I believe this is my most important contribution, so far, to our growing awareness of how the world works. I am deeply indebted to Adam Lebor for his book ‘A Tower of Basel’ and its huge contribution to this awareness. More details here: http://tinyurl.com/omhkyen
Like me, you may have seen the odd reference to the Bank of International Settlements and had no idea what it was, nor what it did . . . and that suits the BIS just fine!
As the central pillar of our global financial system, it is responsible for furthering the interests of central banks by building and maintaining the architecture of transnational finance.
It came into existence in 1929 as the brainchild of Montague Norman, then governor of the Bank of England and one of the most powerful men in the world, together with Hjalmar Schacht president of the German Reichsbank. Its express purpose was to administer German war reparations (financial compensation) to the allied countries involved.
Both Norman and Schacht were very shrewd financiers, with ambitions way beyond a simple administration office. They immediately set about creating a global bankers ‘club’, bringing together the heads of the main central banks with monthly meetings, which continue to this day in absolute secrecy in their offices in an 18 storey tower building near Basel railway station in Switzerland.
Today its members include Ben Bernanke, former head of the Federal Reserve, Mark Carney, Governor of the Bank of England, Mario Draghi of the European Central Bank and the central bank governors of Germany, France, Italy, Sweden, Canada, India and Brazil. The object is to share information and build consensus on the direction of our global financial system.
Returning to its roots, in 1930 the governments of UK, France, Germany, Belgium, Italy, Japan and Switzerland signed the Hague Convention making the BIS untouchable, as the most privileged and legally protected bank on the Planet.
(The “You can no longer touch us”) Article 10 of the BIS Constituent Charter states:
The Bank, its property and assets and all deposits and other funds entrusted to it shall be immune in time of peace and in time of war from any measure such as expropriation, requisition, seizure, confiscation, prohibition or restriction of gold or currency export or import and any other similar measure.
With it becoming ever certain that a second world war was imminent, Schacht and Norman believed financial – not political – disciplines were the only way to ensure the world could be rebuilt from the carnage and return Germany to its strong trading position in Europe.
To achieve their aim it was necessary to maintain the smooth flow of global finance during the war years and provide a haven for gold transactions without political interference. Whilst these objectives appeared laudable, they also carried sinister connotations the BIS have since found difficult to shake off.
Schacht was a financial genius and as Germany prepared for war, Hitler made him General Plenipotentiary for the war economy, placing an emphasis upon delivering the finance necessary to build a vast German war machine. He achieved this with the help of his connections in the BIS. It can be seen from this that financial values dominated, over political considerations, as ‘enemies’ were working together to finance the war.
Before outright hostilities, Austria was ‘incorporated’ into the German Reich and its gold moved to the BIS where it was held for use in Berlin. This was the first of many transactions that involved Nazi looting and plunder during the war. The BIS justified its part by reminding everyone that it was above political intrigue and that the proper financial paperwork had been carried out for these transactions to take place.
In Spain, General Franco was helped to power not only by German and Italian fighting men and machines but also by the hundreds of millions of dollars’ worth of aid also provided by these countries. The latter managed and facilitated by the BIS.
At the height of the Second World War, when armies were killing each other by the tens of thousands, international finance continued unimpeded through the BIS, financing the slaughter on both sides.
When Czechoslovakia was overrun, the entire gold supply of the country was taken over and deposited with the BIS, sacrificed to the needs of transnational finance and the Third Reich. This ‘legalised looting’ was a particularly dark time in the BIS history, exacerbated by also taking in deposits of gold teeth that had come from the concentration camps, all of which were used to finance the German war effort.
It was Cicero, two thousand years ago who observed that “The sinews of war are infinite money”. The BIS updated that wisdom through their actions during the war years to read “The sinews of war are the transnational flow of infinite money!”
When the war finally came to an end attention turned to rebuilding Europe. This saw the introduction of the equally independent International Monetary Fund and World Bank, threatening the very existence of the BIS. However the US demanded, that in return for aid, they wanted the integration of Europe and the erosion of national identity, in the interests of reducing friction between countries. This offered the BIS new opportunities.
Rather than compete with the IMF and offer loans to troubled economies, nor fund development projects as did the World Bank, it would offer discreet services for financial co-ordination, something in huge demand at that time. Europe would need harmonised exchange rates, swift international payments mechanisms and eventually a new single currency, the very core of BIS capabilities.
With the BIS working in the background, in 1951 France, West Germany, Italy and the Benelux states signed the Treaty of Paris establishing the European Coal and Steel Community. This created a ‘common market’ for coal and steel which was regulated by this unelected supranational institution.
It is here that the birthing of the EU truly began, setting a pattern of ‘economically expedient’ excuses for the removal of national sovereignty, rather than the political machinations that it actually represented. And so the rule of technocrats also began and has continued to expand into the present day.
(I have always believed that the unrelenting attacks upon our Royal Family, by Murdoch’s media, had sinister undertones. The strategies adopted for the integration of Europe all those years ago now bear this out.)
This thumb nail sketch of the history of the BIS raises many issues in today’s world. Whilst it is plausible to say that financial disciplines, over political, can provide the smooth running of finance, supporting international trade and growth that benefits us all, our actual experience of the work of this unelected and highly secret organisation has not been as promised.
At the heart of our problems is the human fallibility for power. Only this year the IMF and ECB demonstrated their powerful independence from political authority in the unnecessary bullyboy tactics they chose to adopt when Greece stood up to their ‘Austerity’ measures. Their unbridled power meant that they paid no heed for the distress their deliberate actions caused to the Greek people and the suicides that continue to this day.
‘Austerity’ is a lie and excuse to further reduce national sovereignty by plundering the national assets of countries. The TPP trade agreement also, is not about trade but the subjugation of democracy to corporate power and hence the paranoid secrecy until its launch on an unsuspecting public.
That our money is now being stolen from us, either as taxpayers or as bank customers, to pay for malpractice by those very banks; that cash is now under threat, to provide greater control over the monetary system and that we are being moved into a nightmare world of negative interest rates, is the outcome of the BIS’s development of the EU and its rule by technocrats.
Morality is nowhere to be found in this new world and will eventually bring it down. That the credibility of the EU and its dubious currency is coming under increasing pressure, as the people see their sovereignty taken away and democracy constantly undermined, is demonstrating that the financiers post war dream of a European federal state is unworkable.
The BIS itself is now coming under threat, as its strict conditions of secrecy, which have always been its true power, become outmoded in an increasingly transparent world. People are waking up and veils are being lifted.
The greater our awareness the greater the demand for change and the ending of this traditional abuse of the majority. Just imagine the re-balancing of current power if global trade unions and charities created such an organisation!
Until the next time
Thinking from his Book: Global Magna Carta. Returning Power to the 99% . . . If They Want It! By J T Coombes