A former insider at the World Bank, ex-Senior Counsel Karen Hudes, says the global financial system is dominated by a small group of corrupt, power-hungry figures centered around the privately owned U.S. Federal Reserve. The network has seized control of the media to cover up its crimes, too, she explained. In an interview with The New American, Hudes said that when she tried to blow the whistle on multiple problems at the World Bank, she was fired for her efforts. Now, along with a network of fellow whistleblowers, Hudes is determined to expose and end the corruption. And she is confident of success.
Citing an explosive 2011 Swiss study published in the PLOS ONE journal on the “network of global corporate control,” Hudes pointed out that a small group of entities — mostly financial institutions and especially central banks — exert a massive amount of influence over the international economy from behind the scenes. “What is really going on is that the world’s resources are being dominated by this group,” she explained, adding that the “corrupt power grabbers” have managed to dominate the media as well. “They’re being allowed to do it.”
A former insider at the World Bank, ex-Senior Counsel Karen Hudes, says the global financial system is dominated by a small group of corrupt, power-hungry figures centered around the privately owned U.S. Federal Reserve.
The network has seized control of the media to cover up its crimes, too, she explained. In an interview with The New American, Hudes said that when she tried to blow the whistle on multiple problems at the World Bank, she was fired for her efforts. Now, along with a network of fellow whistleblowers, Hudes is determined to expose and end the corruption. And she is confident of success.
Citing an explosive 2011 Swiss study published in the PLOS ONE journal on the “network of global corporate control,” Hudes pointed out that a small group of entities — mostly financial institutions and especially central banks — exert a massive amount of influence over the international economy from behind the scenes. “What is really going on is that the world’s resources are being dominated by this group,” she explained, adding that the “corrupt power grabbers” have managed to dominate the media as well. “They’re being allowed to do it.”
According to the peer-reviewed paper, which presented the first global investigation of ownership architecture in the international economy, transnational corporations form a “giant bow-tie structure.” A large portion of control, meanwhile, “flows to a small tightly-knit core of financial institutions.” The researchers described the core as an “economic ‘super-entity’” that raises important issues for policymakers and researchers. Of course, the implications are enormous for citizens as well.
Hudes, an attorney who spent some two decades working in the World Bank’s legal department, has observed the machinations of the network up close. “I realized we were now dealing with something known as state capture, which is where the institutions of government are co-opted by the group that’s corrupt,” she told The New American in a phone interview. “The pillars of the U.S. government — some of them — are dysfunctional because of state capture; this is a big story, this is a big cover up.”
At the heart of the network, Hudes said, are 147 financial institutions and central banks — especially the Federal Reserve, which was created by Congress but is owned by essentially a cartel of private banks. “This is a story about how the international financial system was secretly gamed, mostly by central banks — they’re the ones we are talking about,” she explained. “The central bankers have been gaming the system. I would say that this is a power grab.”
The Fed in particular is at the very center of the network and the coverup, Hudes continued, citing a policy and oversight body that includes top government and Fed officials. Central bankers have also been manipulating gold prices, she added, echoing widespread concerns that The New American has documented extensively. Indeed, even the inaccurate World Bank financial statements that Hudes has been trying to expose are linked to the U.S. central bank, she said.
“The group that we’re talking about from the Zurich study — that’s the Federal Reserve; it has some other pieces to it, but that’s the Federal Reserve,” Hudes explained. “So the Federal Reserve secretly dominated the world economy using secret, interlocking corporate directorates, and terrorizing anybody who managed to figure out that they were having any kind of role, and putting people in very important positions so that they could get a free pass.”
The shadowy but immensely powerful Bank for International Settlements serves as “the club of these private central bankers,” Hudes continued. “Now, are people going to want interest on their country’s debts to continue to be paid to that group when they find out the secret tricks that that group has been doing? Don’t forget how they’ve enriched themselves extraordinarily and how they’ve taken taxpayer money for the bailout.”
As far as intervening in the gold price, Hudes said it was an effort by the powerful network and its central banks to “hold onto its paper currency” — a suspicion shared by many analysts and even senior government officials. The World Bank whistleblower also said that contrary to official claims, she did not believe there was any gold being held in Fort Knox. Even congressmen and foreign governments have tried to find out if the precious metals were still there, but they met with little success. Hudes, however, believes the scam will eventually come undone.
“This is like crooks trying to figure out where they can go hide. It’s a mafia,” she said. “These culprits that have grabbed all this economic power have succeeded in infiltrating both sides of the issue, so you will find people who are supposedly trying to fight corruption who are just there to spread disinformation and as a placeholder to trip up anybody who manages to get their act together.… Those thugs think that if they can keep the world ignorant, they can bleed it longer.”
Of course, the major corruption at the highest levels of government and business is not a new phenomenon. Georgetown University historian and Professor Carroll Quigley, who served as President Bill Clinton’s mentor, for example, wrote about the scheme in his 1966 book Tragedy And Hope: A History Of The World In Our Time. The heavyweight academic, who was allowed to review documents belonging to the top echelons of the global establishment, even explained how the corrupt system would work — remarkably similar to what Hudes describes.
“The powers of financial capitalism had a far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole,” wrote Prof. Quigley, who agreed with the goals but not the secrecy. “This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”
But it is not going to happen, Hudes said — at least not if she has something do to with it. While the media are dominated by the “power grabber” network, Hudes has been working with foreign governments, reporters, U.S. officials, state governments, and a broad coalition of fellow whistleblowers to blow the entire scam wide open. There has been quite a bit of interest, too, particularly among foreign governments and state officials in the United States.
Citing the wisdom of America’s Founding Fathers in creating a federal system of government with multiple layers of checks and balances, Hudes said she was confident that the network would eventually be exposed and subjected to the rule of law, stopping the secret corruption. If and when that happens — even if it may be disorderly — Hudes says precious metals will once again play a role in imposing discipline on the monetary system. The rule of law would also be restored, she said, and the public will demand a proper press to stay informed.
“We’re going to have a cleaned-up financial system, that’s where it is going, but in the meantime, people who didn’t know how the system was gamed are going to find out,” she said. “We’re going to have a different kind of international financial system…. It’ll be a new kind of world where people know what’s going on — no more backroom deals; that’s not going to keep happening. We’re going to have a different kind of media if people don’t want to be dominated and controlled, which I don’t think they do.”
Am I right that if everybody boycotted the banks & stopped paying back their mortgages the economy would begin to recover again?
acrobat74 wrote:
An important point about our current system: since money is debt, getting out of debt (fancy term: deleveraging) shrinks the economy.
Quote:
How money gets destroyed (new video)
Wed, 13th Mar 2013
by Positive Money
Remember how new money is created when a bank makes a loan? Well, when someone repays the loan, the opposite process happens, and money is actually destroyed. It effectively disappears from the economy entirely.
'Complementary currencies can help eradicate poverty.
Proving that may be difficult in complex economies, due to the high number of factors influencing outcomes. But in an African slum with little of the national currency available, supplying residents with an alternative currency has a positive effect that is obvious, immediate and incontrovertible.
This was demonstrated when Will Ruddick, an American physicist, economist and former Peace Corps volunteer, introduced a complementary currency into a Kenyan slum called Bangladesh, near the coastal city of Mombasa. Will’s local development organization, Koru-Kenya, worked with over one hundred small business owners in Bangladesh, who agreed to give each other the equivalent of 400 shillings (about €3.5 or $4.60) in mutual credit in the form of business vouchers called Bangla-Pesa. Half of the vouchers would be available for spending on each others’ products and services, and half would be spent into the community on public projects such as waste collection and health services. Allocation decisions were democratic and transparent, and the new currency was backed entirely by the community’s own resources and insured by a system of group guarantors, not by the Kenyan government or a development agency....' _________________ 'And he (the devil) said to him: To thee will I give all this power, and the glory of them; for to me they are delivered, and to whom I will, I give them'. Luke IV 5-7.
( ^^ Lietaer himself is a very interesting persona, have a look at his bio)
Quote:
Wörgl was the first town in Austria which effectively managed to redress the extreme levels of unemployment. They not only re-paved the streets and rebuilt the water system and all of the other projects on Mayor Unterguggenberger’s long list, they even built new houses, a ski jump and a bridge with a plaque proudly reminding us that ‘This bridge was built with our own Free Money’ (see photographs). Six villages in the neighborhood copied the system, one of which built the municipal swimming pool with the proceeds. Even the French Prime Minister, Édouard Dalladier, made a special visit to see first hand the “miracle of Wörgl.”
Wörgl’s demonstration was so successful that it was replicated, first in the neighboring city of Kirchbichl in January of 1933. In June of that year, Unterguggenberger addressed a meeting with representatives of 170 other towns and villages. Soon afterwards 200 townships in Austria wanted to copy it. It was at that point that the central bank panicked and decided to assert its monopoly rights. The people sued the central bank, but lost the case in November 1933. The case went to the Austrian Supreme Court, but was lost again. After that it became a criminal offence in Austria to issue “emergency currency.”
outsider wrote:
Hardly work in large towns, but seems to in small areas:
The Crime of Alleviating Poverty: A Local Community Currency Battles the Central Bank of Kenya:
'Complementary currencies can help eradicate poverty.
Proving that may be difficult in complex economies, due to the high number of factors influencing outcomes. But in an African slum with little of the national currency available, supplying residents with an alternative currency has a positive effect that is obvious, immediate and incontrovertible.
This was demonstrated when Will Ruddick, an American physicist, economist and former Peace Corps volunteer, introduced a complementary currency into a Kenyan slum called Bangladesh, near the coastal city of Mombasa. Will’s local development organization, Koru-Kenya, worked with over one hundred small business owners in Bangladesh, who agreed to give each other the equivalent of 400 shillings (about €3.5 or $4.60) in mutual credit in the form of business vouchers called Bangla-Pesa. Half of the vouchers would be available for spending on each others’ products and services, and half would be spent into the community on public projects such as waste collection and health services. Allocation decisions were democratic and transparent, and the new currency was backed entirely by the community’s own resources and insured by a system of group guarantors, not by the Kenyan government or a development agency....'
Joined: 30 Jul 2006 Posts: 6060 Location: East London
Posted: Sun Jul 07, 2013 11:57 pm Post subject:
Thanks for that post, acrobat74. It prompted me to pass the info to a Third World country I am interested in (oddly, I didn't think of it I first found the Kenyan article).
Here is a REALLY good, clear and concise video by Edward G. Griffin (I have put stuff about him, and Jekyll Island, up before, but this video is beautifully clear, and can easily be understood by Joe Public, as well as being comprehensive, and totally spellbinding:
And below is a Magazine article by Griffin on the same subject:
'Creature from Jekyll Island' (Republic Magazine No. 10 - scroll down to page 12):
http://www.scribd.com/doc/29252888/Republic-Magazine-10 _________________ 'And he (the devil) said to him: To thee will I give all this power, and the glory of them; for to me they are delivered, and to whom I will, I give them'. Luke IV 5-7.
Firstly, how would one coordinate this, and how would one enforce it?
By people having the wisdom in knowing that they do not owe that debt. So why would they want to do such a thing, it being unlawful to pay it too. So that part is as simple as people not paying something they don't owe. If they did but realise.
Quote:
Also, hitting the banks' profits would only get them to curtail lending even more, and thus economic activity would suffer heavily.
But credit is effectively invented from thin air (a promissory note etc,etc.)
The Government for example could issue their own both interest and debt free. Rather than the lie they and we owe any real debt to the issuers of the credit.
Quote:
The whole point in this matter is the complete dependence of our entire economic system on banks - as long as we depend on banks for supplying currency to the economy, making them suffer seems unwise.
Does that include the bank of England that's scapegoated by blaming the high street banks only such as "Positive Money" push?
All it needs is enough people to realise the gigantic scam and how simple it is to resolve. Which is why the so-called ptb do as as much as they do to confuse and complicate it.
Free credit forever:
Russian turns tables on banksters, rewriting small print without them noticing
Buys his own island
Courts support him
http://www.independent.ie/world-news/russian-turns-tables-on-bank-over -small-print-29488583.html _________________ --
'Suppression of truth, human spirit and the holy chord of justice never works long-term. Something the suppressors never get.' David Southwell
http://aangirfan.blogspot.com http://aanirfan.blogspot.com
Martin Van Creveld: Let me quote General Moshe Dayan: "Israel must be like a mad dog, too dangerous to bother."
Martin Van Creveld: I'll quote Henry Kissinger: "In campaigns like this the antiterror forces lose, because they don't win, and the rebels win by not losing."
To secure stability, treat finance and fast food alike
By John Kay
Financial soundness is best promoted by designing a system that is robust in the face of failure
Perhaps the most fundamental confusion in the evolution of financial services regulation is the equation of financial stability with the survival of established institutions. If I had a million pounds for every time I have heard a possible reform opposed because “it wouldn’t have prevented Northern Rock or Lehman Brothers going bust”, I might now have enough money to bail out a bank.
The objective of reform is not to prevent Northern Rock or Lehman going bust. It is highly desirable that organisations such as Northern Rock or Lehman should go bust.
Northern Rock had overambitious expansion plans and a business strategy that proved flawed (although many people thought at the time, with reason, that reliance on wholesale funding was a strength rather than a weakness).
Lehman was run (badly) for the benefit of its senior employees rather than customers or shareholders. In a market economy, such organisations fail while rivals with better business models and management structures gain at their expense. That process of selection is the reason market economies have an impressive record of promoting efficiency and innovation. The problem revealed by the 2007-08 crisis was not that some financial services companies collapsed, but that there was no means of handling their failure without endangering the entire global financial system.
Still, would it not be better if proper supervision ensured that no financial institution could ever get into a mess like Northern Rock or Lehman – or Royal Bank of Scotland or Citigroup or AIG? No, it would not. Just replace “financial institution” with “fast-food outlet” or “supermarket” or “carmaker” in that sentence to see how peculiar is the suggestion.
Begin with practicality. It is hard enough to find people capable of running financial conglomerates – the fading reputation of Jamie Dimon, JPMorgan Chase chief executive, confirms my suspicion that managing these businesses is beyond the capacity of anyone. The search for a cadre of people employed on public-sector salaries to second guess executive decisions is a dream that could not survive even the briefest acquaintance with those who actually perform day-to-day supervisory tasks in regulatory agencies. They tick boxes because that is what they can do, and regulatory structures that are likely to be successful are structures that can be implemented by box tickers.
We have experience of structures in which management or regulatory committees in Moscow or Washington take the place of the market in determining the criteria by which a well-run organisation should be judged, and that experience is not encouraging. The truth is that in a constantly changing environment nobody really knows how organisations should best be run, and it is through trial and error that we find out.
Financial stability is best promoted by designing a system that is robust and resilient in the face of failure, which is why effective and implementable mechanisms of resolution are the key to meaningful financial reform. Some progress has been made, but overall very little; living wills too complex to implement at all, far less within hours, are no solution to the problem of too complex to fail.
The bungled Cyprus bailout showed how far the EU is from the goal of an established resolution programme. The Cypriot parliament understood, even if supposedly more sophisticated policy makers did not, that deposit protection is the primary purpose of banking supervision. What people in the streets, correctly, understand by financial stability is confidence that their savings are safe.
Now we have an equally dotty, and essentially similar, proposal to fund the bailout of failed derivatives exchanges using customers’ collateral. The explicit rationale is that it is more important to keep the institution intact than to protect the interests of its customers. But the reverse is the case. The services may go on (or not: the commonest reason commercial organisations fail is that people do not want their product). But the failed organisation that provided such services need, and should, not.
This applies to fast-food outlets and supermarkets and car plants – and also to utilities such as electricity, water, and the payment system. Financial services differ only because the lobbying power of incumbent companies is so great.
At dawn this morning, Mark Carney made good on one of the promises he made in an era-defining speech last week that reconstructed the Bank of England's relationship with the City of London.
The Bank, and the central banks of Canada (Carney's alma mater), Japan, the US, the eurozone and Switzerland, announced that their temporary arrangements to lend their respective currencies to each other would be made permanent (as so-called "standing arrangements").
Why does it matter?
Well it is an attempt to ensure there are fewer hiccups and bumps for international banks that are the big players in global financial capitalism. It means, for example, that if a bank is in desperate need of an emergency yen loan after Tokyo is closed, or if it want dollars in a hurry while New York sleeps, it can go to the Bank of England for Japanese or US liquidity.
These so-called "swap" arrangements were originally put in place during the 2007-8 financial crisis, on a temporary basis, when global markets seized up - and we all became acutely aware for the first time in a generation that the ability of central banks to create money and make emergency loans to commercial banks is perhaps the most important bulwark against economic meltdown in extremis.
The swap arrangements recognised that financial centres like London are homes to banks that never sleep and which deal in every currency imaginable: it would have been (and is) as lethal for a British bank to run out of dollars to repay creditors, as to have been short of sterling.
Making the swap arrangements more than a stopgap, turning them into a permanent feature of the financial system, is a powerful signal by the central banks that the new global financial system created from the 1970s onwards - of unlimited sums in whatever currency flowing across borders - is a reality they don't envisage changing or wish to change.
Now it is true that in the aftermath of the 2008 crisis, banks reined in their cross border lending. This repatriation of banking happened partly because all banks were under pressure from regulators to shrink their balance sheets, and the easiest way to do this without being slaughtered by politicians was to withdraw from markets away from their respective homes (and the eurozone crisis was a second spur to return to base).
But the central banks are today signalling that they see this modest retreat from global financial capitalism as a temporary phenomenon.
Perhaps more importantly, the tenor of Mr Carney's speech last week to mark the FT 125th birthday was that the balkanisation of finance was not only temporary but a very bad thing - for London.
He used a rhetoric about how valuable big international banking can be to the prosperity of the UK that not even the pro-City Chancellor of the Exchequer has felt able to deploy since the debacle of five years ago.
The last time we heard this sort of language from a pillar of the British establishment was probably when Gordon Brown declaimed at the annual Mansion House speech in June 2007 - weeks before it all went Pete Tong - that we were seeing "an era that history will record as the beginning of a new golden age for the City of London".
Brown has since changed his tune. And doubts about the wisdom of London being host to banks whose loans were equivalent to five times the size of the British economy, and are still 400% of GDP, subsequently characterised policymaking by the Bank of England, the now-defunct Financial Services Authority and the Treasury.
But apparently Carney does not believe that size matters in that sense.
Here is the most important section of his recent speech (and apologies for quoting at some length, but this stuff matters).
"Suppose, for example, that UK-owned banks' share of global banking activity remains the same and that financial deepening in foreign economies increases in line with historical norms. By 2050, UK banks' assets could exceed nine times GDP, and that is to say nothing of the potentially rapid growth of foreign banking and shadow banking based in London.
"Some would react to this prospect with horror. They would prefer that the UK financial services industry be slimmed down if not shut down. In the aftermath of the crisis, such sentiments have gone largely unchallenged.
“Start Quote
It is not for the Bank of England to decide how big the financial sector should be. Our job is to ensure that it is safe”
"But, if organised properly, a vibrant financial sector brings substantial benefits".
Here for me is the heart of Carney's philosophy:
"It is not for the Bank of England to decide how big the financial sector should be. Our job is to ensure that it is safe. The UK can host a large and expanding financial sector safely, if we implement a reform agenda that extends well beyond domestic banking."
Now there are two very big and separate questions begged in this return to the idea that a City big in global banking is a good City.
First is a practical question - whether it is true that enormous banks can be made safe banks.
To cite just one very current concern, and as Mr Carney would concede, we are a very long way from having in place robust global rules to allow bust big international banks to be broken up and "resolved" (to use the jargon) in a way that forces the costs on their institutional and well-heeled creditors rather than on taxpayers.
We have not solved the problem of giant banks being too big to be allowed to fail - and, in a world where most of the countries of the rich west including the UK are at the limits of what they can borrow, big banks in practice may well right now be too big and expensive to save.
In other words, giant banks remain potential weapons of mass economic destruction. It is possible they can be made safe, defused, forever. But it hasn't happened yet.
However there is also an enormous ideological issue which Mr Carney's address implies - amazingly perhaps - has been resolved, with a whimper rather than a bang.
In the immediate aftermath of the crash and during the subsequent Great Recession, there was a lively debate about whether the UK had become too dependent on the City.
There were two concerns raised: whether it was good for the happiness and cohesion of Britain to be so dependent on an industry where huge disproportionate rewards go to small numbers of individuals, significantly widening the gap between rich and poor; and whether the British economy would be more stable and reliable as a wealth generator if it was less reliant on debt-fuelled growth and more reliant on manufacturing and tradeable services other than finance.
Mr Carney's appointment and his subsequent testament of faith in the City implies that the government has more-or-less given up on a fundamental rebalancing and reconstruction of the British economy away from banking.
And given that there hasn't been any conspicuous challenge to the Carney thesis from the Labour opposition, the assumption has to be that what used to known as the Establishment has returned to the comforting conviction that the City is golden-egg laying goose, and not a Trojan Horse.
If so, this is perhaps remarkable, in the wake of the biggest squeeze on living standards since the 1930s. There was a time, not that long ago, when thousands of people in London and New York manifested their distaste for bankers' conduct by creating tent cities. They presumably had confidence in our ability to alter our economic destiny.
Hi Tony, well it's a realistic stance by the political class, if of course morally repugnant.
Two things really:
- All talk of 're-balancing the economy' was utterly pretentious to begin with. This would take decades given the current set-up of the UK economy.
So a red herring to begin with.
- As we all have been discussing in this thread, the current credit creation paradigm is an absolutely hopeless dead-end that, by definition, requires that immense power be given to commercial banks.
These two facts together result in having a political class whose hands are tied when it comes to formulating policy.
And this is true without even considering the lobbying clout of the banking sector and its interlocks with said political class.
The best the current political class can aim for, as John Kay argues, is a realistic mechanism to liquidate banks when they fail without endangering the wider economy - but this verges on the impossible given the global character of the big UK banks. _________________ Summary of 9/11 scepticism: http://tinyurl.com/27ngaw6 and www.911summary.com
Off the TV: http://www.youtube.com/watch?v=M4szU19bQVE
Those who do not think that employment is systemic slavery are either blind or employed. (Nassim Taleb)
www.moneyasdebt.net http://www.positivemoney.org.uk/
As we all have been discussing in this thread, the current credit creation paradigm is an absolutely hopeless dead-end that, by definition, requires that immense power be given to commercial banks.
Bank of England, issues the credits, from thin air.
Cancel it regularly, they can't take advantage of it.
"It's not depositors money lent, but just entry keeping from limitless thin air, that the bank gives up no risk for and yet wants it all back plus interest, ending up "owning" the whole lot every where, on a lie. The Houses we live in, the builders have all been paid, there is is no good reason to pay what isn't owed."
"Money used for exchange person to person is owed. But nothing is owed to bankers which just invent it out of thin air from false debt entry book keeping, but a very small service fee. Certainly not the principle amount nor interest. The Houses we live in, the builders have all been paid, there is is no good reason to pay what isn't owed to crooks."
Brown is also the president of The Public Banking Institute, which stands poised to serve as a powerful part of the solution to the financial debacle we’re currently in, not just in the US, but worldwide. From her research, she came to the conclusion that the main problem plaguing our financial system is the massive interest going into private coffers, and the remedy for that is to replace the privately owned banking system with a public one. She explains:
“After the whole system collapsed in the fall of 2008,... I became aware that there was one state that actually escaped the credit crisis, and that was the only state that had a publicly owned bank—North Dakota. The Bank of North Dakota is owned by the state. They’ve had this bank in place since 1919.
... The private banks are always siphoning off this extra money in interest that they don’t create as principal when they make loans. But if you have a public system—if banking [and]... credit were a public utility just like water should be, or electricity or highways… these are all blood systems of the economy—if money and credit were considered public utility, owned by the public, then the interest would go back to the public.
That is a sustainable system.
The original model is Benjamin Franklin’s Colony of Pennsylvania, which owned its own bank. The government both printed money, the way all the colonies did... [and] it had a bank. So the bank lent the money, and the money came back to the government. The interest was sufficient to fund the government. During that period, the colonists paid no taxes, they had no government debt, and prices did not inflate. It was a sustainable model.”
From that idea, the Public Banking Institute developed the Return to Prosperity Plan.
It sounds incredible, but 40 percent of the cost of everything we buy is interest, according to research by Margrit Kennedy, a German researcher. This interest is entirely hidden, so you don’t know you’re paying it. This is because at every stage of development of a product, interest is paid, again and again. For example, a business must typically take out a loan in order to pay for raw materials and the workforce before it can have a final product to sell. The same goes for each of the businesses in the supply chain, and for each and every retailer.
“If the state owned the bank... then the people get the interest back...” Brown explains. “For example, in North Dakota, the state’s revenues, by law, go into the Bank of North Dakota, so they have a huge deposit base and a huge capital base....
That means the state could save 40 percent on its projects, which means we could either cut taxes by 40 percent, or we could have 40 percent more services provided with the same amount of taxes that we pay now. We just have to change bankers. Instead of banking with Wall Street, we should be banking in our own bank (where we get the profits) or cooperative system (where it all comes back). Banking, instead of feeding off the economy, should feed the economy. And it could be a sustainable system.”
More Information
According to Brown, 18 states have now introduced bills of one sort or another for state-owned banks. And the Public Banking Institute, which is run entirely by volunteers, is continuing to work on furthering this plan.
“We have a very active group,” she says. “People get really excited about this idea. We’ve got representatives all over the country and groups you can join if you want.”
I’ve long been aware of the challenges with our whole economic model, but I’ve only recently begun to appreciate the connection between the banking industry and health, as discussed in this interview. Again, I highly recommend listening to it in its entirety, or reading through the transcript, to get a broader view.
The problem is so vast, and that’s true for just about every problem we have these days. But a large portion of it can be traced back to an unsustainable, unscrupulous, parasitic, private banking system that does not benefit those who use it! It has become a fundamental pernicious evil that’s ruining our culture. I think once people understand the concept proposed by this “Return to Prosperity Plan” at a deeper level, it’s going to be an easy step to switch over. But of course, there’s the logistics of educating the public on how it works, and then developing the funding to get these ballot initiatives passed in each individual state.
But I think it’s a marvelous model, and I applaud Brown for what she’s doing to really wake us up—both to the roots of the problem and to sustainable solutions.
My approach as a physician is to treat the root cause of the problem. If you just treat symptoms like the drug model is doing, the industry makes obscene profits while the public health continues to suffer and decline. In many ways, we’ve done the same thing with Wall Street. We’re not treating the root problem, namely a corrupted banking system, which is what Brown’s Institute and economic plan addresses head on.
Creating a nation-wide public banking system for each state seems like a marvelous solution, and we know it works—it’s been proven in North Dakota. State banks can be more easily monitored than a nationalized bank, while providing more diversity to cater to each state's own economic model.
It’s 20 minutes before 4 p.m. in London and currency traders’ screens are blinking red and green. Some dealers have as many as 50 chat rooms crowded onto four monitors arrayed in front of them like shields. Messages from salespeople and clients appear, get pushed up by new ones and vanish from view. Orders are barked through squawk boxes.
This is the closing “fix,” the thin slice of the day when foreign-exchange traders buy and sell billions of dollars of currency in the largely unregulated $5.3-trillion-a-day foreign-exchange market, the biggest in the world by volume, according to the Bank for International Settlements. Their trades help set the benchmark WM/Reuters rates used to value more than $3.6 trillion of index funds held by pension holders, savers and money managers around the world.
Now regulators from Bern to Washington are examining evidence first reported by Bloomberg News in June that a small group of senior traders at big banks had something else on their screens: details of each other’s client orders. Sharing that information may have helped dealers at firms, including JPMorgan Chase & Co. (JPM:US), Citigroup Inc., UBS AG and Barclays Plc, manipulate prices to maximize their own profits, according to five people with knowledge of the probes.
“This is a market where there is no law and people have turned a blind eye,” said former Senator Ted Kaufman, a Delaware Democrat who sponsored legislation in 2010 to shrink the largest U.S. banks. “We’ve been talking about banks being too big to fail. What’s almost as big a problem is banks too big to manage.”
‘Bandits’ Club’
At the center of the inquiries are instant-message groups with names such as “The Cartel,” “The Bandits’ Club,” “One Team, One Dream” and “The Mafia,” in which dealers exchanged information on client orders and agreed how to trade at the fix, according to the people with knowledge of the investigations who asked not to be identified because the matter is pending. Some traders took part in multiple chat rooms, one of them said.
The allegations of collusion undermine one of society’s fundamental principles -- how money is valued. The possibility that a handful of traders clustered in a closed electronic network could skew the worth of global currencies for their own gain without detection points to a lack of oversight by employers and regulators. Since funds buy and sell billions of dollars of currency each month at the 4 p.m. WM/Reuters rates, which are determined by calculating the median of all trades during a 60-second period, that means less money in the pension and savings accounts of investors around the world.
‘Collusive Practices’
At stake is the integrity of a market that affects the daily valuations of private and public money alike, from the $261 billion Sacramento-based California Public Employees’ Retirement System to the $237 billion Scottish Widows Investment Partnership in Edinburgh, from the $4.1 trillion BlackRock Inc. (BLK:US) in Manhattan, the world’s largest asset manager, to the $1.2 trillion Tokyo-based Government Pension Investment Fund, the biggest pension.
“This is a market that is far more amenable to collusive practices than it is to competitive practices,” said Andre Spicer, a professor at the Cass Business School in London, who is researching the behavior of traders.
‘Big Profits’
Unlike sales of stocks and bonds, which are regulated by government agencies, spot foreign exchange -- the buying and selling for immediate delivery as opposed to some future date -- isn’t considered an investment product and isn’t subject to specific rules.
While firms are required by the Dodd-Frank Act in the U.S. to report trading in foreign-exchange swaps and forwards, spot dealing is exempt. The U.S. Treasury exempted foreign-exchange swaps and forwards from Dodd-Frank’s requirement to back up trades with a clearinghouse. In the European Union, banks will have to report foreign-exchange derivatives transactions under the European Market Infrastructure Regulation.
A lack of regulation has left the foreign-exchange market vulnerable to abuse, said Rosa Abrantes-Metz, a professor at New York University’s Stern School of Business in Manhattan.
“If nobody is monitoring these benchmarks, and since the gains from moving the benchmark are possibly very large, it is very tempting to engage in such a behavior,” said Abrantes-Metz, whose 2008 paper “Libor Manipulation” helped spark a global probe of interbank borrowing rates. “Even a little bit of difference in price can add up to big profits.”
Culture ‘Wrong’
The currency investigations are taking place as authorities grapple with a widening list of scandals involving the manipulation by banks of benchmark financial rates, including the London interbank offered rate, or Libor, and ISDAfix, used to determine the value of interest-rate derivatives. The U.K. regulator also is reviewing how prices are set in the $20 trillion gold market, according to a person with knowledge of the matter.
“Some of these problems developed over many years without anybody speaking up,” said Andrew Tyrie, chairman of Britain’s Commission on Banking Standards and Parliament’s Treasury Select Committee. “This is remarkable. It suggests something very wrong with the culture at these institutions.”
The story published by Bloomberg News in June, based on interviews with current and former traders, triggered internal probes as banks began reviewing millions of instant messages, e-mails and transcripts of phone calls to see whether employees attempted to rig rates. The U.K.’s Financial Conduct Authority, the European Union, the Swiss Competition Commission and the U.S. Department of Justice are all now investigating.
Deutsche Bank
In addition to seeking evidence of collusion, the FCA is looking into whether traders cut deals for personal profit before completing customers’ orders, according to a person with knowledge of the probe. Bloomberg News reported in November, based on the accounts of two people who witnessed the transactions, that some dealers placed side bets for personal accounts or through friends in exchange for cash payments.
At least 12 currency traders have been suspended or put on leave by banks as a result of internal probes, and 11 firms have said they were contacted by authorities. Government-controlled Royal Bank of Scotland Group Plc turned over transcripts of instant messages. Deutsche Bank AG, Germany’s largest lender, said it’s cooperating with regulators and Zurich-based UBS, the world’s fourth-biggest currency dealer, said it’s taking unspecified disciplinary measures against employees.
Justice Department
Britain’s FCA, which has about 60 people working on benchmark investigations, has asked foreign-exchange traders to come in for voluntary interviews, according to the people with knowledge of the probe. The individuals are among at least 40 traders whose communications are being reviewed, one of them said. The conversations being examined date back to 2004, another said. Chris Hamilton, a spokesman for the FCA, declined to comment.
The Justice Department has issued subpoenas to banks, according to three people with knowledge of the probe who asked not to be identified because the investigation is confidential.
“The criminal and antitrust divisions have an active, ongoing investigation into possible manipulation of foreign-exchange rates,” Peter Carr, a department spokesman, said in an e-mail. He declined to name any specific institutions.
EU competition commissioner Joaquin Almunia said in October the Brussels regulator’s probe into currency markets was at a “very preliminary” stage. Several banks have come forward with information on possible rigging in the hope of winning leniency, Almunia’s spokesman Antoine Colombani said in November.
‘The Cartel’
None of the traders or the banks they work for has been accused of wrongdoing.
The investigations have had repercussions across the industry. UBS, RBS, Citigroup, Deutsche Bank, JPMorgan and Lloyds Banking Group Plc are banning traders from using multibank chat rooms, people at the firms said. Investors are breaking their orders into smaller units and using more banks to reduce the opportunity for front-running, one of Europe’s largest money managers said.
One focus of the investigation is the relationship of three senior dealers who participated in “The Cartel” -- JPMorgan’s Richard Usher, Citigroup’s Rohan Ramchandani and Matt Gardiner, who worked at Barclays and UBS -- according to the people with knowledge of the probe. Their banks controlled more than 40 percent of the world’s currency trading last year, according to a May survey by Euromoney Institutional Investor Plc.
Entry into the chat room was coveted by nonmembers interviewed by Bloomberg News, who said they saw it as a golden ticket because of the influence it exerted.
Minimizing Losses
Regulators are examining whether discussions among the traders amounted to collusion -- if, with a few keystrokes, they were able to push around rates to boost bank profits and their own bonuses. Traders on the chat deny that, saying they were merely matching buyers and sellers ahead of the fix. That way they could minimize losses by avoiding trades at a time of day when prices typically fluctuate the most, they said.
The men communicated via Instant Bloomberg, a messaging system available on terminals that Bloomberg LP, the parent of Bloomberg News, leases to financial firms, people with knowledge of the conversations said.
The traders used jargon, cracked jokes and exchanged information in the chat rooms as if they didn’t imagine anyone outside their circle would read what they wrote, according to two people who have seen transcripts of the discussions.
Usher, Ramchandani and Gardiner, along with at least two other dealers over the years, would discuss their customers’ trades and agree on exactly when they planned to execute them to maximize their chances of moving the 4 p.m. fix, two of the people said. When exchange rates moved their way, they would send written slaps on the back for a job well done.
Bollinger Champagne
The conversations echo those uncovered by regulators about Libor, in which bankers promised bottles of Bollinger champagne or cash to counterparts at firms willing to help them rig the benchmark interest rates used to price $300 trillion of contracts from student loans to mortgages. More than six banks have been fined about $6 billion since June 2012, and regulators are investigating traders at half a dozen more firms.
The currency discussions were even more calculating, one of the people who reviewed the transcripts said.
Usher was the moderator of “The Cartel,” people with knowledge of the matter said. He worked at RBS and represented the Edinburgh-based bank when he accepted a 2004 award from the publication FX Week. When he quit RBS in 2010, the chat room died, the people said. He revived the group with the same participants when he joined JPMorgan the same year as chief currency dealer in London.
Standard Chartered
Ramchandani is head of European spot trading at New York-based Citigroup. Born in India, and said by people who know him to be studious and polite, he joined the bank’s trading desk after graduating from the University of Pennsylvania with a degree in economics, according to a spokesman for the school and a recruiter who has a copy of his resume. He relocated to London from New York in 2004.
Both Ramchandani and Usher were part of the Bank of England’s 27-member London Foreign Exchange Joint Standing Committee subgroup of chief dealers as of the end of 2012, according to the central bank’s bulletin. The group met three times last year to discuss matters including regulatory developments, the bulletin reported.
Gardiner joined Standard Chartered Plc in London in September as assistant chief currency dealer. He previously worked at UBS in Zurich and was co-chief dealer with Chris Ashton at Barclays in London.
FCA Inquiry
Usher, Ramchandani and Gardiner were put on leave by their employers after the FCA opened its inquiry, according to people with knowledge of the matter. Ashton, now global head of spot trading at Barclays, was suspended along with five other spot traders at the bank in London and New York.
Ashton and Ramchandani declined to comment when contacted by telephone. Gardiner didn’t return messages left on his mobile phone. JPMorgan declined to provide contact details for Usher, who couldn’t be located through Internet searches or directory assistance. The bank also declined to comment about the probes, as did spokesmen for RBS, Standard Chartered, Citigroup, Barclays and UBS. Deutsche Bank said in an e-mail that it’s cooperating with investigations and “will take disciplinary action with regards to individuals if merited.”
London is the world’s biggest hub for currency trading, accounting for about 41 percent of all transactions, compared with 19 percent for New York and 6 percent for Singapore, according to a Bank for International Settlements survey published in September. About $5.3 trillion changes hands every day, BIS data show, as companies convert earnings into dollars, euros or yen and managers overseeing pensions and savings buy and sell shares around the world.
Essex Countryside
Spot currency trading is conducted in a small and close-knit community. Many of the more than a dozen traders and brokers interviewed for this story live near each other in villages dotting the Essex countryside, a short train ride from London’s financial district, and stay in touch over dinner, on weekend excursions or with regular rounds of golf at local clubs.
Spot traders simply deal with buy and sell orders and don’t need the complex math skills their counterparts on derivatives desks use to extrapolate prices. Developing and maintaining relationships are more important, the traders say.
“The foreign-exchange market has a very strong culture, in which practitioners feel more attached to each other than they do their banks,” said Spicer, the Cass School of Business professor. “It is also dominated by an extremely small group of individuals, often with strong social ties formed by working with each other at some point in the past.”
Golf Club
On one excursion to a private golf club in the so-called stockbroker belt beyond London’s M25 motorway, a dozen currency dealers from the biggest banks and several day traders, who bet on currency moves for their personal accounts, drained beers in a bar after a warm September day on the fairway. One of the day traders handed a white envelope stuffed with cash to a bank dealer in recognition of the information he had received, according to a person who witnessed the exchange.
Such transactions were common and also took place in tavern parking lots in Essex, the person said.
Personal relationships often determine how well currency traders treat their customers, said a hedge-fund manager who asked not to be identified. That’s because there’s no exchange where trades take place and no legal requirement that traders ensure customers receive the best deals available, he said.
Eaton Vance
Hedge-fund managers get the best prices because they trade frequently and are the most sophisticated, according to a former U.S. currency dealer. Next in line are institutional funds -- insurance companies and pension plans that get less-beneficial prices. At the bottom are firms from automakers to smartphone manufacturers that need to swap currencies to purchase materials abroad and repatriate earnings. Traders at banks take advantage of them because they know the least about the market, he said.
Eaton Vance Corp., a mutual-fund company that manages $281 billion, uses the WM/Reuters rate to value its portfolio, so the credibility of the rate as a result of rigging allegations is potentially worrisome and the firm is continuing to monitor its reliability, said Michael O’Brien, director of global trading.
While the Boston-based company has its own trading desk to make sure investors get the best prices, it uses bank traders for certain currencies, O’Brien said, adding that most customers have little choice.
Market Share
“Banks are market-makers in foreign exchange, and to a large degree you can’t avoid them,” O’Brien said. “People have to trust the pricing.”
Four banks control more than half the foreign-exchange market, according to Euromoney’s survey. Deutsche Bank, based in Frankfurt, was No. 1, with a 15.2 percent share, followed by Citigroup with 14.9 percent, Barclays with 10.2 percent and UBS, Switzerland’s biggest lender, with 10.1 percent.
The WM/Reuters rates for 160 currencies, used as a benchmark by companies and investors around the world, are determined by trades executed in a minute-long period called “the fix,” starting 30 seconds before 4 p.m. in London.
The data is collected and distributed by World Markets Co., a unit of Boston-based State Street Corp., and Thomson Reuters Corp. Bloomberg LP competes with Thomson Reuters in providing news and information, as well as currency-trading systems and pricing data. Bloomberg LP also distributes the WM/Reuters rates on Bloomberg terminals.
State Street
Thomson Reuters said it “would lend its expertise to support any authorities’ investigation into alleged disruptive behavior on benchmarks.” The company doesn’t administer the WM/Reuters rates, it added in an e-mailed statement.
“The WM/Reuters benchmark service is committed to reliability and robust operational standards,” State Street said in an e-mail. “WM continually reviews recommended methodology and policies in order to ensure that industry best practices are considered.”
Aside from trading after economic events such as interest-rate cuts, 4 p.m. is the busiest time for currency dealers as customers place orders to be transacted at the fix price.
Things are even more hectic on the last working day of the month, when tracker funds buy and sell currencies with their banks. The funds say they have to trade at the fix because the global indexes they track, such as the MSCI World Index, are calculated once a day using the 4 p.m. WM/Reuters rates.
The frenzy begins an hour earlier on trading floors as dealers jockey for advantage. Bids and offers are exchanged. Slang is common. Mio means million. A yard is a billion.
Loss-Leader
Because traders promise clients they’ll get the fix price, it leaves banks open to losses if the market moves against them, one London-based dealer said. He described trading at the fix as a loss-leader that helped his firm win client business.
To make money, traders interviewed by Bloomberg News said they would share information with counterparts at other firms and trade ahead of large client orders. Most tracker funds place their orders as much as an hour before the fix, giving dealers a glimpse of possible future price movements, which they can use to take positions. Traders on instant-message groups increased their chances of predicting market moves by pooling details of their order books and agreeing to align positions at the fix, according to three people with knowledge of the practice.
Dealers can buy or sell the bulk of their client orders during the 60-second window to exert the most pressure on the published rate, a practice known as banging the close. Because the benchmark is based on the median value of transactions during the period, breaking up orders into a number of smaller trades could have a greater impact than executing one big deal.
Market Movements
Some dealers said the tactic is legitimate and necessary for banks to protect themselves from losses. Traders who agree to buy or sell at the close need to push through the bulk of their orders during the window to minimize the risk of losses from market movements, the traders said.
One large transaction can be enough to move the market. A former bank trader said that if he received an order from a customer at 3:30 p.m. to sell 1 billion euros ($1.37 billion) in exchange for Swiss francs at the 4 p.m. fix, he would have two objectives: to sell his bank’s own euros at the highest price and also to move the rate lower so that at 4 p.m. he could buy the currency from his client at a lower price.
While foreign exchange is unregulated, dealers are prohibited by market-abuse laws from trading on inside information and sharing confidential data about client orders with third parties. In recent years, banks have tightened rules on employees’ trading for their own accounts. Many require staff to hold investments for at least 30 days and obtain written clearance from compliance officials for personal dealings.
Currency Futures
The U.S. Commodity Futures Trading Commission, which has no oversight of the spot market, does regulate foreign-exchange futures, contracts that allow companies or investors to speculate on or hedge against the price movements of currencies. Some of those contracts, such as cash-settled forwards traded on the Chicago Mercantile Exchange, use WM/Reuters rates to determine who owes what at settlement. The agency has been reviewing potential violations of the law, according to a person with knowledge of the matter.
Its chairman, Gary Gensler, who declined to comment about any investigation the agency might be conducting, said the CFTC is understaffed, with 670 employees, when more than 1,000 would better fulfill its mission.
“We need to make sure reference rates are not based on a closing price that’s manipulated,” Gensler said in an interview. “The CFTC does not have enough people, period.”
U.K. Rules
In the U.K., the government is introducing laws designed to curtail market manipulation and punish traders found guilty of wrongdoing. In April, it became a criminal offense for anyone to knowingly make false or misleading statements relating to the setting of benchmarks. Other proposals include deferring bonuses for as long as 10 years and guaranteeing rights for whistle-blowers. They stop short of recommending specific regulations of the spot foreign-exchange market.
Even if regulators were watching the currency market, there would be a question of what they’d see and whether they’d be able to identify wrongdoing, said Felix Shipkevich of Shipkevich PLLC, a derivatives law firm in New York.
“Who has the expertise to determine if there’s any potential unlawful activity going on?” he said. “There are very few people who understand the over-the-counter market.”
More: http://www.hiddensecretsofmoney.com Welcome to the 5th episode of Michael Maloney's Hidden Secrets Of Money. In this instalment, we travel to Berlin and Frankfurt, where we were able to film the money museum inside the Bundesbank...one of the world's largest Central Banks.
This episode serves as an ideal primer for those waking up to the monetary matrix around them, as it clearly shows the history of true money and why it so important to our freedom. The quality of a society is directly proportional to the quality of its money. Debase a currency for long enough, and you end up with dangerous deficits, debt driven disasters, and eventually...delusional dictators. History proves this to be true.
For further insight on what it was like to film inside a central bank, check out the Exclusive Presentation that goes along with this episode at our website. In it, Mike tells what it was like to look at the displays and explanations from an Austrian Economics perspective. He also shows where he believes we are in the following cycles:
Inflation/Deflation
Quality Money/Quantity Currency
Capitalism/Collectivism
It's a fantastic 30+ minute presentation which also reports on personal freedom, gold and silver, the US dollar, and economic freedom.
Now I'd like to ask you , the reader, to dwell for a minute on Mike's last question in the video:
What use is money if you don't have freedom?
Enjoy this episode, and please share it far and wide. Drop us a line in the comments section below and let us know how we are doing .
See you next week,
Dan
Includes some very damning quotes of Churchill's re WWII, as well as much more useful info. _________________ 'And he (the devil) said to him: To thee will I give all this power, and the glory of them; for to me they are delivered, and to whom I will, I give them'. Luke IV 5-7.
Joined: 30 Jul 2006 Posts: 6060 Location: East London
Posted: Sat Jan 25, 2014 5:48 pm Post subject:
These guys would put most of us to shame, with their knowledge of the Bankster's scam system!
I came across this brilliant 'Comment' in Jakarta Post comments while I was seeking some other info: it so good I am posting it in it's entirety (less the bits re other posters; though I haven't gone through them all, a quick browse showed some very good ones, to the extent that I am going to have to go through them before I make my own comment vis-a-vis the main article, Indonesia's massive arms buildup):
"It is well understood that too escape the debt trap of the global bankers, the power to create the national money supply needs to be restored to national governments. Alternatives include:
•Legal tender issued directly by national treasuries and spent on national budgets.
•Publicly-owned central banks empowered to advance the nation’s credit and lend it to the government interest-free.
•Nationalization of bankrupt banks considered “too big to fail” (after expunging or writing down bad debts on inflated bubble assets). These banks could then issue credit to the public and serve the public’s banking needs, with the profits recycling back to the government, defraying the tax burden on the people.
•Publicly-owned local banks (state, provincial, or municipal).
Publicly-owned banks have been successfully established and operated in many countries, including Australia, New Zealand, Canada, Germany, Switzerland, India, China, Japan, Korea, and Malaysia.
In the United States there is currently only one state-owned bank, the Bank of North Dakota. The model, however, has proven to be highly successful. North Dakota is the only U.S. state to have escaped the credit crisis unscathed. In 2009, while other states floundered, North Dakota had its largest budget surplus ever. In 2008, the Bank of North Dakota (BND) had a return on equity of 25%. North Dakota has the lowest unemployment rate in the USA and the lowest default rate on loans. It also has the most local banks per capita.
North Dakota has had its own bank since 1919, when farmers were losing their farms to the Wall Street bankers. They organized, won an election, and passed legislation. The state is required by law to deposit all its revenues in the BND. Like with the sustainable model of the bank of colonial Pennsylvania, interest and profits are returned to the government and to the local economy.
The United States is moving to copy this public banking model. Fourteen U.S. state legislatures have now initiated bills for state-owned banks.
The model could also be replicated in other countries. In Ireland, for example, where the major banks are insolvent and are already nationalized or soon will be, the government could deposit its revenues in its own publicly-owned banks, add sufficient capital to meet capital requirements, and leverage these funds to create interest-free credit for its own local needs. That is exactly what Alexander Hamilton did when faced with government debts that were impossible to repay: he put the government’s existing funds in a bank, then borrowed the money back several times over, employing the accepted “fractional reserve” model.
Japan’s solution is also a variant of what Alexander Hamilton proposed two centuries earlier. Japan retains its status as the third largest economy in the world although it has a debt to GDP ratio of 226%. Japan has “monetized” the national debt, turning it into the national money supply. The government-owned Bank of Japan holds Japanese government debt equal to 100% of the nation’s GDP; and because the government owns the bank, this loan is interest-free and can be rolled over indefinitely. An interest-free loan rolled over indefinitely is the equivalent of issuing money. " _________________ 'And he (the devil) said to him: To thee will I give all this power, and the glory of them; for to me they are delivered, and to whom I will, I give them'. Luke IV 5-7.
Joined: 25 Jul 2005 Posts: 18335 Location: St. Pauls, Bristol, England
Posted: Sat Feb 08, 2014 11:51 pm Post subject:
Argentine Banking System Archives Destroyed By Deadly Fire
ZeroHedge - Submitted by Tyler Durden on 02/05/2014 23:57 -0500
Market Sentiment
http://www.zerohedge.com/news/2014-02-05/argentine-banking-system-arch ives-destroyed-deadly-fire
While we are sure it is a very sad coincidence, on the day when Argentina decrees limits on the FX positions banks can hold and the Argentine Central Bank's reserves accounting is questioned publically, a massive fire - killing 9 people - has destroyed a warehouse archiving banking system documents. As The Washington Post reports, the fire at the Iron Mountain warehouse (which purportedly had multiple protections against fire, including advanced systems that can detect and quench flames without damaging important documents) took hours to control and the sprawling building appeared to be ruined. The cause of the fire wasn’t immediately clear - though we suggest smelling Fernandez' hands...
We noted yesterday that there are major questions over Argentina's reserve honesty...
While first print is preliminary and subject to revision, the size of recent discrepancies have no precedent. This suggest that the government may be attempting to manage expectations by temporarily fudging the "estimate " of reserve numbers (first print) while not compromising "actual" final reported numbers. If this is so, it is a dangerous game to play and one likely to back-fire.
During a balance of payments crisis - as Argentina is undergoing - such manipulation of official statistics (and one so critical for market sentiment) is detrimental to the needed confidence building around the transition in the FX regime.
And today the government decrees limits on FX holdings for the banks...
Argentina’s central bank published resolution late yday on website limiting fx position for banks to 30% of assets.
Banks will have to limit fx futures contracts to 10% of assets: resolution
Banks must comply with resolution by April 30
And then this happens...
Via WaPo,
Nine first-responders were killed, seven others injured and two were missing as they battled a fire of unknown origin that destroyed an archive of bank documents in Argentina’s capital on Wednesday.
The fire at the Iron Mountain warehouse took hours to control...
The destroyed archives included documents stored for Argentina’s banking industry, said Buenos Aires security minister Guillermo Montenegro.
The cause of the fire wasn’t immediately clear.
Boston-based Iron Mountain manages, stores and protects information for more than 156,000 companies and organizations in 36 countries. Its Argentina subsidiary advertises that its facilities have multiple protections against fire, including advanced systems that can detect and quench flames without damaging important documents.
Joined: 25 Jul 2005 Posts: 18335 Location: St. Pauls, Bristol, England
Posted: Wed Feb 19, 2014 11:42 pm Post subject:
nice
How economic growth has become anti-life
An obsession with growth has eclipsed our concern for sustainability, justice and human dignity. But people are not disposable – the value of life lies outside economic development
http://www.theguardian.com/commentisfree/2013/nov/01/how-economic-grow th-has-become-anti-life
Vandana Shiva - theguardian.com, Friday 1 November 2013 04.22 GMT
Jump to comments (391)
An Indian trader inspects sunflower seeds as he participates in a seed auction sale at the grain market in the village of Jandiala, near Amritsar, India, 29 May 2013.
'Economic growth begins when seeds are genetically modified and patented, leading to farmers having to buy seeds every season'. Photograph: Raminder Pal Singh/EPA
Limitless growth is the fantasy of economists, businesses and politicians. It is seen as a measure of progress. As a result, gross domestic product (GDP), which is supposed to measure the wealth of nations, has emerged as both the most powerful number and dominant concept in our times. However, economic growth hides the poverty it creates through the destruction of nature, which in turn leads to communities lacking the capacity to provide for themselves.
The concept of growth was put forward as a measure to mobilise resources during the second world war. GDP is based on creating an artificial and fictitious boundary, assuming that if you produce what you consume, you do not produce. In effect , “growth” measures the conversion of nature into cash, and commons into commodities.
Thus nature’s amazing cycles of renewal of water and nutrients are defined into nonproduction. The peasants of the world,who provide 72% of the food, do not produce; women who farm or do most of the housework do not fit this paradigm of growth either. A living forest does not contribute to growth, but when trees are cut down and sold as timber, we have growth. Healthy societies and communities do not contribute to growth, but disease creates growth through, for example, the sale of patented medicine.
Water available as a commons shared freely and protected by all provides for all. However, it does not create growth. But when Coca-Cola sets up a plant, mines the water and fills plastic bottles with it, the economy grows. But this growth is based on creating poverty – both for nature and local communities. Water extracted beyond nature’s capacity to renew and recharge creates a water famine. Women are forced to walk longer distances looking for drinking water. In the village of Plachimada in Kerala, when the walk for water became 10 kms, local tribal woman Mayilamma said enough is enough. We cannot walk further; the Coca-Cola plant must shut down. The movement that the women started eventually led to the closure of the plant............ _________________ www.lawyerscommitteefor9-11inquiry.org www.rethink911.org www.patriotsquestion911.com www.actorsandartistsfor911truth.org www.mediafor911truth.org www.pilotsfor911truth.org www.mp911truth.org www.ae911truth.org www.rl911truth.org www.stj911.org www.v911t.org www.thisweek.org.uk www.abolishwar.org.uk www.elementary.org.uk www.radio4all.net/index.php/contributor/2149 http://utangente.free.fr/2003/media2003.pdf
"The maintenance of secrets acts like a psychic poison which alienates the possessor from the community" Carl Jung
https://37.220.108.147/members/www.bilderberg.org/phpBB2/
Joined: 25 Jul 2005 Posts: 18335 Location: St. Pauls, Bristol, England
Posted: Wed Mar 19, 2014 7:15 pm Post subject:
The truth is out: money is just an IOU, and the banks are rolling in it
The Bank of England's dose of honesty throws the theoretical basis for austerity out the window
Back in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans didn't know how banking really works, because if they did, "there'd be a revolution before tomorrow morning".
Last week, something remarkable happened. The Bank of England let the cat out of the bag. In a paper called "Money Creation in the Modern Economy", co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window.
To get a sense of how radical the Bank's new position is, consider the conventional view, which continues to be the basis of all respectable debate on public policy. People put their money in banks. Banks then lend that money out at interest – either to consumers, or to entrepreneurs willing to invest it in some profitable enterprise. True, the fractional reserve system does allow banks to lend out considerably more than they hold in reserve, and true, if savings don't suffice, private banks can seek to borrow more from the central bank.
The central bank can print as much money as it wishes. But it is also careful not to print too much. In fact, we are often told this is why independent central banks exist in the first place. If governments could print money themselves, they would surely put out too much of it, and the resulting inflation would throw the economy into chaos. Institutions such as the Bank of England or US Federal Reserve were created to carefully regulate the money supply to prevent inflation. This is why they are forbidden to directly fund the government, say, by buying treasury bonds, but instead fund private economic activity that the government merely taxes.
It's this understanding that allows us to continue to talk about money as if it were a limited resource like bauxite or petroleum, to say "there's just not enough money" to fund social programmes, to speak of the immorality of government debt or of public spending "crowding out" the private sector. What the Bank of England admitted this week is that none of this is really true. To quote from its own initial summary: "Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits" … "In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money 'multiplied up' into more loans and deposits."
In other words, everything we know is not just wrong – it's backwards. When banks make loans, they create money. This is because money is really just an IOU. The role of the central bank is to preside over a legal order that effectively grants banks the exclusive right to create IOUs of a certain kind, ones that the government will recognise as legal tender by its willingness to accept them in payment of taxes. There's really no limit on how much banks could create, provided they can find someone willing to borrow it. They will never get caught short, for the simple reason that borrowers do not, generally speaking, take the cash and put it under their mattresses; ultimately, any money a bank loans out will just end up back in some bank again. So for the banking system as a whole, every loan just becomes another deposit. What's more, insofar as banks do need to acquire funds from the central bank, they can borrow as much as they like; all the latter really does is set the rate of interest, the cost of money, not its quantity. Since the beginning of the recession, the US and British central banks have reduced that cost to almost nothing. In fact, with "quantitative easing" they've been effectively pumping as much money as they can into the banks, without producing any inflationary effects.
What this means is that the real limit on the amount of money in circulation is not how much the central bank is willing to lend, but how much government, firms, and ordinary citizens, are willing to borrow. Government spending is the main driver in all this (and the paper does admit, if you read it carefully, that the central bank does fund the government after all). So there's no question of public spending "crowding out" private investment. It's exactly the opposite.
Why did the Bank of England suddenly admit all this? Well, one reason is because it's obviously true. The Bank's job is to actually run the system, and of late, the system has not been running especially well. It's possible that it decided that maintaining the fantasy-land version of economics that has proved so convenient to the rich is simply a luxury it can no longer afford.
But politically, this is taking an enormous risk. Just consider what might happen if mortgage holders realised the money the bank lent them is not, really, the life savings of some thrifty pensioner, but something the bank just whisked into existence through its possession of a magic wand which we, the public, handed over to it.
I wonder if they tested for Thermite? With all the fire safety devices, it would need to be a heavy weight 'incendiary material' to overide all fire defenses.
'Tragedy and Hope: A History of the World in Our Time by Carroll Quigley* (1966 Macmillan) is an exacting account of how the Bank of England, the Federal Reserve, the European central banks, and the giant investment banks that dominate them (e.g. Goldman Sachs and JP Morgan) came to control all western governments.
According to Quigley, banks have controlled western society – by manipulating the money supply – since the creation of the Bank of England and the fractional reserve lending system in 1694. Moreover, owing to the secrecy under which they operate, Quigley asserts that most elected officials are totally unaware of the immense control central and investment banks exert over the so-called democratic process.
He describes in exhaustive detail how all historical inflationary and deflationary crises, panics, wars, recessions and depressions were orchestrated behind the scenes by the banking establishment, for the purpose of increasing their private wealth. In his epic portrayal of three centuries of western civilization, he also describes how the banking aristocracy financed the rise of Communism in Russia, China and Eastern Europe, as well as bringing Hitler, Mussolini, Stalin and Roosevelt to power and guiding their governments from behind the scenes....'
Looks like an interesting book (allbeit old - 1966) for those interested in financial affairs. _________________ 'And he (the devil) said to him: To thee will I give all this power, and the glory of them; for to me they are delivered, and to whom I will, I give them'. Luke IV 5-7.
Economics Class War: historical context deliberately missing from our schooling & the mainstream media.
http://www.radio4all.net/index.php/program/75194 _________________ --
'Suppression of truth, human spirit and the holy chord of justice never works long-term. Something the suppressors never get.' David Southwell
http://aangirfan.blogspot.com http://aanirfan.blogspot.com
Martin Van Creveld: Let me quote General Moshe Dayan: "Israel must be like a mad dog, too dangerous to bother."
Martin Van Creveld: I'll quote Henry Kissinger: "In campaigns like this the antiterror forces lose, because they don't win, and the rebels win by not losing."
Joined: 25 Jul 2005 Posts: 18335 Location: St. Pauls, Bristol, England
Posted: Fri Oct 17, 2014 9:24 pm Post subject:
new methodology also classifies military spending as an investment in the future
investments in research and development are classified as assets that will create value in future years, a move which, on its own, is worth an extra 1.9 percent
MASSIVE SCAM = CORE OF STORY TOTALLY UNREPORTED
Sex and drugs drive EU growth surge
TODAY @ 09:23 RELATED EU statistics still incoherent due to national differences Valencia faces EU probe over dodgy statistics BY BENJAMIN FOX
http://euobserver.com/news/126110
BRUSSELS - Ask a politician in any EU country what they would give for an extra 2 percent on their nation's economic output without any policy changes, and you are likely to be offered a couple of limbs and a body part.
Yet Eurostat is set to publish figures on Friday (17 October) showing that the bloc's GDP has grown by nearly 2.5 percent.
However, the apparent surge in economic growth is not the result of increased spending or output and will not make anyone feel richer. Instead it is the product of a new accounting system used by the EU's statistical agency to calculate economic activity which includes sectors ranging from research and development to drug trafficking and prostitution.
October is the first month that EU countries have to report data based on the revised regulation on the European System of National and Regional Accounts, known as ESA 2010.
The main innovation in ESA 2010 is that investments in research and development are classified as assets that will create value in future years, a move which, on its own, is worth an extra 1.9 percent.
"In a modern, more and more digital economy, R&D is an investment for the future even more important than buildings, trucks, or factories," said Eurostat in a briefing paper explaining the new regime.
The new methodology also classifies military spending as an investment in the future, and includes chunks of the grey economy and illegal activities such as drug trafficking, prostitution, and smuggling to be taken into account in the gross domestic product.
The UK's Office of National Statistics estimates that Britons' spending on prostitution and illegal drugs bolsters the UK economy by as much as £11 billion (€13.8 billion).
But the EU institutions cannot be accused of cooking the books since ESA 2010 is based on the most up-to-date accounting system used by the United Nations, which is in the process of being implemented across the world.
The US has been using the new rules since August 2013, with Eurostat estimating that this has inflated the US economic indicators by 3 percent.
The legislation putting the rules in place attracted almost no attention when it was adopted by MEPs and ministers in 2012 but will give the bloc its fastest economic growth rate since 2007.
The eurozone registered zero growth in the first six months of 2014 and has expanded by a mere 1.3 percent since 2010.
Finland and Sweden are expected to see the biggest change from the new system of reporting.
Finland's statistical office says that its GDP will go up by 4.3 percent, while Statistics Sweden expects that its figures will be "adjusted upwards by slightly more than 5 percent of which about 4 percentage points are an adaptation to ESA 2010."
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