Less Sovereignty is the Central Bankers Solution for the Crisis

By LUIS MIRANDA | THE REAL AGENDA | JUNE 29, 2012

Everyone on the main stream seems to believe that the continuous meetings between European central bankers and government officials are seeking to save the Euro and to help the governments deal with their sovereign debts. It is common to hear on television how journalists and so-called analysts explain that their expectations include the proposal of real solutions to the crisis which immediately produce jobs and bring stability to the markets.

They just don’t get it. These meetings between central bankers and European leaders are nothing about stability, a solution to the debt problem or the creation of jobs around the euro zone. The latest agreement between the EU Council and the Prime Ministers of Italy and Spain is an example of how the bankers are in complete control. Although the media has painted the bailout of the Spanish and Italian banks as a triumph for both governments, which according to the reports “had their way” when negotiating with the bankers, the reality is they are simply following orders. It wasn’t the Spanish and Italian governments the ones who imposed the conditions that will rule the bailout, but the banks.

The rescue of the banking system in those countries is indeed a result of Italy and Spain submitting, accepting and supporting the idea that the European Central Bank will officially turn into the manager of all Euro economies. Only after Mariano Rajoy and Mario Monti accepted that condition, was that the central bankers gave the green light to ‘lend the money’ to the Spanish and Italian banks, not the other way around. The main stream media is portraying an outcome that is completely the opposite to reality by saying that Mr. Rajoy and Mr. Monti twisted German Chancellor Angela Merkel’s arm into accepting their conditions. The truth is that Merkel herself had to accept the centralization of economic planning sought by the banks as a condition not to let the EU zone collapse before the expected time, and with it drag every single nation including Germany into the rabbit hole they are all going towards in a controlled fashion.

Less sovereignty in exchange for solidarity; this is the latest talking point that emerged from European leaders to justify the loss of self-rule and the intervention of European bankers in the decision making process at the national level. Governments have publicly adopted what seems to be a socialist standing to try to sell their fiscal irresponsibility and to deviate attention from the acquisition of European nations by the central bankers who are the origin of the current financial crisis. But it is not socialism you see, it’s fascism. Countries must get more debt and surrender their sovereignty in order to solve a crisis that is not supposed to get solved, but that was created and planned to further centralize power in the hands of the bankers themselves.

Everyone who is well-informed is familiar with the World Bank and IMF’s plans to cause the current crisis, — and all the other ones that came before — how they’ve applied the same neo-feudal model throughout history to destroy economies and artificially recreate them using models for growth based on the acquisition of debt and the never-ending payments of interests on that debt. It needs to be said: This crisis is not accidental or unexpected. It was planned and executed for decades to seek a justification for a central government just as it has been promoted by the bankers and the media for the past 12 months. The result of the current negotiations in not to seek an exit to the debt problem or to encourage economic growth, but to hand even more power to the bankers.

The meeting held today where European Prime Ministers pose as the saviors is nothing else than window dressing. There is no solidarity on a proposal that intends to make nations less independent and more enslaved to the central bankers. The result that will came from the meeting held by Mariano Rajoy, Angela Merkel Mario Monti and François Hollande is further consolidation of financial power; nothing else. As explained by Joseph Stiglitz, the World Bank and the IMF pursue a policy of financial enslavement against every country by following four simple steps.

Privatization, which is more like ‘Briberization’, he told Greg Palast. Under this scheme, economies are collapsed from the inside while consolidating national assets for pennies on the dollar. Briberization yields then to the second step,  a one-size-fits-all rescue-your-economy plan, which in theory intends to rescue a country’s economy by using  capital market liberalization. This, again in theory, would allow the free flow of investment in and out of the country, but in reality it is the process through which the bankers complete the theft of resources and send them out every time a country buys into the “rescue your economy’ non-sense. As explained by Palast in his article The Globalizer who came in from the Cold, foreign monies come in to the countries for speculative acquisitions in various sectors of the economy and then leaves just as suddenly as it came. The result is the literal disappearance of a nation’s reserves in a matter of days. In order to get back some of those monies, entities like the IMF and the World Bank immediately demand that the country raise interest rates to anywhere between 30% and 80%.

Next, on step three, the bankers mandate that the government impose steep increases in the prices of basic needs such as food, water and gas. In the mid-term, the unexpected increases cause what Stiglitz calls the “The IMF riot.” During this time the bankers “turn up the heat until, finally, the whole cauldron blows up,” said Stiglitz. The bankers simply cut any and all subsidies to food and fuel for the poorest people as it happened in Argentina at the turn of the century and in Indonesia in 1998. Other examples of these riots were the ones in Bolivian riots over water prices last year and this February, the riots in Ecuador over the rise in cooking gas prices imposed by the World Bank.

Secret documents were also obtained by the BBC and The Observer which showed that the banks wanted to make the US dollar the official currency of Ecuador and by doing that, they would submit more than half of the population there under the poverty line. This is something similar to what was done in Argentina and what is being tried now in Europe. According to Stiglitz, although millions of people end up as losers under this system, there are indeed a handful of winners: The Banks. The western banks and the US Treasury make gigantic amounts of cash by infliction pain over developing nations. He cited the case of Ethiopia, where the World Bank and IMF ordered the government to ‘invest’ money on the Federal Reserve’s Treasuries which pays only 4 percent interest, while the country had to borrow money at 12 percent. Ethiopia was looted by the banks.

On step four of the bankers propose and impose the so-called Free Trade, as they did through NAFTA, CAFTA and other trade agreements. They call these programs “poverty reduction strategies”. However, all they do is open markets for a one way flow of products from powerful nations like the United States and China to the poor countries, while closing their own markets to foreign products. The almost automatic consequence of this free trade agreements is the destruction of the local production and farming since they cannot compete with the ridiculous low prices offered by corporations that have their products manufactured by slave labor in Asia and Africa.

As Greg Palast puts it, let there be no confusion about the role of the IMF, World Bank and World Trade Organization in the destruction of nation-states, private property and sovereignty, because they are just three masks that hide the faces of the monopoly men who seek to impose a centralized government model based on absolutist conditions.The results of the negotiations to supposedly save the euro zone are not such, they are just another step into the creeping arrival of world tyranny being sold as the only possible solution to deliver all of us from the consequences of “unbalanced economies”. The plans for the creation and implosion of economies were drafted long ago and the result of those practices is one and only one: World Government. This outcome, by the way, is not a solution or the solution to the current economic crisis.

When you have leaches sucking you dry, the only possible solution is to remove the leaches. The bleeding is the collapsing economy, the leaches are the central bankers, the solution is to remove them from our bodies. Nothing else has worked, nothing else will work.

Bancor: The Global Currency The IMF is Proposing

The Economic Collapse

Sometimes there are things that are so shocking that you just do not want to report them unless they can be completely and totally documented.  Over the past few years, there have been many rumors about a coming global currency, but at times it has been difficult to pin down evidence that plans for such a currency are actually in the works.  Not anymore.  A paper entitled “Reserve Accumulation and International Monetary Stability” by the Strategy, Policy and Review Department of the IMF recommends that the world adopt a global currency called the “Bancor” and that a global central bank be established to administer that currency.  The report is dated April 13, 2010 and a full copy can be read here.  Unfortunately this is not hype and it is not a rumor.  This is a very serious proposal in an official document from one of the mega-powerful institutions that is actually running the world economy.  Anyone who follows the IMF knows that what the IMF wants, the IMF usually gets.  So could a global currency known as the “Bancor” be on the horizon?  That is now a legitimate question.

So where in the world did the name “Bancor” come from?  Well, it turns out that ”Bancor” is the name of a hypothetical world currency unit once suggested by John Maynard Keynes.  Keynes was a world famous British economist who headed the World Banking Commission that created the IMF during the Breton Woods negotiations.

The Wikipedia entry for “Bancor” puts it this way….

The bancor was a World Currency Unit of clearing that was proposed by John Maynard Keynes, as leader of the British delegation and chairman of the World Bank commission, in the negotiations that established the Bretton Woods system, but has not been implemented.

The IMF report referenced above proposed naming the coming world currency unit the “Bancor” in honor of Keynes.

So what about Special Drawing Rights (SDRs)?  Over the past couple of years, SDRs have been touted as the coming global currency.  Well, the report does envision making SDRs “the principal reserve asset” as we move towards a global currency unit….

“As a complement to a multi-polar system, or even—more ambitiously—its logical end point, a greater role could be considered for the SDR.”

However, the report also acknowledges that SDRs do have some serious limitations.  Since the value of SDRs are closely tied to national currencies, anything affecting those currencies will affect SDRs as well.

Right now, SDRs are made up of a basket of currencies.  The following is a breakdown of the components of an SDR….

*U.S. Dollar (44 percent)

*Euro (34 percent)

*Yen (11 percent)

*Pound (11 percent)

The IMF report recognizes that moving to SDRs is only a partial move away from the U.S. dollar as the world reserve currency and urges the adoption of a currency unit that would be truly international.  The truth is that SDRs are clumsy and cumbersome.  For now, SDRs must still be reconverted back into a national currency before they can be used, and that really limits their usefulness according to the report….

“A limitation of the SDR as discussed previously is that it is not a currency. Both the SDR and SDR-denominated instruments need to be converted eventually to a national currency for most payments or interventions in foreign exchange markets, which adds to cumbersome use in transactions. And though an SDR-based system would move away from a dominant national currency, the SDR’s value remains heavily linked to the conditions and performance of the major component countries.”

So what is the answer?

Well, the IMF report believes that the adoption of a true global currency administered by a global central bank is the answer.

The authors of the report believe that it would be ideal if the “Bancor” would immediately be used as currency by many nations throughout the world, but they also acknowledge that a more “realistic” approach would be for the “Bancor” to circulate alongside national currencies at first….

“One option is for bancor to be adopted by fiat as a common currency (like the euro was), an approach that would result immediately in widespread use and eliminate exchange rate volatility among adopters (comparable, for instance, to Cooper 1984, 2006 and the Economist, 1988). A somewhat less ambitious (and more realistic) option would be for bancor to circulate alongside national currencies, though it would need to be adopted by fiat by at least some (not necessarily systemic) countries in order for an exchange market to develop.”

So who would print and administer the “Bancor”?

Well, a global central bank of course.  It would be something like the Federal Reserve, only completely outside the control of any particular national government….

“A global currency, bancor, issued by a global central bank (see Supplement 1, section V) would be designed as a stable store of value that is not tied exclusively to the conditions of any particular economy. As trade and finance continue to grow rapidly and global integration increases, the importance of this broader perspective is expected to continue growing.”

In fact, at one point the IMF report specifically compares the proposed global central bank to the Federal Reserve….

“The global central bank could serve as a lender of last resort, providing needed systemic liquidity in the event of adverse shocks and more automatically than at present. Such liquidity was provided in the most recent crisis mainly by the U.S. Federal Reserve, which however may not always provide such liquidity.”

So is that what we really need?

A world currency administered by an international central bank modeled after the Federal Reserve?

Not at all.

As I have written about previously, the Federal Reserve has devalued the U.S. dollar by over 95 percent since it was created and the U.S. government has accumulated the largest debt in the history of the world under this system.

So now we want to impose such a system on the entire globe?

The truth is that a global currency (whether it be called the “Bancor” or given a different name entirely) would be a major blow to national sovereignty and would represent a major move towards global government.

Considering how disastrous the Federal Reserve system and other central banking systems around the world have been, why would anyone suggest that we go to a global central banking system modeled after the Federal Reserve?

Let us hope that the “Bancor” never sees the light of day.

However, the truth is that there are some very powerful interests that are absolutely determined to create a global currency and a global central bank for the global economy that we now live in.

It would be a major mistake to think that it can’t happen.

Brazil is getting hot. Too hot, too fast

If there is one thing proven beyond doubt during this crisis is that government interventionism in the free market is nefarious.  Developing countries are again and again the victims of globalist inspired management.  Argentina was one notorious case, Iceland and Greece have followed; and now Brazil, a fairly prosperous country in the last decade, is on the way to becoming another victim of artificial implosion.

Financial Times

Brazil’s central bank raised its policy interest rate by three quarters of a percentage point on Wednesday evening in another sign thatBrazil getting too hot the country’s breakneck pace of growth is causing concern over rising prices.

Brazil’s economy expanded by 2.7 per cent in the first quarter over the previous quarter and by 9 per cent over the first quarter of 2009, the national statistics office said on Tuesday. That is much faster than what many economists consider to be the potential, or non-inflationary, rate of about 4.5 to 5 per cent.

“This shows there has been no change in the bank’s position since its previous increase in April,” said Silvio Campos Neto of Banco Schahin in São Paulo. “It is clear from all the indicators that the economy is heating up and inflation is still above target. This is worrying and demands further increases in rates.”

The bank raised its target overnight Selic rate to 10.25 per cent a year, the second three-quarter-point increase at the last two six-weekly meetings of its monetary policy committee.

Consumer price inflation ballooned from a low of 4.17 per cent a year last October to 5.22 per cent in the 12 months to May. Many economists expect inflation to reach 6 per cent by the end of this year, well above the government’s target of 4.5 per cent. Economic growth is expected to be about 6.6 per cent this year.

Mr Campos said he expected the bank to raise the Selic rate to 11.75 per cent by the end of this year.

He said successive interest rate increases would help bring growth back to sustainable levels and predicted the economy would grow by about 4.3 per cent in 2011.

Brazil’s domestic market has recovered quickly from a brief recession during the global crisis, spurred on by a rising consumer class that has benefited from more than a decade of economic stability and low inflation, and from low-cost but effective income transfer programmes.

But the fast pace of growth has exposed bottlenecks such as the poor quality of Brazil’s infrastructure and its heavy tax burden. The rate of investment has risen in recent years but is still short of what is needed to deliver fast, sustainable growth.

Background: Fears of overheating

Brazil’s economy was among the fastest growing in the world during the first quarter, according to figures released on Tuesday that add to fears the economy is overheating and to expectations that the central bank will raise rates again on Wednesday.

The economy grew at a faster-than-expected annual rate of 9 per cent in the three months to March and by 2.7 per cent compared with the previous quarter, according to the IBGE, the national statistics office.

Part of the reason for the growth was an increase in investment, with the rate of investment rising to 18 per cent from 16.3 per cent a year earlier, spurred by gross fixed capital formation, which leapt by 26 per cent year on year, the fastest rate since the IBGE’s current series began in 1995.

“This confirms that the economy is very heated,” said Rafael Bacciotti, economist at Tendências, a consultancy in São Paulo. “The stand-out sectors were industry and services. Employment and wages are also growing strongly and we expect this to continue throughout the year.”

The manufacturing industry grew by 17.2 per cent year on year and the retail sector by 15.2 per cent. Imports also set a record, surging by 39.5 per cent year on year.

The central bank’s most recent weekly survey of market economists showed expectations of overall growth this year rising to 6.6 per cent, the 12th consecutive week of climbing expectations.

But many believe the economy cannot grow at more than 4.5 or 5 per cent a year without provoking an increase in inflation.

The central bank has been forced to act by steadily rising inflation expectations over recent months. Since October, Brazil’s consumer inflation rate has surged from an annual rate of 4.17 per cent to 5.26 per cent in April. However, the central bank’s most recent survey showed a slight drop in forecasts for inflation during 2010, with the average falling to 5.64 per cent from 5.67 per cent a week earlier.

Most economists expect the central bank to announce a second consecutive three-quarter percentage point rise in its policy interest rate, the Selic, at the end of its monetary policy committee’s regular two-day meeting tomorrow.

The committee meets every six weeks to decide whether to change the Selic rate in pursuit of the government’s annual consumer price inflation target, currently 4.5 per cent a year.

If expectations are confirmed, the Selic will rise to 10.25 per cent a year, up from 8.75 per cent when the current tightening cycle began in April.