio, 9:30 am PST
492. March 15, speaker, San Rafael City Hall 6 pm
491. March 13, speaker at Sergio Lub's house, Walnut Creek, info at Favors.org, 6pm
490. March 11, speaker, TedxNewWallStreet. See it here.
489. March 10, interview with Stephen Lendman, progressive radio network, 10 am PST
488. March 6, interview with Melinda Pillsbury-Foster, http://radio.rumormillnews.com/podcast/, 11 am PST
487. Feb. 25, interview with Martin Andelman, http://www.mandelman.ml-implode.com, 9:30 am PST
486. Feb. 25, interview, This Week In Money with Phil Mackesy (howestreet.com), 3 pm PST
485. Feb. 25, interview on CIVL Radio, Latin Waves, How Greece Could Take Down Wall Street, 11:30am PST
484. Feb 23, interview with Thomas Kiely, INN World Report Radio, 7:30 pm EST
483. Feb. 17, featured speaker, Public Banking in America weekly call, 9 am PST
482. Feb. 11, interview with Stephen Lendman, progressive radio network, 10 am PST
481. Feb. 8, interview with Mike Beevers, KFCF Fresno, 4:30 pm PST
480. Feb. 7, interview with Kevin Barrett, NoLiesRadio.org, 9 am PST; listen to archive here
479. Feb. 6, participant, Occupiers and Wells Fargo Executives Gather to Discuss the American Foreclosure Crisis, The Center of Nonprofit Management at California Endowment Building 1000 N. Alameda, Los Angeles, meeting 3 pm and press conference 5:30 pm
478. Feb. 2, interview with Tom Kiely, INN World Report Radio, 7:30 pm EST
477. Feb. 2, interview with Patrick Timpone, oneradionetwork.com, naturalnewsradio.com. Listen to archive here
476. Jan. 31, interview, Liberty Coins and Precious Metals, 9 am PST
475. Jan. 27, interview KPFA, Project Censored, 8:30 am PST
474. Jan. 27, FILMS4CHANGE-INSIDEJOB, panel speaker, Edye Second Space, Santa Monica Performing Arts Center, 7:30 pm
473. Jan 22, interview with Dave Hodges, The Common Sense Show, 7:30 pm PST. Listen live here.
472. Jan. 20, interview with Mike Harris, The Republic Broadcasting Network, 7 am PST
471. Jan. 16, interview with Rob Lorei, WMNF fm, Tampa, 2 pm PST
470. Jan. 14, interview with Stephen Lendman, progressive radio network, 10 am PST
469. Jan. 11, interview with Jeff Rense, rense.com, 8pm PST
Taxpayers are paying billions of dollars for a swindle pulled off by the world’s biggest banks, using a form of derivative called interest-rate swaps; and the Federal Deposit Insurance Corporation has now joined a chorus of litigants suing over it. According to an SEIU report:
Derivatives . . . have turned into a windfall for banks and a nightmare for taxpayers. . . . While banks are still collecting fixed rates of 3 to 6 percent, they are now regularly paying public entities as little as a tenth of one percent on the outstanding bonds, with rates expected to remain low in the future. Over the life of the deals, banks are now projected to collect billions more than they pay state and local governments – an outcome which amounts to a second bailout for banks, this one paid directly out of state and local budgets.
It is not just that local governments, universities and pension funds made a bad bet on these swaps. The game itself was rigged, as explained below. The FDIC is now suing in civil court for damages and punitive damages, a lead that other injured local governments and agencies would be well-advised to follow. But they need to hurry, because time on the statute of limitations is running out.
The Largest Cartel in World History
On March 14, 2014, the FDIC filed suit for LIBOR-rigging against sixteen of the world’s largest banks – including the three largest US banks (JPMorgan Chase, Bank of America, and Citigroup), the three largest UK banks, the largest German bank, the largest Japanese bank, and several of the largest Swiss banks. Bill Black, professor of law and economics and a former bank fraud investigator, calls them “the largest cartel in world history, by at least three and probably four orders of magnitude.”
LIBOR (the London Interbank Offering Rate) is the benchmark rate by which banks themselves can borrow. It is a crucial rate involved in hundreds of trillions of dollars in derivative trades, and it is set by these sixteen megabanks privately and in secret.
Interest rate swaps are now a $426 trillion business. That’s trillion with a “t” – about seven times the gross domestic product of all the countries in the world combined. According to the Office of the Comptroller of the Currency, in 2012 US banks held $183.7 trillion in interest-rate contracts, with only four firms representing 93% of total derivative holdings; and three of the four were JPMorgan Chase, Citigroup, and Bank of America, the US banks being sued by the FDIC over manipulation of LIBOR.
Lawsuits over LIBOR-rigging have been in the works for years, and regulators have scored some very impressive regulatory settlements. But so far, civil actions for damages have been unproductive for the plaintiffs. The FDIC is therefore pursuing another tack.
But before getting into all that, we need to look at how interest-rate swaps work. It has been argued that the counterparties stung by these swaps got what they bargained for – a fixed interest rate. But that is not actually what they got. The game was rigged from the start.
Interest-rate swaps are sold to parties who have taken out loans at variable interest rates, as insurance against rising rates. The most common swap is one where counterparty A (a university, municipal government, etc.) pays a fixed rate to counterparty B (the bank), while receiving from B a floating rate indexed to a reference rate such as LIBOR. If interest rates go up, the municipality gets paid more on the swap contract, offsetting its rising borrowing costs. If interest rates go down, the municipality owes money to the bank on the swap, but that extra charge is offset by the falling interest rate on its variable rate loan. The result is to fix borrowing costs at the lower variable rate.
At least, that is how it’s supposed to work. The catch is that the swap is a separate financial agreement – essentially an ongoing bet on interest rates. The borrower owes both the interest onits variable rate loan and what it must pay out on this separate swap deal. And the benchmarks for the two rates don’t necessarily track each other. As explained by Stephen Gandel on CNN Money:
The rates on the debt were based on something called the Sifma municipal bond index, which is named after the industry group that maintains the index and tracks muni bonds. And that’s what municipalities should have bought swaps based on.
Instead, Wall Street sold municipalities Libor swaps, which were easier to trade and [were] quickly becoming a gravy train for the banks.
Historically, Sifma and LIBOR moved together. But that was before the greatest-ever global banking cartel got into the game of manipulating LIBOR. Gandel writes:
In 2008 and 2009, Libor rates, in general, fell much faster than the Sifma rate. At times, the rates even went in different directions. During the height of the financial crisis, Sifma rates spiked. Libor rates, though, continued to drop. The result was that the cost of the swaps that municipalities had taken out jumped in price at the same time that their borrowing costs went up, which was exactly the opposite of how the swaps were supposed to work.
The two rates had decoupled, and it was chiefly due to manipulation. As noted in the SEUI report:
[T]here is . . . mounting evidence that it is no accident that these deals have gone so badly, so quickly for state and local governments. Ongoing investigations by the U.S. Department of Justice and the California, Florida, and Connecticut Attorneys General implicate nearly every major bank in a nationwide conspiracy to rig bids and drive up the fixed rates state and local governments pay on their derivative contracts.
Changing the Focus to Fraud
Suits to recover damages for collusion, antitrust violations and racketeering (RICO), however, have so far failed. In March 2013, SDNY Judge Naomi Reece Buchwald dismissed antitrust and RICO claims brought by investors and traders in actions consolidated in her court, on the ground that the plaintiffs lacked standing to bring the claims. She held that the rate-setting banks’ actions did not affect competition, because those banks were not in competition with one another with respect to LIBOR rate-setting; and that “the alleged collusion occurred in an arena in which defendants never did and never were intended to compete.”
Okay, the defendants weren’t competing with each other. They were colluding with each other, in order to unfairly compete with the rest of the financial world – local banks, credit unions, and the state and local governments they lured into being counterparties to their rigged swaps. The SDNY ruling is on appeal to the Second Circuit.
In the meantime, the FDIC is taking another approach. Its 24-count complaint does include antitrust claims, but the emphasis is on damages for fraud and conspiring to keep the LIBOR rate low to enrich the banks. The FDIC is not the first to bring such claims, but its massive suit adds considerable weight to the approach.
Why would keeping interest rates low enrich the rate-setting banks? Don’t they make more money if interest rates are high?
The answer is no. Unlike most banks, they make most of their money not from ordinary commercial loans but from interest rate swaps. The FDIC suit seeks to recover losses caused to 38 US banking institutions that did make their profits from ordinary business and consumer loans – banks that failed during the financial crisis and were taken over by the FDIC. They include Washington Mutual, the largest bank failure in US history. Since the FDIC had to cover the deposits of these failed banks, it clearly has standing to recover damages, and maybe punitive damages, if intentional fraud is proved.
The Key Role of the Federal Reserve
The rate-rigging banks have been caught red-handed, but the greater manipulation of interest rates was done by the Federal Reserve itself. The Fed aggressively drove down interest rates to save the big banks and spur economic recovery after the financial collapse. In the fall of 2008, it dropped the prime rate (the rate at which banks borrow from each other) nearly to zero.
This gross manipulation of interest rates was a giant windfall for the major derivative banks. Indeed, the Fed has been called a tool of the global banking cartel. It is composed of 12 branches, all of which are 100% owned by the private banks in their districts; and the Federal Reserve Bank of New York has always been the most important by far of these regional Fed banks. New York, of course is where Wall Street is located.
LIBOR is set in London; but as Simon Johnson observed in a New York Times article titled The Federal Reserve and the LIBOR Scandal, the Fed has jurisdiction whenever the “safety and soundness” of the US financial system is at stake. The scandal, he writes, “involves egregious, flagrant criminal conduct, with traders caught red-handed in e-mails and on tape.” He concludes:
This could even become a “tobacco moment,” in which an industry is forced to acknowledge its practices have been harmful – and enters into a long-term agreement that changes those practices and provides continuing financial compensation.
Bill Black concurs, stating, “Our system is completely rotten. All of the largest banks are involved—eagerly engaged in this fraud for years, covering it up.” The system needs a complete overhaul.
In the meantime, if the FDIC can bring a civil action for breach of contract and fraud, so can state and local governments, universities, and pension funds. The possibilities this opens up for California (where I’m currently running for State Treasurer) are huge. Fraud is grounds for rescission (terminating the contract) without paying penalties, potentially saving taxpayers enormous sums in fees for swap deals that are crippling cities, universities and other public entities across the state. Fraud is also grounds for punitive damages, something an outraged jury might be inclined to impose. My next post will explore the possibilities for California in more detail. Stay tuned.
Ellen Brown is an attorney, founder of the Public Banking Institute, and a candidate for California State Treasurer running on a state bank platform. She is the author of twelve books, including the best-selling Web of Debt and her latest book, The Public Bank Solution, which explores successful public banking models historically and globally.
Is the US or the World Coming to an End? It will be one or the other Paul Craig Roberts 2014 is shaping up as a year of reckoning for the United States. Two pressures are building on the US…
The post Is the US or the World Coming to an End? — Paul Craig Roberts appeared first on PaulCraigRoberts.org.
All of a sudden, the Nasdaq is absolutely tanking. On Monday, it fell more than 1 percent after dropping 3.6 percent on Thursday and Friday combined. At this point, the Nasdaq is off to the worst start to a year that we have seen since 2008, and we all remember what happened back then. So [...]
“As things stand, the banks are the permanent government of the country, whichever party is in power.”
– Lord Skidelsky, House of Lords, UK Parliament, 31 March 2011)
On March 20, 2014, European Union officials reached an historic agreement to create a single agency to handle failing banks. Media attention has focused on the agreement involving the single resolution mechanism (SRM), a uniform system for closing failed banks. But the real story for taxpayers and depositors is the heightened threat to their pocketbooks of a deal that now authorizes both bailouts and “bail-ins” – the confiscation of depositor funds. The deal involves multiple concessions to different countries and may be illegal under the rules of the EU Parliament; but it is being rushed through to lock taxpayer and depositor liability into place before the dire state of Eurozone banks is exposed.
The bail-in provisions were agreed to last summer. According to Bruno Waterfield, writing in the UK Telegraph in June 2013:
Under the deal, after 2018 bank shareholders will be first in line for assuming the losses of a failed bank before bondholders and certain large depositors. Insured deposits under £85,000 (€100,000) are exempt and, with specific exemptions, uninsured deposits of individuals and small companies are given preferred status in the bail-in pecking order for taking losses . . . Under the deal all unsecured bondholders must be hit for losses before a bank can be eligible to receive capital injections directly from the ESM, with no retrospective use of the fund before 2018.
As noted in my earlier articles, the ESM (European Stability Mechanism) imposes an open-ended debt on EU member governments, putting taxpayers on the hook for whatever the Eurocrats (EU officials) demand. And it’s not just the EU that has bail-in plans for their troubled too-big-to-fail banks. It is also the US, UK, Canada, Australia, New Zealand and other G20 nations. Recall that a depositor is an unsecured creditor of a bank. When you deposit money in a bank, the bank “owns” the money and you have an IOU or promise to pay.
Under the new EU banking union, before the taxpayer-financed single resolution fund can be deployed, shareholders and depositors will be “bailed in” for a significant portion of the losses. The bankers thus win both ways: they can tap up the taxpayers’ money and the depositors’ money.
The Unsettled Question of Deposit Insurance
But at least, you may say, it’s only the uninsured deposits that are at risk (those over €100,000—about $137,000). Right?
Not necessarily. According to ABC News, “Thursday’s result is a compromise that differs from the original banking union idea put forward in 2012. The original proposals had a third pillar, Europe-wide deposit insurance. But that idea has stalled.”
European Central Bank President Mario Draghi, speaking before the March 20th meeting in the Belgian capital, hailed the compromise plan as “great progress for a better banking union. Two pillars are now in place” – two but not the third. And two are not enough to protect the public.As observed in The Economist in June 2013, without Europe-wide deposit insurance, the banking union is a failure:
[T]he third pillar, sadly ignored, [is] a joint deposit-guarantee scheme in which the costs of making insured depositors whole are shared among euro-zone members. Annual contributions from banks should cover depositors in normal years, but they cannot credibly protect the system in meltdown (America’s prefunded scheme would cover a mere 1.35% of insured deposits). Any deposit-insurance scheme must have recourse to government backing. . . . [T]he banking union—and thus the euro—will make little sense without it.
All deposits could be at risk in a meltdown. But how likely is that?
Pretty likely, it seems . . . .
What the Eurocrats Don’t Want You to Know
Mario Draghi was vice president of Goldman Sachs Europe before he became president of the ECB. He had a major hand in shaping the banking union. And according to Wolf Richter, writing in October 2013, the goal of Draghi and other Eurocrats is to lock taxpayer and depositor liability in place before the panic button is hit over the extreme vulnerability of Eurozone banks:
European banks, like all banks, have long been hermetically sealed black boxes. . . . The only thing known about the holes in the balance sheets of these black boxes, left behind by assets that have quietly decomposed, is that they’re deep. But no one knows how deep. And no one is allowed to know – not until Eurocrats decide who is going to pay for bailing out these banks.
When the ECB becomes the regulator of the 130 largest ECB banks, says Richter, it intends to subject them to more realistic evaluations than the earlier “stress tests” that were nothing but “banking agitprop.” But these realistic evaluations won’t happen until the banking union is in place. How does Richter know? Draghi himself said so. Draghi said:
“The effectiveness of this exercise will depend on the availability of necessary arrangements for recapitalizing banks … including through the provision of a public backstop. . . . These arrangements must be in place before we conclude our assessment.”
Richter translates that to mean:
The truth shall not be known until after the Eurocrats decided who would have to pay for the bailouts. And the bank examinations won’t be completed until then, because if any of it seeped out – Draghi forbid – the whole house of cards would collapse, with no taxpayers willing to pick up the tab as its magnificent size would finally be out in the open!
Only after the taxpayers – and the depositors – are stuck with the tab will the curtain be lifted and the crippling insolvency of the banks be revealed. Predictably, panic will then set in, credit will freeze, and the banks will collapse, leaving the unsuspecting public to foot the bill.
What Happened to Nationalizing Failed Banks?
Underlying all this frantic wheeling and dealing is the presumption that the “zombie banks” must be kept alive at all costs – alive and in the hands of private bankers, who can then continue to speculate and reap outsized bonuses while the people bear the losses.
But that’s not the only alternative. In the 1990s, the expectation even in the United States was that failed megabanks would be nationalized. That route was pursued quite successfully not only in Sweden and Finland but in the US in the case of Continental Illinois, then the fourth-largest bank in the country and the largest-ever bankruptcy. According to William Engdahl, writing in September 2008:
[I]n almost every case of recent banking crises in which emergency action was needed to save the financial system, the most economical (to taxpayers) method was to have the Government, as in Sweden or Finland in the early 1990’s, nationalize the troubled banks [and] take over their management and assets … In the Swedish case the end cost to taxpayers was estimated to have been almost nil.
Typically, nationalization involves taking on the insolvent bank’s bad debts, getting the bank back on its feet, and returning it to private owners, who are then free to put depositors’ money at risk again. But better would be to keep the nationalized mega-bank as a public utility, serving the needs of the people because it is owned by the people.
As argued by George Irvin in Social Europe Journal in October 2011:
[T]he financial sector needs more than just regulation; it needs a large measure of public sector control—that’s right, the n-word: nationalisation. Finance is a public good, far too important to be run entirely for private bankers. At the very least, we need a large public investment bank tasked with modernising and greening our infrastructure . . . . [I]nstead of trashing the Eurozone and going back to a dozen minor currencies fluctuating daily, let’s have a Eurozone Ministry of Finance (Treasury) with the necessary fiscal muscle to deliver European public goods like more jobs, better wages and pensions and a sustainable environment.
A Third Alternative – Turn the Government Money Tap Back On
A giant flaw in the current banking scheme is that private banks, not governments, now create virtually the entire money supply; and they do it by creating interest-bearing debt. The debt inevitably grows faster than the money supply, because the interest is not created along with the principal in the original loan.
For a clever explanation of how all this works in graphic cartoon form, see the short French video “Government Debt Explained,” linked here.
The problem is exacerbated in the Eurozone, because no one has the power to create money ex nihilo as needed to balance the system, not even the central bank itself. This flaw could be remedied either by allowing nations individually to issue money debt-free or, as suggested by George Irvin, by giving a joint Eurozone Treasury that power.
The Bank of England just admitted in its Quarterly Bulletin that banks do not actually lend the money of their depositors. What they lend is bank credit created on their books. In the U.S. today, finance charges on this credit-money amount to between 30 and 40% of the economy, depending on whose numbers you believe. In a monetary system in which money is issued by the government and credit is issued by public banks, this “rentiering” can be avoided. Government money will not come into existence as a debt at interest, and any finance costs incurred by the public banks’ debtors will represent Treasury income that offsets taxation.
New money can be added to the money supply without creating inflation, at least to the extent of the “output gap” – the difference between actual GDP or actual output and potential GDP. In the US, that figure is about $1 trillion annually; and for the EU is roughly €520 billion ($715 billion). A joint Eurozone Treasury could add this sum to the money supply debt-free, creating the euros necessary to create jobs, rebuild infrastructure, protect the environment, and maintain a flourishing economy.
Ellen Brown is an attorney, founder of the Public Banking Institute, and a candidate for California State Treasurer running on a state bank platform. She is the author of twelve books, including the best-selling Web of Debt and her latest book, The Public Bank Solution, which explores successful public banking models historically and globally.
By Susan Duclos
[UPDATE] I was just reminded that I should have informed readers of the recent blockbuster news that JPMorgan has multi-billion dollar life insurance policies on employees betting on their early deaths, to the tune of 10.4 billion dollars. (Thanks S)
The JPMorgan linked deaths are piling up as yet another death is added to the tally, bringing the official number to 13, yet when lower level banksters are added in, that number tops twenty, and yet official causes of death are either unknown, ruled accidental or "suicides," despite previous warnings, by "V" The Guerrilla Economist via Steve Quayle, of an actual hit list with over three dozen names on it was revealed after the fourth mysterious banker death.
Giampapa, 56, of the Northwest Side, was an accomplished long-distance cyclist and corporate attorney for JPMorgan Chase in Columbus. He was a longtime resident of Victorian Village who had moved with his wife, Thelma, into a condominium near Dublin about two years ago.
Giampapa was biking north on Troy-Sidney Road, near Loy Road, outside of Piqua just after 11 a.m. Saturday when a minivan struck him from behind, Miami County Deputy Todd Tennant said. Giampapa was pronounced dead at the scene.
The man that struck and killed Giampapa was 78 years-old, and while it is unimaginable that he had anything to do with some type of hit squad, the death of ANOTHER JPMorgan employee also cannot be ignored.
1 – William Broeksmit
2- Karl Slym
3 – Gabriel Magee
4 – Mike Dueker
5 – Richard Talley
6 -Tim Dickenson
7 – Ryan Henry Crane
8 - Li Junjie
9 - James Stuart Jr
10 – Autumn Radtke
11 - Edmund (Eddie) Reilly
12 - Kenneth Bellando
The chart below the video was made by a Wake up America reader, color codes explained above the chart.
More from Christopher Greene at AMTV, below.
Explanation of the chart below, via email:
Bankers Deaths Chart uploaded by Susan Duclos
Cross posted at Before It's News
Global Research and Countercurrents 15/3/2014
"Tony’s death comes only a few days after the tragic loss of Bob Crow; for the second time within a week, our movement has lost an outstanding trade unionist and socialist, and I have lost a close friend.” Arthur Scargill, former leader of the National Union of Miners.
“Sad to learn of the passing of Tony Benn. My sincere condolences to his family and friends.”
“Tony Benn was a magnificent writer, speaker and campaigner. There was never a dull moment listening to him, even if you disagreed with him.”
The U.S. government and the Russian government have both been forced into positions where neither one of them can afford to back down. If Barack Obama backs down, he will be greatly criticized for being "weak" and for having been beaten by Vladimir Putin once again. If Putin backs down, he will be greatly criticized [...]
Is Pope Francis taking steps that are laying the groundwork for the emergence of a one world religion? If that question sounds quite bizarre to you, I urge you to read the rest of this article. We live at a time when globalization is advancing rapidly. The global economy is more integrated than it [...]
What are we to make of this sudden rash of banker suicides? Does this trail of dead bankers lead somewhere? Or could it be just a coincidence that so many bankers have died in such close proximity? I will be perfectly honest and admit that I do not know what is going on. But there [...]
“Epic in scale, unprecedented in world history.” That is how William K. Black, professor of law and economics and former bank fraud investigator, describes the frauds in which JPMorgan Chase (JPM) has now been implicated. They involve more than a dozen felonies, including bid-rigging on municipal bond debt; colluding to rig interest rates on hundreds of trillions of dollars in mortgages, derivatives and other contracts; exposing investors to excessive risk; failing to disclose known risks, including those in the Bernie Madoff scandal; and engaging in multiple forms of mortgage fraud.
So why, asks Chicago Alderwoman Leslie Hairston, are we still doing business with them? She plans to introduce a city council ordinance deleting JPM from the city’s list of designated municipal depositories. As quoted in the January 14th Chicago Sun-Times:
The bank has violated the city code by making admissions of dishonesty and deceit in the way they dealt with their investors in the mortgage securities and Bernie Madoff Ponzi scandals. . . . We use this code against city contractors and all the small companies, why wouldn’t we use this against one of the largest banks in the world?
A similar move has been recommended for the City of Los Angeles by L.A. City Councilman Gil Cedillo. But in a January 19th editorial titled “There’s No Profit in L A. Bashing JPMorgan Chase,” the L.A. Times editorial board warned against pulling the city’s money out of JPM and other mega-banks – even though the city attorney is suing them for allegedly causing an epidemic of foreclosures in minority neighborhoods.
“L.A. relies on these banks,” says The Times, “for long-term financing to build bridges and restore lakes, and for short-term financing to pay the bills.” The editorial noted that a similar proposal brought in the fall of 2011 by then-Councilman Richard Alarcon, backed by Occupy L.A., was abandoned because it would have resulted in termination fees and higher interest payments by the city.
It seems we must bow to our oppressors because we have no viable alternative – or do we? What if there is an alternative that would not only save the city money but would be a safer place to deposit its funds than in Wall Street banks?
The Tiny State That Broke Free
There is a place where they don’t bow. Where they don’t park their assets on Wall Street and play the mega-bank game, and haven’t for almost 100 years. Where they escaped the 2008 banking crisis and have no government debt, the lowest foreclosure rate in the country, the lowest default rate on credit card debt, and the lowest unemployment rate. They also have the only publicly-owned bank.
The place is North Dakota, and their state-owned Bank of North Dakota (BND) is a model for Los Angeles and other cities, counties, and states.
Like the BND, a public bank of the City of Los Angeles would not be a commercial bank and would not compete with commercial banks. In fact, it would partner with them – using its tax revenue deposits to create credit for lending programs through the magical everyday banking practice of leveraging capital.
The BND is a major money-maker for North Dakota, returning about $30 million annually in dividends to the treasury – not bad for a state with a population that is less than one-fifth that of the City of Los Angeles. Every year since the 2008 banking crisis, the BND has reported a return on investment of 17-26%.
Like the BND, a Bank of the City of Los Angeles would provide credit for city projects – to build bridges, restore lakes, and pay bills – and this credit would essentially be interest-free, since the city would own the bank and get the interest back. Eliminating interest has been shown to reduce the cost of public projects by 35% or more.
Consider what that could mean for Los Angeles. According to the current fiscal budget, the LAX Modernization project is budgeted at $4.11 billion. That’s the sticker price. But what will it cost when you add interest on revenue bonds and other funding sources? The San Francisco-Oakland Bay Bridge earthquake retrofit boondoggle was slated to cost about $6 billion. Interest and bank fees added another $6 billion. Funding through a public bank could have saved taxpayers $6 billion, or 50%.
If Los Angeles owned its own bank, it could also avoid costly “rainy day funds,” which are held by various agencies as surplus taxes. If the city had a low-cost credit line with its own bank, these funds could be released into the general fund, generating massive amounts of new revenue for the city.
The potential for the City and County of Los Angeles can be seen by examining their respective Comprehensive Annual Financial Reports (CAFRs). According to the latest CAFRs (2012), the City of Los Angeles has “cash, pooled and other investments” of $11 billion beyond what is in its pension fund (page 85), and the County of Los Angeles has $22 billion (page 66). To put these sums in perspective, the austerity crisis declared by the State of California in 2012 was the result of a declared state budget deficit of only $16 billion.
The L.A. CAFR funds are currently drawing only minimal interest. With some modest changes in regulations, they could be returned to the general fund for use in the city’s budget, or deposited or invested in the city’s own bank, to be leveraged into credit for local purposes.
Beyond being a money-maker, a city-owned bank can minimize the risks of interest rate manipulation, excessive fees, and dishonest dealings.
Another risk that must now be added to the list is that of confiscation in the event of a “bail in.” Public funds are secured with collateral, but they take a back seat in bankruptcy to the “super priority” of Wall Street’s own derivative claims. A major derivatives fiasco of the sort seen in 2008 could wipe out even a mega-bank’s available collateral, leaving the city with empty coffers.
The city itself could be propelled into bankruptcy by speculative derivatives dealings with Wall Street banks. The dire results can be seen in Detroit, where the emergency manager, operating on behalf of the city’s creditors, put it into bankruptcy to force payment on its debts. First in line were UBS and Bank of America, claiming speculative winnings on their interest-rate swaps, which the emergency manager paid immediately before filing for bankruptcy. Critics say the swaps were improperly entered into and were what propelled the city into bankruptcy. Their propriety is now being investigated by the bankruptcy judge.
Not Too Big to Abandon
Mega-banks might be too big to fail. According to U.S. Attorney General Eric Holder, they might even be too big to prosecute. But they are not too big to abandon as depositories for government funds.
There may indeed be no profit in bashing JPMorgan Chase, but there would be profit in pulling deposits out and putting them in Los Angeles’ own public bank. Other major cities currently exploring that possibility include San Franciscoand Philadelphia.
If North Dakota can bypass Wall Street with its own bank and declare its financial independence, so can the City of Los Angeles. And so can the County. And so can the State of California.
Ellen Brown is an attorney, chairman of the Public Banking Institute, and author of 12 books including The Public Bank Solution. She is currently running for California state treasurer on the Green Party ticket.
Filed under: Ellen Brown Articles/Commentary
Bankers committing suicide by jumping from the rooftops of their own banks is something that we think of when we think of the Great Depression. Well, it just happened in London, England. A vice president at JPMorgan's European headquarters in London plunged to his death after jumping from the top of the 33rd floor. He [...]