Humanitarian Crisis in the Gaza Strip – Facts & Statistics

June 25, 2011
by occupiedpalestine

The IMEU | June 25, 2011

As Israel’s blockade of the Gaza Strip enters its fifth year, a civil society flotilla – Freedom Flotilla II – made up of ten ships with civilians from 22 countries is setting sail for the Gaza Strip. Last May, Israel attacked Freedom Flotilla I, killing nine civilians including one U.S. citizen.

While this flotilla will be carrying a symbolic amount of humanitarian aid, the stated goal of the flotilla organizers is to challenge the illegality of the blockade itself. What is the situation in Gaza such that hundreds of civilians from tens of countries are risking their lives on the high seas to challenge Israel’s blockade?

The IMEU offers the following facts and figures on Israel’s blockade and how, after more than four years, it has affected life for the roughly 1.5 million Palestinians in Gaza.

1. Is Israel’s blockade of Gaza legal?

No. The stated aim of Israel’s blockade is to apply “pressure” or “sanctions” to weaken the economy of Gaza and decrease support for Hamas. This amounts to collective punishment of Gaza’s civilians, and as such is a violation of international humanitarian law under Article 33 of the Fourth Geneva Convention. Further, as an occupying power, Israel is required under Articles 55, 59 and 60 of the Fourth Geneva Convention to ensure free, unimpeded passage of humanitarian relief and is prohibited from impeding the full realization of the occupied people’s human rights. Israel’s blockade impedes Gazans’ rights to food, to an adequate standard of living, to work, and to the highest attainable standard of health, and therefore is a violation of international law.

2. Israel claims that it allows necessary humanitarian provisions to enter Gaza. Is this true?
No. The amount of goods allowed into Gaza by Israel falls far short of the minimum required to avoid malnutrition, poverty, and prevent or treat a variety of illnesses. The United Nations’ fact-finding mission regarding Israel’s attack on the 2010 humanitarian flotilla found that “a deplorable situation exists in Gaza” that “is totally intolerable and unacceptable in the twenty-first century. It is amazing that anyone could characterize the condition of the people there as satisfying the most basic standards.” Consider the following statistics:

* 54 percent of households face food insecurity, defined as inadequate physical, social or economic access to food. An additional 12 percent are considered vulnerable to food insecurity. Only 20 percent of Gazan households are food secure.
* 38 percent of the population lives below the poverty line.
* Since the blockade began, the number of Palestinian refugees completely unable to secure access to food and lacking the means to purchase even the most basic items, such as soap, school stationery and safe drinking water (‘abject poverty’) has tripled to 300,000.
* 75 percent of households polled by the World Food Programme in the Gaza Strip received outside aid.
* Gaza’s hospitals are at “zero stock levels” for 178 of 480 essential medications, with another 69 at low stock. Of 700 essential medical supplies, 190 are at “zero stock levels” and another 70 at low stock.
* Due to lack of fuel, the Gaza Power Plant runs at 45 percent capacity, leading to daily blackouts of eight to twelve hours. Given this fuel shortage, 90 percent of private cars are no longer driven and of public services, only 15 percent are operational. (Palestinian Centre for Human Rights, The Illegal Closure of the Gaza Strip: Collective Punishment of the Civilian Population, December 10, 2010)
* The Gaza aquifer provides 90 percent of Gaza’s water. Only ten percent of that water meets the standards of being suitable for consumption. Water-borne diseases cause 26 percent of illnesses in Gaza.
* Because of lack of treatment capacity and electricity, Gaza authorities must release around 80,000 cubic meters of sewage into the Mediterranean Sea on a daily basis.
* The construction of 86,000 houses is required to meet natural growth and recover from previous Israeli invasions.

3. Does the blockade prevent the functioning of Gaza’s economy?

Yes. Export of Palestinian goods, the import of raw materials and access to Gaza’s natural resources have been severely restricted, devastating Gazan businesses and the ability of the region to be self-sufficient, thereby rendering it dependent on international aid. For example:

* Economic output per capita has fallen by 40 percent of 1994 levels.
* 95 percent of Gaza’s 3,900 industrial businesses are closed or have suspended work. The other five percent are operating at 20 to 50 percent of capacity. This has cost between 100,000 and 120,000 jobs.
* Israeli restrictions block access to 35 percent of Gaza’s agricultural land and fishermen are forbidden to fish beyond 3 nautical miles from the shore. In 2010, employment in agriculture fell from 14,900 to 10,100.
* While Gaza needs 670,000 truckloads of construction material, an average of 715 enter per month, at 11% of pre-blockade levels. The construction industry now has 10,000 workers, 42 percent of pre-blockade levels.
* Unemployment is at 45.2 percent, with only 40.3 percent of working-age Gazans in the labor force. Youth unemployment is at more than 47 percent.
* 290 truckloads of exports were allowed out of Gaza between November 2010 and May 2011. Before the siege, more than 960 truckloads a month exited Gaza. This is only five percent of pre-blockade levels.
* In 2011, a weekly average of 900 truckloads of goods entered Gaza. Before the siege, 2,807 truckloads entered weekly.
* On March 2, 2011, Israel closed the Karni crossing, forcing importers and exporters to use the Kerem Shalom crossing. For wheat exporters, this increased transport costs by 235 percent and for wheat importers by 30 percent.
* Between June 2010 and March 2011, the cost of wheat flour increased by 50 percent and vegetable oil increased by 40 percent. Meanwhile, the average wage has decreased by more than 25 percent since 2007.
* Gazan households spend 56 percent of their expenditures on food, with 52.5 percent eating lower quality food and 67 percent buying food on credit as a result of high food costs.

Abolish The Federal Reserve

Source: abolishthefederalreserve.org

We are in the midst of a total economic meltdown:

# Don't count on the Federal Reserve to fix the problem . . . THEY ARE THE PROBLEM.

# The Fed is totally corrupt and has a HUGE conflict of interest with that of the U.S.

# They have been robbing us blind since their unconstitutional inception in 1913.

# Their existence goes against every principle our founding fathers stood for.

# The Fed MUST BE ABOLISHED . . . before they steal what little wealth remains in our country.

The purpose of this website is 2 fold:

1. to expose the truth about the unconstitutional fraud perpetrated upon the American public by the Federal Reserve System . . .
* a scam which swindles wealth away from the U.S. public and lines the pockets of greedy international bankers

2. to educate the public as to how we can abolish the Federal Reserve and get our economy back on track . . .
* prospering in a tax free society, with all our liberties and rights in tact, as our founding fathers intended.

It is not surprising that most people are unaware of the Fed's outragous, fraudulent scam because the media does not report on it . . .
Why ? Because the media is controlled by them. An essential step in all cons is to hide the deception from the mark. In this case the Fed is the con-artist . . . while the unsuspecting U.S. public is the mark. The Fed uses its powerful influence to control the media and keep us in the dark.

However, you do not have to look any further than their name to see their blatant deception . . .
The Federal Reserve System -
is NOT Federal . . . has NO reserves . . . is NOT a system

Their deceptive name tries to hide the fact that they are actually a Privately Owned, Central Bank, with no reserves. They "create" money and then loan it to our government (actually exchange it for U.S. bonds) thus creating an endless cycle of national debt. This is referred to as "monetizing the debt," which erodes the standard of living for all Americans.

It is important to understand that the FED does not actually print money, All U.S. currency is in fact printed by the Bureau of Engraving and Printing (BEP). The Fed, rather is the master distributor of the money, which they "create" this way by executing a simple computer entry in their accounting system.

What is The Federal Reserve ? and What do they do ?
Despite what many people think . . . the Federal reserve is NOT . . . an agency of the United States government.
They are no more a part of the Federal government than is Federal Express. The Federal Reserve is actually a privately owned corporation, owned by a secret group of international bankers. In essence, they are a private banking cartel who have a total monopoly on "creating" money for the U.S. government. The Fed's only real agenda is to turn a profit . . . and they do so . . . at the expense of every single man, woman and child living in the U.S.A..

If you ask the average person you meet on the street . . . What is the Fed ? and What do they do ? . . . most (if they have any idea at all) will say they think the Fed is an agency of the U.S. government . . . and that they serve to help stabilize our economy by controlling interest rates and providing liquidity when needed.

Nothing could be further from the truth . . . they really have 1 agenda and 1 agenda only . . . that is to turn a profit.

They do this in 2 different ways:

1. They manipulate interest rates to create "boom-bust" cycles which always work out to the advantage of the hidden elite "insiders". . .
as they know exactly when our economy will boom . . . and when it will bust.

2. They increase the money supply by "creating" money through the incredibly lucrative "sweet heart" deal
they've had with the U.S. government, ever since the Federal Reserve Act of 1913 was signed into law.

Accordingly, when the U.S. Government needs money, they go to the Fed to borrow the money. The Fed calls the Treasury and asks them to print x amount of Federal Reserve Notes (FRN) in units of one hundred dollars. The Treasury charges the Fed 2.3 cents for each note. The Fed then lends that money to the government at face value plus interest. The government has to create a bond for the loan amount as security for the loan.

Now the government owes the private ownership of the Fed the face value of the bonds plus interest. In other words, the Fed earns interest by "loaning" that money to the U.S. government. Imagine that . . . they earn interest by loaning money which is not even theirs to loan . . .
which they just created out of thin air . . .

So essentially every bill they "create" has a debt associated to it . . . and if the debt is not paid . . . what do you think they do ?
That's right . . . They create more Federal Reserve Notes so they can loan more to the government (actually exchange for U.S. bonds)
in order to pay off the debt, thereby growing the national debt even more.

This is what we refer to as a debt monetary system . . . in other words . . . our currency has a debt attached to it before we ever spend any of it. We can never get out of debt because it is a self propagating, vicious cycle, that will ultimately end with the complete destruction of our currency and bankruptcy of our nation.

The Federal Reserve is a fraudulent, unconstitutional scam

* a scam which swindles wealth away from the U.S. public and lines the pockets of greedy international bankers
* a scam which is at the root of every financial crisis and war we have had since the Fed's existence
* a scam which is based on a debt monetary system and fractional reserve banking
* a scam which coincided with unconstitutional enactment of Federal income tax

The Fed is not our friend . . . They are our enemy . . . our worst oppressors, exploiting us every chance they can. The Fed will never use any of their power to fix any of our economic problems, because there is a great conflict of interest. They will always use their power to manipulate the economy to their advantage. Their huge profits come at the expense of every single man women and child living here in the USA . . .

They have single handedly been responsible for every inflationary period, every economic recession and every depression that has occurred during their entire unconstitutional existence.

As they pull the strings on their deliberate boom-bust cycles, the hidden elite "insiders" profit enormously while each of us sees our currency become more and more worthless each and every day . . . In fact, the dollar today is worth only four cents compared to the dollar in 1913, when the Federal Reserve started.

The Fed will profit even more with each financial bailout our government tries. All of these bailouts will ultimately fail and only hurt our economy more . . . because the more money the Fed creates . . . the more our national debt grows AND at the same time . . . the more our inflation grows. Either one of these conditions is very bad for any economy . . . both happening at the same time is a recipe for disaster to our already struggling economy.

The Fed of course is very much in favor of these bailouts . . . because they are in the business of creating money . . . the bailout calls for spending hundreds of billions of dollars that our government does not have . . . the Fed will earn billions in interest by creating all of this money.

And If that was not bad enough, the Fed is also exempt from payng any income tax on the huge profits they make from this scam . . .

They can NOT be audited and do NOT answer to the President or anyone for that matter. The president appoints the Board of Governors but has no control over their secret activities. Congress knows nothing of the conversations, plans, and actions taken in concert with other central banks. We get less and less information regarding the money supply each year, especially now that M3 is no longer reported.

Not only is the Fed exempt from tax . . . but 100% of the income tax that Americans pay . . . goes right to the Fed to pay off this debt, which they perpetually create. It is no coincidence that the Federal Income tax law was enacted in the same year as the Federal Reserve Act. It was needed to finance this scam. Prior to this, the U.S prospered and the government paid it's bills with out needing revenue from income tax . . . but that all ended with the enactment of the Federal Reserve Act of 1913 . . . From that point forward . . . income tax was required to pay for the debt owed to the Fed for interest on the money they create and loan out to the U.S. government. This is just beyond insanity.

History of Central Banks in the U.S.
The majority of our founding fathers were viamently opposed to the notion of a central bank . . . a few, such as Alexander Hamilton and other "federalists" were in favor of one.

Thomas Jefferson very famously said "I believe that banking institutions are more dangerous to our liberties that standing armies"

"The central bank is an institution of the most deadly hostility existing against the principles and form of our constitution. I am an enemy to all banks, discounting bills or notes for anything but coin. If the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."

James Madison said "History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance."

Andrew Jackson said "It is not our own citizens only who are to receive the bounty of our government. More than eight millions of the stock of this bank are held by foreigners... is there no danger to our liberty and independence in a bank that in its nature has so little to bind it to our country? ... Controlling our currency, receiving our public moneys, and holding thousands of our citizens in dependence... would be more formidable and dangerous than a military power of the enemy."

Abraham Lincoln said "The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers ... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest..."

In accordance with Thomas Jefferson's views, Article 1, Section 8 of the US Constitution specifically says that Congress is the only body that can "coin money and regulate the value thereof." The US Constitution has never been amended to allow anyone other than Congress to coin and regulate currency.

Still, through out our history, several central banking systems have been implemented.

* First Bank of the United States- In 1791, Alexander Hamilton, the Secretary of the Treasury, made a deal to support the transfer of the capital from Philadelphia to the banks of the Potomac in exchange for southern support for his Bank project. As a result, the First Bank of the United States (1791-1811) was chartered by Congress in that same year. The First Bank of the United States was modeled after the Bank of England and differed in many ways from today's central banks. For example, it was partly owned by foreigners, who would share from its profits. It was also not solely responsible for the country's money supply; its share was only 20%, while private banks accounted for the rest. The Bank was bitterly opposed by several founding fathers, including Thomas Jefferson and James Madison, who saw it as an engine for speculation, financial manipulation, and corruption.

* Second Bank of the United States-After a five-year interval, the Federal government chartered its successor, the Second Bank of the United States (1816-1836). It was basically a copy of the First Bank, with branches over the country. Andrew Jackson, who became president in 1828, denounced it as an engine of corruption that benefited his enemies. His destruction of the bank was a major political issue in the 1830s and shaped the Second Party System, as Democrats in the states opposed banks and Whigs supported them.

* "Free" Banks: 1837-1863 While there had always been state-chartered banks in the United States, with loss of the Second Bank's charter, there was a need for more banking. Consequently, during the period from 1837 to the Civil War, commonly known as the free banking era, states passed "free bank laws," which allowed banks to operate under a much less onerous charter. While banks were regulated, they were relatively free to enter the business by simply depositing government bonds with state auditors.

These bonds were the collateral backing the notes free banks issued. In addition, free banks were required to redeem their notes on demand in specie. As a result of the free banking laws, hundreds of new banks opened their doors, and free bank notes circulated around the country, often at a discount: The discount on a given bank note varied in part with the distance from the issuing bank and in part with the perceived soundness of the bank.

Over this period a private institution, known as the Suffolk Bank in New England, took on some of the roles typical of a central bank, such as clearing payments, exchanging notes and disciplining banks that were over-issuing their notes. Also, in response to a rising volume of note and check transactions beginning in the late-1840s, the New York Clearinghouse Association was established in 1853 to provide a way for the city's banks to exchange notes and checks and settle accounts.

* National Banks: 1863-1913 The outbreak of the Civil War and the need to finance it led again to a renewed interest in a national bank. But this time, with the lessons of the Second Bank, the designers took a different approach, modeled on the free banking system. In 1863, they established what is now known as the "national banking system." The new system allowed banks to choose between a national charter and a state charter. With a national charter, banks had to issue government-printed bills for their own notes, and the notes had to be backed by Federal bonds, which helped fund the war effort. In 1865, state bank notes were taxed out of existence. Thus, in spite of all previous attempts, this was the first time a uniform national currency was established in the United States.

Birth of the Fed
By the early 20th century the U.S. had already implemented and removed a few central banking systems which were swindled into place by ruthless banking interests. At this time, the dominant families in the banking and business world were the Rockefellers, the Morgans, the Warburgs and the Rothchilds and in the early 1900's they sought to push once again legislation to create another central bank . . . however they knew the government and public were very weary of such an institution . . . so they needed to create an incident to affect public opinion. And for this reason was hatched the idea to deliberately orchestrate what history refers to as "the panic of 1907". This was accomplished by JP Morgan exploiting his mass influence and publishing rumors that a prominent bank in NY was insolvent or bankrupt. Morgan knew this would cause mass hysteria which would affect other banks as well. And it did . . . the public in fear of losing their deposits immediately began mass withdraws. Consequently, the banks were forced to call in their loans, causing recipients to sell their properties and thus a spiral of bankruptcy, repossessions and turmoil emerged.

Unaware of the fraud, the panic of 1907 lead to a congressional investigation headed by senator Nelson Aldrich, who had intimate ties to the banking cartels and later became part off the Rockefeller family through marriage. The commission lead by Aldrich recommended that a central bank should be implemented so that a panic like 1907 could never happen again. This was the spark the international bankers needed to initiate their plan.

In 1910, a secret meeting was held at a J.P. Morgan estate on Jekyll Island off the cost of Georgia. Aldrich met with representatives of prominent banking firms. Such men included Henry Davison (senior partner of J.P. Morgan Company), Frank Vandelip (President of the National Bank of New York associated with the Rockefellers), Charles D. Norton (president of the Morgan-dominated of First National Bank of New York), Benjamin Strong (representing J.P. Morgan), and the primary architect of the Act, Paul Warburg (representing Kuhn, Loeb & Co.) This meeting was so secretive, so concealed from government and public knowledge that the those who attended were told that they could only use their first names to address each other.

Over a period of ten days these bankers drafted the Federal Reserve Act. After which, it was handed over to their political front man Senator Nelson Aldrich to push through congress. And so, two days before Christmas, between the hours of 1:30 A.M. and 4:30 A.M., when much of Congress was either sleeping or at home with their families for the Christmas holidays,The Federal Reserve Act of 1913 was voted on and passed through the Senate.

Woodrow Wilson, who with heavy political sponsorship by the bankers, was elected president in 1912, and had already agreed to sign the Federal Reserve Act in exchange for campaign support. And so, on December 23, 1913, Presdient Wilson signed the bill into law. This Act transferred control of the money supply of the United States from Congress as defined in the U.S. Constitution to the private banking elite.

Years later, Woodrow Wilson wrote in regret "I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit. We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men"

Can there be a more stinging condemnation . . . than by the man who . . . convinced it was for the good . . . championed it in the first place ?

Congress man Lous Mcfadden also expressed the truth after the passage of the bill "A world banking system was being set up here . . . a superstate controlled by international bankers . . . acting together to enslave the world for their own pleasure. The Fed has usurped the government."

The Federal Reserve act of 1913 was an easy sell to the big US banks. By fixing prices, they would be able to sell all the loans they wanted. They knew in advance when interest rates would be lowered or raised, enabling them to profit from the boom/bust cycles. The small banks, on the other hand, didn't have inside information and many of them were wiped out.

The public was told that the Federal reserve was an economic stabilizer and that inflation and economic crisis were a thing of the past . . .
but as history has shown . . . nothing was further from the truth. The fact is that international bankers now had a streamlined machine to expand their personal ambitions. For example from 1914-1919 the fed increased the money supply by nearly 100%, resulting in extensive loans from small banks to the public. Then in 1920, the Fed called in mass percentages of the outstanding money supply, thus resulting in supporting banks having to call in huge numbers of loans and just like in 1907 . . . bank runs, bankruptcy and collapse occurred. Over 5400 competitive banks outside of the Federal reserve system collapsed further consolidating their monopoly.

Privy to this crime congressman Charles Lindbergh stepped up and said in 1921 "Under the Federal reserve act, panics are scientifically created. The present panic is the first scientifically created on, worked out as we figure a mathamatical equation."

How the Fed caused the Great Depression
There is a huge amount of disinformation spread on the subject of what caused the great depression . . . so lets set the record straight.
History has shown that the panic of 1920 was just a warm up for the Fed. From 1921 through 1929 the Fed again increased the money supply, this time by 62%, resulting once again in extensive loans to the public and banks. This caused inflation and an economic boom. Politically-connected insiders knew that an economic boom was being created. So at the start of the boom, they loaded up on debt and bought assets before inflation set in.

There was also a fairly new type of loan called the margin loan in the stock market. Very simply, the margin loan allowed the investor to put down only 10% of the stocks price with the other 90% being loaned through the broker. In other words a person could own $1000 worth of stock with only $100 down. This method was very popular in the roaring 1920's as everyone seemed to be making money in the market, however there was a catch to this loan. it could be called in at anytime and had to be paid within 24 hours. This is termed a margin call and the typical result of a margin call is the selling of the stock purchased with the loan.

In 1929, the Federal Reserve insiders decided to jack up interest rates worldwide in order to cause the "bust" part of the planned boom-bust cycle. At that time, the Federal Reserve did not publish its interest rate target to the general public. The Federal Reserve did not publicly state in advance whether it was planning to raise or lower interest rates. Even in the present, someone who knew in advance about a Federal Reserve move could profit immensely.

The insiders knew what was coming. So a few months before October of 1929, JD Rockefeller, Bernard Barach and other insiders quietly exited the market. They stopped issuing loans and converted all their holdings to cash. And on October 24, 1929, the New York financiers who furnished the margin loans started calling them in in mass. This sparked an instantaneous massive sell off in the market as everyone had to cover the margin loans. It then triggered mass bank runs for the same reason, in turn collapsing over 16000 banks.

Since the insiders had converted their holdings to cash before the crash, after the crash, they were able to buy assets at a huge discount. Since they were unleveraged, they were able to borrow and buy up even more assets at the bottom of the Great Depression. The conspiring international bankers not only bought up rival banks at deep discounts but they were also able to buy up whole corporations for pennies on the dollar. It was the greatest robbery in American history.

But the Fed did not stop there. Rather than expending the money supply to recover from this economic collapse, the Fed actually contracted the money supply . . . fuelling one of the largest economic depressions in history.

The Great Depression is often blamed on "greedy speculators". But that is just propoganda spread by the Fed. The truth is that with artificially low interest rates, it made sense to borrow and buy assets. If interest rates are 2% and inflation is 10%, then borrowing to invest is sensible. Many farmers and small business owners were forced to borrow to expand, to keep up with their competition. The "greedy speculators" were acting independently in the "free market". The Federal Reserve and negative interest rates were the real culprit. The speculators were following the false signal the Federal Reserve was sending via artificially cheap interest rates.

Now having brought society down to it's knees, the Fed decided that the gold standard should be removed which would allow them to proft more by creating more money. In order to do this they needed to acquire the remaining gold in the system . . . so under the pretence of helping to end the depression, came a 1933 gold seizure. On April 5, 1933, Roosevelt signed Executive Order 6102, declaring that under the threat of imprisonment for 10 years, a $10,000 fine or both, everyone in America was required to turn in all gold bullion to the U.S. Treasury at payment of $20.67 per ounce. . . essentially robbing the public of what little wealth they had left.

While U.S. citizens could be ordered not to hoard gold, Roosevelt knew he could not impose such a law on sovereign nations. Foreigners could still exchange there U.S. dollars for gold, So at the end of 1933, after confiscating everyone's gold, President Roosevelt defaulted on the dollar, and declared the USA bankrupt. The gold standard was abolished and the dollar was devalued relative to gold, from $20/oz to $35/oz. thereby decreasing the value of the dollar overnight by 40.94%.

If you look at a dollar bill from before 1933 it says it is redeemable in gold. If you look at a dollar bill today, it says it is legal tender . . . which means it is backed by absolutely nothing. it is worthless paper. The only thing that gives our money value is how much of it is in circulation. Since the dollar was no longer redeemable in gold, this allowed a further increase in the money supply, which meant more profit for the fed and an even more devalued dollar.

The insiders who borrowed to buy assets at the bottom of the Great Depression were allowed to default on their loans, repaying their debts with devalued dollars. Many loan contracts contained "gold clauses" requiring payment to be increased if the dollar were devalued relative to gold. Congress declared these "gold clauses" invalid, ripping off creditors and providing a massive subsidy to debtors.

In this way, politically connected insiders profited from all three legs of the Great Depression. They profited by borrowing and buying assets at the start of the boom. They were first in line to buy assets with the newly created money, so they were the primary beneficiaries of inflation. Due to their political connections, they were able to foresee the crash coming. They converted their holdings to cash before the crash. At the bottom of the Depression, they were able to borrow and buy assets at a discount. Later, they were able to default on these loans via inflation; inflation meant these loans could be repaid with devalued dollars.

Insiders profit in this manner EVERY TIME there is a boom/bust cycle. The Compound Interest Paradox means that boom/bust cycles are an inevitable consequence of debt-based money. No matter what the Federal Reserve does, there will be boom/bust cycles. Insiders who know what the Federal Reserve is going to do have the opportunity to profit immensely.

The Great Depression accomplished several goals. It forced small farmers off their land when they were unable to repay their mortgages. It forced many small businesses to close. It caused the cartelization of many industries. Conditions of great poverty enabled the welfare state apparatus to be put into place. The Great Depression converted the USA from a nation of farmers and small business owners into a nation of wage slaves.

Louis McFadden and the Fed
On June 10, 1932, Congressman Louis McFadden, a long-time adversary to the Federal Reserve, made a 25-minute speech before the House of Representatives, in which he accused the Federal Reserve of deliberately causing the Great Depression.

In 1933, McFadden introduced House Resolution No. 158, Articles of Impeachment for the Secretary of the Treasury, the Comptroller of the Currency, and the Board of Governors of the Federal Reserve, for numerous criminal acts, including but not limited to, conspiracy, fraud, unlawful conversion, and treason.

The following are some quotes from McFadden's speech and resolution:

Mcfadden said of the crash and depression: "it was a carefully contrived occurrence. International bankers sought to bring about a condition of despair, so that they might emerge the rulers of us all"

"Roosevelt did what the International Bankers ordered him to do!

"Do not deceive yourself, Mr. Chairman, or permit yourself to be deceived by others into the belief that Roosevelt's dictatorship is in any way intended to benefit the people of the United States: he is preparing to sign on the dotted line! "He is preparing to cancel the war debts by fraud!"

"He is preparing to internationalize this Country and to destroy our Constitution itself in order to keep the Fed intact as a money institution for foreigners."

"Mr. Chairman, I see no reason why citizens of the United States should be terrorized into surrendering their property to the International Bankers who own and control the Fed. The statement that gold would be taken from its lawful owners if they did not voluntarily surrender it, to private interests, show that there is an anarchist in our Government."

"The statement that it is necessary for the people to give their gold- the only real money- to the banks in order to protect the currency, is a statement of calculated dishonesty!"

"By his unlawful usurpation of power on the night of March 5, 1933, and by his proclamation, which in my opinion was in violation of the Constitution of the United States, Roosevelt divorced the currency of the United States from gold, and the United States currency is no longer protected by gold. It is therefore sheer dishonesty to say that the people's gold is needed to protect the currency."

"Roosevelt ordered the people to give their gold to private interests- that is, to banks, and he took control of the banks so that all the gold and gold values in them, or given into them, might be handed over to the predatory International Bankers who own and control the Fed."

"Roosevelt cast his lot with the usurers. "He agreed to save the corrupt and dishonest at the expense of the people of the United States."

"He took advantage of the people's confusion and weariness and spread the dragnet over the United States to capture everything of value that was left in it. He made a great haul for the International Bankers."

"The Prime Minister of England came here for money! He came here to collect cash!"

"He came here with Fed Currency and other claims against the Fed which England had bought up in all parts of the world. And he has presented them for redemption in gold."

"Mr. Chairman, I am in favor of compelling the Fed to pay their own debts. I see no reason why the general public should be forced to pay the gambling debts of the International Bankers."

"By his action in closing the banks of the United States, Roosevelt seized the gold value of forty billions or more of bank deposits in the United States banks. Those deposits were deposits of gold values. By his action he has rendered them payable to the depositors in paper only, if payable at all, and the paper money he proposes to pay out to bank depositors and to the people generally in lieu of their hard earned gold values in itself, and being based on nothing into which the people can convert it the said paper money is of negligible value altogether."

"It is the money of slaves, not of free men. If the people of the United States permit it to be imposed upon them at the will of their credit masters, the next step in their downward progress will be their acceptance of orders on company stores for what they eat and wear. Their case will be similar to that of starving coal miners. They, too, will be paid with orders on Company stores for food and clothing, both of indifferent quality and be forced to live in Company-owned houses from which they may be evicted at the drop of a hat. More of them will be forced into conscript labor camps under supervision."

"At noon on the 4th of March, 1933, FDR with his hand on the Bible, took an oath to preserve, protect and defend the Constitution of the U.S. At midnight on the 5th of March, 1933, he confiscated the property of American citizens. He took the currency of the United States standard of value. He repudiated the internal debt of the Government to its own citizens. He destroyed the value of the American dollar. He released, or endeavored to release, the Fed from their contractual liability to redeem Fed currency in gold or lawful money on a parity with gold. He depreciated the value of the national currency."

"The people of the U.S. are now using unredeemable paper slips for money. The Treasury cannot redeem that paper in gold or silver. The gold and silver of the Treasury has unlawfully been given to the corrupt and dishonest Fed. And the Administration has since had the effrontery to raid the country for more gold for the private interests by telling our patriotic citizens that their gold is needed to protect the currency."

"It is not being used to protect the currency! It is being used to protect the corrupt and dishonest Fed. "The directors of these institutions have committed criminal offense against the United States Government, including the offense of making false entries on their books, and the still more serious offense of unlawfully abstracting funds from the United States Treasury! "Roosevelt's gold raid is intended to help them out of the pit they dug for themselves when they gambled away the wealth and savings of the American people."

Louis McFadden died in Oct 3, 1936 during a visit to New York City. The official reason of death was "heart-failure sudden-death", but many suspect he was poisoned . . . his death came before he could push for the impeachment. There were previously two alleged attacks on McFadden's life. The first came in the form of two revolver shots when he was in a cab outside one of the Capitol hotels. Both shots missed their intended target. The second was when he became violently ill after a political banquet at Washington. He was saved by a physician friend who procured a stomach pump and gave McFadden emergency treatment.

The Federal Reserve Act and Federal Income Tax
The Federal Reserve act was not the only unconstitutional bill pushed through congress in 1913. Also pushed through the same year was the Sixteenth Amendment, which gives Congress the power to collect tax based on income, without regard to the States or the Census.

The Federal Reserve system wherein every dollar created is an instrument of debt requires the collection of large sums of money from the people to pay off the interest. This new income tax scam was created by Morgan and his crew In order to obtain repayments on the Federal Reserve debt. However it is completely unconstitutional, as it is a direct unapportioned tax. In order to to be constitutionally legal, all direct taxes have to be apportioned (equal for every person). Furthermore, Federal Income Tax was fraudulently passed in Congress, as the required number of states to ratify the amendment was never met.

The Federal Reserve Act and the 16th amendment are the functional equivalent of a surrender treaty. The Federal Reserve Act surrendered control of the monetary system to the international banking cartel and guaranteed the eventual abandonment of the gold standard. The Federal Reserve's debt-based money guaranteed the enslavement of every American under a crushing debt burden. The Federal Reserve guaranteed the ability of the international banking cartel to confiscate wealth through artificially created boom/bust cycles.

The income tax was an easy sell to politicians. It would enable them to greatly increase the size of the government and their own power. The welfare system was created to compensate for the damage caused by the Federal Reserve and the income tax.

At the present day roughly 35% of the average worker's income is taken from them via this tax . . . that means you work 4 months out of the year to fulfill this tax obligation. And guess where that money goes . . . it goes to pay the interest on the currency being produced by the fraudulent Fedral Reserve Bank . . . a system that does not have to exist at all. Not one cent of this tax goes to any governmental program what so ever. NOT ONE CENT. The money you make working 4 months out of the year goes almost literally into the pockets of the international bankers who own the private Federal Reserve Bank.

In fact, in 1985, President Ronald Reagan created the Grace Commission to investigate where Income Tax money was spent by the Government each year. It found that 100% was absorbed by interest on Federal debt.That means that not a single penny collected from Federal Income Tax is spent on services provided by the Government. Such services have always arisen from other direct taxes, such as gasoline tax which pays for new roads.

Even with the faudulent government claim as to the legaity of the income tax. There is literally no statute . . . no law in existance that requires you to pay this tax PERIOD.

The Internal Revenue Service has yet to provide an explanation for the missing law of Federal Income Tax. Some Americans have already stopped paying what appears to be a fraudulent tax – and with rising awareness it is only a matter of time before a formal explanation will be demanded by the people.
The Fed and War
Control of the economy and the eventual robbery of wealth is only 1 side of the rubik's cube, bankers hold in their hands. The next tool for profit and control is war. Since the inception of the Federal reserve in 1913, a number of large and small wars have commenced . . . the three most pronounced were World War I, World War II and Vietnam.

# World War I - In 1914, European wars broke out centered around England and Germany. The American public wanted nothing to do with the war. In turn President Wilson publicly declared neutrality, however under the surface, the U.S. administration was looking for any excuse it could find to enter. Wilson's top advisor and mentor was Vince Colonel Edward House, a man with intimate connections with international banks who wanted in the war. In a noted observation by secretary of state William Jenning Bryan "the large banking interests were deeply interested in the world war because of the wide opportunities for large profits" It's important to understand that the most lucrative thing that can happen for the international bankers is war . . . for it forces the country to borrow even more money from the Federal reserve bank at interest.

In a documented conversation between Colonel Edward House (Wilson's advisor) and Sir Edward Gray (foreign secretary of England) regarding how to get America into the war. Gray inquired . . . "What will Americans do if Germans sink an ocean liner with American passengers on board ?" House responded "I believe that a flame of indignation would sweep the United States and that by itself would be sufficient to carry us into war"

So on May 7th, 1915, on essentially the suggestion of Sir Edward Gray, a ship called the Lusitania was deliberately sent into German controlled waters where German military vessels were known to be . . . and as expected the German U-boats torpedoed the ship . . . exploding stored ammunition, sinking it in 18 minutes and killing 1200 people. To further understand the deliberate nature of this set up, the German Embassy actually put a paid advertisement in the New York Times telling people that if they boarded the Lusitania . . . they did so at their own risk. . . as such a ship sailing from England to America through the war zone would be liable for destruction. In turn and as anticipated the sinking of the Lusitania caused a wave of anger among the American population and America entered the war a short time after. The first world war cost 320,000 American deaths. JD rockefeller made 200 million dollars off of it . . . that's about 1.9 trillion by today's standard. . . not to mention the war cost about 30 billion dollars for America . . . most of which was borrowed from the Federal reserve furthering the profits of the international bankers.

# World War II- On December 7th, 1941, Japan attacked the American fleet in Pearl Harbor triggering the United States entry into that war. President Franklin D Roosevelt declared the attack was a day that will live in infamy. A day in infamy indeed . . . but not because of the alleged surprise attack on Pearl Harbor, After 60 years of surfacing information, it is clear that not only was the attack on Pearl Harbor known weeks in advance, it was outright wanted and provoked.

Roosevelt, who's family had been New York bankers since the 18th century, and who's uncle Frederick was on the original Federal Reserve board . . . was very sympathetic to the interest of the international bankers . . . and their interest was to enter the war. . . for as we have seen nothing is more profitable for international bankers than war. In a journal entry by Roosevelt's secretary of war Henry Stinson dated November 25, 1941, he documented a conversation he had with Roosevelt. "The question was how we should maneuver them into firing the first shot . . . it was desirable to make sure that Japanese be the ones to do this so that there should remain no doubt as to who were the aggressors"

In the months leading up to the attack of Pearl Harbor, Roosevelt had done everything in his power to aim at the Japanese showing a posture of aggression. Though claiming neutrality publicly FDR halted all of Japans imports of petroleum, He froze Japanese assets in the U.S.. He made public loans to Nationalist China and supplied military aid to the British (both enemies of Japan in the war) which by the way is completely in violation of international war rules. And on December 4th (3 days before the attack), Australian intelligence told Roosevelt about a Japanese task force moving towards Pearl Harbor. Roosevelt ignored it. So as hoped and allowed on December 7th, 1941, Japan attacked Perl Harbor killing 2400 soldiers. Before Pearl Harbor 83% of the American public wanted nothing to do with the war, after Pearl Harbor, one million men volentered for the war.

It is important to note that Nazi Germany's war effort was largely supported by 2 organizations, one of which was called I.G. Farben. I.G.Farben produced 84% of Germany's explosives and even the zyklon b used in the concentration camps to kill millions of Jews. One of the unspoken partners of I.G. Farben was JD Rockefeller's standard oil company in America. In fact the German air force could not operate with out a special additive patented by Rockefellers Standard Oil. The drastic bombing of London by Nazi Germany, for example, was made possible by a 20 million dollar sale of fuel to I.G.Farben by the Rockefeller Standard Oil Company. This is just one small point on the topic of how American businesses funded both sides of World War II. One other treasonous organization worth mentioning is the Union Banking corporation of New York City. Not only did it finance numerous aspects of Hitler's rise to power along with actual material during the war, but it was also a Nazi money laundering bank, which was eventually exposed for having millions of dollars of Nazi money in its vaults. The Union Banking corporation of New York City was eventually seized for a trading with the enemy act . . . guess who the director and vice president of the union bank was . . . Prescott Bush. Grandfather of president George W bush and father of president George H Bush.

# Vietnam War- The United States official declaration of war with Vietnam in 1964 came after an alleged incident involving two US destroyers being attacked by the North Vietnamese PT boats in the Gulf of Tonkin. This was known as the Gulf of Tonkin Incident. This single situation was the catalystic pretext for massive troop deployment and full-fleshed warfare. One problem, however. The attack on the US destroyers by Vietnamese PT boats never happened. It was a completely staged event to have an excuse to enter the war. Former Secretary of Defence Robert McNamara stated years later that the Gulf of Tonkin Incident was a mistake, while many other insiders and officers have come forward relaying that it was a contrived farce and complete lie.

Once in the war, it was business as usual. In October 1966 President Lyndon Johnson lifted trade restrictions on the Soviet block knowing full well that the Soviets were providing upwards of 80% of North Vietnam war supplies. Consequently, the Rockefeller interests financed factories in Soviet Union which the Soviets used to manufacture military equipment and send it to North Vietnam. However, the funding of both sides in this conflict was only one side of the coin. In 1985 Vietnam's Rules of Engagement were declassified. This detailed what American troops were and were not allowed to do in the war. It included absurdities like:

* North Vietnamese anti-aircraft missile systems could not be bombed until they were known to be operational
* No enemy could be pursued once they crossed the border of Laos or Cambodia. And most revealing of all..
* The most critical strategic targets were not allowed to be attacked unless initiated via high military officials.

Apart from these imposed ludicrous limitations North Vietnam was informed of these restrictions and therefore could based entire strategies around the limitations of the American forces. This is why the war went on so long. And the bottom line is this: the Vietnam War was never meant to be won. Just sustained. This war for profit resulted in 58.000 American deaths and 3 million dead Vietnamese.

# The War on Terror- September 11th was the jump start for, what is now, accelerating agenda by the ruthless elite. It was a staged war pretext, no different than the sinking of the Lusitania, the provoking of Pearl Harbor and the Gulf of Tonkin lie. In fact, if 9/11 wasn't a planned war pretext, it would be an exception to the rule. It has been used to launch two unprovoked illegal wars, one against Iraq and one against Afghanistan. However, 9/11 was a pretext for another war as well. The war against you. The Patriot Act, Homeland Security, the Military Tribunals Act and other legislations are all completely and entirely designed to destroy your civil liberties and limit your ability to fight back against what is coming.

Currently in the United States, your home can be searched, without a warrant, without you being home. You can in turn be arrested with no charges revealed to you, detained indefinitely with no access to a lawyer and legally tortured, all under the suspicion that you might be a terrorist.

If you need a painted picture of what is happening in this country, let's recognize how history repeats itself. In February 1933, Hitler staged a false flag attack burning down his own German Parliament building, the Reichstag and blamed it on communist terrorists. Within the next few weeks he passed the Enabling Act which completely eradicated the German Constitution, destroying people's liberties. He then led a series of pre-emptive wars all justified in German people as necessary to maintaining "homeland security".
Bretton Woods Agreement
The United States had emerged from the Second World War as a dominant world power both militarily and economically. It had grown wealthy selling weapons and lending money to both sides of the war. In 1945, the U.S. produced half the world's coal, two-thirds of the oil, and more than half of the electricity. The U.S. manufacturing industry was able to produce great quantities of machinery, including ships, airplanes, vehicles, armaments, machine tools, and chemicals. In addition, the U.S. held over 65% of world's gold reserves and was the sole possessor of the atomic bomb.

Delegates from 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire for the United Nations Monetary and Financial Conference during the first three weeks of July 1944. The purpose of the conference was to establish the rules for commercial and financial relations amongst the world's major industrial states. The agreements signed at this conference became known as the Bretton Woods Monetary System.

The Bretton Woods Monetary System was basically a pegged rate currency exchange system with the U.S. dollar functioning as the underlying currency. All countries would peg their currency to the U.S. dollar and would buy and sell U.S. dollars to keep the market exchange rates within a trading band of plus or minus 1% from the original ratio. The U.S. dollar would be convertible into gold at a rate of US$35 per troy ounce. In effect, the U.S. dollar took over the role held by gold under the previous international gold standard financial system.

The U.S. has enjoyed an enormous advantage of such a system because they are the only entity legally capable of creating more of the reserve currency, that being U.S. dollars. Other nations were forced to buy large amounts of U.S. dollar reserves to maintain their currency within the trading band.

JFK and the Fed
On June 4, 1963, John F. Kennedy signed a virtually unknown Presidential decree, Executive Order 11110 , a mere four months before his assassination on November 22, 1963. This decree returned to the U.S. Federal government, the Constitutional right to create and "to issue silver certificates based on any silver bullion, silver, or standard silver dollars in the Treasury."

This meant that based on the amount of silver physically held in the U.S. Treasury's vault, the government could introduce new money into circulation. As a result, more than $4 billion of new "Kennedy Bills" were created through the U.S. Treasury and were put into circulation in $2 and $5 denominations. $10 and $20 United States Notes (USN) were being printed by the Treasury Department when Kennedy was assassinated, but were never put into circulation. It appears obvious that President Kennedy knew the Federal Reserve Notes (FRN) being used as the purported legal currency were contrary to the Constitution of the United States of America.

Kennedy knew that if the silver-backed USN were widely circulated, they would have eliminated the demand for FRN. This is a very simple matter of economics. The USN was backed by silver and the FRN was not only backed by nothing of intrinsic value, but was also an instrument of debt. Executive Order 11110 should have prevented the national debt from reaching its current level (virtually all of the nearly $9 trillion in federal debt has been created since 1963).

Had LBJ or any subsequent President enforced Kennedy's Executive Order 11110, It would have almost immediately given the U.S. Government the ability to repay its debt without going to the private Federal Reserve Banks and being charged interest to create new "money". However, in 1964, Kennedy's successor, Lyndon B. Johnson "caved in", stating that, "Silver has become too valuable to be used as money." And thus the Kennedy bills were removed from circulation.

Nixon Unilaterally Closed the Gold Window

Escalating costs from both the Vietnam War and domestic social programs resulted in ever increasing amounts of U.S. dollars being created. In the early 1970's, the United States as a whole began running a trade deficit for the first time in the twentieth century. Foreign owners of U.S. dollars began to question the ability of the U.S. government to reduce budget and trade deficits.

Increasingly, foreign nations, in particular the French under Charles de Gaulle, began to send the U.S. dollars earned by exporting to the U.S. back to be redeemed in gold as legally entitled under the Bretton Woods Agreement signed in 1944.

The drain on U.S. gold threatened to completely empty the U.S. Treasury. To prevent this from happening, on August 15, 1971, President Richard Nixon unilaterally closed the gold window. He made the dollar inconvertible to gold directly, except on the open market.

The severing of this last link between gold and paper money meant that all the world's currencies now "floated" against one another. The result was inevitable with gold soaring from US$35 to US$195 an ounce by the end of 1974.

This was the final step in abandoning the gold standard. All the central banks had to control now was the public's perception of inflation to allow them to create as much money as desired.

The U.S. was now on a total fiat money system - paper money

Debt Money System and Fractional Reserve Banking
Why can't politicians control our federal debt ? Because all our money is created out of debt . . . It is a debt money system. Our money is is created initially by the purchase of U.S. bonds. The public buys bonds like savings bonds, the banks buy bonds, foreigners buy bonds and when the Fed wants to create more money in the system it buys bonds . . . but pays for them with a simple bookkeeping entry which it creates out of nothing . . . then this new Fed created money is multiplied by a factor of 10 by the banks . . . banks do the fractional reserve principle.

So although the banks don't create currency, they do create checkbook money or deposits by making new loans. They even invest some of this created money. In fact over 1 trillion dollars of this privately created money has been used to purchace U.S. bonds on the open market, which provides the banks with roughly 50 billion dollars in interest, risk free, each year, free less the interest they pay to depositors. In this way, through fractional reserve lending, banks create over 90% of the money and therefore cause over 90% of our inflation.

How to Abolish The Federal Reserve
What can we do about all this ? Fortunately, there's a way to fix the problem fairly easily speadily and with out causing any serious financial problems. We can get our country totaly out of debit in 1-2 years by simply paying off these U.S. bonds with debt free U.S. notes . . . just like president Lincoln issued . . . of course that by itself would create tremendous inflation since our currency is presently multiplied by the fractional reserve banking system . . . but here is the ingenious soultion advanced in part by Milton Friedman to keep the money supply stable and avoid inflation and deflation while the debt is retired.

As the treasury buys up its bonds on the open market with U.S. notes, the reserve requirements of your hometown local bank will be proportionally raised . . . so that the amount of money in circulation remains constant . . . as those holding bonds are paid off in U.S. notes,
they will deposit this money, thus making available the currency then needed by the banks to increase their reserves. Once all the U.S. bonds are replaced with U.S. notes . . . banks will be at 100% reserve banking instead of the fractional reserve system currently in use.

From this point on the former Fed buildings will only be needed as a central clearing house for checks, and as vaults for U.S. notes . . .
The Federal Reserve Act wil no longer be necessary and could be repealed . . . monetary power could be transfered back to the treasury dept . . . there would no further creation or contraction of money by banks.

By doing it this way, our national debt coud be paid off in a single year or so. The Fed and fractional reserve banking would be abolished,
with out national banakruptcy, financial collapse, inflation or deflation or any significant change in the way the average American goes about his busnises. To the average person . . . the primary difference would be . . . that for the first time since the Federal Reserve Act was passed in 1913 . . . taxes would begin to go down.

Now let's take a look at these proposals in more detail.

Here are the main provisions of a monetary reform act which needs to be passed by congress:

1. Pay off the debt with debt-free U.S. notes.-
As Thomas Edison put it "If the U.S. can issue a dollar bond . . . it can issue a dollar bill . . . they both rest purely on the faith and credit of the U.S. government." Paying off the debt (U.S. bonds) with U.S. notes, amounts to a simple substitution of one type of government obligation for another . . . U.S. bonds bears interest while U.S. Notes do not. Federal reserve notes could be used for this as well, but could not be printed after the Fed is abolished as we propose, so we suggest using U.S. notes instead.

2. Abolish fractional reserve banking. -
As the debt is paid off, the reserve requirements of all banks and financial institutions would be raised proportionally at the same time to abosrb the new U.S. notes, which would be deposited and become the banks increased reserves. Towards the end of the first year of the transition period, the remaining liabilites of financial institutions would be assumed or acquired by the U.S. government in a one time operation. In other words, they too would eventually be paid off in debt free U.S. notes in order to keep the total money supply stable. At the end of the first year or so . . . all of the national debt would be paid and we could start enjoying the beneifts of full reserve banking . . . the Fed would become an obsolete anachronism.

3. Repeal the "Federal Reserve Act of 1913" and the "National Banking act of 1864" --
These acts delegate the money power to a private banking monoply. They must be repealed and the money power handed back to the Department of Treasurey, where they were initially under president Abraham Lincoln. No banker or person in any way affiliated with financial institutions should be allowed to regulate banking. After the first 2 reforms, these acts would serve no useful purpose anyway since they relate to a fractional reserve banking system.

4. Withdrawl the U.S. from the IMF, the BIS (bank of international settlements) and the World Bank.-
These institituions, like the Federal Reserve, are designed to further centralize the power of the international bankers over the worlds economy. The U.S. must withdrawl from them. Their harmless function, such as currecny exchange can be accomplished either nationally or in new organizations limited to those functions.

Such a monetary reform act would guarantee that the amount of money in circulation would stay very stable . . . causing nether inflation nor deflation. Remember that for last 3 decades the Fed has doubled the American money supply every 10 years. That fact and fractional reserve banking are the real casues of inflation and a reduction in our buying power. . . a hidden tax. These and other taxes are the real reasons both parents now have to work just to get by.

The money supply shoulld increase slowly to keep prices stable . . . roughly in proportion to poulation growth (about 3% per year) not at the whim of a group of bankers meeting in secret. In fact all future decsisons on how much money will be in the American economy must be made based on statistics of population growth and the price level index.

The new monetary regulators and the treasury dept (perhaps called the monetary committee) would have absolutley no discresion in this matater except in time of declared war. This would insure a steady stable money growth abroptly 3% per year resulting in stable prices and no sharp changes in the money supply. To make certain the process is completly open and honest . . . all deliberations would be public . . . not secret as meetings of the Fed board of governerers are today.

How do we know this will work ? Because these steps remove the 2 major causes of economic instability . . . the Fed and fractional reserve banking and the newest one as well the BIS. But most importantly the danger of a sever depresion would be eliminatead.

Click Here to read the Abolish the Federal Reserve Act of 1913 Petition
Click Here to sign the Abolish the Federal Reserve Act of 1913 Petition

Crisis is an Opportunity: Engineering a Global Depression to Create a Global Government

by Andrew Gavin Marshall
Featured Writer
Dandelion Salad
October 27, 2010

The following is a sample from an forthcoming book by Andrew Gavin Marshall on ‘Global Government’, Global Research Publishers, Montreal. For more by this author on the issue of the economic crisis and global governance, see the recently-released book by the Centre for Research on Globalization, “The Global Economic Crisis: The Great Depression of the XXI Century,” co-edited with Michel Chossudovsky, in which the author contributed three chapters on the history of central banking, the rise of a global currency and global central bank, and the political economy of global government.

Problem, Reaction, Solution: “Crisis is an Opportunity”

In May of 2010, Dominique Strauss-Kahn, Managing Director of the IMF, stated that, “crisis is an opportunity,” and called for “a new global currency issued by a global central bank, with robust governance and institutional features,” and that the “global central bank could also serve as a lender of last resort.” However, he stated, “I fear we are still very far from that level of global collaboration.”[1] Well, perhaps not so far as it might seem.

The notion of global governance has taken an evolutionary path to the present day, with the principle global political and economic actors and institutions incrementally constructing the apparatus of a global government. In the modern world, global governance is an inter-lapping, intersecting, and intertwined web of international organizations, think tanks, multinational corporations, nations, NGOs, philanthropic foundations, military alliances, intelligence agencies, banks and interest groups. Globalization – a term which was popularized in the late 1980s to refer to the global spread of multinational corporations – has laid the principle ideological and institutional foundations for this process. Global social, economic and political integration do not occur at an equal pace; rather, economic integration and governance on a global level has and will continue to be ahead of the other sectors of human social interaction, in both the pace and degree of integration. In short, global economic governance will set the pace for social and political global governance to follow.

In 1885, Friedrich List, a German mercantilist economic theorist wrote that when it came to the integration of a “universal union or confederation of nations,” that “all examples which history can show are those in which the political union has led the way, and the commercial union has followed. Not a single instance can be adduced in which the latter has taken the lead, and the former has grown up from it.”[2] The twentieth century thus changed the historical trend, with undertaking economic integration – union – which is then followed by political integration. The best example of this is the European Union, which started out as a series of trade agreements (1951), eventually leading to an economic community (1957), followed by an economic union (1993), followed by a currency union (2002), and with the recent Lisbon Treaty, is now in the process of implementing the apparatus of a political union (2009). While this same regional governance model is occurring on a global scale in Africa, South America, East Asia, the Gulf Arab states, and with North American and Euro-American integration, it is simultaneously taking place on a global level. With the establishment of the World Trade Organization (WTO) in 1995, global trade systems were institutionally integrated, while the major global economic institutions of the IMF and World Bank, as well as others including the Bank for International Settlements (BIS), accelerated their management of the global economy.

The process of globalization has firmly established a globally integrated economic system, and now the global economic crisis is facilitating the implementation of global economic governance: to create the economic apparatus of a global government, including a global central bank and a global currency. This process is exponentially accelerated through economic crises, which create the need, desire, urgency and means of establishing a structure of global economic governance, purportedly under the guise of “preventing economic crises” and “maintaining” the global economy.

The same institutions and actors responsible for creating the crisis, are then given the job of determining the solution, and are then given the power and means of implementing it: problem, reaction, solution. They create a problem to incur a particular reaction for which they then propose a predetermined solution. When pressure needs to be applied to individual states that are not following dictates of the institutions of global governance, the market is turned against them in a barrage of economic warfare, often in the form of currency speculation and derivatives trading. The result of this economic warfare against a nation is that it must then turn to these same global institutions to come to its rescue: problem, reaction, solution.

The global economic crisis, really having only just begun, will in years to come spiral into a Great Global Debt Depression, plunging the entire world into the greatest economic catastrophe ever known. This will be the ultimate catalyst, the most pervasive crisis, and most commanding ‘opportunity’ to implement the formation of a global government. In 1988, the Economist ran an article entitled, “Get Ready for the Phoenix,” in which it postulated that by the year 2018, there will be a global currency, which it termed the “Phoenix.” The mention of a phoenix is not to go unnoticed, as symbolically, a phoenix dies and from its ashes a new phoenix emerges. It is the symbol of destruction as a form of creation; the ultimate incarnation of crisis as an opportunity. The article in the Economist acknowledged this meaning, with the idea that economic and monetary collapse will likely lead to the formation of a global currency, stating that, “several more big exchange-rate upsets, a few more stockmarket crashes and probably a slump or two will be needed before politicians are willing to face squarely up to that choice.” Further:

"As time passes, the damage caused by currency instability is gradually going to mount; and the very trends that will make it mount are making the utopia of monetary union feasible… The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.[3]"

This further reinforces the notion of crisis as an opportunity, and established the desire to form a global currency far before any crises that prompted official calls for one. In 2000, Paul Volcker, former Chairman of the Federal Reserve, stated that, “if we are to have a truly global economy, a single world currency makes sense,” and a European Central Bank executive stated that, “we might one day have a single world currency,” in “a step towards the ideal situation of a fully integrated world.”[4] In 1998, Jeffrey Garten, , former Undersecretary of Commerce for International Trade in the Clinton administration, former Managing Director at Lehman Brothers and member of the Council on Foreign Relations, wrote an article for the New York Times in which he called for the creation of a “global Fed” and said that, “the world needs an institution that has a hand on the economic rudder when the seas become stormy. It needs a global central bank.”[5]

The Global Economic Crisis As a Pretext for Global Governance

With the onset of the global economic crisis in 2008, powerful political and economic figures began making the call for constructing systems of global governance to manage and “prevent” crises. In September of 2008, in the midst of the financial crisis, Garten wrote an article for the Financial Times renewing his call for a global central bank, which he termed a “Global Monetary Authority.”[6] A month later, Garten wrote a piece for Newsweek saying that, “leaders should begin laying the groundwork for establishing a global central bank.”[7] In the same month, John Mack, CEO of Morgan Stanley said that, “it may take continued international coordination to fully unlock the credit markets and resolve the financial crisis, perhaps even by forming a new global body to oversee the process.”[8]

In October of 2008, then Prime Minister of the UK, Gordon Brown, called for “a new Bretton Woods – building a new international financial architecture for the years ahead,” and that he would want “to see the IMF reformed to become a ‘global central bank’ closely monitoring the international economy and financial system.”[9] In the same month, Brown wrote an op-ed for the Washington Post in which he said that this ‘new Bretton-Woods’ should work towards “global governance.”[10]

That month, the world’s central bankers met in Washington D.C., of which the principle question they faced was “whether it is time to establish a global economic ‘policeman’ to ensure the crash of 2008 can never be repeated,” and that any organization with the power to police the global economy would have to include representatives of every major country – a United Nations of economic regulation.” A former governor of the Bank of England stated that the answer might be in the form of the Bank for International Settlements (BIS), the central bank to the world’s central banks, which compared to the IMF, “is more independent and much better placed to deal with this if it is given the power to do so.”[11]

The first major summit of the G20 – the group of the 20 largest economies in the world – was in November of 2008, in the midst of the financial crisis. The G20 was to replace the G8 in the management of the global economy. The member nations are the United States, Canada, France, Germany, Italy, the United Kingdom, the European Union, Australia, Russia, Japan, South Korea, Turkey, Mexico, Indonesia, Saudi Arabia, Brazil, South Africa, Argentina, India and China. The World Bank and IMF also work directly with the G20, as does the Bank for International Settlements.

In March of 2009, Russia suggested that the G20 meeting in April should “consider the possibility of creating a supra-national reserve currency or a ‘super-reserve currency’,” and to consider the IMF’s Special Drawing Rights (SDRs) in this capacity.[12] A week later, China’s central bank governor proposed the creation of a global currency controlled by the IMF, replacing the US dollar as the world reserve currency, also using the IMF’s SDRs as the reserve currency basket against which all other currencies would be fixed.[13]

Days after this proposal, the US Treasury Secretary Timothy Geithner, former President of the New York Federal Reserve Bank, told the Council on Foreign Relations that, in response to a question about the Chinese proposal, “we’re actually quite open to that suggestion. But you should think of it as rather evolutionary, building on the current architectures, than — rather than — rather than moving us to global monetary union.”[14]

In late March a UN panel of economists recommended the creation of a new global currency reserve that would replace the US-dollar, and that it would be an “independently administered reserve currency.”[15]

Following the April 2009 G20 summit, “plans were announced for implementing the creation of a new global currency to replace the US dollar’s role as the world reserve currency.” Point 19 of the communiqué released by the G20 at the end of the Summit stated, “We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity.” SDRs, or Special Drawing Rights, are “a synthetic paper currency issued by the International Monetary Fund.” As the Telegraph reported, “the G20 leaders have activated the IMF’s power to create money and begin global ‘quantitative easing’. In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body.”[16] The Washington Post reported that the IMF is poised to transform “into a veritable United Nations for the global economy”:

"It would have vastly expanded authority to act as a global banker to governments rich and poor. And with more flexibility to effectively print its own money, it would have the ability to inject liquidity into global markets in a way once limited to major central banks, including the U.S. Federal Reserve… the IMF is all but certain to take a central role in managing the world economy. As a result, Washington is poised to become the power center for global financial policy, much as the United Nations has long made New York the world center for diplomacy.[17]"

In April of 2010, the IMF released a report in which it explained that while SDRs will aid in ‘stabilizing’ the world economy, “a more ambitious reform option would be to build on the previous ideas and develop, over time, a global currency,” but that this is “unlikely to materialize in the foreseeable future absent a dramatic shift in appetite for international cooperation.”[18] Of course, the exacerbation of a global economic crisis – a new great depression – could spur such a “dramatic shift in appetite for international cooperation.”

While the IMF is pushed to the forefront of the global currency agenda, the Bank for International Settlements (BIS) remains as the true authority in terms of ‘global governance’ overall. As the IMF’s magazine, Finance and Development, stated in 2009, “the Bank for International Settlements (BIS), established in 1930, is the central and the oldest focal point for coordination of global governance arrangements.”[19] Jean-Claude Trichet, President of the European Central Bank (ECB), gave a speech at the Council on Foreign Relations in April of 2010 in which he explained that, “the significant transformation of global governance that we are engineering today is illustrated by three examples”:

"First, the emergence of the G20 as the prime group for global economic governance at the level of ministers, governors and heads of state or government. Second, the establishment of the Global Economy Meeting of central bank governors under the auspices of the BIS as the prime group for the governance of central bank cooperation. And third, the extension of Financial Stability Board membership to include all the systemic emerging market economies.[20]"


In concluding his speech, Trichet emphasized that, “global governance is of the essence to improve decisively the resilience of the global financial system.”[21] The following month, Trichet spoke at the Bank of Korea, where he said, “central bank cooperation is part of a more general trend that is reshaping global governance, and which has been spurred by the global financial crisis,” and that, “it is therefore not surprising that the crisis has led to even better recognition of their increased economic importance and need for full integration into global governance.” Once again, Trichet identified the BIS and its “various fora” – such as the Global Economy Meeting and the Financial Stability Board – as the “main channel” for central bank cooperation.[22]

The Great Global Debt Depression

As commentators and governments praised the ‘economic recovery’, the world entered into a massive global debt crisis, a veritable ‘Great Global Debt Depression,’ in which the major industrialized nations of the world, having taken on excessive debts due to bailouts, stimulus packages and decades of imperial expenditures and war-mongering. The debt trap used to enslave the ‘global south’ has come home to roost. The first stage of the ‘Great Global Debt Depression’ began in Greece, where the country was so indebted that it needed to seek help in the form of an IMF ‘bailout’ simply to pay the interest on its debt. For nearly a decade, Greece’s government colluded with major Wall Street firms such as Goldman Sachs and J.P. Morgan Chase to hide its true debt in the derivatives market, so when a new government came to power in October of 2009, it inherited a debt twice as large as it had anticipated, at 300 billion euros.[23]

In early 2010, Greece sought a bailout from the European Union (European Central Bank – ECB) and the IMF in order to pay the annual interest fee on its debt. The ECB and IMF agreed to a loan in April.[24] Greece, however, had been pressured by both the EU and the IMF that in order to receive a loan, it must implement “fiscal austerity measures” in order to reduce its deficit, and also to convince “global markets” that it could reduce its deficit. Greece had implemented two austerity packages that included massive social spending cuts and increases in taxes. Yet, this seemed to not be enough for the EU, IMF or global markets.[25] As Greece was imposing ‘fiscal austerity’ and seeking international loans, ‘global markets’ had turned against the country, as derivatives – particularly Credit Default Swaps (CDS) – were being used to bet that Greece would default on its debt, thus plunging the country further into crisis. Many of the banks participating in this speculative assault were the very same ones that helped Greece hide its debt in the first place. Thus, if Greece defaults on its debt, the speculators who bet against Greece stand to profit, and as these trades become popular, it makes it more difficult for Greece to borrow the money it needs to pay its interest. As one expert explained, “It’s like buying fire insurance on your neighbor’s house — you create an incentive to burn down the house.”[26]

J.P. Morgan Chase, Goldman Sachs, and several other leading banks helped hide the debt for several nations across Europe, which all began to enter into a debt crisis.[27] Interestingly, banks rapidly expanded their use of the derivatives trade not only in Greece, but Spain and Portugal as well, “as worries about those countries’ debts moved markets around the world.” Subsequently, “European banks including the Swiss giants Credit Suisse and UBS, France’s Société Générale and BNP Paribas and Deutsche Bank of Germany have been among the heaviest buyers of swaps insurance.” The reason for this: “those countries are the most exposed. French banks hold $75.4 billion worth of Greek debt, followed by Swiss institutions, at $64 billion,” and “German banks’ exposure stands at $43.2 billion.”[28] J.P. Morgan Chase, Goldman Sachs, and other US banks are also participating in the derivatives assault against Greece, which may be “pushing Greece toward financial collapse.”[29] Thus, we have a situation in which major global banks helped governments acquire expansive debts (and hide it from their balance sheets), and then the countries enter into a debt crisis. As they impose fiscal austerity measures to reduce their deficits, and seek help from central banks and the IMF to pay their interest, these same global banks speculate against the debts, thus pushing the nations further into crisis, exacerbating the social crisis, and forcing further and more expansive ‘austerity measures.’ The interest payments on the debt are, as an added insult, to be paid to these same global banks, which hold most of the debt of these nations. In short, the debt crisis is amounting to a form of financial warfare and social genocide, implemented by the major global banks, the central banking system (which they control), and the international organizations that serve their interests.

A working paper issued by the Bank for International Settlements (BIS) in March of 2010 explained that the West is facing a massive debt crisis, and that the United Kingdom and United States – along with other nations such as Spain and Ireland – took on massive debt in the past three years, making the debt crises in Italy and Greece “comparatively small.”[30] Further, investors are expected “to demand a higher risk premium for holding the bonds issued by a highly indebted country.”[31] In other words, the BIS warned that speculators would likely undertake a ‘market’ assault against indebted nations, further exacerbating the debt crisis and increasing pressure to impose ‘fiscal austerity’, or commit ‘social genocide’. In September of 2009, the derivatives market had rebounded to $426 trillion, and continued to pose “major systemic risks” for the financial system.[32]

Nouriel Roubini, an economist who had predicted the 2008 financial crisis, warned in March of 2010 that, “the recent difficulties of Greece are part of the iceberg. Markets have already targeted Greece, Spain, Portugal, Great Britain, Ireland and Iceland. They could deal with other countries, including Japan and the United States.”[33] Renowned economist Kenneth Rogoff (who accurately predicted the 2008 economic crisis) had also warned that a global debt crisis is on the horizon, which “could set the scene for years of financial troubles.”[34]

In 2010, the World Economic Forum warned of the potential of a “full-scale sovereign fiscal crisis” – a global debt crisis – possibly accompanied by a second major financial crisis.[35] Jürgen Stark, an executive member of the European Central Bank warned in April of 2010 that, “We may already have entered into the next phase of the crisis: a sovereign debt crisis,” which could spread across the EU, to the U.K., United States, and Japan.[36] Economic historian (and Bilderberg participant) Niall Ferguson warned of a “Greek Crisis Coming to America,” and a “fiscal crisis of the western world,” which will spread from Greece, throughout Europe, and to the U.S. and Japan.[37]

Structural Adjustment in the West

As the nations of the West took on enormous debts by giving the banks money (effectively buying the bad debt of the banks), and with decades of imperialism building massive foreign debts, the West and notably America, are entering into a period in which they will be subjected to the same or similar forms of ‘structural adjustment’ as they have inflicted upon the rest of the world. With the G20 promising to impose “fiscal austerity,” public sector jobs will be lost, state-owned assets and infrastructure privatized, taxes raised, interest rates will soar (eventually), and liberalized markets will be expanded and institutionalized, not least so that major global banks will be able to profit off of the subsequent collapse of nations through the financial weapon of speculation. The middle classes will vanish and poverty will reign supreme, while the rich become immeasurably richer and more powerful. Naturally, people will rise up, take to the streets, protest, demonstrate, riot, even rebel and revolt. As sure as the people will resist, the state will repress with police, the military and the ‘Homeland Security State’ apparatus of surveillance and control. Make no mistake: this is the ‘Thirdworldization’ of the West: the ‘Post-Industrial Revolution.’

In early June of 2010, the G20 finance ministers and central bank governors met in Seoul, South Korea, in a meeting with significantly less media coverage than the later G20 leaders summit in Toronto, and significantly more importance to the state of the world economy. The communiqué released by the finance minister and central bankers following the summit stated that G20 nations needed to speed up the process of “fiscal consolidation” (see ‘fiscal austerity’).[38] The IMF presented a report at the meeting recommending the adoption of “adjustment policies” to presumably aid in economic growth.[39] There was no mention, however, of how similar “adjustment policies” failed to deliver growth to the developing world over the previous 30 years, and in fact, spread poverty and economic despair instead.

After the G20 leaders meeting in late June of 2010, leaders of the world’s largest economies agreed on a timetable to impose ‘fiscal austerity’ measures to cut their deficits and halt the growth of their debts. The plan entailed cutting deficits in half by 2013.[40] In June, Germany had announced massive austerity cuts to spending, spurring protests in the streets.[41] Simon Johnson, former Chief Economist at the IMF, stated that fiscal austerity would likely result in “exacerbating developing world-type problems in the United States – and to creating the conditions for another financial crisis.”[42] The chief economist of the major global bank HSBC, stated in May of 2010 that, “at the very least, governments need to pursue a multi-year period of fiscal austerity,” and ultimately, “fiscal positions will become intolerable politically, economically and financially.”[43]

Fiscal austerity will imply massive cuts in social spending, which will do to the developed world what they did to the ‘developing’ world: health, education and social services will be cut, with public employees in those and other sectors fired, creating a massive new wave of unemployed people. Simultaneously, taxes will be dramatically increased, particularly on the middle and lower classes, which would then be more impoverished than ever before. However, fiscal austerity is not the only condition of “structural adjustment,” as many other measures will be taken, advancing on current trends, including further expanding and institutionalizing trade liberalization, as well as selling off public assets in major privatization schemes. Since the West largely privatized all the state-owned industries in the dawn of the neoliberal era, the remaining areas of privatization are largely in infrastructure projects such as roads, airports and ports. However, in America, this will be undertaken by individual states and cities desperate for cash and ‘investment’. Thomas Osborne, head of infrastructure and privatization at UBS bank, said in May of 2009 that, “privatization will eventually take hold,” but it will be done in “a more incremental approach.”[44]

In September of 2010, the Chicago Council on Global Affairs released a report on infrastructure privatization. The Council represents and is run by various officials from J.P. Morgan Chase & Co., CME Group (the world’s largest derivatives exchange), the Federal Reserve Bank of Chicago, Bank One Corporation, McKinsey and Company, Goldman Sachs, Boeing, Northern Trust, United Airlines, the Chicago Board of Trade, and a host of other corporate, financial and banking interests, and the board even includes the First Lady, Michelle Obama.[45] In the report sponsored by the Chicago Council, it stated that, “the trend toward infrastructure privatization is happening not just in the United States, but globally.”[46] Ultimately, the report found that, “financial realities mean that the privatization of infrastructure will continue.”[47] In defining infrastructure, the report identified roads, bridges, port facilities, water treatment plants, electric transmission lines, and railways, as well as hospitals, prisons, “and other communal assets that serve the public interest.”[48]

On this note, sovereign wealth funds (SWFs) from around the world are buying up American infrastructure. Sovereign wealth funds are state-owned investment funds of stocks, bonds, financial assets, resources and property. Some of the world’s largest SWFs are those of the United Arab Emirates, Saudi Arabia, Norway, China, South Korea, Kuwait, and Russia. As the “recovery” edges into the oblivion of the Great Global Debt Depression, SWFs are buying up American infrastructure, including:


"A toll highway in Indiana. The Chicago Skyway. A stretch of highway in Florida. Parking meters in Nashville, Pittsburgh, Los Angeles, and other cities. A port in Virginia. And a whole bevy of Californian public infrastructure projects, all either already leased or set to be leased for fifty or seventy-five years or more in exchange for one-off lump sum payments of a few billion bucks at best, usually just to help patch a hole or two in a single budget year.

America is quite literally for sale, at rock-bottom prices, and the buyers increasingly are the very people who scored big in the oil bubble. Thanks to Goldman Sachs and Morgan Stanley and the other investment banks that artificially jacked up the price of gasoline over the course of the last decade, Americans delivered a lot of their excess cash into the coffers of sovereign wealth funds like the Qatar Investment Authority, the Libyan Investment Authority, Saudi Arabia’s SAMA Foreign Holdings, and the UAE’s Abu Dhabi Investment Authority.[49]"

This process is also underway in Canada, as the Ontario government in 2009 considered selling off “all or part” of its Crown corporations to reduce the provincial deficit, and it hired CIBC and Goldman Sachs to write a blueprint for possible privatizations.[50] Further, there are increased calls – globally – for advancing the agenda of the privatization of water, a scheme which the World Bank has pushed on several countries around the world, resulting in enormous costs – in economic, political and social terms – to the poorest people, and enormous profits for the handful of global water conglomerates. Organized around the International Water Association and the World Water Council, the major water conglomerates, the World Bank and the UN have been promoting water privatization schemes across the ‘developing’ world and increasingly within the West as a means to ‘solving’ the world water crisis. As we have seen, however, from the cases of water privatization in places like Bolivia, South Africa, El Salvador, and several others, it is the poor who suffer the most, and it will be the same whether it is in Angola or America.

Debt Slavery

While nations of the West begin to impose fiscal austerity on their populations and social structures, the harsh effects will come with time, as nations have maintained extremely low interest rates, thus keeping the ‘cost’ of money cheap. However, as the Bank for International Settlements (BIS) report of June 2010 stated, “both fiscal and monetary policy may have to be tightened at the same time.” This means that, according to the BIS, interest rates must rise along with fiscal austerity measures. It was, lest we forget, the extremely high interest rates in the late 70s and early 80s that set off the 1980s debt crisis, as nations with large foreign debts could no longer afford to pay their annual interest payments, thus needing to turn to the IMF and World Bank for ‘assistance’ in the form of ‘structural adjustment programs’. The massive stimulus spending and bailouts will create the likely scenario of causing inflation, making prices rise dramatically. To fight inflation, nations can raise interest rates, which then make the currency more expensive, and thus, reduces the rates of inflation.

As central banks around the world injected billions and trillions of dollars into the financial system, they kept interest rates extremely low in order to encourage the flow of money. In the 2009 annual report of the BIS, it warned that this policy could create massive inflation, so interest rates will have to be raised eventually. The major question is ‘when’ they will rise; if it’s too late, inflation could get out of control, if it’s too early, it could destroy the ‘recovery.’[51] So as the 2010 annual report of the BIS calls for simultaneous fiscal and monetary tightening, this could be potentially disastrous, possibly “pushing the global economy into depression.”[52] The effect of high interest rates, while potentially decreasing the rate of inflation, will increase the cost of the annual debt payments nations must make, thus exacerbating and feeding the ‘fiscal austerity’ measures imposed to reduce spending. This would reverberate onto the average person, as interest rates on all debts, including their personal debts would also increase. While fiscal austerity will increase taxes, increase poverty, and deconstruct the middle class, high interest rates would bleed them dry. However, inflation itself acts as a hidden tax, increasing the cost of consumer goods such as food and fuel, as the currency depreciates in value. This is also a major cost to the vanishing middle class. It seems that either way, the average person is in the crosshairs of a system of economic terrorism. It’s the epitome of a ‘Catch-22’; you’re damned if you do, and you’re damned if you don’t.

Raising interest rates during a time of fiscal austerity, however, is particularly destructive to the average person. Notably, “fiscal and monetary tightening were tried in tandem in the early 1930s and it didn’t work then.”[53] In other words, it helped plunge the world into the Great Depression. Today, however, it would be significantly worse, as now we have the reality of mortgages, credit card debt, derivatives, student debt, etc. These things did not exist at the onset of the Great Depression, so today it would result in the ‘Greatest Depression.’ It’s a debt trap, and everyone is caught in it. If states don’t raise interest rates, the ‘market’ may turn against them, as major global banks, hedge funds and currency speculators may ‘lose confidence’ in a nation’s currency, and flee the currency, thus plunging it in value, leading to potentially hyperinflation (as was experienced in Weimar Germany and Zimbabwe), which also has the effect of devastating a nation and plundering the wealth of its people.

While increasing interest rates is done in the name of reducing the debt at a quicker pace, it ultimately has the opposite effect. It essentially creates a condition in which a nation is permanently indebted, and the cumulative debt increases annually. This occurs due to a nation struggling to pay its annual interest on the debt, and so it seeks the ‘assistance’ of the IMF and international creditors to provide a quick loan to the country to pay the interest. The IMF provides a loan, which is instantly redirected to pay the creditors, and the loan amount that the IMF provided is then added to the overall national debt. Thus, rising interest rates will increase the annual interest payments, because the debt itself has enlarged. The nation will need the ‘assistance’ of another loan – more debt – to pay interest on its overall debt, which then continues to rise. This is how the nations of the ‘Third World’ became so indebted: accumulating more debt to pay interest on old debt, which then creates new debt, requiring more debt to pay the interest on the accumulated debt, and on and on and on. Meanwhile, the ‘structural adjustment programs’ (SAPs) were implemented under the ‘conditions’ of IMF and World Bank loans and ‘assistance’ to deconstruct the social foundations of a nation, eliminate the middle class and exacerbate poverty, presumably in order to help reduce the deficit. This now appears to be the fate of the ‘First World’ industrialized nations. While the BIS annual report called for increasing interest rates, an internal working paper written by the Chief Economist of the BIS in March of 2010 warned that, “fighting rising inflation by tightening monetary policy would not work, as an increase in interest rates would lead to higher interest payments on public debt, leading to higher debt.”[54]

Ultimately, talk about whether or not to increase interest rates, and how to impose fiscal austerity are misleading. This is because these discussions operate on the basis that these debts are legitimate. The legal doctrine of ‘odious debt’ stipulates that sovereign debt incurred without the consent of the people and not benefiting the people is odious and should not be transferable to a successor government. In other words, if a debt doesn’t benefit the people, it’s illegitimate and should not be repaid. If this principle was applied to the ‘Third World’, it could be safely said that the IMF, World Bank, and Western nations would effectively lose their control of the global south. It is through the mechanism of debt that modern imperialism functions most effectively. Naturally, the correct economic path to take for an actual recovery would be to declare all these major debts illegitimate – of the ‘Third World’, and of the Western world – as the debts of the West were incurred from financing foreign imperial adventures, and the debt of the ‘rest’ is the result of that imperialism.

Through the economic crisis, the debts incurred were largely done so in terms of buying the bad debts of the banks that created the crisis, thus, they too are illegitimate. Even the ‘stimulus’ money was indebted in order to solve a financial crisis created by a corrupt minority around the world. Credit card debts and student debts exacerbate poverty, and if there are no jobs for students in a broken economy, their debt is illegitimate. Since credit card debt was incurred to finance consumption and allow people to live beyond their means, there is a notion of responsibility on the part of the debtor, however, because credit card companies target the indebted and have essentially ‘captured’ the middle class, and now they must pay through their own impoverishment, people have been misled, and the debt ultimately did not benefit them; thus, it too is illegitimate. If our governments, the banks, the corporations and all creditors have colluded together to seek personal profit and gain, while impoverishing us and the rest of the world in the process, all the world’s debts to these institutions, actors and nations is odious and should not be repaid. Taking this stance, however, would not get you far in the world of economics or politics, as you would be advocating for the end of financial, economic, social and political imperialism and power structures; not a particularly popular position from the perspective of the powerful.

So the debates and discussions will rage on; when to raise interest rates, how to impose fiscal austerity, how to create ‘recovery’; all the while global political and economic institutions, states and actors will be working to impoverish you and destroy the foundations of society upon which you stand.

Third World America

As a further indication of the coming ‘third world’ status of America, in June of 2008, in the midst of the financial crisis, the United States Federal Reserve was audited by the IMF for the first time in history. As part of the investigation, “the Fed, the Securities and Exchange Commission (SEC), the major investment banks, mortgage banks and hedge funds will be asked to hand over confidential documents to the IMF team.”[55]

Simon Johnson, former Chief Economist at the IMF, wrote an article in May of 2009 explaining that the problem with most third world nations (“emerging market economies”) is that the governments are so closely tight-knit with the corporate and banking elite that they form a financial oligarchy, and that this is essentially the same problem in the United States. He wrote that, “the finance industry has effectively captured our government,” and “recovery will fail unless we break the financial oligarchy that is blocking essential reform.”[56]

In March of 2009, an article appeared in the Washington Post written by Desmond Lachman, a fellow at the American Enterprise Institute, a previous emerging market strategist at Salomon Smith Barney and deputy director of the IMF’s Policy and Review Department, in which he referred to America as the “world’s scariest emerging market.” In other words, America resembles a third world debtor nation, from its corrupt banking elite, to the inept political class, and a massive foreign debt, America “is coming to resemble Argentina, Russia and other so-called emerging markets, both in what led us to the crisis, and in how we’re trying to fix it.”[57]

Towns, cities, and states across America are resorting to drastic actions to reduce their debts, such as closing fire stations, scaling back trash collection, turning off street lights, ending bus services and public transportation, cutting back on library hours or closing them altogether, school districts cutting down the school day, week or year, and it was reported in September of 2010 that “local governments will eliminate roughly half a million employees in the next fiscal year, with public safety, public works, public health, social services, and parks and recreation hardest hit by the cutbacks.” Simultaneously, this is occurring with a dramatic increase in the rate of privatizations or “public-private partnerships” in which even libraries are being privatized.[58]

Structural Adjustment and “Social Explosion”

The imposition of ‘structural adjustment’ in the ‘Third World’ resulted in an explosion of social unrest, as the rural poor, the urban poor, and the urban middle class would come together to protest these policies,[59] and “between 1976 and 1992 there were 146 protests against IMF-supported austerity measures in 39 countries around the world. These took the form of political demonstrations, strikes and riots.”[60] As “fiscal austerity” and ‘structural adjustment’ are imposed on the West, we can expect the same results to occur. In fact, this process has already begun.

At the onset of the global economic crisis in 2008, the IMF warned that governments of the west could see “violent unrest on the streets,” as “violent protests could break out in countries worldwide if the financial system was not restructured to benefit everyone rather than a small elite.”[61] A cynical statement of the IMF, considering it is one of the central institutions that supports and upholds the interests of that “small elite.” In early 2009, Eastern Europe was already experiencing social unrest in opposition to austerity packages, and Latvia experienced the largest protests since the mass rallies against Soviet rule in the late 1980s.[62]

Similar tensions were felt across Western Europe throughout 2009, notably in France where massive strikes and protests were taking place, and several commentators were saying that civil unrest in places like Iceland and Eastern Europe were “a sign of things to come: a new age of rebellion.”[63] On May 1, 2009, major protests and riots broke out in Germany, Greece, Turkey, France and Austria, and there were further protests and riots that broke out in Russia, Italy, Spain, and some politicians were even discussing the threat of revolution.[64] In February of 2009, Dennis Blair, the Director of National Intelligence in the newly formed Obama administration (the highest intelligence position in the country), told the U.S. Congress what constituted the major ‘national security’ threats to the United States, explaining that the ‘economic crisis’ is a greater threat than terrorism:

"I’d like to begin with the global economic crisis, because it already looms as the most serious one in decades, if not in centuries… Economic crises increase the risk of regime-threatening instability if they are prolonged for a one- or two-year period… And instability can loosen the fragile hold that many developing countries have on law and order, which can spill out in dangerous ways into the international community.[65]"

In the same month, the highest-ranking general in the United States, Adm. Michael Mullen, Chairman of the Joint Chiefs of Staff, ranked “the financial crisis as a higher priority and greater risk to security than current wars in Iraq and Afghanistan.” He explained, “It’s a global crisis. And as that impacts security issues, or feeds greater instability, I think it will impact on our national security in ways that we quite haven’t figured out yet.”[66] Again, in the same month, the head of the World Trade Organization (WTO) warned that, “the global economic crisis could trigger political unrest equal to that seen during the 1930s.” He elaborated, “the crisis today is spreading even faster (than the Great Depression) and affects more countries at the same time.”[67]

In February of 2009, renowned economic historian and Harvard professor, Niall Ferguson, predicted a “prolonged financial hardship, even civil war, before the ‘Great Recession’ ends,” and that, “the global crisis is far from over, [it] has only just begun.” He elaborated:

"There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable.[68]"

In May of 2009, the head of the World Bank warned that, “the global economic crisis could lead to serious social upheaval,” as “there is a risk of a serious human and social crisis with very serious political implications.”[69] Zbigniew Brzezinski, former National Security Adviser, co-founder of the Trilateral Commission and a key architect of ‘globalization’ warned that, “There’s going to be growing conflict between the classes and if people are unemployed and really hurting, hell, there could be even riots!”[70]

In December of 2009, Moody’s – one of the world’s major credit ratings agencies – warned that “future tax rises and spending cuts could trigger social unrest in a range of countries from the developing to the developed world,” resulting in “political and social tension.”[71] In March of 2010, Moody’s warned that the U.S., U.K., Germany, France, Spain and other Western nations could likely see “social unrest” as a result of imposing ‘fiscal austerity’, which “will test social cohesion.”[72]

An article in the Financial Times in May of 2010 warned of the emergence of “an age of rage,” in which the initial shock of an economic downturn subsides, and social unrest emerges, as there is usually a lag between an economic collapse and “social fury,” and that it will ultimately be “a test of the strength of democratic institutions in a time of extreme fiscal stress.”[73]

In September of 2010, the IMF chief Dominique Strauss-Kahn said that America and Europe, in the midst of the worst jobs crisis since the Great Depression, face an “explosion of social unrest.” Speaking at the summit of the International Labour Federation, Strauss-Kahn stated, “the labour market is in dire straits. The Great Recession has left behind a waste land of unemployment,” and that, “the Great Recession has left gaping wounds. High and long-lasting unemployment represents a risk to the stability of existing democracies.” The Chief Economist of the IMF, Olivier Blanchard, explained that, “long-term unemployment is alarmingly high: in the US, half the unemployed have been out of work for over six months, something we have not seen since the Great Depression.”[74]

On September 29, 2010, massive protests took place across Europe against the austerity measures being imposed by European governments, with a general strike called in Spain, virtually shutting down Spain’s transportation system. Further, roughly 100,000 protesters “staged the biggest Brussels march in a decade and riot police barricaded EU headquarters as marchers from 30 countries joined the backlash against brutal spending cuts.”[75]

These protests continued throughout October of 2010, particularly in France, where millions of people went on strike, protested, and in some cases, rioted against President Sarkozy’s fiscal austerity plans, turning him into the most unpopular president in more than 50 years.[76]

The G20 Korea Summit

To further accelerate the process of global economic governance, it is essential for the principle economic institutions and powers to integrate China fully into this system. China is already a signatory to the World Trade Organization, having opened up its banking sector to foreign investment, with its economy fully integrated with and largely dependent upon the West, it is pivotal to include China in the system of global governance. China is represented in the Bank for International Settlements (BIS), which the IMF referred to as “the central and the oldest focal point for coordination of global governance arrangements.”[77] The board of directors of the BIS has 19 members, comprising the Governors of the central banks of Belgium, France, Germany, Italy and the United Kingdom and the Chairman of the Board of Governors of the US Federal Reserve System, as well as the Governors of the central banks of Brazil, Canada, China, Japan, the Netherlands, Sweden and Switzerland and the President of the ECB (European Central Bank). China is also represented in the G20, of which the President of the European Central Bank, Jean-Claude Trichet, referred to as “the prime group for global economic governance at the level of ministers, governors and heads of state or government.”[78] In 2009, China and India were invited as official members of the Trilateral Commission,[79] an international think tank created by David Rockefeller and Zbigniew Brzezinski in 1973 with the aim of creating a “community of industrial nations” comprising Western Europe, North America and Japan, essentially with the aim of managing the process of globalization.

In November of 2010, the G20 is to be hosted by South Korea, where they will meet to again advance the process of global governance and global social genocide. Prior to the official meeting of heads of state, a much more important preliminary meeting took place between the finance ministers and central bank governors of the G20 nations. This took place in late October of 2010 in Seoul, South Korea, at a time when the world is immersed in a global currency war. The currency war involves several major nations, from America, to Brazil and China, seeking to depreciate their currency in order to make exports more attractive, so their central banks (all of which cooperate on global governance at the BIS), buy and sell each others’ currencies, attempting to decrease the value of their own currency while increasing the value of competitor currencies. In short, it’s a race to the bottom. To convince China to appreciate its currency, incentives must be given. If China is to be following the dictates of the global financial powers, its economic weight in the world demands that China be better represented and more involved in the governance of these institutions. This means that if China is being integrated into a system of global governance, it must be invited to the management table.

The G20 agreed on implementing an historic reform in the IMF, where for the first time since its creation in 1944, the management structure of the IMF has been [slightly] altered. The significance is that European countries have agreed to give up two of their seats on the 24-member executive board, making room for China and India, and more than 6 per cent of IMF voting power will be transferred to underrepresented countries at the fund. As the Financial Times reported:


"After the changes take effect, Brazil, Russia, India and China will be all included in the fund’s 10 biggest shareholders. The US, with a 17.67 per cent share of IMF quotas, will retain its veto power for the fund’s key decisions as they will continue to require a super-majority of 85 per cent.[80]"

This is important to note as it clearly indicates that America still remains the ‘Godfather’ of the global financial system. The IMF requires 85% of voters to agree on any changes or decisions, and since the U.S. has 17.67% of the shares, if the U.S. votes against anything, the IMF cannot go forward, giving the U.S. veto power over the IMF. Yet these changes still represent an incremental effort to bring China within this system of global governance. At the same time, a top Chinese banker stated that, “the yuan should be included in the basket of currencies that constitute the International Monetary Fund’s Special Drawing Rights.”[81] This would give China a more direct stake in the formation of a global currency, of which its central bank governor is already a firm supporter.

Conclusion

Herman Von Rompuy became President of the European Union in 2009, a new position established by the Lisbon Treaty passed the same year. Rompuy was selected as President following his attendance at a meeting of the Bilderberg Group.[82] Shortly after being given the position, Von Rompuy gave a speech in which he declared that 2009 is “the first year of global governance.”[83] As Denis Healey, a founding member and former member of the Steering Committee of the Bilderberg Group for over 30 years, stated in 2001, “To say we were striving for a one-world government is exaggerated, but not wholly unfair. Those of us in Bilderberg felt we couldn’t go on forever fighting one another for nothing and killing people and rendering millions homeless. So we felt that a single community throughout the world would be a good thing.”[84]

So while institutions and organizations of global governance continue to grant themselves more power and expand their control and authority over the world, the people of the world must wake up to this process and seek to stem and stall its advancement. A global government would represent the people of the world even less than they are already not represented through their national governments. Institutions of global governance are totally unaccountable to the people, totally undemocratic, and are inherently totalitarian. As Gideon Rachman wrote for the Financial Times in December of 2008, “for the first time in my life, I think the formation of some sort of world government is plausible.” While articulating the need for a global government, modeling it on the European Union “going global,” he examined the setbacks that the EU had in this process, suggesting the same is likely in the process for global government. Specifically, he identified that whenever the people were involved in the process, they would act to stall or reject the process of integration. Thus, Rachman concluded, the European Union “has progressed fastest when far-reaching deals have been agreed by technocrats and politicians – and then pushed through without direct reference to the voters. International governance tends to be effective, only when it is anti-democratic.”[85] In other words, if we want global governance, we must kill democracy in the process.

What this implies then, is that the people have the potential to prevent this process from taking place, but only if they become directly involved in rejecting it. This means that people’s movements need to stop recognizing the legitimacy of these international organizations and institutions, complaining only that they are not included in discussions, and instead demand that they be dismantled altogether in favour of forming new governance arrangements – political, economic and social – that actively represent and empower the people over the entrenched powers. This is no simple task, in fact, it is likely the greatest, most monumental and challenging task that has ever faced humanity. So it seems necessary that the people not waste their time, not waste their votes, voices, or ideas, and work together to promote true progressive and humane change. There is hope in humanity yet, but so long as we allow the powerful to accumulate more power for themselves, we cannot expect things to get better for the majority. We must take advantage of our freedoms in order to fight for and preserve them. We can either be free thinkers, directing the course of our own lives, or we can be slaves to bankers.


Link: http://dandelionsalad.wordpress.com/2010/10/27/crisis-is-an-opportunity-engineering-a-global-depression-to-create-a-global-government/.