Winter Patriot Community Blog

Banking, Basel, Marks and Markets

Both the “mark to market” valuations for businesses set by FAS157 and the same effectivley for banks through Basel 11 which built on the original Basel accord, have set in place mechanisms which are prone to, and I believe designed to, the cascading effect. Looking at the effects of this or that regulation is a bit like trying to piece together what happened after a nuclear explosion by focusing on the cascading atomic reaction rather than on who designed and built this bloody bomb and who triggered it. In our case it is the bankers and their various regulatory bodies such as the Bank for International Settlements (BIS).

Here we have the industry looking at the cascading effect:-

“ In short, the rules are seen as being pro-cyclical.
"There's a fundamental weakness in the regulatory framework because it puts no constraints on banks' rate of growth when things are going well then bites deeply later on, which could mean each boom is followed by a credit crunch - when what you really want is to moderate the boom in advance," says the LSE's [London School of Economics] Goodhart.”

Yeah well, Goodhart may well say, “what YOU (that's us, folks) really want...” but he could have added, “What WE really want (speaking for the bankers) is ever wilder cycles up and down.”

Cycles of boom and bust suit bankers. This can be determined rather simply because bankers are the ones who create this yo-yo cycle and it takes deliberate decisions on their part to do it. And they are the ones who profit from it every time. They do it by pumping the money supply up with lotsa loans and then deflating it and collecting lotsa cheap assets. This is the same mechanism behind the mysterious "business cycle". That some banks are going bust now does not mean that the bankers at the centre of control (BIS) are suffering. They're thinning out the competition.

When the Basel Accord was adopted by various governments, it took away control of banks by the host governments. Bank lending was no longer constrained by the government. The government in Australia, for instance, previously could regulate the lending of banks, in theory at least, (but in practice, the banks told the government what to do) independent of the market through Statutory Reserve Deposits i.e. it could go against the Market to damp it down. But now the banks would be regulated BY the market i.e go with it with no restraint now. “The Market” reigns supreme now but the market is and always has been subject to manipulation. And guess who is in the best position to manipulate it? Yes, our old friends the international bankers who own and control the major central banks of the world and their co-ordinating body, the BIS.

The Basel accord imposed on banks an overall set ratio of 8% capital to loans to non government bodies. But the ratio varied between loans for real estate (favoured), for instance, and commercial loans to industry (penalised by a higher ratio). The first thing that happened was that productive industry suffered and speculation in real estate and securities took off. Then these more speculative loans were onsold for a profit and this took them off their balance sheets which allowed the banks to lend more and more while still remaining within their capital ratio.

Meanwhile, they are making more and more profits from these activities plus, they are now price gouging through the imposition of all sorts of fees. This meant massive profits which then increased their capital which meant they could loan evermore money into the speculative sector. Banks were competing with each other for this largesse. Truly pigs at the trough. This self feeding cascading effect facilitated the long boom through the nineties till now, while all the while, industry is suffering and shrinking. The parasite is killing the host. But this situation can't keep going forever and eventually must slow and then the freefall starts. The system reverses itself. There's no mystery here. It was all predictable and therefore must be seen as deliberate on the part of the regulators who designed and brought this system in; the Bank for International Settlements and all the government officials who obliged in adopting it. Now the arguments start.

But arguing with bankers or investment people over regulations is a bit like arguing with a bunch of alcoholics, who have been left in charge of the liquor store, over the trading hours. The whole thing is nuts. One just should not be in this situation.

When I rule the world, these are the laws I will impose !

1 The only body that will issue currency i.e. the money supply, is a government central bank.

2 Governments will only borrow from their own bank.

3 Private banks will be reduced to the status of Credit Co-ops or S&Ls in that they can only lend out funds what they have previously taken in as deposits.

4 No one will be able to on-sell a loan without incurring penalties (to discourage speculation) and with the specific permision of the borrower.

5 Short selling will be illegal in all markets, period. It is fraud to sell something you don't have or own. Future positions can be covered by put and call options or common insurance.

6 Foreign exchange can be handled internally via a government run market in which exporters are able to sell their well earned foreign currency to importers (who have to produce trade contracts to validate their need for it) and the price is set by normal market supply and demand. No foreign debt can be accululated in this fashion and foreign trade does not imbalance the domestic market; it's self regulating. This system was first proposed by John Iggulden of Australia some years ago. He called it Impex. And it's nothing short of brilliant in it's simplicity and elegance.

7 All financial markets will be subjected to a turnover tax to raise taxes from those that can afford them and to discourage speculation. Currently, close to 98% of turnover in foreign exchange markets is speculation and has nothing to do with foreign trade. Our economies are being run by gamblers. And addicted gamblers, at that.

8 The money earned from financial market turnover and interest gained from creating the money supply would go a long way, if not all the way, to providing the government's revenue requirements.

All pretty simple.

The whole financial industry as it is, this bloated, blind and toxic parasite, should be as welcome as a turd in a swimming pool in any decent, just and well run society.

hello!
This is a document with pdf attachments.
Click here to go back to my comment about this.

INTO THE VALLEY OF DEBT (Shorter Version)

Everyone is suffering from the economic slowdown. Many have lost their jobs and houses because of bankers selling questionable financial “rabbits out of hats” such as Collateralised Debt Obligations (CDOs) and the positively fraudulent use of Credit Default Swaps (CDSs) otherwise knowm as derivatives.
Many privately wealthy people have lost much of their capital by buying these Collateralised Debt Obligations (CDOs) or by investing in companies that got caught with them.
Many people of more modest means have lost investments, too, and seen the value of their superannuation plummet, as well. Their Mutual Funds have been caught with CDOs and also hold shares that have lost value through the same process.
And lastly, everybody will suffer from the coming inflation and from future increased taxes caused by government debts incurred to pay off the fraudsters and so make the filthy rich obscenely rich.
And all this through a simple scam. From James Lieber's excellent article in the Village Voice (Jan 27th '09), “What Cooked the World's Economy” -
“The bottom line in this scandal is that fantastically wealthy entities positioned themselves to make unfathomable fortunes by betting that average Americans - Joe Six-Packs and hockey moms - would fail.“
In short, with AIG and JP Morgan in the lead, insurers, investment houses and banks created subprime loan assets by selling loans to people who couldn't afford them and had the rating agencies give them prime rating. These subprime assets had higher subprime returns with apparent prime safety. This was irresistable bait for the greedy. The anonymous “counterparties” behind the AIG/JP Morgan push insured these subprime loans (CDOs) with derivatives (CDSs or Credit Default Swaps aka derivatives) betting that the loans would fall over and thus collecting handsomely. And in the process, bleeding the above companies and others dry and then bleeding the whole nation dry through the government and its bailouts which was the real and ultimate "mark" all along.

The concept was simple. However, the implementation took some doing over many years including dismantling the regulatory provisions and hobbling the oversight bodies.
With this information, looking back over those years makes it plain that it was all deliberatly engineered. The same cast of characters are present at every step; building, priming, selling and detonating the charges and then lobbying excitedly and making threats for the compensation or more correctly, the payoff.
The situation is no different (except in scale) to a man (counterparty) renting a house to pyromaniacs (sub-prime borrowers) then selling the house complete with tenants to an investor (mutual funds, some banks etc) and subsequently insuring the now unloaded house (CDS's) with an insurance company (AIG) multiple times, say twenty times, against burning down which it promptly does. The original seller, (counterparty) collects on his twenty insurance policies twenty times even though he doesn't own the house and then goes looking for another house to buy and rent to more pyromaniacs and on sell and so repeat the process. He keeps doing this until he bankrupts every insurance company he can find and then demands that the government pay up on the fraudulent policies the insurers can't cover now .
That's pretty much it except that the people talked into the subprime mortgages which were designed to be defaulted on were not criminal pyromaniacs but rather gullible or naively hopeful workers. All the other parties, including the complicit senior executives of the insurance companies were and are guilty of criminal behaviour.
The solution to this mess is also simple – declare the Credit Default Swaps (deritatives) invalid legally, no more payouts, and instead provide government funds to assist the people struggling with their mortgages so that not only do they retain a roof over their heads but also to stop the triggering of these fraudulent insurance policies against their default. These derivatives are nothing short of a scam.
The scam is still being worked through because the “bailouts” are an integral part of it and the criminals are directing it all. This is how come the likes of Joseph Cassano of AIG Financial Products are not only not in jail but are still in employment and, unbelievably, also receiving huge bonuses.

To understand in more detail how it all worked, this from James Lieber's article may help,
'“Derivatives weren't initially evil. They began as insurance policies on large loans. A bank that wished to lend money to a big, but shaky, venture, like what Ford or GM have become, could hedge its bet by buying a credit derivative (insurance policy) to cover losses if the debtor defaulted.”
A market or trading forum was needed to facilitate the selling of these loan insurance policies (a.k.a. Credit Derivatives or CDs or just “derivatives”) on a large scale and thereby create a new financial services industry (and new profit centre) and was duly supplied in the form of a computer network. From Leiber again,
“the company that put the basic hardware and software together for pricing and clearing derivatives was Bloomberg. It was quite expensive for a financial institution - say, a bank - to get a Bloomberg machine and receive the specialized training required to certify analysts who would figure out the terms of the insurance. These Bloomberg terminals, originally called Market Masters, were first installed at Merrill Lynch in the late 1980s.
Subsequently, thousands of units have been placed in trading and financial institutions; they became the cornerstone of Michael Bloomberg's wealth, marrying his skills as a securities trader and an electrical engineer.
It's an open question when or if he or his company knew how they would be misused over time to devastate the world's economy.”
How did legitimate insurance on a loan mutate so badly? Well, it soon became apparent (if it wasn't the purpose from the begining) that with the insurance (derivative) in place, there was more money to be made from a loan going bad and collecting on the insurance than if the loan was secure and paid off in due course. Particularly if the loan could be insured for more than it was worth or was purchased for. Coupled with the fact that the loan could be insured multiple times and the fact that you didn't even need to own the loan yourself. So if you insure a loan twenty times over so that when it falls over, you are paid its full book value twenty times. This is more than a “goldmine”; this is an exponential formula to unlimited wealth if the fabulous profits are parlayed a few times. Imagine betting on the winning number on a roulette table and letting the winnings ride and having the number come up again . . . and then keep on repeating this process with no pit-boss (or regulator) to shut the table down!
Now think in trillions!

But this jackpot payoff is dependent on the insured loan going bad. So now there is a market for bad or high risk loans and it is an exponentially ever-growing market because once a derivative buyer or “counterparty” (as he is known in the business) has collected big time on his “investment” he naturally wants to plough it all back into the same glorious, no risk, bonanza. But our counterparty's capital has grown like Topsy and he needs a hundred bad loans this time. How many bad loans will he need after a few circuits on this magic merry-go-round? Clearly the “Bad Loan” business needs to go “bigtime” and to do that the financial regulations and supervision need to be eradicated. Bye-bye Glass-Steagall Act. Hello Commodity Futures Modernization Act (CFMA). And thank you, Bill Clinton.
This need for loans to be defaulted on is one of the reasons why Obama and his backers on Wall Street will not help rescue, in any meaningful way, ordinar, but over committed people struggling to stay in their homes or pay off their credit cards. There are still derivatives in play to be collected on.
Lieber again, “By plunking down millions of dollars, a hedge fund could reap billions once these fatally constructed securities plunged. Again, the funds did not need to own the securities; they just needed to pay for the derivatives - the insurance policies for the securities. And they could pay for them again and again. This was known as replicating. It became an addiction. “
It's not over, either. To repeat, its still in play and there are still loans to fall over and there are still payoffs to collect for the mysterious counterparties whom the Fed and everyone else involved refuse to identify.

But let me backtrack a little to how the first half of the scam operated before the government intervention and the second half began.
The challenge was how to do it on a mass scale. It needed to pull most of the financial industry in because the object was to firstly, loot and crash whole economies and secondly, set the stage for a one world currency which would give the issuers of this currency a de facto world government. .
So they needed a respectable and respected front to lead the way for others to follow; to assure the nervous Nellies that success lay in joining “The Charge of the Blight Brigade into the Valley of Debt”.
What better vehicle than AIG, the biggest insurance company in the world? You are probably protesting that this company is “one of their own”. Yes, but many a fortune has been made from bankrupting a company, particularly, one's own. Maurice Greenburg, the head of AIG, established the demolition team in London, AIG Financial Products by name. I suggest this was not only to escape the rather non-existent regulatory control but also to escape internal detection and intervention from senior executives at the parent company who might not be too exicted about the prospect of their careers, status and livelihoods going up in smoke and so "out" the operation before its time is due.
Lieber points out, “In 2000, AIG asked the New York State Insurance Department to decide if it wanted to regulate them, but the department's superintendent, Neil Levin, said no. The question was not posed by AIGFP, but by the company's main office through its general counsel”.
Perhaps head office was trying to get the regulator to do what it ironically couldn't i.e. audit its own subsiduary because Maurice Greenberg placed the sellers of these grenades, the Credit Default Swaps, in London and refused head office access to their books.
With the solid looking facade of AIG in place all that's needed now is an outside “seal of good housekeeping” for the bait which was provided by Standard & Poors and the other rating agencies. The bait made up of mortgages, credit card debt and sundry other things and otherwise known as CDOs (Collateralised Debt Obligations) was sold to,
“Banks like Wachovia, National City, Washington Mutual, and Lehman Brothers (who) loaded up on this financial trash, which soon proved to be practically worthless. Today, those banks are extinct” (unlike the ratings agencies).
Either these institutions were kept in ignorance and were set up by their fellow bankers to fail with the view to taking out the competition;
or, they were gutted and offered up as sacrificial lambs; that the derivatives were, indeed, taken out on the bad loans (CDOs) by the principals of these firms but held in other companies away from the creditors and eventual liquidators and the wholesale looting put down to incompetence instead of larceny.
I think it likely that both these scenarios were in play with different individual companies and for both the reasons outlined above.
But this bomb is a time bomb and these institutions (and also private investors) are loaded up with these explosive bad loans, we need a trigger to set the chain reaction off. This was supplied by the banks tightening up consumer credit causing an economic slowdown and with it increased unemployment which then caused the CDOs to start popping off and then . . .
“the raters rushed to downgrade them to junk status. This occurred suddenly with more than 4,000 CDOs in the first quarter of 2008 - the financial community now regards them as "toxic waste."
To top it all off, JP MorganChase and others delivered the “coup de grace” by freezing interbank lending with instantaneous catastrophic results.

Part one of the scam was complete by this stage. The fiasco had now entered the public arena through the media coverage. And Part Two was about to start.
The Fed went to Congress to appeal for funds to ease the “credit crisis” which had been deliberately created, of course. After initially baulking, Congress handed over the funds and the Fed promptly gave it to the insurers such as AIG who almost certainly turned this money over to the derivative holders, the anonymous “counterparties” i.e. the scammers and builders of this massive operation. This has to be be part of the original plot because AIG and other insurers simply had nowhere near the capital to pay out on the derivatives and the whole operation only makes sense if the scammers can collect which means the government was meant to pay and pay big right from the beginning. This was the prize, the goal of the whole exercise And the government did pay up and is continuing to pay up, what's more. The scam is still in operation.
In the tight monetary conditions i.e. tight lending practices of the banks to average people, loans are continuing to fall over and derivatives are continuing to be triggered and are continuing to be payed out and Congress, via the Fed, is continuing to fund it all. The strugglers out there in mortgageland will not be helped in any meaningful way because that would lessen the number of subprime loans going into default and this would stop this process that provides the continuing shower of funds down on the pigs at the trough. All this is to say that the bailouts give massive dollar amounts to the already wealthy and every one pays for it because, for one, the value of the dollars everyone else is holding goes down through inflation and two, the taxes that will inevitably follow to cover the government “bialout” to accommodate and facilitate this shift of wealth.

The US Federal Government together with Wall Street (which includes the Federal Reserve Bank) are engaged in a conspiracy to massively defraud the American public.

One World Currency

In this essay, I will be arguing against the use of a One World Currency; why it would be bad for everyone except bankers; how it will be brought in and how it will be made viable. I will also point out how all the strategies essential to its implementation have been employed before only not together and, lastly, how it has caused war in the past and will again in the very near future.

In the Forum section (link below in the right column) is the article “The Tower of Basel”by Ellen Brown. It gives a very brief but good history of the Bank for International Settlements (BIS) which is the driving force behind the campaign for a One World Currency (OWC). I highly recommend reading it before you progress further with this essay.

Still here? You want the bottom line now, right? OK, but read it after!

The most important part of Ellen Brown's article for my purposes is the following paragraphs which are highlighted in the forum version-

“BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies. . . . The IMF and the international banks regulated by the BIS are a team: the international banks lend recklessly to borrowers in emerging economies to create a foreign currency debt crisis, the IMF arrives as a carrier of monetary virus in the name of sound monetary policy, then the international banks come as vulture investors in the name of financial rescue to acquire national banks deemed capital inadequate and insolvent by the BIS.

Ironically, noted Liu, developing countries with their own natural resources did not actually need the foreign investment that trapped them in debt to outsiders:

Applying the State Theory of Money [which assumes that a sovereign nation has the power to issue its own money], any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation.”

The first paragraph clearly spells out that having anything to do with the world banking bodies is akin to national suicide. These bodies are entirely predatory. The second paragraph says that involvement with these bodies has been entirely unnecessary as each country has the ability to issue its own currency backed by its own resources, skills and production. These resources are owned by or are integral to the population as a whole in whichever nation we happen to be looking at. So long as someone holding that nation's currency (whether that person is residing in that particular country of outside of it) can exchange it for goods of intrinsic value, then that currency is valuable and viable. It needs no gold hidden in vaults anywhere to back it up.

There is another factor that gives a nation's currency value domestically and that is the demand for it imposed by the government that demands taxes and will only accept payment in “legal tender” i.e. the national currency. If you don't pay your taxes with this curency, ultimately, they will lock you up. So “you gotta get you some”. Pretty hard to argue with!

The leadership of every country in the world (except the Channel Island of Guernsey, as far as I know) (I have since determined that the list also includes Russia, China and Syriah, Ed) as either been corrupted or tricked into acquiescing to the practice of private banks issuing their currencies and pocketing the interest from it. Given that the entire Money Supply of most countries comes into being through loans from these banks, that's a lot of interest money. This gives enormous power to these banks (or bankers) who, conscious of their trickery, set about corrupting the whole fabric of society to gain control over it and ward off any possible challenge to their position.

If the sovereign Government issued the currency (out of the same thin air that the private banks use), they would have all the interest free capital they need to provide infrastructure and services. (Indeed, this is what the Australian Federal Government did in the very early part of the 20th Century). Interest charged to private borrowers would go towards funding services as well. It is quite possible to run a prosperous nation without taxes!

That is briefly how a currency is supposed to work. Government issued currency, managed well, leads to prosperity with little or no taxation and national independence. What's not to like?
Privately issued currency, which also leads to foreign loans from more private banks, leads to poverty, oppressive taxes and loss of sovereignty. With the loss of sovereignty comes the inevitable risk of involvement in foreign wars that have nothing to do with you. What's not to loathe?

If the drive to one world currency is resisted and should the resistance prove successful, it should immediately be followed with a campaign for a nationalized banking system to return the wealth to the people of the nation.

So that's what's wrong with a privately issued national currency. Does it apply to a One World Currency? Yes, indeed, and more. While there is a general loss of sovereignty within all countries (and it is much more than most people would like to think) there remains the possibility of it being regained by the populace of any particular nation. A nation that successfully financed itself would then be a shining example for others to follow. A global currency would take away that possibility or at least place it so far out of reach to make it virtually impossible. Thereafter, if a nation tried to establish its own currency, it would find it couldn't convert it to carry out foreign trade plus it would have the armies of the world surrounding it because the bankers would be in effective control of all the world's governments (and their armies) just as national banks are in control of national governments now. It just gets that much harder to have an economically just system.

So how are the “Powers That Be” going to bring in a One World Currency? Well, they've already started. They have had a trial run with the Euro for Western Europe which has no doubt provided useful lessons. It is interesting to note that Ireland boomed after it join the European Union with the injection of loan funds which increased the money supply and after they refused (twice) to adopt the Euro as their national currency, they now find themselves deep in recession; carrot and stick. This will be used more and more.

The current derivatives meltdown around the world is a necessary part of this plot to a One World Currency. The PTB get people to adopt unpalatable changes by first creating a problem or crisis and then presenting the change as the solution; “the medicine will taste better than the disease”, sort of thing; along with such platitudes as “Short term pain for long term gain”.

Anyway, you can read more about Stage One, "Into The Valley of Debt" here. It's not over either. There's more of stage one to come. All the trillions of dollars that have been created to “bail out the banks” will inevitably lead to inflation, probably massive. There's no escaping it. The mechanicism for that is explained in the above link. People (political shills) will call out for a stable one world currency and some countries will go for it. But not every country will be keen on it particularly if they know what's in store. So there's a need for something to provide value to and to enforce the adoption of this OWC by reluctant countries. China, for instance, might not be too keen to hear that this new currency will be backed up in part by their own resources yet they will have no say in the issuance of the currency nor share in part of the consequently massive profits. Nevermind the loss of control of their own economy.

I believe the proposed new currency will be backed by oil. The international bankers behind the BIS will not need to own the oil (though they own quite a lot through their oil companies). All they need is for the oil to be sold, and only sold, in exchange for their new currency. This will ensure an instant and massive demand for this currency. This sleight of hand requires the control of or agreement from the world's oil supplier countries. We already have a similar system in place in the world.

In the early seventies, OPEC was formed and then massively increased the price of oil over the following years. The major oil companies (and their client governments) rolled over without much fuss at all and accepted the new staus quo. There were no invasions. I remember being surprised at the time and the answer to the riddle came along in due course. The oil majors (who, remember, are owned by the major banking families) made a deal with the Saudis (and the other OPEC nations followed) to only sell their oil through the oil “bourses” in London and New York and the sales to be denominated in US dollars. This neat trick meant that the major banks could issue huge amounts of dollars (out of thin air) as loans to the value of the world's oil sales because everyone now needed to get the US$ before they could get the oil. This is how the US dollar was cemented in place as the reserve currency of the world. And this is how, too, they have been able to deliberately dismantle the US domestic economy over the last thirty years through globalisation (thank you Milton Freidman!) and not see the value of the US dollar plummet. This is how the US has financed its huge military buildup. It would have not been possible otherwise. It has been able to spend, spend, spend all this new found wealth from the interest gained from the vast loans as well as spending the money outright. It may take a while to get your head round this but, believe me, it really is as simple as its sounds.

Perhaps now you will see new meaning in Saddam Hussein's selling of oil in currencies other than the US$ which he started shortly before he (and all Iraqis) came to grief. This accounted for the timing of the war as well as its raison d'etre. Perhaps you will extend that new meaning to encompass Iran's decision to do likewise. Not only has this threatened the viability of the US's continued military dominance (it buys from all over the world with its currency backed by others oil), but just as importantly, it threatens the introduction and viability of their projected New World Order currency. This makes Iran target number one. If the US and these bankers can't control or own Iran's oil, they must, at least, stop them from selling it in anything other than $US for the moment and the OWC in the future. Bombing their oil fields and have the Iranians block the Straits of Hormuz in retaliation would achieve that just fine.

But that would be a temporary solution. What is needed really is complete control of Iran. This same scenario applies to Russia as well. The oil fields need to be under the international bankers control before the OWC can be introduced. Time is running out. This juggernaut has been put in motion and they cannot afford to stop it in mid stride for fear the whole plot, hatched over decades (if not longer), will collapse.

Here are two articles for added background and comment. The first is from Mike Whitney entitled, "Fragile Dollar Hegemony" and I aggree with him wholeheartedly.

The second is from William Engdahl (his website is here, lots of good stuff there) and has valuable background, though, I have some disagreement (apart from the major point of his article!). For instance,
“the status of the dollar as reserve currency depends on the status of the United States as the world’s unchallenged military superpower. In a sense, since August 1971 the dollar is no longer backed by gold. Instead, it is backed by F-16’s and MI Abrams battle tanks, operating in some 130 US bases around the world, defending liberty and the dollar.”

I believe he has this relationship exactly backwards as I argued further up in the essay.
Also, Engdahl quotes the former Director of the London International Petroleum Exchange, Chris Cook, as saying, “It is therefore with wry amusement that I have seen a myth being widely propagated on the Internet that the genesis of this "Iran bourse" project is a wish to subvert the US dollar by denominating oil pricing in euros.

’As anyone familiar with the Organization of Petroleum Exporting Countries will know, the denomination of oil sales in currencies other than the dollar is not a new subject, and as anyone familiar with economics will tell you, the denomination of oil sales is merely a transactional issue: what matters is in what assets (or, in the case of the United States, liabilities ) these proceeds are then invested.’

This is pure bullshit, as one might expect from someone in Cook's position. BTW, anytime you read, “as anyone familiar with (whatever) will tell you ...” suspect nonsense is being peddled. It's an oft used rhetorical ruse thrown at an uneducated audience (on the particular topic) to counter possible questions. I don't have space to elaborate further here on the above errors but I will answer any questions raised in the comments section.

So, to summarise, the world's international bankers, through owning the Bank for International Settlements and the US Federal Reserve, have been robbing the rest of the world blind ever since oil sales were denominated in US currency in the seventies. This grand theft has allowed them to build this massive military machine with which they are presently dominating the world. Further, they will use this war machine to intimidate the rest of the world into accepting an even more insidious currency, the One World or Global Currency from which it will be exceedingly difficult, indeed, to escape from. The pillaging will be massive and dominance will then be complete. The world will, indeed, "be their footstool". This is the bad news.

The good news is that if this juggernaut that has been launched now is delayed or sidetracked in any way, it will crash, I believe. If the approaching war with Iran in June is stymied, even temporarily, the bankers will miss their opportunity to use oil as the backing for their planned One World Currency and this will take away its viability. The current economic mess will be cleaned up in some other way other than instituting a global currency and maybe, just maybe, the truth will out and the bankers and their corruption of our societies will all start to collapse. Certainly, though, the world will have avoided massive death and destruction from yet another of their wars.
So spread the word!

Addendum.

Another way of seeing this whole issue of the One World Currency is to see it not so much as the introduction of a new currency but rather as the removal of alternate and competing national currencies (such as the Yen and Ruble, in fact, any other currency at all) to the US dollar, which is undeniably our present de facto global currency. Largely, it is just a name change because the same people (private international bankers – Rothschilds et. al.) will be issuing the new currency using the same backing, international oil sales, except now there won't be any alternatives to turn to. There will be no escape.

This changover from $US to $Global needs to be seemless. If the rest of the world starts using their own currencies in a major way in the meantime and see that it works just fine (in fact, better) then the spell will be broken. Everyone may well see that a Global or One World Currency is not only entirely unnecessary, but is (and always has been) a positive menace to world peace and prosperity. A universal currency is a necessary ingredient in establishing and maintaining an empire.

Currently, the $US is being collapsed in preparation for the changover. This has been set in motion and its course is set as the inevitable inflation reeks its damage. The bankers have their One World Currency ready in the wings to implement. BUT, they need control over the sale of ALL the oil to bring it in and to enforce its use. Any alternative to using the OWC to purchase oil will wreck it's viability and its enforcement. They don't have control of Iran's oil and Russia's oil sales yet and time is running out.

The financial meltdown has been years in gestation and once set in motion had a timing of its own. The bankers had planned on a world war before this. Lebanon in 2006 was supposed to provide the spark; the attack on Syria a year or so later, as well; then finally the attack on Gaza. None have worked. What I'm saying is that the global financial meltdown, the One World Currency and all the troubles in the Middle East and now Central Asia are intimately connected and there is a critical timeline involved. Upset that timeline through further delays in bringing all the worlds oil sales under the world bankers' control (either diplomatically or militarily) and their opportunity to switch seemlessly from $US to $Global will disappear.

The $US is imploding and it will be replaced with either nothing (best alternative) or a basket of currencies or the OWC. But this last one needs the control of the oil sales in place first, as I have argued. Hence, the urgency on the bankers part and also the opportunity on everybody else's part to scuttle the whole thing.

The Tower of Basel: Secretive Plans for the Issuing of a Global Currency
Do we really want the Bank for International Settlements (BIS) issuing our global currency

by Ellen Brown
Global Research, April 18, 2009
http://www.globalresearch.ca/index.php?context=va&aid=13239

In an April 7 article in The London Telegraph titled “The G20 Moves the World a Step Closer to a Global Currency,” Ambrose Evans-Pritchard wrote:

“A single clause in Point 19 of the communiqué issued by the G20 leaders amounts to revolution in the global financial order.

“‘We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity,’ it said. SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.

“In effect, 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. Conspiracy theorists will love it.”

Indeed they will. The article is subtitled, “The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity.” Which naturally raises the question, who or what will serve as this global central bank, cloaked with the power to issue the global currency and police monetary policy for all humanity? When the world’s central bankers met in Washington last September, they discussed what body might be in a position to serve in that awesome and fearful role. A former governor of the Bank of England stated:

“[T]he answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS). . . . The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.”1

And if the vision of a global currency outside government control does not set off conspiracy theorists, putting the BIS in charge of it surely will. The BIS has been scandal-ridden ever since it was branded with pro-Nazi leanings in the 1930s. Founded in Basel, Switzerland, in 1930, the BIS has been called “the most exclusive, secretive, and powerful supranational club in the world.” Charles Higham wrote in his book Trading with the Enemy that by the late 1930s, the BIS had assumed an openly pro-Nazi bias, a theme that was expanded on in a BBC Timewatch film titled “Banking with Hitler” broadcast in 1998.2 In 1944, the American government backed a resolution at the Bretton-Woods Conference calling for the liquidation of the BIS, following Czech accusations that it was laundering gold stolen by the Nazis from occupied Europe; but the central bankers succeeded in quietly snuffing out the American resolution.3

Modest beginnings, BIS Office, Hotel Savoy-Univers, Basel

First Annual General Meeting, 1931

In Tragedy and Hope: A History of the World in Our Time (1966), Dr. Carroll Quigley revealed the key role played in global finance by the BIS behind the scenes. Dr. Quigley was Professor of History at Georgetown University, where he was President Bill Clinton’s mentor. He was also an insider, groomed by the powerful clique he called “the international bankers.” His credibility is heightened by the fact that he actually espoused their goals. He wrote:

“I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960's, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments. . . . [I]n general my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known.”

Quigley wrote of this international banking network:

“[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”

The key to their success, said Quigley, was that the international bankers would control and manipulate the money system of a nation while letting it appear to be controlled by the government. The statement echoed one made in the eighteenth century by the patriarch of what would become the most powerful banking dynasty in the world. Mayer Amschel Bauer Rothschild famously said in 1791:

“Allow me to issue and control a nation’s currency, and I care not who makes its laws.”

Mayer’s five sons were sent to the major capitals of Europe – London, Paris, Vienna, Berlin and Naples – with the mission of establishing a banking system that would be outside government control. The economic and political systems of nations would be controlled not by citizens but by bankers, for the benefit of bankers. Eventually, a privately-owned “central bank” was established in nearly every country; and this central banking system has now gained control over the economies of the world. Central banks have the authority to print money in their respective countries, and it is from these banks that governments must borrow money to pay their debts and fund their operations. The result is a global economy in which not only industry but government itself runs on “credit” (or debt) created by a banking monopoly headed by a network of private central banks; and at the top of this network is the BIS, the “central bank of central banks” in Basel.

Behind the Curtain

For many years the BIS kept a very low profile, operating behind the scenes in an abandoned hotel. It was here that decisions were reached to devalue or defend currencies, fix the price of gold, regulate offshore banking, and raise or lower short-term interest rates. In 1977, however, the BIS gave up its anonymity in exchange for more efficient headquarters. The new building has been described as “an eighteen story-high circular skyscraper that rises above the medieval city like some misplaced nuclear reactor.” It quickly became known as the “Tower of Basel.” Today the BIS has governmental immunity, pays no taxes, and has its own private police force.4 It is, as Mayer Rothschild envisioned, above the law.

The BIS is now composed of 55 member nations, but the club that meets regularly in Basel is a much smaller group; and even within it, there is a hierarchy. In a 1983 article in Harper’s Magazine called “Ruling the World of Money,” Edward Jay Epstein wrote that where the real business gets done is in “a sort of inner club made up of the half dozen or so powerful central bankers who find themselves more or less in the same monetary boat” – those from Germany, the United States, Switzerland, Italy, Japan and England. Epstein said:

“The prime value, which also seems to demarcate the inner club from the rest of the BIS members, is the firm belief that central banks should act independently of their home governments. . . . A second and closely related belief of the inner club is that politicians should not be trusted to decide the fate of the international monetary system.”

In 1974, the Basel Committee on Banking Supervision was created by the central bank Governors of the Group of Ten nations (now expanded to twenty). The BIS provides the twelve-member Secretariat for the Committee. The Committee, in turn, sets the rules for banking globally, including capital requirements and reserve controls. In a 2003 article titled “The Bank for International Settlements Calls for Global Currency,” Joan Veon wrote:

“The BIS is where all of the world’s central banks meet to analyze the global economy and determine what course of action they will take next to put more money in their pockets, since they control the amount of money in circulation and how much interest they are going to charge governments and banks for borrowing from them. . . .

“When you understand that the BIS pulls the strings of the world’s monetary system, you then understand that they have the ability to create a financial boom or bust in a country. If that country is not doing what the money lenders want, then all they have to do is sell its currency.”5

The Controversial Basel Accords

The power of the BIS to make or break economies was demonstrated in 1988, when it issued a Basel Accord raising bank capital requirements from 6% to 8%. By then, Japan had emerged as the world’s largest creditor; but Japan’s banks were less well capitalized than other major international banks. Raising the capital requirement forced them to cut back on lending, creating a recession in Japan like that suffered in the U.S. today. Property prices fell and loans went into default as the security for them shriveled up. A downward spiral followed, ending with the total bankruptcy of the banks. The banks had to be nationalized, although that word was not used in order to avoid criticism.6

Among other collateral damage produced by the Basel Accords was a spate of suicides among Indian farmers unable to get loans. The BIS capital adequacy standards required loans to private borrowers to be “risk-weighted,” with the degree of risk determined by private rating agencies; and farmers and small business owners could not afford the agencies’ fees. Banks therefore assigned 100 percent risk to the loans, and then resisted extending credit to these “high-risk” borrowers because more capital was required to cover the loans. When the conscience of the nation was aroused by the Indian suicides, the government, lamenting the neglect of farmers by commercial banks, established a policy of ending the “financial exclusion” of the weak; but this step had little real effect on lending practices, due largely to the strictures imposed by the BIS from abroad.7

Similar complaints have come from Korea. An article in the December 12, 2008 Korea Times titled “BIS Calls Trigger Vicious Cycle” described how Korean entrepreneurs with good collateral cannot get operational loans from Korean banks, at a time when the economic downturn requires increased investment and easier credit:

"The Bank of Korea has provided more than 35 trillion won to banks since September when the global financial crisis went full throttle,’ said a Seoul analyst, who declined to be named. ‘But the effect is not seen at all with the banks keeping the liquidity in their safes. They simply don’t lend and one of the biggest reasons is to keep the BIS ratio high enough to survive,’ he said. . . .

“Chang Ha-joon, an economics professor at Cambridge University, concurs with the analyst. ‘What banks do for their own interests, or to improve the BIS ratio, is against the interests of the whole society. This is a bad idea,’ Chang said in a recent telephone interview with Korea Times.”

In a May 2002 article in The Asia Times titled “Global Economy: The BIS vs. National Banks,” economist Henry C K Liu observed that the Basel Accords have forced national banking systems “to march to the same tune, designed to serve the needs of highly sophisticated global financial markets, regardless of the developmental needs of their national economies.” He wrote:

“[N]ational banking systems are suddenly thrown into the rigid arms of the Basel Capital Accord sponsored by the Bank of International Settlement (BIS), or to face the penalty of usurious risk premium in securing international interbank loans. . . . National policies suddenly are subjected to profit incentives of private financial institutions, all members of a hierarchical system controlled and directed from the money center banks in New York. The result is to force national banking systems to privatize . . . .

“BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies. . . . The IMF and the international banks regulated by the BIS are a team: the international banks lend recklessly to borrowers in emerging economies to create a foreign currency debt crisis, the IMF arrives as a carrier of monetary virus in the name of sound monetary policy, then the international banks come as vulture investors in the name of financial rescue to acquire national banks deemed capital inadequate and insolvent by the BIS.”

Ironically, noted Liu, developing countries with their own natural resources did not actually need the foreign investment that trapped them in debt to outsiders:

“Applying the State Theory of Money [which assumes that a sovereign nation has the power to issue its own money], any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation.”

When governments fall into the trap of accepting loans in foreign currencies, however, they become “debtor nations” subject to IMF and BIS regulation. They are forced to divert their production to exports, just to earn the foreign currency necessary to pay the interest on their loans. National banks deemed “capital inadequate” have to deal with strictures comparable to the “conditionalities” imposed by the IMF on debtor nations:

“escalating capital requirement, loan writeoffs and liquidation, and restructuring through selloffs, layoffs, downsizing, cost-cutting and freeze on capital spending.” Liu wrote:

“Reversing the logic that a sound banking system should lead to full employment and developmental growth, BIS regulations demand high unemployment and developmental degradation in national economies as the fair price for a sound global private banking system.”

The Last Domino to Fall

While banks in developing nations were being penalized for falling short of the BIS capital requirements, large international banks managed to escape the rules, although they actually carried enormous risk because of their derivative exposure. The mega-banks succeeded in avoiding the Basel rules by separating the “risk” of default out from the loans and selling it off to investors, using a form of derivative known as “credit default swaps.”

BIS Tower Building, Basel

Botta 1 Building, Basel

However, it was not in the game plan that U.S. banks should escape the BIS net. When they managed to sidestep the first Basel Accord, a second set of rules was imposed known as Basel II. The new rules were established in 2004, but they were not levied on U.S. banks until November 2007, the month after the Dow passed 14,000 to reach its all-time high. It has been all downhill from there. Basel II had the same effect on U.S. banks that Basel I had on Japanese banks: they have been struggling ever since to survive.8

Basel II requires banks to adjust the value of their marketable securities to the “market price” of the security, a rule called “mark to market.”9 The rule has theoretical merit, but the problem is timing: it was imposed ex post facto, after the banks already had the hard-to-market assets on their books. Lenders that had been considered sufficiently well capitalized to make new loans suddenly found they were insolvent. At least, they would have been insolvent if they had tried to sell their assets, an assumption required by the new rule. Financial analyst John Berlau complained:

“The crisis is often called a ‘market failure,’ and the term ‘mark-to-market’ seems to reinforce that. But the mark-to-market rules are profoundly anti-market and hinder the free-market function of price discovery. . . . In this case, the accounting rules fail to allow the market players to hold on to an asset if they don’t like what the market is currently fetching, an important market action that affects price discovery in areas from agriculture to antiques.”10

Imposing the mark-to-market rule on U.S. banks caused an instant credit freeze, which proceeded to take down the economies not only of the U.S. but of countries worldwide. In early April 2009, the mark-to-market rule was finally softened by the U.S. Financial Accounting Standards Board (FASB); but critics said the modification did not go far enough, and it was done in response to pressure from politicians and bankers, not out of any fundamental change of heart or policies by the BIS.

And that is where the conspiracy theorists come in. Why did the BIS not retract or at least modify Basel II after seeing the devastation it had caused? Why did it sit idly by as the global economy came crashing down? Was the goal to create so much economic havoc that the world would rush with relief into the waiting arms of the BIS with its privately-created global currency? The plot thickens . . . .

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Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her earlier books focused on the pharmaceutical cartel that gets its power from “the money trust.” Her eleven books include Forbidden Medicine, Nature’s Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com.

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NOTES

1 Andrew Marshall, “The Financial New World Order: Towards a Global Currency and World Government,” Global Research (April 6, 2009).

2 Alfred Mendez, “The Network,” The World Central Bank: The Bank for International Settlements, http://copy_bilderberg.tripod.com/bis.htm.

3 “BIS – Bank of International Settlement: The Mother of All Central Banks,” hubpages.com (2009).

4 Ibid.

5 Joan Veon, “The Bank for International Settlements Calls for Global Currency,” News with Views (August 26, 2003).

6 Peter Myers, “The 1988 Basle Accord – Destroyer of Japan’s Finance System,” http://www.mailstar.net/basle.html (updated September 9, 2008).

7 Nirmal Chandra, “Is Inclusive Growth Feasible in Neoliberal India?”, www.networkideas.org (September 2008).

8 Bruce Wiseman, “The Financial Crisis: A look Behind the Wizard’s Curtain,” Canada Free Press (March 19, 2009).

9 See Ellen Brown, “Credit Where Credit Is Due,” www.webofdebt.com/articles/creditcrunch.php (January 11, 2009).

10 John Berlau, “The International Mark-to-market Contagion,” OpenMarket.org (October 10, 2008).

Ellen Brown is a frequent contributor to Global Research.

The Financial New World Order: Towards a Global Currency and World Government
by Andrew G. Marshall
http://www.globalresearch.ca/index.php?context=va&aid=13070

Global Research, April 6, 2009

Introduction

Following the 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. Conspiracy theorists will love it.”[1]

The article continued in stating that, “There is now a world currency in waiting. In time, SDRs are likely to evolve into a parking place for the foreign holdings of central banks, led by the People's Bank of China.” Further, “The creation of a Financial Stability Board looks like the first step towards a global financial regulator,” or, in other words, a global central bank.

It is important to take a closer look at these “solutions” being proposed and implemented in the midst of the current global financial crisis. These are not new suggestions, as they have been in the plans of the global elite for a long time. However, in the midst of the current crisis, the elite have fast-tracked their agenda of forging a New World Order in finance. It is important to address the background to these proposed and imposed “solutions” and what effects they will have on the International Monetary System (IMS) and the global political economy as a whole.

A New Bretton-Woods

In October of 2008, Gordon Brown, Prime Minister of the UK, said that we “must have a new Bretton Woods - building a new international financial architecture for the years ahead.” He continued in saying that, “we must now reform the international financial system around the agreed principles of transparency, integrity, responsibility, good housekeeping and co-operation across borders.” An article in the Telegraph reported that Gordon Brown would want “to see the IMF reformed to become a ‘global central bank’ closely monitoring the international economy and financial system.”[2]

On October 17, 2008, Prime Minister Gordon Brown wrote an op-ed in the Washington Post in which he said, “This week, European leaders came together to propose the guiding principles that we believe should underpin this new Bretton Woods: transparency, sound banking, responsibility, integrity and global governance. We agreed that urgent decisions implementing these principles should be made to root out the irresponsible and often undisclosed lending at the heart of our problems. To do this, we need cross-border supervision of financial institutions; shared global standards for accounting and regulation; a more responsible approach to executive remuneration that rewards hard work, effort and enterprise but not irresponsible risk-taking; and the renewal of our international institutions to make them effective early-warning systems for the world economy.[Emphasis added]”[3]

In early October 2008, it was reported that, “as the world's central bankers gather this week in Washington DC for an IMF-World Bank conference to discuss the crisis, the big question they face is whether it is time to establish a global economic "policeman" to ensure the crash of 2008 can never be repeated.” Further, “any organisation 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 suggested that, “the answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS),” however, “The problem is that it has no teeth. The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.”[4]

Emergence of Regional Currencies

On January 1, 1999, the European Union established the Euro as its regional currency. The Euro has grown in prominence over the past several years. However, it is not to be the only regional currency in the world. There are moves and calls for other regional currencies throughout the world.

In 2007, Foreign Affairs, the journal of the Council on Foreign Relations, ran an article titled, The End of National Currency, in which it began by discussing the volatility of international currency markets, and that very few “real” solutions have been proposed to address successive currency crises. The author poses the question, “will restoring lost sovereignty to governments put an end to financial instability?” He answers by stating that, “This is a dangerous misdiagnosis,” and that, “The right course is not to return to a mythical past of monetary sovereignty, with governments controlling local interest and exchange rates in blissful ignorance of the rest of the world. Governments must let go of the fatal notion that nationhood requires them to make and control the money used in their territory. National currencies and global markets simply do not mix; together they make a deadly brew of currency crises and geopolitical tension and create ready pretexts for damaging protectionism. In order to globalize safely, countries should abandon monetary nationalism and abolish unwanted currencies, the source of much of today's instability.”

The author explains that, “Monetary nationalism is simply incompatible with globalization. It has always been, even if this has only become apparent since the 1970s, when all the world's governments rendered their currencies intrinsically worthless.” The author states that, “Since economic development outside the process of globalization is no longer possible, countries should abandon monetary nationalism. Governments should replace national currencies with the dollar or the euro or, in the case of Asia, collaborate to produce a new multinational currency over a comparably large and economically diversified area.” Essentially, according to the author, the solution lies in regional currencies.[5]

In October of 2008, “European Central Bank council member Ewald Nowotny said a ``tri-polar'' global currency system is developing between Asia, Europe and the U.S. and that he's skeptical the U.S. dollar's centrality can be revived.”[6]

The Union of South American Nations

The Union of South American Nations (UNASUR) was established on May 23, 2008, with the headquarters to be in Ecuador, the South American Parliament to be in Bolivia, and the Bank of the South to be in Venezuela. As the BBC reported, “The leaders of 12 South American nations have formed a regional body aimed at boosting economic and political integration in the region,” and that, “The Unasur members are Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela.”[7]

The week following the announcement of the Union, it was reported that, “Brazilian President Luiz Inacio Lula da Silva said Monday that South American nations will seek a common currency as part of the region's integration efforts following the creation of the Union of South American Nations.” He was quoted as saying, “We are proceeding so as, in the future, we have a common central bank and a common currency.”[8]

The Gulf Cooperation Council and a Regional Currency

In 2005, the Gulf Cooperation Council (GCC), a regional trade bloc among Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE), announced the goal of creating a single common currency by 2010. It was reported that, “An economically united and efficient GCC is clearly a more interesting proposition for larger companies than each individual economy, especially given the impediments to trade evident within the region. This is why trade relations within the GCC have been a core focus of late.” Further, “The natural extension of this trend for increased integration is to introduce a common currency in order to further facilitate trade between the different countries.” It was announced that, “the region's central bankers had agreed to pursue monetary union in a similar fashion to the rules used in Europe.”[9]

In June of 2008, it was reported that, “Gulf Arab central bankers agreed to create the nucleus of a joint central bank next year in a major step forward for monetary union but signaled that a new common currency would not be in circulation by an agreed 2010 target.”[10] In 2002, it was announced that the “Gulf states say they are seeking advice from the European Central Bank on their monetary union programme.” In February of 2008, Oman announced that it would not be joining the monetary union. In November of 2008, it was announced that the “Final monetary union draft says Gulf central bank will be independent from governments of member states.”[11]

In March of 2009, it was reported that, “The GCC should not rush into forming a single currency as member states need to work out the framework for a regional central bank, Saudi Arabia's Central Bank Governor Muhammad Al Jasser.” Jasser was further quoted as saying, “It took the European Union 45 years to put together a single currency. We should not rush.” In 2008, with the global financial crisis, new problems were posed for the GCC initiative, as “Pressure mounted last year on the GCC members to drop their currency pegs as inflation accelerated above 10 per cent in five of the six countries. All of the member states except Kuwait peg their currencies to the dollar and tend to follow the US Federal Reserve when setting interest rates.”[12]

An Asian Monetary Union

In 1997, the Brookings Institution, a prominent American think tank, discussed the possibilities of an East Asian Monetary Union, stating that, “the question for the 21st century is whether analogous monetary blocs will form in East Asia (and, for that matter, in the Western Hemisphere). With the dollar, the yen, and the single European currency floating against one another, other small open economies will be tempted to link up to one of the three.” However, “the linkage will be possible only if accompanied by radical changes in institutional arrangements like those contemplated by the European Union. The spread of capital mobility and political democratization will make it prohibitively difficult to peg exchange rates unilaterally. Pegging will require international cooperation, and effective cooperation will require measures akin to monetary unification.”[13]

In 2001, Asia Times Online wrote an article discussing a speech given by economist Robert A. Mundell at Bangkok's Chulalongkorn University, at which he stated that, “[t]he "Asean plus three" (the 10 members of the Association of Southeast Asian Nations plus China, Japan, and Korea) ‘should look to the European Union as a model for closer integration of monetary policy, trade and eventually, currency integration’.”[14]

On May 6, 2005, the website of the Association of Southeast Asian Nations (ASEAN) announced that, “China, Japan, South Korea and the 10 members of the Association of Southeast Asian Nations (ASEAN) have agreed to expand their network of bilateral currency swaps into what could become a virtual Asian Monetary Fund,” and that, “[f]inance officials of the 13 nations, who met in the sidelines of the Asian Development Bank (ADB) annual conference in Istanbul, appeared determined to turn their various bilateral agreements into some sort of multilateral accord, although none of the officials would directly call it an Asian Monetary Fund.”[15]

In August of 2005, the San Francisco Federal Reserve Bank published a report on the prospects of an East Asian Monetary Union, stating that East Asia satisfies the criteria for joining a monetary union, however, it states that compared to the European initiative, “The implication is that achieving any monetary arrangement, including a common currency, is much more difficult in East Asia.” It further states that, “In Europe, a monetary union was achievable primarily because it was part of the larger process of political integration,” however, “There is no apparent desire for political integration in East Asia, partly because of the great differences among those countries in terms of political systems, culture, and shared history. As a result of their own particular histories, East Asian countries remain particularly jealous of their sovereignty.”

Another major problem, as presented by the San Francisco Fed, is that, “East Asian governments appear much more suspicious of strong supranational institutions,” and thus, “in East Asia, sovereignty concerns have left governments reluctant to delegate significant authority to supranational bodies, at least so far.” It explains that as opposed to the steps taken to create a monetary union in Europe, “no broad free trade agreements have been achieved among the largest countries in the region, Japan, Korea, Taiwan, and China.” Another problem is that, “East Asia does not appear to have an obvious candidate for an internal anchor currency for a cooperative exchange rate arrangement. Most successful new currencies have been started on the back of an existing currency, establishing confidence in its convertibility, thus linking the old with the new.”

The report concludes that, “exchange rate stabilization and monetary integration are unlikely in the near term. Nevertheless, East Asia is integrating through trade, even without an emphasis on formal trade liberalization agreements,” and that, “there is evidence of growing financial cooperation in the region, including the development of regional arrangements for providing liquidity during crises through bilateral foreign exchange swaps, regional economic surveillance discussions, and the development of regional bond markets.” Ultimately, “East Asia might also proceed along the same path [as Europe], first with loose agreements to stabilize currencies, followed later by tighter agreements, and culminating ultimately in adoption of a common anchor—and, after that, maybe an East Asia dollar.”[16]

In 2007, it was reported that, “Asia may need to establish its own monetary fund if it is to cope with future financial shocks similar to that which rocked the region 10 years ago,” and that, “Further Asian financial integration is the best antidote for Asian future financial crises.”[17]

In September of 2007, Forbes reported that, “An East Asian monetary union anchored by Japan is feasible but the region lacks the political will to do it, the Asian Development Bank said.” Pradumna Rana, an Asian Development Bank (ADB) economist, said that, “it appears feasible to establish a currency union in East Asia -- particularly among Indonesia, Japan, (South) Korea, Malaysia, Philippines, Singapore and Thailand,” and that, “The economic potential for monetary integration in Asia is strong, even though the political underpinnings of such an accord are not yet in place.” Further, “the real integration at the trade levels 'will actually reinforce the economic case for monetary union in Asia, in a similar way that real-sector integration did so in Europe,” and ultimately, “the road to an Asian monetary union could proceed on a 'multi-track, multi-speed' basis with a seamless Asian free trade area the goal on the trade side.”[18] In April of 2008, it was reported that, “ASEAN bank deputy governors and financial deputy ministers have met in Vietnam's central Da Nang city, discussing issues on the financial and monetary integration and cooperation in the region.”[19]

African Monetary Union

Currently, Africa has several different monetary union initiatives, as well as some existing monetary unions within the continent. One initiative is the “monetary union project of the Economic Community of West African States (ECOWAS),” which is a “regional group of 15 countries in West Africa.” Among the members are those of an already-existing monetary union in the region, the West African Economic and Monetary Union (WAEMU). The ECOWAS consists of Benin, Burkina Faso, Cote d’Ivoire, Guinea, Guinea Bissau, Mali, Niger, Senegal, Sierra Leone, Togo, Cape Verde, Liberia, Ghana, Gambia, and Nigeria.[20]

The African Union was founded in 2002, and is an intergovernmental organization consisting of 53 African states. In 2003, the Brookings Institution produced a paper on African economic integration. In it, the authors started by stating that, “Africa, like other regions of the world, is fixing its sights on creating a common currency. Already, there are projects for regional monetary unions, and the bidding process for an eventual African central bank is about to begin.” It states that, “A common currency was also an objective of the Organization for African Unity and the African Economic Community, the predecessors of the AU,” and further, that, “The 1991 Abuja Treaty establishing the African Economic Community outlines six stages for achieving a single monetary zone for Africa that were set to be completed by approximately 2028. In the early stages, regional cooperation and integration within Africa would be strengthened, and this could involve regional monetary unions. The final stage involves the establishment of the African Central Bank (ACB) and creation of a single African currency and an African Economic and Monetary Union.”

The paper further states that the African Central Bank (ACB) “would not be created until around 2020, [but] the bidding process for its location is likely to begin soon,” however, “there are plans for creating various regional monetary unions, which would presumably form building blocks for the single African central bank and currency.”[21]

In August of 2008, “Governors of African Central Banks convened in Kigali Serena Hotel to discuss issues concerning the creation of three African Union (AU) financial institutions,” following “the AU resolution to form the African Monetary Fund (AMF), African Central Bank (ACB) and the African Investment Bank (AIB).” The central bank governors “agreed that when established, the ACB would solely issue and manage Africa's single currency and monetary authority of the continent's economy.”[22]

On March 2, 2009, it was reported that, “The African Union will sign a memorandum of understanding this month with Nigeria on the establishment of a continental central bank,” and that, “The institution will be based in the Nigerian capital, Abuja, African Union Commissioner for Economic Affairs Maxwell Mkwezalamba told reporters.” Further, “As an intermediate step to the creation of the bank, the pan- African body will establish an African Monetary Institute within the next three years, he said at a meeting of African economists in the city,” and he was quoted as saying, “We have agreed to work with the Association of African Central Bank Governors to set up a joint technical committee to look into the preparation of a joint strategy.”[23]

The website for the Kenyan Ministry of Foreign Affairs reported that, “The African Union Commissioner for Economic Affairs Dr. Maxwell Mkwezalamba has expressed optimism for the adoption of a common currency for Africa,” and that the main theme discussed at the AU Commission meeting in Kenya was, “Towards the Creation of a Single African Currency: Review of the Creation of a Single African Currency: Which optimal Approach to be adopted to accelerate the creation of the unique continental currency.”[24]

A North American Monetary Union and the Amero

In January of 2008, I wrote an article documenting the moves toward the creation of a North American currency, likely under the name Amero. [See: Andrew G. Marshall, North-American Monetary Integration: Here Comes the Amero. Global Research: January 20, 2008]
I will briefly outline the information presented in that article here.

In 1999, the Fraser Institute, a prominent and highly influential Canadian think tank, published a report written by Economics professor and former MP, Herbert Grubel, called, The Case for the Amero: The Economics and Politics of a North American Monetary Union. He wrote that, “The plan for a North American Monetary Union presented in this study is designed to include Canada, the United States, and Mexcio,” and a “North American Central Bank, like the European Central Bank, will have a constitution making it responsible only for the maintenance of price stability and not for full employment.”[25] He opined that, “sovereignty is not infinitely valuable. The merit of giving up some aspects of sovereignty should be determined by the gains brought by such a sacrifice,” and that, “It is important to note that in practice Canada has given up its economic sovereignty in many areas, the most important of which involve the World Trade Organization (formerly the GATT), the North American Free Trade Agreement,” as well as the International Monetary Fund and World Bank.[26]

Also in 1999, the C.D. Howe Institute, another of Canada’s most prominent think tanks, produced a report titled, From Fixing to Monetary Union: Options for North American Currency Integration. In this document, it was written that, “The easiest way to broach the notion of a NAMU [North American Monetary Union] is to view it as the North American equivalent of the European Monetary Union (EMU) and, by extension, the euro.”[27] It further stated that the fact that “a NAMU would mean the end of sovereignty in Canadian monetary policy is clear. Most obviously, it would mean abandoning a made-in-Canada inflation rate for a US or NAMU inflation rate.”[28]

In May of 2007, Canada’s then Governor of the Central Bank of Canada, David Dodge, said that, “North America could one day embrace a euro-style single currency,” and that, “Some proponents have dubbed the single North American currency the ‘amero’.” Answering questions following his speech, Dodge said that, “a single currency was ‘possible’.”[29]

In November of 2007, one of Canada’s richest billionaires, Stephen Jarislowsky, also a member of the board of the C.D. Howe Institute, told a Canadian Parliamentary committee that, “Canada should replace its dollar with a North American currency, or peg it to the U.S. greenback, to avoid the exchange rate shifts the loonie has experienced,” and that, “I think we have to really seriously start thinking of the model of a continental currency just like Europe.”[30]

Former Mexican President Vicente Fox, while appearing on Larry King Live in 2007, was asked a question regarding the possibility of a common currency for Latin America, to which he responded by saying, “Long term, very long term. What we propose together, President Bush and myself, it's ALCA, which is a trade union for all of the Americas. And everything was running fluently until Hugo Chavez came. He decided to isolate himself. He decided to combat the idea and destroy the idea.” Larry King then asked, “It's going to be like the euro dollar, you mean?” to which Fox responded, “Well, that would be long, long term. I think the processes to go, first step into is trading agreement. And then further on, a new vision, like we are trying to do with NAFTA.”[31]

In January of 2008, Herbert Grubel, the author who coined the term “amero” for the Fraser Institute report, wrote an article for the Financial Post, in which he recommends fixing the Canadian loonie to the US dollar at a fixed exchange rate, but that there are inherent problems with having the US Federal Reserve thus control Canadian interest rates. He then wrote that, “there is a solution to this lack of credibility. In Europe, it came through the creation of the euro and formal end of the ability of national central banks to set interest rates. The analogous creation of the amero is not possible without the unlikely co-operation of the United States. This leaves the credibility issue to be solved by the unilateral adoption of a currency board, which would ensure that international payments imbalances automatically lead to changes in Canada's money supply and interest rates until the imbalances are ended, all without any actions by the Bank of Canada or influence by politicians. It would be desirable to create simultaneously the currency board and a New Canadian Dollar valued at par with the U.S. dollar. With longer-run competitiveness assured at US90¢ to the U.S. dollar.”[32]

In January of 2009, an online publication of the Wall Street Journal, called Market Watch, discussed the possibility of hyperinflation of the United States dollar, and then stated, regarding the possibility of an amero, “On its face, while difficult to imagine, it makes intuitive sense. The ability to combine Canadian natural resources, American ingenuity and cheap Mexican labor would allow North America to compete better on a global stage.” The author further states that, “If forward policy attempts to induce more debt rather than allowing savings and obligations to align, we must respect the potential for a system shock. We may need to let a two-tier currency gain traction if the dollar meaningfully debases from current levels,” and that, “If this dynamic plays out -- and I've got no insight that it will -- the global balance of powers would fragment into four primary regions: North America, Europe, Asia and the Middle East. In such a scenario, ramifications would manifest through social unrest and geopolitical conflict.”[33]

A Global Currency

The Phoenix

In 1988, The Economist ran an article titled, Get Ready for the Phoenix, in which they wrote, “THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let's say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today's national currencies, which by then will seem a quaint cause of much disruption to economic life in the late twentieth century.”

The article stated that, “The market crash [of 1987] taught [governments] that the pretence of policy cooperation can be worse than nothing, and that until real co-operation is feasible (ie, until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.” Amazingly the article states 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. This points to a muddled sequence of emergency followed by patch-up followed by emergency, stretching out far beyond 2018-except for two things. 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.”

Further, the article stated that, “The phoenix zone would impose tight constraints on national governments. There would be no such thing, for instance, as a national monetary policy. The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF. The world inflation rate-and hence, within narrow margins, each national inflation rate-would be in its charge. Each country could use taxes and public spending to offset temporary falls in demand, but it would have to borrow rather than print money to finance its budget deficit.” The author admits that, “This means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case. Even in a world of more-or-less floating exchange rates, individual governments have seen their policy independence checked by an unfriendly outside world.”

The article concludes in stating that, “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.” The last sentence states, “Pencil in the phoenix for around 2018, and welcome it when it comes.”[34]

Recommendations for a Global Currency

In 1998, the IMF Survey discussed a speech given by James Tobin, a prominent American economist, in which he argued that, “A single global currency might offer a viable alternative to the floating rate.” He further stated that, “there was still a great need” for “lenders of last resort.”[35]

In 1999, economist Judy Shelton addressed the US House of Representatives Committee on Banking and Financial Services. In her testimony, she stated that, “The continued expansion of free trade, the increased integration of financial markets and the advent of electronic commerce are all working to bring about the need for an international monetary standard---a global unit of account.” She further explained that, “Regional currency unions seem to be the next step in the evolution toward some kind of global monetary order. Europe has already adopted a single currency. Asia may organize into a regional currency bloc to offer protection against speculative assaults on the individual currencies of weaker nations. Numerous countries in Latin America are considering various monetary arrangements to insulate them from financial contagion and avoid the economic consequences of devaluation. An important question is whether this process of monetary evolution will be intelligently directed or whether it will simply be driven by events. In my opinion, political leadership can play a decisive role in helping to build a more orderly, rational monetary system than the current free-for-all approach to exchange rate relations.”

She further stated that, “As we have seen in Europe, the sequence of development is (1) you build a common market, and (2) you establish a common currency. Indeed, until you have a common currency, you don’t truly have an efficient common market.” She concludes by stating, “Ideally, every nation should stand willing to convert its currency at a fixed rate into a universal reserve asset. That would automatically create a global monetary union based on a common unit of account. The alternative path to a stable monetary order is to forge a common currency anchored to an asset of intrinsic value. While the current momentum for dollarization should be encouraged, especially for Mexico and Canada, in the end the stability of the global monetary order should not rest on any single nation.”[36] [Emphasis added]

Paul Volcker, former Governor of the Federal Reserve Board, stated in 2000, that, “If we are to have a truly global economy, a single world currency makes sense.” In a speech delivered by a member of the Executive Board of the European Central Bank, it was stated that Paul Volcker “might be right, and we might one day have a single world currency. Maybe European integration, in the same way as any other regional integration, could be seen as a step towards the ideal situation of a fully integrated world. If and when this world will see the light of day is impossible to say. However, what I can say is that this vision seems as impossible now to most of us as a European monetary union seemed 50 years ago, when the process of European integration started.”[37]

In 2000, the IMF held an international conference and published a brief report titled, One World, One Currency: Destination or Delusion?, in which it was stated that, “As perceptions grow that the world is gradually segmenting into a few regional currency blocs, the logical extension of such a trend also emerges as a theoretical possibility: a single world currency. If so many countries see benefits from currency integration, would a world currency not maximize these benefits?”

It outlines how, “The dollar bloc, already underpinned by the strength of the U.S. economy, has been extended further by dollarization and regional free trade pacts. The euro bloc represents an economic union that is intended to become a full political union likely to expand into Central and Eastern Europe. A yen bloc may emerge from current proposals for Asian monetary cooperation. A currency union may emerge among Mercosur members in Latin America, a geographical currency zone already exists around the South African rand, and a merger of the Australian and New Zealand dollars is a perennial topic in Oceania.”

The summary states that, “The same commercial efficiencies, economies of scale, and physical imperatives that drive regional currencies together also presumably exist on the next level—the global scale.” Further, it reported that, “The smaller and more vulnerable economies of the world—those that the international community is now trying hardest to help—would have most to gain from the certainty and stability that would accompany a single world currency.”[38] Keep in mind, this document was produced by the IMF, and so its recommendations for what it says would likely “help” the smaller and more vulnerable countries of the world, should be taken with a grain – or bucket – of salt.

Economist Robert A. Mundell has long called for a global currency. On his website, he states that the creation of a global currency is “a project that would restore a needed coherence to the international monetary system, give the International Monetary Fund a function that would help it to promote stability, and be a catalyst for international harmony.” He states that, “The benefits from a world currency would be enormous. Prices all over the world would be denominated in the same unit and would be kept equal in different parts of the world to the extent that the law of one price was allowed to work itself out. Apart from tariffs and controls, trade between countries would be as easy as it is between states of the United States.”[39]

Renewed Calls for a Global Currency

On March 16, 2009, Russia suggested that, “the G20 summit in London in April should start establishing a system of managing the process of globalization and consider the possibility of creating a supra-national reserve currency or a ‘super-reserve currency’.” Russia called for “the creation of a supra-national reserve currency that will be issued by international financial institutions,” and that, “It looks expedient to reconsider the role of the IMF in that process and also to determine the possibility and need for taking measures that would allow for the SDRs (Special Drawing Rights) to become a super-reserve currency recognized by the world community.”[40]

On March 23, 2009, it was reported that China’s central bank “proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.” The goal would be for the world reserve currency that is “disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies.” The chief China economist for HSBC stated that, “This is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money.” The Governor of the People’s Bank of China, the central bank, “suggested expanding the role of special drawing rights, which were introduced by the IMF in 1969 to support the Bretton Woods fixed exchange rate regime but became less relevant once that collapsed in the 1970s.” Currently, “the value of SDRs is based on a basket of four currencies – the US dollar, yen, euro and sterling – and they are used largely as a unit of account by the IMF and some other international organizations.”

However, “China’s proposal would expand the basket of currencies forming the basis of SDR valuation to all major economies and set up a settlement system between SDRs and other currencies so they could be used in international trade and financial transactions. Countries would entrust a portion of their SDR reserves to the IMF to manage collectively on their behalf and SDRs would gradually replace existing reserve currencies.”[41]

On March 25, Timothy Geithner, Treasury Secretary and former President of the New York Federal Reserve, spoke at the Council on Foreign Relations, when asked a question about his thoughts on the Chinese proposal for the global reserve currency, Geithner replied that, “I haven't read the governor's proposal. He's a remarkably -- a very thoughtful, very careful, distinguished central banker. Generally find him sensible on every issue. But as I understand his proposal, it's a proposal designed to increase the use of the IMF's special drawing rights. And 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 [Emphasis added].”[42]

In late March, it was reported that, “A United Nations panel of economists has proposed a new global currency reserve that would take over the US dollar-based system used for decades by international banks,” and that, “An independently administered reserve currency could operate without conflicts posed by the US dollar and keep commodity prices more stable.”[43]

A recent article in the Economic Times stated that, “The world is not yet ready for an international reserve currency, but is ready to begin the process of shifting to such a currency. Otherwise, it would remain too vulnerable to the hegemonic nation,” as in, the United States.[44] Another article in the Economic Times started by proclaiming that, “the world certainly needs an international currency.” Further, the article stated that, “With an unwillingness to accept dollars and the absence of an alternative, international payments system can go into a freeze beyond the control of monetary authorities leading the world economy into a Great Depression,” and that, “In order to avoid such a calamity, the international community should immediately revive the idea of the Substitution Account mooted in 1971, under which official holders of dollars can deposit their unwanted dollars in a special account in the IMF with the values of deposits denominated in an international currency such as the SDR of the IMF.”[45]

Amidst fears of a falling dollar as a result of the increased open discussion of a new global currency, it was reported that, “The dollar’s role as a reserve currency won’t be threatened by a nine-fold expansion in the International Monetary Fund’s unit of account, according to UBS AG, ING Groep NV and Citigroup Inc.” This was reported following the recent G20 meeting, at which, “Group of 20 leaders yesterday gave approval for the agency to raise $250 billion by issuing Special Drawing Rights, or SDRs, the artificial currency that the IMF uses to settle accounts among its member nations. It also agreed to put another $500 billion into the IMF’s war chest.”[46] In other words, the large global financial institutions came to the rhetorical rescue of the dollar, so as not to precipitate a crisis in its current standing, so that they can continue with quietly forming a new global currency.

Creating a World Central Bank

In 1998, Jeffrey Garten wrote an article for the New York Times advocating a “global Fed.” Garten was former Dean of the Yale School of Management, former Undersecretary of Commerce for International Trade in the Clinton administration, previously served on the White House Council on International Economic Policy under the Nixon administration and on the policy planning staffs of Secretaries of State Henry Kissinger and Cyrus Vance of the Ford and Carter administrations, former Managing Director at Lehman Brothers, and is a member of the Council on Foreign Relations. In his article written in 1998, he stated that, “over time the United States set up crucial central institutions -- the Securities and Exchange Commission (1933), the Federal Deposit Insurance Corporation (1934) and, most important, the Federal Reserve (1913). In so doing, America became a managed national economy. These organizations were created to make capitalism work, to prevent destructive business cycles and to moderate the harsh, invisible hand of Adam Smith.”

He then explained that, “This is what now must occur on a global scale. The world needs an institution that has a hand on the economic rudder when the seas become stormy. It needs a global central bank.” He explains that, “Simply trying to coordinate the world's powerful central banks -- the Fed and the new European Central Bank, for instance -- wouldn't work,” and that, “Effective collaboration among finance ministries and treasuries is also unlikely to materialize. These agencies are responsible to elected legislatures, and politics in the industrial countries is more preoccupied with internal events than with international stability.”

He then postulates that, “An independent central bank with responsibility for maintaining global financial stability is the only way out. No one else can do what is needed: inject more money into the system to spur growth, reduce the sky-high debts of emerging markets, and oversee the operations of shaky financial institutions. A global central bank could provide more money to the world economy when it is rapidly losing steam.” Further, “Such a bank would play an oversight role for banks and other financial institutions everywhere, providing some uniform standards for prudent lending in places like China and Mexico. [However, t]he regulation need not be heavy-handed.” Garten continues, “There are two ways a global central bank could be financed. It could have lines of credit from all central banks, drawing on them in bad times and repaying when the markets turn up. Alternately -- and admittedly more difficult to carry out -- it could be financed by a very modest tariff on all trade, collected at the point of importation, or by a tax on certain global financial transactions.”

Interestingly, Garten states that, “One thing that would not be acceptable would be for the bank to be at the mercy of short-term-oriented legislatures.” In essence, it is not to be accountable to the people of the world. So, he asks the question, “To whom would a global central bank be accountable? It would have too much power to be governed only by technocrats, although it must be led by the best of them. One possibility would be to link the new bank to an enlarged Group of Seven -- perhaps a ''G-15'' [or in today’s context, the G20] that would include the G-7 plus rotating members like Mexico, Brazil, South Africa, Poland, India, China and South Korea.” He further states that, “There would have to be very close collaboration” between the global bank and the Fed, and that, “The global bank would not operate within the United States, and it would not be able to override the decisions of our central bank. But it could supply the missing international ingredient -- emergency financing for cash-starved emerging markets. It wouldn't affect American mortgage rates, but it could help the profitability of American multinational companies by creating a healthier global environment for their businesses.”[47]

In September of 2008, Jeffrey Garten wrote an article for the Financial Times in which he stated that, “Even if the US’s massive financial rescue operation succeeds, it should be followed by something even more far-reaching – the establishment of a Global Monetary Authority to oversee markets that have become borderless.” He emphasized the “need for a new Global Monetary Authority. It would set the tone for capital markets in a way that would not be viscerally opposed to a strong public oversight function with rules for intervention, and would return to capital formation the goal of economic growth and development rather than trading for its own sake.”

Further, the “GMA would be a reinsurer or discounter for certain obligations held by central banks. It would scrutinise the regulatory activities of national authorities with more teeth than the IMF has and oversee the implementation of a limited number of global regulations. It would monitor global risks and establish an effective early warning system with more clout to sound alarms than the BIS has.” Moreover, “The biggest global financial companies would have to register with the GMA and be subject to its monitoring, or be blacklisted. That includes commercial companies and banks, but also sovereign wealth funds, gigantic hedge funds and private equity firms.” He recommends that its board “include central bankers not just from the US, UK, the eurozone and Japan, but also China, Saudi Arabia and Brazil. It would be financed by mandatory contributions from every capable country and from insurance-type premiums from global financial companies – publicly listed, government owned, and privately held alike.”[48]

In October of 2008, it was reported that Morgan Stanley CEO John Mack stated 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.”[49]

In late October of 2008, Jeffrey Garten wrote an article for Newsweek in which he stated that, “leaders should begin laying the groundwork for establishing a global central bank.” He explained that, “There was a time when the U.S. Federal Reserve played this role [as governing financial authority of the world], as the prime financial institution of the world's most powerful economy, overseeing the one global currency. But with the growth of capital markets, the rise of currencies like the euro and the emergence of powerful players such as China, the shift of wealth to Asia and the Persian Gulf and, of course, the deep-seated problems in the American economy itself, the Fed no longer has the capability to lead single-handedly.”

He explains the criteria and operations of a world central bank, saying that, “It could be the lead regulator of big global financial institutions, such as Citigroup or Deutsche Bank, whose activities spill across borders,” as well as “act as a bankruptcy court when big global banks that operate in multiple countries need to be restructured. It could oversee not just the big commercial banks, such as Mitsubishi UFJ, but also the "alternative" financial system that has developed in recent years, consisting of hedge funds, private-equity groups and sovereign wealth funds—all of which are now substantially unregulated.” Further, it “could have influence over key exchange rates, and might lead a new monetary conference to realign the dollar and the yuan, for example, for one of its first missions would be to deal with the great financial imbalances that hang like a sword over the world economy.”

He further postulates that, “A global central bank would not eliminate the need for the Federal Reserve or other national central banks, which will still have frontline responsibility for sound regulatory policies and monetary stability in their respective countries. But it would have heavy influence over them when it comes to following policies that are compatible with global growth and financial stability. For example, it would work with key countries to better coordinate national stimulus programs when the world enters a recession, as is happening now, so that the cumulative impact of the various national efforts do not so dramatically overshoot that they plant the seeds for a crisis of global inflation. This is a big threat as government spending everywhere goes into overdrive.”[50]

In January of 2009, it was reported that, “one clear solution to avoid a repeat of the problems would be the establishment of a "global central bank" – with the IMF and World Bank being unable to prevent the financial meltdown.” Dr. William Overholt, senior research fellow at Harvard's Kennedy School, formerly with the Rand Institute, gave a speech in Dubai in which he said that, “To avoid another crisis, we need an ability to manage global liquidity. Theoretically that could be achieved through some kind of global central bank, or through the creation of a global currency, or through global acceptance of a set of rules with sanctions and a dispute settlement mechanism.”[51]

Guillermo Calvo, Professor of Economics, International and Public Affairs at Columbia University wrote an article for VOX in late March of 2009. Calvo is the former Chief Economist of the Inter-American Development Bank, and is currently a Research Associate at the National Bureau of Economic Research (NBER) and President of the International Economic Association and the former Senior Advisor in the Research Department of the IMF.

He wrote that, “Credit availability is not ensured by stricter financial regulation. In fact, it can be counterproductive unless it is accompanied by the establishment of a lender of last resort (LOLR) that radically softens the severity of financial crisis by providing timely credit lines. With that aim in mind, the 20th century saw the creation of national or regional central banks in charge of a subset of the capital market. It has now become apparent that the realm of existing central banks is very limited and the world has no institution that fulfils the necessary global role. The IMF is moving in that direction, but it is still too small and too limited to adequately do so.”

He advocates that, “the first proposal that I would like to make is that the topic of financial regulation should be discussed together with the issue of a global lender of last resort.” Further, he proposed that, “international financial institutions must be quickly endowed with considerably more firepower to help emerging economies through the deleveraging period.”[52]

A “New World Order” in Banking

In March of 2008, following the collapse of Bear Stearns, Reuters reported on a document released by research firm CreditSights, which said that, “Financial firms face a ‘new world order’,” and that, “More industry consolidation and acquisitions may follow after JPMorgan Chase & Co.” Further, “In the event of future consolidation, potential acquirers identified by CreditSights include JPMorganChase, Wells Fargo, US Bancorp, Goldman Sachs and Bank of America.”[53]

In June of 2008, before he was Treasury Secretary in the Obama administration, Timothy Geithner, as head of the New York Federal Reserve, wrote an article for the Financial Times following his attendance at the 2008 Bilderberg conference, in which he wrote that, “Banks and investment banks whose health is crucial to the global financial system should operate under a unified regulatory framework,” and he said that, “the US Federal Reserve should play a "central role" in the new regulatory framework, working closely with supervisors in the US and around the world.”[54]

In November of 2008, The National, a prominent United Arab Emirate newspaper, reported on Baron David de Rothschild accompanying Prime Minister Gordon Brown on a visit to the Middle East, although not as a “part of the official party” accompanying Brown. Following an interview with the Baron, it was reported that, “Rothschild shares most people’s view that there is a new world order. In his opinion, banks will deleverage and there will be a new form of global governance.”[55]

In February of 2009, the Times Online reported that a “New world order in banking [is] necessary,” and that, “It is increasingly evident that the world needs a new banking system and that it should not bear much resemblance to the one that has failed so spectacularly.”[56] But of course, the ones that are shaping this new banking system are the champions of the previous banking system. The solutions that will follow are simply the extensions of the current system, only sped up through the necessity posed by the current crisis.

An Emerging Global Government

A recent article in the Financial Post stated that, “The danger in the present course is that if the world moves to a “super sovereign” reserve currency engineered by experts, such as the “UN Commission of Experts” led by Nobel laureate economist Joseph Stiglitz, we would give up the possibility of a spontaneous money order and financial harmony for a centrally planned order and the politicization of money. Such a regime change would endanger not only the future value of money but, more importantly, our freedom and prosperity.”[57]

Further, “An uncomfortable characteristic of the new world order may well turn out to be that global income gaps will widen because the rising powers, such as China, India and Brazil, regard those below them on the ladder as potential rivals.” The author further states that, “The new world order thus won't necessarily be any better than the old one,” and that, “What is certain, though, is that global affairs are going to be considerably different from now on.”[58]

In April of 2009, Robert Zoellick, President of the World Bank, said that, “If leaders are serious about creating new global responsibilities or governance, let them start by modernising multilateralism to empower the WTO, the IMF, and the World Bank Group to monitor national policies.”[59]

David Rothkopf, a scholar at the Carnegie Endowment for International Peace, former Deputy Undersecretary of Commerce for International Trade in the Clinton administration, and former managing director of Kissinger and Associates, and a member of the Council on Foreign Relations, recently wrote a book titled, Superclass: The Global Power Elite and the World They are Making, of which he is certainly a member. When discussing the role and agenda of the global “superclass”, he states that, “In a world of global movements and threats that don’t present their passports at national borders, it is no longer possible for a nation-state acting alone to fulfill its portion of the social contract.”[60]

He writes that, “even the international organizations and alliances we have today, flawed as they are, would have seemed impossible until recently, notably the success of the European Union – a unitary democratic state the size of India. The evolution and achievements of such entities against all odds suggest not isolated instances but an overall trend in the direction of what Tennyson called “the Parliament of Man,” or ‘universal law’.” He states that he is “optimistic that progress will continue to be made,” but it will be difficult, because it “undercuts many national and local power structures and cultural concepts that have foundations deep in the bedrock of human civilization, namely the notion of sovereignty.”[61]

He further writes that, “Mechanisms of global governance are more achievable in today’s environment,” and that these mechanisms “are often creative with temporary solutions to urgent problems that cannot wait for the world to embrace a bigger and more controversial idea like real global government.”[62]

In December of 2008, the Financial Times ran an article written by Gideon Rachman, a past Bilderberg attendee, who wrote that, “for the first time in my life, I think the formation of some sort of world government is plausible,” and that, “A ‘world government’ would involve much more than co-operation between nations. It would be an entity with state-like characteristics, backed by a body of laws. The European Union has already set up a continental government for 27 countries, which could be a model. The EU has a supreme court, a currency, thousands of pages of law, a large civil service and the ability to deploy military force.”

He then asks if the European model could “go global,” and states that there are three reasons for thinking that may be the case. First, he states, “it is increasingly clear that the most difficult issues facing national governments are international in nature: there is global warming, a global financial crisis and a ‘global war on terror’.” Secondly, he states that, “It could be done,” largely as a result of the transport and communications revolutions having “shrunk the world.” Thirdly, this is made possible through an awakening “change in the political atmosphere,” as “The financial crisis and climate change are pushing national governments towards global solutions, even in countries such as China and the US that are traditionally fierce guardians of national sovereignty.”

He quoted an adviser to French President Nicolas Sarkozy as saying, “Global governance is just a euphemism for global government,” and that the “core of the international financial crisis is that we have global financial markets and no global rule of law.” However, Rachman states that any push towards a global government “will be a painful, slow process.” He then states that a key problem in this push can be explained with an example from the EU, which “has suffered a series of humiliating defeats in referendums, when plans for “ever closer union” have been referred to the voters. In general, the 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. [Emphasis added]”[63]

In November of 2008, the United States National Intelligence Council (NIC), the US intelligence community’s “center for midterm and long-term strategic thinking,” released a report that it produced in collaboration with numerous think tanks, consulting firms, academic institutions and hundreds of other experts, among them are the Atlantic Council of the United States, the Wilson Center, RAND Corporation, the Brookings Institution, American Enterprise Institute, Texas A&M University, the Council on Foreign Relations and Chatham House in London.[64]

The report, titled, Global Trends 2025: A Transformed World, outlines the current global political and economic trends that the world may be going through by the year 2025. In terms of the financial crisis, it states that solving this “will require long-term efforts to establish a new international system.”[65] It suggests that as the “China-model” for development becomes increasingly attractive, there may be a “decline in democratization” for emerging economies, authoritarian regimes, and “weak democracies frustrated by years of economic underperformance.” Further, the dollar will cease to be the global reserve currency, as there would likely be a “move away from the dollar.”[66]

It states that the dollar will become “something of a first among equals in a basket of currencies by 2025. This could occur suddenly in the wake of a crisis, or gradually with global rebalancing.”[67] The report elaborates on the construction of a new international system, stating that, “By 2025, nation-states will no longer be the only – and often not the most important – actors on the world stage and the ‘international system’ will have morphed to accommodate the new reality. But the transformation will be incomplete and uneven.” Further, it would be “unlikely to see an overarching, comprehensive, unitary approach to global governance. Current trends suggest that global governance in 2025 will be a patchwork of overlapping, often ad hoc and fragmented efforts, with shifting coalitions of member nations, international organizations, social movements, NGOs, philanthropic foundations, and companies.” It also notes that, “Most of the pressing transnational problems – including climate change, regulation of globalized financial markets, migration, failing states, crime networks, etc. – are unlikely to be effectively resolved by the actions of individual nation-states. The need for effective global governance will increase faster than existing mechanisms can respond.”[68]

The report discusses the topic of regionalism, stating that, “Greater Asian integration, if it occurs, could fill the vacuum left by a weakening multilaterally based international order but could also further undermine that order. In the aftermath of the 1997 Asian financial crisis, a remarkable series of pan-Asian ventures—the most significant being ASEAN + 3—began to take root. Although few would argue that an Asian counterpart to the EU is a likely outcome even by 2025, if 1997 is taken as a starting point, Asia arguably has evolved more rapidly over the last decade than the European integration did in its first decade(.” It further states that, “movement over the next 15 years toward an Asian basket of currencies—if not an Asian currency unit as a third reserve—is more than a theoretical possibility.”

It elaborates that, “Asian regionalism would have global implications, possibly sparking or reinforcing a trend toward three trade and financial clusters that could become quasi-blocs (North America, Europe, and East Asia).” These blocs “would have implications for the ability to achieve future global World Trade Organization agreements and regional clusters could compete in the setting of trans-regional product standards for IT, biotech, nanotech, intellectual property rights, and other ‘new economy’ products.”[69]

Of great importance to address, and reflecting similar assumptions made by Rachman in his article advocating for a world government, is the topic of democratization, saying that, “advances are likely to slow and globalization will subject many recently democratized countries to increasing social and economic pressures that could undermine liberal institutions.” This is largely because “the better economic performance of many authoritarian governments could sow doubts among some about democracy as the best form of government. The surveys we consulted indicated that many East Asians put greater emphasis on good management, including increasing standards of livings, than democracy.” Further, “even in many well-established democracies, surveys show growing frustration with the current workings of democratic government and questioning among elites over the ability of democratic governments to take the bold actions necessary to deal rapidly and effectively with the growing number of transnational challenges.”[70]

Conclusion

Ultimately, what this implies is that the future of the global political economy is one of increasing moves toward a global system of governance, or a world government, with a world central bank and global currency; and that, concurrently, these developments are likely to materialize in the face of and as a result of a decline in democracy around the world, and thus, a rise in authoritarianism. What we are witnessing is the creation of a New World Order, composed of a totalitarian global government structure.

In fact, the very concept of a global currency and global central bank is authoritarian in its very nature, as it removes any vestiges of oversight and accountability away from the people of the world, and toward a small, increasingly interconnected group of international elites.

As Carroll Quigley explained in his monumental book, Tragedy and Hope, “[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.”[71]

Indeed, the current “solutions” being proposed to the global financial crisis benefit those that caused the crisis over those that are poised to suffer the most as a result of the crisis: the disappearing middle classes, the world’s dispossessed, poor, indebted people. The proposed solutions to this crisis represent the manifestations and actualization of the ultimate generational goals of the global elite; and thus, represent the least favourable conditions for the vast majority of the world’s people.

It is imperative that the world’s people throw their weight against these “solutions” and usher in a new era of world order, one of the People’s World Order; with the solution lying in local governance and local economies, so that the people have greater roles in determining the future and structure of their own political-economy, and thus, their own society. With this alternative of localized political economies, in conjunction with an unprecedented global population and international democratization of communication through the internet, we have the means and possibility before us to forge the most diverse manifestation of cultures and societies that humanity has ever known.

The answer lies in the individual’s internalization of human power and destination, and a rejection of the externalization of power and human destiny to a global authority of which all but a select few people have access to. To internalize human power and destiny is to realize the gift of a human mind, which has the ability to engage in thought beyond the material, such as food and shelter, and venture into the realm of the conceptual. Each individual possesses – within themselves – the ability to think critically about themselves and their own life; now is the time to utilize this ability with the aim of internalizing the concepts and questions of human power and destiny: Why are we here? Where are we going? Where should we be going? How do we get there?

The supposed answers to these questions are offered to us by a tiny global elite who fear the repercussions of what would take place if the people of the world were to begin to answer these questions themselves. I do not know the answers to these questions, but I do know that the answers lie in the human mind and spirit, that which has overcome and will continue to overcome the greatest of challenges to humanity, and will, without doubt, triumph over the New World Order.

Endnotes

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[4] Gordon Rayner, Global financial crisis: does the world need a new banking 'policeman'? The Telegraph: October 8, 2008: http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3155563...

[5] Benn Steil, The End of National Currency. Foreign Affairs: Vol. 86, Issue 3, May/June 2007: pages 83-96

[6] Jonathan Tirone, ECB's Nowotny Sees Global `Tri-Polar' Currency System Evolving. Bloomberg: October 19, 2008: http://www.bloomberg.com/apps/news?pid=20601087&sid=apjqJKKQvfDc&refer=home

[7] BBC, South America nations found union. BBC News: May 23, 2008: http://news.bbc.co.uk/2/hi/americas/7417896.stm

[8] CNews, South American nations to seek common currency. China View: May 26, 2008: http://news.xinhuanet.com/english/2008-05/27/content_8260847.htm

[9] AME Info, GCC: Full steam ahead to monetary union. September 19, 2005: http://www.ameinfo.com/67925.html

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[29] Barrie McKenna, Dodge Says Single Currency ‘Possible’. The Globe and Mail: May 21, 2007

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[33] Todd Harrison, How realistic is a North American currency? Market Watch: January 28, 2009: http://www.marketwatch.com/news/story/Do-we-need-a-North/story.aspx?guid={D10536AF-F929-4AF9-AD10-250B4057A907}

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[36] Judy Shelton, Hearing on Exchange Rate Stability in International Finance. Testimony of Judy Shelton Before the United States House of Representatives Committee on Banking and Financial Services: May 21, 1999: http://financialservices.house.gov/banking/52199she.htm

[37] ECB, The euro and the dollar - new imperatives for policy co-ordination. Speeches and Interviews: September 18, 2000: http://www.ecb.int/press/key/date/2000/html/sp000918.en.html

[38] IMF, One World, One Currency: Destination or Delusion? Economic Forums and International Seminars: November 8, 2000: http://www.imf.org/external/np/exr/ecforums/110800.htm

[39] Robert A. Mundell, World Currency. The Works of Robert A. Mundell: http://www.robertmundell.net/Menu/Main.asp?Type=5&Cat=09&ThemeName=World...

[40] Itar-Tass, Russia proposes creation of global super-reserve currency. ITAR-TASS News Agency: March 16, 2009: http://www.itar-tass.com/eng/level2.html?NewsID=13682035&PageNum=0

[41] Jamil Anderlini, China calls for new reserve currency. The Financial Times: March 23, 2009: http://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html

[42] CFR, A Conversation with Timothy F. Geithner. Council on Foreign Relations Transcripts: March 25, 2009: http://www.cfr.org/publication/18925/

[43] news.com.au, UN backs new new global currency reserve. The Sunday Telegraph: March 29, 2009: http://www.news.com.au/business/story/0,27753,25255091-462,00.html

[44] Ashima Goyal, Is world ready for a global currency? The Economic Times: April 3, 2009: http://economictimes.indiatimes.com/ET-Debate/Is-world-ready-for-a-globa...

[45] R Agarwala, SDR should become the global currency. The Economic Times: April 3, 2009: http://economictimes.indiatimes.com/ET-Debate/SDR-should-become-the-glob...

[46] Kim Kyoungwha and David Yong, Dollar’s Role Is Safe as IMF Expands Own Currency. Bloomberg: April 3, 2009: http://www.bloomberg.com/apps/news?pid=20601087&sid=aBbu9JB2mGkc&refer=home

[47] Jeffrey E. Garten, Needed: A Fed for the World. The New York Times: September 23, 1998: http://www.nytimes.com/1998/09/23/opinion/needed-a-fed-for-the-world.html

[48] Jeffrey Garten, Global authority can fill financial vacuum. The Financial Times: September 25, 2008: http://www.ft.com/cms/s/0/7caf543e-8b13-11dd-b634-0000779fd18c.html?ncli...

[49] CNBC, Morgan's Mack: Firm Was Excessively Leveraged. CNBC: October 16, 2008: http://www.cnbc.com/id/27216678

[50] Jeffrey Garten, We Need a Bank Of the World. Newsweek: October 25, 2008: http://www.newsweek.com/id/165772

[51] Sean Davidson, 'Global central bank could prevent future crisis'. Business 24/7: January 10, 2009: http://www.business24-7.ae/articles/2009/1/pages/01102009_350bc822e4ee45...

[52] Guillermo Calvo, Lender of last resort: Put it on the agenda! VOX: March 23, 2009: http://www.voxeu.org/index.php?q=node/3327

[53] Walden Siew, Banks face "new world order," consolidation: report. Reuters: March 17, 2008: http://www.reuters.com/article/innovationNews/idUSN1743541720080317

[54] James Politi and Gillian Tett, NY Fed chief in push for global bank framework. The Financial Times: June 8, 2008: http://us.ft.com/ftgateway/superpage.ft?news_id=fto060820081850443845

[55] Rupert Wright, The first barons of banking. The National: November 6, 2008: http://www.thenational.ae/article/20081106/BUSINESS/167536298/1005

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[58] Richard Gwyn, Change not necessarily for the better. The Toronto Star: April 3, 2009: http://www.thestar.com/comment/article/612822

[59] FE, Growth to slow down hitting hard the poor countries. The Financial Express: April 1, 2009: http://www.thefinancialexpress-bd.com/search_index.php?page=detail_news&...

[60] David Rothkopf, Superclass: The Global Power Elite and the World They are Making. (Toronto: Penguin Books, 2008), page 315

[61] David Rothkopf, Superclass: The Global Power Elite and the World They are Making. (Toronto: Penguin Books, 2008), pages 315-316

[62] David Rothkopf, Superclass: The Global Power Elite and the World They are Making. (Toronto: Penguin Books, 2008), page 316

[63] Gideon Rachman, And now for a world government. The Financial Times: December 8, 2008: http://www.ft.com/cms/s/0/7a03e5b6-c541-11dd-b516-000077b07658.html

[64] NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: Acknowledgements: http://www.dni.gov/nic/NIC_2025_project.html

[65] NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: page 11: http://www.dni.gov/nic/NIC_2025_project.html

[66] NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: pages 11-12: http://www.dni.gov/nic/NIC_2025_project.html

[67] NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: pages 94: http://www.dni.gov/nic/NIC_2025_project.html

[68] NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: pages 81: http://www.dni.gov/nic/NIC_2025_project.html

[69] NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: pages 83: http://www.dni.gov/nic/NIC_2025_project.html

[70] NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: pages 87: http://www.dni.gov/nic/NIC_2025_project.html

[71] Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: Macmillan Company, 1966), 324

Andrew G. Marshall is a Research Associate of the Centre for Research on Globalization (CRG). He is currently studying Political Economy and History at Simon Fraser University.

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VIDEO:
THE GLOBAL FINANCIAL CRISIS
Michel Chossudovsky
Jan 2009, Montreal - 1:18:37 - Jan 17, 2009
Centre for Research on Globalization (CRG) - www.globalresearch.ca
http://video.google.com/videoplay?docid=-5524526231174165759&ei=3c9zSdaJ...

LECTURE: THE GLOBAL FINANCIAL CRISIS — The Great Depression of the 21st Century with Michel Chossudovsky Causes and consequences of the financial meltdown; The speculative onslaught; Financial fraud and the "bank bailouts"; Bankruptcy of the real economy; Impacts on employment, wages and social services; Towards a spiralling public debt; The economic crisis and its relationship to the Middle East war; The centralization of corporate power; The concentration of wealth; The globalization of poverty. What are the policy alternatives?

VIDEO: The Global Financial Meltdown: Seen With Argentinian Eyes
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Asia Times Online
Obama may cede Iran's nuclear rights
By M K Bhadrakumar
Apr 10, 2009
http://www.atimes.com/atimes/Middle_East/KD10Ak03.html

When the wastes of Qyzylqum and Karakum blossom in early spring, the enchanting sight can pain one's heart. But the killer deserts are deceptive in appearance, especially Qyzylqum, which is in the tract of land between the two great rivers in Central Asia - the Amu Darya and Sirdarya.

In the spring of 1220, when Genghis Khan abruptly rode out of the Qyzylqum with a few hundred Mongol horsemen to take the Amir of Bukhara by surprise, the Amir never imagined that the desert would so easily concede safe passage to a Mongol stranger. Bukhara - one of the biggest cities at that time along with Cordoba, Cairo and Baghdad - paid heavily for the desert's treachery. Bukhara took over two centuries to recover from "God's wrath", which the austere Khan insisted he was administering to the slothful, opulent city for its sinful ways.

It is again early spring in the Central Asian steppes. There is a deceptive calm, but all signs are that the Great Game is bestirring from its slumber. The United States is focusing on the key Central Asian country of Kazakhstan, which straddles the Qyzylqum and the Karakum, to stage a strategic comeback in the region. Prospects are brighter than ever as Kazakhstan is edging closer to the chairmanship of the Organization of Security and Economic Cooperation in Europe (OSCE) next year. The OSCE leadership brings Kazakhstan into the forefront of the Western strategies in Eurasia - and out of Russian orbit.

The war in nearby Afghanistan provides the backdrop for the US's proactive diplomacy. But that, too, is deceptive. It seems the US is also probing a solution to the Iran nuclear problem with Kazakhstan's helping hand. The urgency is great and President Barack Obama has already hinted that he intends to pay a visit to Kazakhstan, the first ever to the steppes by an American president.

According to the Wall Street Journal, the Obama administration is "carefully considering" the setting up of an international uranium fuel bank in Kazakhstan, which could form the exit strategy for the historic US-Iran standoff. That is why the visit by the Iranian President Mahmud Ahmadinejad to Astana, Kazakhstan, on Monday assumes exceptional importance.

In bits and pieces, a stray thought has been surfacing in the recent months in the US discourses over the situation surrounding Iran. It sought a rethink of Washington's insistence on Iran jettisoning its pursuit of uranium enrichment as a pre-requisite of commencement of direct talks between the two countries. This was borne out of a growing realization that the US insistence was no longer tenable. A logjam has indeed developed as it became clearer by the day that within the fractious Iranian opinion there is virtual unanimity when it comes to the continuance of the country's nuclear program, and effecting a regime change in Tehran didn't necessarily alter Iran's policies.

The Obama administration faces the reality that unless the impasse is broken somehow, the standoff continues. The standoff worked to Iran's advantage only insofar as the country speeded up its nuclear program ever since the series of United Nations (UN) Security Council resolutions since 2006 began forbidding Iran from enriching uranium. Iran today has installed over 5,500 centrifuges and built up a stockpile exceeding 1,000 kilograms of low-enriched uranium.

It now appears that the US might cede to Iran's nuclear program. The Wall Street Journal reported last Friday that as part of a policy review commissioned by Obama, "diplomats are discussing whether the US will eventually have to accept Iran's insistence on carrying out the [enrichment] process, which can produce both nuclear fuel and weapons-grade material". The newspaper assessed that the Obama administration's message to Tehran is increasingly shaping up as "Don't develop a nuclear weapon" - a nuanced stance that would not rule out a deal accepting Iranian enrichment as such. It pointed out that Obama's articulations on the subject have become much less specific than those of former president George W Bush, who never minced words in crying a halt to Iran's enrichment.

The new thinking is that the priority should be to win greater access for UN inspectors to the Iranian nuclear establishments, as compared with the current limited inspection regime, which has led to diminishing information regarding Iran's nuclear program. In other words, why not trust Iran to retain its enrichment activities so long as its program can be effectively verified.

In this scenario, it is significant that following talks with Ahmadinejad, Kazakhstan President Nurusultan Nazarbayev chose the venue of their joint press conference on Monday in Astana to make the public offer that his country is willing to host a global nuclear fuel bank as part of a US-backed plan to put all uranium enrichment under international control. "If such a nuclear fuel bank were to be created, Kazakhstan would be ready to consider hosting it on its territory as a signatory of the nuclear non-proliferation treaty and as a country that voluntarily renounced nuclear weapons," Nazarbayev said.

The veteran Kazakh statesman (who might have been the Soviet Union's prime minister but for the superpower's implosion in 1991) didn't speak out of the blue. Such impetuousness is alien to his shrewd political temperament. He knew the time has come for his proposal to be publicly voiced. It is an idea that is evidently supported by Obama. It devolves upon the creation of a global repository that would allow countries to tap into Kazakhstan's vast reserves of uranium to fuel their nuclear plants without having to develop their own enrichment capability. At any rate, Ahmadinejad also chose to publicly welcome the Kazakh proposal. "We [Iran] think that Nurusultan Nazarbayev's idea to host a nuclear fuel bank is a very good proposal," he noted.

These are, of course, early days. However, Iran used to maintain at one point that it would be open to the idea of stopping sensitive uranium enrichment if a supply of nuclear fuel from abroad could be guaranteed. In the face of the Bush administration's mindless containment strategy, the Iranian stance hardened, especially as the nuclear file got transferred from the International Atomic Energy Agency to the UN Security Council, and the country began harping on its due rights to master the complete nuclear fuel cycle, including enriched uranium, for peaceful purposes.

Later on Monday in Astana, Ahmadinejad utilized yet another press conference to argue that he welcomed Nazarbayev's proposal since "any country that has uranium mines and the capability to produce nuclear fuel can also establish a nuclear fuel bank". He then went on to elaborate the Iranian response:

As regards the nuclear issue, two major developments are simultaneously needed. One is ending the assumption that nuclear energy is quite the same as nuclear bomb. And the other one is about disarmament by the nuclear powers in the world. This would ease [Iranian] concerns regarding these powers and also ease the global concerns. That is to say, the issue needs to be solved fundamentally ... Ever since nuclear energy got equated with [the] nuclear bomb, a monopoly developed over nuclear energy, whereas nuclear energy has beneficial uses in medicine, agriculture and industry. I wouldn't say that it was intentional to equate nuclear energy and nuclear bomb, but, considering the broadly negative fallouts of it, we cannot say that it has been totally unintentional, either.

Significantly, Ahmadinejad also utilized the second press meet to make some positive references to Obama's recent overtures. "We hope Obama would manage to … establish friendly relations with other countries on equal terms. We welcome fundamental changes and are longing for them to happen … we are waiting for practical deeds and real changes … Currently, the statements are satisfactory … If fundamental changes [in US policy] occur, we ill definitely welcome them."

What emerges is that Japan might also play a key role in the US-Kazakh nuclear paradigm and any resultant new opening with Iran. The news agency Agence France-Presse reported that senior Japanese diplomats with deep experience in dealing with Iran - Tatsuo Arima, special envoy on the Middle East, Toshiro Suzuki, head of the foreign ministry's Middle East and Africa department, and Akio Shirota, Japanese ambassador in Tehran - have held several days of intensive consultations in Washington with the Obama administration, including with the National Security Council in the White House.

Curiously, Japan and Kazakhstan have an expanding cooperation program in the nuclear field. There is much complementarity between the two countries since Japan is the world's third-largest importer of uranium, next only to the US and France, while Kazakhstan possesses the world's second largest reserves of uranium after Australia. Japan currently imports only 1% of its uranium from Kazakhstan and hopes to increase it to 30-40% in the next decade or so.

As for Kazakhstan, at 1.5 million metric tons, it holds roughly 19% of the world's total uranium deposits. More than half of the Kazakh deposits are also available for extraction by in-site leaching, which is a cheap and environmentally friendly method in comparison with extraction from open pits or deep shaft mines. Kazakhstan produced 6,637 metric tons in 2007 and 8,521 metric tons in 2008. The production is expected to jump to 11,900 tons in 2009.

Japanese companies like Marubeni have moved into Kazakh uranium mines. Within the framework of a series of cooperation agreements, Japan has agreed to provide technology assistance to Kazakhstan for processing uranium fuel and building light-water reactors. One key agreement in October 2007 enabled Kazatompom, a Kazakh state company, to acquire 10% of Westinghouse Electric from Japan's Toshiba at a cost of $540 million.

All in all, therefore, Kazakhstan is gearing up as a leading player in the global uranium market while Japan is eager to secure a stable supply of uranium for its growing nuclear energy industry. Japan is a notoriously reticent partner in nuclear cooperation and the fashion in which it made an exception in the case of Kazakhstan is truly extraordinary. From the US perspective, Japan would be an ideal partner for fleshing out the idea of a nuclear fuel bank in Kazakhstan since it has an advanced nuclear fuel cycle industry. Japan's Rokkasho reprocessing plant gives it a unique status as the first country to have such facility, though a non-nuclear weapon state. Japan is also committed to commercialize practical fast breeder reactor cycles. At the same time, Japan has been right in the vanguard of nuclear disarmament and non-proliferation.

Washington would see that Japan fits well with Kazakhstan's ambitious plans for developing nuclear energy, increasing uranium exports, and expanding nuclear fuel production and export. Besides, Tokyo always kept up cordial ties with Tehran through the 30-year period since the 1979 Iranian revolution.

More importantly, Japan rivals China in both the Central Asian and Middle Eastern regions. The rivalry provides Tokyo with just the right impetus to pay close attention to ties with Astana and Tehran, which are two key capitals in Beijing's energy diplomacy.

But China won't be alone in taking stock of any US-Japanese-Kazakh tie-up in the field of nuclear energy. Russia would be equally wary of the geopolitical implications of any expansion of US influence in Kazakhstan. Russian companies have been making robust efforts to gain control over Kazakhstan's uranium mines. The Kremlin encouraged Astana to become a partner in setting up an international nuclear re-processing center in Siberia. Thus, Moscow would be displeased with any US-Japanese attempt to build up Kazakhstan as an international nuclear fuel bank.

In short, Iran's support of the idea of setting up a nuclear fuel bank holds the potential to address the US-Iran nuclear standoff. On Thursday, the European Union's foreign policy advisor Javier Solana invited Iran's nuclear negotiators for talks. He wouldn't have taken the initiative without synchronizing with the Obama administration. The big question is whether Washington will shed its reluctance to engage with Ahmadinejad, who is completing his term in office in June. The indications are that Obama might be inclined to directly engage, the impact on the presidential poll in Iran notwithstanding.

Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.

The Eurasian Corridor: Pipeline Geopolitics and the New Cold War
by Michel Chossudovsky
August 22, 2008

"The Silk Road Strategy (SRS) constitutes an essential building block of US foreign policy in the post-Cold War era.
The SRS was formulated as a bill presented to the US Congress in 1999. It called for the creation of an energy and transport corridor network linking Western Europe to Central Asia and eventually to the Far East.
The Silk Road Strategy is defined as a "trans-Eurasian security system". The SRS calls for the "militarization of the Eurasian corridor" as an integral part of the "Great Game". The stated objective, as formulated under the proposed March 1999 Silk Road Strategy Act, is to develop America's business empire along an extensive geographical corridor.
While the 1999 SRS legislation (HR 3196) was adopted by the House of Representatives, it never became law. Despite this legislative setback, the Silk Road Strategy became, under the Bush Administration, the de facto basis of US-NATO interventionism, largely with a view to integrating the former Soviet republics of the South Caucasus and Central Asia into the US sphere of influence.
The successful implementation of the SRS required the concurrent "militarization" of the entire Eurasian corridor from the Eastern Mediterranean to China's Western frontier bordering onto Afghanistan, as a means to securing control over extensive oil and gas reserves, as well as "protecting" pipeline routes and trading corridors. The invasion of Afghanistan in October 2001 has served to support American strategic objectives in Central Asia including the control of pipeline corridors. Afghanistan border onto Chinese Western frontier. It is also a strategic landbridge linking the extensive oil wealth of the Caspian Sea basin to the Arabian Sea.
The militarization process under the SRS is largely directed against China, Russia and Iran."

The ongoing crisis in the Caucasus is intimately related to the strategic control over energy pipeline and transportation corridors.

There is evidence that the Georgian attack on South Ossetia on August 7 was carefully planned. High level consultations were held with US and NATO officials in the months preceding the attacks.

The attacks on South Ossetia were carried out one week after the completion of extensive US - Georgia war games (July 15-31st, 2008). They were also preceded by high level Summit meetings held under the auspices of GUAM, a US-NATO sponsored regional military alliance.

War in Georgia Time Line

July 1-2, 2008 GUAM Summit in Batumi, Georgia.

July 1, "US-GUAM Summit" on the sideline of the official GUAM venue.

July 5 -12, Russian Defense Ministry hold War Games in the North Caucasus region under the codename "Caucasus Frontier 2008".

July 9, 2008 China and Kazakhstan announce the commencement of construction of the Kazakhstan-China natural gas pipeline (KCP)

July 15-31, The US and Georgia hold War Games under the codename Operation "Immediate Response". One thousand US servicemen participate in the military exercise.

August 7, Georgian Ground Forces and Air Force Attack South Ossetia

August 8, Russian Forces Intervene in South Ossetia.

August 14, 2008 Signing of US-Polish Agreement on the stationing of "US Interceptor Missiles" on Polish Territory

Introduction: The GUAM Summit Venue

In early July 2008, a regional summit was held in the Georgian city of Batumi under the auspices of GUAM

GUAM is a military agreement between Georgia, Ukraine, Azerbaijan and Moldova, first established in 1997. Since 2006, following the withdrawal of Uzbekistan, GUAM was renamed: The Organization for Democracy and Economic Development - GUAM.

GUAM has little to do with "Democracy and Economic Development". It is a de facto appendage of NATO. It has been used by the US and the Atlantic Alliance to extend their zone of influence into the heartland of the former Soviet Union.

The main thrust of GUAM as a military alliance is to "protect" the energy and transportation corridors, on behalf of the Anglo-American oil giants. GUAM countries are also the recipients of US-NATO military aid and training.

The militarization of these corridors is a central feature of US-NATO planning. Georgia and Ukraine membership in NATO is part of the agenda of controlling the energy and transport corridors from the Caspian Sea basin to Western Europe.

The July 1-2, 2008 GUAM Summit Batumi meetings, under the chairmanship of President Saakashvili, focused on the central issue of pipeline and transportation corridors. The theme of the Summit was a "GUAM – Integrating Europe’s East”, from an economic and strategic-military standpoint, essentially with a view to isolating Russia.

The presidents of Azerbaijan, Georgia and the Ukraine (respectively Ilham Aliyev, Mikheil Saakashvili and Viktor Yushchenko) were in attendance together with the presidents of Poland, Lech Kaczynski, and Lithuania, Valdas Adamkus. Moldova's head of State flatly refused to attend this summit.

Map No 1: Georgia

Undermining Russia

The GUAM Summit agenda focused on undermining Moscow's influence in the Caucasus and Eastern Europe. The Polish President was in attendance.

US-NATO installations in Eastern Europe including the Missile Defense Shield are directly related to the evolving geopolitical situation in the Caucasus. Barely a week after the bombing of South Ossetia by Georgian forces, the US and Poland signed an agreement (August 14) which would allow the US Air Force to deploy US "interceptor missiles" on Polish soil:

"... As military strategists have pointed out, the US missiles in Poland pose a total existential threat to the future existence of the Russian nation. The Russian Government has repeatedly warned of this since US plans were first unveiled in early 2007. Now, despite repeated diplomatic attempts by Russia to come to an agreement with Washington, the Bush Administration, in the wake of a humiliating US defeat in Georgia, has pressured the Government of Poland to finally sign the pact. The consequences could be unthinkable for Europe and the planet. " (William Engdahl, Missile Defense: Washington and Poland just moved the World closer to War, Global Research, August 15, 2008)

The "US-GUAM Summit"

Barely acknowledged by the media, a so-called "US-GUAM Summit" meeting was also held on July 1st on the sidelines of the official GUAM summit venue.

US Deputy Assistant Secretary of State David Merkel met both GUAM and non-GUAM delegations behind closed doors. Several bilateral meetings were held including a Poland GUAM meeting (during which the issue of the US missile defense shield on Polish territory was most probably addressed). Private meetings were also held on July 1st and 2nd at the residence of the Georgian President.

US-Georgia War Games

Barely two weeks following the GUAM Summit of July 1-2, 2008, US-Georgian military exercises were launched at the Vaziani military base, outside Tbilisi,

One thousand U.S and six hundred Georgian troops began a military training exercise under Operation "Immediate Response". US troops included the participation of the US Air Force, Army, Marines and National Guard. While an Iraq war scenario had been envisaged, the military exercises were a dress rehearsal for an upcoming military operation. The war games were completed on July 31st, a week before the onset of the August 7th Georgian attacks on South Ossetia.

Troops from Ukraine and Azerbaijan, which are members of GUAM also participated in Operation "Immediate Response" Unexpectedly, Armenia which is an ally of Russia and a staunch opponent of Azerbaijan also took part in these games, which also served to create and "train and work together" environment between Azeri and Armenian forces (ultimately directed against Russia).

Brig. Gen. William B. Garrett, commander of the U.S. military’s Southern European Task Force, was responsible for the coordination of the US-Georgia war games.

Russia's War Games in the North Caucasus

Russia began large-scale military exercises involving some 8,000 military personnel, some 700 armored units and over 30 aircraft ( in the North Caucasus republics of the Russian Federation on July 5th. (Georgian Times, July 28, 2008)

The Russian war games were explicitly carried out in response to the evolving security situation in Abhkazia and South Ossetia. The exercise, dubbed "Caucasus Frontier 2008", involved units of the 58th Army and the 4th Air Force Army, stationed in the North Caucasus Military District.

A Russian Defense Ministry spokesman acknowledged that the military exercises conducted in the Southern Federal District were being carried out in response to "an escalation in tension in the Georgian-Abkhaz and Georgian-Ossetian conflict zones,...[and] that Russia’s North Caucasian Military District was ready to provide assistance to Russian peacekeepers in Abkhazia and South Ossetia if needed.” (Georgian Times, July 28, 2008, RIA-Novosti, July 5, 2008)

These units of the North Caucasian Military District (Army and Air Force) were subsequently used to lead the Russian counterattack directed against Georgian Forces in South Ossetia on August 8th.

Pipeline Geopolitics

A central issue on the GUAM-NATO drawing board at the July GUAM Summit in Batumi, was the Odessa-Brody-Plotsk (Plock on the Vistula) pipeline route (OBP) (see Maps 3 and 4), which brings Central Asian oil via Odessa, to Northern Europe, bypassing Russian territory. An extension of OBP to Poland's port of Gdansk on the Baltic sea is also envisaged.

It should be noted that the OBP also links up with Russia's Friendship Pipeline (Druzhba pipeline) in an agreement with Russia.

Washington's objective is ultimately to weaken and destabilize Russia's pipeline network --including the Friendship Pipeline and the Baltic Pipeline System (BPS)-- and its various corridor links into the Western Europe energy market.

It should be noted that Russia has established as part of the Druzhba pipeline network, a pipeline corridor which transits through Belarus, thereby bypassing the Ukraine. (See Maps 2 and 3 below)

The Baltic Pipeline System (BPS) also operated by Russia's Transneft links Samara to Russia's oil tanker terminal at Primorsk in the Gulf of Finland. (See map below) It carries crude oil from Russia's Western Siberian region to both North and Western European markets.

Another strategic pipeline system, largely controlled by Russia, is the Caspian Pipeline Consortium (CPC). The CPC is a joint venture arrangement between Russia and Kazakhstan, with shareholder participation from a number of Middle East oil companies.

The Baltic Pipeline System (BPS) is tied into the Atyrau-Samara (AS) pipeline, which is a joint venture between Russia's Transneft and Kazakhstan's national pipeline operator, KazTransOil. The AS pipeline in turn links up with the Russia-Kazakhstan Caspian Petroleum Consortium (CPC), which pumps Tengiz crude oil from Atyrau (Western Kazakhstan) to the CPC’s Russian tanker terminal near Novorossiysk on the Black Sea.

On July 10, 2008, barely a week following the GUAM Summit, Transneft and KazTransOil announced that they were in talks to expand the capacity of the Atyrau-Samara pipeline from 16 to 26 million tons of oil per year. (RBC Daily, July 10, 2008).

The GUAM Transportation Corridor

The GUAM governments represented at the Batumi GUAM Summit also approved the further development of The GUAM Transportation Corridor (GTC), which complements the controversial Baku Tblisi Ceyhan (BTC) pipeline. The latter links the Caspian Sea basin to the Eastern Mediterranean, via Georgia and Turkey, totally bypassing Russian territory. The BTC pipeline is controlled by a oil consortium led by British Petroleum.

Both the GTC and the BTC corridors are protected militarily by GUAM and NATO.

The GTC corridor would connect the Azeri capital of Baku on the Caspian sea to the Georgian ports of Poti/ Batumi on the Black Sea, which would then link up with the Ukrainian Black sea port of Odessa. (And From Odessa, through maritime and land routes to Western and Northern Europe).

Map No 2: Strategic Pipeline Routes. BTC, Friendship Pipeline, Baltic Pipeline System (BPS), CPC, AS

Map No. 3. Russia's Druzhba pipeline system

Map No 4 Eastern Europe. Plock on the Vistula

The Baku Tblisi Ceyan (BTC) Pipeline

The BTC pipeline dominated by British Petroleum and inaugurated in 2006 at the height of the war on Lebanon, has dramatically changed the geopolitics of the Eastern Mediterranean, which is now linked, through an energy corridor, to the Caspian sea basin:

"[The BTC pipeline] considerably changes the status of the region's countries and cements a new pro-West alliance. Having taken the pipeline to the Mediterranean, Washington has practically set up a new bloc with Azerbaijan, Georgia, Turkey and Israel, " (Komerzant, Moscow, 14 July 2006)

Map No 5. The Baku, Tblisi Ceyan pipeline (BTC)

Pipeline Geopolitics and the Role of Israel

Israel is now part of the Anglo-American military axis, which serves the interests of the Western oil giants in the Middle East and Central Asia. Not surprisingly, Israel has military cooperation agreements with Georgia and Azerbaijan.

While the official reports state that the BTC pipeline will "channel oil to Western markets", what is rarely acknowledged is that part of the oil from the Caspian sea would be directly channeled towards Israel. In this regard, an underwater Israeli-Turkish pipeline project has been envisaged which would link Ceyhan to the Israeli port of Ashkelon and from there through Israel's main pipeline system, to the Red Sea.

The objective of Israel is not only to acquire Caspian sea oil for its own consumption needs but also to play a key role in re-exporting Caspian sea oil back to the Asian markets through the Red Sea port of Eilat. The strategic implications of this re-routing of Caspian sea oil are far reaching.

What is envisaged is to link the BTC pipeline to the Trans-Israel Eilat-Ashkelon pipeline, also known as Israel's Tipline, from Ceyhan to the Israeli port of Ashkelon. (For further details, see Michel Chossudovsky, The War on Lebanon and the Battle for Oil, Global Research, 26 July 2006)

Map No 6. Trans-Israel Eilat-Ashkelon pipeline

America's Silk Road Strategy: The Trans-Eurasian Security System

The Silk Road Strategy (SRS) constitutes an essential building block of US foreign policy in the post-Cold War era.

The SRS was formulated as a bill presented to the US Congress in 1999. It called for the creation of an energy and transport corridor network linking Western Europe to Central Asia and eventually to the Far East.

The Silk Road Strategy is defined as a "trans-Eurasian security system". The SRS calls for the "militarization of the Eurasian corridor" as an integral part of the "Great Game". The stated objective, as formulated under the proposed March 1999 Silk Road Strategy Act, is to develop America's business empire along an extensive geographical corridor.

While the 1999 SRS legislation (HR 3196) was adopted by the House of Representatives, it never became law. Despite this legislative setback, the Silk Road Strategy became, under the Bush Administration, the de facto basis of US-NATO interventionism, largely with a view to integrating the former Soviet republics of the South Caucasus and Central Asia into the US sphere of influence.

The successful implementation of the SRS required the concurrent "militarization" of the entire Eurasian corridor from the Eastern Mediterranean to China's Western frontier bordering onto Afghanistan, as a means to securing control over extensive oil and gas reserves, as well as "protecting" pipeline routes and trading corridors. The invasion of Afghanistan in October 2001 has served to support American strategic objectives in Central Asia including the control of pipeline corridors. Afghanistan border onto Chinese Western frontier. It is also a strategic landbridge linking the extensive oil wealth of the Caspian Sea basin to the Arabian Sea.

The militarization process under the SRS is largely directed against China, Russia and Iran. The SRS, called for:

"The development of strong political, economic, and security ties among countries of the South Caucasus and Central Asia and the West [which] will foster stability in this region, which is vulnerable to political and economic pressures from the south, north, and east. [meaning Russia to the North, Iraq, Iran and the Middle East to the South and China to the East] (106th Congress, Silk Road Strategy Act of 1999)

The adoption of a neoliberal policy agenda under advice from the IMF and the World Bank is an integral part of the SRS, which seeks to foster "open market economies... [which] will provide positive incentives for international private investment, increased trade, and other forms of commercial interactions". (Ibid).

Strategic access to South Caucasus and Central Asian oil and gas is a central feature of the Silk Road Strategy:

"The region of the South Caucasus and Central Asia could produce oil and gas in sufficient quantities to reduce the dependence of the United States on energy from the volatile Persian Gulf region." (Ibid)

The SRS is also intent upon preventing the former Soviet republics from developing their own economic, political and military cooperation ties as well as establishing broad ties up with China, Russia and Iran. (See Michel Chossudovsky, America's "War on Terrorism", Global Research, Montreal, 2005).

In this regard, the formation of GUAM, which was launched in 1997, was intended to integrate the former Soviet republics into military cooperation arrangements with the US and NATO, which would prevent them from reestablishing their ties with the Russian Federation.

Under the 1999 SRS Act, the term "countries of the South Caucasus and Central Asia" means Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. (106th Congress, Silk Road Strategy Act of 1999).

The US strategy has, in this regard, not met its stated objective: Whereas Ukraine, Azerbaijan and Georgia have become de facto US protectorates, Kyrgyzstan, Kazakhstan, Tajikistan, Armenia and Belarus are, from a geopolitical standpoint, aligned with Moscow.

This extensive Eurasian network of transport and energy corridors has been defined by Washington as part of an American sphere of influence:

"In the Caspian-Black Sea Region, the European Union and the United States have concentrated on setting up a reliable logistics chain to connect Central Asia with the European Union via the Central Caucasus and Turkey/Ukraine. The routes form the centerpiece of INOGATE (an integrated communication system along the routes taking hydrocarbon resources to Europe) and TRACECA (the multi-channel Europe-Caucasus-Asia corridor) projects.

The TRACECA transportation and communication routes grew out of the idea of the Great Silk Road (the traditional Eurasian communication channel of antiquity). It included Georgian and Turkish Black Sea ports (Poti, Batumi, and Ceyhan), railways of Georgia and Azerbaijan, the Baku-Tbilisi-Ceyhan oil pipeline, ferry lines that connect Turkmenistan and Kazakhstan with Azerbaijan across the Caspian Sea/Lake (Turkmenbashi-Baku; Aktau-Baku), railways and highways now being built in Turkmenistan, Uzbekistan, Kyrgyzstan, Kazakhstan, and China, as well as Chinese Pacific terminals as strategically and systemically important parts of the mega-corridor." (See GUAM and the Trans-Caspian Gas Transportation Corridor: Is it about Politics or Economics?),

The Kazakhstan-China Natural Gas Pipeline (KCP)

Barely a few days following the GUAM Summit in Batumi, China and Kazakhstan announced (July 9, 2008) the commencement of construction work of a 1,300-kilometer natural gas pipeline. The inaugural ceremony was held near Kazakhstan's capital Almaty.

The pipeline which is to be constructed in several stages is expected to start pumping gas in 2010. (See silkroadintelligencer.com, July 9, 2008)

"The new transit route is part of a larger project to build two parallel pipelines connecting China with Central Asia’s vast natural gas reserves. The pipes will stretch more than 7,000 kilometers from Turkmenistan, cross Uzbekistan and Kazakhstan, and enter China’s northwestern Xinjiang region. Uzbekistan started construction of its part this month while Turkmenistan launched its segment last year." (Ibid)

Map No 7. Kazakhstan-China natural gas pipeline (KCP)

China’s National Petroleum Corporation (CNPC) which is the leading operator of the consortium, "has signed deals with state oil and gas firms of Turkmenistan, Uzbekistan and Kazakhstan giving them 50 percent stakes in their respective parts of the pipeline."

The KPC pipeline project encroaches upon US strategic interests in Eurasia. It undermines the logic of America's Silk Road Strategy. The KPC is part of a competing Eurasian based transportation and energy strategy, largely dominated by Russia, Iran and China.

Competing Eurasian Strategy protected by the SCO-CSTO Military Alliance

The competing Eurasian based corridors are protected (against US-NATO encroachment) by two regional military alliances: the Shanghai Cooperation Organization (SCO) and the Collective Security Treaty Organization (CSTO)

The SCO is a military alliance between Russia and China and several Central Asian former Soviet republics including Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Iran has observer status in the SCO.

The Collective Security Treaty Organization (CSTO), which plays a key geopolitical role in relation to transport and energy corridors, operates in close liaison with the SCO. The CSTO regroups the following member states: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.

Of significance, since 2006, the SCO and the CSTO member countries have conducted joint war games and are actively collaborating with Iran.

In October 2007, the Collective Security Treaty Organization (CSTO) and the Shanghai Cooperation Organization (SCO) signed a Memorandum of Understanding, laying the foundations for military cooperation between the two organizations. This SCO-CSTO agreement, barely mentioned by the Western media, involves the creation of a full-fledged military alliance between China, Russia and the member states of SCO/CSTO. It is worth noting that the SCTO and the SCO held joint military exercises in 2006, which coincided with those conducted by Iran. (For further details see Michel Chossudovsky, Russia and Central Asian Allies Conduct War Games in Response to US Threats, Global Research, August 2006)

While remaining distinct from an organizational standpoint, in practice, these two regional military alliances (SCO and SSTO) constitute a single military block, which confronts US-NATO expansionism in Central Asia and the Caucasus.

Full Circle

The US-NATO protected SRS Eurasian transport and energy corridors, are slated to link Central Asia to the Far East, as outlined in the Silk Road Strategy. At present, the Eastward corridors linking Central Asia to China are protected militarily by the SCO-CSTO.

In terms of Washington's global military and strategic agenda, the Eurasian corridors contemplated under the SRS would inevitably encroach upon China's territorial sovereignty.The proposed US-NATO-GUAM pipeline and transportation corridors are intended to connect, at some future date, with the proposed transport and energy corridors in the Western hemisphere, including those envisaged under the North American Security Prosperity Partnership (SPP).

The Security Prosperity Partnership (SPP) is to North America what the Silk Road Strategy (SRS) is to the Caucasus and Central Asia. They are strategic regional constructs of America's business empire. They are the building blocks of the New World Order.

The SPP is the result of a similar process of strategic planning, militarization and free market economic integration, largely based on the control of strategic resources including energy and water, as well as the " protection" of energy and transportation corridors (land and maritime routes ) from Alaska and Canada's Arctic to Central America and the Caribbean basin.

Author's Note: This article has focused selectively on key pipeline corridors with a view to analyzing broad geopolitical and strategic issues.
An examination of the overall network of Eurasian pipeline corridors would require a far more detailed and comprehensive presentation.

Map of Med/Red-Dead Sea canals and Peace Drainage Canal (1998)

http://images.google.ca/imgres?imgurl=http://www.unu.edu/unupress/unupbo...
Click here for larger map.



Proposed Route of the Red-Dead Canal

The Jordan Basin
http://www.mideastweb.org/water.htm

April 4, 2009
Water: The strategic resource in the Middle East
Israel’s Water Wars
by Jason Godesky
15 August 2006
http://atheonews.blogspot.com/2009/04/water-strategic-resource-in-middle...

Israel’s ecology varies from semi-arid to complete desert, yet it has intense water needs. These are fulfilled primarily by three sources. Lake Kinneret (a.k.a., the Sea of Galilee) provides over a third of Israel’s water. Another third comes from two aquifers—large, geographical areas of subterranean catchment where water accumulates. These aquifers lie beneath the Gaza strip and the West Bank: precisely the territories Israel seized in the 1969 war.

Under international law, the West Bank and Gaza are occupied territories, and the Geneva Conventions—which govern the appropriate use of occupied territories—forbid moving people into an occupied territory. That’s precisely what Israel’s settlement program did. Israel then proceeded to siphon the water of the West Bank away from its native Palestinian population, to the new settler population.

At present, Israelis receive five times as much water per person as Palestinians. In Gaza, the disparity is even more striking, with settlers getting seven times as much water as their Palestinian neighbors. Stated differently, on average, Israelis get 92.5 gallons per person per day, while Palestinians in the West Bank get 18.5 gallons per person per day. The minimum quantity of water recommended by the U.S. Agency for International Development and the World Health Organization for household and urban use alone is 26.4 gallons per person per day. …

Israel did hook some Palestinian towns into the water network—although nearly 30 percent of Palestinian homes have yet to be connected—but it did not provide appropriate maintenance work, with the result that, today, as much as half of the water meant to supply some Palestinian towns may be lost to leaking pipes, according to B’Tselem. The country also gave Israelis and settlers priority access to water: In the summer, when water is scare, the Israeli water company Mekorot shuts the valves of the main pipelines supplying Palestinian towns so that Israeli supplies remain unaffected. (32)

In 2005, Ariel Sharon forcibly removed 7,000 settlers from the Gaza strip, amidst great controversy domestically. The move forced him to break away from the Likud party he’d helped found with Menachem Begin to form the new, centrst Kadima party. Controlling the West Bank cost Israel $3 billion per year in military expenditures, but gave Israel control of the aquifers beneath it. A criticism of Sharon’s plan in the New York Jewish Times cited precisely the importance of the West Bank’s water:

During a debate at Tel Aviv University’s Diplomatic Forum, when challenged on how, after disengagement from Northern Samaria (which overlies hydrologically crucial areas of the Mountain Aquifer), Israel will be able to continue to manage and preserve its national water system, Dov Weisglass - Prime Minister Sharon’s crony and mouthpiece - admitted with some embarassment that he did not really undertand much about water problems and added flippantly, to the astonishment of the audience (which included many foreign embassy staff), “maybe we’ll have to import bottles of water.” (36)

Though Sharon’s “crony” may not have been briefed, it’s obvious that Sharon was. This is the same Ariel Sharon who, as a general fighting it, admitted publicly that the 1967 war was fought to obtain water. Sharon withdrew Israeli settlers from Gaza—but only because it had ceased to provide the water it once had. The “level of salting and other pollutants has reduced the quality in numerous sites to below that permissible for drinking water.” (37) Once Israel had used up the resource and it was no longer potable, Sharon gave up the cost of defending the region and generously returned it to the Palestinians.

Because of saltwater intrusion from the sea into the aquifer, and recirculation and evaporation losses of pumped groundwater, the quality of the water is deteriorating faster than fresh rainwater can desalinate it. This means that Gaza residents must acquire water from beyond their borders, which are closed at present; build a large desalination plant; or eliminate agriculture within the next two decades, said the two researchers, Assistant Professor Charles Harvey and Dr. Annette Huber-Lee of the Department of Civil and Environmental Engineering.

“We’re not talking about a hundred years into the future,” said Dr. Huber-Lee, lead author of the study. “I can show numbers that say it’s a problem very soon. It’s reaching a point where you have to decide what you are willing to impose upon people, and without additional sources of water, you finally have to eliminate agriculture.”

Agriculture is about 30 percent of Gaza’s gross domestic product. While this percentage hasn’t decreased in the past 20 years, the increasing salinity has affected the types of food grown, eliminating most citrus fruit—which is sensitive to saline—in favor of salt-tolerant vegetables and flowers.38

With the collapse of the Coastal Aquifer from Israel’s overuse, and signs that the same process may now be happening (though more slowly) at Lake Kinneret, the importance of the Mountain Aquifer is only intensified, but that lies beneath the West Bank, and remains a major flashpoint of tensions. After the 1967 war, Israel siezed 80-85% of the West Bank’s water resources. More recently, the “security barrier” has been used as a means of claiming more water for Israel.

The barrier does not run along the old 1967 border or the 1949 armistice line between Israel and the Arab states, which, in the eyes of the United Nations, delineates Israel and the West Bank. It will contain at least 50% of the West Bank, including the whole of the western mountain aquifer, which supplies the West Bank Palestinians with over half their water. (39)

The barrier has already cut off many Palestinians from their traditional water sources,40 and an article in Ha’aretz estimated that the bizarre loops and zig-zags of the barrier, adhering to no previous delineation, would place some 95% of the Mountain Aquifer on the Israeli side . (41)

Even so, Israel is fighting a losing battle to supply its voracious need for water. A highly complex society in a semi-arid/desert ecosystem is always going to have a chronic water problem, but Israel’s voracious consumption and lack of environmental responsibility has turned that problem into a crisis. Conservation policies have had an effect, but they are limited. Desalination plants are used, but they are expensive. To continue its growth, Israel needs new sources of water. This is a question of life or death for Israel: either it will take new sources of water, by any means necessary, or it will fail to meet its needs for continual growth, and die. But water is a zero-sum game: for Israel to have more, others must have less. Water is no less necessary for Israel’s neighbors than it is for Israel itself, so it is unlikely that this situation could ever end peacefully.

After the 1967 war—the war Ariel Sharon said had been waged to conquer the water sources Israel needed—Moshe Dayan commented that the new conquests gave Israel “provisionally satisfying frontiers, with the exception of those with Lebanon.”

The Litani River is the primary source of water for southern Lebanon. It starts west of Baalbek, in the Biqa’a valley. The average annual flow of the river is estimated at 920 MCM, with 480 MCM measured at the Khardali Bridge, where it makes an almost 90 degree bend to flow west into the Mediterranean.

Permanent occupation of southern Lebanon and continued access to the Litani could augment the annual water supply of Israel by up to 800 million cubic meters, or approximately 40 percent of its current annual water consumption. …Another attraction of the Litani River is the high quality of its water. The salinity level is only 20 parts per million, whereas that of the Sea of Galilee is 250 to 350 parts per million. Many aquifers in Israel are stressed, especially along the coast, and the water in them is increasingly brackish. The water of the Litani would lower the saline level of the Sea of Galilee, from which the National Water Carrier channels water to much of the country. “It is this purity that makes the Litani very attractive to the Israelis, who have developed their National Water Carrier System with a view towards potable (as opposed to irrigation quality) water.” (42)

Not only could the Litani provide the volume of water Israel so desperately needs, but it’s a clean source of water, with very low salinity. It could help repair the water sources that Israel’s overuse has turned salty and brackish. This has been understood by Israel for a very long time, and we can see the Litani River cropping up in Israeli history on a regular basis.

Even before Israel was a state, an engineer in 1905 proposed diverting water from the Litani at its westward bend, to the Hasbani River, a tributary of the Jordan, because “the waters of the Jordan basin would be insufficient for the future needs of Palestine.”

"Prestatehood Jewish interests in the Litani River were made explicit in letters from Chaim Weizmann, head of the World Zionist Organization (WZO), to various British governmental officials in 1919 and 1920. In a letter to Prime Minister David Lloyd George, Weizmann argued that Lebanon was “well watered” and that the river was “valueless to the territory north of the proposed frontiers. They can be used beneficially in the country much further south.” Weizmann concluded that the WZO considered the Litani valley “for a distance of 25 miles above the bend” of the river essential to the future of the Jewish “national home.” Nevertheless, the British and the French mandate powers retained the Litani basin entirely in Lebanon. David Ben-Gurion, a leading Zionist and the first prime minister of Israel, suggested to a 1941 international commission on the question of Palestine that the Litani be included in the borders of the future Jewish state. The commission recommended that seven-eighths of the river’s waters be leased to Israel." (43)

In his diaries, Moshe Sharett—Israel’s second prime minister—quoted Moshe Dayan after the 1967 war as saying that the war had left Israel with “provisionally satisfying frontiers, with the exception of those with Lebanon.” The exception Dayan was referring to was Israel’s continued lack of access to the Litani River. While the water sources captured in 1967 were estimated to last Israel into the 1980s, planners anticipated that Israel would need the Litani by then to make up for the shortfall.

Israel hoped that it would have use of the Litani by the mid 1980s, when it projected that it would have fully used up the waters captured in the 1967 war.

Israel hoped to meet this goal by securing the Litani in 1978. Israel had even included the Litani in calculations of their water resources. (44)

In his same diaries, Sharett quoted Dayan’s plan for how Israel might achieve access to the Litani River, from a secret cabinet meeting:

According to him, the only thing necessary is to find an officer, even just a major. We should either win his heart, or buy him with money, to make him agree to declare himself the savior of the Maronite population. Then the Israeli army will enter Lebanon, occupy the necessary territory, and will create a Christian regime which will ally itself with Israel. The territory from the Litani southward will be totally annexed to Israel, and everything will be all right.

In the mid-1970s, Palestinians displaced into Lebanon brought tensions between the various factions in Lebanon to a head. Bachir Gemayel, the leader of the Maronite Christian Phalange, was long rumored to have accepted Israeli support and training for his troops. Israeli prime minister Begin grew depressed about the invasion of Lebanon when his hopes for forming a peace with Gemayel were dashed by his assassination. The South Lebanon Army or SLA, also made up of Christians, were seen largely as puppets of Israel. The evidence is circumstantial, but certainly provocative: on the timeline anticipated by Israeli hydrologists, when their estimates required access to the Litani River, a series of events—most of them traceable to Israeli policies—converge to create the very state of civil unrest that Moshe Dayan had proposed for an Israeli invasion to sieze the Litani.

In 1978—the year that Israel’s long term water plans drawn up after the 1967 war called for acquiring the Litani—with the war seeming to reach an uneasy truce, the peace was shattered when Israel invaded, ostensibly to establish a “security zone” in southern Lebanon that would have a northern border of the Litani River—the border Ben Gurion had proposed for Israel in 1947. The codename of the invasion was “Operation Litani.”

The hyrdostrategic significance of southern Lebanon is rarely considered as an explanation of current Israeli occupation of the security zone there. The zone stretches along the northern border of Israel and straddles the westward bend of the Litani River. Israel unilaterally established the zone in 1978, after Israeli troops invaded and remained as a hegemonic occupier. Although there are between one and two thousand Israeli troops in the zone, it is controlled and administered by a Christian Lebanese army general who heads the South Lebanese Army (SLA). Trained, equipped, and paid by the Israeli government, the SLA is nonetheless a quasi-militia, composed of Lebanese. The zone has 850 square kilometers, with 85 villages and a population of approximately 180,000.

Shortly after establishing the zone, the Israeli army prohibited drilling of wells there. Moreover, after the 1982 invasion, Israeli army engineers carried out seismic soundings and surveys near the westward bend of the river, probably to determine the optimum place for a diversion tunnel, and confiscated hydrographical charts and technical documents of the river and its installations from the Litani Water Authority offices in the Biqa’a and Beirut. Israel also controlled most or all of the waters from the Hasbani and Wazzani rivers, which rise in Lebanon. Over the years, there have been reports of water siphoning from the Litani into the Jordan River basin, a distance of less than ten kilometers. …

No one can yet document categorically that the Litani waters are being diverted, because large tracts of land near the crucial westward bend of the river are cordoned off by Israeli troops, which prevents researchers, journalists, and United Nations observers from approaching the area. Independent water analysts, however, have reported that Israel has been diverting some water from the Litani River into the Jordan River by tapping the massive underground water resources. Hence the measured flow of the Litani is not affected. (45)

Note:
See original article for citations.
http://atheonews.blogspot.com/2009/04/water-strategic-resource-in-middle...

On The Evil In This World.

I have to note first that in the following essay I have used masculine pronouns throughout. I have often wondered what it would be like for a woman to read about somone she is supposed to, or wants to, identify with only to be faced with “He” and “His” all the time. I have tried it by reversing it and it feels very exclusionary. Our language doesn't seem to have an answer to this problem. It is particularly unfortunate, in this instance, because I will be talking about victims and women, as a group, suffer much more from victimisation than men do. Also, of all the brave people I personally know, all bar one of them are women. In my defence, I can only point out that all the abusers and exploiters mentioned are also exclusively male. Never-the-less, women readers have my apologies in advance.

I will also be arguing for the existence of a benevolent God. I have come to this understanding through my experiences and through Christianity but I do not want to imply that I endorse any denomination. All the denominations I have had anything to do with have caused more harm than good through ignorance and hypocrisy. Mostly, I believe, it is the pathology of power behind the hypocrisy and wilfullignorance. My advice is to approach them with caution, if at all. So with those two qualifications out of the way (and if I haven't put you off already!), let's into it.

In another thread on this blog, some of us were discussing a brilliant, brilliant article from Joe Bageant and during the course of this, McJ made this comment,
“I would be interested in anyone has thoughts on how 'evil' exists. If God permeates us all, does evil come from one rejecting an orientation towards this 'animating spirit'? “
To which Tsisageya added this,
“I might add that, after awhile, there comes a point of no return---or forgiveness, if you will. I mean if a living being rejects/destroys life itself, then wouldn't that lead to death, hence, separation from God?”

I said I would like to comment on this but would need a little time to think it through and arrange it or to “get all my ducks in a row”! The following is the result:-

I'd like to go back to what I mentioned in the comment on the previous thread about the source of life and build up my argument from there.
Biologists and pathologists are unable to determine the source of life within any organism including humans. They can't establish where in the body the source of life is or, indeed, what it is. Nor can they establish what's not there after death. So if the source of life is not within the body, it must be without. The source cannot be located elsewhere in the world, either, so one has to conclude it comes from outside this world, outside the physical universe. A power from outside this physical realm that animates it and gives it life and is therefore integral with it must come from the same source as the physical creation. This being so, then it must come from God. If GOd is the ultimate source of life, then we are alive because God is alive in us. If God is alive in us then he must feel everything we feel including, and especially, our pain.

Now God is only creative and therefore cannot be destructive. Or as John says (1John 1:5) “God is light and in him there is no darkness at all”. If there were darkness in him, then God would be at war with himself. This is impossible. He would be doing violence to himself and denying his own nature. I have argued this further in “Introduction to the Enemy”.
But there is “darkness' in this world and it seems to be at war with all that is creative, everywhere. We read everyday in our news countless people being killed to satiate the greed of a few men. Our governments waging war against largely defenceless people for oil, uranium, gold, diamonds, water and goodness knows what else. They are destroying the world so they can rule it. They are destroying God's creation so that they can rule it in God's place. This creation is not only the physical territory and its resources but also includes all us human beings. This small handful of men behind our various governments want to be God. But they're not God! Are they mad? Yes, indeed. Insanity is being detached from reality i.e. deluded. And the ultimate delusion would have to be that you are God or that you could be God.

It reminds me of that great scene in “Life of Brian” where Eric Idle's character wants to be called Loretta from now on (fair enough) and to be acknowledged as having the “right” to have a baby (not so easy)! Eric's slippery grip on reality is humorous because of its lunacy. Unfortunately, these madmen that rule us and their lunacy cannot be laughed off as easily. If only they could be.

So how did we get to this sorry state when we were created by God in whom there is no darkness and created in his likeness? God created us with free will. We know this because we have choice and so we can, amongst a multitude of other things, choose him or reject him. To choose him is to accept the reality that he made and part of that reality is that the world is here for us to use and not to exploit. And to continue to use the world we have to leave it in a sustainable state. Sustainability must be a part of the plan. Also part of the world are our fellow human beings. They are here to help us and to be helped by us and not to be exploited, either. If God made us, and made us with free will, then he is into relationships. That being so, he would expect us to have relationships amongst each other which would reflect his (hoped for) relationship with us; supportive and non-exploitative relationships which also means sustainable relationships.

Implicit in granting us each free will, God also granted us authority over our own lives. It follows then that clearly we cannot have authority over anyone else's life. This is where all religions and religious leaders go wrong whether they realise it or not. If we try to gain authority or power over someone else, we are going against God's will for that person and ourselves. If we are then rebelling against God, then we are also rebelling against reality. If this is true, then we could expect things to start messing up because we are not driving this machine as it is supposed to be driven i.e. the way God designed this world and us in it to function. Are things screwing up? Absolutely and bigtime! And what's more, the last thing this situation is, is sustainable.

On an individual level, if we are rejecting God's will for us by exploiting others would we not be then rejecting God and some of the life he has for us? Yes, I believe so (and priests and pastors are by no means immune from this, either). I see evidence of it in increased stress levels that lead to increased disease and mental anguish and violent behaviour. Crucially, it removes the joy from one's life; the pure, literally invigorating, “joie de vivre” that is free from any other agenda. The closest the exploiter will get to this is glee which is a very bittersweet thing. There is always hatred at the back of it. The other quality to disappear from your life is peace; that ease that comes from being at ease with oneself.

So we have free will to choose God and God's reality with its sustainability or reject it. But given that God's reality is the only game in town, the only reality we have, we would be crazy to reject it. But we do and we are. The craziness comes from the rejection little by little. The really sad part is that a small rejection of reality, of going against God's will or desire for us all, results in a small amount of craziness because we tell ourselves it's right or worse, God's will. We are practising delusion and this same craziness prevents us from appreciating the little bit of sanity, the little bit of connection to reality we just lost. I don't know if you have ever tried to reason with someone who is seriously deluded or psychotic, but it is just hopeless. Or tried to talk sense to an addict who is still on the way up and thinks he is in control. Again, hopeless. We can readily recognise people who are crazier than we are and can understand why they are angry and driven (without any joy or peace) but it is a little harder to get a handle on people who are saner than we. They often look simple or guileless which can appear foolish or perhaps just serene. But it is very hard to understand why; to “get” what they “get”, if you know what I mean.

I have said before that I believe that the craziness that leads us to believe we can (and even should!) have power over others is addictive and has the same deluded pathology as any other addiction and that we all have the potential to go down this path. I have talked more at length about this addictive behaviour in “Introduction to the System”. What inhibits most people from going down this path to any great extent is something else God gave us, a conscience. You may think that conscience is a cultural thing but it is remarkably similar across all cultures. And nevermind that all cultures say one thing but do another. So we are all tempted to emulate God and seek power over others (even though God has this power he doesn't use it) but we have to actively reject God to do so by going against our conscience. It is definitely a choice. It most probably won't be verbalised but it is never-the-less a choice. And God has allowed us to do that. Why, when the consequences are so predictable and always bad? Because of love. You can't love someone if you don't have free will i.e. free will not to love that person. And you can't love someone fully if they don't have free will, either, because love, at its most complete, is a relationship and in this free will, you have to be equal.

So we've covered free will and rejecting God and the craziness and the destruction that comes from it but does this account for the evil in the world? I suppose for those that think evil is simply an absence of good, it does. But for those that perceive evil to be more than that, and I am one of them, it doesn't. For those of us that look into the atrocities of genocide and systematic rape and torture, it strikes us that something outside our understanding is going on here. Something is terribly wrong. It's much more than an argument that has gotten out of hand. There is a malevolence present. From here, I have to leave the logical argument behind and express my opinions and talk of the experiences that have shaped them. They will either strike you as true or not.

For those that have encountered evil, it is more than an idea; it is a force and, what is more, you can feel it. I have seen and experienced evil up close. I have seen people brutally murdered for the thrill of power and, quite literally, as an overt act of war against God. I have seen a satanic cult at work and, believe me, it was and they still are (as there are many of them throughout our societies) at war against God. The cult members, at times, displayed levels of hatred few would believe possible. They are at the extreme end of the psychopathic spectrum. It is the demonic force acting within them. How do I know this force is demonic? Because I once saw the demon that was in one of these cult members. It was total hatred. The force of that hatred hit me like a bow wave before it.

This demonic force wants to destroy everything that God created. It cannot destroy God so it will destroy everything that God loves. The more “good” a person is the more anathema they are to the demonic. The more helpless and innocent the victim, the better they like it because it is all the more an affront to God and to those that side with him. It is also an attempt to overwhelm and dominate the rest of us. That is its purpose from the demonic point of view and it is the demonic that is driving these offenders. So if you have ever heard yourself asking, “How on earth could someone possibly DO that?!”, now you know.

People are very imperfect as we all know but most of us would like to be and, indeed, try to be better; to be more helpful or more considerate or whatever. Some of us, though, don't try to be better or to co-operate more. At base these people are acting out of fear whether they realise it or not. These people can be reached through example and through cajoling and even a little behaviour modification or “re-education”such as isolation from the rest of us should they become convicted criminals to encourage their understanding of the need for co-operation and socialization. You won't change them through punishment, though, save for the isolation should it be employed. The desired behaviour has to be modelled to them (as distasteful as that may sound to many!).

But there are others, still, who are extremely destructive and who are beyond reach; beyond change. Psychiatry calls them sociopaths. We, in common everyday language, call them psychopaths. These people need to be isolated from the rest of society as other criminals (if they are ever convicted) until they exhibit change and as they never change, this means permanently. While maintaining this separation, they should be treated very humanely (because we are into humane treatment for everybody . . . aren't we?!)

How do some people become psychopaths? It is thought by some psychiatrists and research psychologists (and satanists, too, I might add!) that it comes through childhood abuse. It may appear to be severe or not. What it will always be about though, in my opinion, is a decision for or against compassion for others. Either the abused child decides, “So this is how the game is played. This is the totality of the world. You are either a victim or an abuser. I don't want to be a victim so I'll become an abuser”. This child will not see a third alternative. This child becomes a psychopath, I believe, because from here on in he has to push down the voice of his conscience and as the child is still very young and developing, it can be done very effectively.

Or alternatively, the child victim may reject being what he hates, an abuser, and decide to be a victim. This child probably will not see a third alternative either, at least not for the time being. But later, he might. And that third alternative is to be free. To reject the abusers' view of the world as divided neatly into perps and victims with no other options. To be free, the child, or more likely the adult by now, has to let go of the burning desire for revenge and hand it over to God to deal with. We simply aren't equipped to deal with it. It will destroy the victim as surely as if he had become an abuser because he will be harbouring violence in his heart. And violence is violence no matter how you might justify it and its effects are just the same. I know this truth from bitter experience. Revenge will often cloak itself as a desire for justice for oneself and for others so one has to be very discerning.

We, as a society, need for our own protection to identify and avoid or, better, isolate socially these psychopaths. I could list a string of tell-tales to look for but most of it is covered by:-
1. watching out for liars; three strikes and they're out! Be wary of people who are more charming than the situation calls for and

2. look for what a friend of mine calls “fish-eyes”. These are people who have no life in their eyes. You look in but get nothing back. They are completely blank.

3. “By their fruits you shall know them”, as someone wisely once said. If you suspect someone of being a psychopath, seek out people from their past to talk to and dig into their history.

4. Then share your knowledge with others. Stick to the facts. I wouldn't label them as psychopaths unless the person you are talking to is very familiar with the term and the condition. I would, instead, focus on the chronic lying and on them displaying no conscience and what that means.

It is right to be angry with these people, or more correctly, with what they have done and are doing but revenge is not an option. We don't know what we would have done in their shoes come decision time. I was treated in ways few people can imagine and I didn't decide to throw my lot in with the abusers. But to this day, I don't know how I chose the way I did. I don't take credit for it because I don't know what was at work in me and because of that I am not about to blame someone who chose differently. This still calls for their enforced separation from the rest of us, not as revenge but for our safety. It is or responsibility to keep ourselves, our families and our neighbours safe from harm. It is God's responsibility to judge and apply retribution, not ours. To do so would be to act in God's place and that is the start of the slippery slope that the perpetrators started on. Do we want to end up in their shoes?

As I have found out, if you entertain, or worse embrace, revenge and violence no matter how much you may think it justified, you will hurt people you didn't intend to. There are always unintended and unforeseen consequences. The only predictable aspect of violence is that it will lead to more violence. And from a satanic point of view, that is its purpose - ever more violence and destruction.

The Afghanistan and Iraqi wars were sold to the public as classic “bait and switch” gambits. They wouldn't have worked if the public at large didn't have violence in their hearts to start with; if they didn't have such concepts as righteous or redemptive violence within themselves. You see? It's a trap. It's always a trap. Judged from the results, there is no "good" violence.

When I talk of violence, I am not talking about the use of physical force needed to defend yourself. I am talking about anything that goes the slightest bit beyond that. I am talking, more particularly, about an attitude.

This decision in later life to not seek revenge has given me freedom from the trap of the endless violence/victim/revenge/violence/victim cycle. This is not to say I'm perfect at it, by any means, but I am no longer driven and do much less harm to those around me. I have choice in my life and a measure of peace. Violence in your heart will rob you of both joy and peace and also your ability to choose freely. I am not sure how it works but I have definitely noted this loss of autonomy or freedom and free will in myself and others. Perhaps fear blinds us to our choices or even that we can choose at all and perhaps also this is why our governments push fear at us all the time. Regardless, I know freedom and autonomy is much more likely to come from having peace rather than fear in our hearts and to have peace in our hearts we need to first eject violence from them.

So in conclusion, I'd like to say that if we embrace God and live as God intended (and you don't have to be Einstein to work out what that is!) then we will have a measure of peace and joy in our hearts and we will be creative. We will have life (joie de vivre/God's love) and life abundantly. If, on the other hand, we decide to exploit the world and everybody in it, we can expect to have fear and destruction all around us and, indeed, within us as individuals and collectively as societies because we are not using this world or ourselves as we were designed to function. And worse, once we decide to embrace violence and the exploitation of others i.e. evil, we leave our door wide open for demonic forces to enter the world through us and bringing their evil and hatred with them to add to our own heartlessness. This brings not only untimely physical death but spiritual death as well because we have chosen the ultimate insanity; to reject the very source of life itself. And God will honour that choice.