The fiscal crisis in the United States is near, and it won’t be pretty

By LUIS MIRANDA | THE REAL AGENDA | MARCH 5, 2013

When one hears talks about the collapse of the dollar, it is hard to picture how a currency that is the base of all global transactions can simply disappear. An important point to understand is that such a collapse does not occur at once. It takes a while to happen because that is how it has been arranged. What most people are clueless about is that, not only is the death of the dollar possible, but that it has already started.

Since the dollar became the world’s currency by design, the American currency has lost a great deal of value. According to the U.S. Bureau of Labor and Statistics, one dollar today is worth only about 5% of what the green back was worth back in 1913. More recent signs of the loss of relevance the dollar has had in the global economy is the fact that major commercial power houses –American commercial partners and foes– have officially adopted new ways to conduct commercial transactions. For example, China and Russia are now using their own currencies to deal with the purchase and sale of products. Another case is that of India and Japan. They have also resourced to their own currencies to carry out trade.

The dollar has not only lost value, but also credibility. The origin of the lack of trust on what once was the base currency on which every single product and service was priced –including gold– is the United States’ thirst for debt as a ‘development’ model. Today more than ever before, the American government depends on the issuance of debt as a way to keep up with its spending. For that reason, the country’s central bank, the Federal Reserve, has come up with all kinds of circus moves to slow down an outcome that seems imminent: the complete collapse of the U.S. dollar currency.

The influence of the Fed in the way the U.S. manages its debt to GDP ratio stems from the country’s inability to make payments on the cash it has borrowed from the Fed itself, as well as China and other foreign investors who own much of the American debt. The path chosen by the Fed to temporarily deal with the American inability to make payments on its debt –which continues to grow out of control with every passing day– is to make large purchases of government bonds and to use quantitative easing –the pumping of unlimited amounts of electronic money– in an attempt to make everyone feel good about the state of the economy.

The Fed’s intention is to make clear to the world that the U.S. has meaningful ways to prevent a default, because since all important transactions are carried out in dollars and the dollar is the world’s currency, the private central bank can issue fake money for as long as it wants. The obvious consequence of indefinitely pumping cash into the economy is hyperinflation, which has not happened because banks were ordered not to put the money they were given out into the market in the form of loans.

It seems that the Fed has everything figured out and that the collapse of the dollar will not come as soon as some economists have predicted, but the reality is very different. According to a study conducted by four prominent economists, it is almost crunch time for the Fed and the U.S. government. Right now, the least of the problems for the central bank and the American government is not lack of credibility, but a strong change of a fiscal crisis. The report was prepared by David Greenlaw, Managing Director and Chief U.S. Fixed Income Economist at Morgan Stanley; James D. Hamilton, Professor of Economics at University of California at San Diego and Research Associate of the National Bureau of Economic Research; Peter Hooper, Managing Director and Chief Economist, Deutsche Bank Securities Inc; and Frederic S. Mishkin, Alfred Lerner Professor of Banking and Financial Institutions, a Graduate of the School of Business at Columbia University and former Chairman of the Federal Reserve Bank.

What these four men found, is that the actions of the Federal Reserve caused massive inflation to a level where the dollar’s purchasing power has gone down in free fall . As the very same Federal Reserve policy books say, the goal is to devalue the currency by at least another 30 percent. The 89-page report states that reductions in fiscal revenues and excessive increase in government spending, the close relationship between sovereign debt and the levels of interests to be paid on the debt, a significant relation between debt loans and borrowing costs and the direct effects of the fiscal crises on monetary policy have been combined to render a single outcome: massive losses for countries and institutions such as the U.S. Federal Reserve that will exceed available capital.

What this means is that, if things continue business as usual, even the Fed will become unable to sustain the current fiscal crisis. According to the report, the Fed may enter unknown territory where the amount of debt created will exceed its capital holdings. What will happen when the Fed gets to its limit and can no longer maintain the current debt-based system? According to the authors, the more a country’s debt is held by foreigners the greater the political incentives for the government to default on that debt. This is what has been seen in developing countries. The day of reckoning for the Fed may come as early as 2016. If better fiscal and monetary policies are adopted, the disaster could be put off until 2018.

It is then necessary to remember who are the United States’ investors. As of December of 2012, the Federal Reserve System, which is a branch of the international banking cartel came up as first. In second place is China, with $1202.9 billion. After China, other countries like Japan, Brazil, Switzerland and Russia appear in third, fourth and fifth places. With the U.S. debt reaching and passing 100% of its GDP and the government borrowing and printing money as if it were going out of fashion, the only possible outcome is what we have seen in modern cases of fiscal irresponsibility.

Countries get in debt up to their eye balls to fulfill the promises made at home during by irresponsible politicians during political campaigns. Since the government does not have any money to actually pay for the expenses it creates, it is only ‘normal’ to get in debt to be able to meet demands for more social programs and to pay interests on old debt. But since the governments do not borrow locally, they subject their country, (i.e. the people) to having to work all their lives to make payments on the debt generated on the debt it has gotten into. The ability of a government to make debt payments is finite. Cases in point Argentina in 199o, Greece in 2008 to 2012, Portugal and Spain in 2013 and the looming fiscal crisis the United States will have to face in the near future.

The supposed programs to help nations pay their debt is nothing more than an attempt to slow the collapse of the global economy and the that assures foreign debt holders they will have enough time to loot the countries for all they have gotten. That is the ultimate form of payment used by the international banking cartel uses to recover their so-called investments. Different from Argentina, Greece, Portugal and Spain, it is hard to see how the Americans will allow the bankers to suck every drop of blood for not paying its debt, which is why negotiations have been held to find the least painful way to phase the dollar out. Although the bankers want every single penny back, they prefer to get it in the most peaceful way possible as supposed to having to face street protests as it has happened in Egypt, Libya, Syria, Argentina, Spain and Portugal.

In conclusion, the current system of debt creation as the base for development has reached the end of its life cycle. The consequences to come should the United States continue to print or issue fake money to pay its debt instead of cutting down spending and making big international corporations liable for evading the payment of corporate taxes, will make it impossible for the U.S. government to pay its debt and for the Fed to issue fake money to sustain the current system. The only reason the U.S. has not collapsed as a debtor nation is due to the demand for U.S. Treasuries at home and abroad, which has been maintained due to the dollar’s status as the world currency. That status however, is a subjective and ephimerous concept. The moment more nations decide to trade with their own currencies, or to set up sound monetary systems such as the one Muammar Gaddafi intended to create in Libya –the gold dinar–, the more credibility and trust the dollar will lose. Lack of trust and the impossibility to meet fiscal obligations will end up destroying the dollar.

As the authors put it simply, high debt leads to higher interest rates and higher debt. The high levels of debt reach a tipping point –fiscal crisis– in which the interest rate shoots up. In the case of the U.S. it has many of the possible triggers of that shoot up in interest rates and the only thing that is holding them from going through the roof is an imaginary belief that the U.S. is still that powerful economic entity that it appeared to be many years ago.

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If National Debt is not Important, why are we paying Income tax

Note: This article is focused on the United States, but the same question should be asked everywhere else?

By MIKE ADAMS | NATURALNEWS.com | NOVEMBER 23, 2012

The U.S. federal government is over $16.2 trillion in debt. But that doesn’t really matter, we’re told, because the Federal Reserve — a private banking monopoly — can create an unlimited quantity of dollars to keep buying up the U.S. debt. This is called “QE unlimited,” meaning unlimited quantitative easing (money creation).

On top of that, U.S. Treasury Secretary Timothy Geithner recently suggested we simply eliminate the debt ceiling altogether and launch America into INFINITE debt.

This program of fiscal suicide is already under way. The Federal Reserve announced a few weeks ago that it would begin buying up to $80 billion a month in U.S. debt, continuing indefinitely.

At the same time all this is going on, the government insists it needs to confiscate an ever-expanding portion of your income in order to increase “government revenue.” Current federal tax “revenues” (which is a warped word to use for taxes in the first place) are at roughly $2.4 trillion a year.

But hold on just a second… and here’s the IQ test, are you ready?

If the Federal Reserve can just create trillions of dollars a year in new money and hand it over to the federal government, then why are tax revenues needed at all?

Answer: They aren’t.

If debt doesn’t matter, then taxes aren’t needed at all

Under the current system of unlimited spending, unlimited money creation and unlimited debt that “doesn’t matter” according to the bureaucrats in Washington, there is absolutely no reason why any so-called “revenue” needs to be collected from the working class population whatsoever. “Revenue” only matters if debt matters, and we’ve been told by everybody in Washington (except Ron Paul) that debt doesn’t matter.

Logically, then, we need no income tax at all. The President could simply announce the elimination of all federal taxes and the closure of the IRS, then have the Fed print up the money it needs. No more income taxes… ever! Imagine the savings in paperwork reduction alone…

This instant creation of money by the feds is not only possible, it has already been done. Remember the “too big to fail” bankster bailouts that began in 2008? Bailout totals have exceeded $2 trillion. Do you know where that money came from? The Fed created it out of thin air. They can do this any time they wish, of course. It takes about sixty seconds and a single computer entry at the Fed, matched by an inverse entry at the U.S. Treasury. In mere seconds, whammo! Another couple of trillion dollars (and debt) is magically created.

The real purpose of the income tax? To oppress the economic mobility of the little people

If the income tax is not mathematically needed to provide revenue to the federal government, what is its real purpose?

As anyone who has deeply studied the social impact of the tax code well knows, the true purpose of the tax code is social engineering. And more specifically, to oppress wage earners and small business owners for the purpose of making sure they can never save enough money to stop working.

The United States of America is, after all, a “tax farm,” meaning the productivity of the working people is harvested by the government to be used for whatever nefarious schemes the corrupt bureaucrats have in mind: Endless wars, creating economic dependence through welfare, giving money to their crony insider crooks, and so on.

Besides, the last thing the elitists want is competition from upwardly mobile citizens who mistakenly think they can rise above their economic class and compete with the global elite. “The power to tax is the power to destroy,” Daniel Webster famously said in an 1819 U.S. Supreme Court case. Chief Justice Marshall agreed: “That the power to tax involves the power to destroy… [is] not to be denied.”

And that’s the point of the income tax: To destroy the ambitions of the working class and keep them enslaved in a system of economic servitude that is mathematically designed to ensure permanent subjugation to the system.

It has absolutely nothing whatsoever to do with creating “revenue” or raising money to build roads and schools. That is a total delusion played off by both Republicans and Democrats to prevent people from realizing the far more powerful truth that federal income taxes aren’t necessary at all.

So the next time you hear someone say we need to pay more taxes to “raise revenue” for the federal government, you can confidently laugh in their face at the absurdity of the statement. The federal government can create all the revenue it wishes through an instant computer entry. The point of the income tax is to make sure you never escape the Matrix of economic enslavement.

Article copyright Natural News Network © 2012 All Rights Reserved

Ron Paul: U.S. reached point of no return

By LUIS MIRANDA | THE REAL AGENDA | NOVEMBER 15, 2012

Former presidential candidate and Texas Representative, Ron Paul had an opportunity to talk to the American people Wednesday in what he called his farewell speech. Dr. Paul, who got cheated during the last Republican primaries and caucuses by the Romney political machine, spoke about the United States path to the reality it is living today and how the country has arrived at a moment when the country is simply gone.

Mr. Paul, who spoke from the floor of the House of Representatives in Washington, D.C, reminded his colleagues in Congress and the American people as a whole, that the U.S. has deviated from its original path and that little recourse is left to help take it back to where it is supposed to be. Ron Paul served in office for the best part of the last three decades. During his time in Washington, Dr. Paul warned the nation about the dangerous trend that seemed to be growing in the U.S. regarding the violation of constitutional principles and the uncontrolled expansion of the state.

Most, if not all of Ron Paul’s predictions regarding where the United States would be if the trend was not reversed have now come true. The U.S. is, according many experts, a living Police State, where the federal government imposes its draconian policies on the people, where government employees seek to micromanage the lives of their fellow friends and neighbors for the sake of empowering themselves and where citizens are enemies of the state because they speak their mind in public.

Ron Paul reviewed the current condition of the United States as the Union it is by saying that “poverty is nor rampant and dependency of the Federal Government is now worse than any time in our history. All this with minimum concern for the deficit and unfounded liabilities that common sense tells us, can’t go on much longer.” This sentence summarizes Ron Paul’s message from Wednesday, which has been the same consistent one since he began his political career early in the 1970s.

Ron Paul’s last speech on the House floor served to remind his colleagues and the public how they have been instruments for the demise of the country and victims of the hubris accumulated in the minds of their trusted representatives in the U.S. Congress. He also reminded everyone that the country’s foreign policy, not liberty or wealth, is what made it unsafe to be an American. “The major stumbling block to real change in Washington is the total resistance to admitting that the country is broke.”

Watch Dr. Ron Paul’s complete speech below:

Ron Paul added that despite the growing number of people depending on Government to survive, and although history shows that even in times of deep economic and political distress people seem to look for more big government, the number of citizens embracing liberty and its principles has grown exponentially since he began his political career back in 1976.

Dr. Paul recognized that the demise of the American Empire was due to two main reasons: the establishment of the Income Tax and the creation of the Federal Reserve Banking System. Ron Paul was the strongest advocate of a movement to END THE FED, and to AUDIT the Federal Reserve System given its history of operating outside any kind of government control. In fact, as many readers already know, the FED is a private entity which was voted by Congress with the responsibility to create money out of thin air to sustain a never-ending scheme of deficit spending.

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U.S. Raised Debt Ceiling 102 Times

RT
July 17, 2011

President Obama has warned the US is running out of time to deal with its financial troubles – the Congress must raise the current $14.3-trillion debt ceiling again. And as Professor Rodrigue Tremblay told RT, this has become a tradition in the US.

­The US repeatedly gets away with raising the debt ceiling, Rodrigue Tremblay told RT.

“This system that the US has, has been in place since 1917. They raise the debt ceiling each year, they have done it 102 times; eight times under George W. Bush alone. Most countries do not run their governments this way. In the US it is always a mess,” stated Tremblay.

The professor of economics at the University of Montreal says the US is actually the country with the highest debt, and not Greece. But Washington will never be in line for a bailout, he adds.

“The US is not in the same position as other countries because their currency is used internationally and therefore they can afford to print more dollars than the Euro or any other currency can,” said Tremblay. “The main problem in the US is that there seems to be no one in charge in Washington. President Obama is a lame duck president and does not control the government; and the Republicans control most of the Congress.”

Many Republicans are unhappy with Obama’s plan to reduce the budget deficit. But despite that the debt ceiling will be raised no matter what, Tremblay believes.

“President Obama has a tradition of giving in to the demands of the Republicans. He did it twice before, so the Republicans are expecting him to do the same again. I do not doubt for a moment there will not be a default in America,” Tremblay told RT.

He also pointed out the Republicans are very keen to oppose President Obama and his Democrats on this matter even though the situation might seem too serious for these party political games.

“There are 16 new members of the Republican party in the House of Representatives, and these are tea-baggers, members of the Tea Party. They are not really Republicans, they are outcasts. They do not want to have any tax increase whatsoever, instead they vote for wars,” concluded Tremblay.

The Historical Framework of Globalization

by Dr. James Polk

Our era  is largely defined by two highly interlinked concepts: globalization and the so-called “war on terrorism.” As geopolitical-economic operatives, both concepts complement each other as significant means to specific ends; both shape important aspects of our daily lives and determine form and content of much that passes for public discourse. Particularly in Europe and in the United States, populations are kept vigilant to the “clear and present dangers” ostensibly posed by “international terrorism” through mnemonic icons of troop movements in Central Asia and/or strategically deployed bomb plots that are purportedly thwarted “just in time” by our intelligence services. As if copied from the lecture notes of Carl Schmitt, a totalitarian “enemy” has been constructed which can conveniently be called back into service at a moment’s notice should public memory begin to fade.globalization

Globalization has proceeded by means of three distinct but clearly interwoven interpretations and representations of the world in toto: as the sociopolitical “cosmopolitan moment” [1] (to borrow a term coined by Seyla Benhabib)  of the globe as the embodiment of our lifeworld;  as the stage of operations for multinational corporate/financial interests; and as the battlefield on which incited conflicts are seen as requiring comprehensive, global solutions which are to be achieved through a New World Order. In its current development, the construct of a unified world is largely synonymous with the ideal world government as envisioned in the Sociocracy of French philosopher Auguste Comte in the 19th century [2], in which international bankers and elitist think tanks determine and execute public policies.

Implied in this global ideal is of course the complete dissolution of the nationstate as such through the gradual but de facto irreversible integration of individual nations into the totalitarian framework of the political, economic, and chief judicial/juridical entities operating on a global scale (most significantly the United Nations, the International Monetary Fund, the World Bank, the Bank for International Settlements, and the World Trade Organization).

The philosophical roots of this integrative process can be found in the determinant factors that led to the Treaty of Westphalia, which ended Europe’s horrendously brutal Thirty Years War. The treaty also buried the eius regio, quius religio principle and reinstated the tolerance of Protestants as spelled out in the Peace of Augsburg (1555), the revocation of which under the Holy Roman Emperor Ferdinand II in the Edict of Restitution (1629) prompted the vicious counter-response from Protestant nobility in Austria and Bohemia. The terms of the peace accord also radically limited the territory and power of the Holy Roman Empire and acknowledged the sovereignty of the many principalities that constituted the realm of German influence, with France and Sweden entrusted as guardians of the peace.

But the Treaty of Westphalia was of major importance for one other significant reason. The councils of minds at Münster and Osnabrück were able to establish through rational discourse the concept of a peace accord based on the primacy of reason and rules of law that transcended warring national interests and belief systems, effecting in a truly Kantian sense the regulative idea of attainable peace as a principle of reason to guide all actions of the parties involved, and to which all participants, nolens volens, were to submit.  This is clearly evident in the way various clauses in the treaty assumed a meta-normative role. The treaty thus paved the way for an era of secularized thought in which the rule of law and political negotiation served as instruments of conflict resolution and as guidelines of national sovereignty based on principles of reason.

Parallel to the development of international principles of cosmopolitan conduct in our own time such as those found in the Universal Declaration of Human Rights and in the statutes of the Geneva Convention, economic and financial interests have exploited both the judicial codices formulated in international agreements and the juridical measures that now in many cases supersede pre-existing national laws through increasingly totalitarian bodies such as the World Trade Organization. [3] It is the power embodied in the domains of concentrated financial interests that today are in the process of transforming our lifeworld and realms of experience in previously unimaginable ways.

Coup d’état

Silently, and carefully hidden from public scrutiny, a coup d’état occurred in 1913 in the United States of America. The results of this bloodless coup are being felt today on a truly global scale. With careful, detailed planning, representatives of the most powerful financial institutions in both Europe and the United States succeeded through the enactment of the Federal Reserve Act (also known as the Glass-Owen bill) in radically and permanently altering the foundations of the nation as a whole.

Through the creation of the Federal Reserve system, the financial interests that conceived, wrote, and implemented the Glass-Owen bill took away the authority of the United States government as theoretical representative of the citizens of the country to print our own currency and placed that authority in the hands of a private banking cartel. According to Article 1, Section 8 of the American Constitution, it is Congress to whom the power is given “to coin money” and to “regulate the value thereof.” The Federal Reserve Act of course interprets this power quite literally as the coinage of pennies, nickels, dimes and quarters; it is, however, the creation of money in the form of bank notes that lies at the heart of the act. When the government requires money, the United States treasury writes out IOUs in the form of U.S. treasury bonds, which it then sells to the privately owned Federal Reserve system in exchange for a Federal Reserve check. In reality, the “Federal” Reserve bank simply enters the corresponding numbers on its computer keyboard, once as a liability, and once as an asset. In other words, the numbers are created by the Federal Reserve out of nothing, for which it then demands repayment with interest. The funds are then credited to the government’s account, from which all the various bills are then paid. It is in that exact moment that “money” as such is created by the Federal Reserve bank out of nothing. But there is one additional trick used by all banks operating on the Federal Reserve system: fractional reserve lending. This scheme allows the bank to multiply the amount of money it lends to clients tenfold without having the actual funds in reserve to back it up. This entire scheme has allowed the hidden owners of the private “Federal” Reserve system to effectively extort money from the American people in the form of IOUs, also known as treasuries, which then must be repaid with interest.

The legal anchoring of this scandalous system in the Glass-Owen bill in the United States was only the beginning. Like other central bank signatories to the Bretton-Woods Agreement (and thereby to the World Bank and International Monetary Fund), the US Federal Reserve system is able to control the amount of money in circulation through several mechanisms, for example by raising or lowering interest rates and/or the minimum reserve requirements of banks in the fractional reserve lending system. Through the enactment of the Federal Reserve system, the essence of money has become debt. Through the creation of debt, money comes into existence in the system. It thus becomes obvious that it is never in the bank’s interest that clients, borrowers, actually pay off their debts because that would leave the banks without interest payments. When the borrowers happen to be sovereign nations, for example from the developing world, or now the United States and a number of countries in Western Europe, the interest payments earned by the banks easily go into the hundreds of billions. This is extraordinarily profitable for banks who have been able to “sit in on” the negotiation of peace accords (through which terms of surrender and repayment of damages are settled) and international trade agreement deliberations to regulate global commerce and finance.

World War I and its outcome provide a very enlightening example of just how this has been  accomplished. The terms forced on Germany through Article 231 of the Treaty of Versailles laid the foundations for the consolidation of the enormously powerful financial interests in London, New York, Frankfurt, and Paris, which had been instrumental in pushing through, by hook and by crook, the Federal Reserve Act in the United States. (It should be noted that these are the same financial interests which also did their part to push the nations into military conflict in the first place. The focus here however remains restricted to the genesis and perpetration of the private central banking cartel as such and its connections to the current financial crisis and the war on terrorism.)

The horror of World War I quickly led to the realization  that the global  community of nations should not allow a recurrence of such cruelty, and that universally recognized and accepted principles of conduct were needed to guarantee international peace and harmony. Such principles of good will, intentionally redolent of the terms set out by the Peace of Westphalia, could only be implemented through a common general will or global consent. In other words, a League of Nations, a Völkerbund in the strictest Kantian sense, was needed to define and implement internationally valid principles of humanitarian, indeed cosmopolitan conduct to benefit the entire human species and our lifeworld.

It was this positive impulse among other things that led the participants in the “war to end all wars” to found the “Covenant of the League of Nations.” The agreement encompassed 26 principles to which the 58 member states committed themselves.  But the most central problem confounding the ideals of the League was the fact that the agreement was predicated on significant economic interests that essentially doomed  the treaty to failure from the start. The League was based on the status quo as defined by the victors of World War I, who, as simultaneous representatives of ostensibly “national interests” did everything in their power to ensure the richest gains possible for the elite bankers working behind the scenes in New York, London, Paris, and  Frankfurt. And the means to this end were found in the terms of reparation payments they then forced on Germany. An article featured in the May 31, 1922 issue of the New York Times outlined the most salient demands being made on Germany by the Allied entente powers:

“The Reparation Commission called on Germany to consent to the following undertakings before May 31:

1. Reduce  expenditures and balance the budget.

2. Halt the increase of the foreign debt and the growth of paper money in circulation.

3. Accept a light supervision of her efforts in that direction.

4. Take measures to prevent the further flight of capital and to get back $2,000,000,000  spirited out of the country in the last two years.

5. Assure the Reichbank’s  autonomy from politics.

6. Resume publication of Government fiscal statistics.” [4]

Attentive readers will immediately note the  unmistakable parallels to the demands (“austerity measures”) frequently imposed on developing nations through the international monetary fund in its policy proposals formerly known as “structural adjustment programs,” including demands for the privatization of the banking system, or  to use the phrase introduced by “Fed speak,” to guarantee the banks’ independence (“autonomy”) from politics. (In corrected translation, this is the simple demand that this private banking cartel as the sole source of phony money should be allowed to perpetrate its debt-based currency scam without any supervision or control by the people or their representatives.) A gamut of conditions imposed by the IMF has consistently led to widespread domestic hardship and economic crises  within the nations in question, because the interests and well-being of the general population are often clearly at odds with the IMF programs being implemented. Joseph Stiglitz put it this way:

“The IMF is pursuing not just the objectives set out in its original mandate, of enhancing global stability and insuring that there are funds for countries facing a threat of recession to pursue expansionary policies. It is also pursuing the interests of the financial community. This means the IMF has objectives that are often in conflict with each other. The tension is all the greater because this conflict can’t be brought out into the open: if the new role of the IMF were publicly acknowledged, support for that institution might weaken, and those who have succeeded in changing the mandate almost surely knew this. Thus the new mandate had to be clothed in ways that seemed at least superficially consistent with the old.” [5]

And it is precisely this extraordinary expansion of the power  of the private bank cartels that was central to much of the behind-the-scenes maneuvering during and after World War I. In a very enlightening essay published in Foreign Affairs in 1936, Leon Fraser  brought the true hidden agenda of the banking elite into selective public view:

“The truth was that the experts [i.e., of the second Young Commission – jp]  seized the occasion of the new reparation adjustment as an excuse to repair a long recognized gap in the international financial fabric. The organization which they proposed had functions not connected with reparations, and these ostensibly secondary functions were, in the inner consciousness of the originators, the predominating motives for its establishment. By some of the members — in particular those connected with commercial banking — the institution was envisaged as an instrument for opening up new fields of world trade by means of fresh extensions of credit […]  While there was no unanimity about the opportuneness of creating more credit, all experts agreed that the Bank could fill one obvious hiatus in the financial organization of the world, namely provide a center for central bank collaboration and for corporation to improve the international monetary mechanism.” [6]

The bank Fraser was referring to, of course,  is none other than the central bank of all central banks, the Bank for International Settlements, with headquarters in Basel.

Louis McFadden, former banker-turned-congressman from Pennsylvania, condemned the hidden motives and operational methods of the Versailles Treaty in no uncertain terms. McFadden took particular aim at the Bank for International Settlements, which took charge of the gold Germany was required to deliver in reparations payments. Writing with reference to Grotius’s theory of just settlements of military conflicts (De Jure Belli ac Pacis),  McFadden argued that the Versailles Treaty had in fact been negotiated in bad faith, with the “House of Morgan” and the usual suspects from the clique of international bankers being the prime beneficiaries of the reparations bonds, and that substantial aspects of the treaty had been worked out in the financial centers of London well in advance of the actual negotiations in Paris.  McFadden prophetically augured the long-term  consequences of the treaty as laying the “foundation for the renewal of a dozen wars that are legally justifiable.” [7]

The consolidation of economic and financial power in the West at the end of World War II made possible the ensuing rapid and encompassing globalization of inchoate trends already visible in the League of Nations platform.  The establishment of the United Nations in 1945 as well as the foundation of the World Bank and the International Monetary Fund as stipulated by the outcome of the Bretton-Woods Agreement (1944), contributed substantially to the international system of currency and finance of a distinctively Anglo-American character. This meant in particular that the central banks of all member nations were largely to adopt the modus operandi of the Federal Reserve system. The printing of national currencies, once the privilege of sovereign governments, was to be replaced by the system of government bonds or IOU issuance, which would then be lent or sold to the private banking cartel (spearheaded by the country’s respective “central-bank”) in exchange for currency notes — with interest due. The outcomes of two world wars, in which a private banking cartel had ultimately written the terms of economic and financial surrender, had forced the vanquished into participant roles in the greatest scam in human history: the creation of money out of thin air through debt, with interest payments in permanent flow to the elite sphere of private bankers — all on a global scale.

Many of the newest investment vehicles and resources discussed in growing numbers of studies have so successfully interlocked the political realm with the corporate/financial that a clear separation is no longer possible. Nevertheless, among wide segments of the populations in many countries, voting citizens are still convinced of the sanctity of the elected office. Such convictions are based on false advertising, and the voters have failed to see the fusion between capital and the successful campaign/office tenure regularly performed behind the smoke and mirrors screens of the mass media. In a number of important instances, even opposition/protest movements have been bought and staged. [8] Yes we can! Si, se puede!  should now be seen as the pitiful chants of all those who fell for the change they believed in. Change came in the form of continued bailouts for Wall Street banks, with the former head of the New York Federal Reserve placed comfortably by Obama himself on the throne of the US treasury, immune from critique and reprimand, despite his urgent e-mails to the legal counsel of AIG urging silence in response to congressional queries on the extent of the Fed’s bailout funds funneled into the pockets of Goldman Sachs. (Of course at the time these revelations became public (on the Internet!), the mainstream media was busy convincing the semi-conscious public of the importance of the then-and-now whereabouts of Tiger Woods’s genitalia.) It’s been all business as usual. But the teary-eyed and desperate seem to fall for the Hollywood hype every time: He’s the ONE!

The schematic procedures carried out by the IMF, the World Bank, and the WTO often acquire an outright absurd character. Such was the case in the often-cited structural adjustment program developed for Bolivia in the Enhanced Structural Adjustment Facility (ESAF) Policy Framework Paper for 1998 – 2001. In exchange for much-needed IMF loans, Bolivia was required to transfer the “rights” of the Cochabamba water system to the private firm of Aquas de Tunari, a subsidiary of the International Water Ltd. / Bechtel Corporation consortium. (Bechtel gained international notoriety under the George W. Bush administration as the recipient of generous no-bid military “reconstruction” contracts in Iraq.) The privatization of the water supply meant that prices for this necessity of life increased by more than 300%, becoming unattainable for many families. With public outrage and potential violence on the horizon, a report authored by World Bank experts advised: no public subsidies should be given to ameliorate the increase in water tariffs in Cochabamba. [9]

Recent machinations by the World Trade Organization have also led to precarious globalization strategies. According to Greg Palast, an internal report sent to his office at The Guardian revealed actual threats directed at the leftist government of Brazil if the country continued to refuse to sign the Financial Services Agreement of 1999. This agreement formed the international legal basis for the deregulation of so-called “financial products,” specifically derivatives such as “credit default swaps” and “mortgage backed securities,” which then led to the global financial meltdown.

The pattern of crisis followed by a ready-made plan for a global solution has been persistent since the early 1800s, when European banking elites pulled out all the stops in order to establish a central bank on American soil. These were the same structural interests which eventually led to the passage of the Glass-Owen bill. And it is within this pattern that the origins of the current financial crisis are also to be found, specifically within the highest echelons of the Federal Reserve system.

Subsequent to the September 11 2001 attacks on New York and Washington, D.C., the Federal Reserve was “forced” to lower interest rates to a minimum in order to avoid a potential collapse of a number of important services and industries. This move enabled the decision by all branch banks nationwide to make credit easily available, particularly for home mortgages.  Two years later, the entire country was in a house-buying frenzy with visions of homes increasing in value year after year until the end of time. Many buyers bought two or three in the hope of “flipping” them into untold thousands in profit.

The foundations were laid for the initialization of a previously unknown financial instrument — BISTRO (Broad Index Secured Trust Offering) — developed in the think tanks of J P Morgan. At the speed of electronic funds transfers, BISTRO enabled unimaginable exponential profits through “credit default swaps” which the “House of Morgan” then divided up into packages and sold by the thousands to interested parties among corporations, banks, insurance giants, and investment funds worldwide. As the German magazine Der Spiegel so accurately put it, “bank managers and central bankers were the capitans of this ship, among them superstars such as J P Morgan manager Blythe Masters and former Federal Reserve chairman Alan Greenspan.” [10]

Attentive observers of financial history should recognize the concrete developmental pattern at work here. A putatively well-founded expansion of credit and a corresponding economic boom are followed by a sudden retraction of credit and an implosion of the markets. At the core of our current crisis is the banking industry and its ability to create money and derivatives out of thin air. The collapse was predictable, and in all likelihood carefully planned. No sooner had the collapse of 2008 begun than the directors of America’s leading banks began to issue ultimatums to the American people through their own representative, Henry Paulson (former CEO of Goldman Sachs), as the Secretary of the Treasury. If bank coffers were not replenished with ample public funds, Americans would soon wake up to martial law on the streets of many major cities.

And promptly, the see-no-evil representatives in Washington came to the rescue of the global financial elite, all at the expense of tax payers, and ultimately also at the expense of national sovereignty. Concomitant demands for “global solutions” to this admittedly global problem were promptly put on the national and international agenda by the G20 and by leading economists such as Kenneth Rogoff. The U.S. Congress recently ratified a comprehensive overhaul of the nation’s financial system, and thereby granted increased authority to the Federal Reserve. On a global scale, financial and economic experts from around the world are in the process of developing fundamental revisions to the Basel Accord (Basel III) within the framework of the Bank for International Settlements. [11]

At the same time, the Federal Reserve’s late-2010 announcement that it would initiate a second round of “quantitative easing” in its efforts to free up credit and relieve financial institutions of moribund assets led to more vociferous calls for a new global reserve currency to replace the ailing dollar. The Federal Reserve’s decision to increase liquidity by printing more dollars is already seen as a potentially fatal mistake by many skeptics particularly in China, which holds an inordinately large sum of US dollars in its reserve currency trove. Russia and China, among others, have already agreed to a bilateral exchange of goods and services by using their own currencies, without the US dollar as intermediary.

Unavoidable inflationary pressures guarantee that the days of the US dollar as the world’s reserve currency are numbered; this outcome does not bode well for the people of the United States, who very likely will see martial law if and when prices for daily necessities such as gasoline skyrocket beyond what is affordable. As the chief operative for all the clandestine forces intent on seeing a one-world government in control of the planet, the Federal Reserve has been actively destroying the US currency as an instrument of national sovereignty. And in close collaboration with the “Fed,” working groups within both the United Nations and the IMF have published key position papers in which a new global currency is proposed, to be printed or coined expectedly by a global central bank. [12]

The global “war on terror”

Accompanying the increased authority of global instruments such as the IMF, the WTO and the Bank for International Settlements, an international surveillance network is fully in the making with far-reaching consequences for individual life and liberty. At particular risk today is the integrity of the Internet as the last bastion of uncensored information exchange. With every publicized “cyber attack,“ whether a reality or an ad hoc creation, new demands go out for increased security measures and legislation to control both form and content online. New key supranational concepts such as “Al Qaeda,” “terrorist networks” or “suspicious money transfers” are now in common use in public discourse and enable the implementation of unprecedented military/political control measures and surveillance strategies over ordinary citizens. The readiness of governments worldwide to adopt anti-terror measures that are potentially inimical to all forms of individual freedom is predicated on the questionable acceptance of the official explanation offered by the US government and its intelligence services for the events that transpired on 9/11. The paucity of critique, particularly among  mainstream US media, of the implausible official narrative of all that transpired on 9/11 is itself sufficient evidence of a thoroughly top=down controlled American press.

The analyses of David Ray Griffin and Steven Jones (among many others) [13] of multiple inconsistencies and sheer impossibilities in the official explanation of the 9/11 attacks provide clear evidence that there were and are far more sinister plots at work than what the American public is ready to believe. Answers to the inevitable cui bono? question point to the long-term beneficiaries of global control which will ultimately allow  for no exceptions.

The pattern is always the same. Present a crisis of epoch proportions, and offer solutions on a global scale which ultimately consolidate the interests of a New World Order, one as envisioned by Auguste Comte, with bankers and a select intellectual elite in complete control. The Federal Reserve system should be seen for what it is – the agency of an international group of banking elites who are hell-bent on obtaining a global government, with a single system of universal justice, a single currency, and an all-encompassing surveillance network as guarantors of a fail-proof, totalitarian, neo-feudalistic regime. Thanks to the efforts of this same global elite, the United States is in its last throes and will eventually succumb to the constraints its leaders have willingly adopted within the context of globalization.

As admirable as perpetual peace might be under a system of benevolent reason, with the sanctity of all terrestrial life on earth foremost in mind, the concrete historical track record of those most actively engaged in bringing the ideals of this New World Order into full fruition suffices completely as a reason to reject their goals.

Elite bankers in the United States and Europe conceived and enacted the Federal Reserve system as a major stepping stone toward eventual global governance of a neo-feudalistic society. The continuing global economic crisis was also conceived and implemented as a further essential tool in bringing about a one-world government controlled by bankers and their intellectual shills sitting in crucial positions and calling the shots — qui custodiet custodes?

The “Fed’s” covert policies and clandestine machinations are accelerating the “need” and “demand” for a global currency to replace existing national currencies. In previous eras, the implementation of such plans and intentions would have been deemed high treason and appropriately punished; in today’s parlance, it should most properly be categorized as an act of terrorism.

Deeply influenced by both the Frankfurt School of Critical Theory and twentieth-century phenomenology, James Polk pursued his graduate studies in philosophy at the Freie Universität Berlin, where he received his PhD for work on Kant and Heidegger. He is the author of Am Horizont der Zeit and The Triumph of Ignorance and Bliss – Pathologies of Public America.

Notes

1) Benhabib’s understanding of cosmopolitanism and its implications for human societies is presented in Another Cosmopolitanism (Berkeley Tanner Lectures), Robert Post, ed. (Oxford: Oxford University Press, 2008) and in The Rights of Others: Aliens, Residents, and Citizens (The Seeley Lectures), (Cambridge: Cambridge University Press, 2004).

2) Auguste Comte, System of Positive Polity, transl. Richard Congreve, (London: Longmans, Green, and Co., 1877).

3) See in particular Michel Chossudovsky, “The Global Economic Crisis: An Overview,” The Global Economic Crisis. The Great Depression of the XXI Century, ed. Michel Chossudovsky and Andrew Gavin Marshall, (Montreal: Global Research Publishers, 2010) 3 – 60.

4) Edwin L. James, “Reparations Issue Now Up To Bankers,” New York Times, 31 May 1922.

5) Joseph E. Stiglitz, Globalization and Its Discontents (New York: W. W. Norton, 2002) 206 – 207.

6) Leon Fraser, “The International Bank and Its Future,” Foreign Affairs (New York: Council on Foreign Relations) vol. 14, number 3 (April, 1936), p. 454.

7) Louis T. McFadden, “The Reparations Problem and the Bank for International Settlements,” Annals of the American Academy of Political and Social Science, vol. 150, Economics of World Peace (July, 1930), p. 53 – 64.

8) Michel Chossudovsky, “Manufacturing Dissent: the Anti-globalization Movement is Funded by the Corporate Elites. The People’s Movement has been Hijacked,” Center for Global Research, September 20, 2010, http://www.globalresearch.ca

9) IMF Bolivia Public Expenditure Review. www.wds.worldbank.org

10) The original Spiegel text: “Bankmanager und Zentralbanker waren auf diesem Schiff die Kapitäne, darunter Superstars wie die JP Morgan-Managerin Blythe Masters und der Ex-chef der US-Notenbank, Alan Greenspan.” (translation j.p.) “Der größte Diebstahl aller Zeiten – wie Finanzjongleure die Welt in eine Krise stürzten, die noch lange nicht beendet ist,“ Der Spiegel, number 47 (November 11, 2008) p. 47.

11) See Ellen Brown, “The Towers of Basel: Secretive Plan to Create a Global Central Bank,” The Global Economic Crisis. The Great Depression of the XXI Century, ed. Michel Chossudovsky and Andrew Gavin Marshall, (Montreal: Global Research Publishers, 2010) 330 – 342.

12) See in particular the International Monetary Fund paper entitled “Reserve Accumulation and International Monetary Stability” prepared by the Strategy, Policy and Review Department (April 13, 2010) and the United Nations’ “Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System” (September 21, 2009).

13) See especially David Ray Griffin, Debunking 9/11 Debunking: An Answer to Popular Mechanics and Other Defenders of the Official Conspiracy Theory (Northampton, Mass.: Olive Branch Press, 2007); idem., The 9/11 Commission Report: Omissions and Distortions (Northampton, Mass.: Olive Branch Press, 2004); Niels H. Harrit, Jeffrey Farrer, Steven E. Jones et al., “Active Thermite Material Discovered in Dust from the 9/11 World Trade Center Catastrophe,” The Open Chemical Physics Journal, 2009, 2, 7-31.