Tag Archives: Greed

Banks & IMF Are Out of Control

As a species we are fallible and we recognise this in our attempts to construct laws and regulations which address human weaknesses and flaws. They are by no means complete and human fallibility continues to wreak havoc, more so when those same laws and regulations are removed or neutered by vested interest.

My regular readers will know that one of my hobby horses is the continued abuse of Greece by the Troika, something that is killing innocent Greek people through deprivation and despair. At the heart of this destruction is the IMF and its policy of ‘austerity’ that obligates countries indebted to it to cut social support programmes and hand over sovereign assets at discounted values.

“The organization’s objectives stated in the Articles of Agreement are to promote international monetary cooperation, international trade, high employment, exchange-rate stability, sustainable economic growth, and making resources available to member countries in financial difficulty.”

Further on from this, the frightening scope of its powers are clearly laid out.

Whilst the Fund can “make contracts, acquire and dispose of immovable and movable property and institute legal proceedings” from which nobody is immune, the Fund and its employees “are immune from every form of judicial process” and its assets “free from restrictions, controls and moratoria of any nature.” This includes freedom from any form of personal taxation for all 2400 employees!

With this unprecedented level of unaccountability, the Fund can do whatever it likes. In the case of Greece, it has done precisely this without seeming care or concern, in what has now been described as the ‘immolation’ of Greece. (Merriam-Webster’s dictionary defines immolation as “to kill as a sacrificial victim”, which is the stand I have personally taken over the whole violation of this country.)

This lack of accountability has now been firmly placed in the spotlight, (with similar brutality), after its own internal watchdog, the Independent Evaluation Office (IEO) submitted a report  to the board, (to whom they are solely accountable), which has roundly condemned how the Fund is being run.

Its top level staff have misled and misinformed their own board into becoming the champions of the euro project and which has led to catastrophic misjudgements on Greece. They have also failed to grasp the basic concepts of money theory that ensured they completely ignored the warning signs of an impending crisis within the EU, a ‘serious scientific and professional failure’.

EU insiders have used the fund to rescue their own pet project, with an unprecedented 80% of all available funding being used to bail out Greece, Portugal and Ireland. An ethos of misleading seniors was also extended to the IEO, in its investigations of the activities of “ad-hoc task forces”, where decisions and provision of information remained elusive.

Heads have turned to its managing director Christine Lagarde, who is now to stand trial in France over corruption charges and who has responded to this report with a statement that offers ‘qualified’ acceptance of its contents. Something I interpret as “I hear you” and no more.

This arrogance, by the boss and her organisation, has led to an era of negative interest rates that is devastating savings and the future of pension schemes, whilst ruining the banking system in its wake. Their policies continue without any recovery, or hint of recovery in sight. Here lies the true cancer created by the inbuilt lack of accountability written into the Fund’s Articles of Agreement.

It goes to the very heart of why we need regulations and accountability to guard against the horrific abuses that can occur when human fallibility is not held in check. Millions of people’s lives have been ruined by the mismanagement of this powerful organisation and its independence must surely now be put in question.

And all of this at a time when the European Banking Authority has just conducted a ‘stress test’ across the European banking sector and nobody has failed, nor has anyone passed, as there are no criteria for such assessments.

Instead a rescue package has been put together to stop Italy’s Banca Monte dei Paschi di Siena collapsing and Deutsche Bank, defined by the IMF as “the world’s most systemically risky bank” is being ‘scrutinised’.

Of the 123 lenders covered in the last stress test in 2014 less than half have been covered this time and none of Portugal or Greek banks have been included. Neither will the results of 56 other banks that have taken the tests be published.

Like the IMF, lack of accountability and secrecy reign and beg two questions. Firstly, what was the point of these tests, other than giving the appearance that some form of regulation is being carried out. Secondly, what is the true extent of the fragility of these banks, given the millions of people are dependent upon them for running their personal and business finances.

This last point is even more significant when you consider that the world banking system is a carefully controlled cartel that is not open to competition. Cartels and monopolies offer the very worst of attributes of human fallibility in the unaccountable power and control they provide and a complete immunisation from healthy regulation and governance.

Thatcher and Reagan opened up the financial markets to unlimited growth and power, which has accelerated exponentially in the last 40 years and is now bringing the world to its knees, with an impending financial collapse that will make 1929 and 2008 seem but hiccups.

Only today the man convicted of the UBS £1.4 billion fraud, the biggest in British history, said that “major banks have done little to tackle the culture which allowed him to carry out his crimes”.

Indeed, the Financial Conduct Authority dropped a long-running enquiry into the culture of banking at the beginning of the year, with suggestions that former chancellor George Osborne had exercised pressure on the industry following last year’s surprise election win.

Never has there been the need for the re-emergence of democratically supported political power to bring these financial monoliths back under control. We need regulations that have teeth and can break the conglomerates up and return us to a banking sector that supports the needs of Society and not the needs of the few.

I worry that we hear nothing about the regulation of the financial sector from those seeking political office, either at home or abroad. It was strong leadership that gave them their power and it is that self-same strong leadership that can take it away again now.

Until the next time

 

Thinking from his Book: Global Magna Carta. Returning Power to the 99% . . . If They Want It! By J T Coombes

An ‘Economic’ Hit Man

Since circa 3000 BC we, as a species, have sought to create empires. Wikipedia offers that “this aspiration to universality resulted in conquest by converting ‘outsiders’ or ‘inferiors’ into the colonized region.”

Whilst in the past, this has been achieved by military might, I would argue that since the last World War we have seen the emergence of a new empire that is being expanded by other than that traditional forces of conquest, (although military might remains in the background).

I speak of the transfer of global power after the last war from the British Empire to America and the latter’s subsequent conquest of a large portion of this globe, achieved by stealth and without undue outrage.

A perfect example of US colonisation at work can be evidenced in an innocent news report of only a few days ago, which carried the story that the World Bank is ‘supporting’ a new coal plant in Kosovo that will modernise the country’s creaking energy infrastructure. It will also condemn this young nation to a future powered by climate destroying fossil fuels. So what is the World Bank up to in what appears a grossly irresponsible action?

In his book Confessions of an Economic Hit Man  (one of many he has now written and which everyone interested in how the world works today should read), John Perkins describes his former life as a financial strategist, specialising in making countries subservient to US foreign policy through debt . . . an ‘Economic’ Hit  Man.

His book defines such people as:

“highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the US Agency for International Development (USAID), and other foreign “aid” organisations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet’s natural resources. Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex and murder.”

It is a well written and gripping read about the life of a man who constantly wrestled with his conscience over his work. Finally, for the sake of his daughter’s future, he became a whistleblower for the same reasons as Edward Snowden. What he was being asked to do was simply immoral and WRONG!

His work saw him travelling the world, going into countries (many in Latin America) and making an economic analysis of their complete structure, from political to environmental and resource wealth. He would then compile a report on how that country could be transformed with new energy plants to support industry, road and natural resources infrastructures, finishing with a 25 year forecast of an economic bonanza.

The reports were always exaggerated in what could be achieved because the whole object of the exercise was to weigh that country down with the debt needed to fund this expansion, provided by the World Bank and others. The repayments, the country was promised, would be paid out of the expanded economy.

Indeed, his reports would not be accepted by his employers unless they were hugely exaggerated in economic outcomes, to give credence to the vast debt the country would be taking on, in the certain knowledge that they would have great difficulty in repaying, or even unable to repay.

By his own admission it is fraud on a global scale, designed to provide lucrative contracts no only to his employers, Chas. T. Main Inc., an international low profile consulting firm used by the World Bank to spread its global lending strategy but also US global conglomerates. It was and still is a win/win situation for US government, corporations and banking institutes (the ‘corporatocracy’ as he describes them – the 1% as we know them).

Once the loan is in place, lucrative contracts are passed out to the likes of Bechtel, Brown & Root, Halliburton, Sone & Webster and many other huge US engineers and contractors, who profit handsomely for decades into the future from installation and maintenance contracts worth billions.

Government wins from the leveraged power that comes with debt. When a country begins struggling with debt repayments, as all have done, they become targets for US favours. These will include US military bases, UN votes, or access to the country’s valuable oil and other natural resources and sovereign assets, as an ‘obligated member’ of the growing US empire.

Sometimes there would be resistance, as in the cases of Ecuador and Panama. In the former, in 1981 President Roldos administration introduced new hydrocarbons laws to reform the country’s relationship with the oil companies. Unless they adhered to these laws, designed to help the people of Ecuador, they would be forced to leave the country.

This resistance was a beacon to other Latin American countries who were also under debt oppression. Shortly after delivering a major speech to his countrymen and women he died in fiery airplane crash on May 24 1981. “CIA Assassination” (Jackals as Perkins knew them) was a cry difficult to refute, as he had challenged the might of the corporatocracy and had to be made a lesson of.

In Panama, in 1967, President Omar Torrijos had concluded three treaties with President Jimmy Carter to preserve the sovereignty of the Panama Canal, a vital waterway that conferred huge power on the country. When ‘empire building’ Ronald Reagan superseded Carter as President his policies completely reversed those of Carter.

Reagan became the servant of those who supposedly served him but actually ran government for the benefit of the corporatocracy. People like George H W Bush, Casper Weinberger, Dick Cheney and Robert McNamara, people in government with powerful backgrounds, connections and influence with global corporations.

They were incensed by the deal Carter had done over the rights for the Panama Canal and wanted Omar Torrijos and his administration consigned to history, with its anti-corporatocracy campaigns for an independent Panama. On July 31st 1981, just two months after Roldos death, Omar Torrijos died in a similar plane crash.

Latin America and the world reeled at these events but worse was to follow. In 1986 the US empire called upon its military might and invaded Panama to deter the then President Noriega, who had superseded Torrijos, from concluding a potential deal with Japan to rebuild the canal.

US corporatocracy was not going to allow this vital link to come under the control of a foreign power and so President Noriega was extracted from the country he ruled over and carried back to the US where he stood trial and imprisonment for violations of American law, committed on that rulers own turf!

American propaganda dealt with world outrage at this abusive use of power by branding Noriega as a despot and tyrant and sentencing him 40 years in prison. Many attempts have been made to uncover the truth but the media are a powerful tool in either shaping people’s minds or keeping the truth buried.

1973 saw a turning point for the empire when President Nixon sought $2.2 billion aid from congress to support Israel. It resulted in a Saudi oil embargo on shipments to the US and brought America to its knees. It was this trauma that welded together big corporations, international banks and government and birthed the global corporatocracy we have today.

To ensure this would not happen again the US proffered the Saudi’s the knowhow and corporate might to build a modern day kingdom out of a barren desert. In addition, American military might would always be available to the kingdom. All of this in exchange for petrodollars and the vital undertaking that there would never be another oil embargo.

To further underwrite this security, we now have the present turmoil in the Middle East that has been nurtured by the CIA and their version of ‘foreign policy’, as the empire seeks to preserve its hold on the world and divert any consolidation of power in this oil rich area.

Whilst I have only skimmed the surface of this man’s experiences and their vast impact upon our modern world, it can be seen why Kosovo is flying in the face of global climate agreements with its coal fired power plant, as well as the recent barbaric treatment of Greece. Power and profit are at stake in the growth of this modern empire, neither of which will be compromised at any cost.

All empires eventually decline and today we have China waiting in the not too distant wings. Where it will all end I have no idea but again we are indebted to a brave man with a conscience who is prepared to stand up against US imperial might and tell the world what is happening.

Like Snowden and so many others, we can only applaud their courage and moral integrity, at a time when these essential values have completely left those who rule us.

Until the next time.

 

Thinking from his Book: Global Magna Carta. Returning Power to the 99% . . . If They Want It! By J T Coombes