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Global Power Project: Central Bankers and the Institute of International Finance, Part 3

Global Power Project: Central Bankers and the Institute of International Finance, Part 3

By: Andrew Gavin Marshall

Originally posted at Occupy.com

Left to right: Then-Managing Director of the IIF Charles Dallara, then-President of the European Central Bank Jean-Claude Trichet, then-Governor of the Bank of Canada and Chairman of the Financial Stability Board Mark Carney, then-CEO of Deutsche Bank and Chairman of the IIF Josef Ackermann

Left to right: Then-Managing Director of the IIF Charles Dallara, then-President of the European Central Bank Jean-Claude Trichet, then-Governor of the Bank of Canada and Chairman of the Financial Stability Board Mark Carney, then-CEO of Deutsche Bank and Chairman of the IIF Josef Ackermann

In Part 1 of the Global Power Project exposé on the Institute of International Finance, I examined the origins and evolution of an organization representing the interests of global banks. In Part 2, I looked at the role played by the IIF and its leadership during the European debt crisis. In this third and final part in the series, I examine the relationship between the IIF and global central bankers.

Since the early 1990s, the IIF has been heavily involved working with central bankers, particularly through the Bank for International Settlements (BIS) in Basel, Switzerland, where private bankers have been granted a powerful position determining their own regulations in international financial markets. The IIF has been central throughout the reform of Basel I and the entire process of both Basel II and Basel III – collectively known as the Basel Accords – which were officially organized through the Basel Committee on Banking Supervision (BCBS), run out of the BIS.

From 1999 to 2004, the Basel Committee organized to impose a new set of global banking regulations, called Basel II. The head of the Basel Committee at the time was William McDonough, then the president of the Federal Reserve Bank of New York and a former Vice Chairman at the First National Bank of Chicago. He was also a founding member of the IIF at the 1982 Ditchley Conference, and remained a member on the board of the IIF from 1984 until 1990.

McDonough later explained: “Without the IIF it would have been far more difficult for regulators, such as the Basel Committee, to fully understand the critical issues that confronted the banks. The meetings with the IIF were an excellent sounding board – we trusted them (the banks) and they trusted us (the regulators).”

At the start of the Basel II process in 1999, the IIF created a special group, the Steering Committee on Regulatory Capital, which was to engage with the Basel Committee on behalf of the global banking industry. The papers put forward by the Steering Committee were ultimately accepted and implemented by the Basel Committee in the final accord, Basel II, essentially allowing the banks to regulate themselves.

The Chair of the Steering Committee, Daniel Bouton, who was also chairman and CEO of the French bank, Société Générale, later commented that, “It was of the utmost importance to try to have a coordinated view of the global banking industry in order to be able to discuss with the Basel Committee the most important questions. In fact, the IIF has been the single platform to forge a consensus between global banks about the key principles. And so it has played a very important part in discussions with the Basel Committee.”

But the relationship between the IIF and central bankers goes beyond the timid attempts at “regulation” on the part of global central banks. In fact, central bankers traverse through the revolving door of financial markets: from the mega-banks into the central banks.

At the mega-banks, the bankers’ job is to maximize profits through financial markets. At central banks, their job is to protect the banks through management of financial markets. It is a relationship of mutual interest, each side in need of the other, and together, with unprecedented power, central bankers and the “too-big-to-fail” mega-banks have become financial institutions that dominate the global economy.

Indeed, the Institute of International Finance has a number of boards which meet regularly that include several central bank chiefs. Notably, there is the IIF’s Group of Trustees of the Principles, with four co-chairs. One of the co-chairs is Agustin Guillermo Carstens, the Governor of the Bank of Mexico, who also sits on the board of directors of the Bank for International Settlements. In addition he is a member of the Steering Committee of the G20 Financial Stability Board (FSB), a group of central bank chiefs and finance ministers from the G20 nations who meet alongside leaders of the BIS, European Central Bank, European Commission, IMF, World Bank and the OECD to determine the world’s response to the recent global financial and economic crises.

The other co-chairs of the IIF’s Group of Trustees include: Christian Noyer, the Governor of the Bank of France (from 2003 to the present) and chairman of the Bank for International Settlements (from 2010 to the present); Zhour Xiaochuan, the Governor of the People’s Bank of China (2002 to the present) and a member of the board of directors of the BIS, as well as chairman of the Chinese Monetary Policy Committee and Vice Chairman of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC); and Toshihiko Fukui, former Governor of the Bank of Japan from 2003 to 2008, current president of the Canon Institute for Global Studies, and a former member of the board of the BIS.

Another notable member of the Group of Trustees is Jaime Caruana, the General Manager of the BIS (from 2009 to the present), former Governor of the Bank of Spain, former member of the Governing Council of the European Central Bank (ECB), former Chairman of the Basel Committee, and current member of the G20 Financial Stability Board (FSB). Caruana is also a member of the Group of Thirty, a major think tank bringing together finance chiefs, central bankers and private bankers.

Also on the list is Jean-Claude Trichet, the former President of the European Central Bank from 2003-2011, current chairman of the Group of Thirty, European Chairman of the Trilateral Commission, Chairman of the board of directors of the European think tank BRUEGEL, member of the board of directors of EADS, former president of the Global Economy Meeting of Central Bank Governors at the BIS, former member of the board at the BIS, and current member on the board of the Peter G. Peterson Institute for International Economics, as well as a member of the Steering Committee of the Bilderberg Group.

Left to right: IMF Managing Director Christine Lagarde, then-President of the European Central Bank Jean-Claude Trichet, then-CEO of Deutsche Bank and Chairman of the IIF Josef Ackermann

Left to right: IMF Managing Director Christine Lagarde, then-President of the European Central Bank Jean-Claude Trichet, then-CEO of Deutsche Bank and Chairman of the IIF Josef Ackermann

Other members of the Group of Trustees include current or former top officials from the Bank of Canada, the Italian Ministry of Economy and Finance, the Bank of Italy, the Spanish Ministry of Finance, the IMF, Bank of France, Bank of Brazil, Bank of Chile, Bank of Iceland, German Finance Ministry, the European Central Bank, the World Bank, Federal Reserve Bank of New York, the Saudi Arabian Monetary Authority (SAMA), South African Ministry of Finance, Nigerian Ministry of Finance, and the Turkish Ministry of Finance, among many others.

The Group of Trustees doesn’t merely consist of so-called “public officials,” but also many private bankers and other prominent global power players including top officials from Deutsche Bank, JPMorgan Chase, Credit Suisse, Commerzbank, Citigroup and others.

Another noteworthy member of the Group of Trustees of the IIF is Paul Volcker, the former Chairman of the Board of Governors of the Federal Reserve System from 1979 to 1987, who was previously a chief economist at Chase Manhattan Bank (then under the leadership of David Rockefeller) as well as a former Treasury official and former president of the Federal Reserve Bank of New York. Volcker has since been Chairman of President Obama’s Economic Recovery Advisory Board from 2009 to 2011, a member of the board of directors of the Peterson Institute for International Economics, a member of the Executive Committee of the Trilateral Commission, Chairman Emeritus of the Group of Thirty, and a participant at Bilderberg Meetings.

Not only are central bankers, finance ministers and other “public officials” members of various boards at the IIF, but they also attend regular meetings hosted by the IIF, bringing them into consistent, close contact with the leading figures of the world’s largest financial institutions (aka: their real constituents). With the emerging financial crisis in 2007, the IIF hosted a meeting in Washington, DC, over the course of a weekend that they spent “lavishing central bankers and policymakers with praise, awards and banquets,” and as the Financial Times reported, “a genuine warmth appears to have developed between many senior bankers and policymakers.”

At the 2010 annual meeting of the IIF, in the midst of the exploding European debt crisis, notable invited guest speakers included the Greek Finance Minister as well as Olli Rehn, the European Commissioner for Economic and Monetary Affairs. In his speech, Rehn made clear that his objective, and that of the European Commission, was to enforce austerity measures and “bold structural reforms,” particularly in “labor and product markets.”

At the 2011 annual meeting of the IIF, guest speakers included the German Finance Minister Wolfgang Schauble alongside the Greek Finance Minister Evangelos Venizelos, who spoke of the “political and social cost” of the austerity measures in Greece, enforced under the pressure of financial markets, which he claimed were “an important step that will… convince the markets that the Euro Area can indeed protect itself and its member states.”

Also in attendance at the same IIF meeting was Mark Carney, then the Governor of the Bank of Canada, a board member at the BIS, Chairman of the Committee on the Global Financial System at the BIS, incoming Chairman of the Financial Stability Board (FSB), and now also Governor of the Bank of England. While Carney is often praised for being unafraid to confront bankers, he told the annual meeting that “financial institutions and markets should play critical and complimentary roles in supporting long-term economic prosperity,” even while acknowledging that the latest Basel III banking “regulations” (which he was pivotal in forming) would have little effect in making financial markets safer.

At the 2011 meeting, a special tribute was paid to the outgoing president of the European Central Bank, Jean-Claude Trichet, who had done so much to protect financial markets and banks at the expense of the living standards of the EU general population. Special remarks and presentations in honor of Trichet were delivered by Deutsche Bank CEO Josef Ackermann, IIF Managing Director Charles Dallara, Paul Volcker and Mark Carney. Trichet was commended for two “resolutions,” one of which was signed by the finance ministers and central bank governors of the G20 nations, as well as the leaders of the World Bank and IMF (with IMF Managing Director Christine Lagarde present at the IIF meeting as well), who praised Trichet for his “steadfast leadership in encouraging the governments of Europe to strengthen economic governance and fiscal discipline in the Euro Area,” as well as for “his leading role among global central bank governors in Basel” at the Bank for International Settlements.

Another “resolution” delivered in honor of Trichet was signed by the board of directors of the IIF who praised him “for his many contributions over the past decades to the stability and soundness of the international financial system and the global economy” – which, if anything, Europe’s crisis in 2011 stood as a profound testament against – and they also thanked Trichet for his “laudable improvements to global financial markets” and for being “a tremendous force behind the development of market-based approaches to debt crisis prevention and resolution.”

It is cause for concern when the world’s biggest bankers sit on the same boards and invite the major regulators, central bank chiefs and finance ministers to their meetings, gathering up awards and praise while keeping those parties firmly entrenched within their sphere of influence. The relationship between private banks and central banks is a complex one that is mired in overlap, mutual interests and mutual benefits: a system in which more profit and power is continually bestowed on ever fewer global banking chiefs and technocrats who are unelected, unaccountable and unapproachable – except, of course, to other members of the Institute of International Finance.

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 hosts a weekly podcast show with BoilingFrogsPost.

Obama’s Council of Corporate Kingpins: “Prosperity for the American People”?

Obama’s Council of Corporate Kingpins: “Prosperity for the American People”?


This article explores President Obama’s White House Council on Jobs and Competitiveness, examining the 26 members of the Council, looking at their current and previously-held positions, and assessing whose interests are really being served, and who has the ear of the Obama administration when it comes to economic issues. Much has been written on the chief economic advisers inside the Cabinet who represent banking and corporate interests, such as Treasury Secretary Timothy Geithner who was previously the President of the Federal Reserve Bank of New York. Instead of re-examining the more widely known conflicts of interest within the administration, this article focuses on the White House council which is specifically tasked with advising on the supposed economic “recovery.” If they have the ear of the President, is it not important to know who pays their salaries?

Paul Volcker, former Chairman of the Federal Reserve System, was until recently, Chairman of the President’s Economic Recovery Advisory Board. Upon leaving, Jeffrey R. Immelt, the Chairman and CEO of the General Electric Company, became the new Chair of the Council. The Advisory Board was re-named the President’s Council on Jobs and Competitiveness. Until April of 2011, Immelt was also on the Board of Directors of the Federal Reserve Bank of New York (alongside JP Morgan Chase CEO Jamie Dimon).

As stated on the White House website:

The President’s Council on Jobs and Competitiveness (Jobs Council) was created to provide non-partisan advice to the President on continuing to strengthen the Nation’s economy and ensure the competitiveness of the United States and on ways to create jobs, opportunity, and prosperity for the American people.

The Council will:

Report directly to the President on the design, implementation, and evaluation of policies to promote the growth of the American economy, enhance the skills and education of Americans, maintain a stable and sound financial and banking system, create stable jobs for American workers, and improve the long term prosperity and competitiveness of the American people… [and] provide analysis and information with respect to the operation, regulation, and healthy functioning of the economy and other factors that may contribute to the sustainable growth and competitiveness of American industry and the American labor force.

So, if the Council provides “non-partisan advice” to the Obama administration “to create jobs, opportunity, and prosperity for the American people,” it would perhaps seem important to identify who these people are, as they profess to serve the interests of the wider population. Below, I will examine brief biographies of most of the members of the Council, focusing on the ones that represent corporate interests. However, below these brief outlines, I will undertake a more cohesive examination of the make-up of the Council.

Who is represented on the Council?

A Note on the Data: The information examined was the official biographies on the White House website of the 26 members of the Council, as well as use of the Council on Foreign Relations’ official Membership Roster, and some additional research retrieved from official biographies on other board memberships. The collection of information is related to discovering which organizations and institutions are most highly represented on the Council. To assess this, the results are based upon positions currently and previously held by members of the Council. Thus, if one member had previously worked for a major bank, but is no longer with that bank, it is still included as being represented in the Council. I chose to analyze the information this way for the same reason that one would look at Timothy Geithner’s previous job in order to assess whose interests he speaks for. Having worked at a bank or major corporation in senior positions would have a significant impact upon the advice one gives on economic issues, regardless of their present affiliation with that bank or corporation. Hence, this is a cumulative assessment of the past and present affiliations of the President’s Council on Jobs and Competitiveness.

The Most Highly Represented Organizations on Obama’s Council on Jobs and Competitiveness:

1) The Council on Foreign Relations (8 members):

The CFR was founded in 1921, and was primarily funded in its first decades by the Rockefeller Foundation, the Carnegie Corporation, and later, the Ford Foundation. It is the premier foreign policy think tank in the United States. David Rockefeller, while Chairman and CEO of Chase Manhattan (now JP Morgan Chase) was Chairman of the CFR from 1970-1985, and remains as Honorary Chairman of the Board of Directors.

2) The Business Council (6 members)

Founded in 1933, the BC is an organization of corporate executives which (according to its website), “invites leaders in government, politics, academia, science, medicine, technology and other sectors to address the Council and to participate in its discussions.” It was primarily an advisory body to the U.S. Department of Commerce until 1961 when it “decided to broaden its scope” to “be available to serve all areas of government which requested their services.” The Chairman of the Business Council is Jamie Dimon, CEO of JP Morgan Chase, who is on the board of directors of the Federal Reserve Bank of New York, and is a member of the Council on Foreign Relations.

2) The Business Roundtable (6 members)

The BRT “is an association of chief executive officers of leading U.S. companies with nearly $6 trillion in annual revenues,” established in 1972 “on the belief that in a pluralistic society, businesses should play an active and effective role in the formation of public policy.” The Executive Committee of the BRT includes JP Morgan Chase CEO Jamie Dimon. Four of the nineteen members of the Executive Committee of the BRT are also members of Obama’s Council on Jobs and Competitiveness.

3) Partnership for New York City (5 members)

The Partnership for New York City was formed out of the merger of two organizations: the New York Chamber of Commerce and Industry and the New York City Partnership. As its website states:

Following in the tradition of three generations of Rockefellers who were closely associated with the Chamber, David Rockefeller transformed the organization in 1979. In that year, he founded the New York City Partnership and affiliated it with the Chamber. Although the original Chamber had taken a broad look at what it considered to be “business interests”, it was primarily a business advocacy group. Under Rockefeller’s vision, the new Partnership would allow business leaders to work more directly with government and other civic groups to address broader social and economic problems in a “hands on” way.

4) General Electric (4 members)

One of the most profitable corporations in the world, involved in energy, technology, real estate, aviation, healthcare, transportation, military contracting, oil and gas, power and water, appliances, and media.

4) McKinsey & Company (4 members)

One of the world’s premier global management consulting firms.

5) Google,The Procter & Gamble Company, Harvard University, and the Brookings Institution (3 members each)

The other organizations that are represented by membership on the President’s Council include: The Federal Reserve, Columbia University, The Walt Disney Company, The New America Foundation, Kodak, AT&T, MIT, The Economic Club of New York, American Express Corporation, Time Warner, Xerox Corporation, Amazon, Swiss Re, the Carnegie Endowment for International Peace, the Blackstone Group, the Group of Thirty, DuPont, United Technologies, Morgan Stanley, UBS, Citigroup, Dime Bancorp, Hewlett-Packard, the US Chamber of Commerce, Facebook, the Peter G. Peterson Institute for International Economics, LaSalle Bank, the World Bank, AMR Corporation, General Motors, Dell, Bank of America, Credit Suisse, Intel, Starbucks, and the Rockefeller Foundation.

In total, ten different financial institutions are represented; three major foreign policy think tanks are represented (the Council on Foreign Relations, the Brookings Institution, and the Carnegie Endowment for International Peace, all of which have over-lapping leadership, membership, and funding); six corporate interest groups are represented; four major media conglomerates are represented; eight computer technology and internet corporations are represented; eleven universities are represented, most of which are elite universities, with the highest representation for Harvard, Columbia, and MIT; several chemical companies, military contractors, and foundations, including the Rockefeller Foundation. For the stated purpose of creating “prosperity for the American people,” there are only two labour organizations represented, the AFL-CIO and UFCW.

So it would seem quite clear that those who have the ear of the President on economic matters do not represent the vast majority of American citizens, who – by and large – do not sit as executives or board members of multinational corporations, global banks, powerful think tanks, major foundations, elite universities, or business interest groups. Do you really trust these people to speak for you, your needs, what a real economic “recovery” means for you?

One must ask, if their aim is to – as their website states – create “prosperity for the American people,” did they only have a very specific and small fraction of “American people” in mind? Well, as they say, the proof is in the pudding.

Appendix: Notable Names

The following is a biographical list of selected individuals from the President’s Council on Jobs and Competitiveness:

Ursula M. Burns: Chairman and CEO of Xerox Corporation; board director with American Express Company.

Steve Case: co-founder, America Online; Chairman and CEO, Revolution, LLC; Chairman, The Case Foundation.

Kenneth I. Chenault: Chairman and CEO, American Express Company; board director of IBM, the Procter & Gamble Company, and the World Trade Center Memorial Foundation; on the boards of the Partnership for New York City, The Business Council and the Business Roundtable and serves as Vice Chairman of each of these organizations; member, Council on Foreign Relations.

John Doerr: a partner at Kleiner Perkins Caufield & Byers; on the boards of Google and Amazon.com; on the boards of New Schools, TechNet, ONE and the Aspen Institute.

Roger W. Ferguson: President and Chief Executive Officer of TIAA-CREF; Vice Chairman of the Board of Governors of the Federal Reserve System from 1999 to 2006; Vice Chairman of the Board of Trustees of the New York Economic Club; previously a Trustee of the Carnegie Endowment for International Peace, the National Bureau of Economic Research and the New America Foundation; member of the Council on Foreign Relations and the Group of Thirty; former Chairman of Swiss Re America Holding Corporation, former Associate and Partner at McKinsey & Company.

Mark T. Gallogly: Cofounder and Managing Principal of Centerbridge Partners (Centerbridge is an investment firm with over $15 billion of assets under management); previously with the Blackstone Group for 16 years; currently serves on the advisory council of the Hamilton Project, an economic policy group at the Brookings Institution, Columbia Business School board of overseers, the board of directors of the Dana Corporation, is a partner of the Partnership for New York and member of the Economic Club of New York.

Lewis Hay: Chairman and CEO of NextEra Energy, Inc.; serves on the board of directors of Capital One and Harris Corporation; a vice chairman of the Edison Electric Institute (EEI), the association of U.S. shareholder-owned electric companies; a member of the Business Board of Advisors at Carnegie Mellon University’s Tepper School of Business, and a member of the Business Roundtable.

Ellen Kullman: Chair and CEO of DuPont; a member of the U.S.-India CEO Forum, the Business Council, and the executive committee of SCI-America; a member of the board of directors of United Technologies Corp; is on the board of trustees of Tufts University and serves on the board of overseers at Tufts University School of Engineering; and previously worked for General Electric.

A.G. Lafley: Former Chairman and CEO of Procter & Gamble; serves on the board of directors of GE and board of trustees of Hamilton College and is chairman of the Cincinnati Center City Development Corporation; has also served as a director at General Motors Corporation and Dell Inc.

Monica Lozano: Senior Vice President of media conglomerate, Impremedia, LLC.; on the board of directors of the Walt Disney Company and Bank of America.

Jim McNerney: Chairman and CEO, the Boeing Company; previously worked at Procter & Gamble, McKinsey & Company, and General Electric; former Chairman and CEO of 3M (a $20 billion global technology company); is also a board director of Procter & Gamble, IBM, a member of The Field Museum Board of Trustees in Chicago, a trustee of Northwestern University, and a member of the Northwestern Memorial HealthCare Board; serves on the executive committee of The Business Roundtable; the former chair of The Business Council, the US-China Business Council and the American Society of Corporate Executives.

Richard D. Parsons: Chairman of the board of Citigroup, Inc.; a Senior Advisor at Providence Equity Partners Inc.; former Chairman of the Board and CEO of Time Warner, Inc.; Chairman and Chief Executive Officer of Dime Bancorp, Inc.; former counsel for Nelson Rockefeller and as a senior White House aide under President Gerald Ford; also a member of the boards of The Estee Lauder Companies, Inc. and Madison Square Garden, Inc., and is a member of the Council on Foreign Relations and is on the board of Trustees of the Rockefeller Foundation.

Antonio M. Perez: Chairman and CEO, Eastman Kodak Company; previously had a 25-year career at Hewlett-Packard Company, where he was a corporate vice president and a member of the company’s Executive Council; a member of The Business Council and the Business Roundtable; and was a former member of the Board of Directors of Adobe, Freescale and Schering-Plough Corporation.

Penny Pritzker: President and CEO, Pritzker Realty Group; serves on the board of Hyatt Hotels Corporation and a past board member of the Wrigley Company, Marmon Group and LaSalle Bank Corporation; and is a board member of the Council on Foreign Relations, a trustee of Stanford University, a trustee of the John F. Kennedy Center for the Performing Arts, an advisory board member of Brookings Institution’s Hamilton Project.

Brian Roberts: Chairman and CEO, Comcast Corporation; is a member of the Business Roundtable, a CEO only organization based in Washington, D.C. and also serves on the Board of Directors for NBCUniversal.

Matthew Rose: Chairman and CEO, BNSF Railway; is a member of the Board of Directors of AMR Corporation, AT&T Inc., the Association of American Railroads, and the U.S. Chamber of Commerce; and is also a member of the Texas Governor’s Business Council, the Business Roundtable, The Business Council, the Board of Trustees of Texas Christian University.

Sheryl Sandberg: Chief Operating Officer, Facebook; previously Vice President of Global Online Sales and Operations at Google; previously served as Chief of Staff for the United States Treasury Department under President Bill Clinton; prior to that she was a management consultant with McKinsey & Company and an economist with the World Bank; and she currently serves on the boards of The Walt Disney Company, Starbucks, Women for Women International, Center for Global Development and V-Day.

Laura D’Andrea Tyson: Professor of Global Management, Haas School of Business, UC Berkeley; served in the Clinton Administration and was the Chair of The Council of Economic Advisers (1993-1995) and the President’s National Economic Adviser (1995 – 1996); a Senior Advisor at the McKinsey Global Institute, Credit Suisse Research Institute, and The Rock Creek Group; a Senior Fellow at the Center for American Progress and is a member of the MIT Corporation; on the Advisory Council of the Brookings Institution Hamilton Project and is an Advisory Board member of Newman’s Own, Generation Investment Management, and H&Q Asia Pacific; is a chair for the World Economic Forum’s Global Agenda Council, and serves as a member of the Boards of Directors of Eastman Kodak Company, Morgan Stanley, AT&T, Silver Spring Networks, CB Richard Ellis, the Peter G. Peterson Institute of International Economics, and New America Foundation, and a member of the Council on Foreign Relations.

Robert Wolf: Chairman for UBS Americas and President for UBS Investment Bank; a member of the Council on Foreign Relations and on the Committee Encouraging Corporate Philanthropy and was on the Board of Directors of the Financial Services Roundtable from 2007-2010.

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is co-editor of the book, “The Global Economic Crisis: The Great Depression of the XXI Century.” His website is http://www.andrewgavinmarshall.com

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

Forging a “New World Order” Under a One World Government

Forging a “New World Order” Under a One World Government
Global Power and Global Government: Part 4
Global Research, August 13, 2009

This article is Part 4 in the series, “Global Power and Global Government,” published by Global Research.

Part 1: Global Power and Global Government: Evolution and Revolution of the Central Banking System
Part 2: Origins of the American Empire: Revolution, World Wars and World Order
Part 3: Controlling the Global Economy: Bilderberg, the Trilateral Commission and the Federal Reserve



Globalization and the New World Order

The 1990s saw the emergence of what was called the New World Order. This was a term that emerged in the early 1990s to describe a more unipolar world, addressing the collapse of the Soviet Union and the newfound role of the United States as the sole and unchallenged global power. The New World Order was meant to represent a new phase in the global political economy in which world authority rested in one place, and for the time, that place was to be the United States.

This era saw the continual expansion and formation of regional blocs, with the formation of the European Union, the signing of the North American Free Trade Agreement (NAFTA) and the creation of the WTO. The World Trade Organization was officially formed in 1995, as the successor to the General Agreements on Tariffs and Trade (GATT), which was formed in 1944 at the Bretton-Woods Conference. The WTO manages the international liberal trading order.

The first Director-General of the WTO was Peter D. Sutherland, who was previously the director general of GATT, former Attorney General of Ireland, and currently is Chairman of British Petroleum and Goldman Sachs International, as well as being special representative of the United Nations secretary-general for migrations. He is also a member of the board of the Royal Bank of Scotland Group, the Foundation Board of the World Economic Forum, goodwill ambassador to the United Nations Industrial Development Organisation, is a member of the Bilderberg Group, and is European Chairman of the Trilateral Commission, and he was presented with the Robert Schuman Medal for his work on European Integration and the David Rockefeller Award of the Trilateral Commission.[1] Clearly, the WTO was an organ of the western banking elite to be used as a tool in expanding and institutionalizing their control over world trade.

The European Superstate

In 1992, the Maastricht Treaty was signed, which officially formed the European Union in 1993. In 1994, the European Monetary Institute (EMI) was formed, with the European Central Bank (ECB) being formed in 1998, and the single European currency, the Euro, debuting in 1999. In 2004, the European Constitution was to be signed by all 25-member states of the EU, which was a treaty to establish a constitution for the entire European Union.

The Constitution was a move towards creating a European superstate, creating an EU foreign minister, and with it, coordinated foreign policy, with the EU taking over the seat of Britain on the UN Security Council, representing all EU member states, forcing the nations to “actively and unreservedly” follow an EU foreign policy; set out the framework to create an EU defence policy, as an appendage to or separate from NATO; the creation of a European Justice system, with the EU defining “minimum standards in defining offences and setting sentences,” and creates common asylum and immigration policy; and it would also hand over to the EU the power to “ensure co-ordination of economic and employment policies”; and EU law would supercede all law of the member states, thus making the member nations relative to mere provinces within a centralized federal government system.[2]

Vaclav Klaus, President of the Czech Republic, had stated that he feared that the concept of a stronger and more centralized European Union, as “the developments in the E.U. are really dangerous with regard to moving out of a free society and moving more and more toward masterminding control and regulation,” and that, “We [the Czech Republic] spent a half-century under communist eyes. We are more sensitive than some other West Europeans. We feel things, we see things, we touch things that we don’t like. For us, the European Union reminds us of COMECON [Moscow’s organization for economic control of the Soviet bloc].” He elaborated saying that the similarity with COMECON is not ideologically based, but in its structure, “The decisions are made not in your own country. For us who lived through the communist era, this is an issue.”[3]

The Constitution was largely written up by Valéry Giscard d’Estaing, former President of the French Republic from 1974 to 1981. Giscard d’Estaing also happens to be a member of the Bilderberg Group, the Trilateral Commission, and is also a close friend of Henry Kissinger, having co-authored papers with him. In 2005, French and Dutch voters answered the referendums in their countries, in which they rejected the EU Constitution, which required total unanimity in order to pass.

In 2007, a move was undertaken to introduce what was called the Lisbon Treaty, to be approved by all member-states. Giscard d’Estaing wrote an article for the Independent in which he stated that, “The difference between the original Constitution and the present Lisbon Treaty is one of approach, rather than content.” He described the process of creating the Lisbon Treaty: “It was the legal experts for the European Council who were charged with drafting the new text. They have not made any new suggestions. They have taken the original draft constitution, blown it apart into separate elements, and have then attached them, one by one, to existing treaties. The Treaty of Lisbon is thus a catalogue of amendments. It is unpenetrable for the public.” The main difference was that the word “constitution” was removed and banished from the text.[4]

The Telegraph reported that though the Treaty dropped the word “constitution,” it remained the same in “giving the EU the trappings of a global power and cutting national sovereignty.” It contained plans to create an EU President, who “will serve a two and half year term but unlike democratic heads of state he or she will be chosen by Europe’s leaders not by voters” and “will take over key international negotiations from national heads of government.” The Constitution’s “Foreign Minister” becomes the “High Representative,” who “will run a powerful EU diplomatic service and will be more important on the global and European stage than national foreign ministers.” It sets out to create an “Interior Ministry” which will “centralise databases holding fingerprints and DNA,” and “make EU legislation on new police and surveillance powers.” The ability for EU nations to use vetoes will end, and the Treaty “includes a clause hardwiring an EU “legal personality” and ascendancy over national courts.”[5]

One country in Europe has it written into its constitution that it requires a referendum on treaties, and that country is Ireland. In June of 2008, the Irish went to vote on the Treaty of Lisbon, after weeks and months of being badgered by EU politicians and Eurocrats explaining that the Irish “owe” Europe a “Yes” vote because of the benefits the EU had bestowed upon Ireland. History will show, however, that the Irish don’t take kindly to being bossed around and patronized, so when they went to the polls, “No” was on their lips and on their ballots. The Irish thus rejected the Lisbon Treaty.

North American Integration

The Canada-US Free Trade Agreement of 1989, was signed by President George HW Bush and Canadian Prime Minister Brian Mulroney. The FTA had devastating consequences for the people of Canada and the United States, while enriching the corporate and political elite. For example, GDP growth decreased, unemployment increased the most since the Great Depression,[6] and meanwhile, Brian Mulroney entered the corporate world, of which he now sits as a board member of Barrick Gold Corporation, as well as sitting on the International Advisory Board of the Council on Foreign Relations,[7] of which David Rockefeller remains on as Honorary Chairman.

In 1990, the private sector lobbying groups and think tanks began the promotion of the North American Free Trade Agreement (NAFTA) to expand the Canada-US Free Trade Agreement to include Mexico. NAFTA was signed by then Canadian Prime Minister Jean Chrétien, US President George H.W. Bush and Mexican President Carlos Salinas, in 1993, and went into effect in 1994. It was negotiated during a time in which Mexico was undergoing liberal economic reforms, so NAFTA had the effect of cementing those reforms in an “economic constitution for North America.”[8]

David Rockefeller played a role in the push for NAFTA. In 1965, he had founded the Council for Latin America (CLA), which, as he wrote in a 1966 article in Foreign Affairs, was to mobilize private enterprise throughout the hemisphere “to stimulate and support economic integration.” The CLA, David wrote, “provides an effective channel of cooperation between businessmen in the United States and their counterparts in the countries to the south. It also offers a means of continuing communication and consultation with the White House, the State Department and other agencies of our government.”[9]

The CLA later changed its name to the Council of the Americas (CoA) and maintains a very close relationship with the Americas Society, founded at the same time as the CLA, of which David Rockefeller remains to this day as Chairman of both organizations. As David wrote in his autobiography, Memoirs, in the lead up to NAFTA, the Council of the Americas sponsored a Forum of the Americas, which was attended by President George H.W. Bush, which resulted in the call for a “Western Hemisphere free trade area.”[10]

In 1993, David Rockefeller wrote an article for the Wall Street Journal, in the run up to NAFTA, in which he advocated for the signing of NAFTA as essential, describing it as a vital step on the road to fulfilling his life long work, and that, “Everything is in place — after 500 years — to build a true “new world” in the Western Hemisphere,” and further, that “I truly don’t think that “criminal” would be too strong a word to describe an action on our part, such as rejecting Nafta, that would so seriously jeopardize all the good that has been done — and remains to be done.”[11]

In 1994, Mexico entered into a financial crisis, often referred to as the Mexican peso crisis. The 1980s debt crisis, instigated by the Federal Reserve’s interest rate hikes on international loans, caused Mexico to default on its loans. The IMF had to enter the scene with its newly created Structural Adjustment Programs (SAPs) and reform Mexico’s economy along neoliberal economic policies.

In the late 1980s, “the United States accounted for 73 percent of Mexico’s foreign trade,”[12] and when NAFTA came into effect in 1994, it “immediately opened US and Canadian markets to 84 percent of Mexican exports.”[13] Mexico even became a member of the World Trade Organization (WTO). The peso crisis, which began at the end of 1994, with the ascension of Mexican President Zedillo, went into 1995, and the US organized a bailout worth $52 billion.[14] The bailout did not help the Mexican economy, as it was simply funneled into paying back loans to banks, primarily American banks, and the “crisis in 1995 was declared [by the IMF to be] over as soon as the banks and international lenders started to get repaid; but five years after the crisis, workers were just getting back to where they were beforehand.”[15]

In 2002, Robert Pastor, Director of the Center for North American Studies at the American University in Washington, D.C., prepared a report that he presented to the Trilateral Commission meeting of that same year. The report, A North American Community: A Modest Proposal to the Trilateral Commission, advocated a continuation of the policy of “deep integration” in North America, recommending, “a continental plan for infrastructure and transportation, a plan for harmonizing regulatory policies, a customs union, [and] a common currency.”[16] The report advocated the formation of a North American Community and Pastor wrote that, “a majority of the public in all three countries is prepared to join a larger North American country.”[17]

In 2003, prior to Paul Martin becoming Prime Minister of Canada, the Canadian Council of Chief Executives (CCCE), formerly the BCNI, published on their website, a press release in which they, “urged Paul Martin to take the lead in forging a new vision for North America.” Thomas d’Aquino, CEO of the Council, “urged that Mr. Martin champion the idea of a yearly summit of the leaders of Canada, Mexico and the United States in order to give common economic, social and security issues the priority they deserve in a continental, hemispheric and global context.” Among the signatories to this statement were all the Vice Chairmen of the CCCE, including David Emerson, who would go on to join Martin’s Cabinet.[18]

The CCCE then launched the North American Security and Prosperity Initiative, advocating “redefining borders, maximizing regulatory efficiencies, negotiation of a comprehensive resource security pact, reinvigorating the North American defence alliance, and creating a new institutional framework.”[19]

The Independent Task Force on the Future of North America was then launched in 2005, composed of an alliance and joint project between the CCCE in Canada, the Council on Foreign Relations (CFR) in the United States, and the Mexican Council on Foreign Relations in Mexico. A press release was given on March 14, 2005, in which it said, “The chairs and vice-chairs of the Independent Task Force on the Future of North America today issued a statement calling for a North American economic and security community by 2010.”[20]

On March 23, 2005, a mere nine days following the Task Force press release, the leaders of Canada, the US, and Mexico, (Paul Martin, George W. Bush, and Vicente Fox, respectively), announced “the establishment of the Security and Prosperity Partnership of North America,” which constituted a course of “action into a North American framework to confront security and economic challenges.”[21]

Within two months, the Independent Task Force on the Future of North America released their final report, Building a North American Community, proposing the continuation of “deep integration” into the formation of a North American Community, that “applauds the announced ‘Security and Prosperity Partnership of North America,’ but proposes a more ambitious vision of a new community by 2010 and specific recommendations on how to achieve it.”[22]

At the 2006 meeting of the SPP, the creation of a new group was announced, called the North American Competitiveness Council (NACC), made up of corporate leaders from all three countries who produce an annual report and advise the three governments on how to implement the SPP process of “deep integration”. The Secretariat in Canada is the CCCE, and the Secretariat of the group in the US is made up of the US Chamber of Commerce and the Council of the Americas.[23] The Council of the Americas was founded by David Rockefeller, of which he is still Honourary Chairman, and other board members include individuals from J.P. Morgan, Merck, McDonald’s, Ford, the Federal Reserve Bank of New York, General Electric, Chevron, Shell, IBM, ConocoPhillips, Citigroup, Microsoft, Pfizer, Wal-Mart, Exxon, General Motors, Merrill Lynch, Credit Suisse and the US Department of Treasury.[24]

The process of integration is still underway, and the formation of a North American Community is not far off, only to be followed by a North American Union, modeled on the structure of the European Union, with talk of a North American currency being formed in the future,[25] which was even proposed by Canada’s former Governor of the Bank of Canada.[26]

The New World Order in Theory

In a 1997 article of Foreign Affairs, the journal of the Council on Foreign Relations, Anne-Marie Slaughter discussed the theoretical foundations of the New World Order. Building on George HW Bush’s proclamation of a New World Order in 1991, Slaughter wrote that many saw this as “the promise of 1945 fulfilled, a world in which international institutions, led by the United Nations, guaranteed international peace and security with the active support of the world’s major powers.” However, this concept, she explained, was largely infeasible, as “It requires a centralized rule-making authority, a hierarchy of institutions, and universal membership.” Instead, she explains the emergence of what she called a “new medievalism” as opposed to liberal internationalism. “Where liberal internationalists see a need for international rules and institutions to solve states’ problems, the new medievalists proclaim the end of the nation-state,” where “The result is not world government, but global governance. If government denotes the formal exercise of power by established institutions, governance denotes cooperative problem- solving by a changing and often uncertain cast.”[27]

However, Slaughter challenges the assumptions of both the liberal internationalists and the new medievalists, and states that, “The state is not disappearing, it is disaggregating into its separate, functionally distinct parts. These parts—courts, regulatory agencies, executives, and even legislatures—are networking with their counterparts abroad, creating a dense web of relations that constitutes a new, transgovernmental order,” and that, “transgovernmentalism is rapidly becoming the most widespread and effective mode of international governance.”[28] Slaughter was Dean of the Woodrow Wilson School of Public and International Affairs at Princeton University from 2002-2009, is currently Director of Policy Planning for the United States Department of State, and has previously served on the board of the Council on Foreign Relations.

Reconstructing Class Structure Under a World Government

Bank of Canada Governor Mark Carney, a former executive with Goldman Sachs, stated in his speech at the International Economic Forum of the Americas, that, “Globalized product, capital, and labour markets lie at the heart of the New World Order to which we should aspire. However, the next wave of globalization needs to be more firmly grounded and its participants more responsible,” and that, “Within our economies, major stock adjustments in inventories, labour, and capital will be required.” It is worth quoting him at length in saying:

Although global demand and trade levels appear to be approaching bottom, and inventory and labour adjustments have already been substantial, there is still more to come. Unemployment will likely rise further across the G-7, with the sharpest increases still to come in those economies with the least-flexible labour markets. Uncertainty over the employment outlook will weigh on consumption in most major economies for some time. The capital stock adjustment process will take longer, and global investment growth is likely to remain negative well into 2010. This will serve as a significant drag on global growth and can be expected to reduce potential growth in most major economies.[29] [Emphasis added]

In terms of labour adjustments within the New World Order, there are some important and vital factors to take into account. Primary among these concerns is the notion of transnational classes. Capitalism largely functions through class divides, with the ruling class owning the means of production, which, as a class, is subject to its own hierarchy over which those that control and issue currencies preside.

In Western, industrialized nations, there has been a large middle class which thrives on consumption, enriching the upper class bourgeoisie, while the lower class, (or proletariat in Marxist terms), consists of the labour class. In non-western, industrialized nations, generally referred to as the “Third World”, “developing world” or the “Global South” (consisting of Latin America, Africa, and parts of Asia), there is a greater divide in terms in class lines, where there is a ruling class, and a labour class, largely remaining vacant of a vast, educated middle class. Class structures vary from country to country and region to region.

However, in the past several decades, the reality of class structures has been undergoing drastic changes, and with this, the structure of labour has changed. In the past few decades, a concurrent class restructuring has been taking place, in which the middle classes of the world descend into debt bondage while the upper classes of the world have began a process of transnationalizing. What we have witnessed and are witnessing with recent events, is the transnationalization of class structures, and with that, labour forces.

Social Constructivism

A fascinating theoretical school of thought within the field of Global Political Economy is that of Social Constructivism. Social Constructivists argue that, “The social and political world, including the world of international relations, is not a physical entity or material object that is outside human consciousness. Consequently, the study of international relations must focus on the ideas and beliefs that inform the actors on the international scene as well as the shared understandings between them.” Expanding upon this idea:

The international system is not something ‘out there’ like the solar system. It does not exist on its own. It exists only as an intersubjective awareness among people; in that sense the system is constituted by ideas, not by material forces. It is a human invention or creation not of a physical or material kind but of a purely intellectual and ideational kind. It is a set of ideas, a body of thought, a system of norms, which has been arranged by certain people at a particular time and place.

Examples of socially constructed structures within the global political economy are national borders, as they have no physical line, but are rather formed by a shared understanding between various actors as to where the border is. The nation itself is a social construct, as it has no physical, over-arching form, but is made up of a litany of shared values, ideas, concepts, institutions, beliefs and symbols. Thus, “If the thoughts and ideas that enter into the existence of international relations change, then the system itself will change as well, because the system consists in thoughts and ideas. That is the insight behind the oft-repeated phrase by constructivist Alexander Wendt: ‘anarchy is what states make of it’.”[30]

Class Structure and Social Constructivism

William I. Robinson and Jerry Harris write in Science & Society Journal, that, “One process central to capitalist globalization is transnational class formation, which has proceeded in step with the internationalization of capital and the global integration of national productive structures. Given the transnational integration of national economies, the mobility of capital and the global fragmentation and decentralization of accumulation circuits, class formation is progressively less tied to territoriality.”[31] They argued that a Transnational Capitalist Class (TCC) has emerged, “and that this TCC is a global ruling class. It is a ruling class because it controls the levers of an emergent transnational state apparatus and of global decision making.”[32] This class has no borders, and is composed of the technocratic, media, corporate, banking, social and political elite of the world.

As Jackson and Sorenson point out in relation to social constructivist theory, “If ‘anarchy is what states make of it’ there is nothing inevitable or unchangeable about world politics,” and that, “The existing system is a creation of states and if states change their conceptions of who they are, what their interests are, what they want, etc. then the situation will change accordingly.” As an example, they stated that states could decide “to reduce their sovereignty or even to give up their sovereignty. If that happened there would no longer be an international anarchy as we know it. Instead, there would be a brave new, non-anarchical world – perhaps one in which states were subordinate to a world government.”[33]

As Robinson and Harris explain in their essay, with the rise of the Transnational Capitalist Class (TCC), there is also a rise in the apparatus of a Transnational State (TNS), which is “an emerging network that comprises transformed and externally integrated national states, together with the supranational economic and political forums; it has not yet acquired any centralized institutional form.”[34] Among the economic apparatus of the TNS we see the IMF, World Bank, WTO and regional banks. On the political side we see the Group of 7, Group of 22, United Nations, OECD, and the European Union. This was further accelerated with the Trilateral Commission, “which brought together transnationalized fractions of the business, political, and intellectual elite in North America, Europe, and Japan.” Further, the World Economic Forum has made up an important part of this class, and, I might add, the Bilderberg Group. Robinson and Harris point out that, “Studies on building a global economy and transnational management structures flowed out of think tanks, university centers, and policy planning institutes in core countries.”[35]

The TNS apparatus has been a vital principle of organization and socialization for the transnational class, “as have world class universities, transnationally oriented think tanks, the leading bourgeois foundations, such as Harvard’s School of International Business, the Ford [and Rockefeller] and the Carnegie Foundations, [and] policy planning groups such as the Council on Foreign Relations.” These “elite planning groups are important forums for integrating class groups, developing new initiatives, collective strategies, policies and projects of class rule, and forging consensus and a political culture around these projects.”[36]

Robinson and Harris identify the World Economic Forum as “the most comprehensive transnational planning body of the TCC and the quintessential example of a truly global network binding together the TCC in a transnational civil society.”[37] I would take issue with this, and instead propose the Bilderberg Group, of which they make no mention in their article, as THE quintessential transnational planning body of the TCC, as it is composed of the elite of the elite, totally removed from public scrutiny, and acts as “a secretive global think-tank” of the world’s 130 most powerful individuals.[38]

Many Bilderberg critics will claim that the group acts as a “secret world government” or as the organization “that makes all the key decisions for the world.” However, this is not the case. Bilderberg is simply the most influential planning body, sitting atop a grand hierarchy of various planning bodies and institutions, and is itself a key part of the apparatus of the formation of a Transnational State, but is not, in and of itself, a “world government.” It is a global think tank, which holds the concept of a “world government” in high regard and often works to achieve these ends, but it should not be confused with being the end it seeks.

The economic crisis is perhaps the greatest “opportunity” ever given to the TCC in re-shaping the world order according to their designs, ideals and goals. Through destruction, comes creation; and for these high-placed individuals within the TCC, destruction is itself a form of creation.

In terms of reshaping labour and class structures, the economic crisis provides the ground on which a new global class structure will be built. A major problem for the Transnational Capitalist Class and the formation of a Transnational State, or world government, is the lack of continuity in class structures and labour markets throughout the world. A transnational ruling class, or “Superclass” as David Rothkopf referred to it in his book of the same name (and is, himself, a member of the Superclass), has emerged. It has no borders, yet has built a general continuity and consensus of goals among its members, albeit there are differences and conflicts within the class, but they are based upon the means of achieving the stated ends, rather than on the ends itself. There is not dissent within the ruling class on the aims of achieving a world governing body; the dissent is in how to achieve this, and in terms of what kind of structure, theoretical and philosophical leanings, and political orientation such a government would have.

To achieve these ends, however, all classes must be transnationalized, not simply the ruling class. The ruling class is the first class to be transnationalized, because transnationalization was the goal of the ruling classes based in the powerful Western European nations, (and later in the United States), that started the process of transnationalization or internationalization. Now that there is an established “Superclass” of a transnational composition, the other classes must follow suit. The middle class is targeted for elimination in this sense, because most of the world has no middle class, and to fully integrate and internationalize a middle class, this would require industrialization and development in places such as Africa, and certain places in Asia and Latin America, and would represent a massive threat to the Superclass, as it would be a valve through which much of their wealth and power would escape them. Their goal is not to lose their wealth and power to a transnational middle class, but rather to extinguish the notion of a middle class, and transnationalize a lower, uneducated, labour oriented class, through which they will secure ultimate wealth and power.

The economic crisis serves these ends, as whatever remaining wealth the middle class holds is in the process of being eliminated, and as the crisis progresses, or rather, regresses, and accelerates, the middle classes of the world will suffer, while a great percentage of lower classes of the world, poverty-stricken even prior to the crisis, will suffer the greatest, most probably leading to a massive reduction in population levels, particularly in the “developed” or “Third World” states.

Many would take issue with such a thesis as being an objective of the Transnational Capitalist Class, as capitalism needs a large population, specifically a middle class population, in order to have a market of consumers for their products. Though this is true with how we presently understand the capitalist system and structure, we must also take note that capitalism, itself, is always changing and redefining itself. Through a social constructivist perspective, which I would argue, is very apt in this analysis, such a notion is not inconceivable, as if the capitalist class were to redefine capitalism itself, capitalism itself would change.

It must be addressed that there would be a great many individuals within the TCC or Superclass (Rothkopf estimates the number at 6,000 individuals within the ruling class), who would take issue with eliminating their base for profit making, however, as a total restructuring of the capitalist system and global political economy as a whole is undertaken, the TCC itself is not immune to such drastic and rapid changes itself. In fact, it would be unimaginable to think that it would remain as it currently is.

Rothkopf explains that with 6,000 members of the Superclass, that equals roughly one member of the superclass for every 1 million people in the world. As the composition, class structures, and numbers of the world population drastically alter over the next years and decades, so too will the superclass itself. It too, will be subject to a “cleansing” so to speak, in which the big players will collapse and consolidate many of the smaller players.

The Monetary Structure of a Global Government

A Global Currency

Following the April 2009 G20 Summit, leaders issued a communiqué which set the groundwork for the creation of a global currency to replace the US dollar as the world reserve currency. The communiqué stated that, “We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity.” SDRs, or Special Drawing Rights, are “a synthetic paper currency issued by the International Monetary Fund.” As the Telegraph reported, “the G20 leaders have activated the IMF’s power to create money and begin global “quantitative easing”. In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it.”[39]

In 1988, the Economist featured an article called “Get Ready for the Phoenix,” which said, “THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the late twentieth century.” The article, written in the wake of the 1987 stock market crash, stated that, “Several more big exchange-rate upsets, a few more stockmarket crashes and probably a slump or two will be needed before politicians are willing to face squarely up to that choice. This points to a muddled sequence of emergency followed by patch-up followed by emergency, stretching out far beyond 2018-except for two things. As time passes, the damage caused by currency instability is gradually going to mount; and the very trends that will make it mount are making the utopia of monetary union feasible.”[emphasis added][40]

Paul Volcker, former Governor of the Federal Reserve System, said in 2000, that, “If we are to have a truly global economy, a single world currency makes sense,” and a member of the Executive Board of the European Central Bank reaffirmed Volcker’s comment, stating that, “we might one day have a single world currency. Maybe European integration, in the same way as any other regional integration, could be seen as a step towards the ideal situation of a fully integrated world. If and when this world will see the light of day is impossible to say. However, what I can say is that this vision seems as impossible now to most of us as a European monetary union seemed 50 years ago, when the process of European integration started.”[41]

A Central Bank of the World

Jeffrey Garten has written several articles calling for the creation of a global central bank, or a “global fed.” Garten was former Dean of the Yale School of Management, former Undersecretary of Commerce for International Trade in the Clinton administration, previously served on the White House Council on International Economic Policy under the Nixon administration and on the policy planning staffs of Secretaries of State Henry Kissinger and Cyrus Vance of the Ford and Carter administrations, former Managing Director at Lehman Brothers, and is a member of the Council on Foreign Relations.

In 1998, he wrote an article for the New York Times stating that the world “needs a global central bank,” and that, “An independent central bank with responsibility for maintaining global financial stability is the only way out. No one else can do what is needed: inject more money into the system to spur growth, reduce the sky-high debts of emerging markets, and oversee the operations of shaky financial institutions. A global central bank could provide more money to the world economy when it is rapidly losing steam.”[42]

Following the outbreak of the current financial crisis, Garten wrote an article for the Financial Times in which he called for the “establishment of a Global Monetary Authority to oversee markets that have become borderless.”[43] In October of 2008, he wrote an article for Newsweek stating that, “leaders should begin laying the groundwork for establishing a global central bank.” He explained that, “There was a time when the U.S. Federal Reserve played this role [as governing financial authority of the world], as the prime financial institution of the world’s most powerful economy, overseeing the one global currency. But with the growth of capital markets, the rise of currencies like the euro and the emergence of powerful players such as China, the shift of wealth to Asia and the Persian Gulf and, of course, the deep-seated problems in the American economy itself, the Fed no longer has the capability to lead single-handedly.”[44]

Regionalism

Building upon the model of the European Union, the world is being divided into large continental regional blocs, with regional monetary systems and governments. This will make up the managed blocs of a global government, and mark a significant process in the “hard road to world order,” as Richard N. Gardner called it, in which national sovereignty is eroded piece by piece. Regionalism marks the current phase of the move to the formation of a global government. Friedrich List critiqued liberal cosmopolitanism, stating that economic integration had never preceded political integration, however the elites have and are successfully challenging this notion. In the New World Order, economic integration is preceding political integration into a world governance structure.

The European Union began as a series of free trade agreements, became a monetary union, and is in the process of being formed into a single continental superstate. North American integration began with a series of free trade agreements, defense and security agreements, and is in the process of moving towards monetary and bureaucratic integration into a North American Community. A Union and North American superstate are not far in the distance. A North American currency is openly discussed and proposed by leading think tanks, billionaire investors, as well as the Governor of the Bank of Canada. The likely name of such a currency is the Amero.[45]

Meanwhile, globally, markets are heavily integrating. In 2007, it was reported that the European Union and the United States were beginning the process of transatlantic economic integration.[46] In 2008, it was announced that, “Canadian and European officials say they plan to begin negotiating a massive agreement to integrate Canada’s economy with the 27 nations of the European Union,” under “deep economic integration negotiations,” and “The proposed pact would far exceed the scope of older agreements such as NAFTA.”[47] This, essentially, is a means of integrating with the North American Community before the Community is officially formed; an act of pre-emptive integration.

In 2007, the Council on Foreign Relations journal, Foreign Affairs, ran an article titled, “The End of National Currency.” Discussing the volatility of national currencies, the article stated that, “The right course is not to return to a mythical past of monetary sovereignty, with governments controlling local interest and exchange rates in blissful ignorance of the rest of the world. Governments must let go of the fatal notion that nationhood requires them to make and control the money used in their territory. National currencies and global markets simply do not mix; together they make a deadly brew of currency crises and geopolitical tension and create ready pretexts for damaging protectionism. In order to globalize safely, countries should abandon monetary nationalism and abolish unwanted currencies, the source of much of today’s instability.”

Further, “Monetary nationalism is simply incompatible with globalization. It has always been, even if this has only become apparent since the 1970s, when all the world’s governments rendered their currencies intrinsically worthless.” The author states that, “Since economic development outside the process of globalization is no longer possible, countries should abandon monetary nationalism. Governments should replace national currencies with the dollar or the euro or, in the case of Asia, collaborate to produce a new multinational currency over a comparably large and economically diversified area.”[48]

In 2008, the Union of South American Nations (UNASUR) was formed, “a regional body aimed at boosting economic and political integration in the region,”[49] which will “seek a common currency as part of the region’s integration efforts,” as well as a common central bank.[50]

The Gulf Cooperation Council, a regional bloc of Arab Middle Eastern governments, is pursuing economic integration in the form of a common central bank and a common currency.[51] Similarly, there has been much discussion of an Asian Monetary Union and East Asian economic integration, specifically being touted as a solution to the prevention of future economic crises in East Asia like that which hit it in 1997.[52] Integration would be modeled upon the East Asian regional block of ASEAN (Association of Southeast Asian Nations), and in 2008, “ASEAN bank deputy governors and financial deputy ministers have met in Vietnam’s central Da Nang city, discussing issues on the financial and monetary integration and cooperation in the region.”[53] Further, Africa is being organized as a regional bloc under the African Union, and is also pursuing regional economic integration, and has even set the agenda for the creation of a continental African central bank and the formation of a single African currency.[54]

In 2006, the Bank for International Settlements “suggested ditching many national currencies in favour of a small number of formal currency blocks based on the dollar, euro and renminbi or yen.”[55]

Constructing the Political Structure of a Global Government

Strobe Talbott, Deputy Secretary of State in the Clinton administration from 1994 to 2001, is also a member of the Council on Foreign Relations and the Trilateral Commission and is currently President of the Brookings Institution, a prominent US think tank. In 1992, before becoming Deputy Secretary of State, he wrote an article for Time Magazine originally titled, “The Birth of the Global Nation,” which has now, in the Time Magazine archives, been renamed “America Abroad.” In the article, he states that within the next 100 years, “nationhood as we know it will be obsolete; all states will recognize a single, global authority. A phrase briefly fashionable in the mid-20th century — “citizen of the world” — will have assumed real meaning by the end of the 21st.”

Interestingly, Talbott endorses the social constructivist perspective of nation-states and international order, stating that, “All countries are basically social arrangements, accommodations to changing circumstances. No matter how permanent and even sacred they may seem at any one time, in fact they are all artificial and temporary. Through the ages, there has been an overall trend toward larger units claiming sovereignty and, paradoxically, a gradual diminution of how much true sovereignty any one country actually has.”

He explained that empires “were a powerful force for obliterating natural and demographic barriers and forging connections among far-flung parts of the world,” and following that, “Empire eventually yielded to the nation-state,” and that, “The main goal driving the process of political expansion and consolidation was conquest. The big absorbed the small, the strong the weak. National might made international right. Such a world was in a more or less constant state of war.” Talbott states that, “perhaps national sovereignty wasn’t such a great idea after all.”

He continued, saying that, “it has taken the events in our own wondrous and terrible century to clinch the case for world government. With the advent of electricity, radio and air travel, the planet has become smaller than ever, its commercial life freer, its nations more interdependent and its conflicts bloodier.” Further, “Each world war inspired the creation of an international organization, the League of Nations in the 1920s and the United Nations in the ’40s.” He explained, “The plot thickened with the heavy-breathing arrival on the scene of a new species of ideology — expansionist totalitarianism — as perpetrated by the Nazis and the Soviets. It threatened the very idea of democracy and divided the world. [Thus] The advocacy of any kind of world government became highly suspect.” However, as Talbott points out, Soviet expansion led the way for NATO expansion, and “The cold war also saw the European Community pioneer the kind of regional cohesion that may pave the way for globalism.”

On top of that, “the free world formed multilateral financial institutions that depend on member states’ willingness to give up a degree of sovereignty. The International Monetary Fund can virtually dictate fiscal policies, even including how much tax a government should levy on its citizens. The General Agreement on Tariffs and Trade regulates how much duty a nation can charge on imports. These organizations can be seen as the protoministries of trade, finance and development for a united world.” In addressing crises, Talbott wrote that, “Globalization has also contributed to the spread of terrorism, drug trafficking, AIDS and environmental degradation. But because those threats are more than any one nation can cope with on its own, they constitute an incentive for international cooperation.” Thus, out of crisis, comes opportunity; out of chaos comes order.

In prescribing a solution, Talbott postulates that, “The best mechanism for democracy, whether at the level of the multinational state or that of the planet as a whole, is not an all-powerful Leviathan or centralized superstate, but a federation, a union of separate states that allocate certain powers to a central government while retaining many others for themselves.”[56]

In a 1974 issue of Foreign Affairs, Richard N. Gardner wrote about the formation of the New World Order. Gardner, a former American ambassador to the United Nations, Italy and Spain, is also a member of the Trilateral Commission. In his article, The Hard Road to World Order, Gardner wrote that, “The quest for a world structure that secures peace, advances human rights and provides the conditions for economic progress—for what is loosely called world order—has never seemed more frustrating but at the same time strangely hopeful.”[57] He explained that, “few people retain much confidence in the more ambitious strategies for world order that bad wide backing a generation ago—‘world federalism,’ ‘charter review,’ and “world peace through world law’.” Further, “The same considerations suggest the doubtful utility of bolding a [UN] Charter review conference.”[58]

Gardner wrote, “If instant world government, Charter review, and a greatly strengthened International Court do not provide the answers, what hope for progress is there? The answer will not satisfy those who seek simple solutions to complex problems, but it comes down essentially to this: The hope for the foreseeable future lies, not in building up a few ambitious central institutions of universal membership and general jurisdiction as was envisaged at the end of the last war, but rather in the much more decentralized, disorderly and pragmatic process of inventing or adapting institutions of limited jurisdiction and selected membership to deal with specific problems on a case-by-case basis, as the necessity for cooperation is perceived by the relevant nations.”

He then stated, “In short, the “house of world order” will have to be built from the bottom up rather than from the top down. It will look like a great “booming, buzzing confusion,” to use William James’ famous description of reality, but an end run around national sovereignty, eroding it piece by piece, will accomplish much more than the old-fashioned frontal assault.”[59]

In the 2001 issue of Foreign Affairs, Richard Falk and Andrew Strauss wrote an article titled, “Toward Global Parliament.” They wrote that, “International governance is no longer limited to such traditional fare as defining international borders, protecting diplomats, and proscribing the use of force. Many issues of global policy that directly affect citizens are now being shaped by the international system. Workers can lose their jobs as a result of decisions made at the WTO or within regional trade regimes.”[60] In 2006, a UN report stated that, “the nation-state is an old-fashioned concept that has no role to play in a modern globalised world.”[61]

Further, “As with citizen groups, elite business participation in the international system is becoming institutionalized. The best example is the World Economic Forum in Davos, Switzerland. In the 1980s, the WEF transformed itself from an organization devoted to humdrum management issues into a dynamic political forum. Once a year, a thousand of the world s most powerful business executives get together with another thousand of the world’s senior policymakers to participate in a week of roundtables and presentations. The WEF also provides ongoing arenas for discussion and recommendations on shaping global policy.” They continue in explaining that, “The Davos assembly and overlapping networks of corporate elites, such as the International Chamber of Commerce, have been successful in shaping compatible global policies. Their success has come in the expansion of international trade regimes, the modest regulation of capital markets, the dominance of neoliberal market philosophy, and the supportive collaboration of most governments, especially those of rich countries.”[62]

In explaining the purpose of a global parliament, essentially to address the “democratic deficit” created by international organizations, the authors wrote that, “Some business leaders would certainly oppose a global parliament because it would broaden popular decision-making and likely press for transnational regulations. But others are coming to believe that the democratic deficit must be closed by some sort of stakeholder accommodation. After all, many members of the managerial class who were initially hostile to such reform came to realize that the New Deal—or its social-democratic equivalent in Europe—was necessary to save capitalism. Many business leaders today similarly agree that democratization is necessary to make globalization politically acceptable throughout the world.” Essentially, its purpose would be to give globalization “grassroots acceptance and legitimacy.”[63]

David Rothkopf, a scholar at the Carnegie Endowment for International Peace, former Deputy Undersecretary of Commerce for International Trade in the Clinton administration, former managing director of Kissinger and Associates, and a member of the Council on Foreign Relations, recently wrote a book titled, Superclass: The Global Power Elite and the World They are Making. As a member of that “superclass,” his writing should provide a necessary insight into the construction of this “New World Order.” He states that, “In a world of global movements and threats that don’t present their passports at national borders, it is no longer possible for a nation-state acting alone to fulfill its portion of the social contract.” He wrote that, “progress will continue to be made,” however, it will be challenging, because it “undercuts many national and local power structures and cultural concepts that have foundations deep in the bedrock of human civilization, namely the notion of sovereignty.” He further wrote that, “Mechanisms of global governance are more achievable in today’s environment,” and that these mechanisms “are often creative with temporary solutions to urgent problems that cannot wait for the world to embrace a bigger and more controversial idea like real global government.”[64]

Jacques Attali, founder and former President of the European Bank for Reconstruction and Development, and economic adviser to French President Nicholas Sarkozy, interviewed on EuroNews, said that, “either we’re heading towards a world government or we’re going to put national issues first.” The interviewer stated that the idea of world government will frighten many people, to which Attali responded, “Indeed, that’s only to be expected, because it seems like a fantasy. But there is already global authority in many areas,” and that, “even if it’s hard to think of a European government at the moment, which is there, but very weak, Europe can at least press on its experience to the world. If they’re not capable of creating an economic framework along side a political framework, then they’re never going to do it on a global scale. And then the world economic model will break up, and we’ll be back to the Great Depression.”[65]

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

He stated that, “it is increasingly clear that the most difficult issues facing national governments are international in nature: there is global warming, a global financial crisis and a ‘global war on terror’.” He wrote that the European model could “go global” and that a world government “could be done,” as “The financial crisis and climate change are pushing national governments towards global solutions, even in countries such as China and the US that are traditionally fierce guardians of national sovereignty.” He quoted an adviser to French President Nicolas Sarkozy as saying, “Global governance is just a euphemism for global government,” and that the “core of the international financial crisis is that we have global financial markets and no global rule of law.” However, Rachman states that any push towards a global government “will be a painful, slow process.” He then states that a key problem in this push can be explained with an example from the EU, which “has suffered a series of humiliating defeats in referendums, when plans for ‘ever closer union’ have been referred to the voters. In general, the Union has progressed fastest when far-reaching deals have been agreed by technocrats and politicians – and then pushed through without direct reference to the voters. International governance tends to be effective, only when it is anti-democratic. [Emphasis added]”[66]

In November of 2008, the United States National Intelligence Council (NIC), the US intelligence community’s “center for midterm and long-term strategic thinking,” released a report that it produced in collaboration with numerous think tanks, consulting firms, academic institutions and hundreds of other experts, among them are the Atlantic Council of the United States, the Wilson Center, RAND Corporation, the Brookings Institution, American Enterprise Institute, Texas A&M University, the Council on Foreign Relations and Chatham House in London.[67]

Outlining the global trends that the world will be going through up to the year 2025, the report states that the financial crisis “will require long-term efforts to establish a new international system.” It suggests that as the “China-model” for development becomes increasingly attractive, there may be a “decline in democratization” for emerging economies, authoritarian regimes, and “weak democracies frustrated by years of economic underperformance.” Further, the dollar will cease to be the global reserve currency, as there would likely be a “move away from the dollar.”[68]

Further, the dollar will become “something of a first among equals in a basket of currencies by 2025. This could occur suddenly in the wake of a crisis, or gradually with global rebalancing.”[69] The report elaborates on the construction of a new international system, stating that, “By 2025, nation-states will no longer be the only – and often not the most important – actors on the world stage and the ‘international system’ will have morphed to accommodate the new reality. But the transformation will be incomplete and uneven.” Further, it would be “unlikely to see an overarching, comprehensive, unitary approach to global governance. Current trends suggest that global governance in 2025 will be a patchwork of overlapping, often ad hoc and fragmented efforts, with shifting coalitions of member nations, international organizations, social movements, NGOs, philanthropic foundations, and companies.” It also notes that, “Most of the pressing transnational problems – including climate change, regulation of globalized financial markets, migration, failing states, crime networks, etc. – are unlikely to be effectively resolved by the actions of individual nation-states. The need for effective global governance will increase faster than existing mechanisms can respond.”[70]

The report discusses regionalism, and stated that, “Asian regionalism would have global implications, possibly sparking or reinforcing a trend toward three trade and financial clusters that could become quasi-blocs (North America, Europe, and East Asia).” These blocs “would have implications for the ability to achieve future global World Trade Organization agreements and regional clusters could compete in the setting of trans-regional product standards for IT, biotech, nanotech, intellectual property rights, and other ‘new economy’ products.”[71]

In discussing democracy and democratization, the report stated that, “advances are likely to slow and globalization will subject many recently democratized countries to increasing social and economic pressures that could undermine liberal institutions.” This is largely because “the better economic performance of many authoritarian governments could sow doubts among some about democracy as the best form of government.  The surveys we consulted indicated that many East Asians put greater emphasis on good management, including increasing standards of livings, than democracy.” Further, “even in many well-established democracies, surveys show growing frustration with the current workings of democratic government and questioning among elites over the ability of democratic governments to take the bold actions necessary to deal rapidly and effectively with the growing number of transnational challenges.”[72] In other words, “well established democracies,” such as those in Western Europe and North America, will, through successive crises (climate, finance, war), erode and replace their democratic systems of government with totalitarian structures that are able to “take the bold actions necessary” to deal with “transnational challenges.”

David Rockefeller wrote in his book, Memoirs, that, “For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure–one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.” (Empahsis added) [73]

The Global Economic Crisis in Context

The current global economic crisis has its roots not in the Bush administration, which is linear and diluted thinking at best, but in the systematic nature of the global capitalist system. Crisis is not separate from capital; crisis is capitalist expansion. In addressing the foundations of the economic crisis, neo-Marxist theory can help explain much of the actions and functions that led to the crisis.

In 2006, Walden Bello wrote an article for Third World Quarterly, in which he explained that, “The crisis of globalisation and over-accumulation is one of the three central crises that are currently eroding US hegemony. The other two are the over-extension of US military power and the crisis of legitimacy of liberal democracy.” He explained that, “Monetary manipulation, via the high interest rate regime initiated by Federal Reserve Chief Paul Volcker in the late 1980s, while directed at fighting inflation, was also geared strategically at channeling global savings to the USA to fuel economic expansion. One key consequence of this momentous move was the Third World debt crisis of the early 1980s, which ended the boom of the economies of the South and led to their resubordination to the Northern capitalist centres.”[74]

The economic foundations of the current crisis were laid in the “Clinton globalist project.” As Bello explained, “The administration embraced globalisation as its ‘Grand Strategy’—that is, its fundamental foreign policy posture towards the world.” Further, “The dominant position of the USA allowed the liberal faction of the US capitalist class to act as a leading edge of a transnational ruling elite in the process of formation—a transnational elite alliance that could act to promote the comprehensive interest of the international capitalist class.”[75]

Bello then explained that, “the dominant dynamic of global capitalism during the Clinton period—one that was the source of its strength as well as its Achilles’ Heel—was not the movement of productive capital but the gyrations of finance capital.” The dominance of finance capital was “a result of the declining profitability of industry brought about by the crisis of overproduction. By 1997 profits in US industry had stopped growing. Financial speculation, or what one might conceptualise as the squeezing of value from already created value, became the most dynamic source of profitability.” This was termed “financialization,” and it had many components that composed its structure and led way for its dominance. Among these were the “Elimination of restrictions dating back to the 1930s that had created a Chinese Wall between investment banking and commercial banking in the USA opened up a new era of rapid consolidation in the US financial sector.”[76]

Specifically, this is in reference to the repealing of the Glass-Steagall Act, put in place in 1933 in response to the actions that created the Great Depression, which undertook banking reforms, specifically those designed to limit speculation. In 1987, the Federal Reserve Board voted to ease regulations under Glass-Steagall, after hearing “proposals from Citicorp, J.P. Morgan and Bankers Trust advocating the loosening of Glass-Steagall restrictions to allow banks to handle several underwriting businesses, including commercial paper, municipal revenue bonds, and mortgage-backed securities.” And, “In August 1987, Alan Greenspan — formerly a director of J.P. Morgan and a proponent of banking deregulation – [became] chairman of the Federal Reserve Board.” In 1989, “the Fed Board approve[d] an application by J.P. Morgan, Chase Manhattan, Bankers Trust, and Citicorp to expand the Glass-Steagall loophole to include dealing in debt and equity securities in addition to municipal securities and commercial paper.” In 1990, “J.P. Morgan [became] the first bank to receive permission from the Federal Reserve to underwrite securities.”

In 1998, the House of Representatives passed “legislation by a vote of 214 to 213 that allow[ed] for the merging of banks, securities firms, and insurance companies into huge financial conglomerates.” And in 1999, “After 12 attempts in 25 years, Congress finally repeal[ed] Glass-Steagall, rewarding financial companies for more than 20 years and $300 million worth of lobbying efforts.”[77]

It was in “the late 1990s, with the stock market surging to unimaginable heights, large banks merging with and swallowing up smaller banks, and a huge increase in banks having transnational branches, Wall Street and its many friends in congress wanted to eliminate the regulations that had been intended to protect investors and stabilize the financial system. Hence the Gramm-Leach-Bliley Act of 1999 repealed key parts of Glass-Steagall and the Bank Holding Act and allowed commercial and investment banks to merge, to offer home mortgage loans, sell securities and stocks, and offer insurance.”[78]

One of the architects of the repeal of Glass-Steagall was Clinton Treasury Secretary Robert Rubin. Rubin spent 26 years with Goldman Sachs before entering the Treasury. Robert Rubin worked closely with Alan Greenspan to oppose the regulation of derivatives, and was backed up by his Deputy Treasury Secretary, Lawrence Summers. Rubin, upon leaving the Treasury, went to work as an executive with Citigroup.[79] Robert Rubin is currently the Co-Chairman of the Council on Foreign Relations. Lawrence Summers was a former Chief Economist for the World Bank before being Deputy Treasury Secretary in the Clinton administration. He then became President of Harvard University, and is now Director of the White House National Economic Council in the Obama administration. The current Treasury Secretary, Timothy Geithner, was former President of the Federal Reserve Bank of New York, and is also a Robert Rubin protégé.

The Clinton years saw the rise of derivatives, which are financial instruments (or contracts), the prices of which are derived from one or more underlying assets, indexes, or other items. The value of a derivative changes as the value of the underlying asset changes. They are used to hedge risks but also as instruments of speculation. Derivatives, “which monetised and traded risk in the exchange of a whole range of commodities,” are a key factor that led to the economic crisis.

Another cause of the crisis was “The creation of massive consumer credit to fuel consumption, with much of the source of this capital coming from foreign investors,” which “created a dangerous gap between the consumers’ debt and their income, opening up the possibility of consumer collapse or default that would carry away both consumers and their creditors.” Further, the stock market’s role in driving growth played a part in paving the way for a financial crisis. “Stock market activity drove, in particular, the so-called technology sector, creating a condition of ‘virtual capitalism’ whose dynamics were based on the expectation of future profitability rather than on current performance, which was the iron rule in the ‘real economy’.”[80]

The Federal Reserve, under Alan Greenspan, initially created the dot-com bubble, providing liquidity for speculation into the stock market and “virtual capitalism,”[81] and when that dot-com bubble burst, as all bubbles do, Greenspan and the Fed created the housing bubble by cutting interests rates and offering more Adjustable Rate Mortgages (AMRs), with Fannie Mae and Freddie Mac encouraging banks to make the high-risk loans.[82]

Speculation had proven itself to be a powerful weapon of finance capital. In the 1990s, this was first exemplified by “a speculative attack on the peso that had investors in panic cashing their pesos for dollars, leading to the devaluation and collapse of the Mexican economy in 1994,” and later in “East Asia in 1997. One hundred billion dollars in speculative capital flooded into the region between 1994 and 1997 as countries liberalised their capital accounts.” This speculative money flowed into real estate and the stock market, which resulted in over-investment, and “Smelling crisis in the air, hedge funds and other speculators targeted the Thai baht, Korean won and other currencies, triggering a massive financial panic that led to the drastic devaluation of these currencies and laid low Asia’s tiger economies. In a few short weeks in the summer of 1997 some $100 billion rushed out of the Asian economies, leading to a drastic reversal of the sizzling growth that had marked those economies in the preceding decade. In less than a month, some 21 million Indonesians and one million Thais found themselves thrust under the poverty line.”[83] This was known as the East Asian Financial Crisis.

This crisis “helped precipitate the Russian financial crisis in 1998, as well as financial troubles in Brazil and Argentina that contributed to the spectacular unraveling of Argentina’s economy in 2001 and 2002, when the economy that had distinguished itself as the most faithful follower of the IMF’s prescriptions of trade and financial liberalisation found itself forced to declare a default on $100 billion of its $140 billion external debt.”[84]

The current crisis is not over. The parallels between the current crisis and the Great Depression are frightening. This trend of building speculative bubbles is reminiscent of the 1920s stock market speculation-driven bubble; built by the Federal Reserve, which eased interest rates, provided liquidity to the banks and actively encouraged speculation. Bubbles that were created then burst.

In 1932, Congressman Louis T. McFadden stated before the Congress that the Federal Reserve banks are not government agencies, but “are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders.”[85] Following the creation of the Fed in 1913, Congressman Charles A. Lindbergh said, “From now on, depressions will be scientifically created.” Indeed, he was right. The current crisis, likely leading to a Great Depression, is being used as the primary means through which a global government is being constructed.

In 2007, UK Prime Minister Gordon Brown called for a new world order in reforming the UN, World Bank, IMF and G7.[86] When the bank Bear Stearns collapsed, due to its heavy participation in the mortgage securities market, the Federal Reserve purchased the bank for JP Morgan Chase, whose CEO sits on the board of the New York Federal Reserve Bank. Shortly after this action, a major financial firm released a report saying that banks face a “new world order” of “consolidation and acquisitions.”[87]

In October of 2008, Gordon Brown said that we “must have a new Bretton Woods – building a new international financial architecture for the years ahead.” He continued in saying that, “we must now reform the international financial system around the agreed principles of transparency, integrity, responsibility, good housekeeping and co-operation across borders.” An article in the Telegraph reported that Gordon Brown would want “to see the IMF reformed to become a ‘global central bank’ closely monitoring the international economy and financial system.”[88] In an op-ed for the Washington Post, Gordon Brown wrote that the “new Bretton Woods” should build upon the concept of  “global governance.”[89] There were also calls for a “global economic policeman,” perhaps in the form of the Bank for International Settlements (BIS).[90] In November of 2008, it was reported that Baron David de 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.”[91]

Out of the ashes of the financial crisis, a new world order will emerge in constructing a global government.

Notes

[1]        Membership, Peter Sutherland. The Trilateral Commission: October 2007: http://www.trilateral.org/membship/bios/ps.htm

[2]        Daily Mail, EU Constitution – the main points. The Daily Mail: June 19, 2004: http://www.dailymail.co.uk/news/article-307249/EU-Constitution–main-points.html

[3]        Time, 10 Questions For Vaclav Klaus. Time Magazine: March 13, 2005: http://www.time.com/time/magazine/article/0,9171,1037613,00.html

[4]        Valéry Giscard d’Estaing, Valéry Giscard d’Estaing: The EU Treaty is the same as the Constitution. The Independent: October 30, 2007: http://www.independent.co.uk/opinion/commentators/valeacutery-giscard-destaing-the-eu-treaty-is-the-same-as-the-constitution-398286.html

[5]        Bruno Waterfield, Lisbon Treaty resurrects the defeated EU Constitution. The Telegraph: June 13, 2008: http://www.telegraph.co.uk/news/newstopics/eureferendum/2123045/EU-Treaty-Lisbon-Treaty-resurrected-defeated-EU-Constitution.html

[6]        Mel Hurtig, The Vanishing Country: Is It Too Late to Save Canada? (McClelland & Stewart Ltd., 2002), page 365

[7]        CFR, Brian Mulroney. About US, Leadership and Staff: International Advisory Board: http://www.cfr.org/bios/9841/brian_mulroney.html

[8]        Robert O’Brien and Marc Williams, Global Political Economy: Evolution and Dynamics, 2nd ed. (Palgrave Macmillan: 2007), page 226

[9]        David Rockefeller, What Private Enterprise Means to Latin America. Foreign Affairs: Vol. 44, No. 3 (April, 1966): page 411

[10]      David Rockefeller, Memoirs. New York: Random House: 2002: Pages 436-437

[11]      David Rockefeller, A hemisphere in the balance. The Wall Street Journal: October 1, 1993

[12]      Alexander Dawson, First World Dreams: Mexico Since 1989. Fernwood Books, 2006: Pages 8-9

[13]      Alexander Dawson, First World Dreams: Mexico Since 1989. Fernwood Books, 2006: Page 29

[14]      Alexander Dawson, First World Dreams: Mexico Since 1989. Fernwood Books, 2006: Page 120

[15]      Joseph Stiglitz, Globalization and its Discontents. W.W. Norton & Co.: 2003: page 121

[16]      Robert Pastor, A North American Community: A Modest Proposal to the Trilateral Commission. The Trilateral Commission: Toronto, Ontario: November 1-2, 2002: www.american.edu/internationalaffairs/cnas/PastorTrilateral.pdf : page 4

[17]      Robert Pastor, A North American Community: A Modest Proposal to the Trilateral Commission. The Trilateral Commission: Toronto, Ontario: November 1-2, 2002: www.american.edu/internationalaffairs/cnas/PastorTrilateral.pdf : page 6

[18]      News and Information, Paul Martin Urged to Take the Lead in Forging a New Vision for North American Cooperation. CCCE: November 5, 2003: http://www.ceocouncil.ca/en/view/?document_id=38&type_id=1

[19]      CCCE, North American Security and Prosperity. http://www.ceocouncil.ca/en/north/north.php

[20]      News and Information, Trinational Call for a North American Economic and Security Community by 2010. CCCE: March 14, 2005: http://www.ceocouncil.ca/en/view/?document_id=395

[21]      Office of the Press Secretary, Joint Statement by President Bush, President Fox, and Prime Minister Martin. The White House: March 23, 2005: http://www.whitehouse.gov/news/releases/2005/03/20050323-2.html

[22]      CFR, Building a North American Community. Independent Task Force on the Future of North America: May 2005: http://www.cfr.org/publication/8102/building_a_north_american_community.html

[23]      Issues Center, North American Competitiveness Council (NACC). US Chamber of Commerce: http://www.uschamber.com/issues/index/international/nacc.htm

[24]      CoA, Board of Directors. The Council of the Americas: http://coa.counciloftheamericas.org/page.php?k=bod

[25]      Herbert Grubel, Fix the Loonie. The Financial Post: January 18, 2008:

http://www.nationalpost.com/opinion/story.html?id=245165

Herbert Grubel, The Case for the Amero. The Fraser Institute: September 1, 1999:

http://www.fraserinstitute.org/Commerce.Web/publication_details.aspx?pubID=2512

Thomas Courchene and Richard Harris, From Fixing to Monetary Union: Options for  North American Currency Integration. C.D. Howe Institute, June 1999:

http://www.cdhowe.org/display.cfm?page=research-fiscal&year=1999

Consider a Continental Currency, Jarislowsky Says. The Globe and Mail: November  23, 2007:

http://www.theglobeandmail.com/servlet/story/LAC.20071123.RDOLLAR23/TPStory/?query=%22Steven%2BChase%22b

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

[27]      Anne-Marie Slaughter, The Real New World Order. Foreign Affairs: September/October, 1997: pages 183-184

[28]      Anne-Marie Slaughter, The Real New World Order. Foreign Affairs: September/October, 1997: pages 184-185

[29]      Mark Carney, Remarks by Mark Carney, Governor of the Bank of Canada to the International Economic Forum of the Americas / Conference of Montreal. The Bank of Canada: June 11, 2009: http://www.bankofcanada.ca/en/speeches/2009/sp110609.html

[30]      Robert Jackson and Georg Sørensen, Introduction to International Relations: Theories and Approaches, Third Edition, OUP 2006: page 162

[31]      William I. Robinson and Jerry Harris, Towards a Global Ruling Class? Globalization and the Transnational Capitalist Class. Science & Society, Vol. 64, No. 1, Spring 2000: pages 11-12

[32]      William I. Robinson and Jerry Harris, Towards a Global Ruling Class? Globalization and the Transnational Capitalist Class. Science & Society, Vol. 64, No. 1, Spring 2000: page 12

[33]      Robert Jackson and Georg Sørensen, Introduction to International Relations: Theories and Approaches, Third Edition, OUP 2006: page 258

[34]      William I. Robinson and Jerry Harris, Towards a Global Ruling Class? Globalization and the Transnational Capitalist Class. Science & Society, Vol. 64, No. 1, Spring 2000: page 27

[35]      William I. Robinson and Jerry Harris, Towards a Global Ruling Class? Globalization and the Transnational Capitalist Class. Science & Society, Vol. 64, No. 1, Spring 2000: page 28

[36]      William I. Robinson and Jerry Harris, Towards a Global Ruling Class? Globalization and the Transnational Capitalist Class. Science & Society, Vol. 64, No. 1, Spring 2000: page 29

[37]      William I. Robinson and Jerry Harris, Towards a Global Ruling Class? Globalization and the Transnational Capitalist Class. Science & Society, Vol. 64, No. 1, Spring 2000: page 30

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[39]      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

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

[41]      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

[42]      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

[43]      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

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

[45]      Andrew Gavin Marshall, North-American Monetary Integration: Here Comes the Amero. Global Research: January 20, 2008: http://www.globalresearch.ca/index.php?context=va&aid=7854

[46]      Commission Européenne, EU and US to sign up to transatlantic economic integration plan at Washington Summit on 30 April. UN: April 27, 2007: http://www.eu-un.europa.eu/articles/fr/article_6987_fr.htm

[47]      Andrew Coyne, The crossroads of international trade. Macleans: September 18, 2008: http://www2.macleans.ca/tag/council-of-canadians/

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

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

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

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

John Irish, GCC Agrees on Monetary Union but Signals Delay in Common Currency. Reuters: June 10, 2008: http://www.arabnews.com/?page=6&section=0&article=110727&d=10&m=6&y=2008

Forbes, TIMELINE-Gulf single currency deadline delayed beyond 2010. Forbes: March 23, 2009: http://www.forbes.com/feeds/afx/2009/03/24/afx6204462.html

Agencies, ‘GCC need not rush to form single currency’. Business 24/7: March 26, 2009: http://www.business24-7.ae/articles/2009/3/pages/25032009/03262009_4e19de908b174f04bfb3c37aec2f17b3.aspx

[52]      Barry Eichengreen, International Monetary Arrangements: Is There a Monetary Union in Asia’s Future? The Brookings Institution: Spring 1997: http://www.brookings.edu/articles/1997/spring_globaleconomics_eichengreen.aspx

atimes.com, After European now Asian Monetary Union? Asia Times Online: September 8, 2001: http://www.atimes.com/editor/CI08Ba01.html

ASEAN, China, Japan, SKorea, ASEAN Makes Moves for Asian Monetary Fund. Association of Southeast Asian Nations: May 6, 2005: http://www.aseansec.org/afp/115.htm

Reuven Glick, Does Europe’s Path to Monetary Union Provide Lessons for East Asia? Federal Reserve Bank of San Francisco: August 12, 2005: http://www.frbsf.org/publications/economics/letter/2005/el2005-19.html

AFP, Asian Monetary Fund may be needed to deal with future shocks. Channel News Asia: July 2, 2007: http://www.channelnewsasia.com/stories/afp_world_business/view/285700/1/.html

AFX News Limited, East Asia monetary union ‘feasible’ but political will lacking – ADB. Forbes: September 19, 2007: http://www.forbes.com/feeds/afx/2007/09/19/afx4133743.html

[53]      Lin Li, ASEAN discusses financial, monetary integration. China View: April 2, 2008: http://news.xinhuanet.com/english/2008-04/02/content_7906391.htm

[54]      Paul De Grauwe, Economics of Monetary Union. Oxford University Press, 2007: pages 109-110

Heather Milkiewicz and Paul R. Masson, Africa’s Economic Morass—Will a Common Currency Help? The Brookings Institution: July 2003: http://www.brookings.edu/papers/2003/07africa_masson.aspx

John Gahamanyi, Rwanda: African Central Bank Governors Discuss AU Financial Institutions. The New Times: August 23, 2008: http://allafrica.com/stories/200808230124.html

Eric Ombok, African Union, Nigeria Plan Accord on Central Bank. Bloomberg: March 2, 2009: http://www.bloomberg.com/apps/news?pid=20601116&sid=afoY1vOnEMLA&refer=africa

Ministry of Foreign Affairs, AFRICA IN THE QUEST FOR A COMMON CURRENCY. Republic of Kenya: March 2009: http://www.mfa.go.ke/mfacms/index.php?option=com_content&task=view&id=346&Itemid=62

[55]      Edmund Conway, UK policy blamed for soaring debt levels. The Telegraph: February 20, 2006: http://www.telegraph.co.uk/finance/2932605/UK-policy-blamed-for-soaring-debt-levels.html

[56]      Strobe Talbott, America Abroad. Time Magazine: July 20, 1992: http://www.time.com/time/magazine/article/0,9171,976015,00.html

[57]      Richard N. Gardner, The Hard Road to World Order. Foreign Affairs: April, 1974: page 556

[58]      Richard N. Gardner, The Hard Road to World Order. Foreign Affairs: April, 1974: page 557

[59]      Richard N. Gardner, The Hard Road to World Order. Foreign Affairs: April, 1974: page 558

[60]      Richard Falk and Andrew Strauss, Toward Global Parliament. Foreign Affairs: January/February, 2001: page 213

[61]      Philip Thornton, UN unveils plan to release untapped wealth of…$7 trillion (and solve the world’s problems at a stroke). The Independent: January 30, 2006: http://www.independent.co.uk/news/world/politics/un-unveils-plan-to-release-untapped-wealth-of7-trillion-and-solve-the-worlds-problems-at-a-stroke-525173.html

[62]      Richard Falk and Andrew Strauss, Toward Global Parliament. Foreign Affairs: January/February, 2001: page 215

[63]      Richard Falk and Andrew Strauss, Toward Global Parliament. Foreign Affairs: January/February, 2001: page 218

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

[65]      EuroNews, European Elections. Jacques Attali: the euronews interview: April 6, 2009: http://www.euronews.net/2009/06/04/jacques-attali-the-euronews-interview/

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

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

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

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

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

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

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

[73]      David Rockefeller, Memoirs. Random House, New York, 2002: page 405

[74]      Walden Bello, The Capitalist Conjuncture: Over-accumulation, Financial Crises, and the retreat from globalization. Third World Quarterly: Vol. 27, No. 8: 2006: pages 1346-1348

[75]      Walden Bello, The Capitalist Conjuncture: Over-accumulation, Financial Crises, and the retreat from globalization. Third World Quarterly: Vol. 27, No. 8: 2006: pages 1348-1349

[76]      Walden Bello, The Capitalist Conjuncture: Over-accumulation, Financial Crises, and the retreat from globalization. Third World Quarterly: Vol. 27, No. 8: 2006: page 1350

[77]      PBS, The Long Demise of Glass-Steagall. Frontline: http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

[78]      Robert Buzzanco, Bring Back Glass-Steagall? History News Network: October 21, 2008: http://hnn.us/articles/55548.html

[79]      PETER S. GOODMAN, Taking Hard New Look at a Greenspan Legacy. The New York Times: October 8, 2008: http://www.nytimes.com/2008/10/09/business/economy/09greenspan.html?_r=1

[80]      Walden Bello, The Capitalist Conjuncture: Over-accumulation, Financial Crises, and the retreat from globalization. Third World Quarterly: Vol. 27, No. 8: 2006: page 1350

[81]      Bill Virgin, et. al, The Insider: Dot-com boom just another of ‘Greenspan’s Bubbles’. Seattle PI: February 10, 2008: http://seattlepi.nwsource.com/business/350766_theinsider11.html?source=rss

[82]      Richard C. Cook, They Did It On Purpose: The Housing Bubble & Its Crash were Engineered by the US Government, the Fed & Wall Street. Global Research: October 23, 2008: http://www.globalresearch.ca/index.php?context=va&aid=10654

[83]      Walden Bello, The Capitalist Conjuncture: Over-accumulation, Financial Crises, and the retreat from globalization. Third World Quarterly: Vol. 27, No. 8: 2006: pages 1351-1352

[84]      Walden Bello, The Capitalist Conjuncture: Over-accumulation, Financial Crises, and the retreat from globalization. Third World Quarterly: Vol. 27, No. 8: 2006: page 1352

[85]      Louis T. McFadden, Congressional Record. June 10, 1932: pages 12595-12596 http://www.scribd.com/doc/16502353/Congressional-Record-June-10-1932-Louis-T-McFadden

[86]      Larry Elliott, Brown calls for overhaul of UN, World Bank and IMF. The Guardian: January 17, 2007: http://www.guardian.co.uk/business/2007/jan/17/globalisation.internationalaidanddevelopment

[87]      Andrea Ricci, Banks face “new world order,” consolidation: report. Reuters: March 17, 2008: http://www.reuters.com/article/innovationNews/idUSN1743541720080317

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

[89]      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

[90]      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

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

Controlling the Global Economy: Bilderberg, the Trilateral Commission and the Federal Reserve

Controlling the Global Economy: Bilderberg, the Trilateral Commission and the Federal Reserve
Global Power and Global Government: Part 3
Global Research, August 3, 2009

This essay is Part 3 of “Global Power and Global Government,” published by Global Research.

Part 1: Evolution and Revolution of the Central Banking System
Part 2: Origins of the American Empire: Revolution, World Wars and World Order



The Bilderberg Group and the European Union Project

In 1954, the Bilderberg Group was founded in the Netherlands, which was a secretive meeting held once a year, drawing roughly 130 of the political-financial-military-academic-media elites from North America and Western Europe as “an informal network of influential people who could consult each other privately and confidentially.”[1] Regular participants include the CEOs or Chairman of some of the largest corporations in the world, oil companies such as Royal Dutch Shell, British Petroleum, and Total SA, as well as various European monarchs, international bankers such as David Rockefeller, major politicians, presidents, prime ministers, and central bankers of the world.[2]

Joseph Retinger, the founder of the Bilderberg Group, was also one of the original architects of the European Common Market and a leading intellectual champion of European integration. In 1946, he told the Royal Institute of International Affairs (the British counterpart and sister organization of the Council on Foreign Relations), that Europe needed to create a federal union and for European countries to “relinquish part of their sovereignty.” Retinger was a founder of the European Movement (EM), a lobbying organization dedicated to creating a federal Europe. Retinger secured financial support for the European Movement from powerful US financial interests such as the Council on Foreign Relations and the Rockefellers.[3] However, it is hard to distinguish between the CFR and the Rockefellers, as, especially following World War II, the CFR’s main finances came from the Carnegie Corporation, Ford Foundation and most especially, the Rockefeller Foundation.[4]

The Bilderberg Group acts as a “secretive global think-tank,” with an original intent to “to link governments and economies in Europe and North America amid the Cold War.”[5] One of the Bilderberg Group’s main goals was unifying Europe into a European Union. Apart from Retinger, the founder of the Bilderberg Group and the European Movement, another ideological founder of European integration was Jean Monnet, who founded the Action Committee for a United States of Europe, an organization dedicated to promoting European integration, and he was also the major promoter and first president of the European Coal and Steel Community (ECSC), the precursor to the European Common Market.[6]

Declassified documents (released in 2001) showed that “the US intelligence community ran a campaign in the Fifties and Sixties to build momentum for a united Europe. It funded and directed the European federalist movement.”[7] The documents revealed that, “America was working aggressively behind the scenes to push Britain into a European state. One memorandum, dated July 26, 1950, gives instructions for a campaign to promote a fully-fledged European parliament. It is signed by Gen William J Donovan, head of the American wartime Office of Strategic Services, precursor of the CIA.” Further, “Washington’s main tool for shaping the European agenda was the American Committee for a United Europe, created in 1948. The chairman was Donovan, ostensibly a private lawyer by then,” and “The vice-chairman was Allen Dulles, the CIA director in the Fifties. The board included Walter Bedell Smith, the CIA’s first director, and a roster of ex-OSS figures and officials who moved in and out of the CIA. The documents show that ACUE financed the European Movement, the most important federalist organisation in the post-war years.” Interestingly, “The leaders of the European Movement – Retinger, the visionary Robert Schuman and the former Belgian prime minister Paul-Henri Spaak – were all treated as hired hands by their American sponsors. The US role was handled as a covert operation. ACUE’s funding came from the Ford and Rockefeller foundations as well as business groups with close ties to the US government.”[8]

The European Coal and Steel Community was formed in 1951, and signed by France, West Germany, Italy, Belgium, Luxembourg and the Netherlands. Newly released documents from the 1955 Bilderberg meeting show that a main topic of discussion was “European Unity,” and that “The discussion affirmed complete support for the idea of integration and unification from the representatives of all the six nations of the Coal and Steel Community present at the conference.” Further, “A European speaker expressed concern about the need to achieve a common currency, and indicated that in his view this necessarily implied the creation of a central political authority.” Interestingly, “A United States participant confirmed that the United States had not weakened in its enthusiastic support for the idea of integration, although there was considerable diffidence in America as to how this enthusiasm should be manifested. Another United States participant urged his European friends to go ahead with the unification of Europe with less emphasis upon ideological considerations and, above all, to be practical and work fast.”[9] Thus, at the 1955 Bilderberg Group meeting, they set as a primary agenda, the creation of a European common market.[10]

In 1957, two years later, the Treaty of Rome was signed, which created the European Economic Community (EEC), also known as the European Community. Over the decades, various other treaties were signed, and more countries joined the European Community. In 1992, the Maastricht Treaty was signed, which created the European Union and led to the creation of the Euro. The European Monetary Institute was created in 1994, the European Central Bank was founded in 1998, and the Euro was launched in 1999. Etienne Davignon, Chairman of the Bilderberg Group and former EU Commissioner, revealed in March of 2009 that the Euro was debated and planned at Bilderberg conferences.[11] This was an example of regionalism, of integrating an entire region of the world, a whole continent, into a large supranational structure. This was one of the primary functions of the Bilderberg Group, which would also come to play a major part in other international issues.

Interdependence Theory

The theoretical justifications for integration and regionalism arrived in the 1960s with what is known as “interdependence theory.” One of its primary proponents was a man named Richard N. Cooper. Two other major proponents of interdependence theory are Robert Keohane and Joseph Nye. Interdependence theory and theorists largely expand upon the notions raised by Keynes.

Richard Cooper wrote that, during the 1960s “there has been a strong trend toward economic interdependence among the industrial countries. This growing interdependence makes the successful pursuit of national economic objectives much more difficult.” He also identified that “the objective of greater economic integration involves international agreements which reduce the number of policy instruments available to national authorities for pursuit of their economic objectives.”[12] Further, “Cooper argues that new policies are needed to address the unprecedented conditions of international interdependence.”[13]

Cooper also opposed a return to mercantilist pursuits in order for nations to secure economic objectives, arguing that, “economic nationalism invited policy competition that is doomed to fail,” and thus concludes “that international policy coordination is virtually the only means to achieve national economic goals in an interdependent world.”[14]

Keohane and Nye go into further analysis of interdependence, specifically focusing on how interdependence transforms international politics. They tend to frame their concepts in ideological opposition to international relations realists, who view the world, like mercantilists, as inherently anarchic. Keohane and Nye construct what is known as “complex interdependence,” in which they critique realism. They analyze realism as consisting of two primary facets: that states are the main actors in the international arena, and that military force is central in international power. They argue that, “global economic interdependence has cast doubt on these assumptions. Transnational corporations and organizations born of economic integration now vie with states for global influence.”[15]

Keohane and Nye also discuss the relevance and importance of international regimes in the politics of interdependence, defining regimes as “networks of rules, norms, and procedures that regularize behavior.” They argue that, “Regimes are affected by the distribution of power among states, but regimes, in turn, may critically influence the bargaining process among states.”[16] Again, this contests the realist and mercantilist notions of the international sphere being one of chaos, as a regime can produce and maintain order within the international arena.

Interdependence theorists tend to argue that interdependence has altered the world order in that it has become based upon cooperation and mutual interests, largely championing the liberal economic notion of a non-chaotic and cooperative international order in which all nations seek and gain a mutual benefit. Ultimately, it justifies the continued process of global economic integration, while realist and mercantilist theorists, who interdependence theorists contest and debate, justify the use of force in the international arena in terms of describing it as inherently chaotic. In theory, the notions of mercantilism and liberalism are inimical to one another however, they are not mutually exclusive and are, in fact, mutually reinforcing. Events throughout the 1970s are a clear example of this mutually reinforcing nature of mercantilist behaviour on the part of states, and the “interdependence” of the liberal economic order.

As early mercantilist theorist Frederick List wrote in regards to integration and union, “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.”[17] It would appear that the elites have chosen the road less traveled in the 20th century, with the Bilderberg Group pursuing integration and union in Europe by starting with commercial union and having political union follow. This concept is also evident in the notions of interdependence theory, which focuses on global economic integration as changing the realist/mercantilist notions of a chaotic international order, as states and other actors become more cooperative through such economic ties.

Trilateralism

In the late 1960s, Western European economies (in particular West Germany) and Japan were rapidly developing and expanding. Their currencies rose against the US dollar, which was pegged to the price of gold as a result of the Bretton Woods System, which, through the IMF, set up an international monetary system based upon the US dollar, which was pegged to gold. However, with the growth of West Germany and Japan, “by the late 1960s the system could no longer be expected to perform its previous function as a medium for international exchange, and as a surrogate for gold.” On top of this, to maintain its vast empire, the US had developed a large balance-of-payments deficit.[18]

Richard Nixon took decisive, and what many referred to as “protectionist” measures, and in 1971, ended the dollar’s link to gold, which “resulted in a devaluation of the dollar as it began to float against other currencies,” and “was meant to restore the competitiveness of the US economy,”[19] as with devaluation, “U.S.-made goods would cost less to foreigners and foreign-made goods would be less competitive on the U.S. market.” The second major action taken by Nixon was when he “slapped a ten percent surcharge on most imports into the United States,” which was to benefit U.S. manufacturing firms over foreign ones in competition for the U.S. market. The result was that less imports from Asia were coming into the US, more US goods were sold in their markets at more competitive prices, forcing Japan and the European Economic Community (EEC) to relax their trade barriers to US products.[20]

An article in Foreign Affairs, the journal of the Council on Foreign Relations, referred to Nixon’s New Economic Policy as “protectionist,” encouraging a “disastrous isolationist trend,”[21] and that Nixon shattered “the linchpin of the entire international monetary system— on whose smooth functioning the world economy depends.”[22] Another article in Foreign Affairs explained that the Atlanticist, or internationalist faction of the US elite were in particular, upset with Nixon’s New Economic Policy, however, they “agreed on the diagnosis: the relative balance of economic strengths had so changed that the United States could no longer play the role of economic leader. But they also argued that further American unilateralism would fuel a spiral of defensive reactions that would leave all the Western economies worse off. Their suggested remedy, instead, was much more far-reaching coordination among all the trilateral [North American, European and Japanese] governments.”[23]

There was a consensus within the American ruling class that the Bretton Woods System was in need of a change, but there were divisions among members in how to go about changing it. The more powerful (and wealthy) international wing feared how US policies may isolate and alienate Western Europe and Japan, and they advocated that, “The world economic roles of America must be reconciled with the growth to power of Europe and Japan. There must be fundamental reform of the international monetary system. There must be renewed efforts to reduce world trade barriers. The underlying U.S. balance of payments has deteriorated.” However, Nixon “went much too far” as he alienated Western Europe and Japan.

In 1970, David Rockefeller became Chairman of the Council on Foreign Relations, while also being Chairman and CEO of Chase Manhattan. In 1970, an academic who joined the Council on Foreign Relations in 1965 wrote a book called Between Two Ages: America’s Role in the Technetronic Era. The author, Zbigniew Brzezinski, called for the formation of “A Community of the Developed Nations,” consisting of Western Europe, the United States and Japan. Brzezinski wrote about how “the traditional sovereignty of nation states is becoming increasingly unglued as transnational forces such as multinational corporations, banks, and international organizations play a larger and larger role in shaping global politics.” David Rockefeller had taken note of Brzezinski’s writings, and was “getting worried about the deteriorating relations between the U.S., Europe, and Japan,” as a result of Nixon’s economic shocks. In 1972, David Rockefeller and Brzezinski “presented the idea of a trilateral grouping at the annual Bilderberg meeting.” In July of 1972, seventeen powerful people met at David Rockefeller’s estate in New York to plan for the creation of the Commission. Also at the meeting was Brzezinski, McGeorge Bundy, the President of the Ford Foundation, (brother of William Bundy, editor of Foreign Affairs) and Bayless Manning, President of the Council on Foreign Relations.[24] So, in 1973, the Trilateral Commission was formed to address these issues.

A 1976 article in Foreign Affairs explained that, “Trilateralism as a linguistic expression—and the Trilateral Commission—arose in the early 1970s from the reaction of the more Atlanticist part of the American foreign policy community to the belligerent and defensive unilateralism that characterized the foreign economic policy of the Nixon Administration.”[25] The Commission’s major concerns were to preserve for the “industrialized societies,” in other words, seek mutual gain for the Trilateral nations, and to construct “a common approach to the needs and demands of the poorer nations.” However, this should be read as, “constructing a common approach to [dealing with] poorer nations.” As well as this, the Commission would undertake “the coordination of defense policies and of policies toward such highly politicized issues as nuclear proliferation, terrorism, and aerial hijacking, and such highly politicized geographic areas as the Middle East or Southern Africa.”[26]

Interestingly, interdependence theorist Joseph Nye is a member of the Trilateral Commission, as is Richard N. Cooper.[27] Today, Joseph Nye is a member of the Board of Directors of the Council on Foreign Relations,[28] and Richard N. Cooper was a Director of the Council on Foreign Relations from 1993-1994.[29]

The end of the link of the dollar to gold meant that, “the US was no longer subject to the discipline of having to try to maintain a fixed par value of the dollar against gold or anything else: it could let the dollar move as the US Treasury [and ultimately, the Federal Reserve] wished and pointed towards the removal of gold from international monetary affairs.” This created a dollar standard, as opposed to a gold standard, which “places the direction of the world monetary policy in the hands of a single country,” which was “not acceptable to Western Europe or Japan.”[30] Addressing this issue was among the reasoning behind the creation of the Trilateral Commission.

The Oil Crisis

The May 1973 meeting of the Bilderberg Group occurred five months prior to the extensive oil price rises brought about by the Yom Kippur War. However, according to leaked minutes from the meeting, a 400% increase in the price of oil was discussed, and meeting participants were creating a “plan [on] how to manage the about-to-be-created flood of oil dollars.”[31] Oil is no issue foreign to the interests of the Bilderberg Group, as among the 1973 participants were the CEOs of Royal Dutch Shell, British Petroleum (BP), Total S.A., ENI, Exxon, as well as significant banking interests and individuals such as Baron Edmond de Rothschild and David Rockefeller, and the US Secretary of State at the time, Henry Kissinger.[32]

In 1955, Henry Kissinger, a young scholar at the time, was brought into the Council on Foreign Relations, where he distinguished himself as a prominent Council member and became a protégé to Nelson Rockefeller, one of David Rockefeller’s brothers. In 1969, Kissinger became Richard Nixon’s National Security Adviser.[33] This Bilderberg meeting was taking place during a time of great international instability, particularly in the Middle East.

Kissinger, as National Security Adviser, was in a power struggle with Secretary of State William Rogers over foreign policy. Nixon even referred to the continual power struggle between Kissinger as National Security Advisor and Secretary of State William Rogers, saying that, “Henry’s personality problem is just too goddamn difficult for us to deal [with],” and that Kissinger’s “psychopathic about trying to screw [Secretary of State William] Rogers.” Nixon even said that if Kissinger wins the struggle against Rogers, Kissinger would “be a dictator.” Nixon told his Chief of Staff, Haldeman, that Kissinger feels “he must be present every time I see anybody important.”[34]

At the time of the Yom Kippur War, Nixon was in the middle of major domestic issues, as the Watergate scandal was breaking, leading to an increase in the power and influence of Kissinger, as “The president was deeply preoccupied, and at times incapacitated by self-pity or alcohol.”[35] By 1970, Kissinger had Rogers “frozen out of policy-making on Southeast Asia,” during the Vietnam War, so Rogers “concentrated on the Middle East.” Eventually, Nixon had Rogers resign, and then Henry Kissinger took the position as both National Security Advisor and Secretary of State.[36]

As Kissinger later said in a speech marking the 25th anniversary of the Trilateral Commission, “In 1973, when I served as Secretary of State, David Rockefeller showed up in my office one day to tell me that he thought I needed a little help,” and that, “David’s function in our society is to recognize great tasks, to overcome the obstacles, to help find and inspire the people to carry them out, and to do it with remarkable delicacy.” Kissinger finished his speech by saying, “David, I respect you and admire you for what you have done with the Trilateral Commission. You and your family have represented what goes for an aristocracy in our country—a sense of obligation not only to make it materially possible, but to participate yourself in what you have made possible and to infuse it with the enthusiasm, the innocence, and the faith that I identify with you and, if I may say so, with your family.”[37]

Kissinger sabotaged Rogers’ peace negotiations with Egyptian President Anwar Sadat, who, at the time, was trying to rally other Arab leaders against Israel. In 1972, King Faisal of Saudi Arabia had “insisted that oil should not be used as a political weapon.” However, “in 1973, Faisal announced that he was changing his mind about an oil embargo.” Faisal held a meeting with western oil executives, warning them. Sadat told Faisal of the plan to attack Israel, and Faisal agreed to help both financially and with the “oil weapon.” Days later, the Saudi oil minister, Sheik Ahmed Yamani, “began dropping hints to the oil companies about a cutback in production that would affect the United States.” Yamani said Henry Kissinger had been “misleading President Nixon about the seriousness of Faisal’s intentions.”[38]

On October 4, the US National Security Agency (NSA) “knew beyond a shadow of a doubt that an attack on Israel would take place on the afternoon of October 6.” However, the Nixon White House “ordered the NSA to sit on the information,” until the US warned Israel a few hours before the attack, even though “Nixon’s staff had at least two days’ advance warning that an attack was coming on October 6.”[39] Hours before the attack on Israel by Syria and Egypt, the U.S. warned its Israeli counterparts, however, “the White House insisted that the Israelis do nothing: no preemptive strikes, no firing the first shot. If Israel wanted American support, Kissinger warned, it could not even begin to mobilize until the Arabs invaded.” Israeli Prime Minister Golda Meir stood Israeli defences down, citing “Kissinger’s threats as the major reason.” Interestingly, Kissinger himself was absent from his office on the day of the attack, and he knew days before when it was set to take place, yet, still went to the Waldorf Astoria in New York. Further, he waited three days before convening a U.N. Security Council meeting.[40] The attack needed to go forward, as directed by the backdoor diplomacy of Kissinger.

With the outbreak of the Yom Kippur War on October 6, 1973, Kissinger “centered control of the crisis in his own hands.” After the Israelis informed the White House that the attack on them had taken place, Kissinger did not consult Nixon or even inform him on anything for three hours, who was at his retreat in Florida. After talking to Nixon hours later, Kissinger told him that, “we are on top of it here,” and “the president left matters in Kissinger’s hands.” Alexander Haig, Kissinger’s former second in command in the National Security Council, then Chief of Staff to Nixon, was with the President on that morning. Haig told Kissinger “that Nixon was considering returning to Washington, [but] Kissinger discouraged it—part of a recurring pattern to keep Nixon out of the process.” For three days, it was Kissinger who “oversaw the diplomatic exchanges with the Israelis and Soviets about the war. Israeli prime minister Golda Meir’s requests for military supplies, which were beginning to run low, came not to Nixon but to Kissinger.” On October 11, the British Prime Minister called asking to speak to Nixon, to which Kissinger responded, “Can we tell them no? When I talked to the President he was loaded,” but the British were told, “the prime minister could speak to Kissinger.”[41]

On October 12, the major American oil companies sent a letter to Nixon suggesting the Arab countries “should receive some price increase,” and Nixon, following Kissinger’s advice, sent arms to Israel, which precipitated the Arab OPEC countries to announce a 70% increase in the price of oil on October 16th, and announce an oil embargo against the US on the 17th.[42]

The Bilderberg meeting five months prior involved participants planning “how to manage the about-to-be-created flood of oil dollars.” At the meeting, an OPEC Middle East oil revenue rise of over 400% was predicted. A Bilderberg document from the meeting stated that, “The task of improving relations between energy importing countries should begin with consultations between Europe, the US and Japan. These three regions, which represented about 60 per cent of world energy consumption, accounted for an even greater proportion of world trade in energy products, as they absorbed 80 per cent of world energy exports.” The same document also stated that “an energy crisis or an increase in energy costs could irremediably jeopardize the economic expansion of developing countries which had no resources of their own,” and the “misuse or inadequate control of the financial resources of the oil producing countries could completely disorganize and undermine the world monetary system.”[43]

As economist F. William Engdahl noted in his book, A Century of War, “One enormous consequence of the ensuing 400 per cent rise in OPEC oil prices was that investments of hundreds of millions of dollars by British Petroleum, Royal Dutch Shell [both present at Bilderberg] and other Anglo-American petroleum concerns in the risky North Sea could produce oil at a profit,” as “the profitability of these new North Sea oilfields was not at all secure until after the OPEC price rises.”[44] In 2001, the former Saudi representative to OPEC, Sheik Ahmed Yamani, said, “’I am 100 per cent sure that the Americans were behind the increase in the price of oil. The oil companies were in real trouble at that time, they had borrowed a lot of money and they needed a high oil price to save them.” When he was sent by King Faisal to the Shah of Iran in 1974, the Shah said that it was Henry Kissinger who wanted a higher price for oil.[45]

An article in Foreign Policy, the journal published by the Carnegie Endowment for International Peace, concluded from exhaustive research, that, “Since 1971, the United States has encouraged Middle East oil-producing states to raise the price of oil and keep it up.” This conclusion was based upon State Department documents, congressional testimony and interviews with former policy-makers.[46] At the Eighth Petroleum Congress of the League of Arab States (Arab League) in 1972, James Akins, head of the fuel and energy section of the State Department, gave a speech in which he said that oil prices were “expected to go up sharply due to lack of short-term alternatives to Arab oil,” and that this was, “an unavoidable trend.” A Western observer at the meeting said Akins’ speech was essentially, “advocating that Arabs raise the price of oil to $5 per barrel.” The oil industry itself was also becoming more unified in their position. The National Petroleum Council (NPC), “a government advisory body representing oil industry interests, waited until Nixon was safely re-elected before publishing a voluminous series of studies calling for a doubling of U.S. oil and gas prices.”[47]

The summer before the Yom Kippur War, in 1973, James Akins was made U.S. Ambassador to Saudi Arabia. He also happened to be a member of the Council on Foreign Relations.[48] Saudi Arabian minister for petroleum and representative to OPEC, Sheik Ahmed Yamani, stated in February of 1973, that, “it is in the interests of the oil companies that prices be raised,” as “their profits are collected from the production stage.” It was also in the interests of the US, as OPEC will have a massive increase in revenues to be invested, likely in the US, itself.[49]

The oil companies themselves were also fearful of having their business facilities in OPEC countries nationalized, so they “were anxious to engage OPEC countries in the oil business in the United States, in order to give them an interest in maintaining the status quo.” Weeks before war broke out, the National Security Council, headed by Kissinger, issued a statement saying that military intervention in the event of a war in the Middle East was “ruled out of order.”[50]

U.S. Ambassador to Saudi Arabia, James Akins, later testified in congress on the fact that when, in 1975, the Saudis went to Iran to try to get the Shah to roll back the price of oil, they were told that Kissinger told the Iranians that, “the United States understood Iran’s desire for higher oil prices.”[51] Akins was removed from Saudi Arabia in 1975, “following policy disputes with Secretary of State Henry Kissinger.”[52]

The OPEC oil price increases resulted in the “removal of some withholding taxes on foreign investment” in the United States, “unchecked arms sales, which cannot be handled without U.S. support personnel, to Iran and Saudi Arabia,” as well as an “attempt to suppress publication of data on volume of OPEC funds on deposit with U.S. banks.”[53] Ultimately, the price increases “would be of competitive advantage to the United States because the economic damage would be greater to Europe and Japan.” Interestingly, “Programs for sopping up petrodollars have themselves become justifications for the continued flow of U.S. and foreign funds to pay for higher priced oil. In fact, a lobby of investors, businessmen, and exporters [was] growing in the United States to favor giving the OPEC countries their way.” Outside the United States, it is “widely believed” that the high-priced oil policy was aimed at hurting Europe, Japan, and the developing world.[54] There was also “input from the oil industry” which went “into the formulation of U.S. international oil policy.”[55]

In 1974, when a White House official suggested to the Treasury to force OPEC to lower the price of oil, his idea was swept under, and he later stated that, “It was the banking leaders who swept aside this advice and pressed for a ‘recycling’ program to accommodate to higher oil prices.” In 1975, a Wall Street investment banker was sent to Saudi Arabia to be the main investment adviser to the Saudi Arabian Monetary Agency (SAMA), and “he was to guide the Saudi petrodollar investments to the correct banks, naturally in London and New York.”[56]

In 1974, another OPEC oil price increase of more than 100 percent was undertaken, following a meeting in Tehran, Iran. This initiative was undertaken by the Shah of Iran, who just months before was opposed to the earlier price increases. Sheikh Yamani, the Saudi oil minister, was sent to meet with the Shah of Iran following his surprise decision to raise prices, as Yamani was sent by Saudi King Faisal, who was worried that higher prices would alienate the US, to which the Shah said to Yamani, “Why are you against the increase in the price of oil? That is what they want? Ask Henry Kissinger – he is the one who wants a higher price.”[57]

As Peter Gowan stated in The Globalization Gamble, “the oil price rises were the result of US influence on the oil states and they were arranged in part as an exercise in economic statecraft directed against America’s ‘allies’ in Western Europe and Japan. And another dimension of the Nixon administration’s policy on oil price rises was to give a new role, through them, to the US private banks in international financial relations.” He explained that the Nixon administration was pursuing a higher oil price policy two years before the Yom Kippur War, and “as early as 1972 the Nixon administration planned for the US private banks to recycle the petrodollars when OPEC finally did take US advice and jack up oil prices.”[58] Ultimately, the price rises had devastating impacts on Western Europe and Japan, which were quickly growing economies, but which were heavily dependent upon Middle eastern oil. This is an example of how the US, while championing a liberal international economic order, acted in a mercantilist fashion, depriving competitors through improving its own power and influence.

In 1973, David Rockefeller set up the Trilateral Commission to promote coordination and cooperation among Japan, Western Europe, and North America (namely, the US), yet, in the same year, his good friend and close confidante, Henry Kissinger, played a key role in promoting and orchestrating the oil price rises that had a damaging impact upon Japan and Western Europe. Also it should be noted, David Rockefeller’s Chase Manhattan Bank, of which he was CEO at the time, profited immensely off of the petrodollar recycling system promoted by Henry Kissinger, where the OPEC countries would reinvest their new excess capital into the American economy through London and New York banks.

How does one account for these seemingly diametrically opposed initiatives? Perhaps the oil crisis, having a negative effect on Japan and Western European economies, could have spurred the necessity for cooperation among the trilateral countries, forcing them to come together and coordinate future policies.

It is of vital importance to understand the global conditions in which the price rises and its solutions arose, particularly in relation to the Third World. Africa, since the late 1800s, had been under European colonial control. It was from the 1950s to the 1960s that almost all African countries were granted independence from their European metropoles. Africa is a very significant case to look at, as it is extremely rich in many resources, from agriculture to oil, minerals, and a huge variety of other resources used all around the world. If African nations were able to develop their own economies, use their own resources, and create their own industries and businesses, they could become self-sufficient at first, and then may become a force of great competition for the established industries and elites around the world. After all, Europe does not have much to offer in terms of resources, as the continent’s wealth has largely come from plundering the resources of regions like Africa, and in becoming captains of monetary manipulation. A revitalized, vibrant, economically independent and successful Africa could spell the end of Western financial dominance. “Between 1960 and 1975 African industry grew at the annual rate of 7.5 per cent. This compared favourably with the 7.2 per cent for Latin America and 7.5 per cent for South-East Asia.”[59] In Africa, “the 1960-73 period witnessed some important first steps in the process of industrialization,” however, “[t]he dramatic decline in rates of industrialization began to show after the first ‘oil crisis’. Between 1973 and 1984, the rate of growth” rapidly declined.[60]

So, by manipulating the price of oil, you can manipulate the development of the Third World, which was beginning to look as if it could grow into significant competition, as it was experiencing exponential growth. There were two oil shocks in the 1970s; one in 1973 and another in 1979. Following the price rises, there was a need for the developing countries of the world to borrow money to finance development.

The banks that were getting massive amounts of petrodollars deposited into them from the oil producing countries needed to “recycle” the dollars by investing them somewhere, in order to make a profit. Luckily for the banks, “[d]eveloping countries were desperate for funds to help them industrialize their economies. In some cases, developing countries were oil consumers and required loans to help pay for rising oil prices. In other cases, a decision had been made to follow a strategy of indebted industrialization. This meant that states borrowed money to invest in industrialization and would pay off the loans from the profits of their new industries. Loans were an attractive option because they did not come with the influence of foreign transnational corporations that accompanied foreign direct investment and most states had few funds of their own to invest.”[61]

The oil price rises “changed the face of world finance,” as: “In the new era of costly energy, scores of countries, not all of them in the Third World, were too strapped to pay their imported-oil bills. At the same time, Western banks suddenly received a rush of deposits from oil-producing nations. It seemed only logical, even humane, that the banks should recycle petrodollars.” This is where the true face of Trilateralism began to show: “It became an everyday event for one or two lead banks in the U.S. or Western Europe to round up dozens of partners by telephone to put together so-called jumbo syndicates for loans to developing countries. Some bankers were so afraid of missing out that during lunch hours they even empowered their secretaries to promise $5 million or $10 million as part of any billion-dollar loan package for Brazil or Mexico.” Interestingly, these banks argued, “that their foreign loans were encouraged by officials at the U.S. Treasury and Federal Reserve Board. They feared that developing countries would become economically and politically unstable if credit was denied. In 1976 Arthur Burns, chairman of the Federal Reserve, began cautioning bankers that they might be lending too much overseas, but he did nothing to curb the loans. For the most part, they ignored the warning. Financiers were confident that countries like Mexico, with its oil reserves, and Brazil, with abundant mineral resources, were good credit risks.”[62]

According to a report produced by the Federal Reserve, prior to the 1973 oil crisis, “the private Japanese financial system remained largely isolated from the rest of the world. The system was highly regulated,” and, “various types of banking firms and other financial service firms were legally and administratively confined to a specified range of activities assigned to each.” However, the “OPEC oil shock in 1973 signaled a turning point in the operation of the Japanese financial system.”[63] As part of this turning point, the Bank of Japan (the central bank of Japan), relaxed “monetary control by lending more generously to the major banks. The result was a growing budget deficit and a rapid rise in inflation.”[64] The deregulation of Japanese banking access to foreign markets went hand-in-hand with the deregulation of domestic markets. It was a two-way street; as Japanese industry and banks gained access to foreign markets, foreign industry and banks gained access to the Japanese market. This led to the growth of Japanese banks internationally, of which today many are among the largest banks in the world. This was a result of the Trilateral Commission’s efforts. Also evident of the Trilateral partnership was that western banks “made loans so that poor countries could purchase goods made in Western Europe and North America.”[65]

Of great significance was that, “the new international monetary arrangements gave the United States government far more influence over the international monetary and financial relations of the world than it had enjoyed under the Bretton Woods system. It could freely decide the price of the dollar. And states would become increasingly dependent upon developments in Anglo-American financial markets for managing their international monetary relations. And trends in these financial markets could be shifted by the actions (and words) of the US public authorities, in the Treasury Department and the Federal Reserve Board (the US Central Bank).”[66] This new system is referred to as the Dollar-Wall Street Regime (DWSR), as it is dependent upon the US dollar and the key actors on Wall Street.

The Federal Reserve’s response to the initial 1973-74 oil price shock was to keep interest rates low, which led to inflation and a devalued dollar. It’s also what allowed and encouraged banks to lend massive amounts to developing countries, often lending more than their net worth. However, in 1979, with the second oil shock, the Federal Reserve changed policy, and the true nature of the original oil crisis, petrodollar recycling and loans became apparent.

The Rise of Neo-Liberalism

In the early 1970s, the government of Chile was led by a leftist socialist-leaning politician named Salvador Allende, who was considering undertaking a program of nationalization of industries, which would significantly affect US business interests in the country. David Rockefeller expressed his view on the issue in his book, Memoirs, when he said that actions taken by Chile’s new government “severely restricted the operations of foreign corporations,” and he continued, saying, “I was so concerned about the situation that I met with Secretary of State William P. Rogers and National Security Advisor Henry Kissinger.”[67]

As author Peter Dale Scott analyzed in his book, The Road to 9/11, David Rockefeller played a pivotal role in the events in Chile. After a failed attempt at trying to solve the ‘situation’ by sending David’s brother Nelson Rockefeller, the Governor of New York, down to Latin America, David Rockefeller attempted a larger operation. David Rockefeller told the story of how his friend Agustin (Doonie) Edwards, the publisher of El Mercurio, had warned David that if Allende won the election, Chile would “become another Cuba, a satellite of the Soviet Union.” David then put Doonie “in touch with Henry Kissinger.”[68]

In the same month that Kissinger met with Edwards, the National Security Council (of which Kissinger held the top post) authorized CIA “spoiling operations” to prevent the election of Allende. David Rockefeller had known Doonie Edwards from the Business Group for Latin America (BGLA), which was founded by Rockefeller in 1963, later to be named the Council of the Americas. Rockefeller founded it initially, in cooperation with the US government, “as cover for [CIA’s] Latin American operations.” The US Assistant Secretary of State for Latin American Affairs at the time was Charles Meyer, formerly with Rockefeller’s BGLA, who said that he was chosen for his position at the State Department “by David Rockefeller.” When Allende was elected on September 4, 1970, Doonie Edwards left Chile for the US, where Rockefeller helped him “get established” and the CEO of PepsiCo, Donald Kendall, gave him a job as a Vice President. Ten days later, Donald Kendall met with Richard Nixon, and the next day, Nixon, Kissinger, Kendall and Edwards had breakfast together. Later that day, Kissinger arranged a meeting between Edwards and CIA director, Richard Helms. Helms met with both Edwards and Kendall, who asked the CIA to intervene. Later that day, Nixon told Helms and Kissinger to “move against Allende.”[69]

However, before Edwards met with the CIA director, Henry Kissinger had met privately with “David Rockefeller, chairman of the Chase Manhattan Bank, which had interests in Chile that were more extensive than even Pepsi-Cola’s.” Rockefeller even allowed the CIA to use his bank for “anti-Allende Chilean operations.”[70] After Allende came to power, “commercial banks, including Chase Manhattan, Chemical, First National City, Manufacturers Hanover, and Morgan Guaranty, cancelled credits to Chile,” and the “World Bank, Inter-American Development Bank, Agency for International Development, and the Export-Import Bank either cut programs in Chile or cancelled credits.” However, “military aid to Chile, which has always been substantial, doubled in the 1970-1974 period as compared to the previous four years.”[71]

On September 11, 1973, General Augusto Pinochet orchestrated a coup d’état, with the aid and participation of the CIA, against the Allende government of Chile, overthrowing it and installing Pinochet as dictator. The next day, an economic plan for the country was on the desks of “the General Officers of the Armed Forces who performed government duties.” The plan entailed “privatization, deregulation and cuts to social spending,” written up by “U.S.-trained economists.”[72] These were the essential concepts in neoliberal thought, which, through the oil crises of the 1970s, would be forced upon the developing world through the World Bank and IMF.

In essence, Chile was the neo-liberal Petri-dish experiment. This was to expand drastically and become the very substance of the international economic order.

Globalization: A Liberal-Mercantilist Economic Order?

Neo-Liberals Take the Forefront

In 1971, Jimmy Carter, a somewhat obscure governor from Georgia had started to have meetings with David Rockefeller. They became connected due to Carter’s support from the Atlanta corporate elite, who had extensive ties to the Rockefellers. So in 1973, when David Rockefeller and Zbigniew Brzezinski were picking people to join the Trilateral Commission, Carter was selected for membership. Carter thus attended every meeting, and even paid for his trip to the 1976 meeting in Japan with his campaign funds, as he was running for president at the time. Brzezinski was Carter’s closest adviser, writing Carter’s major campaign speeches.[73]

When Jimmy Carter became President, he appointed over two-dozen members of the Trilateral Commission to key positions in his cabinet, among them, Zbigniew Brzezinski, who became National Security Adviser; Samuel P. Huntington, Coordinator of National Security and Deputy to Brzezinski; Harold Brown, Secretary of Defense; Warren Christopher, Deputy Secretary of State; Walter Mondale, Vice President; Cyrus Vance, Secretary of State; and in 1979, he appointed David Rockefeller’s friend, Paul Volcker, as Chairman of the Federal Reserve Board.[74]

In 1979, the Iranian Revolution spurred another massive increase in the price of oil. The Western nations, particularly the United States, had put a freeze on Iranian assets, “effectively restricting the access of Iran to the global oil market, the Iranian assets freeze became a major factor in the huge oil price increases of 1979 and 1981.”[75] Added to this, in 1979, British Petroleum cancelled major oil contracts for oil supply, which along with cancellations taken by Royal Dutch Shell, drove the price of oil up higher.[76]

However, in 1979, the Federal Reserve, now the lynch-pin of the international monetary system, which was awash in petro-dollars (US dollars) as a result of the 1973 oil crisis, decided to take a different action from the one it had taken earlier. In August of 1979, “on the advice of David Rockefeller and other influential voices of the Wall Street banking establishment, President Carter appointed Paul A. Volcker, the man who, back in August 1971, had been a key architect of the policy of taking the dollar off the gold standard, to head the Federal Reserve.”[77]

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.”[78] 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.”[79] 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.[80] In 1973, Volcker became a member of Rockefeller’s Trilateral Commission. In 1975, he got the job as President of the New York Federal Reserve Bank, the most powerful of the 12 branches of the Fed.

In 1979, Carter gave the job of Treasury Secretary to Arthur Miller, who had been Chairman of the Fed. This left an opening at the Fed, which was initially offered by Carter to David Rockefeller, who declined, and then to A.W. Clausen, Chairman of Bank of America, who also declined. Carter repeatedly tried to get Rockefeller to accept, and ultimately Rockefeller recommended Volcker for the job.[81] Volcker became Chairman of the Federal Reserve System, and immediately took drastic action to fight inflation by radically increasing interest rates.

The world was taken by shock. This was not a policy that would only be felt in the US with a recession, but was to send shock waves around the world, devastating the Third World debtor nations. This was likely the ultimate aim of the 1970s oil shocks and the 1979 Federal Reserve shock therapy. With the raising of interest rates, the cost of international money also rose. Thus, the interest rates on international loans made throughout the 1970s rose from 2% in the 1970s to 18% in the 1980s, dramatically increasing the interest charges on loans to developing countries.[82]

In the developing world, states that had to import oil faced enormous bills to cover their debts, and even oil producing countries, such as Mexico, faced huge problems as they had borrowed heavily in order to industrialize, and then suffered when oil prices fell again as the recession occurring in the developed states reduced demand. Thus, in 1982, Mexico declared that it could no longer pay its debt, meaning that, “they could no longer cover the cost of interest payments, much less hope to repay the debt.” The result was the bursting of the debt bubble. Banks then halted their loans to Mexico, and “Before long it was evident that states such as Brazil, Venezuela, Argentina, and many sub-Saharan African countries were in equally difficult financial positions.”[83]

The IMF and World Bank entered the scene newly refurnished with a whole new outlook and policy program designed just in time for the arrival of the debt crisis. The IMF “negotiated standby loans with debtors offering temporary assistance to states in need. In return for the loans states agreed to undertake structural adjustment programs (SAPs). These programs entailed the liberalization of economies to trade and foreign investment as well as the reduction of state subsidies and bureaucracies to balance national budgets.”[84] Thus, the neoliberal project of 1973 in Chile was expanded into the very functioning of the International Financial Institutions (IFIs).

Neoliberalism is “a particular organization of capitalism, which has evolved to protect capital(ism) and to reduce the power of labour. This is achieved by means of social, economic and political transformations imposed by internal forces as well as external pressure,” and it entails the “shameless use of foreign aid, debt relief and balance of payments support to promote the neoliberal programme, and diplomatic pressure, political unrest and military intervention when necessary.”[85] Further, “neoliberalism is part of a hegemonic project concentrating power and wealth in elite groups around the world, benefiting especially the financial interests within each country, and US capital internationally. Therefore, globalization and imperialism cannot be analysed separately from neoliberalism.”[86]

Joseph Stiglitz, former Chief Economist of the World Bank, wrote in his book, Globalization and its Discontents, “In the 1980s, the Bank went beyond just lending for projects (like roads and dams) to providing broad-based support, in the form of structural adjustment loans; but it did this only when the IMF gave its approval – and with that approval came IMF-imposed conditions on the country.”[87] As economist Michel Chossudovsky wrote, “Because countries were indebted, the Bretton Woods institutions were able to oblige them through the so-called ‘conditionalities’ attached to the loan agreements to appropriately redirect their macro-economic policy in accordance with the interests of the official and commercial creditors.”[88]

The nature of SAPs is such that the conditions imposed upon countries that sign onto these agreements include: lowering budget deficits, devaluing the currency, limiting government borrowing from the central bank, liberalizing foreign trade, reducing public sector wages, price liberalization, deregulation and altering interest rates.[89] For reducing budget deficits, “precise ‘ceilings’ are placed on all categories of expenditure; the state is no longer permitted to mobilize its own resources for the building of public infrastructure, roads, or hospitals, etc.”[90]

Joseph Stiglitz wrote that, “the IMF staff monitored progress, not just on the relevant indicators for sound macromanagement – inflation, growth, and unemployment – but on intermediate variables, such as the money supply,” and that “In some cases the agreements stipulated what laws the country’s Parliament would have to pass to meet IMF requirements or ‘targets’ – and by when.”[91] Further, “The conditions went beyond economics into areas that properly belong in the realm of politics,” and that “the way conditionality was imposed made the conditions politically unsustainable; when a new government came into power, they would be abandoned. Such conditions were seen as the intrusion by the new colonial power on the country’s own sovereignty.”[92]

“The phrase ‘Washington Consensus’ was coined to capture the agreement upon economic policy that was shared between the two major international financial institutions in Washington (IMF and World Bank) and the US government itself. This consensus stipulated that the best path to economic development was through financial and trade liberalization and that international institutions should persuade countries to adopt such measures as quickly as possible.”[93] The debt crisis provided the perfect opportunity to quickly impose these conditions upon countries that were not in a position to negotiate and with no time to spare, desperately in need of loans. Without the debt crisis, such policies may have been subject to greater scrutiny, and with a case-by-case analysis of countries adopting SAPs, the world would become quickly aware of their dangerous implications. The debt crisis was absolutely necessary in implementing the SAPs on an international scale in a short amount of time.

The effect became quite clear, as the result “of these policies on the population of developing countries was devastating. The 1980s is known as the ‘lost decade’ of development. Many developing countries’ economies were smaller and poorer in 1990 than in 1980. Over the 1980s and 1990s, debt in many developing countries was so great that governments had few resources to spend on social services and development.”[94] With the debt crisis, countries in the developing world were “[s]tarved of international finance, [and] states had little choice but to open their economies to foreign investors and trade.”[95] The “Third World” was recaptured in the cold grasp of economic colonialism under the auspices of neo-liberal economic theory.

A Return to Statist Theory

Since the 1970s, mercantilist thought had re-emerged in mainstream political-economic theory. Under various names such as neo-mercantilism, economic nationalism or statism, they hold as vital the centrality of the state in the global political economy. Much “Globalization” literature puts an emphasis on the “decline of the state” in the face of an integrated international economic order, where borders are made illusory. However, statist theory at least helps us understand that the state is still a vital factor within the global political economy, even in the midst of a neo-liberal economic order.

Within the neo-liberal economic order, it was the powerful western (primarily US and Western European) states that imposed neo-mercantilist or statist policies in order to protect and promote their interests within the global political economy. Some of these methods were revolved around policy tools such as export subsidies, imposed to lower the price of goods, which would make them more attractive to importers, giving that particular nation an advantage over the competition.

For example, the US has enormous agriculture export subsidies, which make US agriculture and grain an easily affordable, attractive and accessible commodity for importing nations. Countries of the global south (the Lesser-Developed Countries, LDCs), subject to neo-liberal policies imposed upon them by the World Bank and IMF were forced to open their economies up to foreign capital. The World Bank would bring in heavily subsidized US grain to these poor nations under the guise of “food aid,” which would have the affect of destabilizing the nation’s agriculture market, as the heavily subsidized US grains would be cheaper than local produce, putting farmers out of business. Most LDCs are predominantly rural based, so when the farming sector is devastated, so too is the entire nation. They plunge into economic crisis and even famine.

With the statist approach, theorists examine how the state is still relevant in shaping economic outcomes and still remains a powerful entity in the international arena. One theorist who is prominent within the statist school is Robert Gilpin. Gilpin, a professor at the Woodrow Wilson School of Public and International Affairs at Princeton, is also a member of the Council on Foreign Relations. In his book, Global Political Economy, Gilpin postulated that multinational corporations were an invention of the United States, and indeed an “American phenomenon” upon which European and Asian states responded by internationalizing their own firms. In this sense, his theory postulated to a return to the competitive nature of mercantilist economic theory, in which one state gains at the expense of another. He also addresses the nature of the international economy, in that both historically and presently, there was a single state acting as the main enforcer and manager of the global economy. Historically, it was Britain, and presently, it was the United States.

One cannot deny the significance of the state in the global political economy, as it has been, and still remains very relevant. The events of 1973 are exemplary of this, however, more must be examined in order to better understand the situation. Though states are still prominent actors, it is vital to address in whose interest they act. Mercantilist and statist theorists tend to focus on the concept that states act in their own selfish interest, for the benefit of the state, both politically and economically. However, this is somewhat linear and diversionary, as it does not address the precise structure of the state economy, specifically in terms of its monetary and central banking system.

States, most especially the large hegemonic ones, such as the United States and Great Britain, are controlled by the international central banking system, working through secret agreements at the Bank for International Settlements (BIS), and operating through national central banks (such as the Bank of England and the Federal Reserve). The state is thus owned by an international banking cartel, and though the state acts in such a way that proves its continual relevance in the global economy, it acts so not in terms of self-interest for the state itself, but for the powerful interests that control that state. The same international banking cartel that controls the United States today previously controlled Great Britain and held it up as the international hegemon. When the British order faded, and was replaced by the United States, the US ran the global economy. However, the same interests are served. States will be used and discarded at will by the international banking cartel; they are simply tools.

In this sense, interdependence theory, which presumes the decline of the state in international affairs, fails to acknowledge the role of the state in promoting and undertaking the process of interdependence. The decline of the nation-state is a state-driven process, and is a process that leads to a rise of the continental state and the global state. States, are still very relevant, but both liberal and mercantilist theorists, while helpful in understanding the concepts behind the global economy, lay the theoretical groundwork for a political economic agenda being undertaken by powerful interests. Like Robert Cox said, “Theory is always for someone and for some purpose.”

Hegemonic-Stability Theory

In his book, Global Political Economy, Gilpin explained that, “In time, if unchecked, the integration of an economy into the world economy, the intensifying pressures of foreign competition, and the necessity to be efficient in order to survive economically could undermine the independence of a society and force it to adopt new values and forms of social organization. Fear that economic globalization and the integration of national markets are destroying or could destroy the political, economic, and cultural autonomy of national societies has become widespread.”[96]

However, Gilpin explains that the “Creation of effective international regimes and solutions to the compliance problem require both strong international leadership and an effective international governance structure.” Yet, he explains, “Regimes in themselves cannot provide governance structure because they lack the most critical component of governance – the power to enforce compliance. Regimes must rest instead on a political base established through leadership and cooperation.”[97] This is where we see the emergence of Hegemonic Stability Theory.

Gilpin explains that, “The theory of hegemonic stability posits that the leader or hegemon facilitates international cooperation and prevents defection from the rules of the regime through use of side payments (bribes), sanctions, and/or other means, but can seldom, if ever, coerce reluctant states to obey the rules of a liberal international economic order.” As he explained, “The American hegemon did indeed play a crucial role in establishing and managing the world economy following World War II.”[98]

The roots of Hegemonic Stability Theory (HST) lie within both liberal and statist theory, as it is representative of a crossover theory that cannot be so easily placed in either category. The main concept champions the liberal notion of the open international economic system, guided by liberal principles of open-markets and free trade, while bringing in the statist concept of a single hegemonic state representing the concentration of political and economic power, as it is the enforcer of the liberal international economy.

The more liberal-leaning theorists of HST argue that a liberal economic order requires a strong, hegemonic state to maintain the smooth functioning of the international economy. One thing this state must do is maintain the international monetary system, as Britain did under the gold standard and the United States did under the Dollar-Wall Street Regime, following the end of the Bretton-Woods dollar-gold link.

Regime Theory

Regime Theory is another crossover theory between liberal and mercantilist theorists. Its rise was primarily in reaction to the emergence of Hegemonic Stability Theory, in order to address the concern of a perceived decline in the power of the US. This was due to the rise of new economic powers in the 1970s, and another major purveyor of this theory was Robert Keohane. They needed to address how the international order could be maintained as the hegemonic power declined. The answer was in the building of international organizations to manage the international regime.

In this sense, Regime Theory has identified an important aspect of the global political economy, in that though states have upheld the international order in the past, never before has there been such an undertaking to institutionalize the authority over the international order through international organizations. These organizations, such as the World Bank, IMF, UN, and WTO, though still controlled and influenced by states, predominantly the international hegemon, the United States, represent a changing direction of internationalization and transnationalism. Regime Theorists tend to justify the formation of a more transnational apparatus of power, beyond just a single hegemonic state, into a more internationalized structure of authority.

Notes

[1]        CBC, Informal forum or global conspiracy? CBC News Online: June 13, 2006: http://www.cbc.ca/news/background/bilderberg-group/

[2]        Holly Sklar, ed., Trilateralism: The Trilateral Commission and Elite Planning for World Management. (South End Press: 1980), 161-171

[3]        Holly Sklar, ed., Trilateralism: The Trilateral Commission and Elite Planning for World Management. (South End Press: 1980), 161-162

[4]        CFR, The First Transformation. CFR History: http://www.cfr.org/about/history/cfr/first_transformation.html

[5]        Glen McGregor, Secretive power brokers meeting coming to Ottawa? Ottawa Citizen: May 24, 2006: http://www.canada.com/topics/news/world/story.html?id=ff614eb8-02cc-41a3-a42d-30642def1421&k=62840

[6]        William F. Jasper, Rogues’ gallery of EU founders. The New American: July 12, 2004: http://findarticles.com/p/articles/mi_m0JZS/is_14_20/ai_n25093084/pg_1?tag=artBody;col1

[7]        Ambrose Evans-Pritchard, Euro-federalists financed by US spy chiefs. The Telegraph: June 19, 2001: http://www.telegraph.co.uk/news/worldnews/europe/1356047/Euro-federalists-financed-by-US-spy-chiefs.html

[8]        Ambrose Evans-Pritchard, Euro-federalists financed by US spy chiefs. The Telegraph: June 19, 2001: http://www.telegraph.co.uk/news/worldnews/europe/1356047/Euro-federalists-financed-by-US-spy-chiefs.html

[9]        Bilderberg Group, GARMISCH-PARTENKIRCHEN CONFERENCE. The Bilderberg Group: September 23-25, 1955, page 7:

http://wikileaks.org/leak/bilderberg-meetings-report-1955.pdf

[10]      Who are these Bilderbergers and what do they do? The Sunday Herald: May 30, 1999: http://findarticles.com/p/articles/mi_qn4156/is_19990530/ai_n13939252

[11]      Andrew Rettman, ‘Jury’s out’ on future of Europe, EU doyen says. EUobserver: March 16, 2009: http://euobserver.com/9/27778

[12]      George T. Crane, Abla Amawi, The Theoretical evolution of international political economy. Oxford University Press US, 1997: page 110

[13]      George T. Crane, Abla Amawi, The Theoretical evolution of international political economy. Oxford University Press US, 1997: page 107

[14]      George T. Crane, Abla Amawi, The Theoretical evolution of international political economy. Oxford University Press US, 1997: pages 107-108

[15]      George T. Crane, Abla Amawi, The Theoretical evolution of international political economy. Oxford University Press US, 1997: page 108

[16]      George T. Crane, Abla Amawi, The Theoretical evolution of international political economy. Oxford University Press US, 1997: page 108

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

[18]      Holly Sklar, ed., Trilateralism: The Trilateral Commission and Elite Planning for World Management. South End Press: 1980: page 65

[19]      Robert O’Brien and Marc Williams, Global Political Economy: Evolution and Dynamics, 2nd ed. Palgrave Macmillan: 2007: page 215

[20]      Holly Sklar, ed., Trilateralism: The Trilateral Commission and Elite Planning for World Management. South End Press: 1980: pages 66-67

[21]      Holly Sklar, ed., Trilateralism: The Trilateral Commission and Elite Planning for World Management. South End Press: 1980: page 67

[22]      C. Fred Bergsten, The New Economics and US Foreign Policy. Foreign Affairs: January, 1972: page 199

[23]      Richard H. Ullman, Trilateralism: “Partnership” For What? Foreign Affairs: October, 1976: pages 3-4

[24]      Holly Sklar, ed., Trilateralism: The Trilateral Commission and Elite Planning for World Management. South End Press: 1980: pages 76-78

[25]      Richard H. Ullman, Trilateralism: “Partnership” For What? Foreign Affairs: October, 1976: page 3

[26]      Richard H. Ullman, Trilateralism: “Partnership” For What? Foreign Affairs: October, 1976: page 5

[27]      Congressional Research Service, TRILATERAL COMMISSION. The Library of Congress: pages 13-14: http://www.scribd.com/doc/5014337/Trilateral-Commission

[28]      CFR, Joseph S. Nye, Jr.. Board of Directors: http://www.cfr.org/bios/1330/joseph_s_nye_jr.html

[29]      Annual Report, The Council on Foreign Relations. Historical Roster of Directors and Officers, 2008: page 78

[30]      Peter Gowan, The Globalization Gamble: The Dollar-Wall Street Regime and its Consequences. Page 19-20

[31]      William Engdahl, A Century of War: Anglo-American Oil Politics and the New World Order. (London: Pluto Press, 2004), 130-132

[32]      William Engdahl, A Century of War: Anglo-American Oil Politics and the New World Order. (London: Pluto Press, 2004), 286-287, 134

[33]      CFR, “X” Leads the Way. CFR History: http://www.cfr.org/about/history/cfr/x_leads.html

[34]      Robert Dallek, The Kissinger Presidency. Vanity Fair: May 2007: http://www.vanityfair.com/politics/features/2007/05/kissinger200705

[35]      Ibid.

[36]      David Stout, William P. Rogers, Who Served as Nixon’s Secretary of State, Is Dead at 87. The New York Times: January 4, 2001: http://query.nytimes.com/gst/fullpage.html?res=9B02E5D6113BF937A35752C0A9679C8B63

[37]     TC, Tributes to David Rockefeller, Founder and Honorary Chairman. The Trilateral Commission: December 1, 1998: http://www.trilateral.org/nagp/regmtgs/98/1201tribs.htm

[38]      John Loftus and Mark Aarons, The Secret War Against the Jews: How Western Espionage Betrayed the Jewish People. St. Martin’s Griffin: 1994: pages 304-307

[39]      John Loftus and Mark Aarons, The Secret War Against the Jews: How Western Espionage Betrayed the Jewish People. St. Martin’s Griffin: 1994: pages 308-310

[40]      John Loftus and Mark Aarons, The Secret War Against the Jews: How Western Espionage Betrayed the Jewish People. St. Martin’s Griffin: 1994: pages 310-311

[41]      Robert Dallek, The Kissinger Presidency. Vanity Fair: May 2007: http://www.vanityfair.com/politics/features/2007/05/kissinger200705

[42]      John Loftus and Mark Aarons, The Secret War Against the Jews: How Western Espionage Betrayed the Jewish People. St. Martin’s Griffin: 1994: pages 312-313

[43]      F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New  World Order. London: Pluto Press, 2004: pages 130-132

[44]      F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New  World Order. London: Pluto Press, 2004: pages 136-137

[45]      The Observer, Saudi dove in the oil slick. The Guardian: January 14, 2001: http://www.guardian.co.uk/business/2001/jan/14/globalrecession.oilandpetrol

[46]      V.H. Oppenheim, Why Oil Prices Go Up (1) The Past: We Pushed Them. Foreign Policy: No. 25, Winter, 1976-1977: page 24

[47]      V.H. Oppenheim, Why Oil Prices Go Up (1) The Past: We Pushed Them. Foreign Policy: No. 25, Winter, 1976-1977: pages 31-33

[48]      IPC, James Akins. Iran Policy Committee: Scholars and Fellows: http://www.iranpolicy.org/scholarsandfellows.php#1

[49]      V.H. Oppenheim, Why Oil Prices Go Up (1) The Past: We Pushed Them. Foreign Policy: No. 25, Winter, 1976-1977: pages 35-36

[50]      V.H. Oppenheim, Why Oil Prices Go Up (1) The Past: We Pushed Them. Foreign Policy: No. 25, Winter, 1976-1977: pages 37-38

[51]      V.H. Oppenheim, Why Oil Prices Go Up (1) The Past: We Pushed Them. Foreign Policy: No. 25, Winter, 1976-1977: page 44

[52]      Time, The Cast of Analysts. Time Magazine: March 12, 1979: http://www.time.com/time/magazine/article/0,9171,948424,00.html

[53]      V.H. Oppenheim, Why Oil Prices Go Up (1) The Past: We Pushed Them. Foreign Policy: No. 25, Winter, 1976-1977: page 48

[54]      V.H. Oppenheim, Why Oil Prices Go Up (1) The Past: We Pushed Them. Foreign Policy: No. 25, Winter, 1976-1977: pages 50-51

[55]      V.H. Oppenheim, Why Oil Prices Go Up (1) The Past: We Pushed Them. Foreign Policy: No. 25, Winter, 1976-1977: page 53

[56]      F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New  World Order. London: Pluto Press, 2004: page 137

[57]  The Observer, Saudi dove in the oil slick. The Guardian: January 14, 2001: http://www.guardian.co.uk/business/2001/jan/14/globalrecession.oilandpetrol

[58] Peter Gowan, The Globalization Gamble: The Dollar-Wall Street Regime and its Consequences: marxsite.com/Gowan_DollarWallstreetRegime.pdf: page 10

[59]      Dharam Ghai, ed., The IMF and the South: The Social Impact of Crisis and Adjustment (London: United Nations Research Institute for Social Development, 1991), 81

[60]      Dharam Ghai, ed., The IMF and the South: The Social Impact of Crisis and Adjustment (London: United Nations Research Institute for Social Development, 1991), 82

[61]      Robert O’Brien and Marc Williams, Global Political Economy: Evolution and Dynamics, 2nd ed. Palgrave Macmillan: 2007: page 223

[62]      Gisela Bolte, et. al., Jumbo Loans, Jumbo Risks. Time Magazine: December 3, 1984: http://www.time.com/time/magazine/article/0,9171,923771,00.html

[63]      Allen B. Frankel and Paul B. Morgan, A Primer on the Japanese Banking System. Board of Governors of the Federal reserve System, International Finance Discussion Papers: Number 419, December 1991: page 3

[64]      A. W. Mullineux, International Banking and Financial Systems: A Comparison. Springer, 1987: page 63

[65]      Robert K. Schaeffer, Understanding Globalization: The Social Consequences of Political, Economic, and Environmental Change. Rowman & Littlefield, 2005: page 82

[66] Peter Gowan, The Globalization Gamble: The Dollar-Wall Street Regime and its Consequences: marxsite.com/Gowan_DollarWallstreetRegime.pdf: page 12

[67]      David Rockefeller, Memoirs. New York: Random House: 2002: Page 431

[68]      Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: page 39-40

[69]      Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: page 41

[70]      Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: pages 40-41

[71]      Daniel Brandt, U.S. Responsibility for the Coup in Chile. Public Information Research: November 28, 1998: http://www.namebase.org/chile.html

[72]      Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism. Macmillan: 2007: page 77

[73]      Holly Sklar, ed., Trilateralism: The Trilateral Commission and Elite Planning for World Management. South End Press: 1980: pages 201-203

[74]      Holly Sklar, ed., Trilateralism: The Trilateral Commission and Elite Planning for World Management. South End Press: 1980: pages 91-92

[75]      Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: page 88

[76]      F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New  World Order. London: Pluto Press, 2004: page 173

[77]      F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New  World Order. London: Pluto Press, 2004: page 174

[78]      Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend. John Wiley and Sons, 2004: page 36

[79]      Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend. John Wiley and Sons, 2004: page 37

[80]      Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend. John Wiley and Sons, 2004: page 38

[81]      Joseph B. Treaster, Paul Volcker: The Making of a Financial Legend. John Wiley and Sons, 2004: pages 57-60

[82]      Robert O’Brien and Marc Williams, Global Political Economy: Evolution and Dynamics, 2nd ed. Palgrave Macmillan: 2007: page 223

[83]      Robert O’Brien and Marc Williams, Global Political Economy: Evolution and Dynamics, 2nd ed. Palgrave Macmillan: 2007: page 224

[84]      Robert O’Brien and Marc Williams, Global Political Economy: Evolution and Dynamics, 2nd ed. Palgrave Macmillan: 2007: page 224

[85]      A. Paloni and M. Zonardi, eds., Neoliberalism: A Critical Introduction. London: Pluto, 2005: page 3

[86]      A. Paloni and M. Zonardi, eds., Neoliberalism: A Critical Introduction. London: Pluto, 2005: page 1

[87]      Joseph Stiglitz, Globalization and its Discontents. New York: Norton, 2003: page 14

[88]      Michel Chossudovsky, The Globalization of Poverty and the New World Order, 2nd ed. Quebec: Global Research, 2003: page 35

[89]      Marc Williams, International Economic Organizations and the Third World. Hemel Hempstead: Harvester Wheatsheaf, 1994: page 85

[90]      Michel Chossudovsky, The Globalization of Poverty and the New World Order, 2nd ed. Quebec: Global Research, 2003: page 52

[91]      Joseph Stiglitz, Globalization and its Discontents. New York: Norton, 2003: pages 43-44

[92]      Joseph Stiglitz, Globalization and its Discontents. New York: Norton, 2003: pages 44-46

[93]      Robert O’Brien and Marc Williams, Global Political Economy: Evolution and Dynamics, 2nd ed. Palgrave Macmillan: 2007: page 224

[94]      Robert O’Brien and Marc Williams, Global Political Economy: Evolution and Dynamics, 2nd ed. Palgrave Macmillan: 2007: page 224

[95]      Robert O’Brien and Marc Williams, Global Political Economy: Evolution and Dynamics, 2nd ed. Palgrave Macmillan: 2007: page 225

[96]      Robert Gilpin, Global Political Economy: Understanding the International Economic Order, Princeton University Press, 2001: page 81

[97]      Robert Gilpin, Global Political Economy: Understanding the International Economic Order, Princeton University Press, 2001: page 97

[98]      Robert Gilpin, Global Political Economy: Understanding the International Economic Order, Princeton University Press, 2001: pages 97-98

The Bilderberg Plan for 2009: Remaking the Global Political Economy

The Bilderberg Plan for 2009: Remaking the Global Political Economy
Global Research, May 26, 2009

From May 14-17, the global elite met in secret in Greece for the yearly Bilderberg conference, amid scattered and limited global media attention. Roughly 130 of the world’s most powerful individuals came together to discuss the pressing issues of today, and to chart a course for the next year. The main topic of discussion at this years meeting was the global financial crisis, which is no surprise, considering the list of conference attendees includes many of the primary architects of the crisis, as well as those poised to “solve” it.

The Agenda: The Restructuring of the Global Political Economy

Before the meeting began, Bilderberg investigative journalist Daniel Estulin reported on the main item of the agenda, which was leaked to him by his sources inside. Though such reports cannot be verified, his sources, along with those of veteran Bilderberg tracker, Jim Tucker, have proven to be shockingly accurate in the past. Apparently, the main topic of discussion at this year’s meeting was to address the economic crisis, in terms of undertaking, “Either a prolonged, agonizing depression that dooms the world to decades of stagnation, decline and poverty … or an intense-but-shorter depression that paves the way for a new sustainable economic world order, with less sovereignty but more efficiency.” Other items on the agenda included a plan to “continue to deceive millions of savers and investors who believe the hype about the supposed up-turn in the economy. They are about to be set up for massive losses and searing financial pain in the months ahead,” and “There will be a final push for the enactment of Lisbon Treaty, pending on Irish voting YES on the treaty in Sept or October,”[1] which would give the European Union massive powers over its member nations, essentially making it a supranational regional government, with each country relegated to more of a provincial status.

Shortly after the meetings began, Bilderberg tracker Jim Tucker reported that his inside sources revealed that the group has on its agenda, “the plan for a global department of health, a global treasury and a shortened depression rather than a longer economic downturn.” Tucker reported that Swedish Foreign Minister and former Prime Minister, Carl Bildt, “Made a speech advocating turning the World Health Organization into a world department of health, advocating turning the IMF into a world department of treasury, both of course under the auspices of the United Nations.” Further, Tucker reported that, “Treasury Secretary Geithner and Carl Bildt touted a shorter recession not a 10-year recession … partly because a 10 year recession would damage Bilderberg industrialists themselves, as much as they want to have a global department of labor and a global department of treasury, they still like making money and such a long recession would cost them big bucks industrially because nobody is buying their toys…..the tilt is towards keeping it short.”[2]

After the meetings finished, Daniel Estulin reported that, “One of Bilderberg’s primary concerns according to Estulin is the danger that their zeal to reshape the world by engineering chaos in order to implement their long term agenda could cause the situation to spiral out of control and eventually lead to a scenario where Bilderberg and the global elite in general are overwhelmed by events and end up losing their control over the planet.”[3]

On May 21, the Macedonian International News Agency reported that, “A new Kremlin report on the shadowy Bilderberg Group, who this past week held their annual meeting in Greece, states that the West’s financial, political and corporate elite emerged from their conclave after coming to an agreement that in order to continue their drive towards a New World Order dominated by the Western Powers, the US Dollar has to be ‘totally’ destroyed.” Further, this same unconfirmed Kremlin report, stated that, “most of the West’s wealthiest elite convened at an unprecedented secret meeting in New York called for and led by” David Rockefeller, “to plot the demise of the US Dollar.”[4] This report, which was not acknowledged by other media sources, requires verification.

The Secret Meeting of Billionaires

The meeting being referred to was a secret meeting where, “A dozen of the richest people in the world met for an unprecedented private gathering at the invitation of Bill Gates and Warren Buffett to talk about giving away money,” held at Rockefeller University, and included notable philanthropists such as Gates, Buffett, New York Mayor Michael Bloomberg, George Soros, Eli Broad, Oprah Winfrey, David Rockefeller Sr. and Ted Turner. One attendee stated that, “It wasn’t secret,” but that, “It was meant to be a gathering among friends and colleagues. It was something folks have been discussing for a long time. Bill and Warren hoped to do this occasionally. They sent out an invite and people came.” Chronicle of Philanthropy editor Stacy Palmer said, “Given how serious these economic times are, I don’t think it’s surprising these philanthropists came together,” and that, “They don’t typically get together and ask each other for advice.” The three hosts of the meeting were Buffet, Gates and David Rockefeller.[5] [See: Appendix 2: Bilderberg Connections to the Billionaire’s Meeting].

At the meeting, “participants steadfastly refused to reveal the content of the discussion. Some cited an agreement to keep the meeting confidential. Spokesmen for Mr. Buffett, Mr. Bloomberg, Mr. Gates, Mr. Rockefeller, Mr. Soros and Ms. Winfrey and others dutifully declined comment, though some confirmed attendance.”[6] Reports indicate that, “They discussed how to address the global slump and expand their charitable activities in the downturn.”[7]

The UK newspaper The Times reported that these “leading billionaires have met secretly to consider how their wealth could be used to slow the growth of the world’s population,” and that they “discussed joining forces to overcome political and religious obstacles to change.” Interestingly, “The informal afternoon session was so discreet that some of the billionaires’ aides were told they were at ‘security briefings’.” Further, “The billionaires were each given 15 minutes to present their favourite cause. Over dinner they discussed how they might settle on an ‘umbrella cause’ that could harness their interests,” and what was decided upon was that, “they agreed that overpopulation was a priority.” Ultimately, “a consensus emerged that they would back a strategy in which population growth would be tackled as a potentially disastrous environmental, social and industrial threat,” and that, “They need to be independent of government agencies, which are unable to head off the disaster we all see looming.” One guest at the meeting said that, “They wanted to speak rich to rich without worrying anything they said would end up in the newspapers, painting them as an alternative world government.”[8]

The Leaked Report

Bilderberg investigative reporter Daniel Estulin reportedly received from his inside sources a 73-page Bilderberg Group meeting wrap-up for participants, which revealed that there were some serious disagreements among the participants. “The hardliners are for dramatic decline and a severe, short-term depression, but there are those who think that things have gone too far and that the fallout from the global economic cataclysm cannot be accurately calculated if Henry Kissinger’s model is chosen. Among them is Richard Holbrooke. What is unknown at this point: if Holbrooke’s point of view is, in fact, Obama’s.” The consensus view was that the recession would get worse, and that recovery would be “relatively slow and protracted,” and to look for these terms in the press over the next weeks and months.

Estulin reported, “that some leading European bankers faced with the specter of their own financial mortality are extremely concerned, calling this high wire act “unsustainable,” and saying that US budget and trade deficits could result in the demise of the dollar.” One Bilderberger said that, “the banks themselves don’t know the answer to when (the bottom will be hit).” Everyone appeared to agree, “that the level of capital needed for the American banks may be considerably higher than the US government suggested through their recent stress tests.” Further, “someone from the IMF pointed out that its own study on historical recessions suggests that the US is only a third of the way through this current one; therefore economies expecting to recover with resurgence in demand from the US will have a long wait.” One attendee stated that, “Equity losses in 2008 were worse than those of 1929,” and that, “The next phase of the economic decline will also be worse than the ’30s, mostly because the US economy carries about $20 trillion of excess debt. Until that debt is eliminated, the idea of a healthy boom is a mirage.”[9]

According to Jim Tucker, Bilderberg is working on setting up a summit in Israel from June 8-11, where “the world’s leading regulatory experts” can “address the current economic situation in one forum.” In regards to the proposals put forward by Carl Bildt to create a world treasury department and world department of health under the United Nations, the IMF is said to become the World Treasury, while the World Health Organization is to become the world department of health. Bildt also reaffirmed using “climate change” as a key challenge to pursue Bilderberg goals, referring to the economic crisis as a “once-in-a-generation crisis while global warming is a once-in-a-millennium challenge.” Bildt also advocated expanding NAFTA through the Western hemisphere to create an American Union, using the EU as a “model of integration.”

The IMF reportedly sent a report to Bilderberg advocating its rise to becoming the World Treasury Department, and “U.S. Treasury Secretary Timothy Geithner enthusiastically endorsed the plan for a World Treasury Department, although he received no assurance that he would become its leader.” Geithner further said, “Our hope is that we can work with Europe on a global framework, a global infrastructure which has appropriate global oversight.”[10]

Bilderberg’s Plan in Action?

Reorganizing the Federal Reserve

Following the Bilderberg meeting, there were several interesting announcements made by key participants, specifically in regards to reorganizing the Federal Reserve. On May 21, it was reported that US Treasury Secretary Timothy Geithner “is believed to be leaning heavily towards giving the Federal Reserve a central role in future regulation,” and “it is understood that the Fed would take on some of the work currently undertaken by the US Securities and Exchange Commission.”[11]

On Wednesday, May 20, Geithner spoke before the Senate Banking Committee, at which he stated that, “there are important indications that our financial system is starting to heal.” In regards to regulating the financial system, Geithner stated that, “we must ensure that international rules for financial regulation are consistent with the high standards we will be implementing in the United States.”[12]

Bloomberg reported that, “The Obama administration may call for stripping the Securities and Exchange Commission of some of its powers under a regulatory reorganization,” and that, “The proposal, still being drafted, is likely to give the Federal Reserve more authority to supervise financial firms deemed too big to fail. The Fed may inherit some SEC functions, with others going to other agencies.” Interestingly, “SEC Chairman Mary Schapiro’s agency has been mostly absent from negotiations within the administration on the regulatory overhaul, and she has expressed frustration about not being consulted.”

It was reported that “Treasury Secretary Timothy Geithner was set to discuss proposals to change financial regulations last night at a dinner with National Economic Council Director Lawrence Summers [who was also present at Bilderberg], former Fed Chairman Paul Volcker [also at Bilderberg], ex-SEC Chairman Arthur Levitt and Elizabeth Warren, the Harvard University law professor who heads the congressional watchdog group for the $700 billion Troubled Asset Relief Program.”[13] The Federal Reserve is a privately owned central bank, owned by its shareholders, consisting of the major banks the make up each regional Fed bank (the largest of which is JP Morgan Chase and the Federal Reserve Bank of New York). This plan would essentially give a privately owned bank, which has governmental authority, the ability to regulate the banks that own it. It’s the equivalent of getting a Colonel to guard a General to whom he is directly answerable. Talk about the fox guarding the hen house. It is literally granting ownership over the financial regulator to the banks being regulated.

As Market Watch, an online publication of the Wall Street Journal, reported, “The Federal Reserve, created nearly 100 years ago in the aftermath of a financial panic, could be transformed into a different agency as the Obama administration reinvents the way government interacts with the financial system.” Referring to Geithner’s Senate appearance, it was reported that, “Geithner was also grilled on the cozy relationships that exist between the big banks and the regional Federal Reserve banks. Before Geithner joined the administration, he was president of the New York Fed, which is a strange public-private hybrid institution that is actually owned and run by the banks.” In response, “Geithner insisted that the private banks have no say over the policies of the New York Fed, but he acknowledged that the banks do have a say in hiring the president, who does make policy. The chairman of the New York Fed, Stephen Friedman, was forced to resign earlier this month because of perceived conflicts of interest due to his large holdings in Goldman Sachs.”[14]

The IMF as a Global Treasury

The Bilderberg agenda of creating a global treasury has already been started prior to the Bilderberg meeting, with decisions made during the G20 financial summit in April. Although the G20 seemed to frame it more in context of being formed into a global central bank, although it is likely the IMF could fill both roles.

Following the G20 meeting at the beginning of April, 2009, it was reported that, “The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity,” as the Communiqué released by the G20 leaders stated that, “We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity,” and that, “SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.” Essentially, “they are putting a de facto world currency into play. It is outside the control of any sovereign body.”[15] [See Appendix 2: Creating a Central Bank of the World]

Following the Bilderberg meeting, “President Obama has asked Congress to authorize $100 billion in loans to the International Monetary Fund (IMF) to help create a $500 billion global bailout fund,” which would give the IMF the essential prerogative of a global treasury, providing bailouts for countries in need around the world. Further, “the bill would allow the IMF to borrow up to $100 billion from the U.S. and increase the U.S. fiscal contribution to the IMF by $8 billion.” Elaborating on the program, it was reported that, “World leaders began on the global bailout initiative, called the New Arrangement for Borrowing (NAB), at the G-20 summit in early April. The president agreed at that time to make the additional funds available.” Obama wrote that, “Treasury Secretary Geithner concluded that the size of the NAB is woefully inadequate to deal with the type of severe economic and financial crisis we are experiencing, and I agree with him.”[16]

With the G20 decision to increase the usage of IMF Special Drawing Rights (SDRs), forming a de facto world currency, it was recently reported that, “Sub-Saharan Africa will receive around $10 billion from the IMF in Special Drawing Rights (SDRs) to help its economies weather the global financial crisis,” and that, “As part of a $1.1 trillion deal to combat the world economic downturn agreed at April’s G20 summit, the IMF will issue $250 billion worth of SDRs, which can be used to boost foreign currency reserves.”[17]

Recent reports have also indicated that the IMF’s role in issuing SDRs goes hand in hand with the Bilderberg discussion on the potential collapse of the US dollar, and, “Transforming the dollar standard into an SDR-based system would be a major break with a policy that has lasted more than 60 years.” It was reported that, “There are two ways in which the dollar’s role in the international monetary system can be reduced. One possibility is a gradual, market-determined erosion of the dollar as a reserve currency in favor of the euro. But, while the euro’s international role – especially its use in financial markets – has increased since its inception, it is hard to envisage it overtaking the dollar as the dominant reserve currency in the foreseeable future.” However, “With the dollar’s hegemony unlikely to be seriously undermined by market forces, at least in the short and medium-term, the only way to bring about a major reduction in its role as a reserve currency is by international agreement.” This is where the SDRs come into play, as “One way to make the SDR the major reserve currency relatively soon would be to create and allocate a massive amount of new SDRs to the IMF’s members.”[18] This is, interestingly, exactly what is happening with Africa and the IMF now.

Former IMF Managing Director Jacques de Larosière recently stated that the current financial crisis, “given its scope, presents a unique opening to improve institutions, and there is already a danger that the chance might be missed if the different actors cannot agree to changes by the time economic growth resumes.” He is now an adviser with BNP Paribas, a corporation highly represented at Bilderberg meetings, and he was head of the Treasury of France when Valéry Giscard d’Estaing was President of France, who is a regular of the Bilderberg Group.[19]

The Guardian Covers Bilderberg

The British paper, the Guardian, was the only major mainstream news publication to provide ongoing coverage of the Bilderberg meeting over the weekend. His first columns were satirical and slightly mocking, referring to it as, “A long weekend at a luxury hotel, where the world’s elite get to shake hands, clink glasses, fine-tune their global agenda and squabble over who gets the best sun loungers. I’m guessing that Henry Kissinger brings his own, has it helicoptered in and guarded 24/7 by a CIA special ops team.”[20] However, as the weekend dragged on, his reporting took a change of tone. He reported on the Saturday that, “I know that I’m being followed. I know because I’ve just been chatting to the plainclothes policemen I caught following me,” and he was arrested twice in the first day of the meetings for attempting to take photographs as the limousines entered the hotel.[21]

He later reported that he wasn’t sure what they were discussing inside the hotel, but that he has “a sense of something rotten in the state of Greece,” and he further stated, “Three days and I’ve been turned into a suspect, a troublemaker, unwanted, ill at ease, tired and a bit afraid.” He then went on to write that, “Bilderberg is all about control. It’s about “what shall we do next?” We run lots of stuff already, how about we run some more? How about we make it easier to run stuff? More efficient. Efficiency is good. It would be so much easier with a single bank, a single currency, a single market, a single government. How about a single army? That would be pretty cool. We wouldn’t have any wars then. This prawn cocktail is GOOD. How about a single way of thinking? How about a controlled internet?,” and then, “How about not.”

He makes a very astute point, countering the often postulated argument that Bilderberg is simply a forum where people can speak freely, writing: “I am so unbelievably backteeth sick of power being flexed by the few. I’ve had it flexed in my face for three days, and it’s up my nose like a wasp. I don’t care whether the Bilderberg Group is planning to save the world or shove it in a blender and drink the juice, I don’t think politics should be done like this,” and the author, Charlie Skelton, eloquently stated, “If they were trying to cure cancer they could do it with the lights on.” He further explained that, “Bilderberg is about positions of control. I get within half a mile of it, and suddenly I’m one of the controlled. I’m followed, watched, logged, detained, detained again. I’d been put in that position by the “power” that was up the road.”[22]

On Sunday, May 17, Skelton reported that when he asked the police chief why he was being followed, the chief responded asking, “Why you here?” to which Skelton said he was there to cover the Bilderberg conference, after which the chief stated, “Well, that is the reason! That is why! We are finished!”[23] Do reporters get followed around and stalked by police officers when they cover the World Economic Forum? No. So why does it happen with Bilderberg if all it is, is a conference to discuss ideas freely?

On the Monday following the conference, Skelton wrote that, “It isn’t just me who’s been hauled into police custody for daring to hang around half a mile from the hotel gates. The few journalists who’ve made the trip to Vouliagmeni this year have all been harassed and harried and felt the business end of a Greek walkie-talkie. Many have been arrested. Bernie, from the American Free Press, and Gerhard the documentarian (sounds like a Dungeons and Dragons character) chartered a boat from a nearby marina to try to get photos from the sea. They were stopped three miles from the resort. By the Greek navy.” As Skelton said himself, “My dispatches on the 2009 conference, if they mean anything at all, represent nothing more acutely than the absence of thorough mainstream reporting.”[24]

Skelton’s final report on Bilderberg from May 19, showed how far he had gone in his several days of reporting on the meeting. From writing jokingly about the meeting, to discovering that he was followed by the Greek State Security force. Skelton mused, “So who is the paranoid one? Me, hiding in stairwells, watching the pavement behind me in shop windows, staying in the open for safety? Or Bilderberg, with its two F-16s, circling helicopters, machine guns, navy commandos and policy of repeatedly detaining and harassing a handful of journalists? Who’s the nutter? Me or Baron Mandelson? Me or Paul Volker, the head of Obama’s economic advisory board? Me or the president of Coca-Cola?”

Skelton stated that, “Publicity is pure salt to the giant slug of Bilderberg. So I suggest next year we turn up with a few more tubs. If the mainstream press refuses to give proper coverage to this massive annual event, then interested citizens will have to: a people’s media.”

Amazingly, Skelton made the pronouncement that what he learned after the Bilderberg conference, was that, “we must fight, fight, fight, now – right now, this second, with every cubic inch of our souls – to stop identity cards,” as, “It’s all about the power to ask, the obligation to show, the justification of one’s existence, the power of the asker over the subservience of the asked.” He stated that he “learned this from the random searches, detentions, angry security goon proddings and thumped police desks without number that I’ve had to suffer on account of Bilderberg: I have spent the week living in a nightmare possible future and many different terrible pasts. I have had the very tiniest glimpse into a world of spot checks and unchecked security powers. And it has left me shaken. It has left me, literally, bruised.” Pointedly, he explains that, “The identity card turns you from a free citizen into a suspect.”[25]

Who was there?

Royalty

Among the members of the Bilderberg Group are various European monarchs. At this years meeting, Queen Beatrix of the Netherlands was present, who happens to be the largest single shareholder in Royal Dutch Shell, one of the world’s largest corporations. She was joined by one of her three sons, Prince Constantijn, who also attended the meeting. Prince Constantijn has worked with the Dutch European Commissioner for the EU, as well as having been a strategic policy consultant with Booz Allen & Hamilton in London, a major strategy and technology consulting firm with expertise in Economic and Business Analysis, Intelligence and Operations Analysis and Information Technology, among many others. Prince Constantijn has also been a policy researcher for RAND Corporation in Europe. RAND was initially founded as a global policy think tank that was formed to offer research and analysis to the US Armed Forces, however, it now works with governments, foundations, international organizations and commercial organizations.[26] Also present among European Royalty was Prince Philippe of Belgium, and Queen Sofia of Spain.

Private Bankers

As usual, the list of attendees was also replete with names representing the largest banks in the world. Among them, David Rockefeller, former CEO and Chairman of Chase Manhattan, now JP Morgan Chase, of which he was, until recently, Chairman of the International Advisory Board; and still sits as Honourary Chairman of the Council on Foreign Relations, Chairman of the Board of the Americas Society and Council of the Americas, Honourary Chairman of the Trilateral Commission, which he founded alongside Zbigniew Brzezinski; also a founding member of the Bilderberg Group, prominent philanthropist and is the current patriarch of one of the world’s richest and most powerful banking dynasties.

Also present was Josef Ackermann, a Swiss banker who is CEO of Deutsche Bank, also a non-executive director of Royal Dutch Shell; Deputy Chairman of Siemens AG, Europe’s largest engineering corporation; he is also a member of the International Advisory Council of Zurich Financial Services Group; Chairman of the Board of the Institute International of Finance, the world’s only global association of financial institutions; and Vice Chairman of the Foundation Board of the World Economic Forum.[27]

Roger Altman was also present at the Bilderberg meeting, an investment banker, private equity investor and former Deputy Treasury Secretary in the Clinton Administration. Other bankers at this years meeting include Ana Patricia Botin, Chairman of the Spanish bank, Banco Español de Crédito, formerly having worked with JP Morgan; Frederic Oudea, CEO and newly appointed Chairman of the Board of French bank Societe Generale; Tommaso Padoa-Schioppa, an Italian banker and economist, formerly Italy’s Minister of Economy and Finance; Jacob Wallenberg, Chairman of Investor AB; Marcus Wallenberg, CEO of Investor AB; and George David, CEO of United Technologies Corporation, who also sits on the board of Citigroup, member of the Business Council, the Business Roundtable, and is Vice Chairman of the Peterson Institute for International Economics. [For more on the Peterson Institute, see: Appendix 1]

Canadian bankers include W. Edmund Clark, President and CEO of TD Bank Financial Group, also a member of the board of directors of the C.D. Howe Institute, a prominent Canadian think tank; Frank McKenna, Deputy Chairman of TD Bank Financial Group, former Canadian Ambassador to the United States, former Premier of New Brunswick; and Indira Samarasekera, President of the University of Alberta, who is also on the board of Scotiabank, one of Canada’s largest banks.

Central Bankers

Of course, among the notable members of the Bilderberg Group, are the world’s major central bankers. Among this years members are the Governor of the National Bank of Greece, Governor of the Bank of Italy, President of the European Investment Bank, James Wolfensohn, former President of the World Bank, and Nout Wellink, on the board of the Bank for International Settlements (BIS).[28] Jean-Claude Trichet, the President of the European Central Bank was also present.[29] There is no indication that the Governor of the Federal Reserve, Ben Bernanke was present, which would be an odd turn of events, considering that the Federal Reserve Governor is always present at Bilderberg meetings, alongside the President of the Federal Reserve Bank of New York, William C. Dudley. I have contacted the New York Fed inquiring if Dudley visited Greece or went to any meetings in Greece between May 14-17, or if another senior representative from the New York Fed went in his stead. I have yet to get a response.

The Obama Administration at Bilderberg

The Obama administration was heavily represented at this years Bilderberg meeting. Among the attendees were Keith B. Alexander, a Lieutenant General of U.S. Army and Director of the National Security Agency, the massive spying agency of the United States; Timothy Geithner, US Treasury Secretary and former President of the Federal Reserve Bank of New York; Richard Holbrooke, the Obama administration’s special envoy for Afghanistan and Pakistan; General James Jones, United States National Security Advisor; Henry Kissinger, Obama’s special envoy to Russia, longtime Bilderberg member and former Secretary of State and National Security Advisor; Dennis Ross, special advisor for the Persian Gulf and Southwest Asia to Secretary of State Hillary Clinton; David Patraeus, Commander of CENTCOM, (U.S. Central Command, in the Middle East), Lawrence Summers, Director of the White House’s National Economic Council, former Treasury Secretary in the Clinton administration, former President of Harvard University, former Chief Economist of the World Bank; Paul Volcker, former Governor of the Federal Reserve System and Chair of Obama’s Economic Recovery Advisory Board; Robert Zoellick, former Chairman of Goldman Sachs and current President of the World Bank;[30] and Deputy Secretary of State James Steinberg.[31]

Other Notable Names

Among many others present at the meeting are Viscount Étienne Davignon, former Vice President of the European Commission, and Honourary Chairman of the Bilderberg Group; Francisco Pinto Balsemão, former Prime Minister of Portugal; Franco Bernabè, CEO of Telecom Italia and Vice Chairman of Rothschild Europe; Carl Bildt, former Prime Minister of Sweden; Kenneth Clarke, Shadow Business Secretary in the UK; Richard Dearlove, former head of Britain’s Secret Intelligence Services (MI6); Donald Graham, CEO of the Washington Post Company; Jaap De Hoop Scheffer, Secretary-General of NATO; John Kerr, member of the British House of Lords and Deputy Chairman of Royal Dutch Shell; Jessica Matthews, President of the Carnegie Endowment for International Peace; Richard Perle of the American Enterprise Institute; Romano Prodi, former Italian Prime Minister; J. Robert S. Prichard, CEO of Torstar Corporation and President Emeritus of the University of Toronto; Peter Sutherland, former Director General of the General Agreement on Tariffs and Trade (GATT), first Director General of the World Trade Organization (WTO), and is currently Chairman of British Petroleum (BP) and Goldman Sachs International as well as being a board member of the Royal Bank of Scotland, Chairman of the Trilateral Commission, Vice Chairman of the European Roundtable of Industrialists, and longtime Bilderberg member; Peter Thiel, on the board of directors of Facebook; Jeroen van der Veer, CEO of Royal Dutch Shell; Martin Wolf, Associate Editor and Chief Economics Commentator of the Financial Times newspaper; and Fareed Zakaria, US journalist and board member of the Council on Foreign Relations.[32] There were also some reports that this years meeting would include Google CEO Eric Schmidt, as well as Wall Street Journal Editor Paul Gigot,[33] both of whom attended last years meeting.[34]

Conclusion

Clearly, it was the prerogative of this year’s Bilderberg meeting to exploit the global financial crisis as much as possible to reach goals they have been striving toward for many years. These include the creation of a Global Treasury Department, likely in conjunction with or embodied in the same institution as a Global Central Bank, both of which seem to be in the process of being incorporated into the IMF.

Naturally, Bilderberg meetings serve the interests of the people and organizations that are represented there. Due to the large amount of representatives from the Obama administration that were present, US policies revolving around the financial crisis are likely to have emerged from and serve the interests of the Bilderberg Group. Given the heavy representation of Obama’s foreign policy establishment at the Bilderberg meeting, it seemed surprising to not have received any more information regarding US foreign policy from this year’s meeting, perhaps having to do with Pakistan and Afghanistan.

However, the US recently decided to fire the general who oversaw the Afghan war, being replaced with “Lt. Gen. Stanley McChrystal, a former Green Beret who recently commanded the military’s secretive special operations forces in Iraq.”[35] From 2003 to 2008, McChrystal “led the Pentagon’s Joint Special Operations Command (JSOC), which oversees the military’s most sensitive forces, including the Army’s Delta Force,” and who Pulitzer-Prize winning investigative journalist Seymour Hersh singled out as the head of VP Cheney’s “executive assassination wing.”[36]

So, given these recent changes, as well as the high degree of representation Obama’s foreign policy establishment held at Bildebrerg this year, there were likely to have been some decisions or at least discussion of the escalation of the Afghan war and expansion into Pakistan. However, it is not surprising that the main item on the agenda was the global financial crisis. Without a doubt, the next year will be an interesting one, and the elite are surely hoping to make it a productive one.


APPENDIX 1: Bilderberg Connections to the Billionaire’s Meeting

Peter G. Peterson, one of the guests in attendance at the secret billionaires meeting, was the former United States Secretary of Commerce in the Nixon administration, Chairman and CEO of Lehman Brothers, Kuhn, Loeb Inc., from 1977 to 1984, he co-founded the prominent private equity and investment management firm, the Blackstone Group, of which he is currently Senior Chairman, and in 1985, he became Chairman of the Council on Foreign Relations, taking over when David Rockefeller stepped down from that position. He founded the Peterson Institute for International Economics and was Chairman of the New York Federal Reserve Bank from 2000-2004. The Peterson Institute for International Economics is a major world economic think tank, which seeks to “inform and shape public debate,” from which, “Institute studies have helped provide the intellectual foundation for many of the major international financial initiatives of the past two decades: reform of the International Monetary Fund (IMF), adoption of international banking standards, exchange rate systems in the G-7 and emerging-market economies, policies toward the dollar, the euro, and other important currencies, and responses to debt and currency crises (including the current crisis of 2008–09).” It has also “made important contributions to key trade policy decisions” such as the development of the World Trade Organization, NAFTA, APEC, and East Asian regionalism.[37]

It has a prominent list of names on its board of directors. Peter G. Peterson is Chairman of the board; George David, Chairman of United Technologies is Vice Chairman, as well as being a board member of Citigroup, and was a guest at this year’s Bilderberg meeting; Chen Yuan, Governor of the China Development Bank and former Deputy Governor of the People’s Bank of China (China’s central bank); Jessica Einhorn, Dean of Washington’s Paul H. Nitze School of Advanced International Studies (SAIS) of the Johns Hopkins University, former Visiting Fellow of the International Monetary Fund (IMF), former Managing Director of the World Bank, and currently on the board of Time Warner and the Council on Foreign Relations; Stanley Fischer, Governor of the Central Bank of Israel, former Vice President at the World Bank, former Managing Director at the IMF, former Vice Chairman of Citigroup, and has also been a regular participant in Bilderberg meetings; Carla A. Hills, former US Trade Representative, and was the prime negotiator of NAFTA, she sits on the International Advisory Boards of American International Group, the Coca-Cola Company, Gilead Sciences, J.P. Morgan Chase,  member of the Executive Committee of the Trilateral Commission, Co-Chair of the Council on Foreign Relations, and played a key part in the CFR document, “Building a North American Community,” which seeks to remodel North America following along the lines of the European Union, and she has also been a prominent Bilderberg member; David Rockefeller also sits on the Peterson Institute’s board, as well as Lynn Forester de Rothschild; Jean-Claude Trichet, President of the European Central Bank, who is at every Bilderberg meeting; Paul A. Volcker, former Governor of the Federal Reserve System, regular participant of Bilderberg meetings, and current Chair of Obama’s Economic Recovery Advisory Board.

Honourary Directors of the Peterson Institute include Bilderbergers Alan Greenspan, former Chairman of the Board of Governors of the Federal Reserve System, a prime architect of the current crisis; Frank E. Loy, former Under Secretary of State for Global Affairs, and is on the boards of Environmental Defense, the Pew Center for Global Climate Change, Resources for the Future, and Population Services International; George P. Shultz, former US Secretary of State in the Reagan administration, President and Director of Bechtel Group and former Secretary of the Treasury.[38]

APPENDIX 2: Creating a Central Bank of the World

Jeffrey Garten, Undersecretary of Commerce for International Trade in the Clinton administration, former Dean of the Yale School of Management, previously served on the White House Council on International Economic Policy under the Nixon administration and on the policy planning staffs of Secretaries of State Henry Kissinger and Cyrus Vance of the Ford and Carter administrations. He also was a managing director of Lehman Brothers and the Blackstone Group, is also a member of the Council on Foreign Relations. As early as 1998, Garten wrote an article for the New York Times in which he advocated the creation of a global central bank.[39]

Amid the current financial crisis, Garten wrote an article for the Financial Times in which he advocated for “the establishment of a Global Monetary Authority to oversee markets that have become borderless,” acting as a global central bank.[40] In late October, Garten wrote an article for Newsweek in which he said that world “leaders should begin laying the groundwork for establishing a global central bank.”[41]

Three days after the publication of Garten’s Newsweek article, it was reported that, “The International Monetary Fund may soon lack the money to bail out an ever growing list of countries crumbling across Eastern Europe, Latin America, Africa, and parts of Asia, raising concerns that it will have to tap taxpayers in Western countries for a capital infusion or resort to the nuclear option of printing its own money.” Further, “The nuclear option is to print money by issuing Special Drawing Rights, in effect acting as if it were the world’s central bank.”[42]

[For a detailed look at the moves to create a global central bank, regional currencies, a global reserve currency and a world governing body, see: Andrew G. Marshall, The Financial New World Order: Towards a Global Currency and World Government: Global Research, April 6, 2009]

Endnotes

[1] CFP, Annual Elite Conclave, 58th Bilderberg Meeting to be held in Greece, May 14-17. Canadian Free Press: May 5, 2009:
http://canadafreepress.com/index.php/article/10854

[2] Paul Joseph Watson, Bilderberg Wants Global Department Of Health, Global Treasury. Prison Planet: May 16, 2009:
http://www.infowars.com/bilderberg-wants-global-department-of-health-global-treasury/

[3] Paul Joseph Watson, Bilderberg Fears Losing Control In Chaos-Plagued World. Prison Planet: May 18, 2009:
http://www.prisonplanet.com/bilderberg-fears-losing-control-in-chaos-plagued-world.html

[4] Sorcha Faal, Bilderberg Group orders destruction of US Dollar? MINA: May 21, 2009:
http://macedoniaonline.eu/content/view/6807/53/

[5] Kristi Heim, What really happened at the billionaires’ private confab. The Seattle Times: May 20, 2009:
http://seattletimes.nwsource.com/html/thebusinessofgiving/2009244202_what_really_happened_at_the_bi.html

[6] A. G. Sulzberger, The Rich Get … Together (Shhh, It Was a Secret). The New York Times: May 20, 2009:
http://cityroom.blogs.nytimes.com/2009/05/20/the-rich-get-together-shhh-it-was-a-secret/

[7] Chosun, American Billionaires Gather to Discuss Slump. The Chosun Ilbo: May 22, 2009:
http://english.chosun.com/site/data/html_dir/2009/05/22/2009052200772.html

[8] John Harlow, Billionaire club in bid to curb overpopulation. The Sunday Times: May 24, 2009:
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6350303.ece

[9] Press Release, Investigative Author, Daniel Estulin Exposes Bilderberg Group Plans. PRWeb: May 22, 2009:
http://www.prweb.com/releases/Bilderberg_Group_Meeting/Daniel_Estulin/prweb2453144.htm

[10] James P. Tucker Jr., BILDERBERG AGENDA EXPOSED. American Free Press: June 1, 2009:
http://www.americanfreepress.net/html/bilderberg_2009_179.html

[11] James Quinn, Tim Geithner to reform US financial regulation. The Telegraph: May 21, 2009:
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance
/5359527/Tim-Geithner-to-reform-US-financial-regulation.html

[12] Greg Menges, U. S. Secretary of the Treasury Timothy F. Geithner speech before the Senate Banking Committee. Examiner: May 20, 2009:
http://www.examiner.com/x-8184-Boston-Investing-Examiner~y2009m
5d20-U-S-Secretary-of-the-Treasury-Timothy-F-Geithner-speech-before-the-Senate-Banking-Committee

[13] Robert Schmidt and Jesse Westbrook, U.S. May Strip SEC of Powers in Regulatory Overhaul. Bloomberg: May 20: 2009:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a18ctNv3FDcw

[14] Rex Nutting, Fed could be completely retooled, Geithner says. Market Watch: May 20, 2009:
http://www.marketwatch.com/story/fed-could-be-completely-retooled-geithner-says

[15] 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

[16] Marie Magleby, Obama Wants U.S. to Loan $100 Billion to Global Bailout Fund. CNS News: May 20, 2009:
http://www.cnsnews.com/public/content/article.aspx?RsrcID=48329

[17] Joe Bavier, Sub-Saharan Africa to receive $10 bln in SDRs-IMF. Reuters: May 25, 2009:
http://www.reuters.com/article/latestCrisis/idUSLP336909

[18] Onno Wijnholds, The Dollar’s Last Days? International Business Times: May 18, 2009:
http://www.ibtimes.com/articles/20090518/dollar-rsquolast-days.htm

[19] MATTHEW SALTMARSH, Former I.M.F. Chief Sees Opportunity in Crisis. The New York Times: May 22, 2009:
http://www.nytimes.com/2009/05/23/business/global/23spot.html?ref=global

[20] Charlie Skelton, Our man at Bilderberg: in pursuit of the world’s most powerful cabal. The Guardian: May 13, 2009:
http://www.guardian.co.uk/world/2009/may/13/in-search-of-bilderberg

[21] Charlie Skelton, Our man at Bilderberg: They’re watching and following me, I tell you. The Guardian: May 15, 2009:
http://www.guardian.co.uk/world/2009/may/15/bilderberg-charlie-skelton-dispatch

[22] Charlie Skelton, Our man at Bilderberg: I’m ready to lose control, but they’re not. The Guardian: May 15, 2009:
http://www.guardian.co.uk/world/2009/may/15/bilderberg-charlie-skelton-dispatch1

[23] Charlie Skelton, Our man at Bilderberg: ‘You are not allowed to take pictures of policemen!’ The Guardian: May 17, 2009:
http://www.guardian.co.uk/world/2009/may/17/charlie-skelton-bilderberg

[24] Charlie Skelton, Our man at Bilderberg: Fear my pen. The Guardian: May 18, 2009:
http://www.guardian.co.uk/world/2009/may/18/bilderberg-charlie-skelton-dispatch

[25] Charlie Skelton, Our man at Bilderberg: Let’s salt the slug in 2010. The Guardian: May 19, 2009:
http://www.guardian.co.uk/news/blog/2009/may/19/bilderberg-skelton-greece

[26] Dutch Royal House, Work and official duties. Prince Constantijn:
http://www.koninklijkhuis.nl/english/content.jsp?objectid=18215

[27] Deutsche Bank, Management Board. Our Company:
http://www.db.com/en/content/company/management_board.htm

[28] InfoWars, Bilderberg 2009 Attendee List (revised). May 18, 2009:
http://www.infowars.com/bilderberg-2009-attendee-list/

[29] Demetris Nellas, Greek nationalists protest Bilderberg Club meeting. AP: May 14, 2009:
http://www.google.com/hostednews/ap/article/ALeqM5jep_nbEq1srzJHFQ8fRGNQO3P38QD987H3200

[30] InfoWars, Bilderberg 2009 Attendee List (revised). May 18, 2009:
http://www.infowars.com/bilderberg-2009-attendee-list/

[31] MRT, Top US official arrives in Greece. Macedonian Radio and Television: May 15, 2009:
http://www.mrt.com.mk/en/index.php?option=com_content&task=view&id=6112&Itemid=28

[32] InfoWars, Bilderberg 2009 Attendee List (revised). May 18, 2009:
http://www.infowars.com/bilderberg-2009-attendee-list/

[33] WND, Google joins Bilderberg cabal. World Net Daily: May 17, 2009:
http://worldnetdaily.com/index.php?fa=PAGE.view&pageId=98469

[34] Adam Abrams, Are the people who ‘really run the world’ meeting this weekend? Haaretz: May 14, 2009:
http://www.haaretz.com/hasen/spages/1085589.html

[35] YOCHI J. DREAZEN and PETER SPIEGEL, U.S. Fires Afghan War Chief. The Wall Street Journal: May 12, 2009:
http://online.wsj.com/article/SB124206036635107351.html

[36] M.J. Stephey, Stan McChrystal: The New U.S. Commander in Afghanistan. Time Magazine: May 12, 2009:
http://www.time.com/time/politics/article/0,8599,1897542,00.html

[37] PIIE, About the Institute. Peterson Institute for International Economics:
http://www.petersoninstitute.org/institute/aboutiie.cfm

[38] PIIE, Board of Directors. Peterson Institute for International Economics:
http://www.petersoninstitute.org/institute/board.cfm#52

[39] 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

[40] Jeffrey Garten, Global authority can fill financial vacuum. The Financial Times: September 25, 2008:
http://www.ft.com/cms/s/7caf543e-8b13-11dd-b634-0000779fd18c,Authorised=false.html?_i_
location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F7caf543e-8b13-11dd-b634-000077
9fd18c.html&_i_referer=http%3A%2F%2Fwilliamnotes.wordpress.com%2F2008%2F09%2F30%2Fgarten-on-a-global-monetary-authority%2F

[41] Jeffrey Garten, We Need a Bank Of the World. Newsweek: October 25, 2009: http://www.newsweek.com/id/165772

[42] Ambrose Evans-Pritchard, IMF may need to “print money” as crisis spreads. The Telegraph: October 28, 2009:
http://www.telegraph.co.uk/finance/comment/ambroseevans
_pritchard/3269669/IMF-may-need-to-print-money-as-crisis-spreads.html

The Financial New World Order: Towards a Global Currency and World Government

The Financial New World Order: Towards a Global Currency and World Government
Global Research, April 6, 2009

Introduction

Following the 2009 G20 summit, plans were announced for implementing the creation of a new global currency to replace the US dollar’s role as the world reserve currency. Point 19 of the communiqué released by the G20 at the end of the Summit stated, “We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity.” SDRs, or Special Drawing Rights, are “a synthetic paper currency issued by the International Monetary Fund.” As the Telegraph reported, “the G20 leaders have activated the IMF’s power to create money and begin global “quantitative easing”. In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it.”[1]

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

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

A New Bretton-Woods

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

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

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

Emergence of Regional Currencies

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

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

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

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

The Union of South American Nations

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

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

The Gulf Cooperation Council and a Regional Currency

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

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

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

An Asian Monetary Union

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

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

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

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

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

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

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

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

African Monetary Union

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

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

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

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

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

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

A North American Monetary Union and the Amero

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

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

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

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

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

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

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

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

A Global Currency

The Phoenix

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

The article stated that, “The market crash [of 1987] taught [governments] that the pretence of policy cooperation can be worse than nothing, and that until real co-operation is feasible (ie, until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.” Amazingly the article states that, “Several more big exchange-rate upsets, a few more stockmarket crashes and probably a slump or two will be needed before politicians are willing to face squarely up to that choice. This points to a muddled sequence of emergency followed by patch-up followed by emergency, stretching out far beyond 2018-except for two things. As time passes, the damage caused by currency instability is gradually going to mount; and the very trends that will make it mount are making the utopia of monetary union feasible.”

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

The article concludes in stating that, “The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.” The last sentence states, “Pencil in the phoenix for around 2018, and welcome it when it comes.”[34]


Recommendations for a Global Currency

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

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

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

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

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

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

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

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

Renewed Calls for a Global Currency

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

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

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

On March 25, Timothy Geithner, Treasury Secretary and former President of the New York Federal Reserve, spoke at the Council on Foreign Relations, when asked a question about his thoughts on the Chinese proposal for the global reserve currency, Geithner replied that, “I haven’t read the governor’s proposal.  He’s a remarkably — a very thoughtful, very careful, distinguished central banker.  Generally find him sensible on every issue.  But as I understand his proposal, it’s a proposal designed to increase the use of the IMF’s special drawing rights.  And we’re actually quite open to that suggestion.  But you should think of it as rather evolutionary, building on the current architectures, than — rather than — rather than moving us to global monetary union [Emphasis added].”[42]

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

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

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

Creating a World Central Bank

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

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

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

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

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

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

In October of 2008, it was reported that Morgan Stanley CEO John Mack stated that, “it may take continued international coordination to fully unlock the credit markets and resolve the financial crisis, perhaps even by forming a new global body to oversee the process.”[49]

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

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

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

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

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

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

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

A “New World Order” in Banking

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

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

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

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

An Emerging Global Government

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

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

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

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

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

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

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

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

He quoted an adviser to French President Nicolas Sarkozy as saying, “Global governance is just a euphemism for global government,” and that the “core of the international financial crisis is that we have global financial markets and no global rule of law.” However, Rachman states that any push towards a global government “will be a painful, slow process.” He then states that a key problem in this push can be explained with an example from the EU, which “has suffered a series of humiliating defeats in referendums, when plans for “ever closer union” have been referred to the voters. In general, the Union has progressed fastest when far-reaching deals have been agreed by technocrats and politicians – and then pushed through without direct reference to the voters. International governance tends to be effective, only when it is anti-democratic. [Emphasis added]”[63]

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

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

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

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

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

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

Conclusion

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

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

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

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

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

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

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

Endnotes

[1] 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

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

[3] 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

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

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

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

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

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

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

[10] John Irish, GCC Agrees on Monetary Union but Signals Delay in Common Currency. Reuters: June 10, 2008: http://www.arabnews.com/?page=6&section=0&article=110727&d=10&m=6&y=2008

[11] Forbes, TIMELINE-Gulf single currency deadline delayed beyond 2010. Forbes: March 23, 2009: http://www.forbes.com/feeds/afx/2009/03/24/afx6204462.html

[12] Agencies, ‘GCC need not rush to form single currency’. Business 24/7: March 26, 2009: http://www.business24-7.ae/articles/2009/3/pages/25032009/03262009_4e19de908b174f04bfb3c37aec2f17b3.aspx

[13] Barry Eichengreen, International Monetary Arrangements: Is There a Monetary Union in Asia’s Future? The Brookings Institution: Spring 1997: http://www.brookings.edu/articles/1997/spring_globaleconomics_eichengreen.aspx

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