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Meet the Secretive Committees that Run the Global Economy

Meet the Secretive Committees that Run the Global Economy

By: Andrew Gavin Marshall

8 October 2015

Originally published at Occupy.com

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There exists an overlapping and highly integrated network of institutions, committees and secret meetings of ad-hoc groups that collectively run the global economy. This network consists of finance ministries, central banks, international organizations and the various conferences and confabs that bring them together. This network is responsible for facilitating global financial diplomacy and managing the architecture of global financial governance. In short: it is the most powerful and informal political structure in the world.

With the United States at the center of the system, the Treasury Department and Federal Reserve Bank are the two most important American institutions in global financial governance – and the Treasury Secretary and Federal Reserve Chairperson are the world’s two most powerful financial diplomats. Both institutions are headquartered in Washington, D.C., just down the street from the headquarters of the International Monetary Fund (IMF) and World Bank Group, two global financial bodies created in 1944 to manage the world economy on behalf of the rich Western nations that founded them.

Twice a year, the IMF and the World Bank host large international conferences. The Spring Membership Meeting, typically held in April, and the Annual membership meeting draw a crowd consisting of most of the finance ministers and central bank governors from the IMF’s 188 member nations, representing the Fund’s Governing Board. They descend on D.C. where the meetings are typically held (though occasionally they are hosted in other countries as well), and draw scores of journalists, academics and thousands of bankers and financiers who are eager to meet, greet, wine, dine and make deals with the political decision-makers of the global economy.

The top five shareholders of the IMF (United States, Japan, Germany, France and U.K.) reflect the membership of an ad-hoc group of finance ministers that began meeting in 1973, thereafter known as the Group of Five (G-5). At the time, U.S. Treasury Secretary George Shultz described the group as “a channel for informal and very frank communication on monetary and other issues, both of a long-term and more immediate character.” But the G-5 was hardly the first of such groups.

In 1962, the Group of Ten (G-10) was formed as a meeting of finance ministers and central bank governors from the rich industrial nations, including the U.S., West Germany, Japan, France, U.K., Italy, Canada, Belgium, Sweden, Netherlands (and eventually Switzerland, although the name remained the same). The G-10 would meet alongside the leaders of the IMF, the Organization for Economic Cooperation and Development (OECD) and the Bank for International Settlements (BIS).

Following the U.S. unilateral decision to end the Bretton Woods monetary system in 1971, a series of committees and groups were established to provide forums for major economies of the world to negotiate forming a new monetary system, and to integrate developing economies into the institutional apparatus of global financial governance. The Group of Ten was utilized as one such forum.

In 1972, the G-10 laid the groundwork for the establishment of a special Committee of 20 to be formed within the IMF, whose membership reflected the composition of the IMF Executive Board, but at the ministerial level – giving it a much higher level of political authority than the board, which is composed of mid-level officials from their respective national finance ministries. The committee would include most G-10 members alongside several developing country representatives, and was formally institutionalized in late 1974 as the “Interim Committee” of the IMF.

(Although the Group of Five was formed in 1973, it wasn’t until 1975 that it held the first meeting at the head of state level, with the addition of Italy to the group. The following year, Canada was invited to participate, and thereafter it was known as the Group of Seven (G-7), effectively functioning as the steering committee for the global economy.)

Fast forward to the mid-1990s, when the G-7 nations instructed the Group of Ten to consult with emerging market economies on ways to reform the global financial architecture in cooperation with major international organizations like the IMF, World Bank, OECD, and BIS, which were increasingly opening their membership and ownership positions to large emerging market economies.

The idea was thus: If developed countries give developing countries a stake in the existing system, they won’t use their new-found wealth and power to oppose that system. And all the while, the West was to remain at the center. Through crisis and collapse and “rescue” efforts led by the IMF, BIS and World Bank, developing and emerging market economies were encouraged to accept Western economic “advice” on how to manage their economies. If they wanted bailouts in the form of loans from international institutions, those countries had to follow conditions that demanded a total restructuring of their economies and societies along G-7 lines – designed to transform them into modern “market economies” capable of integrating into the larger global economy.

The groundwork was laid out over the following years, and in the course of 1999, the IMF’s Interim Committee was reformed into the International Monetary and Financial Committee (IMFC). The G-10 organized several seminars involving major emerging market economies and, together with the G-7, formed a new group known as the Financial Stability Forum (FSF), a meeting group of central bankers, finance ministers and regulators who were handed responsibility for maintaining financial stability in the world. Finally, 1999 also saw the organizing efforts of the G-7 result in the formation of yet another forum, the Group of Twenty (G-20).

The G-20 was born in December of 1999 at a meeting of finance ministers and central bank governors from the G-7 nations, along with Russia, China, India, Brazil, Indonesia, Korea, Australia, Mexico, Saudi Arabia, South Africa, Turkey, Argentina and the European Union. The event was attended by top officials from the IMF, World Bank and the European Central Bank. But despite all the international noise, the G20 was largely the initiative of two men: Canadian Finance Minister Paul Martin and U.S. Treasury Secretary Lawrence Summers.

The G-7, or G-8 once Russia was invited in, remained the main forum for global economic leadership. But in the midst of the global financial crisis in 2008, the G-20 was the group convened by U.S. President George W. Bush, who brought together heads of state for the first meeting that took place in Washington on November 15. That meeting produced an agreement among G-20 nations to pump trillions of dollars into their economies in order to bail out their banking systems.

In 2010, then-President of the European Central Bank, Jean-Claude Trichet, explained at a meeting of the Institute of International Finance (IIF) that the G-20 had emerged “as the prime group for global economic governance.”

Speaking to a crowd of hundreds of the world’s most powerful bankers and financiers, Trichet explained, “Global economic governance embraces supranational institutions – such as the IMF – as well as informal groupings – such as the G-7 and the G-20. Both are necessary, and both are complementary.” Trichet praised the evolving system as “moving decisively towards a much more inclusive system of global governance, encompassing key emerging economies as well as the industrialized countries.”

To this day, the hierarchy of global economic governance follows a familiar pattern. Take the IMF’s meetings, where 188 of the world’s finance ministers and central bankers meet. The International Monetary and Financial Committee (IMFC) holds a meeting, functioning as the steering committee to the Fund. And prior to IMFC meetings, the G-20 finance ministers and central bank governors hold a series of meetings, including a joint meeting with the IMFC, as they already have a significant crossover of membership.

But before the G-20 meets, the ministers and governors of the G-7 nations typically meet privately for an hour or so, attempting to form a common position or strategy in dealing with the wider groupings of the G-20 and IMFC, in which all G-7 nations are represented at the ministerial level. The chiefs of the world’s major international organizations (IMF, World Bank, OECD, WTO, BIS) participate in almost all of these meetings, acting as advisers to and receiving high-level political direction from these groups.

The hierarchy of global economic governance emanates out of the United States, in close cooperation with Germany, Japan and the other members of the Group of Seven. From there, it networks through the Group of Twenty and the IMFC, which in turn collectively function as the steering committee for the world’s major international organizations, and act as the board of directors of the global economy.

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Kickstarter Campaign for a Book on the Empire of Economics

Dear Readers,

I have recently launched a Kickstarter campaign to try to raise money to support my efforts to finish the first book of what will likely be a series on ‘Power Politics and the Empire of Economics’.

What I am asking of my readers is not only to consider donating to the project, but more importantly, to share and promote it through social media, by sending it to others who you think may be interested, and to help get the word out in any way you can!

Every bit helps, and a great deal of help is needed if this is to be successful!

I have collected below links to the campaign, as well as a video I made to promote it, and links to the sample introduction chapter that I published online so that potential patrons could read the kind of material that they would be supporting.

About the Project:

This book will tell the stories of the rich and powerful oligarchs and family dynasties who collectively rule our world: the global Mafiocracy, operating behind-the-scenes playing their games of power politics, globalization’s Game of Thrones where rich and influential families play their games, balancing collusion and cooperation with fierce competition to rule the world Empire of Economics.

In 1975, Henry Kissinger told President Ford: “The trick in the world now is to use economics to build a world political structure.”

This book is that story.

A small network of banks and other financial institutions dominate the global economy, its wealth and resources. This small network of corporate power functions as a global financial Mafia, complete with excessive criminal behaviour in laundering drug money, funding terrorists, rigging interest rates and manipulating markets.

Name a nation, and there are rich dynasties that rule behind the scenes. The Rockefellers in the United States, the Rothschilds in France and Britain, the Agnelli family in Italy, the Wallenbergs in Sweden, the Tata family of India and Oppenheimers of South Africa, the Koc and Sabanci families of Turkey, the Gulf Arab monarchs and the rich industrial families of Germany with dark Nazi pasts.

Germany once again rules Europe, with the European Union’s institutions of unelected technocrats undertaking a process of internal colonization as they impose their economic empire upon Greece, Spain, Italy, Ireland, Portugal and Cyprus. Finance ministers and central bankers are the agents of empire, cooperating closely with bankers, oligarchs and dynasties to create a world which best serves their interests.  The global financial Mafia mingles with political leaders at forums and secret meetings like the Bilderberg group, the Trilateral Commission and the World Economic Forum.

From the streets of Athens, to Egypt, Turkey, Brazil, Spain, China, South Africa, Chile, Canada, and in the streets of Ferguson and Baltimore, people are rising up against exploitation, repression and domination.

This book is not simply a collection of stories of the ruling Mafiocracy; it is designed to encourage strategy among popular and revolutionary movements capable of creating something altogether new. It is time to do away with a world ruled by oligarchs, and save the species from itself. But first, we must know our world better.

Help me to complete the first book in a series on ‘Power Politics and the Empire of Economics’. For four years I have been doing my own research, scouring the archives of the New York Times, Wall Street Journal, Financial Times, government documents, official reports and corporate strategies, studying the world of power and empire, translating the political language of ‘economics’ into plain and simple English.

I have been published in multiple news sources, online and in print, interviewed by radio and television networks, and now I am asking for your help to raise $10,000 so that I can finish the first book in this series, to expose the Empire for all to see, its strengths as well as the weaknesses left exposed for us to exploit. Let us bring true democracy and an end to Mafiocracy. Help me to write this book, and together, let’s help each other to end the Empire.

Read the sample chapter here!

Read the pdf version here!

Donate today. Thank you.

Andrew Gavin Marshall

Power Politics and the Empire of Economics: An Introduction

Power Politics and the Empire of Economics: An Introduction

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By: Andrew Gavin Marshall

27 May 2015

The following is a sample chapter from an upcoming book.

You can download a pdf version here: Power Politics and the Empire of Economics 

The President sat and listened to his closest adviser as they plotted a strategy to maintain Western domination of the world economy. The challenge was immense: divisions between industrial countries were growing as the poor nations of the world were becoming increasingly united in opposition to the Western world order. From Africa, across the Middle East, to Asia and Latin America, the poor (or ‘developing’) countries were calling for the establishment of a ‘New International Economic Order,’ one which would not simply serve the interests of the United States, Western Europe, and the other rich, industrial nations, but the world as a whole. It was on the 24th of May 1975 when President Gerald Ford was meeting with his Secretary of State and National Security Adviser, Henry Kissinger, easily the two most powerful political officials in the world at the time. Kissinger told the President: “The trick in the world now is to use economics to build a world political structure.”[1]

Ford and Kissinger agreed that the United States could not accept a new ‘economic order’ that would undermine American and Western power throughout the world. Uprisings, revolutions and liberation movements across Africa, Asia and beyond had largely thrown off the shackles of European colonial domination, establishing themselves as independent political nation-states with their own interests and objectives. Chief among those goals was for economic independence to follow political independence, to take control of their own resources and economies from the Europeans and Americans, to determine their own economic policies and help to redistribute global wealth along equal and just lines.

The problem for the Western and industrial nations, with the United States at the center, was that formal colonial domination was no longer considered acceptable. In previous decades and centuries, the rich and powerful nations would directly colonize and control foreign societies, establishing puppet governments and protectorates, extracting resources, exploiting labour and expanding their own national power and international prestige. Following the end of World War II, such practices were no longer politically or publicly acceptable. The era of decolonization had taken hold, and the people of the world were failing to remain passive and obedient in the face of great injustices and inequality. War had become a bad word, colonialism was no longer en vogue, and belligerent political bullying by the rich countries increasingly risked a major backlash, threatening to unite the entire world against the West.

A new strategy for global domination had to be constructed. The West could not afford a direct political or ideological confrontation with the developing world, with many top American officials, including Henry Kissinger, acknowledging that if they were to pursue such a strategy they would be isolated and lost, with even the Europeans and Japanese abandoning them. Foreign ministers and heads of state could not appear to be attacking or seeking to dominate the developing world.

It was decided that the war would have to be waged largely in the world of economics and finance, where the conversation would change from that of colonialism and imperialism to the technical details of economic policy. The imperial interests and objectives of the powerful nations that had existed for centuries could no longer be articulated in a direct way. But those same interests and objectives would not vanish. Instead, they would be hidden behind bland, vague and technical rhetoric. The language of economics provides the appearance of impartiality, backed up by pseudo-scientific-sounding studies and ideologies, accessible only to those with the proper training, education and experience, otherwise inaccessible and incomprehensible to the general public. Empire was a thing of the past. In its place rose a new global economy, built by banks not bombs, expanding the reach of corporations not colonies, managing debt not dominions.

The “world political structure” which Kissinger described would not, however, make militaries and foreign ministers and diplomats irrelevant. They would still have a role to play in maintaining and expanding empire, though never calling it by its proper name, instead using words like ‘democracy’, ‘freedom’ and ‘markets’. But the role of such officials would often become secondary to that of the financial and economic diplomats, who would increasingly become the first line of offense in constructing the “world political structure,” the Empire of Economics.

Two days after Kissinger articulated this strategy to President Ford, another meeting was held at the White House with several more high-level cabinet officials. The discussion was a follow-up on the U.S. strategy to construct such a system. Stressing that political diplomats and foreign ministers could not take on the developing world directly, Kissinger told the assembled officials, “it is better to have the Finance Ministers be bastards, that’s where I want it.”[2]

This book is the story of how financial diplomats, politicians, bankers, billionaires, family dynasties and powerful nations have used economics to build a “world political structure,” engaging in a constant game of power politics with and against each other and the rest of the world to construct and maintain their Empire of Economics for the benefit of a small ruling class, the global Mafiocracy: a super-rich, often criminal cartel of global oligarchs and family dynasties.

It is a brutal, vicious world of secret meetings, behind-the-scenes intrigue, financial warfare and coup d’états, economic colonization and debt domination. It is the unforgiving world of empire, an immense concentration of global wealth and power, a parasitic system of world domination built on the impoverishment and exploitation of billions. And it is a world obscured and hidden behind the dry, dull and seemingly empty rhetoric of economics. It is a language in need of translation, a reality in need of elucidation, and an empire in need of opposition.

Power Politics and Empire

It was the largest and most powerful empire the world had ever known. It spanned the globe, across oceans and seas, countries and continents, enveloping much of the known world – and the people throughout it – within the domineering shadows of its political, economic, social, cultural and financial institutions and ideologies. Those who ruled were the wealthy and war-like family dynasties, individual oligarchs, kings of coin, titans of industry, and a religious priesthood of proselytizing propagandists. These rulers would engage in a constant game of ‘power politics’ with and against each other in the quest to gain title, money and influence.

They lie, cheat, steal, kill and conquer; they plant their flags and preach their gospels, serve their interests and those of their unknown (or sometimes) masters. It requires a constant cunning, managing an endless lack of trust for all those around you, fearful that on your way up, others might seek to cut you down. To play the game of power politics in the age of empires is to be pragmatic, strategic and ruthless; it requires no less, but frequently more. It is a practice passed down through families, institutions and ideologies. No, this is not ‘Game of Thrones’, but rather, the Game of Globalization in the Empire of Economics: power politics of the 21st century.

But the game itself has been with humanity as long as empire, and was always seen at the center of the system of power within every empire. Human systems – that is, what we call ‘civilization’ and ‘society’ – are, ultimately, human creations with humans in control. Thus, power – at its center – is always dependent upon the interactions, relationships and emotions of the few individuals and families who rule. When such people get angry or throw a tantrum – because the neighbor boy stole his toy (or Russia annexed Crimea, for example) – wars are waged, and the poor are sent to go murder or be murdered, cities burn to the ground, nations crumble into dust.

The game is not known to many, save for those who play it. The masses are left with simple images, rumours and speculation, if anything at all. A public persona of the more visible rulers must be carefully constructed so as to legitimize their authority. The people must be satisfied to the bare minimum, so that they do not rise up in resentment and fury against the few who live in the most obscene opulence and imperial impunity. If the consent of the population is not maintained, a ruler must seek to control them in other ways, which generally means seeking to crush them, to punish them into submission and subservience. Kill and conquer at home and you can kill and conquer abroad.

Control is based upon a mixture of consent and coercion. The people must be either willing to let the rulers rule, to accept their position in society without question, or they must be made to fear the reach and wrath of the rulers, to be punished and persecuted, segregated and isolated, beaten, raped and murdered. The rulers must be vicious, but appear virtuous. If, however, a choice must be made between acting ruthless and appearing righteous, it is better for the rulers to be wretched and murderous, for the game of power politics is never won by virtue alone, but being vicious can get you far enough without assistance.

Niccolo Machiavelli wrote his book The Prince more than 500 years ago as an examination of power politics and methods through which one can achieve and maintain power within the old warring Italian city-states. Having long served as an adviser and strategist to various rulers, including princes, popes and dynasties, Machiavelli asserted that “it is desirable to be both loved and feared; but it is difficult to be both and, if one of them has to be lacking, it is much safer to be feared than loved.” He explained that this was so because “love is sustained by a bond of gratitude which, because men are excessively self-interested, is broken whenever they see a chance to benefit themselves.” On the other hand, “fear is sustained by a dread of punishment that is always effective.”[3] Machiavelli has long been accused of being a cynic or pessimist in his interpretations of human nature, but this misses the point.

Machiavelli’s work was examining the attitudes, nature and actions of those who wielded significant power, which was always a small minority of the population. Indeed, far from a cynical interpretation, The Prince is rather a pragmatic and accurate interpretation of a deeply cynical world where every institution and individual wielding significant influence engages in a constant game of power politics designed to benefit themselves, maintaining or expanding their own power, often at the expense of others. It is a world where every relationship, title, position and even marriage holds strategic significance. For those individuals and families who rule, every decision must be made as a calculated attempt to preserve and expand their power. If this is not done, they will not remain rulers long, for this is how the game is played and won, and if one does not play by the rules, others will. Thus, the more cunning and ruthless a strategist, the more likely they are to elevate through the hierarchy because they will do what others will not, acting without hesitation to manipulate or crush others in order to rise higher.

It is a game – like that of all empires past – in which the few compete and cooperate with one another in the advancement of their own individual, familial, national or global interests, expanding their empires. It is a game in which the vast majority of humanity are – as they have long been – left to suffer the consequences, fight the wars, drown in debt, poverty, hunger and misery. On occasion, and increasingly often, groups of people – segments of the population – rise up in resistance, riot, revolt or even revolution. This is when the people are able to engage more directly in the game of power politics, because they change the game. Suddenly, all the key players at the top notice the building fury of the masses and so the game itself is put at risk. The key players will almost always – even in spite of their frequent competition and opposition to each other – work together if it means protecting the game itself.

A useful comparison is that of a Mafia crime network, in which the various heads of families may sit at the same table though they often feud with one another, working together to mutual benefit when possible, though occasionally whacking one another off when the competition grows fierce. It is a delicate balancing act of competition and cooperation, but when the criminal network is itself threatened, perhaps through the efforts of an ambitious district attorney or crackdown on organized crime, the various families will seek to unite in their efforts to protect the racket which benefits them all. If they remain divided in the face of growing opposition and potential external threats, they increase the risk that they will be conquered. When the game is threatened, the players must stand together or fall apart.

For successful rulers, the balance of competition and cooperation – vicious and virtuous – is present both in their relationships with other rulers, and with the larger populations. And so the rulers themselves – the oligarchs and dynasties – span both private and public realms: they are presidents and prime ministers, kings, queens and sultans, corporate chiefs, billionaires and bankers, consultants and advisers, academics and intellectuals, technocratic tyrants and plutocratic princelings. Their world is not our world. But it rules, wrecks and ravages our world and the people and life within it. It is a game that steers humanity toward certain extinction resulting from excessive environmental devastation, guided by that ever-present drive within those who have the most for more, more, more.

The game is little more, at its core, than basic gangsterism, its players little more than petty tyrants. Such personalities, egos and interests populate all sectors of society, all institutions, frequently appearing in inter-personal relationships. The more power they have, the greater the repercussions of the game. At the top of the global power structure are the personalities and families of immense wealth, political influence and prestige. With the same basic principles of a Mafia structure, the individuals and institutions that play the game of power politics in the age of globalization – in the Empire of Economics – are perhaps best understood as a global Mafiocracy. It makes no difference whether a nation is ruled by a monarchy, a dictatorship or democracy: the Mafiocracy is ever-present, and ever-expanding in its wretched reach.

The State of Empire

The world is defined and dominated largely by institutions, individuals and ideologies. The institution of the nation-state is perhaps the most obvious example, best represented by the world’s most powerful country, the United States of America. The government of the United States is composed of three separate branches (or institutions): the executive (President and Cabinet), legislative (Congress/Senate) and judiciary (the Supreme Court). The executive leads the government, while the role of the legislative and judiciary is (theoretically) designed to keep a check on executive power, preventing it from accumulating too much authority in one branch, threatening the potential for tyranny.

Since World War II, the executive branch has accumulated increased powers within the U.S. government, with a wide mandate to manage foreign and economic policies specifically, with little oversight and few checks from the legislative and judiciary branches. The executive is composed of a wide array of institutions itself, each with their own specific mandates, interests, and varying degrees of influence. These include the many cabinet departments, such as the Treasury Department, Defense Department (Pentagon), State Department, CIA, National Security Council (NSC), Department of Homeland Security, and many more. In addition, since 1913, the Federal Reserve has functioned as the central bank of the United States, operating with a large degree of independence from the other branches of government, including political independence from the executive branch (apart from the President’s ability to appoint the Chairman and Board of Governors), and no oversight from Congress (though the Fed chairman will occasionally testify to Congress).

Individually and collectively, these government departments and institutions manage hundreds of billions and even trillions of dollars in assets and funds, making them individually larger than most multinational corporations and banks in the world. These departments within the U.S. government are largely responsible for the maintenance and expansion of the American imperial system. Since the time of ancient Nubia and Egypt thousands of years ago, much of the world has been dominated by empires, rising, expanding and collapsing over centuries and millennia, running through ancient Greece, Rome, China, Aztec and Inca, Persian, Ottoman, and in the past five hundred years with the rise and demise of the European empires whose reach expanded the globe. For the most part, imperial systems have been dominated by families, often called royalty, sultanates, emperors or emirs. The essential interest and priority of all empires has been to protect and expand their empire, largely for the benefit of its ruling class or groups, with the imperial family at the center of power.

It is only a phenomenon of the post-World War II period that denial of the existence of empire is commonplace. Through the two World Wars of the 20th century, empires collapsed and faded into history. World War I led to the collapse of the German, Russian, Austro-Hungarian and Ottoman empires. World War II led to the collapse of the Japanese and Nazi empires, and its aftermath resulted in the erosion of European colonial domination, as the British, French, and other European colonial powers had to adjust to a new global order under American hegemony. It was in the post-World War II period that the United States had achieved unprecedented economic and political power. With just over 5 percent of the world’s population, the U.S. controlled roughly half the world’s wealth. Citing this very statistic, the U.S. State Department (responsible for managing diplomacy and foreign policy) published a policy paper in which top officials acknowledged that the global inequality that existed between the U.S. and the rest of the world would lead to “envy and resentment.” The “real task” of the United States was “to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security,” doing away with “the luxury of altruism and world-benefaction.”[4]

Europe was devastated by the war, and the United States occupied the West with the Soviet Union occupying the East of the continent. The European empires were crumbling, and the process of decolonization had begun to take the world by storm, with the U.S. attempting to manage the process on behalf of its Western European allies. In its strategy for world domination, the United States sought to rebuild its former war-time enemies – Germany and Japan – into economic powerhouses, with West Germany acting as the locomotive for European integration (into what is now the European Union) and Japan acting as a counterweight to the spread of Communism in East Asia. Western Europe, Japan and other allies depended upon the United States military to protect their ‘security’ interests around the world, arming favorable dictators, supporting coups, fuelling civil wars, undertaking large occupations and counter-insurgency operations targeting independence, anti-colonial and revolutionary movements around the world.

Despite the imperial realities of this system, there was an overwhelming tendency within the United States and its industrial allies to deny the existence of imperialism altogether. Instead, these nations were merely economically and technologically advanced democracies who sought to protect ‘freedom’ and ‘democracy’ around the world in a largely ideological confrontation with the Soviet Union, which presented itself as the image of socialism and communism in a struggle against the capitalist imperial powers of the West. The Soviet Union’s influence was dominant in Eastern Europe, with a few close allies scattered across the Middle East, Africa and Latin America. The United States and its Western allies, however, were the dominant powers across much of the rest of the Middle East, Asia, Africa and Latin America. The only real sense in which the Soviet Union presented a challenge for the United States was in its military and nuclear capabilities. This was the period known as the ‘Cold War’, though despite its confrontational rhetoric dividing East and West, communist states from capitalist democracies, it was largely a struggle waged against the rest of the world, the ‘Third World’, otherwise known as the developing world or ‘Global South’. It was in the poor, colonized nations and regions of the world where the majority of the world’s resources were located, and thus, where the Western imperial powers needed to maintain control.

While the United States rebuilt Germany and Japan into economic locomotives, becoming the second and third richest countries in the world, American economic power experienced a relative decline. This created strong allies for the United States, and while they remained militarily dependent upon their imperial patron, their growing economic power gave them increased leverage. With their increased economic power came increased potential to act independently of the U.S. and other rich nations. Competition between the great powers increased during the same period that newly independent nations of the developing world were increasingly uniting in opposition to a Western-dominated world order.

On May 1, 1974, the vast majority of the world’s nations voted in favour of the U.N. Declaration on the Establishment of a New International Economic Order (NIEO), proclaiming that “the greatest and most significant achievement during the last decades has been the independence from colonial and alien domination of a large number of peoples and nations which has enabled them to become members of the community of free people.” Among the ‘principles’ adopted in forming the NIEO were “equality of States, self-determination of all peoples,” and the outlawing of war, seeking “the broadest co-operation” of all nations of the world in banishing the “prevailing disparities” and securing “prosperity for all.”[5]

Each nation of the world would have the right “to adopt the economic and social system that it deems the most appropriate for its own development,” and establish control over their own natural resources. The people who continued to live under colonial domination, racial oppression and foreign occupation had a right “to achieve their liberation and the regain effective control over their natural resources and economic activities.” In 1974, this would include Israeli-occupied Palestine, South African apartheid, and U.S.-occupied Vietnam. The last line in the document stated that the Declaration should “be one of the most important bases of economic relations between all peoples and all nations.”[6]

But Henry Kissinger had other plans. As Secretary of State and National Security Adviser, Kissinger was the chief imperial strategist in the United States, and remains one of the most influential foreign policy strategists in the nearly four decades since he left office. Kissinger’s “trick” to use economics in building a “world political structure” would largely be pursued through the finance ministries, central banks and international organizations (such as the IMF and World Bank) which are controlled by the rich and powerful nations. In the face of a growing threat, the rich nations banded together in various forums, conferences and diplomatic gatherings, the most notable of which came to be known as the Group of Seven, bringing together the U.S., Germany, Japan, the United Kingdom, France, Italy and Canada. Through these various institutions and initiatives, a “world political structure” would be incrementally constructed as the Empire of Economics.

A Family Affair

Empires don’t just happen; they are constructed, protected, expanded and destroyed. Empires need imperialists, even if they don’t refer to themselves as such. In the Empire of Economics, the imperialists are a diverse group, including the obvious presidents, prime ministers, chancellors and other heads of state; foreign, military and intelligence officials and ministries; finance ministers, central bankers and the heads of international organizations; the large banks, corporations and institutions that control the world’s wealth and resources, and the powerful individual oligarchs and family dynasties that lie behind these institutions.

As with most empires through history, the central unit of power is often that of a ‘family’, be it royal, financial, corporate or crime. After all, the first institution into which people are born and raised is very often that of the ‘family unit’. Power becomes hereditary, passed down through generations of children raised to take the place of their fathers and mothers in expanding the influence and protecting the legacy of the family. As with any imperial – or dynastic – family structures, they are plagued with rivalries, power struggles, tragedies, divisions and declines. The modern imperial family in the Empire of Economics – emanating from the vast industrial, corporate and banking fortunes established over past centuries – is no exception to the drama and decadence of earlier imperial dynasties.

Every nation has their dynasties, some better known than others. In the United States, over the past century, several names have become synonymous with wealth, power and prestige: Vanderbilt, Carnegie, Morgan, Harriman, Astor and Rockefeller. In 2006, roughly a third of the Fortune 500 companies (that is, the largest corporations in America) were family-run businesses, often performing better than ‘professionally’ managed companies. Among them is one of the largest corporations in the world, Wal-Mart, run and largely owned by the Walton family.[7] In 2010, six of the top ten richest individuals in the United States had inherited wealth, meaning that the richest of the rich in America were not self-made billionaires, but members of wealthy dynasties.[8]

Rich families are often able to preserve their dynastic wealth through a family ‘trust’, which allow the super-rich to provide for future generations of the family largely free of taxes and outside claims. The proliferation of family trusts has led to what one commentator in the New York Times referred to as “an American aristocracy.”[9] Perhaps the most recognizable family trust – and most ‘royal’ of the American dynasties – is that of the Rockefeller family. In the 19th century, John D. Rockefeller amassed a vast fortune monopolizing the oil industry into Standard Oil. In the early 20th century, the company was broken up by the government into multiple smaller companies, some of which are known today as Exxon Mobil and Chevron, among others. The Rockefeller fortune expanded into other industries and banking, and with that came an increased role in founding universities, foundations and think tanks, which were central to the process of generating the institutional and ideological foundations for American imperialism in the 20th century.

The patriarch of the family today, David Rockefeller, is currently in his 100th year. On the occasion of his 90th birthday in 2005, then-President of the World Bank, James Wolfensohn, spoke at the Council on Foreign Relations, where he said, “it’s fair to say that there has been no other single family influence greater than the Rockefeller’s in the whole issue of globalization.”[10]

As of 2014, Rockefeller Financial Services, the family investment company, held over $100 million in investments in several large American and foreign corporations, including JPMorgan Chase, Chevron, Microsoft, Oracle, Merck & Co., TD Bank, and Wells Fargo. Rockefeller Financial also maintains significant holdings in Honeywell International, Capital One Financial Corporation, Google, Exxon Mobil, Comcast, eBay, Wal-Mart, VISA, and Royal Dutch Shell, BP, IBM, McGraw Hill Financial, PepsiCo, McDonald’s, UPS, General Electric, Ford Motor Company, Apple, Intel, Boeing, Pfizer, The Walt Disney Company, Coca-Cola, Halliburton, U.S. Bancorp, Verizon and Goldman Sachs, among many others.[11]

Not only does the Rockefeller family office invest in major banks and corporations (on behalf of the family and its clients), but some major banks have also invested in the family office itself. In 2008, one of France’s largest banks, Société Générale, purchased a 37% stake in Rockefeller & Co. In 2012, that stake was sold to another major financial dynasty, the Rothschilds, who purchased it through RIT Capital Partners, the investment arm of the London branch of the Rothschild family, overseen by Lord Jacob Rothschild. As Barron’s magazine noted at the time, the union of these financial dynasties “should provide some valuable marketing opportunities” in which “new wealth” around the world would want “to tap the joint expertise of these experienced families that have managed to keep their heads down and their assets intact over several generations and right through the upheavals of history.”[12]

The Rothschild banking dynasty, which has its roots in late 18th century Europe, had established several branches of the family spread throughout major European nations and capitals, with two of the most prominent being the London and Paris arms. In 2012, the French and British Rothschild banks were planning to merge their assets into a single entity, under the name of Paris Orléans, headed by David de Rothschild. Upon the announcement of the merger, David de Rothschild explained that its purpose was to “allow the bank to better meet the requirements of globalization… while ensuring my family’s control over the long term.”[13] David, one of the richest Rothschilds today, noted in a 2010 interview with Ha’aretz that as a member of the Rothschild family, “We have an obligation to continue the dynasty.”[14]

The Rothschilds have a long history, marred with tragedies and rivalries so common to historical dynastic clans. In the 1990s, as the French and British branches of the family were increasing their cooperation under the leadership of Baron David de Rothschild and Sir Evelyn de Rothschild, respectively, Sir Evelyn commented that, “The first important strength of the family is unity.” Evelyn viewed Jacob Rothschild – another member of the British family branch – as a potential rival in control over the British bank, N.M. Rothschild, but Jacob went off to found RIT Capital Partners. Jacob’s half-brother, Amschel Rothschild, was pressured by his father to join the family business, despite his lack of interest and talent for it. Shortly after the death of his mother in 1996, Amschel attended a business meeting in Paris, after which he went to his hotel room and hung himself at the age of 41. With his death, a crisis was seen in the future of the family dynasty, which prompted the closer connections between the British and French branches.[15]

Sir Evelyn de Rothschild and his wife, Lady Lynn Forester de Rothschild (an American), count two prominent dynasties among their close friends: the Clintons and the British Royal Family. Lynn has long-standing ties to the Clintons, and considers Hillary to be “the woman she most admires,” while Sir Evelyn served as an usher at Queen Elizabeth II’s wedding. The couple spends occasional weekends with the Queen at Windsor Castle, and would also be frequent guests at the White House during the Clinton administration.[16]

In Italy, the Agnelli family – presided over today by the young patriarch, John Elkann – has been considered Italian royalty for the past century. The previous patriarch, Giovanni (‘Gianni’) Agnelli, ruled the family empire from the 1960s until his death in the early 2000s. The Agnelli empire controlled the large auto-company Fiat, as well as managing a wide array of companies and investments “in shipping, oil refining, armaments, banking, insurance, retailing and manufacturing.”[17] When the Soviet leader, Nikita Khrushchev, visited Italy, he singled out Gianni in a room filled with several Italian cabinet ministers and took the patriarch aside. “I want to talk to you,” said Khrushchev, “because you will always be in power.” The Soviet leader signaled to the cabinet ministers, adding, “That lot will never do more than just come and go.”[18] By the late 1990s, the Fiat group was the largest employer in Italy, accounting for roughly 5 percent of the country’s gross national product (GNP), and, when combined with the other family’s holdings, the Agnelli family controlled roughly a quarter of the entire capitalization of the Milan stock market.[19]

The Wallenberg family has dominated banking and industry in Sweden for over 200 years.[20] In the mid-1990s, the New York Times referred to the Wallenbergs as “one of the most powerful business families in the world” and “Sweden’s answer to the Rockefellers.”[21] For the post-war period, the business was under the leadership of Marcus Wallenberg Jr., who died in 1982 and had established “an industrial and financial empire of unprecedented scope,” with the family having controlling or influential shares in half of Sweden’s largest corporations, including Electrolux, L.M. Ericsson, Saab, and the Skandinaviska Enskilda Bank (SEB), one of Sweden’s largest multinational banks. By the mid-1980s, the family’s business empire accounted for roughly 30 percent of Sweden’s gross national product.[22]

By the mid-1990s, the Wallenberg empire controlled companies accounting for 40 percent of the Swedish stock market, just as the fifth generation of the family was taking over the reins. Jacob and his cousin, Marcus Wallenberg, were to take over the business from Jacob’s father, Peter, determined on “making the empire a global one.” The family’s holding company, Investor AB, was valued at $6.4 billion, which was in turn owned by a foundation trust controlled by the Wallenberg family.[23] As The Economist noted in 2006, “There is little that happens in Swedish business that does not involve the Wallenbergs,” with one prominent Swedish hedge fund manager commenting, “They are a bit like royalty.”[24] Jacob Wallenberg told the Financial Times in 2014 that, “I think our family is very strong on tradition, it is very strong on responsibility, it is very strong on nation, and I should say family.”[25]

In Canada, a quiet dynasty rules behind the scenes, with “undeniable” influence on provincial and federal politics, according to former U.S. Ambassador to Canada David Jacobson, who discussed the Desmarais family in a diplomatic cable leaked by Wikileaks.[26] The family’s economic empire goes by the name Power Corporation, based in the French-speaking province of Quebec and the city of Montreal. Through its various subsidiaries and shareholdings, the corporate and financial influence of the family reaches to all significant sectors of corporate Canada, as well as Europe, Asia and the United States.

The family was presided over by Paul Desmarais, Sr. from the time he began the business in the 1950s and 60s until his death in 2013, at which time the family empire was passed on to his two sons, Paul, Jr. and André Desmarais. As the Globe & Mail reported upon the patriarch’s death in 2013, “he knew and influenced, in small ways or large, every Canadian prime minister and Quebec premier over the past five decades.” Desmarais helped Prime Minister Pierre Trudeau open relations with China in the 1970s, and established the Canada China Business Council in 1978. Prime Ministers Brian Mulroney, Jean Chrétien and Paul Martin also maintained very close connections with Desmarais and the Power Corp. empire. Jean Chrétien’s daughter, France Chrétien, even married Paul’s son, André. Paul Martin worked for Desmarais at Power Corp. for 13 years before entering politics, eventually becoming finance minister and Prime Minister. Brian Mulroney, a close friend for nearly five decades, said of Desmarais, “I loved him like a brother… He was one of the most significant players in Canadian economic history.”[27]

The Wall Street Journal referred to Desmarais as “one of Canada’s wealthiest and most powerful businessmen” who “was closely involved in the nation’s politics.” Canada’s current Prime Minister Stephen Harper praised Desmarais for his “leadership, integrity, global vision, and profound attachment to his country.” Among the patriarch’s friends were former U.S. President Bill Clinton and former French President Nicolas Sarkozy.[28]

Asian nations are not to be outdone, with long traditions and new manifestations for family rule with powerful dynasties in the political and economic sphere, as well as a host of monarchs. As The Australian reported in 2014, “the big family business in Asia today is not running companies, but controlling countries,” noting that apart from the obvious in North Korea, many of Asia’s nations were “permeated with political leaderships that keep governance in the family.” The newly installed Chinese President, Xi Jinping, was a ‘princeling’ – a child of the Communist Party founders and bosses – whose father was a former Vice Premier. Japan’s prime minister, Shinzo Abe, comes from a prominent political family. His grandfather was a Member of Parliament, his father was a foreign minister, and his mother’s father was a former Prime Minister. The President of Korea, Park Geun-hye, was the daughter of a previous president.[29]

This pattern was repeated in the Philippines, Indonesia, Malaysia, Thailand, Myanmar, Singapore, Bangladesh, India, and Sri Lanka, their own versions of names like Kennedy, Bush and Clinton in the United States. An associate professor at the University of Queensland, David Martin Jones, commented, “The rise of dynasticism within democracy is little understood, and fits with a loss of popular support for mainstream parties, while these dynastic figures fit with the media/celebrity culture and spin that has undermined politics as a mode of persuasion.”[30]

Japan was, for many years, the world’s second largest economy after the United States. Today, it stands in third place, with China picking up the mantle at second. China began its economic ‘opening’ in 1978 under the leadership of Party leader Deng Xiaoping. As the world’s most populous nation increasingly embraced Western forms of ‘capitalism’, the Communist Party leadership which dominated the country acted as patrons and subsequently profiteers of China’s economic development. The highly efficient mixture of a single-party technocratic dictatorship and state-capitalism led to rapid economic growth and immense riches being accumulated by the nation’s new oligarchy. The princelings have become a rich and powerful class, using their political contacts to study at prestigious schools in Europe and America, taking control of large businesses inside China and rising up the Party apparatus.[31] As Bloomberg reported, in China, “wealth and influence is concentrated in the hands of as few as 14 and as many as several hundred families.”[32]

In Turkey, two families largely dominate the economy, Koc and Sabanci, having reached their third generations with interests in banking, energy, automobiles, retail and other markets. Together, Koc Holding and Sabanci Holding – and their various subsidiaries – “make up more than a quarter of the market capitalization of the Istanbul stock market.” The U.S.-based credit ratings agency, Standard & Poor’s, gave Koc Holding a higher credit rating than Turkey.[33]

In another ‘emerging market’ economy, South Africa, one family reigns supreme: Oppenheimer. Harry F. Oppenheimer, who died in 2000, was known as the “king of diamonds,” with an empire controlling most of South Africa’s diamonds, gold, uranium and copper, “wielding extraordinary power over some of the world’s strategic metals and minerals.” Through a complex web of corporate subsidiaries and shareholdings, the Oppenheimer family controlled the supply of the world’s diamonds through their monopoly of De Beers, which also held “vast holdings in banking, real estate, pulp and paper, bricks and pipe, coal and potash, locomotives and beer.” As head of Anglo American Corporation, Harry Oppenheimer spent twenty-five years as “the most powerful figure in his country’s economy as well as one of the richest men in the world,” noted the New York Times.[34]

India, the world’s largest ‘democracy,’ second most populous country and one of the fastest-growing economies, is yet another example of a family business. Politically, India has long been dominated by the Gandhi and Nehru families, but behind the scenes, the families of old and new industrialists dominate the economy. Among India’s largest and most respected conglomerates is the Tata family, which has run the Tata Group for nearly 150 years. Ratan Tata took over the Tata Group in 1991, with its more than 100 companies operating in everything from steel to software. The Tata family had run the company for over a century, but was based almost entirely in India, which began opening its economy up to the West the same year Ratan took over the company. He turned the Tata Group into a global conglomerate, acquiring major British companies, including Tetley Tea, Jaguar Land Rover and Corus, a steelmaker. Ratan became, in the words of the Financial Times, “a pioneer in the country’s move toward globalization,” and both he and the Group “came to embody India’s own emergence as a world economic player over the course of the past decade.”[35]

Germany, the second largest exporter in the world (after China) and the fourth largest economy in the world (after the U.S., China and Japan) is also no stranger to family dynasties and business empires. According to a 2012 study cited by Forbes, roughly 43% of all German exports in 2011 were accounted for by the country’s 4,400 largest family-owned firms. Many of the large companies that are not directly owned by families are often owned by foundations, which are in turn owned by prominent families.[36] The archetypal head of a German business empire, the Financial Times explained in 2007, is “very wealthy but low-profile and frugal.” In other words, they’re rich, cheap and stay behind the scenes.[37] Some of Germany’s wealthiest families and individuals stay so far out of the spotlight that there are few known photographs of them in existence. Susanne Klatten, daughter of the German industrialist Herbert Quandt, who built the BMW empire, is the 44th richest person in the world, with a very low public profile, even spending parts of her life operating under false names.[38]

One reason for the publicity-shy nature of Germany’s corporate, industrial and financial elite could be due to the fact that many of them date back to Germany’s industrialization and prospered immensely through the Nazi era, where they frequently collaborated with Hitler’s murderous regime. Just as the Japanese industries and families of the imperial age were re-established to manage Japan’s post-war industrialization, so too was German industry rebranded after the Nazi era to lead Germany’s reindustrialization and rapid economic growth. The Quandt family behind BMW had collaborated heavily with Nazi Germany, with one German historian, Joachim Scholtyseck, noting, “The Quandts were linked inseparably with the crimes of the Nazis,” using some 50,000 concentration camp slave laborers at the company’s factories, building weapons for the Nazi war machine. “The family patriarch was part of the regime,” Scholtyseck added. The Quandt family also took over dozens of businesses which were seized from Jewish families.[39]

Since the early 1970s, the Arab dictatorships – virtually all run by political dynasties – have accumulated massive wealth and influence, and have invested that wealth into Western banks and corporations. Saudi Arabia is the best example, but the Gulf monarchs include the families that run the United Arab Emirates (UAE), Bahrain, Qatar and Kuwait. One such individual who has made a name for himself in the world of finance is the Saudi Prince Alwaleed bin Talal bin Abdulaziz Al Saud, who has been referred to as the “Arabian Warren Buffett,” having become one of the largest shareholders in Citicorp by the early 1990s. In 1999, the Economist noted that while the Saudi royals were “secretive, venal and backward,” Prince Alwaleed was “open, intelligent and successful.”[40]

As of 2013, Prince Alwaleed bin Talal was worth an estimated $27 billion, and was the second largest shareholder in the global media conglomerate, News Corp. (after the principal shareholders and owners, the Murdoch family), and is also a stockholder in Apple, TimeWarner, Citigroup, Motorola, Saks, AOL, eBay and EuroDisney, and even owns part of Twitter. Further, the Prince owns several luxury hotels in London, New York and elsewhere, partnering up with major banks and other billionaires like Bill Gates. The Prince has a fleet of some 300 cars, a 280-foot yacht which was originally built for a world famous Saudi arms dealer (Adnan Khashoggi), and a fleet of jets, one of which includes a golden throne. He became the subject of minor scandal when it was reported that at his desert encampment in Saudi Arabia, one of the Prince’s past-times is, literally, “dwarf-tossing.” But the Prince’s defenders were quick to reassure an American audience of “his great beneficence,” noting that dwarves were “outcasts” in the Saudi Kingdom, and so the Prince simply hired them as jesters, providing them with “a work ethic,” which included having them “dive for $100 bills in bonfires.”[41]

Russia and several countries in Eastern Europe (notably Ukraine) are dominated by a handful of oligarchs, who concentrated control of resources and the economy in their hands following the collapse of the Soviet Union.

There are also individual oligarchs all across the world, and if they pass their fortunes on to their children they could establish new financial and corporate dynasties. One example in the United States is Warren Buffett, a billionaire investor who founded Berkshire Hathaway, which is a major shareholder in American Express, Coca-Cola, Exxon Mobil, Goldman Sachs, IBM, Moody’s Corporation, Munich Re, Procter & Gamble, U.S. Bancorp, Wal-Mart and Wells Fargo, among others.[42] Buffet’s friend, fellow billionaire oligarch Bill Gates, is also a major shareholder in Berkshire Hathaway, through his own holding company, Cascade Investment.[43]

These are just a few of the world’s major dynasties and oligarchs in the Empire of Economics, cooperating and competing with one another in what could be interpreted as globalization’s Game of Thrones. Individually, these family dynasties and oligarchs are able to exert significant and varying degrees of control over their respective national economies. Collectively, they wield immense global financial and economic power, largely unknown to outsiders. As banks and corporations became increasingly global in scope and size, so too did the interests of the individuals and families behind many of the world’s major companies. The world’s top banks and corporations, in turn, collectively own each other through shareholdings, as well as much of the rest of the network of global corporations.

The Swiss Federal Institute of Technology in Zurich published a study in 2011 of the ownership structure of the world’s largest 43,000 multinational corporations. The researchers traced the shareholdings of the companies to a small network ‘core’ of the largest 1,318 corporations, which collectively accounted for roughly 80 percent of the global revenues of the entire sample of 43,000 corporations. Within the ‘core’ is what the researchers called the ‘super-entity’, a grouping of roughly 147 closely knit companies – mostly banks and insurance companies – who own each other and collectively control 40 percent of the entire network of 43,000 companies.[44] Thus, a global economic order in which less than 150 of the world’s top banks and financial institutions control not only each other but a large percentage of the world’s remaining corporations can hardly be said to be a “free market” of competition. In truth, the “super-entity” more closely resembles a cartel, the global financial mafia.

Among the top 50 companies of the ‘super-entity’ (as of 2008), were: Barclays, Capital Group Companies, FMR Corporation, AXA, State Street Corporation, JPMorgan Chase, UBS, Deutsche Bank, Credit Suisse, Bank of New York Mellon, Goldman Sachs, Morgan Stanley, Société Générale, Bank of America, Lloyds TSB, ING Group and BNP Paribas, among others.[45] As of late 2014, the list of top institutions within the super-entity has changed slightly, with some previous banks merging or collapsing as a result of the financial crisis, and with the rise of asset management firms such as BlackRock.

BlackRock is the world’s largest asset management company, with roughly $4 trillion of assets under management, standing as the single largest shareholder in one out of every five corporations in the United States, owning at least 5 percent of almost half of all corporations in the country. As the New York Times noted in 2013, BlackRock has “tremendous influence.”[46] As the Financial Times noted in 2012, when one includes the assets which BlackRock advises on (on top of managing), the total sum that the company monitors amounts to roughly $12 trillion, almost the same size as the entire U.S. economy, putting the company “in an extraordinarily influential position.”[47] Larry Fink, the CEO of BlackRock who started his career as “a prince of Wall Street,” rose to what the Financial Times called “the pinnacle of US finance,” where he “slips in and out of the offices of the world’s financial and political elite with ease.” Fink and BlackRock have extensive influence with the major American and European banks and corporations, as well as sovereign wealth funds in the Arab world and Asia.[48]

Fink turned BlackRock from a virtually unknown entity in 2008 to “a global colossus” with its $13.5 billion purchase of Barclays Global Investors in 2009. Vanity Fair referred to Fink in 2010 as “the leading member of the country’s financial oligarchy.” Throughout the financial crisis, Fink and BlackRock played a role as key adviser to all of Wall Street’s top CEOs, as well as the heads of the Federal Reserve System, Federal Reserve Bank of New York and the U.S. Treasury Department, playing a central role in the major bailouts and mergers that marked the crisis. One senior bank official referred to BlackRock as “almost a shadow government.” Another bank executive commented, “Larry has always wanted to be important… And now that he’s more important than he ever dreamed of, he’s loving it.” Fink also maintained very close ties to the two U.S. Treasury Secretaries who served tenures during the financial crisis, Hank Paulson (former CEO of Goldman Sachs) and Timothy Geithner (former President of the New York Fed), whom Fink referred to as “two of our best Treasury secretaries.”[49]

This interconnected and interdependent network of the global financial mafia is in turn controlled by the shareholdings of individual oligarchs and family dynasties. After all, most mafias are ultimately family businesses, and the world of finance is no exception. But there are other key players as well, including sovereign wealth funds (state-run investment companies), central banks, and other investment vehicles. The use of the term ‘mafia’ or Mafiocracy is not simply rhetorical, as the banks and corporations which sit at the heart of this network – the “super-entity” – are repeatedly caught, fined and slapped on the wrist for excessive criminal behavior, including massive fraud and the formation of illegal cartels designed to manipulate prices and increase profits.

Nowhere is this more obvious than in the financial sector, plagued by multiple scandals since the financial crisis, including the role of banks in creating the crisis in the first place. In addition to that, however, a small network of banks has been found to function as a criminal cartel in manipulating interest rates (specifically, the LIBOR rate) and the foreign exchange (forex) market. In addition, the world’s major banks also reap immense profits (and commit grave crimes) through the laundering of billions of dollars in drug money, terrorist financing and providing other services to organized crime.[50] And this is to say nothing of the economic and financial support that corporations and banks provide for dictators, tyrants, mass murderers, war mongering and state violence, environmental degradation and the physical plundering of the planet for short-term profit.

But the global financial mafia – and the oligarchs and dynasties who sit at its core – cannot wield significant influence without the political legitimacy that comes with state power. Successful financial dynasties (with the Rockefellers as perhaps the best example) establish complex networks of influence, building institutions and supporting ideologies that in turn influence the state and shape the minds and careers of those who rise through it. The Rockefeller family established the University of Chicago and have long been patrons of Harvard. They created philanthropic foundations which provided strategic funding to universities, research centers, think tanks and international forums, having a lasting impact on the shaping of the social sciences (notably Political Science and Economics). The Rockefeller name has made its imprint on some of the most influential American and international think tanks and forums, including the Council on Foreign Relations, the Bilderberg meetings and the Trilateral Commission, which was founded by David Rockefeller in 1973 in an effort to encourage cooperation between the ‘trilateral’ regions of North America, Western Europe and Japan.

The effect of these networks – which are replicated to varying degrees by members of the global financial mafia in their respective nations – was to create a new elite class of technocrats and professionals, strategists and policymakers whose ideologies and interests aligned with that of the Mafiocracy. For dynasties and oligarchs to exert influence over economic and political policies and society at large, they need much more than a large economic share of corporate, banking and stock market capitalization. More than anything, they need access to policymakers: presidents, prime ministers, foreign ministers, finance ministers, central bankers, technocrats and the leaders of international organizations.

In short, they need to engage and integrate actively with the world of economic and financial diplomacy, interacting and building relationships with the policymakers of the rich and powerful nations, those who have the political authority necessary to implement policies that affect the Mafiocracy. Together, policy-makers, technocrats, financial diplomats and the Mafiocracy of oligarchs and dynasties are the central players in the game of global power politics, and are the key architects in the system of global economic and financial governance, the Empire of Economics.

Machiavelli to the Mafiocracy

Dynastic control of corporations and banks, while supporting long-term influence and interests, has obvious downsides, since talent and skills are not hereditary, and thus, there is no guarantee that family members and descendants will be as savvy or effective in their management of the family business. For this reason, many oligarchs and dynasties turn to individuals outside of the family to manage their companies, advise on their wealth management strategies, and run the day-to-day business of the family empire. Such advisers, confidantes and interlocutors exist in the world of financial dynasties well beyond the scope of the family business, but help to manage the family’s social and political interests and relationships as well.

Some five hundred years ago, Niccolo Machiavelli advised Popes, princes and other rulers, writing The Prince as a dedication to the first modern financial dynasty, the Medici family of Florence. If Machiavelli were writing The Prince today, he would likely still dedicate it to the major family dynasties, Rockefeller, Rothschild, Wallenberg or perhaps the Agnelli family of Italy and other modern Medicis. With few exceptions, however, the modern imperial families of finance do not directly control the state or political apparatus as they did in past centuries. So for the Machiavellis of the modern era, they must establish close relationships not simply with the top families, but the top political authorities as well.

They act as ‘friends’ and networking agents to the major dynasties while sitting as advisers and cabinet ministers to the world’s major presidents and prime ministers. They run consulting firms, outsourcing their strategic insight and networks of contacts to the highest bidder. They sit on the boards of corporations, think tanks and foundations, fostering the development of future generations of advisers and strategists, regularly appearing in the media to voice their own “independent” analysis of world events and strategic advice. They are the Machiavellis to the global Mafiocracy, moving in and out of government but always remaining in the upper echelons of the ruling institutions. They attend international conferences, forums, professional and social events. They are essential to the global Mafiocracy, with extensive experience in the highest positions of power, understanding how state power is wielded and shaped, they know the key policy-makers at home and abroad, and are able to open doors with their recognizable names, yielding endless benefits to their dynastic patrons and friends.

Perhaps the most recognizable and “respected” consigliere to the Mafiocracy is none other than Henry Kissinger. A German émigré to the United States in the late 1930s, Kissinger became a noted academic at Harvard University, where he became acquainted with the politics of academic life, preparing him “for world politics.” With the help of his academic mentors, he established a seminar and an academic journal which effectively expanded his network of contacts with other young leaders in government, business, media and finance.[51]

In the mid-1950s, Kissinger was invited to join the Council on Foreign Relations (CFR), the premier U.S.-based think tank focusing on foreign policy, long considered a type of training ground (or rite of passage) for any top future foreign policy officials in the United States government. The Council, founded in 1921, also happened to be an institution which was dominated by Rockefeller men and money. Kissinger was appointed as a staff director of a study group on nuclear weapons and foreign policy on behalf of the Council, out of which he wrote a book that advocated for “limited nuclear war” with the Soviet Union. From there, Kissinger was appointed as the director of a Special Studies Project run by the Rockefeller Brothers Fund. At this time, Kissinger developed a close relationship with Nelson Rockefeller, who would become the young Henry’s patron.[52] Kissinger later recalled first meeting Nelson Rockefeller, noting that he and the other young ‘experts’ who formed a study group under Rockefeller’s patronage were “intoxicated by the proximity of power” and sought to impress Nelson in offering “tactical advice on how to manipulate events.”[53]

Kissinger received tenure at Harvard in 1959, and served as a part-time consultant to Nelson Rockefeller, who became the Governor of New York State in 1959 (a position he would hold until 1973). He did part-time consulting with the Kennedy administration in the early 1960s, and with the Lyndon Johnson administration that followed Kennedy’s assassination. When Richard Nixon became president in 1969, Henry Kissinger joined the administration as National Security Adviser, and took on the additional role as Secretary of State in 1973. When Kissinger joined the Nixon administration, Nelson Rockefeller gave Henry a ‘gift’ of $50,000.[54] When Nixon resigned in disgrace in August of 1974, replaced by Gerald Ford, Kissinger remained as National Security Adviser until 1975 and as Secretary of State until the end of the Ford administration in early 1977. Nelson Rockefeller, who had long sought the presidency, was appointed Vice President in the Ford administration.

During these years, Henry Kissinger was the most influential figure shaping U.S. foreign policy, and he did so with a ruthlessly pragmatic understanding of power and its uses. He oversaw the war in Vietnam, the illegal bombing of Cambodia, killing several million civilians during the Nixon administration alone. In addition to his many war crimes in Indochina (for which he won the Nobel Peace Prize in 1973), Kissinger supported Pakistan’s genocide in Bangladesh, killing several million, after which he congratulated the dictator of Pakistan for his “delicacy and tact.” He was also central in the CIA coup to overthrow the democratically elected government of Chile in 1973, of which he said, “The issues are much too important for the Chilean voters to be left to decide for themselves.” The result was the establishment of a U.S.-supported dictator, Augusto Pinochet, who murdered many thousands and tortured many tens of thousands more.[55]

Kissinger also supported the murderous Argentine military regime which killed tens of thousands, along with the Indonesian dictator, Suharto, in his genocide in East Timor, killing several hundred thousand civilians. He supported the Turkish invasion of Cyprus, and the war against the government of Angola, which ultimately killed millions in southern Africa. These are but a few examples of Kissinger’s influence on foreign policy, resulting in the deaths of many millions of people around the world, in addition to the displacement, torture and suffering of many millions of others. With the blood of so many innocent people on his hands, Kissinger had acquired the status of a highly respected “statesman.”[56]

When Kissinger left the government, he did not lose much influence. He remained a central figure within the foreign policy establishment. The ‘Establishment’, as it was known to many, had consisted of prominent Wall Street bankers and lawyers who effectively monopolized the key foreign-policy positions within the government in the decades leading up to and following World War II. By the 1970s, the ‘Establishment’ had given way to what Leslie Gelb (currently a president emeritus of the Council on Foreign Relations) called the “foreign policy community,” which functions as “an aristocracy of professionals.” This community consisted of roughly 300 professors, lawyers, businessmen, think tank ‘experts’, foundation officials and journalists (though today it is likely a far greater number). Whereas previous leaders in the foreign policy establishment were primarily bankers who took time off to manage foreign policy, members of the community tend to focus on foreign policy as “a full-time job.” The community had “first infiltrated, then subsumed the older and familiar establishment,” and by the 1970s it was “monopolizing the top foreign and national security posts in any administration.”[57]

Gelb, writing in the New York Times, noted that members of the earlier Establishment “were insiders, who knew the right persons to telephone, meeting quietly, avoiding publicity.” The Community, on the other hand, “operate far more openly,” noting that, “unlike the Rockefellers, they cannot pick up the phone and speak to the President. They talk to the President indirectly, through the articles they write in journals such as Foreign Affairs and Foreign Policy or in the op-ed pages of [the New York Times] and other newspapers, or in testimony to Congressional committees, through attending conferences with high Government officials at the Brookings Institution in Washington or the Council on Foreign Relations in New York.” Citing Kissinger as one of several examples, Gelb wrote that “the professors had moved to the center of power.” The members of the foreign policy community, explained Gelb, “sometimes actually make the decisions, usually define what is to be debated and invariably manage the resulting policies.”[58]

This foreign policy community links together major universities (particularly the Ivy League schools), philanthropic foundations (Rockefeller, Ford, Carnegie), think tanks, international conferences and forums. Among the most important think tanks in the foreign policy community are the Council on Foreign Relations, the Brookings Institution and the Center for Strategic and International Studies (CSIS), among many others. These think tanks are typically dominated by boards and trustees who are former high level government officials, top corporate executives, bankers, university professors and chancellors, foundation officials, media barons, and of course, individual oligarchs and members of financial dynasties. In addition to major national think tanks, there are a host of international think tanks and forums that bring together the members of the global Mafiocracy with policy-makers and other influential individuals. The three most important and influential of these international forums are the Bilderberg Group, the Trilateral Commission and the World Economic Forum.

The Bilderberg meetings began in 1954 as a conference of high-ranking government officials, bankers, corporate executives, European royalty, media barons, military and intelligence chiefs, academics and think tank officials drawn almost exclusively from North American and Western European nations. The meetings take place once a year, drawing roughly 130 participants who meet for a long weekend in a four-star hotel to engage in off-the-record, secret discussions behind closed doors. The meetings are governed by a Steering Committee of roughly forty individuals who are responsible for inviting other participants from their respective nations. Families such as the Rockefellers, Rothschilds, Agnellis and Wallenbergs have long been represented at Bilderberg meetings.

The Trilateral Commission, which was founded by David Rockefeller, functions as an international think tank and series of conferences uniting the policy-oriented, political, academic, corporate and financial elites of Western Europe, North America and Japan (having expanded since its founding in 1973 to include more Asian nations, notably China and India). David Rockefeller still sits as honorary chairman of the Commission, which consists of roughly 350 members who hold a full membership meeting once yearly, while holding regional meetings separately, of the North America, European and Japanese/Asian groups respectively.

The annual meetings of the World Economic Forum (WEF) in Davos, Switzerland, bring together thousands of the world’s top corporate executives, bankers and financiers with leading heads of state, finance and trade ministers, central bankers and policymakers from dozens of the world’s largest economies; the heads of all major international organizations including the IMF, World Bank, World Trade Organization, Bank for International Settlements, UN, OECD and others, as well as hundreds of academics, economists, political scientists, journalists, cultural elites and occasional celebrities.

Henry Kissinger is a regular fixture at these various think tanks, forums and conferences. He currently sits as a trustee and counselor of the Center for Strategic and International Studies (CSIS), a member (and former board member) of the Council on Foreign Relations, a member of the Trilateral Commission, a participant in World Economic Forum meetings, and as a participant (and former Steering Committee member) of the Bilderberg Group.

After he left government in 1977, Kissinger remained an important figure in foreign policy and establishment circles, making hundreds of thousands of dollars per year as an author, lecturer, academic and consultant, notably for NBC and Goldman Sachs.[59] In 1982, Kissinger founded his own consulting firm, Kissinger Associates, which for a fee of roughly $250,000 per year, advises its clients on “strategic planning.” To help with the consultancy, Kissinger brought in his former deputy national security adviser in the Nixon administration, Brent Scowcroft, as well as a former British Foreign Secretary, Lord Carrington.[60]

Kissinger Associates was headquartered on the corner of Park Avenue and 52nd Street in New York City, located in the same office building as the First American Bank of New York and Chase Private Banking International. Among the client list for Kissinger’s firm are several big names, including H.J. Heinz, Arco, American Express, Shearson Lehman, as well as FIAT (Agnelli), Volvo, Fluor Corporation, International Energy Corporation, Midland Bank, and L.M. Ericsson of Sweden (controlled by the Wallenbergs). As the New York Times noted in 1986, “Kissinger and his associates are by all accounts the most successful of this new breed of former senior Government officials who have decided to advise big businesses rather than join them,” noting that Defense Secretaries, State Secretaries and Treasury Secretaries had overseen millions of people and enormous budgets with which most multinational conglomerates cannot compete, and thus, “big business is too small for many of the new generation of Government superstars.”[61]

As Kissinger himself explained, “I think that in the modern world, if you don’t understand the relationship between economics and politics, you cannot be a great statesman. You cannot do it with foreign policy and security knowledge alone.”[62] In 2002, Leslie Gelb, a top official at the Council on Foreign Relations, commented that, “Within the foreign policy world, and among many corporate CEOs, Henry Kissinger carries more weight than any senior individual in the world today.”[63]

Kissinger has long functioned as a glorified errand boy for the ruling global Mafiocracy. Among his close friends and associates are many of the world’s most powerful dynasties, including his original patrons, the Rockefellers, as well as the Agnelli family of Italy, the Rothschilds of Europe, the Oppenheimer family in South Africa, and a whole coterie of ruling elites in China. Sir Evelyn de Rothschild was introduced to his present wife, Lynn Forester, by their “mutual friend” Henry Kissinger at a 1998 meeting of the Bilderberg Group.[64] Of the late patriarch of Italy’s ruling family, Kissinger said that in “the last two decades of his life, no one was closer to me than Gianni Agnelli,” noting that they spoke on the phone roughly twice a week and would visit each other “every month or so.” Kissinger described Agnelli as “the uncrowned king of Italy” and a “powerful personality who was the most influential Italian of his era.”[65] Kissinger even helped to rebuild ties between the diamond and gold empire headed by Harry Oppenheimer and the South African president.[66]

Kissinger has known the many powerful leaders of China over the past four decades, since he led the diplomatic ‘opening’ of U.S. relations with China in the early 1970s. As he officially established relations with Mao Zedong’s China in 1973, David Rockefeller’s Chase Manhattan Bank became the first U.S. bank to get into the country since the Communists came to power in 1949. Chase Manhattan became the “correspondent” for the Bank of China in the United States, for the purposes of financing commerce. The deal was reached following a 10-day visit by Rockefeller to China in the summer of 1973.[67] Some four decades later, China would be the second largest economy in the world, governed by an elite new class of ‘Princelings’ and technocratic tyrants. China’s economic growth has increasingly translated in growing political power in the international arena. But behind the dry, technocratic exterior of Chinese politics lies a brutal world of factional power politics, in-fighting, scandal, corruption and a struggle for control.

China: Globalization’s Gangster State

Following Mao and Zhou Enlai, Deng Xiaoping would become China’s most powerful leader from 1979 until 1989. Henry Kissinger described Mao as “a prophet who was consumed by the objectives he had set,” and Zhou Enlai as a “most skillful diplomat.” But Deng Xiaoping, for Kissinger, was “a greater reformer,” adding, “I certainly met no other Chinese who had the vision and the courage to move China into the international system and… in instituting a market system.”[68]

Deng Xiaoping was first among the ‘Eight Immortals’ of modern China, and principal architect of modern China.[69] The Immortals were those who supported Deng Xiaoping’s leadership of the Communist Party, believing that only by “opening China to the outside world” would they be able to “raise living standards” and avoid “social upheaval that would threaten the Communist Party’s grip on power.” A Bloomberg special report on the influence of the descendants of the Eight Immortals noted that they ultimately “sowed the seeds of one of the biggest challenges to the Party’s authority,” by entrusting major state assets to their children, “many of whom became wealthy.” This marked “the beginning of a new elite class, now known as princelings.” Over the decades, the emergence and growth of the princeling class would increasingly fuel “public anger over unequal accumulation of wealth, unfair access to opportunity and exploitation of privilege – all at odds with the original aims of the communist revolution.”[70]

The Deng Xiaoping era lasted roughly from 1978 until 2012, when the first princeling came to take the highest seat of power in China, with the rise of Xi Jinping. Prior to that, Deng and the Eight Immortals “towered over China,” first through Deng’s rule, and then “through Deng’s hand-chosen successors, Jiang Zemin and Hu Jintao,” noted a special report in The Diplomat.[71] Deng Xiaoping’s China also saw the rapid rise of the factional backroom power politics that dominate the Chinese Communist Party, and by extension, the government and society. Deng articulated the strategy for China to take in its global rise: “hide your brightness; bide your time.”[72]

The Chinese state has always presented an image of itself to its domestic population and a foreign audience as one of being united with a well-oiled political system. But since the era of Deng, the Party system – which determines who rises to the top positions of power in the country – has been governed not by a visible and public structure, but by “back-room patronage and shadowy negotiations among party elders.” The “problem” with this system, suggested the New York Times in 2012, was that “the power of those elders have diminished with each generation,” noting that then-President and party chief, Hu Jintao, who ruled from 2003 until 2013, was “weaker than his predecessor, Jiang Zemin,” who had ruled China from 1989 until 2002, “who was much weaker than Mr. Deng,” who was paramount from 1978 until his death in the 1990s.[73]

In Chinese factional power politics, the top leaders and former top leaders establish their own networks of patronage, passing benefits and favors to others in exchange for various support, making deals, trades, negotiations and much deeper intrigues. These powerful factions occasionally go to battle with each other, orchestrating all sorts of technocratic coups (the removal of top officials loyal to one boss over the other).[74] The large party factions, headed by their respective party bosses (sitting and former top Chinese leaders) would hold conclaves and secret meetings in which they would negotiate and horse-trade over the appointments to be made to the top ruling body in China, the Politburo Standing Committee.[75]

In 2010, the two main party factions led by then-president Hu Jintao and former president Jiang Zemin decided upon a successor to be president of China, Xi Jinping, with Li Keqiang chosen to be the future prime minister, Hu’s first choice for president.[76] Xi Jinping, who was allied with the Jiang Zemin faction, was ultimately considered to be a compromise candidate between the major faction leaders.[77] Another fast-rising official in the Chinese state apparatus was Bo Xilai, allied with Jiang’s faction, and touted as a possible member of the next Politburo Standing Committee. Bo was viewed by many as “dangerous” and “capable of anything,” creating powerful enemies among top-level Chinese officials.[78]

Bo Xilai was well known both within China and internationally among ruling circles, having risen to the position of party boss in Chongqing City in central China. Under his leadership, Chongqing built strong ties to corporate America and he even won the endorsement of none other than Henry Kissinger, who met with Bo in 2011, after which Kissinger said, “I saw the vision for the future by the Chinese leaders.”[79]

Within a year, Bo Xilai would become the subject of a major scandal which provided a glimpse into the backroom power politics waged by China’s ruling elite and its influential factions and personalities. In a spectacular tale worthy of the palace intrigue of ancient imperial China, Bo went from rising star to serving a life sentence in prison. After making himself a powerful enemy in the form of then-Chinese president Hu Jintao, Bo and his police chief – and long-time confidante – Wang Lijun, became the targets of a quiet corruption investigation designed to prevent his rise to the Politburo Standing Committee.[80]

In January of 2012, Wang Lijun went to his patron, increasingly worried about his own future as the investigation clamped down, hoping to secure the protection of Bo. Instead, Bo decided to toss Wang to the wolves and save himself. Bo fired him from his official post and put a police tail on him. When Wang managed to elude his unwanted entourage, he fled to the American consulate in a nearby city where he asked for asylum, claiming his life was under threat and providing evidence that Bo Xilai’s wife, Gu Kailai, had murdered a British banker (and possible spy) with cyanide in a hotel room a few months before, which he subsequently helped cover up. Suddenly, the quiet backroom attempt to remove Bo as a threat to the Party leadership became a very public scandal revealing the gangster-state nature of China’s power politics.[81]

In a seemingly bizarre twist, the scandal even had repercussions in Canada, as Bo Xilai was “Canada’s closest ally in China’s power structure.” Specifically, Bo had close connections to Canada’s imperial family of finance, the Desmarais family of Montreal, who own Power Corporation. The Desmarais clan had close relations with Bo since the 1970s, when Bo’s father, the Chinese vice premier, Bo Yibo, established a connection with Paul Desmarais, Sr. As Bo’s power within China grew, so too did the market access of the Desmarais economic empire. Through the Desmarais network, Canada’s political elite also established close connections with Bo Xilai. Prime Minister Stephen Harper was one of the last foreign officials to have visited Bo before he was arrested on corruption charges. In fact, André Desmarais, son of Paul, Sr., was accompanied by his father-in-law, former Canadian Prime Minister Jean Chrétien, on a trip to China on behalf of the Canada China Business Council. A mere eight days after Bo’s wife murdered a British banker in a hotel room in Bo’s fiefdom of Chongqing, Bo Xilai smiled and shook the hands of Desmarais and Chrétien, greeting them “like old friends.”[82]

A Financial Times article from 2014 explained that many top Chinese leaders, including former vice-premier of finance and current Standing Committee member, Wang Qishan, are fans of the Netflix original show, House of Cards. The show depicts a politician (Frank Underwood) and his wife, who, through their back-room deals, secret machinations, lies, deception and even murder, are able to rapidly ascend through the ranks of political power in Washington, D.C., first as a top Congressional official making his way to become Vice President and ultimately, President.[83]

Kurt Campbell, writing in the Financial Times, noted that one possible reason for the popularity of shows like House of Cards among the Chinese leadership was that they may view the portrayal of politics in the show “as quintessentially American – perhaps even an accurate depiction of workings of U.S. government.” It was “widely believed” in China, he wrote, that “beneath the surface, America’s vaunted democracy is rife with injustice and corruption.” Not to be discounted, of course, was that the show also provided a parallel in the scandal surrounding Bo Xilai and his wife, Gu Kailai, with their rapid rise and dramatic downfall from the near-heights of Chinese political power. The scandal was “eerily reminiscent of the dirty political deeds perpetrated by Underwood in his quest for power.” Even U.S. President Barack Obama had commented that he was fascinated with the show, though he “confessed a pang of envy for the ‘efficiency’ with which things get done in the fictional Washington of its creation.”[84]

Indeed, House of Cards more closely resembles the realities of power politics exercised at the highest levels than is reflected in most other television and cinematic productions. While often criticized as being highly ‘cynical’ (much like Machiavelli’s The Prince), the truth is that it is a more accurate interpretation of a deeply cynical power structure. The Netflix show was an American adaptation of an earlier British television miniseries of the same name, which was itself based upon a series of books written by Michael Dobbs, a former adviser to Prime Minister Margaret Thatcher and chief of staff to the British Conservative Party. Dobbs was once dubbed “Westminster’s baby-faced hit man,” with the British press noting that many of his political enemies said that he was “as calculating and conceited as some of his fictional characters.”[85]

Dobbs, in fact, wrote the original book, House of Cards, following “a blazing row” with Margaret Thatcher, in which she delivered upon him “a verbal hand-bagging” and subsequently fired him. After that, Dobbs sat down to write his book, which was “inspired by the shenanigans he’d seen and been involved in.” In a recent interview, Dobbs told a journalist, “All of the wickedness you see on House of Cards, I’d seen or even been responsible for.”[86] In a 2015 interview with the Wall Street Journal, Dobbs, who is now a member of Britain’s House of Lords, said, “I don’t think it matters whether it’s in Westminster or Washington – it could be in Beijing or Moscow – because it’s the story about passions, ambitions, weaknesses and wickedness, which I think is universal and almost timeless.”[87]

It is a rarity for power to be accurately portrayed in art and cultural media. Its complexities can hardly be summarized in simple and short journalistic prose, and television news stands as an obscene testament to intellectual infantilism in modern society. Some 500 years ago, when Machiavelli was writing about the realities of power in his era, he could get away with a deliberate and direct approach since he was writing during a time where the vast majority of the population was illiterate, where those who would potentially read his text were the wealthy and powerful, those to whom it would be useful.

Over the past several centuries, with the spread of technology, education, mass communication and democracy, the global political world has become far more complex, with more players, interests, rivals and potential problems than ever before. As a corollary, the “passions, ambitions, weaknesses and wickedness” – as Dobbs described it – have become more global, impactful and entrenched. Whereas Machiavelli wrote about warring city-states, today we have competing continents and large economies, the global system of nation-states, banks and corporations. In addition, the public – the populations of nations and regions – have become literate, better educated, with more access to more information than ever before. They have become more active participants in their respective political systems than they were in past centuries and millennia.

At once, the tools of control and conquest are more advanced and efficient than ever, while the ability to exercise and justify the use of power politics and empire-building is at an historic low. The realities of mass culture and communication, largely a product of the 20th century, have changed the rhetoric and presentation of power in the modern world, though not necessarily the realities and priorities of power. The exercise of power has thus increasingly become coupled with and dependent upon the public use of vague, euphemistic, obscure and often incomprehensible language.

It is a language spoken and understood by those who are invested and involved with the world of high-powered politics, in which the key leaders and players must be able to speak publicly and purposefully in an effort to expand their interests, build their empires and play their games, but which also requires enough obscurity and evasion in order to ensure that the mass publics and populations of the world remain in the dark about the realities playing out behind the scenes. “Political language,” wrote George Orwell in a 1946 essay, “is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.” In his essay, written two years prior to the publication of his famous book, 1984, Orwell explained some of the many uses of political language, writing:

It is almost universally felt that when we call a country democratic we are praising it: consequently the defenders of every kind of regime claim that it is a democracy, and fear that they might have to stop using that word if it were tied down to any one meaning. Words of this kind are often used in a consciously dishonest way. That is, the person who uses them has his own private definition, but allows his hearer to think he means something quite different.[88]

Orwell suggested that political language was most often used to defend the indefensible, citing examples of maintaining British rule in India, Russian purges, and the use of nuclear bombs in Japan. Such things, he wrote, “can indeed be defended, but only by arguments which are too brutal for most people to face, and which do not square with the professed aims of political parties.” Thus, he noted, “political language has to consist largely of euphemism, question-begging and sheer cloudy vagueness.” When poor villages are bombed by foreign militaries, its residents machine-gunned and murdered, homes destroyed and survivors scattered, this, wrote Orwell, “is called pacification.” Political leaders cannot publicly state that they intend to murder and destroy entire communities and nations all for the benefit of imperial ambitions, so they claim instead that they must pacify the population, to secure ‘order’ and ‘stability’. The term “pacification” is never actually defined, but the policies and effects which occur under the cloaking of that rhetoric provides as clear a definition as one will get. Orwell continued:

The great enemy of clear language is insincerity. When there is a gap between one’s real and one’s declared aims, one turns as it were instinctively to long words and exhausted idioms… All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred, and schizophrenia… But if thought corrupts language, language can also corrupt thought. A bad usage can be spread by tradition and imitation even among people who should and do know better.[89]

Orwell’s essay, Politics and the English Language, is perhaps more relevant today than it was when it was written in 1946. One journalist, Matt Schiavenza, discussed the uses of political language in an article he wrote for The Atlantic discussing modern politics in China. With names of powerful institutions and conferences such as the Politburo Standing Committee, the Plenum and Plenary sessions of the Party Congress which promise a host of undefined ‘reforms’, Shiavenza wrote, “for lovers of clear, concise language, Chinese politics are a nightmare.” But he acknowledged its purpose: “If this language seems vague and boring, well, that’s the point: Chinese politics are designed to attract as little attention as possible.”[90]

The same can and should be said for American, European, Japanese and other modern, advanced political societies. China is an extreme case, but by no means the exception. Chinese politics has a heavily technocratic element, in which ‘experts’ (engineers, economists, academics) frequently rule the political apparatus and manage the public debate, designing and implementing large-scale social engineering projects; reshaping, en masse, the nature and structure of society, defining purpose for the population, steering the direction and managing the many crises that result from the totalitarian domination of 1.3 billion people.

In 2010 alone, China experienced 180,000 protests, riots and mass demonstrations, an average of 500 per day, and this was in the midst of an economic ‘boom’ for the country.[91] In such circumstances it is necessary for the Chinese elite to present an image of themselves not as in-fighting, factional, power-mad, super-rich oligarchs competing for domination, but as highly-qualified ‘experts’ who are able to make decisions and implement policies through ‘consensus’ in the interests of China and its population as a whole. Obviously, this is a fantasy world, behind which is a totalitarian system that controls the media, education, communication, transportation, and with all the necessary tools of violent repression.

Technocracy – that is, rule by experts – establishes the institutional ideology, and communicates through the technical language of Chinese politics. Only other ‘experts’ have the technical skills to understand what is being said and to participate in the process of decision-making. The public is left with obscure generalizations, flashy distractions, empty sound-bites and pre-packaged conclusions. But perhaps even worse than the “nightmare” of Chinese politics and its “vague and boring” language, is that of the global financial structure and economic diplomacy. It is within this world where the ideologies, individuals and institutions of global governance have constructed and advanced the architecture and interests of the global Empire of Economics.

The Language of Empire

The language of economics and finance is designed to be incomprehensible to those who are not ‘experts’ or experienced in the fields of economics and finance. The language reflects an ideology that is heavily institutionalized in modern ‘industrial’ society, obscuring realities behind its vague and undefined terms and concepts. We are presented with a world of trained economists, experts in the economic ‘science’ of society; politicians, presidents, prime ministers, chancellors and other heads of state who speak and decide on important matters; the finance ministers and central bank governors who meet, speak, plan and implement the world’s major economic and financial policies; the heads of acronym-named international organizations and their technocratic administrations; the banks, corporations, institutions and individuals who control most of the wealth, resources, trade and ‘financial markets’; the universities, think tanks and foundations who shape the education and training of future financial diplomats, who define the debate and discussion, who determine the policy-options and objectives; and the journalists and news publications who disseminate the economic and financial ‘news’ of the day, whose primary audience is composed of the diplomats and key players in the world of finance and economics.

It is a world little understood to outsiders, obscure and unknown even to most trained economists. Like their counterparts in political science, economists are ‘educated’ (aka: trained, indoctrinated) so that they know just enough to be active participants and administrators of the political (or economic) system, but not enough to understand its actual structure and purpose, nor question its legitimacy. Mired and focused on the technical details, ‘specialized’ in their education to focus and only understand specific sectors of the economic and financial system, the experts are segregated, knowledge is divided and divisive. With a tunnel vision focus on the technical details, most economists and experts are incapable of seeing the larger, institutional, ideological and indeed, the deeply political nature and realities of the financial and economic system.

The economic and financial system is designed this way, precisely because – much like Chinese politics – behind its technical terms, opaque objectives, and insurmountable institutions lies a world of brutal power politics, national and transnational factional battles between rivals and regions, engineering empire, enforcing state tyranny and violence, undertaking dramatic coup d’états and maintaining dynastic dominance. The world of financial power politics stands at the core of the Empire of Economics.

Economic and financial diplomacy is concerned with the design and construction of the Empire of Economics. Diplomats, by definition, hold political authority. Their job is to represent the interests of their nation, their ministry or government department, their embassies, outposts and ‘missions’. In the realm of economic and financial diplomacy, the key participants and players, those with the most political authority, are the central bankers, finance ministers, treasury secretaries, the leadership of international organizations, trade negotiators, economic advisers and of course, the presidents, prime ministers and chancellors – the heads of state.

Foreign diplomacy and international relations present itself with the public image of a convoluted and never-ending attempt at failing to help others around the world, to advance democracy, freedom, human rights, civilization and the ‘common interest’. But behind the media, the rhetoric of diplomacy, the coded language and confused causes, is an unforgiving world of empire. This world erupts in wars, coups, civil conflicts, dictators taking power or falling from it, bombs, bullets and occupation.

The famed linguist and prolific social critic, Noam Chomsky (one of the most cited intellectuals in history), has accurately described the world of ‘international relations’ between nations as functioning according to ‘Mafia principles.’ For decades, Chomsky has been one of the best known, most articulate and well-researched critics of U.S. and Western foreign policy and empire. He has spoken and written consistently that since World War II, regardless of political party or affiliation, successive presidents and their administrations were guided in their foreign policy by the “godfather principle, straight out of the mafia: that defiance cannot be tolerated.” Countries that defy the United States or its allies must be “punished” before “the contagion spreads.”[92] Chomsky elaborated on the ‘Mafia principle’ of international relations, writing, “The Godfather does not tolerate ‘successful defiance,’ even from a small storekeeper who fails to pay protection money. It is too dangerous. It must therefore be stamped out, and brutally, so that others understand that disobedience is not an option.” This principle has been “a leading doctrine of foreign policy for the US during the period of its global dominance.”[93]

Economic diplomacy has its parallels as the most powerful nations compete and cooperate for influence within the global Empire of Economics, also adhering to ‘Mafia principles’ in the exercise of financial power.

Diplomacy and Design of the “World Political Structure”

The Empire of Economics had been long in the making, but its modern manifestation – the various institutions, ideologies and interests that comprise the global economic and financial system – is largely a product of the 1970s. It was an era of profound monetary (currency) and economic crises and transformations. The global currency system that had existed in managing the monetary and economic relations between nations from the end of World War II was abandoned by the United States in 1971. Thereafter, the world of economic diplomacy was thrown to the center of the storm. Decisions of immense political importance had to be made and a new global monetary and financial system needed to be constructed. This task was handed to the central bankers and finance ministers of the rich and powerful nations of the world, first and foremost, the United States, followed by West Germany, France, Britain, Japan, Italy, Canada, Switzerland, the Netherlands, Belgium, Luxembourg and the Nordic nations.

Suddenly, finance ministers and central bankers were pushed to the forefront of advancing the global imperial interests of the rich, powerful nations, at times even eclipsing foreign and state ministers responsible for managing the nation’s foreign policy. It is through the frequent private meetings, international forums, conferences, social events and state visits where the finance ministers, central bankers and other technocrats engage in the very long and incremental process of negotiating the construction and evolution of the global economic and financial system. This was what Kissinger defined as the “trick” to use in creating “a world political structure.”

Banks, financial institutions, corporations and global markets were reaching far beyond the nation-state, becoming transnational in character, objectives and ideology. Political power had to follow financial and corporate power, to provide the political legitimacy necessary to advance the interests of the Mafiocracy. A bank can make a loan, but only powerful nations can force compliance to pay, to demand policies be changed, and to enforce the repercussions of failure. It was in the finance ministries and central banks of the powerful nations where state power and authority was to be exercised in closer coordination with other influential nations, and where they would consult and cooperate with concentrated transnational financial power.

Since the early 1930s, central bankers from the rich and powerful Western nations would meet in secret (usually in Basel, Switzerland) at the headquarters of the Bank for International Settlements (BIS), the central bank to the world’s major central banks. These meetings of central bankers take place behind closed doors every two months, in off-the-record conversations, after which no communiqué or press release is issued, no reporters informed. The cooperation of central bankers was in turn supported and enhanced through the establishment of the International Monetary Fund (IMF) in 1944, which brought in not only central bankers, but also finance ministers from the member nations of the Fund.

Liaquat Ahamed is a widely read and respected author within the economic world, and particularly among financial diplomats. He has worked at the World Bank, with banks, hedge funds, asset managers and is currently on the board of trustees of the Brookings Institution, an influential American think tank. In 2009, he published Lords of Finance about the major Western central bankers during the early 20th century, winning multiple awards, including the 2010 Pulitzer Price for History. In 2014, he published another work, Money and Tough Love: On Tour with the IMF, looking at the history and workings of the International Monetary Fund, interviewing many IMF officials and even attending several meetings and travelling with IMF missions to various nations.

Ahamed noted that from its origins at the end of World War II, the annual meetings of the IMF (usually taking place in September or October), consisted primarily of top financial diplomats from the founding 29 members of the Fund, which “functioned as a sort of conclave of the cardinals of capitalism, intent on rebuilding the Western financial system after thirty years of war and depression.” The annual meetings of the IMF were “grand affairs,” as most of the “financial statesmen of the era had either been bankers at the tail-end of the Gilded Age or, in the case of the British, colonial administrators.” In the late 1950s, the IMF membership had grown to sixty-eight, with several hundred officials showing up to the annual meetings.[94]

The IMF, BIS and other international institutions such as the World Bank, Organisation for Economic Co-operation and Development (OECD), and the General Agreement on Tariffs and Trade (GATT) would play central roles in the management and expansion of the global Empire of Economics. But a great deal of power was organized often outside of these institutions, by relatively smaller groups of nations who would meet in private as ad hoc groups of finance ministers, central bankers their deputies and other technocrats and international organization officials. Together, as representatives of the rich and powerful nations and institutions, they would seek to forge a consensus between themselves, which they could then extend through the various other (larger) forums and institutions.

The first of these ad hoc groups was known as the Group of Ten (G-10), established in 1962. The G-10 would periodically bring together the central bankers and finance ministers of ten rich nations: Belgium, Canada, France, [West] Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom and the United States. Very soon after its establishment, Switzerland was invited, yet it continued to call itself the Group of Ten. Through this forum, these nations would “consult and co-operate on economic, monetary and financial matters.”[95]

Over the first half of the 1970s, a series of committees would be formed to further coordinate policies and strategies among the powerful nations. The Group of Ten agreed to form a special group at the IMF in 1972 known as the Committee of 20 (C-20), bringing together the finance ministers and central bankers from the key constituencies represented on the IMF’s executive board, coming together at the annual and spring meetings of the IMF and World Bank in order to function as a type of steering committee for the Fund, providing strategic direction the Board of Governors.[96]

In 1973, a separate group was formed, known as the Group of Five (G-5), bringing together the finance ministers (and occasionally the central bankers) from the United States, West Germany, Japan, the United Kingdom and France.[97] The following year, the IMF’s C-20 was institutionalized as the Interim Committee of the IMF, and would later become known as the International Monetary and Financial Committee (IMFC), which still exists and meets today. It has a parallel group that provides strategic advice to the World Bank, known as the Joint Development Committee.[98]

A hierarchy of these groups began to emerge, with the richest five countries holding their secretive meetings of the Group of Five, where they would seek to establish a consensus among themselves and subsequently push their agreements through the wider G-10, from where they would then advance their collective interests through the Interim Committee of the IMF. The era of ad-hoc committees to run the world had begun. The IMF’s own publication, Finance & Development, would later describe these groups as “a steering committee for the world economy,” driving the process of global governance.[99] In 1975, the U.S. Treasury Secretary, William E. Simon, wrote to President Ford, “I believe that bringing together finance ministers from time to time in these forums is a useful way of getting decisions on difficult and technically complex financial issues.”[100]

A few months later, Henry Kissinger would explain to President Ford the strategy “to use economics to build a world political structure.” Two days after Kissinger made that statement to the President, a larger meeting was held at the White House which included all of the top financial diplomats and economic advisers in the Ford administration, where the strategy was further discussed. As Kissinger told the other ministers during the meeting, “it is better to have the Finance Ministers be bastards, that’s where I want it.”[101]

Before the end of the year, the Group of Five would meet for the first time at the level of heads of state, holding their inaugural meeting in Rambouillet, France, where Italy was also invited as an additional member. The following year, Canada would be invited to join, thus crowning the annual meeting as the Group of Seven (G7), which continues to meet to this very day, functioning as “an informal Western directorate,” as the New York Times described it in 1975.[102] The ministers and central bankers of the G5 would continue to function as the primary forum for economic coordination until the mid-1980s, when the G7 ministers and central bank governors would officially replace it.

The financial and corporate power that was concentrated in the G-7 nations began to expand across the world, and so too did major economic, financial and debt crises. The powerful nations would then have to come to the rescue of their own banks by providing bailouts for foreign nations who owed the banks money and were too poor to pay. In return for financial ‘aid’, largely channeled through the IMF, the Group of Seven nations would demand strict conditions to be met, including sweeping changes to the economic, political and social structure of the nation getting the bailout. Their economies would be forced to reform to the ‘market system’, benefitting domestic oligarchs and elites, as well as large banks and corporations in the G-7 nations. A financial or debt crisis would manifest as a form of financial warfare, while the bailout programs would function as economic occupations designed to advance the interests of the Empire.

From the early 1980s to the early 2000s, these debt crises spread from Latin America to Africa, Eastern Europe, East Asia, Russia and back to Latin America. The International Monetary Fund functioned like an imperial management facility, controlling entire nations and regions like an occupying power. As early as 1977, the U.S. Treasury Secretary, Michael Blumenthal, wrote to President Jimmy Carter discussing the importance of the IMF, while acknowledging that many nations of the world were complaining about the harsh conditions attached to IMF loans. Blumenthal wrote, “The IMF for years served as a kind of whipping boy,” noting that countries that were in crisis and needed to take drastic measures to solve their financial situations (usually in the form of painful austerity measures) would “often need an external source to blame. The IMF is an ideal candidate and is accustomed to being in that position.” Further, he wrote, “If we didn’t have the IMF, we would have to invent another institution to perform this function.”[103]

In the early 1990s, the IMF was managing ‘programs’ in over 50 countries around the world, which “helps explain why it has long been demonized as an all-powerful, behind-the-scenes puppeteer for the third world,” in the words of the New York Times.[104] In 1992, the Financial Times noted that the fall of the Soviet Union “left the IMF and G7 to rule the world and create a new imperial age,” which “works through a system of indirect rule that has involved the integration of leaders of developing countries into the network of the new ruling class.”[105] When Russia was invited to these special meetings, they would be known as the Group of Eight (G-8), but the G-7 still served as the core of global governance.

In the late 1990s, a new committee was formed, known as the Group of Twenty (G-20), which consisted of the finance ministers and central bankers of the G-7 nations, the European Union and twelve major “emerging market” economies: Russia, China, India, Brazil, Mexico, Indonesia, Argentina, South Africa, Saudi Arabia, Turkey, Australia and South Korea.[106] It would not be until the global financial crisis of 2008 that the G-20 would meet at the level of heads of state, when it held its first meeting in Washington, D.C. on November 15.[107] By September of 2009, the G20 had effectively become “the new global economic coordinator” and “steering committee” for the world economy.[108] From 2011 onwards, the G7 would only meet “informally,” with the G20 finance ministers and central bankers gathering prior to the IMF and World Bank spring and annual meetings in order to coordinate strategy and policies.[109]

Despite the dry and uninspiring names of the groupings, the reality is that they function as conclaves of empire, where ministers and governors align in their respective cliques – such as advanced versus emerging market economies – and pursue their individual national and collective interests. The emerging market economies push for greater representation and authority in international organizations such as the IMF, attempting to increase their own power within the apparatus of global governance and empire. Power struggles and financial warfare between nations are left to behind-the-scenes negotiations and discussions, kept largely out of the public eye.

In 2010, the then-chairman of the International Monetary and Financial Committee (formerly the Interim Committee of the IMF) was Youssef Boutros-Ghali, the finance minister of the Egyptian dictatorship, widely respected in financial circles, though much hated among Egyptians as a representation of the dictatorship’s extreme corruption. That year, a currency war had erupted between the rich nations and the emerging market economies, in which countries like China and Brazil were seeking to make their currencies more competitive than Western currencies, thus making their exports cheaper and more attractive. Financial diplomats began to fret about the potential implications of the currency warfare. The issue was to be taken up at the IMFC meeting, though Boutros-Ghali stressed that the subject “will not be on the public agenda” during the IMF meetings. “These are issues that you solve in closed rooms,” he said, and needed “to be handled quietly and in a spirit of cooperation.” Such important issues were not for public discussion, as it could frighten markets and accidentally reveal to the public the true nature of the global economic system. Instead, Boutros-Ghali explained, “It is something that needs quiet discussions, quiet diplomacy to get things moving.”[110]

The “quiet diplomacy” of “closed room” meetings of finance ministers and central bankers is one of the defining characteristics of the modern imperial system. There is no better example of this system today than that of the European Union and its debt crisis, which began in 2010.

Europe Under Empire

One of the most important institutions in Europe is called the ‘Eurogroup’, consisting of the finance ministers of the 19 nations that use the euro as their common currency within the 28-nation European Union. From the time that Europe’s debt crisis began in early 2010, the Eurogroup would hold meetings at least once a month, with top officials from the IMF, the European Commission (the executive body of the EU) and the European Central Bank (ECB) also participating. The Eurogroup was presided over by a president, Jean-Claude Juncker, who also served as the Prime Minister and Finance Minister of Luxembourg.

The Eurogroup functions as a type of board of directors for the eurozone economies, meeting behind closed doors at various locations across Europe where they negotiate and attempt to establish a consensus in managing the debt crisis, forcing countries in crisis (such as Greece, Ireland, Portugal, Italy and Spain) to impose austerity measures, cutting social spending and increasing unemployment and poverty for the benefit of banks and financial markets. The future of the European Union and its 500 million citizens is decided in these “secret meetings” of finance ministers, central bankers and transnational technocrats.[111]

In April of 2011, Jean-Claude Juncker was speaking at a conference of European elites when he said, “Monetary policy is a serious issue. We should discuss this in secret, in the Eurogroup.” Juncker explained that throughout his more than two decades as prime minister of Luxembourg, making him the longest-sitting head of state in the E.U. at the time, he often “had to lie” in order to prevent financial markets from panicking. Just as monetary policy had long been discussed and decided in secret meetings of central bankers, Juncker felt that all major economic decisions should be discussed and agreed upon in the same way. “I’m ready to be insulted as being insufficiently democratic, but I want to be serious,” he explained, “I am for secret, dark debates.”[112] The following month, he lived up to his reputation and became the target of criticism after he lied to the press about a secret meeting of the Eurogroup that was taking place in a Luxembourg castle to discuss a second possible bailout for Greece.[113]

Presented to the public as an essentially economic issue, Europe’s debt crisis is discussed and debated through the use of financial rhetoric and terminology in all its bland and vague varieties: fiscal discipline, structural reform, austerity, labour flexibility, budget and trade deficits, external imbalances, internal adjustments, strict conditionality and deficit reduction strategies. Many of these terms are interchangeable, and while they all provide the appearance of technical expertise and understanding, they have profoundly important meanings and implications.

For example, the main policy pushed on countries in crisis is to demand that they cut all forms of social spending, including health care, education, welfare, social services, firing large amounts of public-sector workers, dismantling government programs and policies which benefit the majority of the population, creating mass unemployment and poverty. This systematic impoverishment of the population is a brutal process that results in mass misery, increased suffering, hunger, disease, skyrocketing suicide rates and social devastation. To describe this process in these terms, however, would be to prevent the policies from ever being implemented. Instead, these policies and programs are described with the following terms: austerity, fiscal discipline, fiscal adjustment, belt-tightening, deficit reduction, balancing the books, and budget consolidation.

The brutality of the European and global economic empires remains hidden behind these bland terms. But the truth is revealed in the countries and on the streets of those nations most affected by the debt crisis, in Greece and Spain, Italy, Ireland and Portugal. Unemployment has soared, particularly among youth, of whom more than 50 percent remained unemployed in Greece and Spain by 2015. Poverty and suffering under the E.U.’s economic colonization programs have prompted social unrest, resistance, riots and rebellions, new social movements, anti-austerity political parties and even the rapid rise of fascism. Germany dominates Europe and its major institutions, as the largest economy on the continent, second-largest exporter in the world after China, and fourth largest economy in the world as a whole (following the U.S., China and Japan). Its economic weight makes it the most powerful nation influencing and directing the apparatus of the European Union, including the European Commission, the European Central Bank and the Eurogroup, with significant influence (especially alongside other rich EU nations) in the IMF and Bank for International Settlements (BIS).

Germany leads a bloc of rich nations within the European Union who are the strongest advocates of “fiscal discipline” and “austerity,” among them the Netherlands, Finland, Luxembourg and Austria, generally referred to as the northern bloc or creditor countries. France, the second-largest economy in the European Union, generally leads a bloc consisting of the ‘southern’ nations, the debtor nations. The rich countries provide the majority of funding to the E.U.’s institutions, and thus wield the greatest influence.

Germany and France were the two most influential countries in constructing the European Union over the course of the previous six decades, with consistent cooperation and support among the Benelux countries (Belgium, Netherlands, Luxembourg), and occasionally the United Kingdom, though its influence has dramatically decreased in recent years. As a result of this process, the rules that were written were done so in such a way as to benefit this ‘core’ group of nations more than any others. Despite the fact that there are 28 nations in the European Union, the collective weight of a core group consisting of a handful of rich nations is able to direct the process of integration and force the other member nations to change their policies and transform their societies.

As financial markets began to punish countries for having high debt levels, plunging them into crisis, the European Union, its key institutions and leaders began to mobilize to provide large ‘bailouts’ to these countries. Big banks, most notably those based in Germany and France, had lent large amounts of money to several nations, including Greece, and wanted their interest payments to be made on time. The banking systems in the rich countries were thus under threat of potentially facing the consequences of their own bad loans. To prevent the banks from having to suffer, the rich nations agreed to establish bailout programs which would be managed by the European Commission, the European Central Bank and the International Monetary Fund (IMF). These three institutions, collectively known as the Troika, would provide the money for the bailouts and in turn would set the conditions demanded by the core nations for the bailout countries to implement, namely, austerity and impoverishment. The Troika institutions are entirely unaccountable to voters and publics, representing unelected and anti-democratic technocratic tyrannies, yet they wield unprecedented power over entire populations and societies.

The European Commission functions as the executive branch of the E.U., writing legislation and managing roughly two dozen governmental cabinet departments, headed by individual Commissioners, the most influential and important of which is the Commissioner for Economic and Monetary Affairs. For much of the debt crisis, this individual was Olli Rehn, a Finnish politician who served in that position from 2009 to 2014. Coming from Finland, Rehn was closely aligned with the core group of rich nations and was among the strongest individual proponents of austerity throughout the crisis. The Commission itself was presided over by a President, personified in the former Portuguese Prime Minister, José Manuel Barroso, who served in the role from 2004 to 2014.

The European Central Bank (ECB) manages the monetary policy for the 19 member nations of the eurozone who share a common currency. The ECB is run by a president, a role held from 2003 to 2011 by a Frenchman, Jean-Claude Trichet, a former governor of France’s central bank, the Banque du France. From late 2011 on, the role of president was held by an Italian, Mario Draghi, previously the governor of the Bank of Italy. The ECB is further managed by an Executive Board, consisting of the president, vice president and four other members appointed from different EU countries. In addition, the ECB has a Governing Council made up of the governors of the national central banks of the eurozone economies, collectively comprising what is called the Eurosystem. The German Bundesbank and its president is the most powerful individual central bank in the ECB, often allied with its Dutch, Finnish and Austrian counterparts.[114] Both the Executive Board and Governing Board are responsible for making the major decisions in the central bank’s policies and play a highly influential role in managing the European debt crisis, especially in crisis-hit countries.

Technically speaking, the ECB is an independent institution, meaning that it is given political independence from the nation states of the European Union, serving its mandate as a technocratic institution interested only in a stable monetary policy, free of interference from political leaders. The core countries of the EU, however, wield significant influence on the ECB, and not only through their appointments to the Executive Board and their respective national central banks, but in behind-the-scenes negotiations and secret meetings. As the heads of state of the core eurozone nations frequently formed an allied bloc in their negotiations and management of the European debt crisis, these blocs were reflected inside the ECB and other EU institutions,[115] and Germany remained the most influential of all.[116]

The behind-the-scenes power politics between nations was also reflected in the Eurogroup of finance ministers, where Germany and France would have to negotiate an agreement, with Germany leading the group of countries demanding harsh measures, alongside the Netherlands and Finland.[117] This has allowed Germany, the Netherlands and Finland to have some of the most influential finance ministers in managing the entire process and policies of reform and deeper integration in the European Union.[118] Many of these policies and programs are agreed through the “secret, dark debates” of the Eurogroup meetings, to borrow Jean-Claude Juncker’s phrase.

The German Finance Ministry is located in Berlin, housed in a Nazi-era building which previously served as the headquarters for the Nazi air force, the Luftwaffe, from which Hitler’s second-in-command, Herman Goering, plotted the bombing campaigns across Europe. Today, the same building serves as the main center for managing Germany’s economic empire in the EU and the Troika occupations of crisis countries. The building “is a monument to both the Nazis’ ambition and their taste,” noted Vanity Fair, though the statues of eagles sitting atop large swastikas have been removed.[119]

In late 2011, Europe’s debt crisis was reaching new heights, with financial markets waging a vicious assault against Greece and Italy for their failure to impose brutal austerity measures on their populations. It was at the Old Opera House in Frankfurt, Germany, where a farewell party was being held for Jean-Claude Trichet, president of the ECB, resigning from his post at the end of the month (to be replaced by Mario Draghi). Nearly all of Europe’s key policymakers were present at the party, but as the crisis escalated, a small group of top officials held an “explosive” behind-the-scenes meeting to try to come to an agreement on forming a response. Nicolas Sarkozy squared off against Trichet, with German Chancellor Angela Merkel coming to the central banker’s side. But the real significance of the meeting was that it established the formation of a small ad hoc group of eight individuals at the top of the EU’s power structure who would be able to collectively steer the course of Europe.[120]

They called themselves the ‘Frankfurt Group’, though the media dubbed them Europe’s new ‘Politburo’, reflecting the similar functions of China’s top ruling body. The group consisted of the German Chancellor, French President, the head of the ECB, the President of the European Commission, José Manuel Barroso, the Commissioner for Economic and Monetary Affairs, Olli Rehn, the President of the Eurogroup of finance ministers, Jean-Claude Juncker, the President of the European Council, Herman Van Rompuy, and the Managing Director of the IMF, former French finance minister Christine Lagarde.[121]

Within the following three weeks, the Frankfurt Group would orchestrate coup d’états in both Greece and Italy, removing democratically-elected prime ministers and political parties from power, replacing them with economists and central bankers, technocratic tyrants whose sole purpose was to impose the brutal austerity measures demanded by banks and financial markets. One of the key battlegrounds in the war waged by the Frankfurt Group was in the lead-up to and during the G20 summit of leaders and ministers at Cannes, France in early November of 2011.[122]

Less than a week before the G20 summit, Greece’s prime minister, George Papandreou, surprised members of his own cabinet and infuriated Europe’s rulers when he decided to hold a referendum asking Greek citizens if they were willing to follow the conditions set by the bailout agreement with the Troika. Sarkozy went “ballistic” and summoned Papandreou to Cannes for a meeting with several officials of the Frankfurt Group in order “to put Papandreou against the wall, in the corner,” in the words of one person present at the meeting. Over the following weeks, the Group would orchestrate the removal of Papandreou from power, replacing him with Lucas Papademos, the former Vice President of the European Central Bank from 2002 to 2010, prior to which he was the governor of the central bank of Greece from 1994, simultaneously sitting as a member of the ECB’s governing council from its creation in 1998 until 2002. European Commission President José Manuel Barroso had played a central role in removing Papandreou from power, operating secretly from hotel rooms with his close aides and without the knowledge of Merkel or Sarkozy.[123]

When the world’s major leaders headed to Cannes in early November for the G20 summit, President Obama was given an inside look into the inner workings of European power politics, even attending a meeting of the Frankfurt Group. The European debt crisis took international headlines and was the main topic of discussion at the summit. The Obama administration, with Timothy Geithner as Treasury Secretary, had for months been working quietly through financial diplomacy to encourage a more comprehensive solution to Europe’s crisis, attempting to balance the interests of global financial markets with those of Germany. Obama told Chancellor Merkel and other leaders, “Our preference is that the ECB should act a bit like the Federal Reserve did,” referring to its role in acting as a “lender of last resort,” providing funds for states or banks that needed quick cash to avoid a crisis.[124]

The ECB’s legal mandate reflected that of its major national backer, the German Bundesbank, the chief architect and prototype of the ECB structure. Holding a far more conservative and ‘hawkish’ approach to monetary policy than most of the world’s other central banks, the mandate stressed that the central bank was not allowed to finance governments, and so instead of acting quickly to bailout governments in need, financial markets wage war against nations in need of funds while EU leaders squabble and negotiate the details of programs that require the countries to restructure their entire societies. The longer the negotiations drag out, the more vicious the assault of financial markets will be. This exacerbates the crisis and weakens the negotiating position of the crisis country, allowing the powerful countries to extract more concessions and impose more demands.

Central bankers frequently refer to the term and concept of “creative destruction,” referring to the role that financial crises play in providing the needed pressure on countries to change their policies and restructure their societies, following the orders of central bankers, finance ministers and other technocrats. Andrew Crockett was the former head of the Bank for International Settlements (BIS), the central bank to the world’s central banks, who was one of the most respected international monetary diplomats of his era. Crockett described “creative destruction” as a process of financial instability that “is not only inevitable but also positive.” It forces various governing and social systems “to change and adapt,” destroying old and creating new institutions and structures. This process “has to be allowed to work.”[125] Former Federal Reserve Chairman Alan Greenspan referred to creative destruction as the “partner” of “free-market competition,” noting that where markets go, crises follow.[126]

As financial markets creatively destroyed European countries, the Frankfurt Group held four meetings on the sidelines of the G20 summit in Cannes, with its eight ‘Politburo’ members wearing badges marked ‘Groupe de Francfort’. Obama was invited to one of the meetings where he received a “crash course” in Europe’s ruling structures and processes. One participant in the meeting referred to the American president as “a quick learner.” Obama continued to meet with other European leaders assembled at Cannes, attempting to help forge a response to the crisis. At one point, he pulled Angela Merkel aside just prior to a G20 working session and said, “I guess you guys have to be creative here.”[127]

And they got creative with Italy’s Prime Minister, Silvio Berlusconi, the billionaire media oligarch who was long a thorn in the side of EU leaders, consistently failing to impose the austerity measures demanded by Brussels, Frankfurt and Berlin. Chancellor Merkel had been quietly working behind the scenes for weeks to remove Berlusconi from power.[128] On November 12, Berlusconi was forced to resign and his replacement was Mario Monti, an economist and former European Commissioner.[129] Monti was also a founder and honorary chairman of Bruegel, a Brussels-based international economic think tank. He served on advisory boards to Coca-Cola and Goldman Sachs, was a former Steering Committee member of the Bilderberg Group, and at the time of his appointment as Prime Minister, he was serving as the European Chairman of the Trilateral Commission, the transnational think tank founded by David Rockefeller in 1973. Lucas Papademos, the technocratic prime minister of Greece, was also drawn from among the membership of the Trilateral Commission.

It no doubt helped matters that Mario Monti was “an old family friend” of the Agnelli family, whose young patriarch, John Elkann, was also a Trilateral Commission member. Monti even served on the board of Fiat for some time. After Monti assumed his position as Prime Minister of Italy, he would meet regularly with John Elkann, who lobbied on behalf of Italian industry to promote reforms that benefit large companies.[130] Six months into his technocratic government, John Elkann said that there was “no doubt that Monti becoming prime minister has been positive for Italy.”[131]

Following the Frankfurt Group’s two coups, the Wall Street Journal praised the moves as “exactly the kind of game-changing display of political power euro-zone leaders have promised but failed to deliver since the start of the crisis,” adding that it was “sure to be greeted with similar jubilation in the market.” The “self-appointed Frankfurt Group,” however, lacked legitimacy and was representative of a “democratic deficit” in the European Union.[132] The Financial Times referred to technocrats as “efficient, calculating machines” who might “lack a democratic mandate but they’re fantastically well-regarded in Frankfurt.” The job of the “brilliant but bloodless functionaries” was to push through “unpopular measures” without concern for citizens.[133]

The New York Times referred to the technocratic coups as “the cold reality of 21st-century politics,” in which Greek and Italian citizens “have just watched democratically elected governments toppled by pressure from financiers, European Union bureaucrats and foreign heads of state.” Democracy and national sovereignty might be pleasant concepts, but when it comes to a crisis, “it’s the technocrats who really get to call the shots,” with stability for the euro and the European Union pursued “at the expense of democracy.” Real power in the European Union “would pass permanently to the forces represented by the so-called Frankfurt Group.”[134]

Roger Altman is the chairman of Evercore Partners, a major U.S. investment bank, and a former top U.S. Treasury Department official during the Clinton administration, having served a long career between Wall Street and Washington. Altman also happens to be a member of the Steering Committee of the Bilderberg meetings, as well as writing regular columns in the financial press. In December of 2011, Altman reflected on the events of previous months in an article for the Financial Times, concluding that financial markets were “acting like a global supra-government” which is able to “oust entrenched regimes where normal political processes could not do so,” and “force austerity, banking bail-outs and other major policy changes.”

Their influence “dwarfs” that of institutions like the IMF, and apart from “unusable nuclear weapons,” financial markets “have become the most powerful force on earth.” When their power is “flexed,” he wrote, “the immediate impact on society can be painful,” with growing unemployment and the collapse of governments. Whether the power of financial markets was “healthy” for the world was not important, he suggested, but their power “is permanent.” Altman concluded, “above all, there is no stopping the new policing role of the financial markets. There may be more frequent market crises. We should not rush to conclude that they will end in tears.” At least, not in tears for those who run large banks.[135]

Financial markets, technocrats, central bankers, finance ministers and the top political leaders of the dominant nations have wreaked havoc on Europe. The process of economic colonization of the ‘periphery’ nations of the E.U. has advanced year after year. Nations were repeatedly put under Troika occupation, with policies dictated by technocrats and politicians in Brussels, Frankfurt, Berlin, Paris and Washington. The policies create mass suffering as austerity destroys the countries, impoverishes their populations, while the various ‘structural reforms’ open up the economy to be plundered cheaply by foreign banks and corporations. Commentators in the press, however, began to increasingly warn about Europe’s “democratic deficit” and its crisis of legitimacy in the eyes of its 500 million citizens.[136]

One of the world’s largest banks, JPMorgan Chase, published a report on Europe’s debt crisis in May of 2013, stating that the process of “adjustment” in the eurozone was “about halfway done on average,” and warning that austerity would need to continue “for a very extended period” and that leaders would need to deal with “deep seated” political problems. The bank identified what it viewed as the main problems, embedded in the constitutions and political systems of many of the countries in crisis, including the “constitutional protection of labor rights” and “the right to protest if unwelcome changes are made to the political status quo.”[137]

There was, of course, a reason why the EU’s technocratic, political and financial elite were growing increasingly worried about “democratic legitimacy” and people exercising “the right to protest.” The citizens of Europe, especially the ‘periphery’ nations under various forms of Troika and financial market pressure, had been increasingly involved in social unrest, protests, urban rebellions and the emergence of new, populist, anti-austerity and increasingly revolutionary movements. These processes were not confined to Europe, however, as resistance movements were taking place with increased frequency and ferocity around the world in the wake of the global financial crisis.

The Age of Rage

It was in late 2010 and early 2011 that the world witnessed the start of a new phase of global uprisings, with the Arab Spring erupting and spreading across much of the Middle East and North Africa, leading to the removal of long-time U.S. and European-supported dictators in Tunisia, Egypt, and Yemen, with protests spreading across many more nations, upsetting the established order. The Saudis, along with the other Gulf Arab dynastic dictatorships, led the counter-revolution against the move to democracy, spreading violence, chaos and civil war from Libya to Syria, Iraq, Yemen, and beyond.

In the European Union, the year 2011 also turned out to be a very dramatic one in terms of protests, social unrest and anti-austerity movements. Protests of tens of thousands in Greece would erupt in violent confrontations with the police,[138] as a new anti-austerity movement began spreading across the country, going by the name, ‘I Won’t Pay’ (for someone else’s crisis).[139] As Portugal was strong-armed into a bailout program, the “desperate generation” of youth, inspired by the Arab Spring protests, sparked a new social movement organized via social media, struggling against the “wasted aspirations of a whole generation,” with more than 30 percent of youth unemployed across the country.[140] Even Brussels experienced instances of riot police turning water cannons and tear gas on protesters who were opposing the E.U.’s policies and increased powers.[141]

The protests in Portugal in turn inspired a new protest movement in Spain, where thousands of youth occupied the Puerto del Sol square in Madrid in opposition to the main political parties and austerity. Known as the ‘Indignados’ (the indignant ones), the movement spread across much of the country as unemployment among youth soared to 45 percent.[142] The Guardian noted that, “a youth-led rebellion is spreading across southern Europe.”[143] Thousands of protesters turned up to voice their opposition to the Group of 8 (G-7 plus Russia) summit in May of 2011.[144] At the end of that month, tens of thousands of protesters took to the streets across Europe, from Spain to Germany, France, Greece, Portugal and beyond, answering the call for a “European Revolution” in over one hundred cities across the continent.[145] Spain’s Indignados paved the way for similar movements to be replicated in several other countries, notably including Greece.[146]

In the pages of the Financial Times, Gideon Rachman wrote that “2011 is turning into the year of global indignation,” from the Arab world, to Europe, India, China, Chile and even Israel. “Many of the countries hit by unrest,” he noted, “have explicitly accepted rising inequality as a price worth paying for rapid economic growth.”[147] Protests and social unrest spread across Europe throughout the summer, particularly in Greece and Italy. In September, a protest following the examples set in the Arab world and Europe began in New York City, starting what would later be known as the Occupy Wall Street Movement.[148] The occupation continued through the month, facing increased police repression countered with growing numbers of supporters.[149] At the same time, Greece was facing growing domestic unrest as the Troika auditors were in Athens pressuring the government to meet ‘reform’ targets.[150]

By October of 2011, thousands were on the streets in Portugal,[151] over 700 Occupy Wall Street protesters were arrested on the Brooklyn Bridge,[152] and the Occupy Movement began spreading across the United States to dozens of other cities.[153] Tens of thousands of protesters continued to take to the streets of Athens, where they were met with the oppressive state apparatus in the form of riot police tear gassing Greek citizens.[154] In mid-October, Occupy Wall Street had become international, igniting Occupy protests and encampments across Europe and Canada.[155] On a global day of protest on October 15, there were demonstrations in roughly 951 different cities across 87 different countries.[156] Roughly 150,000 people marched in Rome, thousands marched toward Angela Merkel’s Chancellery office in Berlin, with several thousand more marching on the European Central Bank headquarters in Frankfurt,[157] as Germany experienced protests bringing out roughly 40,000 people in 50 different cities.[158] The German Finance Minister, Wolfgang Schauble, told the media that he was taking the protests “very seriously.”[159]

The Financial Times noted that protesters were “united in their loathing of bankers on both sides of the Atlantic,” and despite their different circumstances, they “find common ground in their outrage at the lack of economic opportunities and their alienation from mainstream politics.” The editorial warned politicians not to ignore the protests, as “failure to address these concerns would risk reinforcing the protesters’ sense of disengagement, transforming their alienation into a dangerous self-fulfilling prophecy.” The demands of most protesters were not “yet a rejection of capitalism,” many were simply expressing that they wanted “a more equitable share” in the benefits of the system. “It is therefore in everyone’s interest,” noted the editorial, “that their energy be directed into making capitalism work better rather than overturning it.”[160]

Martin Wolf in the Financial Times suggested that protesters were “raising some big questions,” but “for this to be the beginning of a new leftwing politics” there must be the emergence of “a credible new ideology.” In discussing the issue of inequality which was raised by the protests, Wolf wrote that while it would be “impossible to define an acceptable level of inequality,” it is ultimately “corrosive if those with wealth are believed to have rigged the game rather than won in honest competition.” Thus, with growing inequality, “the sense that we are equal as citizens weakens” while “democracy is sold to the highest bidder.” Wolf concluded: “The left does not know how to replace the market. But pro-marketeers still need to take the protests seriously. All is not well.”[161]

An Empire Under Threat

In 2012, Dominic Barton, the CEO of McKinsey & Company, the world’s largest consulting firm, wrote and published a small essay entitled, “Capitalism for the Long-Term”. Barton described the world since the global financial crisis began three years earlier, in which dramatic changes in power were taking place between the West and East (with the growth of Asia and the emerging market economies), as “a rise in populist politics and social stresses” combined with “significant strains on global governance systems.” These combinations would likely result in “increased geopolitical rivalries”, “security challenges”, and other “rising tensions.” The most important consequence of the crisis for the corporate oligarchy, however, was “the challenge to capitalism itself.” Barton noted that the crisis had “exacerbated the friction between business and society,” forcing leaders to confront “rising income inequality” and “understandable anger over high unemployment” as well as “a host of other issues.”[162]

A March 2013 report by the large Swiss bank, UBS, referred to social unrest as “a systemic phenomenon” which “is highly uncertain, complex and ambiguous,” warning that “it is highly likely to generate ripple effects into other sectors of the economy and society, possibly leading to the toppling of governments, or even political systems.”[163] A July 2013 report from the French insurance giant, AXA, reflected on protests and urban rebellions erupting in what were previously considered ‘stable’ emerging market nations, such as Turkey and Brazil. AXA’s Investment Managers report noted that many emerging market nations were “currently experiencing a surge in political risk due to social unrest,” the main cause of which “is the rise of the middle class in these countries.”[164]

The World Economic Forum published its report on Global Risks in 2014 just in time for its annual meeting, having prepared the report in collaboration large insurance giants and prestigious universities. The report noted that “the generation coming of age in the 2010s faces high unemployment and precarious job situations, hampering their efforts to build a future and raising the risk of social unrest.”[165] In general, it wrote, “the mentality of this generation is realistic, adaptive and versatile,” and while they are “full of ambition to make the world a better place,” they feel “disconnected from traditional politics and government.”[166]

The report cited a recent global opinion survey of youth which noted that young people “think independently” of past generations, and that this “points to a wider distrust of authorities and institutions.” Having witnessed the response of governments in the wake of the financial crisis, as well as the NSA Internet spying scandals, youth populations are increasingly alienated from authorities. “Anti-austerity movements and other protests give voice to an increasing distrust in current socio-economic and political systems,” said the report, as youth populations accounted for an “important” segment of the population which expressed their “general disappointment” with both “regional and global governance bodies such as the EU and the [IMF].” The report noted that the “digital revolution” had provided youth around the world with “unprecedented access to knowledge and information worldwide,” allowing them “to build abstract networks addressing single issues and place less importance on traditionally organized political parties and leadership.”[167] This youth population represented a “lost generation” who could fuel social unrest, “vulnerable to being sucked into criminal or extremist movements.”[168]

The global Mafiocracy was so concerned with growing unrest, protests and the potential for revolution, that the Rothschild banking dynasty itself organized a special conference on the subject. Hosted by Lady Lynn Forester de Rothschild, wife of Sir Evelyn de Rothschild, the ‘Conference on Inclusive Capitalism’ was held in the very exclusive Mansion House in London’s financial district, closed to the public and press. The May 2014 conference was exclusively for the world’s super-rich oligarchs, institutions and dynasties. Some 250 individuals were invited, collectively responsible for managing more than $30 trillion in assets, accounting for roughly one-third of the world’s investable wealth located in one room. As NPR noted, “If money is power, then this is the most powerful group of people ever to focus on income inequality.”[169]

Among the speakers at the Conference were Prince Charles; former President Bill Clinton (a close friend of Jacob and Lynn de Rothschild); Christine Lagarde, the managing director of the IMF; Mark Carney, the Governor of the Bank of England and a top international central banking official; Lionel Barber, an editor at the Financial Times; Dominic Barton of McKinsey & Co., as well as top executives from Honeywell, UBS, BlackRock, The Dow Chemical Company, Unilever, Google, GlaxoSmithKline and Prudential.[170]

“Now is the time to be famous or fortunate,” said the central banker Mark Carney. He told the assembled members of the Mafiocracy, “just as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself.” In other words, the capitalist system was eating itself. “Capitalism loses its sense of moderation,” said Carney, “when the belief in the power of markets enters the realm of faith.” This kind of religious “radicalism came to dominate economic ideas and became a pattern of social behaviour,” and in the decades leading up to the global financial crisis, “we moved from a market economy to a market society.”[171]

Christine Lagarde, the managing director of the IMF, began her speech by discussing Karl Marx, “who predicted that capitalism, in its excesses, carried the seeds of its own destruction,” as “the accumulation of capital in the hands of a few” would lead “to major conflicts, and cyclical crises.” Lagarde warned that capitalism has increasingly “been associated with high unemployment, rising social tensions, and growing political disillusion.” Among the “main casualties,” she said, “has been trust – in leaders, in institutions, in the free-market system itself,” citing a recent poll which revealed that only one in five people “believed that government or business leaders would tell the truth on an important issue.” This, she explained, “is a wakeup call,” adding, “in a world that is more networked than ever, trust is harder to earn and easier to lose.”[172]

As the global Mafiocracy grows increasingly worried about the potential revolutionary implications of the “lost generation” of youth around the world, struggling to make their parasitic planetary system of Empire legitimate in the eyes of the citizens of the world, the youth are left behind, already written off as “lost.” Youth and young adults are better educated and have more access to information and communication than ever before in human history, yet their prospects for jobs, social elevation and opportunities appear increasingly grim and uneasy. Frustrated and furious youth have been the leading force behind the resistance movements, riots, rebellions and revolutions that have spread across much of the world in the wake of the global financial crisis, from Eastern Europe to the Middle East and North Africa, the European Union, to the streets of Ferguson and Baltimore in the United States.

Western ‘democratic’ society is becoming increasingly closed. It is evolving into a high-tech police and surveillance state. The United States government continues to wage a race war against the minority black population who are treated as an internally colonized population, with high rates of police repression and imprisonment. The political system is visibly ruled by parasites, with all the pomposity of the Roman Senate. The plutocrats have lavish and distant lives, segregated in their obscene wealth and unseen influence. The middle class is a debt-slave class, fueling consumption through credit, now in the slow and painful process of being exsanguinated of their economic vitality and opportunities. Some will rise to the higher ranks, but the rest will be pushed down to where the poor have always been. Increasingly, much larger segments of the American population will find themselves in similar circumstances as their fellow black, Hispanic, Indigenous and immigrant neighbours.

In this environment, the United States still sits at the center of global monetary, financial, economic and corporate power. The U.S. dollar remains the world’s reserve currency, and the country is still the largest economy. Through the process of integrating the increasingly rich and powerful nations of Latin America, the Middle East and Asia into the Empire of Economics, the stakes have become higher and the challenges greater, as the U.S. seeks to maintain its dominant position, and thus its ability to shape the changing global order. With many new players in the game of global power politics, there are more negotiations, consultations, forums for cooperation and frequent confrontations. As the United States and Europe increasingly aggravate Russia by expanding their empire to its border, the threat for economic competition to break out into actual warfare grows.

The human species is in a deeply precarious situation. As the Empire of Economics increasingly benefits the comparatively small global Mafiocracy at the expense of most of the world’s remaining 7 billion people, the economic and military structures of global empire are rapidly accelerating their devastation of the natural environment and ecosystem upon which all life on the planet depends. Human beings are confronted with a profound question: As we soar forward on our current path toward increased poverty, exploitation and environmental destruction, at what point do we begin to more directly question the legitimacy of the existing global system which determines the fate and direction of the species? As we face the increasing possibility of a mass extinction of our species over the coming century, as the democratic facades of modern society crumble and high-tech totalitarian police states rise in their place, there has perhaps never been a time in history where it was more essential for the people of the world to begin to create alternatives to the existing global system.

The concept of a truly global, transformative revolution in the organization of human society, power relations and purpose must be contemplated in a more serious, deliberate effort. This book hopes to encourage this discussion through an expanded understanding of the realities of global power politics, the ruling Mafiocracy and the Empire of Economics. A genuine global revolution is an absolute necessity. But far from promoting a mere ideological or philosophical alternative, this text hopes to encourage a more pragmatic approach to organizing resistance both outside and within the existing global order and its various institutions.

A dual strategy is required in operating outside the global hierarchy, experimenting with creative alternatives constructed from the bottom-up, while simultaneously playing the game of power politics to directly challenge the Empire of Economics in its own arena. Instead of dividing these efforts between those who advocate for revolutionary alternatives and those who encourage reformist initiatives, a more coherent and organized strategy should be invoked, establishing alternative forums, organizations and avenues of cooperation between revolutionaries and reformers. This serves multiple purposes, as it would allow for revolutionary movements to maintain contact and provide direction to reformers and new political parties, instead of leaving them to engage only with the existing power structures, thus increasing the chances that they may be co-opted by the Empire and undermine the efforts of revolutionary groups. Instead, revolutionary movements would be encouraged to co-opt and even control the direction and efforts of reformist groups and political parties.

Strategic thinking and planning should become commonplace among revolutionary movements and efforts. Debate, discussion, coordination and creative construction among opposition groups must increasingly come to replace division, derision, co-optation and ‘creative destruction’. For this to emerge, the initiative must be taken by revolutionary groups to create the organizations and opportunities to engage with each other and reformist groups, to create a space for cooperation and provide the impetus for strategic direction. Just as the Mafiocracy has created forums and institutions through which they engage and influence policy-makers, educational and media structures, so too must revolutionary groups form parallel systems with similar functions, but opposing objectives.

This task can effectively be pursued by the “lost generation” of global youth who can become capable of finding their own way, charting their own path, imagining and creating their own world. It could be a world in which the human species has a higher purpose beyond that of contributing to “economic growth,” with greater prospects beyond that of probable extinction. Nothing less than everything we have and everyone we know is at stake.

What is frightfully clear is that the Empire of Economics does not serve the collective interests of humanity and the planetary system upon which life depends. We must do this ourselves, individually and collectively. The worst that could happen is to try and fail, remaining where we currently stand. The best that could happen is nothing if not unknown and unforeseeable, but altogether possible, if we wish and work to make it so. The future may yet belong to the people of the world, but only if we empower ourselves in the present. So perhaps it is time to become properly acquainted with the unforgiving, brutal realities of power politics, empire and resistance.

Notes

[1] Memorandum of Conversation, 24 May 1975: Foreign Relations of the United States, 1973-1976, Vol. XXXI, Foreign Economic Policy, Document 292:

http://history.state.gov/historicaldocuments/frus1969-76v31/d292

[2] Memorandum of Conversation, 26 May 1975: Foreign Relations of the United States, 1973-1976, Vol. XXXI, Foreign Economic Policy, Document 294:
http://history.state.gov/historicaldocuments/frus1969-76v31/d294

[3] Niccolo Machiavelli, The Prince (Cambridge University Press, 1988), page 59.

[4] Memo by George Kennan, Head of the US State Department Policy Planning Staff. Written February 28, 1948, Declassified June 17, 1974. George Kennan, “Review of Current Trends, U.S. Foreign Policy, Policy Planning Staff, PPS No. 23. Top Secret. Included in the U.S. Department of State, Foreign Relations of the United States, 1948, volume 1, part 2 (Washington DC Government Printing Office, 1976), 509-529:

http://en.wikisource.org/wiki/Memo_PPS23_by_George_Kennan

[5] General Assembly, “Declaration on the Establishment of a New International Economic Order,” Resolution adopted by the General Assembly, United Nations, Resolution 3201 (S-VI), 1 May 1974:

http://www.un-documents.net/s6r3201.htm

[6] General Assembly, “Declaration on the Establishment of a New International Economic Order,” Resolution adopted by the General Assembly, United Nations, Resolution 3201 (S-VI), 1 May 1974:

http://www.un-documents.net/s6r3201.htm

[7] Charles R. Morris, “Old Money,” New York Times, 29 October 2006:

http://www.nytimes.com/2006/10/29/books/review/Morris.t.html?pagewanted

[8] Stephen Foley, “Richest dynasties back in the money after crunch,” The Independent, 24 September 2010:

http://www.independent.co.uk/news/business/news/richest-dynasties-back-in-the-money-after-crunch-2088087.html

[9] Ray D. Madoff, “America Builds an Aristocracy,” New York Times, 11 July 2010:

http://www.nytimes.com/2010/07/12/opinion/12madoff.html

[10] James D. Wolfensohn, Council on Foreign Relations Special Symposium in honor of David Rockefeller’s 90th Birthday, The Council on Foreign Relations, 23 May 2005: http://www.cfr.org/world/council-foreign-relations-special-symposium-honor-david-rockefellers-90th-birthday/p8133

[11] Nasdaq Institutional Portfolios, Rockefeller Financial Services, 31 December 2014: http://www.nasdaq.com/quotes/institutional-portfolio/rockefeller-financial-services-inc-66951;

Holdings Channel, Rockefeller Financial Services, 31 December 2014:

https://www.holdingschannel.com/all/stocks-held-by-rockefeller-financial-services-inc/

[12] Richard C. Morais, “Rock of Ages,” Barron’s Penta, 15 September 2012:

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[13] James Boxell, “Rothschilds eye cross-Channel unity,” Financial Times, 4 April 2012:

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[14] Eytan Avriel and Guy Rolnik, “Family values,” Ha’aretz, 5 November 2010:

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[15] Youssef M. Ibrahim, “Restoring The House of Rothschild,” New York Times, 27 October 1996:

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[18] Obituaries, “Giovanni Agnelli,” The Telegraph, 25 January 2003:
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[20] Joseph B. Treaster, “Marcus Wallenberg is Dead at 82; Top Swedish Banker-Industrialist,” New York Times, 15 September 1982:

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[21] Stephanie Strom, “In Sweden, a Shy Dynasty Steps Out,” New York Times, 12 May 1996:

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[22] Barnaby J. Feder, “The Testing of Peter Wallenberg,” New York Times, 13 October 1985:

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[23] Stephanie Strom, “In Sweden, a Shy Dynasty Steps Out,” New York Times, 12 May 1996:

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[24] “The Wallenbergs: Sweden’s enduring business dynasty,” The Economist, 12 October 2006:

http://www.economist.com/node/8023389

[25] Richard Milne, “Jacob Wallenberg, Investor head with more influence than money,” Financial Times, 29 June 2014:

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[26] Kevin Dougherty, “Charest denies WikiLeaks charge,” The Windsor Star, 12 May 2011:

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[27] Sandra Martin, “Behind the scenes, Paul Desmarais was a force in Canadian politics,” Globe and Mail, 9 October 2013:

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[28] Paul Vieira and Stephen Miller, “Canadian Mogul Paul Desmarais Dead at 86,” Wall Street Journal, 9 October 2013:

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[29] Rowan Callick, “Keeping it in the family,” The Australian, 27 February 2014:

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[30] Rowan Callick, “Keeping it in the family,” The Australian, 27 February 2014:

http://www.theaustralian.com.au/news/features/keeping-it-in-the-family/story-e6frg6z6-1226838578644#

[31] Jeremy Page, “Children of the Revolution,” Wall Street Journal, 26 November 2011:

http://online.wsj.com/news/articles/SB10001424053111904491704576572552793150470?mod=WSJ_hpp_RIGHTTopCarousel_1&mg=reno64-wsj

[32] Bloomberg News, “Heirs of Mao’s Comrades Rise as New Capitalist Nobility,” Bloomberg, 26 December 2012:

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[33] “Turkish conglomerates: Too big to fail, but in a good way,” The Economist, 1 February 2014:

http://www.economist.com/news/business/21595463-two-huge-family-firms-koc-and-sabanci-should-weather-turkeys-crisis-too-big-fail

[34] Marilyn Berger, “Harry Oppenheimer, 91, South African Industrialist, Dies,” New York Times, 21 August 2000:
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[35] James Crabtree, “Indian pioneers combine profitability and probity,” Financial Times, 2 February 2015:

http://www.ft.com/intl/cms/s/0/65e2602e-a66a-11e4-9bd3-00144feab7de.html#axzz3XjoejstQ

[36] Frederick E. Allen, “The Family Secret That Makes German Companies So Successful,” Forbes, 14 August 2012:

http://www.forbes.com/sites/frederickallen/2012/08/14/the-family-secret-that-makes-german-companies-so-successful/

[37] Ralph Atkins, “Archetypal family business head is wealthy but frugal,” Financial Times, 16 May 2007:

http://www.ft.com/intl/cms/s/0/2b3a7a96-0349-11dc-a023-000b5df10621.html#axzz3XjoejstQ

[38] Stephen Evans, “Germany’s super-shy super-rich,” BBC, 28 July 2014:

http://www.bbc.com/news/magazine-28472884

[39] Fiona Govan, “BMW dynasty breaks silence over Nazi past,” The Telegraph, 29 September 2011:

http://www.telegraph.co.uk/history/world-war-two/8796157/BMW-dynasty-breaks-silence-over-Nazi-past.html

[40] “The mystery of the world’s second-richest businessman,” The Economist, 25 February 1999:

http://www.economist.com/node/187913

[41] William D. Cohan, “The Stockholder in the Sand,” Vanity Fair, 21 March 2013:

http://www.vanityfair.com/news/2013/03/myth-prince-alwaleed-bin-talal-saudi

[42] Berkshire Hathaway, Annual Report 2013, Page 16:

http://www.berkshirehathaway.com/2013ar/2013ar.pdf

[43] Jack Witzig and Pamela Roux, “Bill Gates Fattens Wealth Gap Over Slim as Cascade Surges,” Bloomberg, 29 March 2013:

http://www.bloomberg.com/news/articles/2013-05-29/bill-gates-fattens-wealth-gap-over-slim-as-cascade-surges

[44] Andy Coghlan and Debora MacKenzie, “Revealed – the capitalist network that runs the world,” New Scientist, 24 October 2011:

http://www.newscientist.com/article/mg21228354.500-revealed–the-capitalist-network-that-runs-the-world.html

[45] Andy Coghlan and Debora MacKenzie, “Revealed – the capitalist network that runs the world,” New Scientist, 24 October 2011:

http://www.newscientist.com/article/mg21228354.500-revealed–the-capitalist-network-that-runs-the-world.html

[46] Susanne Craig, “The Giant of Shareholders, Quietly Stirring,” New York Times, 18 May 2013:

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[47] Gillian Tett, “‘BlackRock envy’ replaces Goldman allure,” Financial Times, 14 June 2012:

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[48] Henny Sender and Dan McCrum, “BlackRock: Ahead of the Street,” Financial Times, 28 November 2012:

http://www.ft.com/intl/cms/s/0/2a24b71e-37c5-11e2-8edf-00144feabdc0.html#axzz2noNtCpOd

[49] Suzanna Andrews, “Larry Fink’s $12 Trillion Shadow,” Vanity Fair, April 2010:

http://www.vanityfair.com/news/2010/04/fink-201004

[50] Andrew Gavin Marshall, “The Global Banking ‘Super-Entity’ Drug Cartel: The “Free Market” of Finance Capital,” Andrewgavinmarshall.com, 28 October 2012:

https://andrewgavinmarshall.com/2012/10/28/the-global-banking-super-entity-drug-cartel-the-free-market-of-finance-capital/

[51] Theodore Draper, “Little Heinz And Big Henry,” New York Review of Books, 6 September 1992:

https://www.nytimes.com/books/98/12/06/specials/isaacson-kissinger.html

[52] Theodore Draper, “Little Heinz And Big Henry,” New York Review of Books, 6 September 1992:

https://www.nytimes.com/books/98/12/06/specials/isaacson-kissinger.html

[53] Remembrances, Words of Commemoration: Memorial Service for Nelson Rockefeller, 2 February 1979:

http://www.henryakissinger.com/eulogies/020279.html

[54] Judith Miller, “Kissinger Co.,” New York Times, 26 May 1979.

[55] Gerald Caplan, “Toronto welcomes Henry Kissinger, accused war criminal,” Globe & Mail, 3 June 2011:

http://www.theglobeandmail.com/globe-debate/munk-debates/toronto-welcomes-henry-kissinger-accused-war-criminal/article4192522/;

Omar Aziz, “The Ivy League’s favorite war criminal: Why the atrocities of Henry Kissinger should be mandatory reading,” Salon, 17 April 2015:

http://www.salon.com/2015/04/17/the_ivy_leagues_favorite_war_criminal_why_the_atrocities_of_henry_kissinger_should_be_mandatory_reading/;

Fred Branfman, “The Top 10 Most Inhuman Henry Kissinger Quotes,” AlterNet, 24 April 2013:

http://www.alternet.org/world/top-10-most-inhuman-henry-kissinger-quotes;

Christopher Hitchens, “Kissinger Declassified,” Vanity Fair, December 2004:

http://www.vanityfair.com/news/2004/12/hitchens200412;

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Global Power Project: The Group of Thirty, Architects of Austerity

Global Power Project: The Group of Thirty, Architects of Austerity

By: Andrew Gavin Marshall

Originally posted at Occupy.com

europe-austerity-slider

The Group of Thirty, a preeminent think tank that brings together dozens of the world’s most influential policy makers, central bankers, financiers and academics, has been the focus of two recent reports for Occupy.com’s Global Power Project. In studying this group, I compiled CVs of the G30’s current and senior members: a total of 34 individuals. The first report looked at the origins of the G30, while the second examined some of the current projects and reports emanating from the group. In this installment, I take a look at some specific members of the G30 and their roles in justifying and implementing austerity measures.

Central Bankers, Markets and Austerity

For the current members of the Group of Thirty who are sitting or recently-sitting central bankers, their roles in the financial and economic turmoil of recent years is well-known and, most especially, their role in bailing out banks, providing long-term subsidies and support mechanisms for financial markets, and forcing governments to implement austerity and “structural reform” policies, notably in the European Union. With both the former European Central Bank (ECB) President Jean-Claude Trichet and current ECB President Mario Draghi serving as members of the G30, austerity measures have become a clearly favored policy of the G30.

In a January 2010 interview with the Wall Street Journal, Jean-Claude Trichet explained that he had been “involved personally in numerous financial crises since the beginning of the 1980s,” in Latin America, Africa, the Middle East and Soviet Union, having been previously the president of the Paris Club – an “informal” grouping that handles debt crisis and restructuring issues on behalf the world’s major creditor nations. In this capacity, Trichet “had to deal with around 55 countries that were in bankruptcy.”

In July of 2010, Trichet wrote in the Financial Times that “now is the time to restore fiscal sustainability,” noting that “consolidation is a must,” which is a different way of saying austerity. In each of E.U. government bailouts – of which the ECB acted as one of the three central institutions responsible for negotiating and providing the deal, alongside the European Commission and the IMF, forming the so-called Troika – austerity measures were always a required ingredient, which subsequently plunged those countries into even deeper economic, social and political crises (Spain and Greece come to mind).

The same was true under the subsequent ECB president and G30 member, Draghi, who has continued to demand austerity measures, structural reforms (notably in dismantling the protections for labor), and extended support to the banking system, even to a greater degree than his predecessor. In a February 2012 interview with the Wall Street Journal, Draghi stated that “the European social model has already gone,” noting that countries of the Eurozone would have “to make labour markets more flexible.” He meant, of course, that they must have worker protections and benefits dismantled to make them more “flexible” to the demands of corporate and financial interests who can more easily and cheaply exploit that labor.

In a 2012 interview with Der Spiegel, Draghi noted that European governments will have to “transfer part of their sovereignty to the European level” and recommended that the European Commission be given the supranational authority to have a direct say in the budgets of E.U. nations, adding that “a lot of governments have yet to realize that they lost their national sovereignty a long time ago.” He further explained, incredibly, that since those governments let their debts pile up they must now rely on “the goodwill of the financial markets.”

Another notable member of the Group of Thirty who has been a powerful figure among the world’s oligarchs of austerity is Jaime Caruana, the General Manager of the Bank for International Settlements (BIS), which serves as the bank for the central banks of the world. Caruana was previously Governor of the Bank of Spain, from 2000 to 2006, during which time Spain experienced its massive housing bubble that led directly to the country’s debt crisis amid the global recession. In 2006, a team of inspectors within the Bank of Spain sent a letter to the Spanish government criticizing then-Governor Caruana for his “passive attitude” toward the massive bubble he was helping to facilitate.

As head of the BIS, Caruana delivered a speech in June of 2011 to the assembled central bankers at an annual general meeting in Basel, Switzerland, in which he gave his full endorsement of the austerity agenda across Europe, noting that “the need for fiscal consolidation [austerity] is even more urgent” than during the previous year. He added, “There is no easy way out, no shortcut, no painless solution – that is, no alternative to the rigorous implementation of comprehensive country packages including strict fiscal consolidation and structural reforms.”

At the 2013 annual general meeting of the BIS, Caruana again warned that attempts by governments “at fiscal consolidation need to be more ambitious,” and warned that if financial markets view a government’s debt as unsustainable, “bond investors can and do punish governments hard and fast.” If governments continue to delay austerity, he said, the markets will have to use “market discipline” to force governments to act, “and then the pain will be large indeed.” In further recommending “structural reforms” to labor and service markets, Caruana noted that “the reforms are critical to attaining and preserving confidence,” by which, of course, he meant the confidence of markets.

rogof

The ‘Academic’ of Austerity: Kenneth Rogoff

Kenneth Rogoff is an influential academic economist and a member of the Group of Thirty. Rogoff currently hold a position as professor at Harvard University and as a member of the Council on Foreign Relations. He sits on the Economic Advisory Panel to the Federal Reserve Bank of New York, and previously Rogoff spent time as the chief economist of the IMF as well serving as an adviser to the executive board of the Central Bank of Sweden. Rogoff is these days most famous – or infamous – for co-authoring (with Carmen Reinhart) a study published in 2010 that made the case for austerity measures to become the favored policy of nations around the world.

The study, entitled, “Growth in a Time of Debt,” appeared in the American Economic Review in 2010 to great acclaim within high-level circles. One of the main conclusions of the paper held that when a country’s debt-to-GDP ratio hits 90%, “they reach a tipping point after which they’ll start experiencing serious growth slowdowns.” The paper was cited by the U.S. Congress as well as by Olli Rehn, the European Commissioner for Economic and Monetary Affairs and one of Europe’s stalwart defenders of austerity, who has demanded the measures be instituted on multiple countries in the E.U. in return for bailout funds.

Google Scholar search for the terms “Growth in a Time of Debt” and “Rogoff” turned up approximately 828 results. In 2013, Forbes referred to the paper as “perhaps the most quoted but least read economic publication of recent years.” The paper was also cited in dozens of media outlets around the world, multiple times, especially by influential players in the financial press.

In 2012, Gideon Rachman, writing in the Financial Times, said Rogoff was “much in demand to advise world leaders on how to counter the financial crisis,” and noted that while the economist had been attending the World Economic Forum meetings for a decade, he had become “more in demand than ever” after having “written the definitive history of financial crises over the centuries” alongside Carmen Reinhart. Rogoff was consulted by Barack Obama, “and is known to have spent many hours with George Osborne, Britain’s chancellor,” wrote Rachman, noting that Rogoff advised government’s “to get serious about cutting their deficits, [which] strongly influenced the British government’s decision to make controlling spending its priority.”

The praise became all the more noteworthy in April of 2013 when researchers at the University of Massachusetts, Amherst, published a paper accusing Rogoff and Reinhart of “sloppy statistical analysis” while documenting several key mistakes that undermined the conclusions of the original 2010 paper. The report from Amherst exploded across global media, immediately forcing Rogoff and Reinhart on the defensive. The New Yorker noted that “the attack from Amherst has done enormous damage to Reinhart and Rogoff’s credibility, and to the intellectual underpinnings of the austerity policies with which they are associated.”

As New York Times columnist and fellow G30 member Paul Krugman noted, the original 2010 paper by Reinhart and Rogoff “may have had more immediate influence on public debate than any previous paper in the history of economics.” After the Amherst paper, he added, “The revelation that the supposed 90 percent threshold was an artifact of programming mistakes, data omissions, and peculiar statistical techniques suddenly made a remarkable number of prominent people look foolish.” Krugman, who had firmly opposed austerity policies long before Rogoff’s paper, suggested that “the case for austerity was and is one that many powerful people want to believe, leading them to seize on anything that looks like a justification.”

Indeed, many of those “powerful people” happen to be members of the Group of Thirty who are, with the notable exception of Krugman, largely in favor of austerity measures. Krugman himself tends to represent the limits of acceptable dissent within the G30, criticizing policies and policy makers while accepting the fundamental concepts of the global financial and economic system. He commented that he had been a member of the G30 since 1988 and referred to it as a “talk shop” where he gets “a chance to hear what people like Trichet and Draghi have to say in an informal setting,” adding, “while I’ve heard some smart things from people with a role in real-world decisions, I’ve also heard a lot of very foolish things said by alleged wise men.”

Andrew Gavin Marshall is a 26-year old researcher and writer based in Montreal, Canada. He is Project Manager of The People’s Book Project, chair of the Geopolitics Division of The Hampton Institute, research director for Occupy.com’s Global Power Project and World of Resistance (WOR) Report, and hosts a weekly podcast show with BoilingFrogsPost.

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

“Crisis is an Opportunity”: Engineering a Global Depression to Create a Global Government
Global Research, October 26, 2010
Problem, Reaction, Solution: “Crisis is an Opportunity”

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

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

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

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

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

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

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

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

The Global Economic Crisis As a Pretext for Global Governance

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

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

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

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

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

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

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

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

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

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

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

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

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

The Great Global Debt Depression

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

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

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

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

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

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

Structural Adjustment in the West

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

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

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

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

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

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

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

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

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

Debt Slavery

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

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

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

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

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

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

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

Third World America

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

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

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

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

Structural Adjustment and “Social Explosion”

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

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

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

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

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

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

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

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

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

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

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

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

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

The G20 Korea Summit

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

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

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

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

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

Conclusion

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

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

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


Notes

[1]        Dominique Strauss-Kahn, Concluding Remarks by Dominique Strauss-Kahn, Managing Director of the International Monetary Fund, at the High-Level Conference on the International Monetary System, Zurich, 11 May 2010:
http://www.imf.org/external/np/speeches/2010/051110.htm

[2]        George T. Crane, Abla Amawi, The Theoretical evolution of international political economy. Oxford University Press US, 1997: pages 50-51

[3]        Get ready for the phoenix. The Economist: Vol. 306: January 9, 1988: pages 9-10

[4]        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

[5]        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

[6]        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?nclick_check=1

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

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

[9]        Robert Winnett, Financial Crisis: Gordon Brown calls for ‘new Bretton Woods’. The Telegraph, 13 October 2008:
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3189517/Financial-Crisis-Gordon-Brown-calls-for-new-Bretton-Woods.html

[10]      Gordon Brown, Out of the Ashes. The Washington Post: October 17, 2008:
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/16/AR2008101603179.html

[11]      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/Global-financial-crisis-does-the-world-need-a-new-banking-policeman.html

[12]      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

[13]      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

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

[15]      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

[16]      Ambrose Evans-Pritchard, The G20 moves the world a step closer to a global currency. The Telegraph: April 3, 2009:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5096524/The-G20-moves-the-world-a-step-closer-to-a-global-currency.html

[17]      Anthony Faiola, A Bigger, Bolder Role Is Imagined For the IMF, The Washington Post, 20 April 2009:
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/19/AR2009041902242.html?hpid=topnews

[18]      Izabella Kaminska, IMF blueprint for a global currency – yes really, Financial Times Blog, 4 August 2010:
http://ftalphaville.ft.com/blog/2010/08/04/306346/imf-blueprint-for-a-global-currency-yes-really/

[19]      Amar Bhattacharya, A Tangled Web, Finance and Development, March 2009, Vol. 46, No. 1:
http://www.imf.org/external/pubs/ft/fandd/2009/03/bhattacharya.htm

[20]      Jean-Claude Trichet, Global Governance Today, Keynote address by Mr Jean-Claude Trichet, President of the European Central Bank, at the Council on Foreign Relations, New York, 26 April 2010:
http://www.bis.org/review/r100428b.pdf

[21]      Ibid.

[22]      Jean-Claude Trichet, Central bank cooperation after the global financial crisis, Video address by Jean-Claude Trichet, President of the European Central Bank, at the Bank of Korea International Conference 2010, Seoul, 31 May 2010:
http://www.ecb.int/press/key/date/2010/html/sp100531.en.html

[23]      Ambrose Evans-Pritchard, Greece defies Europe as EMU crisis turns deadly serious. The Telegraph: December 13, 2009:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6804156/Greece-defies-Europe-as-EMU-crisis-turns-deadly-serious.html
; Elena Becatoros, Greece prepares economic crisis plan. The Globe and Mail: December 14, 2009:
http://www.theglobeandmail.com/report-on-business/greece-prepares-economic-crisis-plan/article1399496/; LOUISE STORY, LANDON THOMAS Jr.  and NELSON D. SCHWARTZ, Wall St. Helped to Mask Debt Fueling Europe’s Crisis. The New York Times: February 13, 2010:
http://www.nytimes.com/2010/02/14/business/global/14debt.html?adxnnl=1&adxnnlx=1266501631-XefUT62RSKhWj6xKSCX37Q

[24]      Richard Wray, EU ministers agree Greek bailout terms. The Guardian: April 11, 2010:
http://www.guardian.co.uk/world/2010/apr/11/eu-greece-bailout-terms

[25]      Economist, Now comes the pain. The Economist: March 4, 2010:
http://www.economist.com/world/europe/displaystory.cfm?story_id=15603267

[26]      Nelson D. Schwartz and Eric Dash, Banks Bet Greece Defaults on Debt They Helped Hide. The New York Times: February 24, 2010:
http://www.nytimes.com/2010/02/25/business/global/25swaps.html?ref=business

[27]      Louise Story, Wall St. was partner in Greece’s debt crisis. The Boston Globe: February 14, 2010:
http://www.boston.com/news/world/europe/articles/2010/02/14/wall_street_helped_greece_land_deeper_in_debt/

[28]      Nelson D. Schwartz and Eric Dash, Banks Bet Greece Defaults on Debt They Helped Hide. The New York Times: February 24, 2010:
http://www.nytimes.com/2010/02/25/business/global/25swaps.html?ref=business

[29]      Barrie McKenna and Joanna Slater, Role of banks eyed in Greek debt crisis. The Globe and Mail: February 25, 2010:
http://www.theglobeandmail.com/report-on-business/role-of-banks-eyed-in-greek-debt-crisis/article1481750/

[30]      Stephen G. Cecchetti, M.S. Mohanty and Fabrizio Zampolli, The Future of Public Debt: Prospects and Implications. BIS Working Papers, No 300, Monetary and Economic Department, March 2010: page 2

[31]      Ibid, page 12.

[32]      Ambrose Evans-Pritchard, Derivatives still pose huge risk, says BIS. The Telegraph: September 13, 2009:
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6184496/Derivatives-still-pose-huge-risk-says-BIS.html

[33]      Report on Business, Is Japan hurtling toward a debt crisis? The Globe and Mail: April 14, 2010:
http://www.theglobeandmail.com/report-on-business/economy/is-japan-hurtling-toward-a-debt-crisis/article1534498/

[34]      Brett Arends, What a Sovereign-Debt Crisis Could Mean for You. The Wall Street Journal: December 18, 2009:
http://online.wsj.com/article/SB10001424052748703323704574602030789251824.html

[35]      Edmund Conway, ‘Significant chance’ of second financial crisis, warns World Economic Forum. The Telegraph: January 14, 2010:
http://www.telegraph.co.uk/finance/financetopics/davos/6990433/Significant-chance-of-second-financial-crisis-warns-World-Economic-Forum.html

[36]      Nina Koeppen, ECB Official Warns of Potential Sovereign Debt Crisis. The Wall Street Journal: April 15, 2010:
http://blogs.wsj.com/economics/2010/04/15/ecb-official-warns-of-potential-sovereign-debt-crisis/

[37]      Niall Ferguson, A Greek crisis is coming to America. The Financial Times: February 10, 2010:
http://www.ft.com/cms/s/0/f90bca10-1679-11df-bf44-00144feab49a.html

[38]      G20 communique after meeting in South Korea, Reuters, 5 June 2010:
http://www.reuters.com/article/idUSTRE6540VN20100605

[39]      David Lawder, Global rebalancing policies need coordination-IMF, Reuters, 5 June 2010:
http://www.reuters.com/article/idUSN0514799020100605

[40]      Sewell Chan and Jackie Calmes, World Leaders Agree on Timetable for Cutting Deficits, The New York Times, 27 June 2010:
http://www.nytimes.com/2010/06/28/business/global/28summit.html

[41]      Toby Helm, Ian Traynor and Paul Harris, Europe embraces the cult of austerity – but at what cost? The Observer, 13 June 2010:
http://www.guardian.co.uk/business/2010/jun/13/europe-embraces-cult-of-austerity

[42]      Simon Johnson, Fiscal Austerity and America’s Future, The New York Times Economix Blog, 26 August 2010:
http://economix.blogs.nytimes.com/2010/08/26/fiscal-austerity-and-americas-future/

[43]      Izabella Kaminska, Bible code, finance edition, The Financial Times Blog, 18 May 2010:
http://ftalphaville.ft.com/blog/2009/05/18/55977/bible-code-finance-edition/

[44]      Joseph A. Giannone, UBS banker sees next U.S. privatizations smaller, Reuters, 6 May 2009:
http://www.reuters.com/article/idUSTRE54562G20090506

[45]      CCGA, Board of Directors, The Chicago Council on Global Affairs:
http://www.thechicagocouncil.org/dynamic_page.php?id=117

[46]      Emerging Leaders Perspectives, No Free Money: Is the Privatization of Infrastructure in the Public Interest? The Chicago Council on Global Affairs, September 2010: p. 4

[47]      Ibid, page 7.

[48]      Ibid, page 11.

[49]      Matt Taibbi, Exclusive Excerpt: America on Sale, From Matt Taibbi’s ‘Griftopia’, Rolling Stone, 18 October 2010:
http://www.rollingstone.com/politics/news/17390/222206?RS_show_page=0

[50]      Andrew Willis and Boyd Erman, Ontario ponders sale of Crown corporations to beat down deficit, The Globe and Mail, 15 December 2009:
http://www.theglobeandmail.com/report-on-business/ontario-ponders-sale-of-crown-corporations-to-beat-down-deficit/article1401807/

[51]      Simone Meier, BIS Sees Risk Central Banks Will Raise Interest Rates Too Late, Bloomberg, 29 June 2009:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aOnSy9jXFKaY

[52]      Ambrose Evans-Pritchard, BIS plays with fire, demands double-barrelled monetary and fiscal tightening, The Telegraph, 28 June 2010:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7859800/BIS-plays-with-fire-demands-double-barrelled-monetary-and-fiscal-tightening.html

[53]      Ibid.

[54]      Stephen G. Cecchetti, M.S. Mohanty and Fabrizio Zampolli, The Future of Public Debt: Prospects and Implications. BIS Working Papers, No 300, Monetary and Economic Department, March 2010: page 14

[55]      Gabor Steingart, The Shrinking Influence of the US Federal Reserve, Der Spiegel, 26 June 2008:
http://www.spiegel.de/international/world/0,1518,562291,00.html

[56]      Simon Johnson, The Quiet Coup, The Atlantic, May 2009:
http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/

[57]      Desmond Lachman, Welcome to America, the World’s Scariest Emerging Market, The Washington Post, 29 March 2009:
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/25/AR2009032502226.html

[58]      Luiza Ch. Savage, Third World America, Macleans, 14 September 2010:
http://www2.macleans.ca/2010/09/14/third-world-america/

[59]      Juha Y. Auvinen, “IMF Intervention and Political Protest in the Third World: A Conventional Wisdom Refined,” Third World Quarterly, Vol. 17, No. 3, (1996), p. 377

[60]      Firoze Manji and Carl O’Coill, “The Missionary Position: NGOs and Development in Africa,” International Affairs, Vol. 78, No. 3, (2002), p. 578

[61]      Angela Balakrishnan, IMF chief issues stark warning on economic crisis. The Guardian: December 18, 2008:
http://www.guardian.co.uk/business/2008/dec/16/imf-financial-crisis

[62]      Jason Burke, Eastern Europe braced for a violent ‘spring of discontent’. The Observer: January 18, 2009:
http://www.guardian.co.uk/world/2009/jan/18/eu-riots-vilinius
; Philip P. Pan, Economic Crisis Fuels Unrest in E. Europe. The Washington Post: January 26, 2009:
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/25/AR2009012502516.html

[63]      Adrian Michaels, Europe’s winter of discontent. The Telegraph: January 27, 2009:
http://www.telegraph.co.uk/comment/personal-view/4363750/Europes-winter-of-discontent.html
; Ian Traynor, Governments across Europe tremble as angry people take to the streets. The Guardian: January 31, 2009:
http://www.guardian.co.uk/business/2009/jan/31/global-recession-europe-protests
; Ben Hall, French workers stage strike in protest at job losses and reforms. The Financial Times: January 29, 2009:
http://www.ft.com/cms/s/0/71c25576-eda6-11dd-bd60-0000779fd2ac.html
; Roger Boyes, World Agenda: riots in Iceland, Latvia and Bulgaria are a sign of things to come. The Times: January 21, 2009:
http://www.timesonline.co.uk/tol/news/world/europe/article5559773.ece

[64]      Henry Samuel, Riots across Europe fuelled by economic crisis. The Telegraph: May 1, 2009:
http://www.telegraph.co.uk/news/worldnews/europe/5258634/Riots-across-Europe-fuelled-by-economic-crisis.html

[65]      Stephen C. Webster, US intel chief: Economic crisis a greater threat than terrorism. Raw Story: February 13, 2009:
http://rawstory.com/news/2008/US_intel_chief_Economic_crisis_greater_0213.html

[66]      Tom Philpott, MILITARY UPDATE: Official: Financial crisis a bigger security risk than wars. Colorado Springs Gazette: February 1, 2009:
http://www.gazette.com/articles/mullen-47273-military-time.html

[67]      AFP, WTO chief warns of looming political unrest. AFP: February 7, 2009:
http://www.google.com/hostednews/afp/article/ALeqM5gpC1Q4gXJfp6EwMl1rMGrmA_a7ZA

[68]      Heather Scoffield, ‘There will be blood’. The Globe and Mail: February 23, 2009:
http://www.theglobeandmail.com/report-on-business/article973785.ece

[69]      BBC, World Bank warns of social unrest. BBC News: May 24, 2009:
http://news.bbc.co.uk/2/hi/business/8066037.stm

[70]      Press TV, Economic Crisis: Brzezinski warns of riots in US. Global Research: February 21, 2009:
http://www.globalresearch.ca/index.php?context=va&aid=12392

[71]      Edmund Conway, Moody’s warns of ‘social unrest’ as sovereign debt spirals, The Telegraph, 15 December 2009:
http://www.telegraph.co.uk/finance/economics/6819470/Moodys-warns-of-social-unrest-as-sovereign-debt-spirals.html

[72]      Ambrose Evans-Pritchard, Moody’s fears social unrest as AAA states implement austerity plans. The Telegraph: March 15, 2010:
http://www.telegraph.co.uk/finance/economics/7450468/Moodys-fears-social-unrest-as-AAA-states-implement-austerity-plans.html

[73]      Simon Schama, The world teeters on the brink of a new age of rage, The Financial Times, 22 May 2010:
http://www.ft.com/cms/s/0/45796f88-653a-11df-b648-00144feab49a.html

[74]      Ambrose Evans-Pritchard, IMF fears ‘social explosion’ from world jobs crisis, The Telegraph, 13 September 2010:
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8000561/IMF-fears-social-explosion-from-world-jobs-crisis.html

[75]      Roddy Thomson, European cities hit by anti-cuts protests, AFP, 29 September 2010:
http://www.google.com/hostednews/afp/article/ALeqM5iGPFQn-DOcZkJmTK5anC4nfopDZA?docId=CNG.a9e7345890360219e1ae3413e8fe2974.8b1

[76]      Peter Allen, Nicolas Sarkozy most unpopular French president in more than 50 years, The Telegraph, 25 October 2010:
http://www.telegraph.co.uk/news/worldnews/europe/france/8086078/Nicolas-Sarkozy-most-unpopular-French-president-in-more-than-50-years.html

[77]      Amar Bhattacharya, A Tangled Web, Finance and Development, March 2009, Vol. 46, No. 1:
http://www.imf.org/external/pubs/ft/fandd/2009/03/bhattacharya.htm

[78]      Jean-Claude Trichet, Global Governance Today, Keynote address by Mr Jean-Claude Trichet, President of the European Central Bank, at the Council on Foreign Relations, New York, 26 April 2010:
http://www.bis.org/review/r100428b.pdf

[79]      About the Trilateral Commission, The Pacific Asia Group, The Trilateral Commission:
http://www.trilateral.org/go.cfm?do=Page.View&pid=13

[80]      Song Jung-a, G20 agrees historic reform of IMF, Financial Times, 23 October 2010:
http://www.ft.com/cms/s/0/816ee036-dea2-11df-9b4a-00144feabdc0.html?ftcamp=rss

[81]      China Bureau, China Banker Urges IMF To Include Yuan In SDR Basket – Report, Wall Street Journal, 25 October 2010:
http://online.wsj.com/article/BT-CO-20101025-700112.html

[82]      Ian Traynor, Who speaks for Europe? Criticism of ‘shambolic’ process to fill key jobs. The Guardian, 17 November 2009:
http://www.guardian.co.uk/world/2009/nov/17/top-european-job-selection-process

[83]      Herman Von Rompuy, Speech Upon Accepting the EU Presidency, BBC News, 22 November 2009:
http://www.youtube.com/watch?v=pzm_R3YBgPg

[84]      Jon Ronson, Who pulls the strings? (part 3), The Guardian, 10 March 2001:
http://www.guardian.co.uk/books/2001/mar/10/extract1

[85]      Gideon Rachman, And now for a world government, Financial Times, 8 December 2010:
http://us.ft.com/ftgateway/superpage.ft?news_id=fto120820081424026754

The Global Economic Crisis: Riots, Rebellion and Revolution

The Global Economic Crisis: Riots, Rebellion and Revolution
When Empire Hits Home, Part 3
Global Research, April 7, 2010

This is Part 3 of the series, “When Empire Hits Home.”

Part 1: War, Racism and the Empire of Poverty
Part 2: Western Civilization and the Economic Crisis: The Impoverishment of the Middle Class


As nations of the world are thrown into a debt crisis, the likes of which have never been seen before, harsh fiscal ‘austerity’ measures will be undertaken in a flawed attempt to service the debts. The result will be the elimination of the middle class. When the middle class is absorbed into the labour class – the lower class – and lose their social, political, and economic foundations, they will riot, rebel, and revolt.

Ratings Agency Predicts Civil Unrest

Moody’s is a major ratings agency, which performs financial research and analysis on governments and commercial entities and ranks the credit-worthiness of borrowers. On March 15, Moody’s warned that the US, the UK, Germany, France, and Spain “are all at risk of soaring debt costs and will have to implement austerity plans that threaten ‘social cohesion’.” Further, Moody’s warned that such ‘austerity’ measures increase the potential for ‘social unrest’:

“Growth alone will not resolve an increasingly complicated debt equation. Preserving debt affordability at levels consistent with AAA ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion,” said Pierre Cailleteau, the chief author.

“We are not talking about revolution, but the severity of the crisis will force governments to make painful choices that expose weaknesses in society,” he said.[1]

In other words, due to the massive debt levels of western nations taken on to save the banks from the crisis they caused, the people must now pay through a reduction of their standards of living. Naturally, social unrest would follow.

This has not been the first or only warning of “social unrest” in the west, and it certainly won’t be the last.

The Economic Crisis and Civil Unrest

At the onset of the economic crisis, these warnings were numerous. While many will claim that since we have moved on since the fall of 2008, these warnings are no longer valid. However, considering that the western world is on the verge of a far greater economic crisis that will spread over the next few years, from Greece to America, a great global debt depression, these warnings should be reviewed with an eye on the near future.

In December of 2008, in the midst of the worst period of the crisis of 2008, the IMF issued a warning to government’s of the west to “step up action to stem the global economic crisis or risk delaying a recovery and sparking violent unrest on the streets.”[2] However, governments did not stem or stop the economic crisis, they simply delayed the eventual and inevitable crisis to come, the debt crisis. In fact, the actions governments took to “stem” the economic crisis, or delay it, more accurately, have, in actuality, exacerbated the compound effects that the crisis will ultimately have. In short, bailing out the banks has created a condition in which an inevitable debt crisis will become far greater in scope and devastation than had they simply allowed the banks to fail.

Even the Bank for International Settlements (BIS), the most prestigious financial institution in the world – the central bank to the world’s central banks – has warned that the bailouts have put the global economy in potentially far greater peril. The BIS warned that, “The scope and magnitude of the bank rescue packages also meant that significant risks had been transferred onto government balance sheets.”[3]

The head of the IMF warned that, “violent protests could break out in countries worldwide if the financial system was not restructured to benefit everyone rather than a small elite.”[4] However, he is disingenuous in his statements, as he and the institution he represents are key players in that “small elite” that benefit from the global financial system; this is the very system he serves.

In late December of 2008, “A U.S. Army War College report warn[ed] an economic crisis in the United States could lead to massive civil unrest and the need to call on the military to restore order.” The report stated:

Widespread civil violence inside the United States would force the defense establishment to reorient priorities … to defend basic domestic order and human security.[5]

Further revealed in the news release was the information that, “Pentagon officials said as many as 20,000 Soldiers under the U.S. Northern Command (NORTHCOM) will be trained within the next three years to work with civilian law enforcement in homeland security.”[6]

Europe in Social Crisis

In January of 2009, it was reported that Eastern Europe was expected to experience a “dangerous popular backlash on the streets” over the spring in response to the economic crisis:

Hit increasingly hard by the financial crisis, countries such as Bulgaria, Romania and the Baltic states face deep political destabilisation and social strife, as well as an increase in racial tension.

Last week protesters were tear-gassed as they threw rocks at police outside parliament in Vilnius, capital of Lithuania, in a protest against an austerity package including tax rises and benefit cuts.[7]

In January of 2009, Latvia experienced the largest protests since the mass rallies against Soviet rule in the late 1980s, with the protests eventually turning into riots. Similar “outbursts of civil unrest” spread across the “periphery of Europe.”[8]

This should be taken as a much larger warning, as the nations of Eastern Europe are forced into fiscal ‘austerity’ measures before they spread through the western world. Just as throughout the 1980s and the 1990s, countries of the ‘global south’, which signed Structural Adjustment Programs (SAPs) with the IMF and World Bank, were forced to undertake neoliberal reforms and harsh fiscal austerity measures. The people of these nations rioted and rebelled, in what was cynically referred to as “IMF riots”. What our nations have done abroad, in the name of ‘aid’ but in the intent of empire, is now coming home. The west will undergo its very own “IMF riots”.

The fears of civil unrest, however, were not confined simply to the periphery of Europe. In January of 2009, a massive French strike was taking place, as “teachers, television employees, postal workers, students and masses of other public-sector workers” were expressing discontent with the handling of the economic crisis; as “A depression triggered in America is being played out in Europe with increasing violence, and other forms of social unrest are spreading.”[9]

By late January, France was “paralysed by a wave of strike action, the boulevards of Paris resembling a debris-strewn battlefield.” Yet, the ‘credit crunch’ had hit harder in Eastern Europe and the civil unrest was greater, as these countries had abandoned Communism some twenty years prior only to be crushed under the “free market” of Capitalism, leading many to feel betrayed: “Europe’s time of troubles is gathering depth and scale. Governments are trembling. Revolt is in the air.”[10]

Olivier Besancenot, the leader of France’s extreme left “is hoping the strike will be the first step towards another French revolution as the recession bites and protests multiply across Europe’s second largest economy.” He told the Financial Times that, “We want the established powers to be blown apart,” and that, “We are going to reinvent and re-establish the anticapitalist project.”[11]

In January of 2009, Iceland’s government collapsed due to the pressures from the economic crisis, and amidst a storm of Icelanders protesting in anger against the political class. As the Times reported, “it is a sign of things to come: a new age of rebellion.” An economist at the London School of Economics warned that we could expect large-scale civil unrest beginning in March to May of 2009:

It will be caused by the rise of general awareness throughout Europe, America and Asia that hundreds of millions of people in rich and poor countries are experiencing rapidly falling consumption standards; that the crisis is getting worse not better; and that it has escaped the control of public authorities, national and international.[12]

In February of 2009, the Guardian reported that police in Britain were preparing for a “summer of rage” as “victims of the economic downturn take to the streets to demonstrate against financial institutions.” Police officials warned “that middle-class individuals who would never have considered joining demonstrations may now seek to vent their anger through protests this year.”[13]

In March, it was reported that “top secret contingency plans” had been drawn up to counter the threat posed by a possible “summer of discontent,” which “has led to the ­extraordinary step of the Army being put on ­standby.” The report revealed that, “What worries emergency planners most is that the middle classes, now struggling to cope with unemployment and repossessions, may take to the streets with the disenfranchised.”[14]

As the G20 met in London in early April 2009, mass protests took place, resulting in violence, “with a band of demonstrators close to the Bank of England storming a Royal Bank of Scotland branch, and baton-wielding police charging a sit-down protest by students.” While the majority of protests were peaceful, “some bloody skirmishes broke out as police tried to keep thousands of people in containment pens surrounding the Bank of England.”[15] Protests further broke out into riots as a Royal Bank of Scotland office was looted.[16] The following day, a man collapsed and died in central London during the protests shortly after having been assaulted by riot police.[17]

On May 1, 2009, major protests and riots broke out in Germany, Greece, Turkey, France and Austria, fuelled by economic tensions:

Police in Berlin arrested 57 people while around 50 officers were hurt as young demonstrators threw bottles and rocks and set fire to cars and rubbish bins. There were also clashes in Hamburg, where anti-capitalist protesters attacked a bank.

In Turkey, masked protesters threw stones and petrol bombs at police, smashing banks and supermarket windows in its biggest city, Istanbul. Security forces fired tear gas and water cannon at hundreds of rioters and more than a hundred were arrested with dozens more hurt. There were also scattered skirmishes with police in the capital, Ankara, where 150,000 people marched.[18]

There were further protests and riots that broke out in Russia, Italy, Spain, and some politicians were even discussing the threat of revolution.[19]

As a debt crisis began spreading throughout Europe in Greece, Portugal, and Spain, social unrest followed suit. Riots and protests increasingly took place in Greece, showing signs of things to come to all other western nations, which will sooner or later have to face the harsh reality of their odious debts.[20]

Is Civil Unrest Coming to America?

In February of 2009, Obama’s intelligence chief, Dennis Blair, the Director of National Intelligence, told the Senate Intelligence Committee that the economic crisis has become the greatest threat to U.S. national security:

I’d like to begin with the global economic crisis, because it already looms as the most serious one in decades, if not in centuries … Economic crises increase the risk of regime-threatening instability if they are prolonged for a one- or two-year period… And instability can loosen the fragile hold that many developing countries have on law and order, which can spill out in dangerous ways into the international community.[21]

What this means, is that economic crises (“if they are prolonged for a one or two year period”) pose a major threat to the established powers – the governing and economic powers – in the form of social unrest and rebellion (“regime-threatening instability”). The colonial possessions – Africa, South America, and Asia – will experience the worst of the economic conditions, which “can loosen the fragile hold that many developing countries have.” This can then come back to the western nations and imperial powers themselves, as the riots and rebellion will spread home, but also as they may lose control of their colonial possessions – eliminating western elites from a position of power internationally, and acquiescence domestically: The rebellion and discontent in the ‘Third World’ “can spill out in dangerous ways into the international community.”

In the same month, the highest-ranking general in the United States, “Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, ranks the financial crisis as a higher priority and greater risk to security than current wars in Iraq and Afghanistan.” He explained, “It’s a global crisis. And as that impacts security issues, or feeds greater instability, I think it will impact on our national security in ways that we quite haven’t figured out yet.”[22] Rest assured, they’ve figured it out, but they don’t want to tell you.

Again, in the same month, the head of the World Trade Organization (WTO) warned that, “The global economic crisis could trigger political unrest equal to that seen during the 1930s.” He elaborated, “The crisis today is spreading even faster (than the Great Depression) and affects more countries at the same time.”[23]

In February of 2009, renowned economic historian and Harvard professor, Niall Ferguson, predicted a “prolonged financial hardship, even civil war, before the ‘Great Recession’ ends,” and that, “The global crisis is far from over, [it] has only just begun, and Canada is no exception,” he said while at a speaking event in Canada. He explained, “Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence,” while, “the crisis will eventually provoke political conflict.” He further explained:

There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable.[24]

Even in May of 2009, the head of the World Bank warned that, “the global economic crisis could lead to serious social upheaval,” as “there is a risk of a serious human and social crisis with very serious political implications.”[25]

Zbigniew Brzezinski, former National Security Adviser, co-founder of the Trilateral Commission and a key architect of ‘globalization’ warned in February of 2009 that, “There’s going to be growing conflict between the classes and if people are unemployed and really hurting, hell, there could be even riots!”[26]

In early May 2009, the New York Times reported on the results of a major poll, suggesting, “A solid majority of people in the major Western democracies expect a rise in political extremism in their countries as a result of the economic crisis.” Of those surveyed, 53% in Italy and the United States said they expected extremism is “certain to happen” or “probable” in the next three years. That percentage increases to 65% in Britain and Germany, and is at 60% in France and Spain.[27]

Over the summer of 2009, the major nations of the west and their corporate media machines promoted and propagandized the notion of an ‘economic recovery’, allowing dissent to quell, spending to increase, stock market speculation to accelerate, and people’s fears and concerns to subside. It was a massive organized propaganda effort, and it had major successes for a while. However, in the New Year, this illusion is largely being derided for what it is, a fantasy. With the slow but steady erosion of this economic illusion, fears of riots, rebellion and revolution return.

On March 1, 2010, Nation of Islam leader Louis Farrakhan warned President Obama about civil unrest, saying:

When we can’t feed our families what do you tell us? Thou shalt not steal? When survival is the first law of nature? What are you going to do when black people and poor people erupt in the streets of America? It’s coming! Will you use the federal troops, Mr. President, against the poor?[28]

A March 8 article in the Wall Street Journal speculated about the discontent among the American people in regards to the economy, suggesting that it is “likely” that the economy has “bottomed” and that it will simply “trudge along” until November. However, the author suggested that given all the growing discontent in a variety of areas, it wouldn’t be surprising to see some civil unrest:

Now, contrary to what you may read in the New York Times or the Huffington Post, the ugliness could come from anywhere – the Left, the Center or the Right. Almost everyone in America thinks they’ve been betrayed.[29]

Clearly, the possibility and inevitability of riots in the United States, and in fact in many western nations becomes increasingly apparent. The middle classes will likely become the most angered and mobilized populace, having their social foundations pulled out from under them, and with that, they are overcome with a ‘failure of expectations’ for their political and economic clout. With no social foundations on which to stand, a class cannot reach high in the political and economic ladder, nationally or internationally.

As documented in Part 2 of this series, the middle class, for the past few decades, has been a class living on debt, consuming on debt, surviving on debt and existing only in theory. As nations collapse into a global debt crisis, the middle classes and the college students will be plunged into a world which they have seldom known: poverty. As documented in Part 1 of this series, the global social systems of poverty, race and war are inextricably interrelated and dependent on one another. As the middle class is absorbed into the global poverty class – the labour class – our nations in the west vastly expand their hegemony over the world’s resources and key strategic points, rapidly accelerating military involvement in every region of the world. As war expands, poverty grows, and racial issues are exacerbated; thus, the government asserts a totalitarian system of control.

Will the Middle Class Become Revolutionary?

In 2007, a British Defence Ministry report was released assessing global trends in the world over the next 30 years. The report stated assuredly that, “During the next 30 years, every aspect of human life will change at an unprecedented rate, throwing up new features, challenges and opportunities.”[30] In regards to ‘globalization,’ the report states:

A key feature of globalization will be the continuing internationalization of markets for goods, services and labour, which will integrate geographically dispersed sets of customers and suppliers.  This will be an engine for accelerating economic growth, but will also be a source of risk, as local markets become increasingly exposed to destabilizing fluctuations in the wider global economy… Also, there will continue to be winners and losers in a global economy led by market forces, especially so in the field of labour, which will be subject to particularly ruthless laws of supply and demand.[31]

Another major focus of the report is in the area of “Global Inequality,” of which the report states, over the next 30 years:

[T]he gap between rich and poor will probably increase and absolute poverty will remain a global challenge… Disparities in wealth and advantage will therefore become more obvious, with their associated grievances and resentments, even among the growing numbers of people who are likely to be materially more prosperous than their parents and grandparents.  Absolute poverty and comparative disadvantage will fuel perceptions of injustice among those whose expectations are not met, increasing tension and instability, both within and between societies and resulting in expressions of violence such as disorder, criminality, terrorism and insurgency. They may also lead to the resurgence of not only anti-capitalist ideologies, possibly linked to religious, anarchist or nihilist movements, but also to populism and the revival of Marxism.[32]

The report states quite emphatically that there is a great potential for a revolution coming from the middle class:

The middle classes could become a revolutionary class, taking the role envisaged for the proletariat by Marx.  The globalization of labour markets and reducing levels of national welfare provision and employment could reduce peoples’ attachment to particular states.  The growing gap between themselves and a small number of highly visible super-rich individuals might fuel disillusion with meritocracy, while the growing urban under-classes are likely to pose an increasing threat to social order and stability, as the burden of acquired debt and the failure of pension provision begins to bite.  Faced by these twin challenges, the world’s middle-classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest.[33]

Is Revolution the Right Way Forward?

As the world has already experienced the greatest transfer of wealth in human history, the greatest social transformation in world history is soon to follow. The middle classes of the west, long the foundations upon which the consumer capitalist system was based, are about to be radically reorganized and integrated into the global labour class. As this process commences and accelerates, the middle classes will begin to protest, riot, rebel, and possibly revolt.

We must ask ourselves: Is this the right way forward?

History is nothing but an example that when revolution takes place, it can quickly and effectively be hijacked by militant and extremist elements, often resulting in a situation worse than that prior to the revolution. Often, these elements themselves are co-opted by the ruling elite, ensuring that whatever regime rises in the ashes of the old, no matter how militant or radical, it will continue to serve and expand the entrenched interests of elites. This is the worst-case scenario of revolution, and with history as a guide, it is also a common occurrence. To understand the nature of co-opted revolutions and entrenched elites, one need only look at the revolutions in France and Russia.[34]

While the righteous indignation and anger of the western middle class population, and in fact, the global population as a whole, is entirely justified, there is an extreme danger in the possibilities of how such a revolutionary class may act. It is imperative to not take violent action, as it would merely be playing directly into the hands of states and global institutions that have been preparing for this eventuality for some time. Nations are becoming ‘Homeland Security States’, setting up surveillance societies, increasing the role of the military in domestic issues and policing, expanding the police state apparatus and militarizing society in general. Democracy is in decline; it is a dying idea. Nation states are increasingly tossing aside even the remaining vestiges of a democratic façade and preparing for a new totalitarianism to arise, in conjunction with the rise of a ‘new capitalism’.

Violent action and riots by the people of these nations will only result in a harsh and brutal closing of society, as the state clamps down on the people and installs an oppressive form of governance. This is a trend and process of which the people should not help speed along. Violent acts will result in violent oppression. While peaceful opposition may itself be oppressed and even violently repressed by the state apparatus, the notion of a clamp down on peaceful protesters is likely to increase dissatisfaction with the ruling powers, increase support for the protesters, and may ultimately speed up the process of a truly new change in governance. It’s difficult to demonize peaceful action.

While people will surely be in the streets, seeking to expand their social, political, and economic rights, we must undertake as a global society, a rapid and extensive expansion of our mental and intellectual rights and responsibilities. We cannot take to the streets without taking on the challenges of our minds. This cannot alone be a physical change in governance that people seek – not simply a political revolution – this must be coupled and driven by an intellectual revolution. What is required is a new Enlightenment, a new Renaissance. While the Enlightenment and Renaissance were western movements of thinking and social change, the new global Enlightenment must be a truly transnational and worldwide revolution in thinking.

Western Civilization has failed. It will continue to insist upon its own dominance, but it is a failure in regards to addressing the interests of all human civilization. Elites like to think that they are in absolute control and are all-powerful; this is not the case. For every action, there is an equal and opposite reaction. Take, for example, the integration of North America into a regional bloc like that of the European Union, an entirely elite-driven project of which the people largely know little or nothing about. Elites seek to force the people of this region to increasingly identify themselves as ‘North American’, just as elites in Europe increasingly push for a ‘European’ identity as opposed to a national identity. While the intended purpose of this social reorganization is to more easily control people, it has the effect of uniting some of these people in opposition to these elite-driven projects. Thus, those they seek to unite in order to control, are then united in opposition to their very control.

As the ‘globalization project’ of constructing a ‘new world order’ expands, built upon the concepts of global governance, elites will inadvertently unite the people of the world in opposition to their power-project. This is the intellectual well that must be tapped as soon as possible. Ideas for a truly new world, a true human ‘civilization’ – a “Humane Civilization” – must be constructed from ideas originating in all regions of the world, from all peoples, of all religions, races, ethnicities, social groups and standings. If we are to make human civilization work, it must work for all of humanity.

This will require a global “revolution in thinking”, which must precede any direct political action. The global social, political, and economic system must be deconstructed and built anew. The people of the world do not want war, it is the leaders – the powerful – who decide to go to war, and they are never the ones to fight them. War is a crime against humanity, a crime of poverty, of discrimination, of hate. The social, political and economic foundations of war must be dismantled. Socially constructed divides between people – such as race and ethnicity – must be dismantled and done away with. All people must be treated as people; racial and gender inequality is a crime against humanity itself.

Poverty is the greatest crime against humanity the world has ever known. Any society that permits such gross inequalities and absolute poverty, which calls itself ‘civilized’, is only an aberration of the word, itself. As Dr. Martin Luther King, Jr. stated:

I am convinced that if we are to get on the right side of the world revolution, we as a nation must undergo a radical revolution of values. We must rapidly begin the shift from a “thing-oriented” society to a “person-oriented” society. When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, materialism, and militarism are incapable of being conquered.[35]

Endnotes

[1]        Ambrose Evans-Pritchard, Moody’s fears social unrest as AAA states implement austerity plans. The Telegraph: March 15, 2010: http://www.telegraph.co.uk/finance/economics/7450468/Moodys-fears-social-unrest-as-AAA-states-implement-austerity-plans.html

[2]        Angela Balakrishnan, IMF chief issues stark warning on economic crisis. The Guardian: December 18, 2008: http://www.guardian.co.uk/business/2008/dec/16/imf-financial-crisis

[3]        BIS, International banking and financial market developments. BIS Quarterly Review: December 2008: page 20

[4]        Angela Balakrishnan, IMF chief issues stark warning on economic crisis. The Guardian: December 18, 2008: http://www.guardian.co.uk/business/2008/dec/16/imf-financial-crisis

[5]        Military.com, Study: DoD May Act On US Civil Unrest. McClatchy-Tribune Information Services: December 29, 2008: http://www.military.com/news/article/study-dod-may-act-on-us-civil-unrest.html

[6]        Ibid.

[7]        Jason Burke, Eastern Europe braced for a violent ‘spring of discontent’. The Observer: January 18, 2009: http://www.guardian.co.uk/world/2009/jan/18/eu-riots-vilinius

[8]        Philip P. Pan, Economic Crisis Fuels Unrest in E. Europe. The Washington Post: January 26, 2009: http://www.washingtonpost.com/wp-dyn/content/article/2009/01/25/AR2009012502516.html

[9]        Adrian Michaels, Europe’s winter of discontent. The Telegraph: January 27, 2009: http://www.telegraph.co.uk/comment/personal-view/4363750/Europes-winter-of-discontent.html

[10]      Ian Traynor, Governments across Europe tremble as angry people take to the streets. The Guardian: January 31, 2009: http://www.guardian.co.uk/business/2009/jan/31/global-recession-europe-protests

[11]      Ben Hall, French workers stage strike in protest at job losses and reforms. The Financial Times: January 29, 2009: http://www.ft.com/cms/s/0/71c25576-eda6-11dd-bd60-0000779fd2ac.html

[12]      Roger Boyes, World Agenda: riots in Iceland, Latvia and Bulgaria are a sign of things to come. The Times: January 21, 2009: http://www.timesonline.co.uk/tol/news/world/europe/article5559773.ece

[13]      Paul Lewis, Britain faces summer of rage – police. The Guardian: February 23, 2009: http://www.guardian.co.uk/uk/2009/feb/23/police-civil-unrest-recession

[14]      Geraint Jones, MI5 Alert On Bank Riots. The Express: March 1, 2009: http://www.express.co.uk/posts/view/86981/MI5-alert-on-bank-riots

[15]      Sam Jones, Jenny Percival and Paul Lewis, G20 protests: riot police clash with demonstrators. The Guardian: April 1, 2009: http://www.guardian.co.uk/world/2009/apr/01/g20-summit-protests

[16]      Telegraph TV, G20 protests: Rioters loot RBS as demonstrations turn violent. The Telegraph: April 1, 2009: http://www.telegraph.co.uk/finance/financetopics/g20-summit/5089870/G20-protests-Rioters-loot-RBS-as-demonstrations-turn-violent.html

[17]      ITN, Police ‘admit contact’ with man killed at G20 protest. In The News: April 6, 2009: http://www.inthenews.co.uk/news/health/crime/death-at-g20-police-silent-on-assault-reports-$1285968.htm

[18]      Henry Samuel, Riots across Europe fuelled by economic crisis. The Telegraph: May 1, 2009: http://www.telegraph.co.uk/news/worldnews/europe/5258634/Riots-across-Europe-fuelled-by-economic-crisis.html

[19]      Ibid.

[20]      David Oakley, et. al., Europe fears rock global markets. The Financial Times: February 4, 2010: http://www.ft.com/cms/s/0/a124518a-11cb-11df-b6e3-00144feab49a.html

[21]      Stephen C. Webster, US intel chief: Economic crisis a greater threat than terrorism. Raw Story: February 13, 2009: http://rawstory.com/news/2008/US_intel_chief_Economic_crisis_greater_0213.html

[22]      Tom Philpott, MILITARY UPDATE: Official: Financial crisis a bigger security risk than wars. Colorado Springs Gazette: February 1, 2009: http://www.gazette.com/articles/mullen-47273-military-time.html

[23]      AFP, WTO chief warns of looming political unrest. AFP: February 7, 2009: http://www.google.com/hostednews/afp/article/ALeqM5gpC1Q4gXJfp6EwMl1rMGrmA_a7ZA

[24]      Heather Scoffield, ‘There will be blood’. The Globe and Mail: February 23, 2009: http://www.theglobeandmail.com/report-on-business/article973785.ece

[25]      BBC, World Bank warns of social unrest. BBC News: May 24, 2009: http://news.bbc.co.uk/2/hi/business/8066037.stm

[26]      Press TV, Economic Crisis: Brzezinski warns of riots in US. Global Research: February 21, 2009: http://www.globalresearch.ca/index.php?context=va&aid=12392

[27]      John C. Freed, Economic Crisis Raises Fears of Extremism in Western Countries. The New York Times: May 6, 2009: http://www.nytimes.com/2009/05/07/world/europe/07poll.html

[28]      WBEZ, Farrakhan Warns Obama of Civil Unrest. Chicago Public Radio: March 1, 2010: http://www.wbez.org/Content.aspx?audioID=40331

[29]      Evan Newmark, Mean Street: America’s Coming Civil Unrest? The Wall Street Journal: March 8, 2010: http://blogs.wsj.com/deals/2010/03/08/mean-street-americas-coming-civil-unrest/

[30]      DCDC, The DCDC Global Strategic Trends Programme, 2007-2036, 3rd ed. The Ministry of Defence, January 2007: page 1

[31]      Ibid, page 3.

[32]      Ibid.

[33]      Ibid, page 81.

[34]      For a look at the co-opting of the French Revolution by elites, see: Andrew Gavin Marshall, Global Power and Global Government: Evolution and Revolution of the Central Banking System. Global Research: July 21, 2009: http://www.globalresearch.ca/index.php?context=va&aid=14464; For a look at the relationship between the Russian Revolution and powerful banking and corporate interests in America and Europe, see: Andrew Gavin Marshall, Origins of the American Empire: Revolution, World Wars and World Order. Global Research: July 28, 2009: http://www.globalresearch.ca/index.php?context=va&aid=14552

[35]      Rev. Martin Luther King, Beyond Vietnam: A Time to Break Silence. Speech delivered by Dr. Martin Luther King, Jr., on April 4, 1967, at a meeting of Clergy and Laity Concerned at Riverside Church in New York City: http://www.hartford-hwp.com/archives/45a/058.html

Debt Dynamite Dominoes: The Coming Financial Catastrophe

Debt Dynamite Dominoes: The Coming Financial Catastrophe
Assessing the Illusion of Recovery
Global Research, February 22, 2010

Understanding the Nature of the Global Economic Crisis

The people have been lulled into a false sense of safety under the ruse of a perceived “economic recovery.” Unfortunately, what the majority of people think does not make it so, especially when the people making the key decisions think and act to the contrary. The sovereign debt crises that have been unfolding in the past couple years and more recently in Greece, are canaries in the coal mine for the rest of Western “civilization.” The crisis threatens to spread to Spain, Portugal and Ireland; like dominoes, one country after another will collapse into a debt and currency crisis, all the way to America.

In October 2008, the mainstream media and politicians of the Western world were warning of an impending depression if actions were not taken to quickly prevent this. The problem was that this crisis had been a long-time coming, and what’s worse, is that the actions governments took did not address any of the core, systemic issues and problems with the global economy; they merely set out to save the banking industry from collapse. To do this, governments around the world implemented massive “stimulus” and “bailout” packages, plunging their countries deeper into debt to save the banks from themselves, while charging it to people of the world.

Then an uproar of stock market speculation followed, as money was pumped into the stocks, but not the real economy. This recovery has been nothing but a complete and utter illusion, and within the next two years, the illusion will likely come to a complete collapse.

The governments gave the banks a blank check, charged it to the public, and now it’s time to pay; through drastic tax increases, social spending cuts, privatization of state industries and services, dismantling of any protective tariffs and trade regulations, and raising interest rates. The effect that this will have is to rapidly accelerate, both in the speed and volume, the unemployment rate, globally. The stock market would crash to record lows, where governments would be forced to freeze them altogether.

When the crisis is over, the middle classes of the western world will have been liquidated of their economic, political and social status. The global economy will have gone through the greatest consolidation of industry and banking in world history leading to a system in which only a few corporations and banks control the global economy and its resources; governments will have lost that right. The people of the western world will be treated by the financial oligarchs as they have treated the ‘global South’ and in particular, Africa; they will remove our social structures and foundations so that we become entirely subservient to their dominance over the economic and political structures of our society.

This is where we stand today, and is the road on which we travel.

The western world has been plundered into poverty, a process long underway, but with the unfolding of the crisis, will be rapidly accelerated. As our societies collapse in on themselves, the governments will protect the banks and multinationals. When the people go out into the streets, as they invariably do and will, the government will not come to their aid, but will come with police and military forces to crush the protests and oppress the people. The social foundations will collapse with the economy, and the state will clamp down to prevent the people from constructing a new one.

The road to recovery is far from here. When the crisis has come to an end, the world we know will have changed dramatically. No one ever grows up in the world they were born into; everything is always changing. Now is no exception. The only difference is, that we are about to go through the most rapid changes the world has seen thus far.

Assessing the Illusion of Recovery

In August of 2009, I wrote an article, Entering the Greatest Depression in History, in which I analyzed how there is a deep systemic crisis in the Capitalist system in which we have gone through merely one burst bubble thus far, the housing bubble, but there remains a great many others.

There remains as a significantly larger threat than the housing collapse, a commercial real estate bubble. As the Deutsche Bank CEO said in May of 2009, “It’s either the beginning of the end or the end of the beginning.”

Of even greater significance is what has been termed the “bailout bubble” in which governments have superficially inflated the economies through massive debt-inducing bailout packages. As of July of 2009, the government watchdog and investigator of the US bailout program stated that the U.S. may have put itself at risk of up to $23.7 trillion dollars.

[See: Andrew Gavin Marshall, Entering the Greatest Depression in History. Global Research: August 7, 2009]

In October of 2009, approximately one year following the “great panic” of 2008, I wrote an article titled, The Economic Recovery is an Illusion, in which I analyzed what the most prestigious and powerful financial institution in the world, the Bank for International Settlements (BIS), had to say about the crisis and “recovery.”

The BIS, as well as its former chief economist, who had both correctly predicted the crisis that unfolded in 2008, were warning of a future crisis in the global economy, citing the fact that none of the key issues and structural problems with the economy had been changed, and that government bailouts may do more harm than good in the long run.

William White, former Chief Economist of the BIS, warned:

The world has not tackled the problems at the heart of the economic downturn and is likely to slip back into recession. [He] warned that government actions to help the economy in the short run may be sowing the seeds for future crises.

[See: Andrew Gavin Marshall, The Economic Recovery is an Illusion. Global Research: October 3, 2009]

Crying Wolf or Castigating Cassandra?

While people were being lulled into a false sense of security, prominent voices warning of the harsh bite of reality to come were, instead of being listened to, berated and pushed aside by the mainstream media. Gerald Celente, who accurately predicted the economic crisis of 2008 and who had been warning of a much larger crisis to come, had been accused by the mainstream media of pushing “pessimism porn.”[1] Celente’s response has been that he isn’t pushing “pessimism porn,” but that he refuses to push “optimism opium” of which the mainstream media does so outstandingly.

So, are these voices of criticism merely “crying wolf” or is it that the media is out to “castigate Cassandra”? Cassandra, in Greek mythology, was the daughter of King Priam and Queen Hecuba of Troy, who was granted by the God Apollo the gift of prophecy. She prophesied and warned the Trojans of the Trojan Horse, the death of Agamemnon and the destruction of Troy. When she warned the Trojans, they simply cast her aside as “mad” and did not heed her warnings.

While those who warn of a future economic crisis may not have been granted the gift of prophecy from Apollo, they certainly have the ability of comprehension.

So what do the Cassandras of the world have to say today? Should we listen?

Empire and Economics

To understand the global economic crisis, we must understand the global causes of the economic crisis. We must first determine how we got to the initial crisis, from there, we can critically assess how governments responded to the outbreak of the crisis, and thus, we can determine where we currently stand, and where we are likely headed.

Africa and much of the developing world was released from the socio-political-economic restraints of the European empires throughout the 1950s and into the 60s. Africans began to try to take their nations into their own hands. At the end of World War II, the United States was the greatest power in the world. It had command of the United Nations, the World Bank and the IMF, as well as setting up the NATO military alliance. The US dollar reigned supreme, and its value was tied to gold.

In 1954, Western European elites worked together to form an international think tank called the Bilderberg Group, which would seek to link the political economies of Western Europe and North America. Every year, roughly 130 of the most powerful people in academia, media, military, industry, banking, and politics would meet to debate and discuss key issues related to the expansion of Western hegemony over the world and the re-shaping of world order. They undertook, as one of their key agendas, the formation of the European Union and the Euro currency unit.

[See: Andrew Gavin Marshall, Controlling the Global Economy: Bilderberg, the Trilateral Commission and the Federal Reserve. Global Research: August 3, 2009]

In 1971, Nixon abandoned the dollar’s link to gold, which meant that the dollar no longer had a fixed exchange rate, but would change according to the whims and choices of the Federal Reserve (the central bank of the United States).  One key individual that was responsible for this choice was the third highest official in the U.S. Treasury Department at the time, Paul Volcker.[2]

Volcker got his start as a staff economist at the New York Federal Reserve Bank in the early 50s. After five years there, “David Rockefeller’s Chase Bank lured him away.”[3] So in 1957, Volcker went to work at Chase, where Rockefeller “recruited him as his special assistant on a congressional commission on money and credit in America and for help, later, on an advisory commission to the Treasury Department.”[4] In the early 60s, Volcker went to work in the Treasury Department, and returned to Chase in 1965 “as an aide to Rockefeller, this time as vice president dealing with international business.” With Nixon entering the White House, Volcker got the third highest job in the Treasury Department. This put him at the center of the decision making process behind the dissolution of the Bretton Woods agreement by abandoning the dollar’s link to gold in 1971.[5]

In 1973, David Rockefeller, the then-Chairman of Chase Manhattan Bank and President of the Council on Foreign Relations, created the Trilateral Commission, which sought to expand upon the Bilderberg Group. It was an international think tank, which would include elites from Western Europe, North America, and Japan, and was to align a “trilateral” political economic partnership between these regions. It was to further the interests and hegemony of the Western controlled world order.

That same year, the Petri-dish experiment of neoliberalism was undertaken in Chile. While a leftist government was coming to power in Chile, threatening the economic interests of not only David Rockefeller’s bank, but a number of American corporations, David Rockefeller set up meetings between Henry Kissinger, Nixon’s National Security Adviser, and a number of leading corporate industrialists. Kissinger in turn, set up meetings between these individuals and the CIA chief and Nixon himself. Within a short while, the CIA had begun an operation to topple the government of Chile.

On September 11, 1973, a Chilean General, with the help of the CIA, overthrew the government of Chile and installed a military dictatorship that killed thousands. The day following the coup, a plan for an economic restructuring of Chile was on the president’s desk. The economic advisers from the University of Chicago, where the ideas of Milton Freidman poured out, designed the restructuring of Chile along neoliberal lines.

Neoliberalism was thus born in violence.

In 1973, a global oil crisis hit the world. This was the result of the Yom Kippur War, which took place in the Middle East in 1973. However, much more covertly, it was an American strategem. Right when the US dropped the dollar’s peg to gold, the State Department had quietly begun pressuring Saudi Arabia and other OPEC nations to increase the price of oil. At the 1973 Bilderberg meeting, held six months before the oil price rises, a 400% increase in the price of oil was discussed. The discussion was over what to do with the large influx of what would come to be called “petrodollars,” the oil revenues of the OPEC nations.

Henry Kissinger worked behind the scenes in 1973 to ensure a war would take place in the Middle East, which happened in October. Then, the OPEC nations drastically increased the price of oil. Many newly industrializing nations of the developing world, free from the shackles of overt political and economic imperialism, suddenly faced a problem: oil is the lifeblood of an industrial society and it is imperative in the process of development and industrialization. If they were to continue to develop and industrialize, they would need the money to afford to do so.

Concurrently, the oil producing nations of the world were awash with petrodollars, bringing in record surpluses. However, to make a profit, the money would need to be invested. This is where the Western banking system came to the scene. With the loss of the dollar’s link to cold, the US currency could flow around the world at a much faster rate. The price of oil was tied to the price of the US dollar, and so oil was traded in US dollars. OPEC nations thus invested their oil money into Western banks, which in turn, would “recycle” that money by loaning it to the developing nations of the world in need of financing industrialization. It seemed like a win-win situation: the oil nations make money, invest it in the West, which loans it to the South, to be able to develop and build “western” societies.

However, all things do not end as fairy tales, especially when those in power are threatened. An industrialized and developed ‘Global South’ (Latin America, Africa, and parts of Asia) would not be a good thing for the established Western elites. If they wanted to maintain their hegemony over the world, they must prevent the rise of potential rivals, especially in regions so rich in natural resources and the global supplies of energy.

It was at this time that the United States initiated talks with China. The “opening” of China was to be a Western project of expanding Western capital into China. China will be allowed to rise only so much as the West allows it. The Chinese elite were happy to oblige with the prospect of their own growth in political and economic power. India and Brazil also followed suit, but to a smaller degree than that of China. China and India were to brought within the framework of the Trilateral partnership, and in time, both China and India would have officials attending meetings of the Trilateral Commission.

So money flowed around the world, primarily in the form of the US dollar. Foreign central banks would buy US Treasuries (debts) as an investment, which would also show faith in the strength of the US dollar and economy. The hegemony of the US dollar reached around the world.

[See: Andrew Gavin Marshall, Controlling the Global Economy: Bilderberg, the Trilateral Commission and the Federal Reserve. Global Research: August 3, 2009]

The Hegemony of Neoliberalism

In 1977, however, a new US administration came to power under the Presidency of Jimmy Carter, who was himself a member of the Trilateral Commission. With his administration, came another roughly two-dozen members of the Trilateral Commission to fill key positions within his government. In 1973, Paul Volcker, the rising star through Chase Manhattan and the Treasury Department became a member of the Trilateral Commission. In 1975, he was made President of the Federal Reserve Bank of New York, the most powerful of the 12 regional Fed banks. In 1979, Jimmy Carter gave the job of Treasury Secretary to the former Governor of the Federal Reserve System, and in turn, David Rockefeller recommended Jimmy Carter appoint Paul Volcker as Governor of the Federal Reserve Board, which Carter quickly did.[6]

In 1979, the price of oil skyrocketed again. This time, Paul Volcker at the Fed was to take a different approach. His response was to drastically increase interest rates. Interest rates went from 2% in the late 70s to 18% in the early 1980s. The effect this had was that the US economy went into recession, and greatly reduced its imports from developing nations. A the same time, developing nations, who had taken on heavy debt burdens to finance industrialization, suddenly found themselves having to pay 18% interest payments on their loans. The idea that they could borrow heavily to build an industrial society, which would in turn pay off their loans, had suddenly come to a halt. As the US dollar had spread around the world in the forms of petrodollars and loans, the decisions that the Fed made would affect the entire world. In 1982, Mexico announced that it could no longer service its debt, and defaulted on its loans. This marked the spread of the 1980s debt crisis, which spread throughout Latin America and across the continent of Africa.

Suddenly, much of the developing world was plunged into crisis. Thus, the IMF and World Bank entered the scene with their newly developed “Structural Adjustment Programs” (SAPs), which would encompass a country in need signing an agreement, the SAP, which would provide the country with a loan from the IMF, as well as “development” projects by the World Bank. In turn, the country would have to undergo a neoliberal restructuring of its country.

Neoliberalism spread out of America and Britain in the 1980s; through their financial empires and instruments – including the World Bank and IMF – they spread the neoliberal ideology around the globe. Countries that resisted neoliberalism were subjected to “regime change”. This would occur through financial manipulation, via currency speculation or the hegemonic monetary policies of the Western nations, primarily the United States; economic sanctions, via the United Nations or simply done on a bilateral basis; covert regime change, through “colour revolutions” or coups, assassinations; and sometimes overt military campaigns and war.

The neoliberal ideology consisted in what has often been termed “free market fundamentalism.” This would entail a massive wave of privatization, in which state assets and industries are privatized in order to become economically “more productive and efficient.” This would have the social effect of leading to the firing of entire areas of the public sector, especially health and education as well as any specially protected national industries, which for many poor nations meant vital natural resources.

Then, the market would be “liberalized” which meant that restrictions and impediments to foreign investments in the nation would diminish by reducing or eliminating trade barriers and tariffs (taxes), and thus foreign capital (Western corporations and banks) would be able to invest in the country easily, while national industries that grow and “compete” would be able to more easily invest in other nations and industries around the world. The Central Bank of the nation would then keep interest rates artificially low, to allow for the easier movement of money in and out of the country. The effect of this would be that foreign multinational corporations and international banks would be able to easily buy up the privatized industries, and thus, buy up the national economy. Simultaneously major national industries may be allowed to grow and work with the global banks and corporations. This would essentially oligopolize the national economy, and bring it within the sphere of influence of the “global economy” controlled by and for the Western elites.

The European empires had imposed upon Africa and many other colonized peoples around the world a system of ‘indirect rule’, in which local governance structures were restructured and reorganized into a system where the local population is governed by locals, but for the western colonial powers. Thus, a local elite is created, and they enrich themselves through the colonial system, so they have no interest in challenging the colonial powers, but instead seek to protect their own interests, which happen to be the interests of the empire.

In the era of globalization, the leaders of the ‘Third World’ have been co-opted and their societies reorganized by and for the interests of the globalized elites. This is a system of indirect rule, and the local elites becoming ‘indirect globalists’; they have been brought within the global system and structures of empire.

Following a Structural Adjustment Program, masses of people would be left unemployed; the prices of essential commodities such as food and fuel would increase, sometimes by hundreds of percentiles, while the currency lost its value. Poverty would spread and entire sectors of the economy would be shut down. In the “developing” world of Asia, Latin America and Africa, these policies were especially damaging. With no social safety nets to fall into, the people would go hungry; the public state was dismantled.

When it came to Africa, the continent so rapidly de-industrialized throughout the 1980s and into the 1990s that poverty increased by incredible degrees. With that, conflict would spread. In the 1990s, as the harsh effects of neoliberal policies were easily and quickly seen on the African continent, the main notion pushed through academia, the media, and policy circles was that the state of Africa was due to the “mismanagement” by Africans. The blame was put solely on the national governments. While national political and economic elites did become complicit in the problems, the problems were imposed from beyond the continent, not from within.

Thus, in the 1990s, the notion of “good governance” became prominent. This was the idea that in return for loans and “help” from the IMF and World Bank, nations would need to undertake reforms not only of the economic sector, but also to create the conditions of what the west perceived as “good governance.” However, in neoliberal parlance, “good governance” implies “minimal governance”, and governments still had to dismantle their public sectors. They simply had to begin applying the illusion of democracy, through the holding of elections and allowing for the formation of a civil society. “Freedom” however, was still to maintain simply an economic concept, in that the nation would be “free” for Western capital to enter into.

While massive poverty and violence spread across the continent, people were given the “gift” of elections. They would elect one leader, who would then be locked into an already pre-determined economic and political structure. The political leaders would enrich themselves at the expense of others, and then be thrown out at the next election, or simply fix the elections. This would continue, back and forth, all the while no real change would be allowed to take place. Western imposed “democracy” had thus failed.

An article in a 2002 edition of International Affairs, the journal of the Royal Institute of International Affairs (the British counter-part to the Council on Foreign Relations), wrote that:

In 1960 the average income of the top 20 per cent of the world’s population was 30 times that of the bottom 20 per cent. By 1990 it was 60 times, ad by 1997, 74 times that of the lowest fifth. Today the assets of the top three billionaires are more than the combined GNP [Gross National Product] of all least developed countries and their 600 million people.

This has been the context in which there has been an explosive growth in the presence of Western as well as local non-governmental organizations (NGOs) in Africa. NGOs today form a prominent part of the ‘development machine’, a vast institutional and disciplinary nexus of official agencies, practitioners, consultants, scholars and other miscellaneous experts producing and consuming knowledge about the ‘developing world’.

[. . . ] Aid (in which NGOs have come to play a significant role) is frequently portrayed as a form of altruism, a charitable act that enables wealth to flow from rich to poor, poverty to be reduced and the poor to be empowered.[7]

The authors then explained that NGOs have a peculiar evolution in Africa:

[T[heir role in ‘development’ represents a continuity of the work of their precursors, the missionaries and voluntary organizations that cooperated in Europe’s colonization and control of Africa. Today their work contributes marginally to the relief of poverty, but significantly to undermining the struggle of African people to emancipate themselves from economic, social and political oppression.[8]

The authors examined how with the spread of neoliberalism, the notion of a “minimalist state” spread across the world and across Africa. Thus, they explain, the IMF and World Bank “became the new commanders of post-colonial economies.” However, these efforts were not imposed without resistance, as, “Between 1976 and 1992 there were 146 protests against IMF-supported austerity measures [SAPs] in 39 countries around the world.” Usually, however, governments responded with brute force, violently oppressing demonstrations. However, the widespread opposition to these “reforms” needed to be addressed by major organizations and “aid” agencies in re-evaluating their approach to ‘development’:[9]

The outcome of these deliberations was the ‘good governance’ agenda in the 1990s and the decision to co-opt NGOs and other civil society organizations to a repackaged programme of welfare provision, a social initiative that could be more accurately described as a programme of social control.

The result was to implement the notion of ‘pluralism’ in the form of ‘multipartyism’, which only ended up in bringing “into the public domain the seething divisions between sections of the ruling class competing for control of the state.” As for the ‘welfare initiatives’, the bilateral and multilateral aid agencies set aside significant funds for addressing the “social dimensions of adjustment,” which would “minimize the more glaring inequalities that their policies perpetuated.” This is where the growth of NGOs in Africa rapidly accelerated.[10]

Africa had again, become firmly enraptured in the cold grip of imperialism. Conflicts in Africa would be stirred up by imperial foreign powers, often using ethnic divides to turn the people against each other, using the political leaders of African nations as vassals submissive to Western hegemony. War and conflict would spread, and with it, so too would Western capital and the multinational corporation.

Building a ‘New’ Economy

While the developing world fell under the heavy sword of Western neoliberal hegemony, the Western industrialized societies experienced a rapid growth of their own economic strength. It was the Western banks and multinational corporations that spread into and took control of the economies of Africa, Latin America, Asia, and with the fall of the Soviet Union in 1991, Eastern Europe and Central Asia.

Russia opened itself up to Western finance, and the IMF and World Bank swept in and imposed neoliberal restructuring, which led to a collapse of the Russian economy, and enrichment of a few billionaire oligarchs who own the Russian economy, and who are intricately connected with Western economic interests; again, ‘indirect globalists’.

As the Western financial and commercial sectors took control of the vast majority of the world’s resources and productive industries, amassing incredible profits, they needed new avenues in which to invest. Out of this need for a new road to capital accumulation (making money), the US Federal Reserve stepped in to help out.

The Federal Reserve in the 1990s began to ease interest rates lower and lower to again allow for the easier spread of money. This was the era of ‘globalization,’ where proclamations of a “New World Order” emerged. Regional trading blocs and “free trade” agreements spread rapidly, as world systems of political and economic structure increasingly grew out of the national structure and into a supra-national form. The North American Free Trade Agreement (NAFTA) was implemented in an “economic constitution for North America” as Reagan referred to it.

Regionalism had emerged as the next major phase in the construction of the New World Order, with the European Union being at the forefront. The world economy was ‘globalized’ and so too, would the political structure follow, on both regional and global levels. The World Trade Organization (WTO) was formed to maintain and enshrine global neoliberal constitution for trade. All through this time, a truly global ruling class emerged, the Transnational Capitalist Class (TCC), or global elite, which constituted a singular international class.

However, as the wealth and power of elites grew, everyone else suffered. The middle class had been subjected to a quiet dismantling. In the Western developed nations, industries and factories closed down, relocating to cheap Third World countries to exploit their labour, then sell the products in the Western world cheaply. Our living standards in the West began to fall, but because we could buy products for cheaper, no one seemed to complain. We continued to consume, and we used credit and debt to do so. The middle class existed only in theory, but was in fact, beholden to the shackles of debt.

The Clinton administration used ‘globalization’ as its grand strategy throughout the 1990s, facilitating the decline of productive capital (as in, money that flows into production of goods and services), and implemented the rise finance capital (money made on money). Thus, financial speculation became one of the key tools of economic expansion. This is what was termed the “financialization” of the economy. To allow this to occur, the Clinton administration actively worked to deregulate the banking sector. The Glass-Steagle Act, put in place by FDR in 1933 to prevent commercial banks from merging with investment banks and engaging in speculation, (which in large part caused the Great Depression), was slowly dismantled through the coordinated efforts of America’s largest banks, the Federal Reserve, and the US Treasury Department.

Thus, a massive wave of consolidation took place, as large banks ate smaller banks, corporations merged, where banks and corporations stopped being American or European and became truly global. Some of the key individuals that took part in the dismantling of Glass-Steagle and the expansion of ‘financialization’ were Alan Greenspan at the Federal Reserve and Robert Rubin and Lawrence Summers at the Treasury Department, now key officials in Obama’s economic team.

This era saw the rise of ‘derivatives’ which are ‘complex financial instruments’ that essentially act as short-term insurance policies, betting and speculating that an asset price or commodity would go up or go down in value, allowing money to be made on whether stocks or prices go up or down. However, it wasn’t called ‘insurance’ because ‘insurance’ has to be regulated. Thus, it was referred to as derivatives trade, and organizations called Hedge Funds entered the picture in managing the global trade in derivatives.

The stock market would go up as speculation on future profits drove stocks higher and higher, inflating a massive bubble in what was termed a ‘virtual economy.’ The Federal Reserve facilitated this, as it had previously done in the lead-up to the Great Depression, by keeping interest rates artificially low, and allowing for easy-flowing money into the financial sector. The Federal Reserve thus inflated the ‘dot-com’ bubble of the technology sector. When this bubble burst, the Federal Reserve, with Allen Greenspan at the helm, created the “housing bubble.”

The Federal Reserve maintained low interest rates and actively encouraged and facilitated the flow of money into the housing sector. Banks were given free reign and actually encouraged to make loans to high-risk individuals who would never be able to pay back their debt. Again, the middle class existed only in the myth of the ‘free market’.

Concurrently, throughout the 1990s and into the early 2000s, the role of speculation as a financial instrument of war became apparent. Within the neoliberal global economy, money could flow easily into and out of countries. Thus, when confidence weakens in the prospect of one nation’s economy, there can be a case of ‘capital flight’ where foreign investors sell their assets in that nation’s currency and remove their capital from that country. This results in an inevitable collapse of the nations economy.

This happened to Mexico in 1994, in the midst of joining NAFTA, where international investors speculated against the Mexican peso, betting that it would collapse; they cashed in their pesos for dollars, which devalued the peso and collapsed the Mexican economy. This was followed by the East Asian financial crisis in 1997, where throughout the 1990s, Western capital had penetrated East Asian economies speculating in real estate and the stock markets. However, this resulted in over-investment, as the real economy, (production, manufacturing, etc.) could not keep up with speculative capital. Thus, Western capital feared a crisis, and began speculating against the national currencies of East Asian economies, which triggered devaluation and a financial panic as capital fled from East Asia into Western banking sectors. The economies collapsed and then the IMF came in to ‘restructure’ them accordingly. The same strategy was undertaken with Russia in 1998, and Argentina in 2001.

[See: Andrew Gavin Marshall, Forging a “New World Order” Under a One World Government. Global Research: August 13, 2009]

Throughout the 2000s, the housing bubble was inflated beyond measure, and around the middle of the decade, when the indicators emerged of a crisis in the housing market a commercial real estate bubble was formed. This bubble has yet to burst.

The 2007-2008 Financial Crisis

In 2007, the Bank for International Settlements (BIS), the most prestigious financial institution in the world and the central bank to the world’s central banks, issued a warning that the world is on the verge of another Great Depression, “citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system.”[11]

As the housing bubble began to collapse, the commodity bubble was inflated, where money went increasingly into speculation, the stock market, and the price of commodities soared, such as with the massive increases in the price of oil between 2007 and 2008. In September of 2007, a medium-sized British Bank called Northern Rock, a major partaker in the loans of bad mortgages which turned out to be worthless, sought help from the Bank of England, which led to a run on the bank and investor panic. In February of 2008, the British government bought and nationalized Northern Rock.

In March of 2008, Bear Stearns, an American bank that had been a heavy lender in the mortgage real estate market, went into crisis. On March 14, 2008, the Federal Reserve Bank of New York worked with J.P. Morgan Chase (whose CEO is a board member of the NY Fed) to provide Bear Stearns with an emergency loan. However, they quickly changed their mind, and the CEO of JP Morgan Chase, working with the President of the New York Fed, Timothy Geithner, and the Treasury Secretary Henry Paulson (former CEO of Goldman Sachs), forced Bear Stearns to sell itself to JP Morgan Chase for $2 a share, which had previously traded at $172 a share in January of 2007. The merger was paid for by the Federal Reserve of New York, and charged to the US taxpayer.

In June of 2008, the BIS again warned of an impending Great Depression.[12]

In September of 2008, the US government took over Fannie Mae and Freddie Mac, the two major home mortgage corporations. The same month, the global bank Lehman Brothers declared bankruptcy, giving the signal that no one is safe and that the entire economy was on the verge of collapse. Lehman was a major dealer in the US Treasury Securities market and was heavily invested in home mortgages. Lehman filed for bankruptcy on September 15, 2008, marking the largest bankruptcy in US history. A wave of bank consolidation spread across the United States and internationally. The big banks became much bigger as Bank of America swallowed Merrill Lynch, JP Morgan ate Washington Mutual, and Wells Fargo took over Wachovia.

In November of 2008, the US government bailed out the largest insurance company in the world, AIG. The Federal Reserve Bank of New York, with Timothy Geithner at the helm:

[Bought out], for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks, including Goldman Sachs Group Inc., Merrill Lynch & Co., Societe Generale and Deutsche Bank AG, among others. That decision, critics say, amounted to a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been allowed to fail.

As Bloomberg reported, since the New York Fed is quasi-governmental, as in, it is given government authority, but not subject to government oversight, and is owned by the banks that make up its board (such as JP Morgan Chase), “It’s as though the New York Fed was a black-ops outfit for the nation’s central bank.”[13]

The Bailout

In the fall of 2008, the Bush administration sought to implement a bailout package for the economy, designed to save the US banking system. The leaders of the nation went into rabid fear mongering. The President warned:

More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically.

The head of the Federal Reserve Board, Ben Bernanke, as well as Treasury Secretary Paulson, in late September warned of “recession, layoffs and lost homes if Congress doesn’t quickly approve the Bush administration’s emergency $700 billion financial bailout plan.”[14] Seven months prior, in February of 2008, prior to the collapse of Bear Stearns, both Bernanke and Paulson said “the nation will avoid falling into recession.”[15] In September of 2008, Paulson was saying that people “should be scared.”[16]

The bailout package was made into a massive financial scam, which would plunge the United States into unprecedented levels of debt, while pumping incredible amounts of money into major global banks.

The public was told, as was the Congress, that the bailout was worth $700 billion dollars. However, this was extremely misleading, and a closer reading of the fine print would reveal much more, in that $700 billion is the amount that could be spent “at any one time.” As Chris Martenson wrote:

This means that $700 billion is NOT the cost of this dangerous legislation, it is only the amount that can be outstanding at any one time.  After, say, $100 billion of bad mortgages are disposed of, another $100 billion can be bought.  In short, these four little words assure that there is NO LIMIT to the potential size of this bailout. This means that $700 billion is a rolling amount, not a ceiling.

So what happens when you have vague language and an unlimited budget?  Fraud and self-dealing.  Mark my words, this is the largest looting operation ever in the history of the US, and it’s all spelled out right in this delightfully brief document that is about to be rammed through a scared Congress and made into law.[17]

Further, the proposed bill would “raise the nation’s debt ceiling to $11.315 trillion from $10.615 trillion,” and that the actions taken as a result of the passage of the bill would not be subject to investigation by the nation’s court system, as it would “bar courts from reviewing actions taken under its authority”:

The Bush administration seeks “dictatorial power unreviewable by the third branch of government, the courts, to try to resolve the crisis,” said Frank Razzano, a former assistant chief trial attorney at the Securities and Exchange Commission now at Pepper Hamilton LLP in Washington. “We are taking a huge leap of faith.”[18]

Larisa Alexandrovna, writing with the Huffington Post, warned that the passage of the bailout bill will be the final nails in the coffin of the fascist coup over America, in the form of financial fascists:

This manufactured crisis is now to be remedied, if the fiscal fascists get their way, with the total transfer of Congressional powers (the few that still remain) to the Executive Branch and the total transfer of public funds into corporate (via government as intermediary) hands.

[. . . ] The Treasury Secretary can buy broadly defined assets, on any terms he wants, he can hire anyone he wants to do it and can appoint private sector companies as financial deputies of the US government. And he can write whatever regulation he thinks [is] needed.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.[19]

At the same time, the US Federal Reserve was bailing out foreign banks of hundreds of billions of dollars, “that are desperate for dollars and can’t access America’s frozen credit markets – a move co-ordinated with central banks in Japan, the Eurozone, Switzerland, Canada and here in the UK.”[20] The moves would have been coordinated through the Bank for International Settlements (BIS) in Basle, Switzerland. As Politico reported, “foreign-based banks with big U.S. operations could qualify for the Treasury Department’s mortgage bailout.” A Treasury Fact Sheet released by the US Department of Treasury stated that:

Participating financial institutions must have significant operations in the U.S., unless the Secretary makes a determination, in consultation with the Chairman of the Federal Reserve, that broader eligibility is necessary to effectively stabilize financial markets.[21]

So, the bailout package would not only allow for the rescue of American banks, but any banks internationally, whether public or private, if the Treasury Secretary deemed it “necessary”, and that none of the Secretary’s decisions could be reviewed or subjected to oversight of any kind. Further, it would mean that the Treasury Secretary would have a blank check, but simply wouldn’t be able to hand out more than $700 billion “at any one time.” In short, the bailout is in fact, a coup d’état by the banks over the government.

Many Congressmen were told that if they failed to pass the bailout package, they were threatened with martial law.[22] Sure enough, Congress passed the bill, and the financial coup had been a profound success.

No wonder then, in early 2009, one Congressman reported that the banks “are still the most powerful lobby on Capitol Hill. And they frankly own the place.”[23] Another Congressman said that “The banks run the place,” and explained, “I will tell you what the problem is – they give three times more money than the next biggest group. It’s huge the amount of money they put into politics.”[24]

The Collapse of Iceland

On October 9th, 2008, the government of Iceland took control of the nation’s largest bank, nationalizing it, and halted trading on the Icelandic stock market. Within a single week, “the vast majority of Iceland’s once-proud banking sector has been nationalized.” In early October, it was reported that:

Iceland, which has transformed itself from one of Europe’s poorest countries to one of its wealthiest in the space of a generation, could face bankruptcy. In a televised address to the nation, Prime Minister Geir Haarde conceded: “There is a very real danger, fellow citizens, that the Icelandic economy in the worst case could be sucked into the whirlpool, and the result could be national bankruptcy.”

An article in BusinessWeek explained:

How did things get so bad so fast? Blame the Icelandic banking system’s heavy reliance on external financing. With the privatization of the banking sector, completed in 2000, Iceland’s banks used substantial wholesale funding to finance their entry into the local mortgage market and acquire foreign financial firms, mainly in Britain and Scandinavia. The banks, in large part, were simply following the international ambitions of a new generation of Icelandic entrepreneurs who forged global empires in industries from retailing to food production to pharmaceuticals. By the end of 2006, the total assets of the three main banks were $150 billion, eight times the country’s GDP.

In just five years, the banks went from being almost entirely domestic lenders to becoming major international financial intermediaries. In 2000, says Richard Portes, a professor of economics at London Business School, two-thirds of their financing came from domestic sources and one-third from abroad. More recently—until the crisis hit—that ratio was reversed. But as wholesale funding markets seized up, Iceland’s banks started to collapse under a mountain of foreign debt.[25]

This was the grueling situation that faced the government at the time of the global economic crisis. The causes, however, were not Icelandic; they were international. Iceland owed “more than $60 billion overseas, about six times the value of its annual economic output. As a professor at London School of Economics said, ‘No Western country in peacetime has crashed so quickly and so badly’.”[26]

What went wrong?

Iceland followed the path of neoliberalism, deregulated banking and financial sectors and aided in the spread and ease of flow for international capital. When times got tough, Iceland went into crisis, as the Observer reported in early October 2008:

Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland’s currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan.

[. . . ] The discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won’t send any more money and supplies of foreign currency are running out.[27]

In 2007, the UN had awarded Iceland the “best country to live in”:

The nation’s celebrated rags-to-riches story began in the Nineties when free market reforms, fish quota cash and a stock market based on stable pension funds allowed Icelandic entrepreneurs to go out and sweep up international credit. Britain and Denmark were favourite shopping haunts, and in 2004 alone Icelanders spent £894m on shares in British companies. In just five years, the average Icelandic family saw its wealth increase by 45 per cent.[28]

As the third of Iceland’s large banks was in trouble, following the government takeover of the previous two, the UK responded by freezing Icelandic assets in the UK. Kaupthing, the last of the three banks standing in early October, had many assets in the UK.

On October 7th, Iceland’s Central Bank governor told the media, “We will not pay for irresponsible debtors and…not for banks who have behaved irresponsibly.” The following day, UK Chancellor of the Exchequer, Alistair Darling, claimed that, “The Icelandic government, believe it or not, have told me yesterday they have no intention of honoring their obligations here,” although, Arni Mathiesen, the Icelandic minister of finance, said, “nothing in this telephone conversation can support the conclusion that Iceland would not honor its obligation.”[29]

On October 10, 2008, UK Prime Minister Gordon Brown said, “We are freezing the assets of Icelandic companies in the United Kingdom where we can. We will take further action against the Icelandic authorities wherever that is necessary to recover money.” Thus:

Many Icelandic companies operating in the U.K., in totally unrelated industries, experienced their assets being frozen by the U.K. government–as well as other acts of seeming vengeance by U.K. businesses and media.

The immediate effect of the collapse of Kaupthing is that Iceland’s financial system is ruined and the foreign exchange market shut down. Retailers are scrambling to secure currency for food imports and medicine. The IMF is being called in for assistance.[30]

The UK had more than £840m invested in Icelandic banks, and they were moving in to save their investments,[31] which just so happened to help spur on the collapse of the Icelandic economy.

On October 24, 2008, an agreement between Iceland and the IMF was signed. In late November, the IMF approved a loan to Iceland of $2.1 billion, with an additional $3 billion in loans from Denmark, Finland, Norway, Sweden, Russia, and Poland.[32] Why the agreement to the loan took so long, was because the UK pressured the IMF to delay the loan “until a dispute over the compensation Iceland owes savers in Icesave, one of its collapsed banks, is resolved.”[33]

In January of 2009, the entire Icelandic government was “formally dissolved” as the government collapsed when the Prime Minister and his entire cabinet resigned. This put the opposition part in charge of an interim government.[34] In July of 2009, the new government formally applied for European Union membership, however, “Icelanders have traditionally been skeptical of the benefits of full EU membership, fearing that they would lose some of their independence as a small state within a larger political entity.”[35]

In August of 2009, Iceland’s parliament passed a bill “to repay Britain and the Netherlands more than $5 billion lost in Icelandic deposit accounts”:

Icelanders, already reeling from a crisis that has left many destitute, have objected to paying for mistakes made by private banks under the watch of other governments.

Their anger in particular is directed at Britain, which used an anti-terrorism law to seize Icelandic assets during the crisis last year, a move which residents said added insult to injury.

The government argued it had little choice but to make good on the debts if it wanted to ensure aid continued to flow. Rejection could have led to Britain or the Netherlands seeking to block aid from the International Monetary Fund (IMF).[36]

Iceland is now in the service of the IMF and its international creditors. The small independent nation that for so long had prided itself on a strong economy and strong sense of independence had been brought to its knees.

In mid-January of 2010, the IMF and Sweden together delayed their loans to Iceland, due to Iceland’s “failure to reach a £2.3bn compensation deal with Britain and the Netherlands over its collapsed Icesave accounts.” Sweden, the UK and the IMF were blackmailing Iceland to save UK assets in return for loans.[37]

In February of 2010, it was reported that the EU would begin negotiations with Iceland to secure Icelandic membership in the EU by 2012. However, Iceland’s “aspirations are now tied partially to a dispute with the Netherlands and Britain over $5 billion in debts lost in the country’s banking collapse in late 2008.”[38]

Iceland stood as a sign of what was to come. The sovereign debt crisis that brought Iceland to its knees had new targets on the horizon.

Dubai Hit By Financial Storm

In February of 2009, the Guardian reported that, “A six-year boom that turned sand dunes into a glittering metropolis, creating the world’s tallest building, its biggest shopping mall and, some say, a shrine to unbridled capitalism, is grinding to a halt,” as Dubai, one of six states that form the United Arab Emirates (UAE), went into crisis. Further, “the real estate bubble that propelled the frenetic expansion of Dubai on the back of borrowed cash and speculative investment, has burst.”[39]

Months later, in November of 2009, Dubai was plunged into a debt crisis, prompting fears of sparking a double-dip recession and the next wave of the financial crisis. As the Guardian reported:

Governments have cut interest rates, created new electronic money and allowed budget deficits to reach record levels in an attempt to boost growth after the near-collapse of the global financial system. [. . . ] Despite having oil, it’s still the case that many of these countries had explosive credit growth. It’s very clear that in 2010, we’ve got plenty more problems in store.[40]

The neighboring oil-rich state of Abu Dhabi, however, came to the rescue of Dubai with a $10 billion bailout package, leading the Foreign Minister of the UAE to declare Dubai’s financial crisis as over.[41]

In mid-February of 2010, however, renewed fears of a debt crisis in Dubai resurfaced; Morgan Stanley reported that, “the cost to insure against a Dubai default [in mid-February] shot up to the level it was at during the peak of the city-state’s debt crisis in November.”[42] These fears resurfaced as:

Investors switched their attention to the Gulf [on February 15] as markets reacted to fears that a restructuring plan from the state-owned conglomerate Dubai World would pay creditors only 60 per cent of the money they are owed.[43]

Again, the aims that governments seek in the unfolding debt crisis is not to save their people from a collapsing economy and inflated currency, but to save the ‘interests’ of their major banks and corporations within each collapsing economy.

A Sovereign Debt Crisis Hits Greece

In October of 2009, a new Socialist government came to power in Greece on the promise of injecting 3 billion euros to reinvigorate the Greek economy.[44] Greece had suffered particularly hard during the economic crisis; it experienced riots and protests. In December of 2009, Greece said it would not default on its debt, but the government added, “Salaried workers will not pay for this situation: we will not proceed with wage freezes or cuts. We did not come to power to tear down the social state.” As Ambrose Evans-Pritchard wrote for the Telegraph in December of 2009:

Greece is being told to adopt an IMF-style austerity package, without the devaluation so central to IMF plans. The prescription is ruinous and patently self-defeating. Public debt is already 113pc of GDP. The [European] Commission says it will reach 125pc by late 2010. It may top 140pc by 2012.

If Greece were to impose the draconian pay cuts under way in Ireland (5pc for lower state workers, rising to 20pc for bosses), it would deepen depression and cause tax revenues to collapse further. It is already too late for such crude policies. Greece is past the tipping point of a compound debt spiral.

Evans-Pritchard wrote that the crisis in Greece had much to do with the European Monetary Union (EMU), which created the Euro, and made all member states subject to the decisions of the European Central Bank, as “Interest rates were too low for Greece, Portugal, Spain, and Ireland, causing them all to be engulfed in a destructive property and wage boom.” Further:

EU states may club together to keep Greece afloat with loans for a while. That solves nothing. It increases Greece’s debt, drawing out the agony. What Greece needs – unless it leaves EMU – is a permanent subsidy from the North. Spain and Portugal will need help too.[45]

Greece’s debt had soared, by early December 2009, to a spiraling 300-billion euros, as its “financial woes have also weighed on the euro currency, whose long-term value depends on member countries keeping their finances in order.” Further, Ireland, Spain and Portugal were all facing problems with their debt. As it turned out, the previous Greek government had been cooking the books, and when the new government came to power, it inherited twice the federal deficit it had anticipated.[46]

In February of 2010, the New York Times revealed that:

[W]ith Wall Street’s help, [Greece] engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.[47]

Even back in 2001, when Greece joined the Euro-bloc, Goldman Sachs helped the country “quietly borrow billions” in a deal “hidden from public view because it was treated as a currency trade rather than a loan, [and] helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.” Further, “Greece owes the world $300 billion, and major banks are on the hook for much of that debt. A default would reverberate around the globe.” Both Goldman Sachs and JP Morgan Chase had undertaken similar efforts in Italy and other countries in Europe as well.[48]

In early February, EU nations led by France and Germany met to discuss a rescue package for Greece, likely with the help of the European Central Bank and possibly the IMF. The issue had plunged the Eurozone into a crisis, as confidence in the Euro fell across the board, and “Germans have become so disillusioned with the euro, many will not accept notes produced outside their homeland.”[49]

Germany was expected to bail out the Greek economy, much to the dismay of the German people. As one German politician stated, “We cannot expect the citizens, whose taxes are already too high, to go along with supporting the erroneous financial and budget policy of other states of the eurozone.” One economist warned that the collapse of Greece could lead to a collapse of the Euro:

There are enough people ­speculating on the markets about the possible bankruptcy of Greece, and once Greece goes, they would then turn their attentions to Spain and Italy, and Germany and France would be forced to step in once again.[50]

However, the Lisbon Treaty had been passed over 2009, which put into effect a European Constitution, giving Brussels enormous powers over its member states. As the Telegraph reported on February 16, 2010, the EU stripped Greece of its right to vote at a crucial meeting to take place in March:

The council of EU finance ministers said Athens must comply with austerity demands by March 16 or lose control over its own tax and spend policies altogether. It if fails to do so, the EU will itself impose cuts under the draconian Article 126.9 of the Lisbon Treaty in what would amount to economic suzerainty [i.e., foreign economic control].

While the symbolic move to suspend Greece of its voting rights at one meeting makes no practical difference, it marks a constitutional watershed and represents a crushing loss of sovereignty.

“We certainly won’t let them off the hook,” said Austria’s finance minister, Josef Proll, echoing views shared by colleagues in Northern Europe. Some German officials have called for Greece to be denied a vote in all EU matter until it emerges from “receivership”.

The EU has still refused to reveal details of how it might help Greece raise €30bn (£26bn) from global debt markets by the end of June.[51]

It would appear that the EU is in a troubling position. If they allow the IMF to rescue Greece, it would be a blow to the faith in the Euro currency, whereas if they bailout Greece, it will encourage internal pressures within European countries to abandon the Euro.

In early February, Ambrose Evans-Pritchard wrote in the Telegraph that, “The Greek debt crisis has spread to Spain and Portugal in a dangerous escalation as global markets test whether Europe is willing to shore up monetary union with muscle rather than mere words”:

Julian Callow from Barclays Capital said the EU may to need to invoke emergency treaty powers under Article 122 to halt the contagion, issuing an EU guarantee for Greek debt. “If not contained, this could result in a `Lehman-style’ tsunami spreading across much of the EU.”

[. . . ] EU leaders will come to the rescue in the end, but Germany has yet to blink in this game of “brinkmanship”. The core issue is that EMU’s credit bubble has left southern Europe with huge foreign liabilities: Spain at 91pc of GDP (€950bn); Portugal 108pc (€177bn). This compares with 87pc for Greece (€208bn). By this gauge, Iberian imbalances are worse than those of Greece, and the sums are far greater. The danger is that foreign creditors will cut off funding, setting off an internal EMU version of the Asian financial crisis in 1998.[52]

Fear began to spread in regards to a growing sovereign debt crisis, stretching across Greece, Spain and Portugal, and likely much wider and larger than that.

A Global Debt Crisis

In 2007, the Bank for International Settlements (BIS), “the world’s most prestigious financial body,” warned of a coming great depression, and stated that while in a crisis, central banks may cut interest rates (which they subsequently did). However, as the BIS pointed out, while cutting interest rates may help, in the long run it has the effect of “sowing the seeds for more serious problems further ahead.”[53]

In the summer of 2008, prior to the apex of the 2008 financial crisis in September and October, the BIS again warned of the inherent dangers of a new Great Depression. As Ambrose Evans-Pritchard wrote, “the ultimate bank of central bankers” warned that central banks, such as the Federal Reserve, would not find it so easy to “clean up” the messes they had made in asset-price bubbles.

The BIS report stated that, “It is not impossible that the unwinding of the credit bubble could, after a temporary period of higher inflation, culminate in a deflation that might be hard to manage, all the more so given the high debt levels.” As Evans-Pritchard explained, “this amounts to a warning that monetary overkill by the Fed, the Bank of England, and above all the European Central Bank could prove dangerous at this juncture.” The BIS report warned that, “Global banks – with loans of $37 trillion in 2007, or 70pc of world GDP – are still in the eye of the storm.” Ultimately, the actions of central banks were designed “to put off the day of reckoning,” not to prevent it.[54]

Seeing how the BIS is not simply a casual observer, but is in fact the most important financial institution in the world, as it is where the world’s central bankers meet and, in secret, decide monetary policy for the world. As central banks have acted as the architects of the financial crisis, the BIS warning of a Great Depression is not simply a case of Cassandra prophesying the Trojan Horse, but is a case where she prophesied the horse, then opened the gates of Troy and pulled the horse in.

It was within this context that the governments of the world took on massive amounts of debt and bailed out the financial sectors from their accumulated risk by buying their bad debts.

In late June of 2009, several months following Western governments implementing bailouts and stimulus packages, the world was in the euphoria of “recovery.” At this time, however, the Bank for International Settlements released another report warning against such complacency in believing in the “recovery.” The BIS warned of only “limited progress” in fixing the financial system. The article is worth quoting at length:

Instead of implementing policies designed to clean up banks’ balance sheets, some rescue plans have pushed banks to maintain their lending practices of the past, or even increase domestic credit where it’s not warranted.

[. . . ] The lack of progress threatens to prolong the crisis and delay the recovery because a dysfunctional financial system reduces the ability of monetary and fiscal actions to stimulate the economy.

That’s because without a solid banking system underpinning financial markets, stimulus measures won’t be able to gain traction, and may only lead to a temporary pickup in growth.

A fleeting recovery could well make matters worse, the BIS warns, since further government support for banks is absolutely necessary, but will become unpopular if the public sees a recovery in hand. And authorities may get distracted with sustaining credit, asset prices and demand rather than focusing on fixing bank balance sheets.

[. . . ] It warned that despite the unprecedented measures in the form of fiscal stimulus, interest rate cuts, bank bailouts and quantitative easing, there is an “open question” whether the policies will be able to stabilize the global economy.

And as governments bulk up their deficits to spend their way out of the crisis, they need to be careful that their lack of restraint doesn’t come back to bite them, the central bankers said. If governments don’t communicate a credible exit strategy, they will find it harder to place debt, and could face rising funding costs – leading to spending cuts or significantly higher taxes.[55]

The BIS had thus endorsed the bailout and stimulus packages, which is no surprise, considering that the BIS is owned by the central banks of the world, which in turn are owned by the major global banks that were “bailed out” by the governments. However, the BIS warned that these rescue efforts, “while necessary” for the banks, will likely have deleterious effects for national governments.

The BIS warned that, “there’s a risk central banks will raise interest rates and withdraw emergency liquidity too late, triggering inflation”:

Central banks around the globe have lowered borrowing costs to record lows and injected billions of dollars [or, more accurately, trillions] into the financial system to counter the worst recession since World War II. While some policy makers have stressed the need to withdraw the emergency measures as soon as the economy improves, the Federal Reserve, Bank of England, and European Central Bank are still in the process of implementing asset-purchase programs designed to unblock credit markets and revive growth.

“The big and justifiable worry is that, before it can be reversed, the dramatic easing in monetary policy will translate into growth in the broader monetary and credit aggregates,” the BIS said. That will “lead to inflation that feeds inflation expectations or it may fuel yet another asset-price bubble, sowing the seeds of the next financial boom-bust cycle.”[56]

Of enormous significance was the warning from the BIS that, “fiscal stimulus packages may provide no more than a temporary boost to growth, and be followed by an extended period of economic stagnation.” As the Australian reported in late June:

The only international body to correctly predict the financial crisis – the Bank for International Settlements (BIS) – has warned the biggest risk is that governments might be forced by world bond investors to abandon their stimulus packages, and instead slash spending while lifting taxes and interest rates.

Further, major western countries such as Australia “faced the possibility of a run on the currency, which would force interest rates to rise,” and “Particularly in smaller and more open economies, pressure on the currency could force central banks to follow a tighter policy than would be warranted by domestic economic conditions.” Not surprisingly, the BIS stated that, “government guarantees and asset insurance have exposed taxpayers to potentially large losses,” through the bailouts and stimulus packages, and “stimulus programs will drive up real interest rates and inflation expectations,” as inflation “would intensify as the downturn abated.”[57]

In May of 2009, Simon Johnson, former chief economist of the International Monetary Fund (IMF), warned that Britain faces a major struggle in the next phase of the economic crisis:

[T]he mountain of debt that had poisoned the financial system had not disappeared overnight. Instead, it has been shifted from the private sector onto the public sector balance sheet. Britain has taken on hundreds of billions of pounds of bank debt and stands behind potentially trillions of dollars of contingent liabilities.

If the first stage of the crisis was the financial implosion and the second the economic crunch, the third stage – the one heralded by Johnson – is where governments start to topple under the weight of this debt. If 2008 was a year of private sector bankruptcies, 2009 and 2010, it goes, will be the years of government insolvency.

However, as dire as things look for Britain, “The UK is likely to be joined by other countries as the full scale of the downturn becomes apparent and more financial skeletons are pulled from the sub-prime closet.”[58]

In September of 2009, the former Chief Economist of the Bank for International Settlements (BIS), William White, who had accurately predicted the previous crisis, warned that, “The world has not tackled the problems at the heart of the economic downturn and is likely to slip back into recession.” He “also warned that government actions to help the economy in the short run may be sowing the seeds for future crises.” An article in the Financial Times elaborated:

“Are we going into a W[-shaped recession]? Almost certainly. Are we going into an L? I would not be in the slightest bit surprised,” [White] said, referring to the risks of a so-called double-dip recession or a protracted stagnation like Japan suffered in the 1990s.

“The only thing that would really surprise me is a rapid and sustainable recovery from the position we’re in.”

The comments from Mr White, who ran the economic department at the central banks’ bank from 1995 to 2008, carry weight because he was one of the few senior figures to predict the financial crisis in the years before it struck.

Mr White repeatedly warned of dangerous imbalances in the global financial system as far back as 2003 and – breaking a great taboo in central banking circles at the time – he dared to challenge Alan Greenspan, then chairman of the Federal Reserve, over his policy of persistent cheap money [i.e., low interest rates].

[. . . ] Worldwide, central banks have pumped [trillions] of dollars of new money into the financial system over the past two years in an effort to prevent a depression. Meanwhile, governments have gone to similar extremes, taking on vast sums of debt to prop up industries from banking to car making.

These measures may already be inflating a bubble in asset prices, from equities to commodities, he said, and there was a small risk that inflation would get out of control over the medium term if central banks miss-time their “exit strategies”.

Meanwhile, the underlying problems in the global economy, such as unsustainable trade imbalances between the US, Europe and Asia, had not been resolved.[59]

In late September of 2009, the General Manager of the BIS warned governments against complacency, saying that, “the market rebound should not be misinterpreted,” and that, “The profile of the recovery is not clear.”[60]

In September, the Financial Times further reported that William White, former Chief Economist at the BIS, also “argued that after two years of government support for the financial system, we now have a set of banks that are even bigger – and more dangerous – than ever before,” which also, “has been argued by Simon Johnson, former chief economist at the International Monetary Fund,” who “says that the finance industry has in effect captured the US government,” and pointedly stated: “recovery will fail unless we break the financial oligarchy that is blocking essential reform.”[61]

In mid-September, the BIS released a warning about the global financial system, as “The global market for derivatives rebounded to $426 trillion in the second quarter [of 2009] as risk appetite returned, but the system remains unstable and prone to crises.” The derivatives rose by 16% “mostly due to a surge in futures and options contracts on three-month interest rates.” In other words, speculation is back in full force as bailout money to banks in turn fed speculative practices that have not been subjected to reform or regulation. Thus, the problems that created the previous crisis are still present and growing:

Stephen Cecchetti, the [BIS] chief economist, said over-the-counter markets for derivatives are still opaque and pose “major systemic risks” for the financial system. The danger is that regulators will again fail to see that big institutions have taken far more exposure than they can handle in shock conditions, repeating the errors that allowed the giant US insurer AIG to write nearly “half a trillion dollars” of unhedged insurance through credit default swaps.[62]

In late November of 2009, Morgan Stanley warned that, “Britain risks becoming the first country in the G10 bloc of major economies to risk capital flight and a full-blown debt crisis over coming months.” The Bank of England may have to raise interest rates “before it is ready — risking a double-dip recession, and an incipient compound-debt spiral.” Further:

Morgan Stanley said [the] sterling may fall a further 10pc in trade-weighted terms. This would complete the steepest slide in the pound since the industrial revolution, exceeding the 30pc drop from peak to trough after Britain was driven off the Gold Standard in cataclysmic circumstances in 1931.[63]

As Ambrose Evans-Pritchard wrote for the Telegraph, this “is a reminder that countries merely bought time during the crisis by resorting to fiscal stimulus and shunting private losses onto public books,” and, while he endorsed the stimulus packages claiming it was “necessary,” he admitted that the stimulus packages “have not resolved the underlying debt problem. They have storied up a second set of difficulties by degrading sovereign debt across much of the world.”[64] Morgan Stanley said another surprise in 2010 could be a surge in the dollar. However, this would be due to capital flight out of Europe as its economies crumble under their debt burdens and capital seeks a “safe haven” in the US dollar.

In December of 2009, the Wall Street Journal reported on the warnings of some of the nation’s top economists, who feared that following a financial crisis such as the one experienced in the previous two years, “there’s typically a wave of sovereign default crises.” As economist Kenneth Rogoff explained, “If you want to know what’s next on the menu, that’s a good bet,” as “Spiraling government debts around the world, from Washington to Berlin to Tokyo, could set the scene for years of financial troubles.” Apart from the obvious example of Greece, other countries are at risk, as the author of the article wrote:

Also worrying are several other countries at the periphery of Europe—the Baltics, Eastern European countries like Hungary, and maybe Ireland and Spain. This is where public finances are worst. And the handcuffs of the European single currency, Prof. Rogoff said, mean individual countries can’t just print more money to get out of their debts. (For the record, the smartest investor I have ever known, a hedge fund manager in London, is also anticipating a sovereign debt crisis.)

[. . . ] The major sovereign debt crises, he said, are probably a couple of years away. The key issue is that this time, the mounting financial troubles of the U.S., Germany and Japan mean these countries, once the rich uncles of the world, will no longer have the money to step in and rescue the more feckless nieces and nephews.

Rogoff predicted that, “We’re going to be raising taxes sky high,” and that, “we’re probably going to see a lot of inflation, eventually. We will have to. It’s the easiest way to reduce the value of those liabilities in real terms.” Rogoff stated, “The way rich countries default is through inflation.” Further, “even U.S. municipal bonds won’t be safe from trouble. California could be among those facing a default crisis.” Rogoff elaborated, “It wouldn’t surprise me to see the Federal Reserve buying California debt at some point, or some form of bailout.”[65]

The bailouts, particularly that of the United States, handed a blank check to the world’s largest banks. As another favour, the US government put those same banks in charge of ‘reform’ and ‘regulation’ of the banking industry. Naturally, no reform or regulation took place. Thus, the money given to banks by the government can be used in financial speculation. As the sovereign debt crisis unfolds and spreads around the globe, the major international banks will be able to create enormous wealth in speculation, rapidly pulling their money out of one nation in debt crisis, precipitating a collapse, and moving to another, until all the dominoes have fallen, and the banks stand larger, wealthier, and more powerful than any nation or institution on earth (assuming they already aren’t). This is why the bankers were so eager to undertake a financial coup of the United States, to ensure that no actual reform took place, that they could loot the nation of all it has, and profit off of its eventual collapse and the collapse of the global economy. The banks have been saved! Now everyone else must pay.

Edmund Conway, the Economics Editor of the Telegraph, reported in early January of 2010, that throughout the year:

[S]overeign credit will buckle under the strain of [government] deficits; the economic recovery will falter as the Government withdraws its fiscal stimulus measures and more companies will continue to fail. In other words, 2010 is unlikely to be the year of a V-shaped recovery.[66]

In other words, the ‘recovery’ is an illusion. In mid-January of 2010, the World Economic Forum released a report in which it warned that, “There is now more than a one-in-five chance of another asset price bubble implosion costing the world more than £1 trillion, and similar odds of a full-scale sovereign fiscal crisis.” The report warned of a simultaneous second financial crisis coupled with a major fiscal crisis as countries default on their debts. The report “also warned of the possibility of China’s economy overheating and, instead of helping support global economic growth, preventing a fully-fledged recovery from developing.” Further:

The report, which in previous years had been among the first to cite the prospect of a financial crisis, the oil crisis that preceded it and the ongoing food crisis, included a list of growing risks threatening leading economies. Among the most likely, and potentially most costly, is a sovereign debt crisis, as some countries struggle to afford the unprecedented costs of the crisis clean-up, the report said, specifically naming the UK and the US.

[. . .] The report also highlights the risk of a further asset price collapse, which could derail the nascent economic recovery across the world, with particular concern surrounding China, which some fear may follow the footsteps Japan trod in the 1990s.[67]

Nouriel Roubini, one of America’s top economists who predicted the financial crisis, wrote an article in Forbes in January of 2010 explaining that, “the severe recession, combined with a financial crisis during 2008-09, worsened the fiscal positions of developed countries due to stimulus spending, lower tax revenues and support to the financial sector.” He warned that the debt burden of major economies, including the US, Japan and Britain, would likely increase. With this, investors will become wary of the sustainability of fiscal markets and will begin to withdraw from debt markets, long considered “safe havens.” Further:

Most central banks will withdraw liquidity starting in 2010, but government financing needs will remain high thereafter. Monetization and increased debt issuances by governments in the developed world will raise inflation expectations.

As interest rates rise, which they will have to in a tightening of monetary policy, (which up until now have been kept artificially low so as to encourage the spread of liquidity around the world), interest payments on the debt will increase dramatically. Roubini warned:

The U.S. and Japan might be among the last to face investor aversion—the dollar is the global reserve currency and the U.S. has the deepest and most liquid debt markets, while Japan is a net creditor and largely finances its debt domestically. But investors will turn increasingly cautious even about these countries if the necessary fiscal reforms are delayed.[68]

Governments will thus need to drastically increase taxes and cut spending. Essentially, this will amount to a global “Structural Adjustment Program” (SAP) in the developed, industrialized nations of the West.

Where SAPs imposed upon ‘Third World’ debtor nations would provide a loan in return for the dismantling of the public state, higher taxes, growing unemployment, total privatization of state industries and deregulation of trade and investment, the loans provided by the IMF and World Bank would ultimately benefit Western multinational corporations and banks. This is what the Western world now faces: we bailed out the banks, and now we must pay for it, through massive unemployment, increased taxes, and the dismantling of the public sphere.

In February of 2010, Niall Ferguson, a prominent British economic historian, wrote an article for the Financial Times entitled, “A Greek Crisis Coming to America.” He starts by explaining that, “It began in Athens. It is spreading to Lisbon and Madrid. But it would be a grave mistake to assume that the sovereign debt crisis that is unfolding will remain confined to the weaker eurozone economies.” He explained that this is not a crisis confined to one region, “It is a fiscal crisis of the western world,” and “Its ramifications are far more profound than most investors currently appreciate.” Ferguson writes that, “the problem is essentially the same from Iceland to Ireland to Britain to the US. It just comes in widely differing sizes,” and the US is no small risk:

For the world’s biggest economy, the US, the day of reckoning still seems reassuringly remote. The worse things get in the eurozone, the more the US dollar rallies as nervous investors park their cash in the “safe haven” of American government debt. This effect may persist for some months, just as the dollar and Treasuries rallied in the depths of the banking panic in late 2008.

Yet even a casual look at the fiscal position of the federal government (not to mention the states) makes a nonsense of the phrase “safe haven”. US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941.

Ferguson points out that, “The long-run projections of the Congressional Budget Office suggest that the US will never again run a balanced budget. That’s right, never.” Ferguson explains that debt will hurt major economies:

By raising fears of default and/or currency depreciation ahead of actual inflation, they push up real interest rates. Higher real rates, in turn, act as drag on growth, especially when the private sector is also heavily indebted – as is the case in most western economies, not least the US.

Although the US household savings rate has risen since the Great Recession began, it has not risen enough to absorb a trillion dollars of net Treasury issuance a year. Only two things have thus far stood between the US and higher bond yields: purchases of Treasuries (and mortgage-backed securities, which many sellers essentially swapped for Treasuries) by the Federal Reserve and reserve accumulation by the Chinese monetary authorities.[69]

In late February of 2010, the warning signs were flashing red that interest rates were going to have to rise, taxes increase, and the burden of debt would need to be addressed.

China Begins to Dump US Treasuries

US Treasuries are US government debt that is issued by the US Treasury Department, which are bought by foreign governments as an investment. It is a show of faith in the US economy to buy their debt (i.e., Treasuries). In buying a US Treasury, you are lending money to the US government for a certain period of time.

However, as the United States has taken on excessive debt loads to save the banks from crisis, the prospect of buying US Treasuries has become less appealing, and the threat that they are an unsafe investment is ever-growing. In February of 2009, Hilary Clinton urged China to continue buying US Treasuries in order to finance Obama’s stimulus package. As an article in Bloomberg pointed out:

The U.S. is the single largest buyer of the exports that drive growth in China, the world’s third-largest economy. China in turn invests surplus earnings from shipments of goods such as toys, clothing and steel primarily in Treasury securities, making it the world’s largest holder of U.S. government debt at the end of last year with $696.2 billion.[70]

The following month, the Chinese central bank announced that they would continue buying US Treasuries.[71]

However, in February of 2009, Warren Buffet, one of the world’s richest individuals, warned against buying US Treasuries:

Buffett said that with the U.S. Federal Reserve and Treasury Department going “all in” to jump-start an economy shrinking at the fastest pace since 1982, “once-unthinkable dosages” of stimulus will likely spur an “onslaught” of inflation, an enemy of fixed-income investors.

“The investment world has gone from underpricing risk to overpricing it,” Buffett wrote. “Cash is earning close to nothing and will surely find its purchasing power eroded over time.”

“When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s,” he went on. “But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary.”[72]

In September of 2009, an article on CNN reported of the dangers if China were to start dumping US Treasuries, which “could cause longer-term interest rates to shoot up since bond prices and yields move in opposite directions,” as a weakening US currency could lead to inflation, which would in turn, reduce the value and worth of China’s holdings in US Treasuries.[73]

It has become a waiting game; an economic catch-22: China holds US debt (Treasuries) which allows the US to spend to “save the economy” (or more accurately, the banks), but all the spending has plunged the US into such abysmal debt from which it will never be able to emerge. The result is that inflation will likely occur, with a possibility of hyperinflation, thus reducing the value of the US currency. China’s economy is entirely dependent upon the US as a consumer economy, while the US is dependent upon China as a buyer and holder of US debt. Both countries are delaying the inevitable. If China doesn’t want to hold worthless investments (US debt) it must stop buying US Treasuries, and then international faith in the US currency would begin to fall, forcing interest rates to rise, which could even precipitate a speculative assault against the US dollar. At the same time, a collapsing US currency and economy would not help China’s economy, which would tumble with it. So, it has become a waiting game.

In February of 2010, the Financial Times reported that China had begun in December of 2009, the process of dumping US Treasuries, and thus falling behind Japan as the largest holder of US debt, selling approximately $38.8 billion of US Treasuries, as “Foreign demand for US Treasury bonds fell by a record amount”:

The fall in demand comes as countries retreat from the “flight to safety” strategy they embarked on at the peak of the global financial crisis and could mean the US will have to pay more in debt interest.

For China, the sale of US Treasuries marks a reversal that it signalled last year when it said it would begin to reduce some of its holdings. Any changes in its behaviour are politically sensitive because it is the biggest US trade partner and has helped to finance US deficits.

Alan Ruskin, a strategist at RBS Securities, said that China’s behaviour showed that it felt “saturated” with Treasury paper. The change of sentiment could hurt the dollar and the Treasury market as the US has to look to other countries for financing.[74]

So, China has given the US a vote of non-confidence. This is evident of the slippery-slide down the road to a collapse of the US economy, and possibly, the US dollar, itself.

Is a Debt Crisis Coming to America?

All the warning signs are there: America is in dire straights when it comes to its total debt, proper actions have not been taken to reform the monetary or financial systems, the same problems remain prevalent, and the bailout and stimulus packages have further exposed the United States to astronomical debt levels. While the dollar will likely continue to go up as confidence in the Eurozone economies tumbles, this is not because the dollar is a good investment, but because the dollar is simply a better investment (for now) than the Euro, which isn’t saying much.

The Chinese moves to begin dumping US Treasuries is a signal that the issue of American debt has already weighed in on the functions and movements of the global financial system. While the day of reckoning may be months if not years away, it is coming nonetheless.

On February 15, it was reported that the Federal Reserve, having pumped $2.2 trillion into the economy, “must start pulling that money back.” As the Fed reportedly bought roughly $2 trillion in bad assets, it is now debating “how and when to sell those assets.”[75] As the Korea Times reported, “The problem: Do it too quickly and the Fed might cut off or curtail the recovery. Wait too long and risk setting off a punishing round of inflation.”[76]

In mid-February, there were reports of dissent within the Federal Reserve System, as Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, warned that, “The US must fix its growing debt problems or risk a new financial crisis.” He explained, “that rising debt was infringing on the central bank’s ability to fulfill its goals of maintaining price stability and long-term economic growth.” In January, he was the lone voice at a Fed meeting that said interest rates should not remain near zero for an “extended period.” He said the worst case scenario would be for the US government to have to again ask the Fed to print more money, and instead suggested that, “the administration must find ways to cut spending and generate revenue,” admitting that it would be a “painful and politically inconvenient” process.[77]

However, these reports are largely disingenuous, as it has placed focus on a superficial debt level. The United States, even prior to the onset of the economic crisis in 2007 and 2008, had long been a reckless spender. The cost of maintaining an empire is astronomical and beyond the actual means of any nation. Historically, the collapse of empires has as much or more to do with a collapse in their currency and fiscal system than their military defeat or collapse in war. Also important to note is that these processes are not mutually exclusive, but are, in fact, intricately interconnected.

As empires decline, the world order is increasingly marred in economic crises and international conflict. As the crisis in the economy worsens, international conflict and wars spread. As I have amply documented elsewhere, the United States, since the end of World War II, has been the global hegemon: maintaining the largest military force in the world, and not shying away from using it, as well as running the global monetary system. Since the 1970s, the US dollar has acted as a world reserve currency. Following the collapse of the USSR, the grand imperial strategy of America was to dominate Eurasia and control the world militarily and economically.

[See: Andrew Gavin Marshall, An Imperial Strategy for a New World Order: The Origins of World War III. Global Research: October 16, 2009]

Throughout the years of the Bush administration, the imperial strategy was given immense new life under the guise of the “war on terror.” Under this banner, the United States declared war on the world and all who oppose its hegemony. All the while, the administration colluded with the big banks and the Federal Reserve to artificially maintain the economic system. In the latter years of the Bush administration, this illusion began to come tumbling down. Never before in history has such a large nation wages multiple major theatre wars around the world without the public at home being fiscally restrained in some manner, either through higher taxes or interest rates. In fact, it was quite the opposite. The trillion dollar wars plunged the United States deeper into debt.

By 2007, the year that Northern Rock collapsed in the UK, signaling the start of the collapse of 2008, the total debt – domestic, commercial and consumer debt – of the United States stood at a shocking $51 trillion.[78]

As if this debt burden was not enough, considering it would be impossible to ever pay back, the past two years has seen the most expansive and rapid debt expansion ever seen in world history – in the form of stimulus and bailout packages around the world. In July of 2009, it was reported that, “U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.”[79]

That is worth noting once again: the “bailout” bill implemented under Bush, and fully supported and sponsored by President-elect Obama, has possibly bailed out the financial sector of up to $23.7 trillion. How could this be? After all, the public was told that the “bailout” was $700 billion.

In fact, the fine print in the bailout bill revealed that $700 billion was not a ceiling, as in, $700 billion was not the maximum amount of money that could be injected into the banks; it was the maximum that could be injected into the financial system “at any one time.” Thus, it became a “rolling amount.” It essentially created a back-door loophole for the major global banks, both domestic and foreign, to plunder the nation and loot it entirely. There was no limit to the money banks could get from the Fed. And none of the actions would be subject to review or oversight by Congress or the Judiciary, i.e., the people.[80]

This is why, as Obama became President in late January of 2009, his administration fully implemented the financial coup over the United States. The man who had been responsible for orchestrating the bailout of AIG, the buyout of Bear Stearns as a gift for JP Morgan Chase, and had been elected to run the Federal Reserve Bank of New York by the major global banks in New York (chief among them, JP Morgan Chase), had suddenly become Treasury Secretary under Obama. The Fed, and thus, the banks were now put directly in charge of the looting.

Obama then took on a team of economic advisers that made any astute economic observer flinch in terror. The titans of economic crisis and catastrophe had become the fox in charge of the chicken coop. Those who were instrumental in creating and constructing the economic crises of the previous decades and building the instruments and infrastructure that led to the current crisis, were with Obama, brought in to “solve” the crisis they created. Paul Volcker, former Chairman of the Federal Reserve and architect of the 1980s debt crisis, was now a top economic adviser to Obama. As well as this, Lawrence Summers joined Obama’s economic team, who had previously been instrumental in Bill Clinton’s Treasury Department in dismantling all banking regulations and creating the market for speculation and derivatives which directly led to the current crisis.

In short, the financial oligarchy is in absolute control of the United States government. Concurrently, the military structure of the American empire has firmly established its grip over foreign policy, as America’s wars are expanded into Pakistan, Yemen, and potentially Iran.

Make no mistake, a crisis is coming to America, it is only a question of when, and how severe.

Imperial Decline and the Rise of the New World Order

The decline of the American empire, an inevitable result of its half-century of exerting its political and economic hegemony around the world, is not an isolated event in the global political economy. The US declines concurrently with the rise of what is termed the “New World Order.”

America has been used by powerful western banking and corporate interests as an engine of empire, expanding their influence across the globe. Banks have no armies, so they must control nations; banks have no products, so they must control industries; banks have only money, and interest earned on it. Thus, they must ensure that industry and governments alike borrow money en masse to the point where they are so indebted, they can never emerge. As a result, governments and industries become subservient to the banking interests. Banks achieved this masterful feat through the construction of the global central banking system.

Bankers took control first of Great Britain through the Bank of England, building up the massive might of the British Empire, and spread into the rest of Europe, creating central banks in the major European empires. In the 20th Century, the central bankers took control of the United States through the creation of the Federal Reserve in 1913, prior to the outbreak of World War I.

[See: Andrew Gavin Marshall, Global Power and Global Government: Evolution and Revolution of the Central Banking System. Global Research: July 21, 2009]

Following World War I, a restructuring of the world order was undertaken. In part, these actions paved the way to the Great Depression, which struck in 1929. The Great Depression was created as a result of the major banks engaging in speculation, which was actively encouraged and financed by the Federal Reserve and other major central banks.

As a result of the Great Depression, a new institution was formed, the Bank for International Settlements (BIS), based in Basle, Switzerland. As historian Carroll Quigley explained, the BIS was formed to “remedy the decline of London as the world’s financial center by providing a mechanism by which a world with three chief financial centers in London, New York, and Paris could still operate as one.” He explained:

[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.[81]

The new order that is being constructed is not one in which there is another single global power, as many commentators suggest China may become, but rather that a multi-polar world order is constructed, in which the global political economy is restructured into a global governance structure: in short, the new world order is to be marked by the construction of a world government.

This is the context in which the solutions to the global economic crisis are being implemented. In April of 2009, the G20 set into motion the plans to form a global currency, which would presumably replace the US dollar as the world reserve currency. This new currency would either be operated through the IMF or the BIS, and would be a reserve currency whose value is determined as a basket of currencies (such as the dollar, yen, euro, etc), which would play off of one another, and whose value would be fixed to the global currency.

This process is being implemented, through long-term planning, simultaneously as we see the further emergence of regional currencies, as not only the Euro, but plans and discussions for other regional currencies are underway in North America, South America, the Gulf states, Africa and East Asia.

A 1988 article in the Economist foretold of a coming global currency by 2018, in which the author wrote that countries would have to give up monetary and economic sovereignty, however:

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.[82]

To create a global currency, and thus a global system of economic governance, the world would have to be plunged into economic and currency crises to force governments to take the necessary actions in moving towards a global currency.

From 1998 onwards, there have been several calls for the formation of a global central bank, and in the midst of the global economic crisis of 2008, renewed calls and actual actions and efforts undertaken by the G20 have sped up the development of a “global Fed” and world currency. A global central bank is being offered as a solution to prevent a future global economic crisis from occurring.

[See: Andrew Gavin Marshall, The Financial New World Order: Towards a Global Currency and World Government. Global Research: April 6, 2009]

In March of 2008, closely following the collapse of Bear Stearns, a major financial firm released a report stating that, “Financial firms face a ‘new world order’,” and that major banks would become much larger through mergers and acquisitions. There would be a new world order of banking consolidation.[83]

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.”[84]

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.”[85] However, what the article fails to point out is that the ‘new world order in banking’ is to be constructed by the bankers.

This process is going hand-in-hand with the formation of a new world order in global political structures, following the economic trends. As regionalism was spurred by economic initiatives, such as regional trading blocs and currency groupings, the political structure of a regional government followed closely behind. Europe was the first to undertake this initiative, with the formation of a European trading bloc, which became an economic union and eventually a currency union, and which, as a result of the recently passed Lisbon Treaty, is being formally established into a political union.

[See: Andrew Gavin Marshall, Forging a “New World Order” Under a One World Government. Global Research: August 13, 2009]

The new world order consists of the formation of regional governance structures, which are themselves submissive to a global governance structure, both economically and politically.

‘New Capitalism’

In the construction of a ‘New World Order’, the capitalist system is under intense reform. Capitalism has, since its inception, altered its nature and forms. In the midst of the current global economic crisis, the construction of the ‘New Capitalism’ is based upon the ‘China model’; that is, ‘Totalitarian Capitalism’.

Governments will no longer stand behind the ‘public relations’ – propagandized illusion of ‘protecting the people’. When an economy collapses, the governments throw away their public obligations, and act for the interests of their private owners. Governments will come to the aid of the powerful banks and corporations, not the people, as “The bourgeoisie resorts to fascism less in response to disturbances in the street than in response to disturbances in their own economic system.”[86] During a large economic crisis:

[The state] rescues business enterprises on the brink of bankruptcy, forcing the masses to foot the bill. Such enterprises are kept alive with subsidies, tax exemptions, orders for public works and armaments. In short, the state thrusts itself into the breach left by the vanishing private customers. [. . . ] Such maneuvers are difficult under a democratic regime [because people still] have some means of defense [and are] still capable of setting some limit to the insatiable demands of the money power. [In] certain countries and under certain conditions, the bourgeoisie throws its traditional democracy overboard.[87]

Those who proclaim the actions of western governments ‘socialist’ are misled, as the ‘solutions’ are of a different nature. Daniel Guerin wrote in Fascism and Big Business about the nature of the fascist economies of Italy and Germany in the lead up to World War II. Guerin wrote of the actions of Italian and German governments to bail out big businesses and banks in an economic crisis:

It would be a mistake to interpret this state intervention as ‘socialist’ in character. It is brought about not in the interest of the community but in the exclusive interest of the capitalists.[88]

Fascist economic policy:

[I]ssues paper and ruins the national currency at the expense of all the people who live on fixed incomes from investments, savings, pensions, government salaries, etc., – and also the working class, whose wages remain stable or lag far behind the rise in the cost of living. [. . .] The enormous expenses of the fascist state do not appear in the official budget, [hiding the inflation].[89]

[. . . ] The hidden inflation produces the same effects as open inflation: the purchasing power of money is lessened.[90]

The bureaucracy of the fascist state becomes much more powerful in directing the economy, and is advised by the ‘capitalist magnates’, who “become the economic high command – no longer concealed, as previously, but official – of the state. Permanent contact is established between them and the bureaucratic apparatus. They dictate, and the bureaucracy executes.”[91] This is exactly the nature of the Treasury Department and Federal Reserve, most especially since the Obama administration took office.

In November of 2008, the National Intelligence Council (NIC) issued a report in collaboration between all sixteen US intelligence agencies and major international foundations and think tanks, in which they assessed and analyzed general trends in the world until 2025. When it reported on trends in ‘democratization’, discussing the spread and nature of democracy in the world, the report warned:

[A]dvances [in democracy] are likely to slow and globalization will subject many recently democratized countries to increasing social and economic pressures that could undermine liberal institutions. [. . . ] The better economic performance of many authoritarian governments could sow doubts among some about democracy as the best form of government.

[. . . ] Even in many well-established democracies [i.e., the West], 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.[92]

The warning from Daniel Guerin is vital to understanding this trend: “The bourgeoisie resorts to fascism less in response to disturbances in the street than in response to disturbances in their own economic system.”[93] Totalitarianism is on the rise, as David Lyon wrote:

The ultimate feature of the totalitarian domination is the absence of exit, which can be achieved temporarily by closing borders, but permanently only by a truly global reach that would render the very notion of exit meaningless. This in itself justifies questions about the totalitarian potential of globalization. [. . . ] Is abolition of borders intrinsically (morally) good, because they symbolize barriers that needlessly separate and exclude people, or are they potential lines of resistance, refuge and difference that may save us from the totalitarian abyss? [I]f globalization undermines the tested, state-based models of democracy, the world may be vulnerable to a global totalitarian etatization, [i.e., centralization and control].[94]

In 2007, the British Defense Ministry released a report in which they analyzed future trends in the world. It stated in regards to social problems, “The middle classes could become a revolutionary class, taking the role envisaged for the proletariat by Marx.” Interestingly:

The thesis is based on a growing gap between the middle classes and the super-rich on one hand and an urban under-class threatening social order: ‘The world’s middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest’. Marxism could also be revived, it says, because of global inequality. An increased trend towards moral relativism and pragmatic values will encourage people to seek the ‘sanctuary provided by more rigid belief systems, including religious orthodoxy and doctrinaire political ideologies, such as popularism and Marxism’.[95]

The general trend has thus become the reformation of the capitalist system into a system based upon the ‘China model’ of totalitarian capitalism. The capitalist class fear potential revolutionary sentiment among the middle and lower classes of the world. Obama was a well-packaged Wall Street product, sold to the American people and the people of the world on the promise of ‘Hope’ and ‘Change.’ Obama was put in place to pacify resistance.

Prior to Obama becoming President, the American people were becoming united in their opposition against not only the Bush administration, but Congress and the government in general. Both the president and Congress were equally hated; the people were uniting. Since Obama became President, the people have been turned against one another: ‘conservatives’ blame the ‘liberals’ and ‘socialists’ for all the problems, pointing fingers at Obama (who is nothing more than a figurehead), while those on the left point at the Republicans and ‘conservatives’ and Bush, placing all the blame on them. The right defends the Republicans; the left defends Obama. The people have been divided, arguably more so than at any time in recent history.

In dividing the people against each other, those in power have been able to quell resistance against them, and have continued to loot and plunder the nation and people, while using its military might to loot and plunder foreign nations and people. Obama is not to provide hope and change for the American people; his purpose was to provide the illusion of ‘change’ and provide ‘hope’ to the elites in preventing a purposeful and powerful opposition or rebellion among the people. Meanwhile, the government has been preparing for the potentiality of great social and civil unrest following a future collapse or crisis. Instead of coming to the aid of the people, the government is preparing to control and oppress the people.

Could Martial Law Come to America?

Processes undertaken in the American political establishment in previous decades, and rapidly accelerated under the Bush administration and carried on by the Obama administration, have set the course for the imposition of a military government in America. Readily armed with an oppressive state apparatus and backed by the heavy surveillance state apparatus, the ‘Homeland Security’ state is about controlling the population, not protecting them.

In January of 2006, KBR, a subsidiary of the then-Vice President Cheney’s former corporation, Halliburton, received a contract from the Department of Homeland Security:

[T]o support the Department of Homeland Security’s (DHS) U.S. Immigration and Customs Enforcement (ICE) facilities in the event of an emergency. [The contract] has a maximum total value of $385 million over a five-year term, consisting of a one-year based period and four one-year options, the competitively awarded contract will be executed by the U.S. Army Corps of Engineers, Fort Worth District. KBR held the previous ICE contract from 2000 through 2005.

[It further] provides for establishing temporary detention and processing capabilities to augment existing ICE Detention and Removal Operations (DRO) Program facilities in the event of an emergency influx of immigrants into the U.S., or to support the rapid development of new programs. [. . . ] The contract may also provide migrant detention support to other U.S. Government organizations in the event of an immigration emergency, as well as the development of a plan to react to a national emergency, such as a natural disaster. [emphasis added][96]

Put simply, the contract is to develop a system of ‘internment camps’ inside the United States to be used in times of ‘emergency’. Further, as Peter Dale Scott revealed in his book, The Road to 9/11:

On February 6, 2007, homeland security secretary Michael Chertoff announced that the fiscal year 2007 federal budget would allocate more than $400 million to add sixty-seven hundred additional detention beds (an increase of 32 percent over 2006). [This was] in partial fulfillment of an ambitious ten-year Homeland Security strategic plan, code-named Endgame, authorized in 2003, [designed to] remove all removable aliens [and] potential terrorists.[97]

As Scott previously wrote, “the contract evoked ominous memories of Oliver North’s controversial Rex-84 ‘readiness exercise’ in 1984. This called for the Federal Emergency Management Agency (FEMA) to round up and detain 400,000 imaginary ‘refugees,’ in the context of ‘uncontrolled population movements’ over the Mexican border into the United States.” However, it was to be a cover for the rounding up of ‘subversives’ and ‘dissenters’. Daniel Ellsberg, who leaked the ‘Pentagon papers’ in 1971, stated that, “Almost certainly this [new contract] is preparation for a roundup after the next 9/11 for Mid-Easterners, Muslims and possibly dissenters.”[98]

In February of 2008, an article in the San Francisco Chronicle, co-authored by a former US Congressman, reported that, “Beginning in 1999, the government has entered into a series of single-bid contracts with Halliburton subsidiary Kellogg, Brown and Root (KBR) to build detention camps at undisclosed locations within the United States. The government has also contracted with several companies to build thousands of railcars, some reportedly equipped with shackles, ostensibly to transport detainees.”[99]

Further, in February of 2008, the Vancouver Sun reported that:

Canada and the U.S. have signed an agreement that paves the way for the militaries from either nation to send troops across each other’s borders during an emergency, but some are questioning why the Harper government has kept silent on the deal. [. . .] Neither the Canadian government nor the Canadian Forces announced the new agreement, which was signed Feb. 14 in Texas [but the] U.S. military’s Northern Command, however, publicized the agreement with a statement outlining how its top officer, Gen. Gene Renuart, and Canadian Lt.-Gen. Marc Dumais, head of Canada Command, signed the plan, which allows the military from one nation to support the armed forces of the other nation in a civil emergency.

[. . . ] If U.S. forces were to come into Canada they would be under tactical control of the Canadian Forces but still under the command of the U.S. military.[100]

Commenting on the Military Commissions Act of 2006, Yale law and political science professor Bruce Ackerman wrote in the Los Angeles Times that the legislation “authorizes the president to seize American citizens as enemy combatants, even if they have never left the United States. And once thrown into military prison, they cannot expect a trial by their peers or any other of the normal protections of the Bill of Rights.” Further, it states that the legislation “grants the president enormous power over citizens and legal residents. They can be designated as enemy combatants if they have contributed money to a Middle Eastern charity, and they can be held indefinitely in a military prison.” Not only that, but, “ordinary Americans would be required to defend themselves before a military tribunal without the constitutional guarantees provided in criminal trials.” Startlingly, “Legal residents who aren’t citizens are treated even more harshly. The bill entirely cuts off their access to federal habeas corpus, leaving them at the mercy of the president’s suspicions.”[101]

Senator Patrick Leahey made a statement on February 2007 in which he discussed the John Warner Defense Authorization Act of 2007, saying:

Last year, Congress quietly made it easier for this President or any President to declare martial law. That’s right: In legislation added at the Administration’s request to last year’s massive Defense Authorization Bill, it has now become easier to bypass longtime posse comitatus restrictions that prevent the federal government’s use of the military, including a federalized National Guard, to perform domestic law enforcement duties.

He added that, “posse comitatus [is] the legal doctrine that bars the use of the military for law enforcement directed at the American people here at home.” The Bill is an amendment to the Insurrection Act, of which Leahey further commented:

When the Insurrection Act is invoked, the President can — without the consent of the respective governors — federalize the National Guard and use it, along with the entire military, to carry out law enforcement duties. [This] is a sweeping grant of authority to the President. [. . . ] In addition to the cases of insurrection, the Act can now be invoked to restore public order after a terrorist attack, a natural disaster, a disease outbreak, or — and this is extremely broad — ‘other condition’.[102]

On May 9, 2007, the White House issued a press release about the National Security Presidential Directive (NSPD) 51, also known as the “National Security and Homeland Security Presidential Directive.” This directive:

[P]rescribes continuity requirements for all executive departments and agencies, and provides guidance for State, local, territorial, and tribal governments, and private sector organizations in order to ensure a comprehensive and integrated national continuity program that will enhance the credibility of our national security posture and enable a more rapid and effective response to and recovery from a national emergency.

The document defines “catastrophic emergency” as, “any incident, regardless of location, that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the U.S. population, infrastructure, environment, economy, or government functions.” It explains “Continuity of Government” (COG), as “a coordinated effort within the Federal Government’s executive branch to ensure that National Essential Functions continue to be performed during a Catastrophic Emergency.” [emphasis added]

The directive states that, “The President shall lead the activities of the Federal Government for ensuring constitutional government. In order to advise and assist the President in that function, the Assistant to the President for Homeland Security and Counterterrorism (APHS/CT) is hereby designated as the National Continuity Coordinator.”[103]

Essentially, in time of a “catastrophic emergency”, the President takes over total control of the executive, legislative and judicial branches of government in order to secure “continuity”. In essence, the Presidency would become an “Executive Dictatorship”.

In late September of 2008, in the midst of the financial crisis, the Army Times, an official media outlet of the Pentagon, reported that, “Helping ‘people at home’ may become a permanent part of the active Army,” as the 3rd Infantry Division’s 1st Brigade Combat Team, having spent years patrolling Iraq, are now “training for the same mission — with a twist — at home.” Further:

They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack.[104]

None of the authorizations, bills, executive orders, or contracts related to the declaration of marital law and suspension of democracy in the event of an ‘emergency’ have been repealed by the Obama administration.

In fact, as the New York Times revealed in July 2009, the Obama administration has decidedly left in place the Bush administration decisions regarding the government response to a national emergency in ‘Continuity of Government’ (COG) plans in establishing a ‘shadow government’:

A shift in authority has given military officials at the White House a bigger operational role in creating a backup government if the nation’s capital were “decapitated” by a terrorist attack or other calamity, according to current and former officials involved in the decision.

The move, which was made in the closing weeks of the administration of President George W. Bush, came after months of heated internal debate about the balance of power and the role of the military in a time of crisis, participants said. Officials said the Obama administration had left the plan essentially intact.

Under the revamped structure, the White House Military Office, which reports to the office of the White House chief of staff, has assumed a more central role in setting up a temporary “shadow government” in a crisis.

The Obama administration announced that their continuity plans were ‘settled’ and they “drew no distance between their own policies and those left behind by the Bush administration.”[105] In July of 2009, it was also reported on moves by the Obama administration to implement a system of ‘preventive detention’. With this, any semblance of democratic accountability and freedom have been utterly gutted and disemboweled; the Republic is officially dead:

[‘Preventive detention’] is to be a permanent, institutionalized detention scheme with the power vested in the President going forward to imprison people with no charges.

[. . . ] Manifestly, this isn’t about anything other than institutionalizing what has clearly emerged as the central premise of the Obama Justice System:  picking and choosing what level of due process each individual accused Terrorist is accorded, to be determined exclusively by what process ensures that the state will always win.   If they know they’ll convict you in a real court proceeding, they’ll give you one; if they think they might lose there, they’ll put you in a military commission; if they’re still not sure they will win, they’ll just indefinitely imprison you without any charges.

[. . .] It’s Kafkaesque show trials in their most perverse form:  the outcome is pre-determined (guilty and imprisoned) and only the process changes.  That’s especially true since, even where a miscalculation causes someone to be tried but then acquitted, the power to detain them could still be asserted.[106]

Society, and with it, any remaining ‘democracy’ is being closed down. In this economic crisis, as Daniel Guerin warned decades ago, the financial oligarchy have chosen to ‘throw democracy overboard’, and have opted for the other option: totalitarian capitalism; fascism.

In Conclusion

The current crisis is not merely a failure of the US housing bubble, that is but a symptom of a much wider and far-reaching problem. The nations of the world are mired in exorbitant debt loads, as the sovereign debt crisis spreads across the globe, entire economies will crumble, and currencies will collapse while the banks consolidate and grow. The result will be to properly implement and construct the apparatus of a global government structure. A central facet of this is the formation of a global central bank and a global currency.

The people of the world have been lulled into a false sense of security and complacency, living under the illusion of an economic recovery. The fact remains: it is only an illusion, and eventually, it will come tumbling down. The people have been conned into handing their governments over to the banks, and the banks have been looting and pillaging the treasuries and wealth of nations, and all the while, and making the people pay for it.

There never was a story of more woe, than that of human kind, and their monied foe.

Truly, the people of the world do need a new world order, but not one determined and constructed by and for those who have created the past failed world orders. It must be a world order directed and determined by the people of the world, not the powerful. But to do this, the people must take back the power.

The way to achieving a stable economy is along the path of peace. War and economic crises play off of one another, and are systematically linked. Imperialism is the driver of this system, and behind it, the banking establishment as the financier.

Peace is the only way forward, in both political and economic realms. Peace is the pre-requisite for social sustainability and for a truly great civilization.

The people of the world must pursue and work for peace and justice on a global scale: economically, politically, socially, scientifically, artistically, and personally. It’s asking a lot, but it’s our only option. We need to have ‘hope’, a word often strewn around with little intent to the point where it has come to represent failed expectations. We need hope in ourselves, in our ability to throw off the shackles that bind us and in our diversity and creativity construct a new world that will benefit all.

No one knows what this world would look like, or how exactly to get there, least of all myself. What we do know is what it doesn’t look like, and what road to steer clear of. The time has come to retake our rightful place as the commanders of our own lives. It must be freedom for all, or freedom for none. This is our world, and we have been given the gift of the human mind and critical thought, which no other living being can rightfully boast; what a shame it would be to waste it.

Notes

[1]        Dan Harris, Pessimism Porn? Economic Forecasts Get Lurid. ABC News: April 9, 2009: http://abcnews.go.com/Technology/story?id=7299825&page=1

Hugo Lindgren, Pessimism Porn. New York Magazine: February 1, 2009: http://nymag.com/news/intelligencer/53858/

[2]        Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend. John Wiley and Sons, 2004: page 38

[3]        Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend. John Wiley and Sons, 2004: page 36

[4]        Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend. John Wiley and Sons, 2004: page 37

[5]        Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend. John Wiley and Sons, 2004: page 38

[6]        Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend. John Wiley and Sons, 2004: pages 57-60

[7]        Firoze Manji and Carl O’Coill, The Missionary position: NGOs and development in Africa. International Affairs: Issue 78, Vol. 3, 2002: pages 567-568

[8]        Firoze Manji and Carl O’Coill, The Missionary position: NGOs and development in Africa. International Affairs: Issue 78, Vol. 3, 2002: page 568

[9]        Firoze Manji and Carl O’Coill, The Missionary position: NGOs and development in Africa. International Affairs: Issue 78, Vol. 3, 2002: page 578

[10]      Firoze Manji and Carl O’Coill, The Missionary position: NGOs and development in Africa. International Affairs: Issue 78, Vol. 3, 2002: page 579

[11]      Ambrose Evans-Pritchard, BIS warns of Great Depression dangers from credit spree. The Telegraph: June 27, 2009:

http://www.telegraph.co.uk/finance/economics/2811081/BIS-warns-of-Great-Depression-dangers-from-credit-spree.html

[12]      Gill Montia, Central bank body warns of Great Depression. Banking Times: June 9, 2008:

 http://www.bankingtimes.co.uk/09062008-central-bank-body-warns-of-great-depression/

[13]      David Reilly, Secret Banking Cabal Emerges From AIG Shadows: David Reilly. Bloomberg: January 29, 2010: http://www.bloomberg.com/apps/news?pid=20601039&sid=aaIuE.W8RAuU

[14]      AP, Bernanke, Paulson: Congress must act now. MSNBC: September 23, 2008: http://www.msnbc.msn.com/id/26850571/

[15]      Chris Isidore, Paulson, Bernanke: Slow growth ahead. CNN Money: February 14, 2008: http://money.cnn.com/2008/02/14/news/economy/bernanke_paulson/index.htm

[16]      People should be more scared than mad, Paulson says. Politico: September 24, 2008: http://www.politico.com/blogs/thecrypt/0908/People_should_be_more_scared_than_mad_Paulson_says.html

[17]      Chris Martenson, What the latest bailout plan means. ChrisMartenson.com: September 21, 2008: http://www.chrismartenson.com/blog/what-latest-bailout-plan-means/5149

[18]      Alison Fitzgerald and John Brinsley, Treasury Seeks Authority to Buy $700 Billion Assets. Bloomberg: September 20, 2008: http://www.bloomberg.com/apps/news?pid=20601087&sid=aZ2aFDx8_idM&refer=home

[19]      Larisa Alexandrovna, Welcome to the final stages of the coup. Huffington Post: September 29, 2008: http://www.huffingtonpost.com/larisa-alexandrovna/welcome-to-the-final-stag_b_127990.html

[20]      Liam Halligan, A default by the US government is no longer unthinkable. The Telegraph: September 20, 2008: http://www.telegraph.co.uk/finance/comment/liamhalligan/3023967/A-default-by-the-US-government-is-no-longer-unthinkable.html

[21]      Mike Allen, Exclusive: Foreign banks may get help. Politico: September 21, 2008: http://www.politico.com/news/stories/0908/13690.html

[22]      Steve Watson, Democratic Congressman: Representatives Were Threatened With Martial Law In America Over Bailout Bill. Infowars.com: October 3, 2008: http://www.infowars.net/articles/october2008/031008Sherman.htm

[23]      Ryan Grim, Dick Durbin: Banks “Frankly Own The Place”. Huffington Post: April 29, 2009: http://www.huffingtonpost.com/2009/04/29/dick-durbin-banks-frankly_n_193010.html

[24]      GRETCHEN MORGENSON and DON VAN NATTA Jr., In Crisis, Banks Dig In for Fight Against Rules. The New York Times: May 31, 2009: http://www.nytimes.com/2009/06/01/business/01lobby.html

[25]      Kerry Capell, The Stunning Collapse of Iceland. BusinessWeek: October 9, 2008: http://www.businessweek.com/globalbiz/content/oct2008/gb2008109_947306.htm?chan=globalbiz_europe+index+page_top+stories

[26]      Toby Sanger, Iceland’s Economic Meltdown Is a Big Flashing Warning Sign. AlterNet: October 21, 2008: http://www.alternet.org/economy/103525/iceland%27s_economic_meltdown_is_a_big_flashing_warning_sign/?comments=view&cID=1038826&pID=1038711

[27]      Tracy McVeigh, The party’s over for Iceland, the island that tried to buy the world. The Observer: October 5, 2008: http://www.guardian.co.uk/world/2008/oct/05/iceland.creditcrunch

[28]      Ibid.

[29]      Arsaell Valfells, Gordon Brown Killed Iceland. Forbes: October 16, 2008: http://www.forbes.com/2008/10/16/brown-iceland-britain-oped-cx_av_valfells.html?referer=sphere_related_content&referer=sphere_related_content

[30]      Ibid.

[31]      Councils ‘not reckless with cash’. BBC: October 10, 2008: http://news.bbc.co.uk/1/hi/uk_politics/7660438.stm

[32]      Economic programme in cooperation with IMF. The Icelandic Government Information Centre: October 24, 2008: http://www.iceland.org/info/iceland-imf-program/

[33]      David Ibison, Iceland’s rescue package flounders. The Financial Times: November 12, 2008

[34]      David Blair, Financial crisis causes Iceland’s government to collapse. The Telegraph: January 27, 2009: http://www.telegraph.co.uk/news/worldnews/europe/iceland/4348312/Financial-crisis-causes-Icelands-government-to-collapse.html

[35]      Iceland applies to join European Union. CNN: July 17, 2009: http://www.cnn.com/2009/WORLD/europe/07/17/iceland.eu.application/index.html?iref=newssearch

[36]      Omar Valdimarsson, Iceland parliament approves debt bill. Reuters: August 28, 2009: http://www.reuters.com/article/idUSTRE57R3B920090828

[37]      Rowena Mason, IMF and Sweden to delay Iceland loans. The Telegraph: January 14, 2010: http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6990795/IMF-and-Sweden-to-delay-Iceland-loans.html

[38]      Justyna Pawlak, EU to recommend start of Iceland talks – EU official. Reuters: February 16, 2010: http://www.reuters.com/article/idUSLDE61F25D20100216

[39]      Paul Lewis, Dubai’s six-year building boom grinds to halt as financial crisis takes hold. The Guardian: February 13, 2009: http://www.guardian.co.uk/world/2009/feb/13/dubai-boom-halt

[40]      Larry Elliott and Heather Stewart, Fears of double-dip recession grow as Dubai crashes. The Guardian: November 26, 2009: http://www.guardian.co.uk/business/2009/nov/26/double-dip-recession-dubai-debt

[41]      Hugh Tomlinson, UAE minister claims Dubai crisis is over. The Times Online: December 17, 2009: http://business.timesonline.co.uk/tol/business/economics/article6960523.ece

[42]      AP, Dubai debt fears resurface as questions linger. Forbes: February 16, 2010: http://www.forbes.com/feeds/ap/2010/02/16/business-financials-ml-dubai-financial-crisis_7359531.html

[43]      Alastair Marsh, Markets hit as fears over Dubai debt rekindled. The Independent: February 16, 2010: http://www.independent.co.uk/news/business/news/markets-hit-as-fears-over-dubai-debt-rekindled-1900730.html

[44]      Ed Harris, Greece turns to Socialists to fight economic crisis. London Evening Standard: October 5, 2009: http://www.thisislondon.co.uk/standard/article-23752278-greece-turns-to-socialists-to-fight-economic-crisis.do

[45]      Ambrose Evans-Pritchard, Greece defies Europe as EMU crisis turns deadly serious. The Telegraph: December 13, 2009: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6804156/Greece-defies-Europe-as-EMU-crisis-turns-deadly-serious.html

[46]      Elena Becatoros, Greece prepares economic crisis plan. The Globe and Mail: December 14, 2009: http://www.theglobeandmail.com/report-on-business/greece-prepares-economic-crisis-plan/article1399496/

[47]      LOUISE STORY, LANDON THOMAS Jr. and NELSON D. SCHWARTZ, Wall St. Helped to Mask Debt Fueling Europe’s Crisis. The New York Times: February 13, 2010: http://www.nytimes.com/2010/02/14/business/global/14debt.html?adxnnl=1&adxnnlx=1266501631-XefUT62RSKhWj6xKSCX37Q

[48]      Ibid.

[49]      Sam Fleming and Kirsty Walker, The euro? It’s a great success, says Mandy as Greece turmoil sends single currency into worst ever crisis. The UK Daily Mail: February 12, 2010: http://www.dailymail.co.uk/news/article-1250094/Greece-debt-crisis-Britons-pay-3-5bn-bailout.html

[50]      Kate Connolly, Greek debt crisis: the view from Germany. The Guardian: February 11, 2010: http://www.guardian.co.uk/world/2010/feb/11/germany-greece-tax-debt-crisis

[51]      Ambrose Evans-Pritchard, Greece loses EU voting power in blow to sovereignty. The Telegraph: February 16, 2010: http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7252288/Greece-loses-EU-voting-power-in-blow-to-sovereignty.html

[52]      Ambrose Evans-Pritchard, Fears of ‘Lehman-style’ tsunami as crisis hits Spain and Portugal. The Telegraph: February 4, 2010: http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7159456/Fears-of-Lehman-style-tsunami-as-crisis-hits-Spain-and-Portugal.html

[53]      Ambrose Evans-Pritchard, BIS warns of Great Depression dangers from credit spree. The Telegraph: June 25, 2007: http://www.telegraph.co.uk/finance/economics/2811081/BIS-warns-of-Great-Depression-dangers-from-credit-spree.html

[54]      Ambrose Evans-Pritchard, BIS slams central banks, warns of worse crunch to come. The Telegraph: June 30, 2008: http://www.telegraph.co.uk/finance/markets/2792450/BIS-slams-central-banks-warns-of-worse-crunch-to-come.html

[55]      Heather Scoffield, Financial repairs must continue: central banks. The Globe and Mail: July 29, 2009: http://v1.theglobeandmail.com/servlet/story/RTGAM.20090629.wcentralbanks0629/BNStory/HEATHER+SCOFFIELD/

[56]      Simone Meier, BIS Sees Risk Central Banks Will Raise Interest Rates Too Late. Bloomberg: June 29, 2009: http://www.bloomberg.com/apps/news?pid=20601068&sid=aOnSy9jXFKaY

[57]      David Uren, Bank for International Settlements warning over stimulus benefits. The Australian: June 30, 2009: http://www.theaustralian.com.au/news/bank-for-international-settlements-warning-over-stimulus-benefits/story-0-1225743622643

[58]      Edmund Conway, S&P’s warning to Britain marks the next stage of this global crisis. The Telegraph: May 23, 2009: http://www.telegraph.co.uk/finance/financetopics/recession/5373334/SandPs-warning-to-Britain-marks-the-next-stage-of-this-global-crisis.html

[59]      Robert Cookson and Sundeep Tucker, Economist warns of double-dip recession. The Financial Times: September 14, 2009: http://www.ft.com/cms/s/0/e6dd31f0-a133-11de-a88d-00144feabdc0.html

[60]      Patrick Jenkins, BIS head worried by complacency. The Financial Times: September 20, 2009: http://www.ft.com/cms/s/0/a7a04972-a60c-11de-8c92-00144feabdc0.html?catid=4&SID=google

[61]      Robert Cookson and Victor Mallet, Societal soul-searching casts shadow over big banks. The Financial Times: September 18, 2009: http://www.ft.com/cms/s/0/7721033c-a3ea-11de-9fed-00144feabdc0.html

[62]      Ambrose Evans-Pritchard, Derivatives still pose huge risk, says BIS. The Telegraph: September 13, 2009: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6184496/Derivatives-still-pose-huge-risk-says-BIS.html

[63]      Ambrose Evans-Pritchard, Morgan Stanley fears UK sovereign debt crisis in 2010. The Telegraph: November 30, 2009: http://www.telegraph.co.uk/finance/economics/6693162/Morgan-Stanley-fears-UK-sovereign-debt-crisis-in-2010.html

[64]      Ibid.

[65]      Brett Arends, What a Sovereign-Debt Crisis Could Mean for You. The Wall Street Journal: December 18, 2009: http://online.wsj.com/article/SB10001424052748703323704574602030789251824.html

[66]      Edmund Conway, A 2010 sovereign debt crisis could still cause UK banking chaos. The Telegraph: January 4, 2010: http://www.telegraph.co.uk/finance/economics/6928164/A-2010-sovereign-debt-crisis-could-still-cause-UK-banking-chaos.html

[67]      Edmund Conway, ‘Significant chance’ of second financial crisis, warns World Economic Forum. The Telegraph: January 14, 2010: http://www.telegraph.co.uk/finance/financetopics/davos/6990433/Significant-chance-of-second-financial-crisis-warns-World-Economic-Forum.html

[68]      Nouriel Roubini and Arpitha Bykere, The Coming Sovereign Debt Crisis. Forbes: January 14, 2010: http://www.forbes.com/2010/01/13/sovereign-debt-crisis-opinions-colummnists-nouriel-roubini-arpitha-bykere.html

[69]      Niall Ferguson, A Greek crisis is coming to America. The Financial Times: February 10, 2010: http://www.ft.com/cms/s/0/f90bca10-1679-11df-bf44-00144feab49a.html

[70]      Indira A.R. Lakshmanan, Clinton Urges China to Keep Buying U.S. Treasury Securities. Bloomberg: February 22, 2009: http://www.bloomberg.com/apps/news?pid=20601070&sid=apSqGtcNsqSY

[71]      Agencies, China to keep buying US Treasuries: central banker. China Daily: March 23, 2009: http://www.chinadaily.com.cn/bizchina/2009-03/23/content_7606971.htm

[72]      Jonathan Stempel, Buffett says U.S. Treasury bubble one for the ages. Reuters: February 28, 2009: http://uk.reuters.com/article/idUKTRE51R1Q720090228

[73]      Paul R. La Monica, China still likes us … for now. CNN Money: September 16, 2009: http://money.cnn.com/2009/09/16/markets/thebuzz/index.htm

[74]      Alan Rappeport, Foreign demand falls for Treasuries. The Financial Times: February 17, 2010: http://www.ft.com/cms/s/0/f06667d2-1b63-11df-838f-00144feab49a.html

[75]      Barrie McKenna, Fed weighs sale of mortgage securities. CTV: February 17, 2010: http://www.ctv.ca/generic/generated/static/business/article1471824.html

[76]      Dale McFeatters, Fed Plans to Wind Down $2.2 Tril. Stake. Korea Times: February 15, 2010: http://www.koreatimes.co.kr/www/news/opinon/2010/02/160_60822.html

[77]      Alan Rappeport, Lone voice warns of debt threat to Fed. The Financial Times: February 16, 2010: http://www.ft.com/cms/s/0/c918b8dc-1b37-11df-953f-00144feab49a.html

[78]      FIABIC, US home prices the most vital indicator for turnaround. FIABIC Asia Pacific: January 19, 2009: http://www.fiabci-asiapacific.com/index.php?option=com_content&task=view&id=133&Itemid=41

Alexander Green, The National Debt: The Biggest Threat to Your Financial Future. Investment U: August 25, 2008: http://www.investmentu.com/IUEL/2008/August/the-national-debt.html

John Bellamy Foster and Fred Magdoff, Financial Implosion and Stagnation. Global Research: May 20, 2009: http://www.globalresearch.ca/index.php?context=va&aid=13692

[79]      Dawn Kopecki and Catherine Dodge, U.S. Rescue May Reach $23.7 Trillion, Barofsky Says (Update3). Bloomberg: July 20, 2009: http://www.bloomberg.com/apps/news?pid=20601087&sid=aY0tX8UysIaM

[80]      Chris Martenson, What the latest bailout plan means. ChrisMartenson.com: September 21, 2008: http://www.chrismartenson.com/blog/what-latest-bailout-plan-means/5149

[81]      Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: Macmillan Company, 1966), 324-325

[82]      Get ready for the phoenix. The Economist: Vol. 306: January 9, 1988: pages 9-10

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

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

[85]      Michael Lafferty, New world order in banking necessary after abject failure of present model. The Times Online: February 24, 2009: http://business.timesonline.co.uk/tol/business/management/article5792585.ece

[86]      Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 22

[87]      Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 23

[88]      Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 215

[89]      Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 224

[90]      Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 230

[91]      Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 239

[92]      NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: pages 87:
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[93]      Daniel Guerin, Fascism and Big Business. Monad Press, 1973: page 22

[94]      David Lyon, Theorizing surveillance: the panopticon and beyond. Willan Publishing, 2006: page 71

[95]      Richard Norton-Taylor, Revolution, flashmobs, and brain chips. A grim vision of the future. The Guardian: April 9, 2007:
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[96]      KBR, KBR Awarded U.S. Department of Homeland Security Contingency Support Project for Emergency Support Services. Press Releases: 2006 Archive, January 24, 2006: http://www.kbr.com/news/2006/govnews_060124.aspx

[97]      Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007, page 240

[98]      Peter Dale Scott, Homeland Security Contracts for Vast New Detention Camps. Pacific News Service: February 8, 2006:
http://news.pacificnews.org/news/view_article.html?article_id=eed74d9d44c30493706fe03f4c9b3a77

[99]      Lewis Seiler and Dan Hamburg, Rule by Fear or Rule by Law? The San Francisco Chronicle: February 4, 2008:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/04/ED5OUPQJ7.DTL

[100]    David Pugliese, Canada-U.S. pact allows cross-border military activity. The  Vancouver Sun: February 23, 2008:

http://www.canada.com/vancouversun/news/story.html?id=ba99826e-f9b7-42a4-9b0a-f82134b92e7e

[101]    Bruce Ackerman, The White House Warden. Los Angeles Times: September 28, 2006: 

http://www.law.yale.edu/news/3531.htm

[102]    Patrick Leahy, Statement Of Sen. Patrick Leahy On Legislation To Repeal Changes To  The Insurrection Act. February 7, 2007:  http://leahy.senate.gov/press/200702/020707.html

[103]    The White House, National Security and Homeland Security Presidential Directive.  Office of the Press Secretary: May 9, 2007:

http://georgewbush-whitehouse.archives.gov/news/releases/2007/05/20070509-12.html

[104]    Gina Cavallaro, Brigade homeland tours start Oct. 1. The Army Times: September 30, 2008: http://www.armytimes.com/news/2008/09/army_homeland_090708w/

[105]    ERIC LICHTBLAU and JAMES RISEN, Power Shifts in Plan for Capital Calamity. The New York Times: July 27, 2009: http://www.nytimes.com/2009/07/28/us/politics/28continuity.html

[106]    Glen Greenwald, First steps taken to implement preventive detention, military commissions. Salon: July 21, 2009: http://www.salon.com/opinion/greenwald/2009/07/21/detention/index.html