Tag Archives: IMF

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

TTIP . . . Another Control Being Put in Place!

 

“In addition to the blogs, I publish a weekly Newsletter on a Friday dealing with anything during the week that caught my eye. I am sending this one to you as it is pertinent to my current theme on ‘Feudalism & Unification’. If you are happy I will continue sending you ‘week old’ Newsletters but please tell me if you are unhappy with this.

TYSM as always for your continued support of my work.”  J T Coombes

Observations for the Week Ending 12th February 2016

TTIP . . . Another Control Being Put in Place!

As the IMF and EU increase their financial control over the 99% through legislation and debt, so the corporate powers are now providing further pressure, through odious trade agreements that are designed, not for trade, but the obliteration of people driven democracy.

The old Establishment are certainly fearful of the freedoms the internet is now providing our species and dramatically reducing the traditional methods of control that have been used for millennia to keep the populace in ignorance.

These trade agreements are a last ditch attempt to apply corporate pressure to the obliteration of democracy, in a serious endeavour by the old Establishment to consolidate and maintain its power over Society.

Secret agreements, such as TTIP and TPP are still only available for vetting, by elected representatives of the people, in closely guarded rooms and no copy(ies) are allowed to leave these fortified spaces. Why is there such rigorous secrecy and has been for the 7-year gestation of the final documents, if Society is not being threatened?

This action itself is a blatant contempt for democracy and a scary indication of what might come if allowed to reach maturity. Perhaps we have already seen the future last year in Greece, where unelected bankers marched into the country and imposed restrictions of the people over the head of the elected government. With these trade agreements it will be not only bankers but also company directors and their technocrat officials, immune from any forms of control.

At the heart of this subversive activity by the powerful, is the move to enact legislation that neuters the legislative process of countries and therefore their governments. I still struggle to understand why governments are so easily giving away their powers like this. Unless it then becomes a very easy ride to just do what the corporations want and take the pay check at the end of each month.

The obvious legislative target here, without even thinking, is any and all legislation designed to protect citizens from shoddy and inferior goods and takes us down a frightening path of substandard foods and electrical goods, as high safety standards mean inroads into profit.

In the past, authoritarian power and its abuse has come from monarchs, with vast armies at their disposal to consolidate their power. In this 21st century it is debt, not armed forces that is underwriting the power, through debt obligation.

The problems of abuse are no different, although no longer restricted to just one country this time. For some restraint to be exercised we need a modern version of the Magna Carta document used 800 years to control the power.

The written word worked then and it can work again. Indeed, the internet provides the ‘unarmed’ resistance to growing control through the written word, in large part, providing the reduction in global ignorance that has previously allowed the 1% this control.

The original Magna Carta came from barons whose power base was being undermined. Today it is the middle classes who are being undermined and maybe this is the area from which a new ‘Global’ Magna Carta should emanate. Globally they are being attacked at their very source, by the application of indebtedness to their young before they have started any form of career and undermining jobs with new technology that is no longer restricted to the production line.

It is the unifying aspects of one global group of people, such as this, which could provide the impetus for a sustained and unified global reaction against the current increasing powers of the 1% and the obliteration of proper democracy.

By the very nature of their secrecy they are actively seeking to deny all forms of democracy, of which these odious trade agreements, now being signed into force, are very much a part. Indeed, they are the spearhead of the final nails being driven into the coffin of global democracy and we have to do something to fight back.

A global middle class driven Magna Carta of some description would fit the bill in uniting people in a commonly understood cause. The vast protest at the signing into force of these agreements shows a mind-set that is becoming united and action will come from this awareness and understanding of what is going on. Exciting times.

 

Enjoy your weekend.