America’s claims to winning the World War II, came with insistence at the Bretton Woods meeting that dollar be assigned a de facto reserve currency power in 1945 Other countries, the Bretton Woods agreement mandated, should peg their currencies to the dollar.
With dollar standard replacing gold standard, world trade and finance became exclusively transacted in dollars. Without having to hold gold reserves against new dollars it issued, the Federal Reserve saw no limit to the amount of dollars it could print.
Also, exploiting this unheard-of de facto reserve currency imperium, the US freely financed its expensive military bases overseas, exporting inflation to all its trading partners.
Soon, US trade deficits in balance of trade became chronic, especially as European and Japanese economies recovered from the WWII. Bloating the deficits in the late 1960s came not only as a result of Lyndon Johnson’s war in Vietnam but also because of his so-called Great Society Program.
By resorting to printing dollars to finance these intractable federal deficits, rather than either devaluing the dollar against gold or raising taxes for fear of losing reelection bid, truly quickened dollar’s precipitous fall.
With $35 per ounce the fixed parity price of gold as it was since 1945 when the US economy was without much competition, it was obvious that there was no way such a value should remain the same in late 1960s than being artificially kept high.
To avoid being caught up unawares, central banks around the world quietly accelerated their selling of dollars and buying gold. Reacting, the US demanded that nations holding surplus dollars US should invest their dollar surpluses in US government’s debt (treasury bonds and bills) and earn interest on their deposits. This bought dollar a momentary relief.
Despite Washington’s appeal that nations should invest their accumulated dollars in US government debts, the dangerously divergent relation between dollar supply to a fixed reserve of gold, it wasn’t surprising to see countries like France with their accumulated to show up insisting instead to receive gold in exchange, as the 1945 Bretton Woods agreement allowed.
Preventing this impending collapse, President Richard Nixon, on August 15, 1971 without prior warning, robbed nations their right to gold, when he unilaterally announced that rather than dollar continuing to be convertible to gold, it’d become a floating currency.
But rather than this saving the dollar, a floodgate of worldwide currency speculations was the result. Without the February 12, 1973 devaluation slowing the nervous capital flows from continuing to leave the dollar, Washington had to seek a permanent to the dollar’s endless fall.
In May 1973, on Rockefeller’s insistence, a group of 84 Bilderberger members, mostly western financial and political insiders secretly met in Saltsjoebaden, meeting at the resort island outside Stockholm, Sweden, agreed to give the dollar a new lease of lease, by adopting oil as dollar’s new measure of value. Hence petro-dollar replaced gold-dollar.
Since they lacked power to raise oil price by 400 percent as agreed, they agreed to orchestrate a war between Arab nations and Israel. Openly supporting Israel in such a power, they believed, would force Arab nations into raising OPEC’s oil price as well as a possible Arab oil embargo on the US and some European countries supporting Israel, which could further tighten Arab oil supply.
That was how it played out in October 1973 Yom Kippur War between Arabs and Israel, masterminded by Henry Kissinger. OPEC oil price was raised as high as 70 percent (from $3.01/barrel to $5.11), and Arabs imposed oil embargo on the US and some European countries. Even with the war ended, oil price continued rising until in mid-1970s when it reached exactly 400 percent as originally agreed in Saltsjoebaden.
Soon non oil producing developing countries had to resort to borrowing from these ‘banksters’ who lured them with favorable interest rates, especially with non-oil commodity prices forced to collapse by the same Wall Street and City of London banksters.
Having soaked these developing countries in huge debts, the Federal Reserve Chairman, Paul Volcker, on October 6, 1979 acting on the written scripts of the Rockefeller-led Wall Street, caused a coup d’état, a monetary shock therapy, which suddenly raised the US interest rates by 300 percent.
Purposefully held artificially high between 1979 and 1982, the obvious happened. The 300 percent raise in interest rates had erupted developing countries’ debt crisis, setting off mass defaults, as was wanted by the Wall Street, since compounded, would lead to debt service alone causing colossal capital flows from these poor countries to Wall Street.
When the time became ripe as planned, the IMF now a debt policeman became a de facto Anglo-American neo-colonial monetary and economic dictatorship handing debt-soaked poor countries unheard-of economic austerity as conditionalities for their debts, as designed by Wall Street bankers who didn’t to be known as the real robbers.
The conditionalities insisted that if these debt-ridden poor nations would ever wanted to see more dollars from foreign bank lenders (Wall Street and City of London banks) again, they better slash ”domestic imports to the bone, cut national budget savagely, and devalue national currency.” The reason for these demands was to ensure that these poor debtor nations saved enough dollars for meeting their debt obligations.
Little wonder between 1982 and the end of the decade when the debt crisis officially ended, Africa’s debt had risen from $73billion to $160billion. By the time Africa paid off this debt scam, the region was plundered to the tune of $400 billion by Wall Street banks and Washington to financing US deficits. Besides huge capital loss, policy contamination and neoliberal imposition also set Africa’s development march three decades behind.
While hundreds of billions looted from poor countries brought a huge windfall of financial liquidity to the US banking system, it also turned Wall Street into extravaganza, with unheard-of financial excesses as everyone got intoxicated with the enjoyment the loot provided.
Little wonder by the time the dust settled, surprisingly the US economy was so ruined that by the end of 1980s, it assumed a third world status. It happened because Wall Street financial speculation forced America’s real sector economy into deindustrialization, economic financialization, and unprecedented outsourcing of jobs to countries such as China and Mexico.
Using dollar to defraud nations (2)
On the insistence of Rockefeller, President Ronald Reagan in August 1987 made Alan Greenspan the new Federal Reserve Chairman. With no time wasted on October 20, 1987 manipulate the stock markets in favor of the Wall Street, using new the derivatives markets to pump liquidity to prop up stocks.
An edge of legality intervention surprisingly turned the Fed from the lender of last resort to the lender of first resort.
Advancing Wall Street financial domination of the world, he quickly assembled and armed Wall Street hedge fund shrewd speculators led by George Soros’s Quantum Fund, Julian Robertson’s Jaguar and Tiger Funds, and Moore Capital Management to go around the world to look out for vulnerable economies to attack.
After a long ambush, in 1997, they successfully attacked the vulnerable currencies of East Asian tiger economies of Thailand, the Philippines, Indonesia, and South Korea. That Greenspan refused to act to ease the financial pressures until after the tiger economies had collapsed, showed how much Greenspan was the sender of these hedge fund attackers, who succeeded in dispossessing tiger countries over $200bn, which their central banks had to hurriedly to transfer to the US Treasury to build their dollar reserves against future attacks.
But as be
neficial as these minor attacks were to Wall Street Money Trust, they were never the reasons Greenspan was handed the Fed. He was made Fed Chairman simply to lead an historic Wall Street global financial dominion by dropping financial nuclear bombs around major financial capitals of the world.
The formalization of financial sector consolidation in the 1994 Interstate Banking and Branch Efficiency Act, with biggest banks swallowing small banks to create a formidable financial cartel based on ‘survival of the biggest’ rather than the fittest. This concentration of financial monopoly powers in few giant banking groups was needed to fully initiate the 21st century Wall Street financial revolution with securitization explosion.
Consolidation and concentration of the financial sector needed liberalization and deregulation of the sector. This meant the repealing of the Glass-Steagall Act, or else commercial banks wouldn’t be involved in investment banking and insurance business directly or indirectly through affiliates.
As a result of Rockefeller’s Chase Manhattan Bank with its one hundred million dollars spent on lobbying and making campaign contributions to influential lawmakers, on November 12, 1999 with the signing of the Gramm-Leach-Bliley Act by Clinton, the Glass-Steagall Act was finally repealed. With the Glass-Steagall gone and Wall Street simply the foxes entrusted with the hen-house, commercial banks began to lure customers into investing in securities they were under pressure as was the case in the 1920s that eventually led to the 1930s Great Depression.
But to use subprime mortgage packaging and securitization to defraud the rest of the world, Wall Street Money Trust got the full support of the White House, Congress, Supreme Court and two major credit rating agencies — Moody’s and S&P — that handed them AAA credit ratings, risk-free highest quality.
With these, the securitization toxic assets such as subprime mortgage-backed securities were bundled and sold off to foreign banks and other high yield-hungry foreign investors, who given the opaqueness of the entire process and the fact that not only were all the branches of US government, including the judiciary, raised no objections but also were handed Moody’s or S&P highest credit rating made it easier for foreign investors to be lured into this historic financial scam.
Also because most foreign investors and banks around the world fully believed in Washington’s ”Too Big to Fail” doctrine, they had also always believed that so long as their investments were in the hands of major Wall Street banks, they were in safe hands.
But on September 15, 2008 the whole world was shocked, when amidst the exploding banking crisis that was rocking Wall Street, the Fed Chairman Ben Bernanke, New York Fed President Tim Geithner, and Treasury Secretary Henry Paulson, emerging from their secret meeting decided not to bail out Wall Street’s fourth largest investment bank, Lehman Brothers. This singular decision had forced foreign investors and banks that the kind of insurance policy they believed they had that made them to rely for almost three decades on big US banks for the safety of their money was gone.
The news of such deliberate decision to let a major Wall Street bank like Lehman Brothers go bankrupt quickly spreading across financial markets around the world like wildfire, led to their plunge, especially as it became obvious to most foreign investors that Washington had changed its doctrine of ”Too Big to Fail” to ”Too Big to Save.” With series of financial earthquakes taking place around the world, what was a US localized subprime mortgage securitization crisis of about $800bn, had turned into a systemic global crisis of confidence across the globe as banks, now questioning the true state of health of other big banks on Wall Street.
Soon, as a result of this carefully orchestrated refusal to rescue Lehman Brothers, foreign banks and investors began the madness-like exiting the US before it could be too late. Putting more fear on them was needed to ensure that their running for their dear lives from Wall Street could trigger either mass sell-off of foreign held highly priced investments on Wall Street as junks, or foreigners literally abandoning their trillions of dollar investments as toxic wastes.
Little wonder no sooner had most foreign investors run for their dear lives from the ‘crumbling’ US financial system did Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke announce an emergency bailout fund, named Troubled Asset Relief Program. By handing hundreds of billions of dollars to Citigroup, JP Morgan Chase, Goldman Sachs — the very architects of colossal securitization fraud, Washington revealed the truth that it and Wall Street banks staged managed this historic scam to ripe foreigners of trillions of dollars in US investments.
With nations and corporations around suffering from serious liquidity crunch, as a result of the global financial meltdown that cost the rest of the world trillions of dollars, same trillions of dollars were printed and handed to Wall Street financial terrorists to go around the world and invest in nations stock markets buying up their cheapened stocks as well as buying up their strategic foreign corporations trapped in debts.
Using dollar to defraud nations (3)
Forcing him out of the Garden of Eden ended his free lunch, man has always tried to live and consume off the labor of others. Since plundering is the only shortest way to avoid the pain of labor, man has been doing everything to plunder others.
In his famous book, ”The Law,” Frederic Bastiat, renowned French economist and politician argued, ”Man can live and satisfy his wants only by ceaseless labor, by the ceaseless application of his faculties to national resources…. But it is also true that man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder.”
I’ll confess here that what I’ve being trying to convince the reader is to agree that like previous imperial powers, the US too has used its power to pursue narrow national interests. And that dollar’s de facto reserve currency power has since 1945 been used to plunder the vast wealth of the world.
To continue acting as the world’s central bank, forcing the rest of the world to accept the dollar as a global legal tender without any intrinsic value, fear and intimidation have been used by Washington.
But Washington’s today’s plundering isn’t unique. It’s synonymous with every reigning imperial power. The Roman Empire lived off the labor of conquered territories. To live off the labor and resources of others, Britain used crude imperial power, including slaughtering any foreign leader standing on London’s way.
Like every other great power, unwilling to share power, Washington has been doing everything to stop China’s rise, especially afraid that China’s rise should definitely make dollar the first causality with the yuan replacing it as de facto reserve currency. That would end Washington’s use of the dollar to continue looting the world’s economy.
For this reason a series of roadblocks have been mounted in an effort to disrupt China’s rise. With incitement of internal political and social disorders in the late 1980s unable to stop China’s rise, the late 1990s witnessed economic blockades, including dispatching the George Soros led speculative financial attacks on East Asian tiger economies in 1997, with the goal of believing that they could have triggered a regional economic chaos, with China the eventual epicenter.
With that too unstopping China, oil card, the most dreadful arsenal in its imperial toolkit, was fully deployed, raising global oil price to the roof. And leaving nothing to chance, this was combined with another arsenal, subprime mortgage scam having trillions of dollars ‘legally’ dispossessed from countries around the world, with C
hina the main target.
What really has been shielding Chinese economy from all these serial financial and economic attacks isn’t because of Chinese people’s extreme nationalism, or culture of hard work. Neither because of it’s with five millennia nationhood or the most populous nation in the world. Not even Chinese people’s sheer sacrifice.
It’s China’s socialist market capitalist economic system; completely alien to the west, given western nations’ practice of shareholder, profit maximizing capitalism. It’s this socialist market capitalism that despite high oil price and subprime mortgage-induced global financial crisis in 2008 targeted at China, not only rebuffed these attacks but also put the Chinese economy on the faster lane.
Because it’s an organic economic system with both state and private sectors acting together, China’s socialist market capitalism was able to neutralize the 2008 financial tremor from Wall Street. Such private sector-public sector collaborations meant that should private sector investment be lagging, public sector investment should be stepped up. And should the economy be booming and private companies having excess funds at their disposal, the state sector immediately steps back by reducing its own investments so as to avoid an unhealthy overheating of the economy.
By resorting to taking full advantage of its untapped domestic consumer market, the economy further boomed rather than plunging like every other economy hit by the Wall Street earth quake, more so because the central government, discovering how sluggish global economy was, replaced export-driven economic growth with domestic consumption-driven economic growth. This surprisingly supercharged the economy.
No wonder, while western economies were ravaging (with EU economy shrank by 0.3 percent and the US economy struggled at 0.5 percent) China between 2008 and 2013, witnessed 42.2 percent total GDP growth. This happened because the economy, stimulated by the state sector, particularly the country’s state-owned core banking system, had a record investment boom.
Another reason for the investment boom in China was due to the fact that US investors had to invest in China order to get the kind of high returns on investment they needed, especially as increasingly impoverished Americans clamored for low priced goods.
With post-2008 financial crisis economic policy based on massive investments in the expansion of China’s infrastructure — trillions of dollars being spent since 2011 on roads, rails, seaports, airports — this resulted in technology innovation leap-flogging. In fact, with China’s 12th Five-Year Plan of 2011-2015 entirely focused on use of massive infrastructure expansion and upgrading, China has shortened its high-tech product and service catch up gap with the west.
Unable to bring China down, the 2008 global financial inferno ended up causing devastating damage to vulnerable developing economies around the world to the extent that these cash-strapped economies had to contend with an army of Wall Street hedge funds speculators attacking them by buying up their strategic national and corporate assets as well as preying on their stock markets, in the false name of foreign investment.
Buying up these cheapened economies happened thanks to the imposition of a worthless de facto reserve currency, called dollar, without any form of intrinsic value backing it up.
To understand the level of stealing the US has used the dollar to carry out, you should know that it costs $0.04 to produce each dollar note. In other words, spending $0.04 on each note, the Rockefellers, the JP Morgans, and the Warburgs, as the real owners of the Federal Reserve System, have forced the world to accept them as $1 note, $5 note, $10 note, $20 note, $50 note, or $100 note.
With this, never in any known human history has the world been so plundered by the use of worthless sheets of paper.
Fully aware that this fraud shouldn’t last forever, Rockefeller-led Wall Street Money Trust had since used their worthless dollar notes to accumulate gold and other precious metals (including Solomon’s treasures) worth as high as $400 trillion.
1 comment
This is wonderful.