Tag Archives: Central Bank

BlackRock’s Fink Says Invasion of Ukraine “Accelerates” ESG and Digital Currencies Shift

BlackRock CEO Larry Fink’s annual letter to shareholders has become heavily scrutinized as ones from Berkshire Hathaway chief Warren Buffett and JP Morgan chief Jamie Dimon. Fink is the boss of a $10 trillion asset manager, the world’s largest, and oversees more money than the Fed. Fink told shareholders that Russia’s invasion of Ukraine would fundamentally reshape the world economy and drive up inflation as supply chains are reconfigured.

“The Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades,” Fink wrote.

Fink predicted “companies and governments will also be looking more broadly at their dependencies on other nations. This may lead companies to onshore or nearshore more of their operations resulting in a faster pull back from some countries.”

As a result, “a large-scale reorientation of supply chains will inherently be inflationary,” he said, pointing out that even before the conflict broke out in Eastern Europe, the economic effects of the virus pandemic brought US inflation to its highest in four decades.

Today’s inflationary environment, teetering on the verge of stagflation, has put central banks in “difficult decisions about how fast to raise rates. They face a dilemma they haven’t faced in decades, which has been worsened by geopolitical conflict and the resulting energy shocks. Central banks must choose whether to live with higher inflation or slow economic activity and employment to lower inflation quickly,” Fink said.

Like Fink’s last letter to shareholders, he was focused on the firm’s “ESG” and “green technology” commitments. This time around, he said the invasion “will actually accelerate the shift toward greener sources of energy in many parts of the world,” because higher fossil fuel prices will make the transition of renewables financially competitive. 

“We’ve already seen European policymakers promoting investment in renewables as an important component of energy security,” he said. “More than ever, countries that don’t have their own energy sources will need to fund and develop them– which for many will mean investing in wind and solar power.”

In the short-term, alternatives to Russian energy products “will inevitably slow the world’s progress toward net-zero [emissions] in the near term,” he added. BlackRock is the world’s largest asset manager, which has pushed “ESG” policies that harm American fossil fuel companies, basically following the World Economic Forum’s (WEF) script.

On digital currencies, Fink said the Ukrainian conflict has the “potential impact on accelerating digital currencies. The war will prompt countries to re-evaluate their currency dependencies.” He spoke about central bank digital currencies (CBDC) and how they “can enhance the settlement of international transactions while reducing the risk of money laundering and corruption.” Again, Fink is following WEF’s script of implementing new forms of digital currency that will mean governments will have more control over the people.

Fink also praised how global corporate elites banded together following Russia’s invasion and isolated Moscow from the global financial system overnight, paralyzing the country’s economy. He said the private sector demonstrated the power of the capital markets:

“Russia has been essentially cut off from global capital markets, demonstrating the commitment of major companies to operate consistent with core values. This “economic war” shows what we can achieve when companies, supported by their stakeholders, come together in the face of violence and aggression,” he said.

Fink has made clear that the conflict in Ukraine is being used as an accelerator to reorganize the global economy as the old world order crumbles and a multipolar world emerges. Supply chains will be onshored or moved closer to home, and the WEF’s agenda of a green new world, more corporate surveillance, and trackable money are inevitable this decade.

Readers can find Fink’s complete letter here

CBDC: Central Bank Digital Currency Is Coming

Digital currency is and has been a huge topic within the past few years, especially with the growth of Bitcoin, Ethereum, and several other cryptocurrencies. But with so many other new and popular developments, these new currencies have been shrouded with controversy and a polarization of opinion.

Now, a new development is on the horizon: Central Bank Digital Currencies (CBDC). But don’t be fooled, it’s not the same as cryptocurrency, nor does it bring the benefits crypto offers. Instead, CBDC might just be a new version of the same old central banking system.

A much anticipated paper by MIT and the Boston Fed is expected to be released this fall. The paper will include details of what a U.S. CBDC might look like.

A growing number of people have become quite critical of the current central banking system. Many have described the Federal Reserve as a cartel, a gang that is engaged in unethical actions against the citizenry. If you follow the money and dive deep into how our central banking system really works, it’s not hard to see why people have that perspective.

Because of this perspective, many actions taken by the “financial elite”, like the establishment of a CBDC, are noteworthy, and raise suspicion that these measures will be implemented for more power and control.

Former President of the Federal Reserve Bank of Boston Eric Rosengren provided some key insights as to what a central bank digital currency (CBDC) might look like.

“Rosengren broke out the ecosystem into three buckets: bitcoin, stablecoins, and CBDC, which he referred to as ‘digital currency’….Rosengren also revealed that blockchain and distributed ledger technology were not part of the design in a hypothetical U.S. digital currency. Rosengren stated it is, “…less likely that we are going to be designing a digital currency for the blockchain or for a particular blockchain.”

According to Rosengren, he further envisioned a central bank digital currency not as a stablecoin, but rather as a retail payment or substitute for cash. “You can’t pay for something on the internet with cash so the digital currency provides you a mechanism to use cash but in digital form,” said Rosengren.”

Forbes

So, CBDC is basically cash in digital form. Digital cash that can and will be used to make transactions in everyday life, something that not all cryptocurrencies are designed for. While some cryptocurrencies can be used for these purposes, others, like Bitcoin, are more of an asset for storing wealth. That being said, Bitcoin can still be used to purchase some goods and services and is now legal tender in El Salvador.

There are differences between CBDC and cryptocurrencies. While both can be seen as ‘digital’, their differences are vast and one should not assume that CBDC is the solution cryptocurrencies are offering.

One of the most important differences is that cryptocurrency is on a blockchain ledger, while CBDC isn’t. A blockchain is a new way of creating databases that has huge potential in many industries. Specific to currency, blockchain allows for decentralization of currency, a transparent ledger of transactions and it makes it so no single entity can control all the currency and manipulate its value easily. It also means transactions cannot be deleted or altered, and everyone can verify it.

This level of transparency is not typically favored by those who control an entire country’s money supply – i.e. central banks.

To go deeper, Bitcoin is not a privately owned currency. It’s not part of the “system.” Your wealth in Bitcoin cannot be frozen, controlled, or seized by governments. In fact, governments don’t have any “power” over these cryptocurrencies as they do with modern day currency – the type of control government would have over CBDC.

In speaking about some of the values of Bitcoin, and perhaps other cryptocurrencies, Chamath Palihapitiya, a former Facebook executive said,

“This is a fantastic fundamental hedge and store of value against autocratic regimes and banking infrastructure that we know is corrosive to how the world needs to work properly,” Palihapitiya said. “You cannot have central banks infinitely printing currency.”

Chamath Palihapitiya on Bitcoin

With all this in mind, CBDC will be no different than modern day currency, it’s just going to be digital, that’s all. CBDC is not an embrace of cryptocurrency, which remains something entirely different, something governments don’t like and have no control over.

National Security Agency (NSA) whistleblower Edward Snowden, who leaked documents exposing a massive global surveillance being used by the NSA explains,

“Rather, I will tell you what a CBDC is NOT—it is NOT, as Wikipedia might tell you, a digital dollar. After all, most dollars are already digital, existing not as something folded in your wallet, but as an entry in a bank’s database, faithfully requested and rendered beneath the glass of your phone…”

Edward Snowden
In every example, money cannot exist outside the knowledge of the Central Bank. Bitcoin, Ethereum and other cryptocurrencies exist outside the knowledge of the Central Bank.

“Instead, a CBDC is something closer to being a perversion of cryptocurrencyor at least of the founding principles and protocols of cryptocurrency—a cryptofascist currency, an evil twin entered into the ledgers on Opposite Day, expressly designed to deny its users the basic ownership of their money and to install the State at the mediating center of every transaction.”

Edward Snowden

Snowden explains that proponents of CBDCs believe that strictly-centralized currencies are the realization of a bold new standard “where every central-bank-issued-dollar is held by a central-bank-managed account, recorded in a vast ledger-of-State that can be continuously scrutinized and eternally revised.” They believe that this will make everyday transactions safer and easier to tax, making it impossible to hide money from the government.

“He argues that this is simply a step to increase the power and control of the surveillance state, one that continually finds ways to take away our right to privacy for the sake of “national security.”

CBDC opponents, however, cite that very same purported “safety” and “ease” to argue that an e-dollar, say, is merely an extension to, or financial manifestation of, the ever-encroaching surveillance state. To these critics, the method by which this proposal eradicates bankruptcy fallout and tax dodgers draws a bright red line under its deadly flaw: these only come at the cost of placing the State, newly privy to the use and custodianship of every dollar, at the center of monetary interaction. Look at China, the napkin-clingers cry, where the new ban on Bitcoin, along with the release of the digital-yuan, is clearly intended to increase the ability of the State to “intermediate”—to impose itself in the middle of—every last transaction.”

Edward Snowden

This is the key difference between CBDC and Bitcoin, Ethereum, and others. These are viewed by both central and commercial banks as dangerous because they’ve been designed to ensure equal protection for all users, with no special privileges or power extended to the State who like to keep their eye on everything.

guest essay published in the New York Times by Dr. Eswar Prasad, a professor of trade policy at Cornell University and the author of a forthcoming book on digital currencies, outlines a number of pros and cons of digital currencies. One of the cons is as follows,

“If cash were replaced with a digital dollar, however, the Fed could impose a negative interest rate by gradually shrinking the electronic balanced in everyone’s digital currency accounts, creating an incentive for consumers to spend and for companies to invest.”

Dr. Eswar Prasad

The thought of banks depleting the savings of every wage worker if they don’t spend it is quite concerning to say the least.

In China, things are moving fast. The country’s central bank, the People’s Bank of China, stated in a July 2021 white paper that the digital renminbi is “ready for cross-border use.” Yet for its state-sponsored digital currency to be realized, the digital renminbi must be interoperable with the CBDCs of other countries. Simply put, their currency must be able to work with digital currencies from other countries.

The People’s Bank of China is supporting the development of global CBDC standards and working with other monetary authorities to launch a multi-CBDC arrangement because of this reason.

The Takeaway

When it comes to CBDC, it simply favours the already powerful and allows them more control over people’s lives and an even greater reduction of their privacy. Like many moves the “elite” make, it will all be done under the guise of ‘goodwill and service to others’ when it fact that is likely not the intention.

As new technological solutions arise we see human life becoming simpler and more expansive, but what type of thinking and paradigms back the way that technology is used? In our current world, it is a paradigm of control, disconnection, and domination. Perhaps the most important takeaway here is that as the world evolves technologically we are still not solving real problems because we are stuck in old ways of thinking.

We must begin connecting with the earth, ourselves and something deeper inside ourselves to ask what type of world we truly wish to see. Sitting back and leaving our collective direction up to those currently in power will not result in a meaningful paradigm change. We must come together at a grass roots level and think differently about how we want to live on this planet.

Update Oct 26, 7:30PM: Correction on Bitcoin being legal tender in El Salvador, not Ecuador.

The Dark Past Of The Bank For International Settlements

Patrick Wood,
July 21st, 2020

Today, the BIS is getting headlines again because of its direction of central banks to go cashless. It is readily apparent that it has not lost its power and influence over the decades. For anyone wanting to understand how the world really works, this is a must-read paper. ⁃ TN Editor

Created at Bretton Woods in 1944, the World Bank has been dominated by international bankers, members of the Council on Foreign Relations and later by the  Trilateral Commission. Corruption and self-interest run amok as public funds are converted into private hands by the billions.

Introduction

According to The World Bank, it is,

“a vital source of financial and technical assistance to developing countries around the world. We are not a bank in the common sense. We are made up of two unique development institutions owned by 184 member countries—the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Each institution plays a different but supportive role in our mission of global poverty reduction and the improvement of living standards. The IBRD focuses on middle income and creditworthy poor countries, while IDA focuses on the poorest countries in the world. Together we provide low-interest loans, interest-free credit and grants to developing countries for education, health, infrastructure, communications and many other purposes.” 1

High-minded words like “our mission of global poverty reduction and the improvement of living standards” would lead the reader to believe that the World Bank is some benevolent and global welfare organization. Why is it then, that The World Bank joins the International Monetary Fund and the World Trade Organization as organizations that people around the world just love to hate?

In reality, the World Bank carries its weight, along with the International Monetary Fund and the Bank for International Settlements, to forcibly integrate minor countries of the world into its own brand of capitalistic democracy.

World Bank Beginnings

A sibling of the IMF, the World Bank was born out of the U.N. Monetary and Financial Conference at Bretton Woods, New Hampshire in July, 1944. The original name given to the World Bank was the International Bank for Reconstruction and Development (IBRD) and reflects its original mission: to rebuild Europe after the devastation of World War II. The name “World Bank” was not actually adopted until 1975.

Both the IBRD and the IMF were created as independent specialized agencies of the United Nations, of which they remain to this day.

The word “Development” in the IBRD name was rather insignificant at the time because most of the southern hemisphere was still under colonial rule, with each colonial master responsible for the business activities in their respective countries.

Note: It is argued by some that there was an original desire by banking elites to put an end to colonialism by restructuring investment and trade patterns in colonized countries. This paper will not deal with this issue, but it should be noted that this has been exactly what has happened, in many cases being aided by the operations of the World Bank and the IMF.

As a “reconstruction” bank, however, the World Bank was impotent. It ultimately loaned only $497(US) million for reconstruction projects. The Marshall Plan, by contrast, became the true engine of the reconstruction of Europe by loaning over $41(US) billion by 1953.

The primary architects of the World Bank were Harry Dexter White and John Maynard Keynes, both of whom are summarized Global Banking: The International Monetary Fund (see article for complete details) as follows:

“Such is the moral fiber and intellectual credentials of the creators of the IMF [and the World Bank]: One was an English ideologue economist with a markedly global bent, and the other a corrupt and high-ranking U.S. government official who was a top Soviet spy.”2

Structure of the World Bank

Today, the World Bank consists of two primary units: The already-mentioned IBRD and the International Development Association (IDA), which was created in 1960.

The IBRD lends only to governments who are credit-worthy; in other words, there is an expectation that they will repay their loans. The IDA, by contrast, only lends to governments who are not credit-worthy and are usually the poorest nations. Together, they create a “one-two” punch in global lending to any government that they are able to talk into borrowing. The U.S. currently contributes about $1 billion per year of taxpayer funds to the IDA.

Three other affiliates combine with the World Bank, to be collectively called the World Bank Group:

  • The International Finance Corporation (IFC) – Founded in 1956, lends directly to the private sector in developing counties.
  • The Multilateral Investment Guarantee Agency (MIGA) -Founded in 1988, provides guarantees to investors in developing countries against losses caused by noncommercial risks.
  • The International Center for Settlement of Investment Disputes (ICSID) – Founded in 1966, provides international facilities for conciliation and arbitration of investment disputes.

Headquarters for the World Bank is Washington, DC. It employs approximately 7,000 in the Washington complex, and another 3,000 in 109 offices scattered throughout member countries.

IBRD funds its lending operations by selling AAA-rated bonds and other debt instruments to other banks, pension funds, insurance companies and corporations around the world. By contrast, the IDA is funded by (taxpayer) contributions from member countries. Annual levels of lending is roughly equal between IBRD and IDA. While the IFC generates its own capital in open markets, MIGA and ICSID receive the majority of their funding from the World Bank, much of which is taxpayer funded.

Ownership of the World Bank consists of voting shares held by member countries, according to size and contributions. Currently, the U.S. is the largest shareholder with 16.4 percent of total votes. The next largest voting blocks are Japan (7.9 percent) and Germany (4.5 percent). Because major decisions require an 85 percent super-majority vote, the U.S. can effectively veto any change (100% -16.4% = 83.6%).

American Hegemony

It should be noted that the United Nations is headquartered in the United States, on land originally donated to it by David Rockefeller. The Bretton Woods Conference was held in New Hampshire. Every president of the World Bank has hailed from the United States. It is no wonder that the rest of the world views the World Bank as an American operation.

There has been an unwritten but traditional rule that the World Bank president will always be an American, while the president of the IMF is European. (A recent exception to this is the current IMF president, who is Canadian).

It is instructive to review the past presidents of the World Bank, because it demonstrates which elite cabal is really in control of World Bank operations. In turn, this will point strongly to the real beneficiaries of the World Bank hegemony. The complete biographies and accomplishments of these men far exceed the available space in this report, so only a few highlights are noted.

1. Eugene Meyer. June to December, 1946. Chairman, Board of Governors of the Federal Reserve from 1930-1933; owner of the Washington Post; Member, Council on Foreign Relations; agent of Lazard Freres, Brown Brothers, Harriman; appointed head of the War Finance Corporation during WWI by Woodrow Wilson.

2. John J. McCloy. March 1947 to April 1949. Member and chair of the Council on Foreign Relations; Chairman, Ford Foundation; Chairman, Chase Manhattan Bank; lawyer whose firm was council to Chase Manhattan Bank.

3. Eugene Black. July 1949 to December 1962. Chairman, Board of Directors for the Federal Reserve System (1933-34); senior vice president of Chase Manhattan Bank; Member, Council on Foreign Relations; member of Bilderbergers; created the International Finance Corporation and the International Development Association at the World Bank.

4. George Woods. January 1963 to March 1968. Vice president of Harris, Forbes & Co.; vice president of Chase Bank; vice president of and board member of First Boston Corp. (one of the largest U.S. investment banking firms).

5. Robert Strange McNamara. April 1968 to June 1981. President and director of Ford Motor Company; Secretary of Defense in the Kennedy and Johnson administrations; member of Trilateral Commission, Council on Foreign Relations and Bilderbergers; honorary council trustee of Aspen Institute. Personally negotiated China’s entrance into the World Bank.

6. A.W. Clausen. July 1981 to June 1986. President, CEO and chairman of  Bank of America; member, Trilateral Commission; member, Bretton-Woods Committee.

7. Barber B. Conable. July 1986 to August 1991. Member of U.S. House of Representatives from 1965 to 1985; member Trilateral Commission and Council on Foreign Relations; senior fellow, American Enterprise Institute; board member, New York Stock Exchange; member, Commission on Global Governance.

8. Lewis T. Preston. September 1991 to May 1995. President, CEO and chairman of J.P. Morgan & Co., and chairman of the executive committee; vice president of Morgan Guaranty Trust Co.; member and treasurer of Council on Foreign Relations; director of General Electric.

9. James D. Wolfensohn. June 1995 to 2005 Executive partner and head of the investment banking department, Salomon Brothers (New York); executive deputy chairman and managing director, Schroders Ltd. (London); director, Rockefeller Foundation; board member, Rockefeller University; honorary trustee, Brookings Institution; Director, Population Council (founded by John D. Rockefeller); member, Council on Foreign Relations.

10. Paul Wolfowitz. 2005 – present. Deputy Secretary of Defense (2001-2005); member, Trilateral Commission; member, Council on Foreign Relations; member, Bilderbergers; director of the neocon flagship, Project for the New American Century ( PNAC); member of the elite “Vulcans” group that advised George W. Bush on foreign policy during the 2000 presidential elections (other neocon members included Condoleezza Rice, Colin Powell and Richard Perle); member of and frequent speaker at Social Democrats USA (successor to the Socialist Party of America).

An important pattern emerges here. These men frame a 50-year time period stretching from 1946 to 2006. The early players have long since passed away. There was no social connection between the early and latter presidents. Yet, seven out of ten are members of the Council on Foreign Relations; four are members of the Trilateral Commission, seven have major global bank affiliations (Chase Manhattan, J.P. Morgan, Bank of America, First Boston, Brown Brothers, Harriman, Salomon Brothers, Federal Reserve), and four men were directly connected to Rockefeller interests.

A detailed analysis is not required to see the pattern emerge: Global bankers (the same old crowd) and their related global proxies, have completely dominated the World Bank for its entire history. Collectively and individually, they have always operated purposefully and consistently for their own self-interested, financial gain. Why would anyone expect even one of them to act out of character (e.g., be concerned for world poverty) while directing the helm of the World Bank?

Purposes of convenience

Whatever the true purposes of the World Bank and IMF might have been, the publicly displayed purposes have changed when it was convenient and necessary.

In 1944, reconstruction of war torn countries after WW II was the important issue.

When the Bank demonstrated its impotence by loaning only a pittance of less than $500 million, it changed its pubic image by positioning itself as a check and balance to the expansion of communism. Without the World Bank to engage all of the lesser countries of the world who were susceptible to communist influence, communism might spread and ultimately threaten to end the cold war with an ugly nuclear Holocaust.

Public and legislative sentiment ultimately fizzled and the Bank was again under heavy criticism when Robert Strange McNamara was appointed president.

Poverty Reduction: Trojan Horse

As noted above, McNamara was president of the World Bank from 1968 through 1981. He was also among the original membership of the Trilateral Commission, founded in 1973 by Rockefeller and Brzezinski, and was widely considered to be a central figure in the global elite of his day.

It was McNamara who caused the focus of the World Bank to fall on poverty and poverty reduction. This has essentially remained the siren call right into the present. This was a brilliant maneuver because who would ever say they are anti-poor or pro-poverty? Any attack on the Bank would thus be viewed as an attack on poverty relief itself. From 1968 onward, the battle cry of the Bank has been “eliminate poverty.”

This is clearly seen on the About Us page of the World Bank web site, where these words are prominently displayed:

“Each institution (IBRD and IDA) plays a different but supportive role in our mission of global poverty reduction and the improvement of living standards. [emphasis added]

However, Article I of The Articles of Agreement of the IBRD, as amended on February 16, 1989, state its official Purposes as follows:

(i) To assist in the reconstruction and development of territories of members by facilitating the investment of capital for productive purposes, including the restoration of economies destroyed or disrupted by war, the reconversion of productive facilities to peacetime needs and the encouragement of the development of productive facilities and resources in less developed countries.

(ii) To promote private foreign investment by means of guarantees or participations in loans and other investments made by private investors; and when private capital is not available on reasonable terms, to supplement private investment by providing, on suitable conditions, finance for productive purposes out of its own capital, funds raised by it and its other resources.

(iii) To promote the long-range balanced growth of international trade and the maintenance of equilibrium in balances of payments by encouraging international investment for the development of the productive resources of members, thereby assisting in raising productivity, the standard of living and conditions of labor in their territories.

(iv) To arrange the loans made or guaranteed by it in relation to international loans through other channels so that the more useful and urgent projects, large and small alike, will be dealt with first.

(v) To conduct its operations with due regard to the effect of international investment on business conditions in the territories of members and, in the immediate postwar years, to assist in bringing about a smooth transition from a wartime to a peacetime economy.

The Bank shall be guided in all its decisions by the purposes set forth above.3

Note that the word “poverty” does not appear even once. The reason is clear: Whatever “business as usual” might be with the Bank, it has nothing to do with poverty or poverty reduction. Rather, the Bank is in business to loan money by stimulating borrowing demand in developing countries, with a view to increasing international trade. The primary beneficiaries of international trade are the global corporations, and the poor are actually poorer as a result.

This hypocrisy was noted even by Nobel laureate and former World Bank chief economist, Joseph Stiglitz, as late as 2002:

As far as these ‘client countries’ were concerned, it was a charade in which the politicians pretended to do something to redress the problems [of poverty] while financial interests worked to preserve as much of the status quo as they could.4
Liberalization and Structural Adjustments

When Alden Clausen (also an original member of the Trilateral Commission) took over the reins from Robert McNamara in 1981, a massive shakeup in the bank occurred. As Stiglitz noted,

“In the early 1980’s a purge occurred inside the World Bank, in its research department, which guided the Bank’s thinking and direction.”5

Clausen, a true core member of the global elite, brought in a new chief economist with radical new ideas:

“…Ann Krueger, an international trade specialist, best known for her work on ‘rent seeking’ — how special interests use tariffs and other protectionist measures to increase their incomes at the expense of others…Krueger saw government as the problem. Free markets were the solution to the problems of developing countries.“6 [emphasis added]

This was precisely the time when so-called liberalization policies and Structural Adjustments were forcefully implemented as a means of forcing countries to privatize industries. If governments were the problem, then they should turn over areas of critical infrastructure to private multinational corporations which, according to Krueger, could perform better and more efficiently than bureaucratic government bodies.

Not surprisingly, most of the career staff economists left the Bank in the early 1980s in protest over Clausen and Krueger’s policies.

How the Money Laundry Works

The mechanism and operation of Structural Adjustments, along with the tight cooperation between the IMF and the World Bank, was adequately covered in The August Review’s Global Banking: The International Monetary Fund. The following well-documented example will be the “picture worth a thousand words” in the Review’s effort to profile self-serving Bank and global corporate policies. It also demonstrates the “tag-team” approach used by the Bank and IMF in the prying open of closed markets in uncooperative countries. It’s a rather tangled story, but careful reading will produce understanding of how the “system” works.


Water Wars

In 1998, the IMF approved a loan of $138 million for Bolivia it described as designed to help the country control inflation and stabilize its domestic economy. The loan was contingent upon Bolivia’s adoption of a series of “structural reforms,” including  Privatization of “all remaining public enterprises,” including water services. Once these loans were approved, Bolivia was under intense pressure from the World Bank to ensure that no public subsidies for water existed and that all water projects would be run on a “cost recovery” basis, meaning that citizens must pay the full construction, financing, operation and maintenance costs of a water project. Because water is an essential human need and is crucial for agriculture, cost recovery pricing is unusual, even in the developed world.

In this context, Cochabamba, the third largest city in Bolivia, put its water works up for sale in late 1999.

Only one entity, a consortium led by Bechtel subsidiary Aguas del Tunari, offered a bid, and it was awarded a 40-year concession to provide water. The exact details of the negotiation were kept secret, and Bechtel claimed that the numbers within the contract are “intellectual property.” But, it later came to light that the price included the financing by Cochabamba’s citizens of a part of a huge dam construction project being undertaken by Bechtel, even though water from the Misicuni Dam Project would be 600% more expensive than alternative water sources. Cochabambans were also required to pay Bechtel a contractually guaranteed 15% profit, meaning that the people of Cochabamba were asked to pay for investments while the private sector got the profits.

Immediately upon receiving the concession, the company raised water rates by as much as 400% in some instances. These increases came in an area where the minimum wage is less than $100 a month. After the price hike, self-employed men and women were estimated to pay one quarter of their monthly earnings for water.

Immediately upon receiving the concession, the company raised water rates by as much as 400% in some instances. These increases came in an area where the minimum wage is less than $100 a month. After the price hike, self-employed men and women were estimated to pay one quarter of their monthly earnings for water.

The city’s residents were outraged. In January of 2000, a broad coalition called the Coordination for the Defense of Water and Life, or simply La Coordinadora, led by a local worker, Oscar Olivera, called for peaceful demonstrations. Cochabamba was shut down for four days by a general strike and transportation stoppage, but the demonstrations stopped once the government promised to intervene to lower water rates. However, when there were no results in February, the demonstrations started again. This time, however, demonstrators were met with tear gas and police opposition, leaving 175 injured and two youths blinded.

The threat that privatization of public services under  GATS (General Agreement on Trade in Services) poses to democracy were demonstrated in March 2000. La Coordinadora held an unofficial referendum, counted nearly 50,000 votes, and announced that 96% of the respondents favored the cancellation of the contract with Aguas del Tunari. They were told by the water company that there was nothing to negotiate.

On April 4, the residents of the city returned to the streets, shutting down the city. Again, they were met with police resistance, and on April 8, the government declared martial law. The Bolivian military shot a 17-year-old protester in the face, killing him. However, the protests continued, and, on April 10, the government relented, signing an accord that agreed to the demand of the protesters to reverse the water concession. The people of Cochabamba took back their water.

Unfortunately, this inspiring story didn’t simply end with the victory for the people of Cochabamba. On February 25, 2002, Bechtel filed a grievance using investor protections granted in a Bolivia-Netherlands Bilateral Investment Agreement at the World Bank, demanding a $25 million dollar payment as compensation for lost profits.7

Note: Bechtel Engineering is the largest civil engineering company in the world. It is privately owned by the Bechtel family. For many years, general counsel (and vice-president) for Bechtel was none other than original Trilateral Commission member Caspar Weinberger.

Since then, the World Bank has granted additional “poverty reduction” loans to Bolivia. Carefully read the Bank’s current (2006) assessment on Bolivia found on its web site:

“Bolivia is experiencing a time of difficulty and uncertainty. In recent months, various political and social disturbances have escalated with serious consequences, culminating in the resignation of President Gonzalo Sánchez de Lozada in October 2003, and the appointment of Vice-President Carlos Mesa as President. The current administration inherits a difficult economic, political and social climate, which is compounded by long-term issues, such as profound inequality, an economy that has been adversely affected by the region’s recent economic slump, and widespread public disenchantment with corruption.”8

Political and social disturbances? Difficult economic, political and social climate? Profound inequality? Widespread disenchantment with corruption? It leaves one speechless.

So, in the case of Bolivia, we see the following in operation:

  • An IMF loan is made to Bolivia, with conditionalities
  • The World Bank steps in to enforce the conditionalities and impose structural adjustments
  • The World Bank loans “development” funds to Bolivia, and simultaneously brings in private bank consortiums to fund the various projects that Bechtel had in mind.
  • Bechtel makes a sole-source bid, and it is accepted.
  • The water project ends in total failure and Bechtel gets kicked out after extreme political pressure from consumers.
  • Bechtel files a “lost profit” claim according to a pre-negotiated “insurance guarantee” with the World Bank Group (MIGA, see above.)
  • If Bechtel wins its claim, it will be paid off with taxpayer money contributed by member countries.
  • Undoubtedly, any loans from private-sector banks that later turn sour, will be bailed-out with taxpayer funds as well.

This kind of operation is brazen stealing (albeit perhaps legally) of funds from everyone in sight: Bolivia, the city of Cochabamba, the people of Cochabamba, U.S. taxpayers. The only beneficiaries are Bechtel, the commercial banks and a few corrupt politicians who got their customary bribes and kickbacks.

A penetrating question remains to be answered: When did Bechtel first set their sights on the Bolivia deal? Did Bechtel have a role in suggesting or creating the conditionalities and Structural Adjustments specified by the World Bank in the first place? If so, there would be grounds for criminal investigation.

It is not likely that the World Bank will tell us, because of its very secretive inner workings. Even Stiglitz has noted,

“The IMF and World Bank still have disclosure standards far weaker than those of governments in democracies like the United States, or Sweden or Canada. They attempt to hide critical reports; it is only their inability to prevent leaks that often forces the eventual disclosure.”9

Corruption

The World Bank has received accusations of corruption for many years. Since the Bank is an independent specialized agency of the United Nations and considering the old adage, “The fruit doesn’t fall far from the tree”, this might not come as a surprise to most. The United Nations has a major and documented track record on corruption of every conceivable sort. It would be too simplistic to just leave it at that.

In May, 2004, Sen. Richard Lugar (R-Indiana), as Chairman of the Foreign Relations Committee, kicked off the most recent inquiry into corruption related to the activities of the multilateral development banks, of which the World Bank is foremost.

The heads of the various development banks were invited to testify (voluntarily) before the Committee. According to Sen. Lugar, James Wolfensohn “declined the invitation, citing the established practice of Bank officials not to testify before the legislatures of their numerous member countries.”

Witnesses before the Committee testified that as much as $100 billion may have been lost to corruption in World Bank lending projects.

In Sen. Lugar’s opening remarks, he points out that the entire history of the World Bank is suspect, with between 5 percent and 25 percent of all lending being lost to corruption.

“But corruption remains a serious problem. Dr. Jeffrey Winters of Northwestern University, who will testify before us today, estimates that the World Bank ‘has participated mostly passively in the corruption of roughly $100 billion of its loan funds intended for development.’ Other experts estimate that between 5 percent and 25 percent of the $525 billion that the World Bank has lent since 1946 has been misused. This is equivalent to between $26 billion and $130 billion. Even if corruption is at the low end of estimates, millions of people living in poverty may have lost opportunities to improve their health, education, and economic condition.”10

One must wonder why World Bank officials have been so sloppy and careless with taxpayer dollars. Even further, one must wonder if the corruption was a necessity to achieve the underlying purposes of the Bank, that is, to create bogus and unwanted projects in order to “stimulate” trade.

Sen. Lugar continued his opening remarks,

“Corruption thwarts development efforts in many ways. Bribes can influence important bank decisions on projects and on contractors. Misuse of funds can inflate project costs, deny needed assistance to the poor, and cause projects to fail. Stolen money may prop up dictatorships and finance human rights abuses. Moreover, when developing countries lose development bank funds through corruption, the taxpayers in those poor countries are still obligated to repay the development banks. So, not only are the impoverished cheated out of development benefits, they are left to repay the resulting debts to the banks.”11

It has not been determined which Bank employees might have taken bribes in exchange for influence, but one can be sure that any deal starting with corruption only has one direction to go — down. In the end, it is helpless individuals who are left holding the bag. The incurred debts and failed projects just add to the impoverishment of already poor people.

This is not to say that charges of corruption at the World Bank are modern revelations only. In 1994, marking the 50th anniversary of its creation at Bretton Woods, South End Press released 50 Years is Enough: The Case Against the World Bank and the International Monetary Fund, edited by Kevin Danaher. The book details official Bank and IMF reports that reveal the same kind of corruption back then. In addition, it revealed different types of corruption, for instance,

“Beyond the wasted money and the environmental devastation, there was an even more sinister side to the Bank during the McNamara years: the World Bank’s predilection for increasing support to military regimes that tortured and murdered their subjects, sometimes immediately after the violent overthrow of more democratic governments. In 1979, Senator James Abourezk (D-South Dakota) denounced the bank on the Senate floor, noting that the Bank was increasing ‘loans to four newly repressive governments [Chile, Uruguay, Argentina and the Philippines] twice as fast as all others.’ He noted that 15 of the world’s most repressive governments would receive a third of all World Bank loan commitments in 1979, and that Congress and the Carter administration had cut off bilateral aid to four of the 15 — Argentina, Chile, Uruguay and Ethiopia — for flagrant human rights violations. He blasted the Bank’s ‘excessive secretiveness’ and reminded his colleagues that ‘we vote the money, yet we do not know where it goes.’” 12

The text speaks for itself and needs no comment. Readers of this report will likely have a better understanding of where the money went!

Conclusions

This report does not pretend to be an exhaustive analysis of the World Bank. There are many facets, examples and case studies that could be explored. In fact, many critical and analytical books have been written about the World Bank. The object of this report was to show how the World Bank fits into globalization as a central member in the triad of global monetary powers: The IMF, the BIS and the World Bank.

The World Bank is likely to continue to operate despite any amount of political flack or public protest. Such is the pattern of elitist-dominated institutions. Such is the history of the International Monetary Fund and the Bank for International Settlements.

It is sufficient to conclude that…

  • of the two architects of the World Bank, one was a top Soviet communist agent (Harry Dexter White) and the other was a British ideologue (John Maynard Keynes) totally dedicated to globalism (See Global Banking: The International Monetary Fundfor more details on White and Keynes)
  • From the beginning, the Bank has been dominated by international banking interests and members of the Council on Foreign Relations and later by the Trilateral Commission
  • the cry of “poverty reduction” is a sham to conceal the recycling of billions of taxpayer dollars, if not trillions, into private hands
  • the cry of “poverty reduction” defuses critics of the Bank as being anti-poor and pro-poverty
  • corruption at the World Bank goes back decades, if not all the way to the very beginning

Footnotes

  1. World Bank web site, About Page
  2. The August Review, Global Banking: The International Monetary Fund
  3. World Bank web site, IBRD Articles of Agreement: Article I
  4. Stiglitz, Globalization and its Discontents (Norton, 2002), p. 234
  5. ibid, p. 13
  6. ibid
  7. Wallach, Whose Trade Organization? (The New Press, 2004), p.125]
    • See also, Bechtel Vs. Bolivia: The Bolivian Water Revolt
    • See also, The New Yorker, letter on Leasing the Rain
    • See also, PBS, Leasing the Rain
  8. World Bank web site, Bolivia Country Brief
  9. Stiglitz, op. cit., p. 234
  10. Lugar, U.S. Senate Website, $100 billion may have been lost to World Bank Corruption, May 13, 2004
  11. ibid.
  12. Hanaher, 50 Years is Enough: The Case Against the World Bank and the International Monetary Fund, (South End Press, 1994), p. 10

The Nationalization of the FED and what it Means

Ryan DeLarme
April 22nd, 2020

We are still in the midst of this Pandemic situation, and while  it is certainly true that people are sick and the virus is very real, most would agree that we are being sold fractions of truth packaged nicely with whatever agenda and spin the source happens to be promoting. The information war continues, a hefty percentage of the population are living in fear, others are making the best of it despite their uncertainty, and some can even see a light at the end of the tunnel.

President Trump is in a great position thanks to the National Emergencies Act, which was signed by every state and territory. As a direct result of this the “white-hats” in the Government were able to achieve several important objectives, primarily: the Nationalization of the Federal Reserve, and getting the Defense Production Act signed.

Our current debt-based monetary system will inevitably lead to a complete and total economic collapse.  We desperately need to make a change while we still can. By now, everyone should understand that the Federal Reserve is not part of the government but privately owned control mechanism for the central banking system and it’s cartels. Almost every country has one (central bank) and they are wonderful tools for controlling Governments. Here are some reason why the FED being Nationalized could be a good thing:

  1. Doing so would allow the federal government to quit borrowing money, dramatically reduce taxes and eventually pay off the entire U.S. national debt.  Instead of inheriting the largest debt in the history of the world, future generations would actually have a chance at economic prosperity because they would not be forced to pay off the horrific debt of previous generations.  The Federal Reserve is a perpetual debt machine, it has almost completely destroyed the value of the U.S. dollar and it has an absolutely nightmarish track record of incompetence.
  2. Our current debt-based monetary system is a perpetual debt machine.  When they need money the U.S. government swaps U.S. Treasury bonds for “Federal Reserve notes”, thus creating more government debt.  Usually the money isn’t even printed up – most of the time it is just electronically credited to the government. The Federal Reserve creates these “Federal Reserve notes” out of thin air. These Federal Reserve notes are backed by nothing and have no intrinsic value of their own.
  3. When each new dollar is created, the interest owed by the federal government on that new dollar is not also created at the same time. Therefore, more debt is actually created than the amount of money that the federal government receives from the Federal Reserve. This is a Ponzi scheme that is designed to drain wealth from the American people and transfer it to the banking system aka the perpetual debt system.
  4. Our current debt-based monetary system requires very high personal income taxes to pay for it.  It is no accident that the personal income tax was introduced at about the same time that the Federal Reserve system came into existence. If we nationalized the Federal Reserve and capped federal government spending at a reasonable percentage of GDP, it would be entirely possible to massively cut taxes and still keep our promises regarding Social Security and other important social programs at the same time.
  5. Under our current system, the U.S. national debt will never, ever be paid off.  We are many Trillions in debt and at this point we add more than a trillion dollars to that number every year.  While there is certainly a danger that we would have inflation under a debt-free monetary system, the reality is that we are absolutely guaranteed inflation under the Federal Reserve system.
  6. Most Americans believe that inflation is a fact of life, but the sad truth is that the United States has only had a major, ongoing problem with inflation since the Federal Reserve was created back in 1913. If you do not believe this, just check out this chart. Sadly, the U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created.
  7. We (hopefully) won’t have trillions of dollars of secret loans being made to big financial institutions on Wall Street and in foreign countries. Most Americans don’t realize this, but the Federal Reserve made $16.1 trillion in secret loans to their friends during the last financial crisis. Meanwhile, hundreds of small banks were left out in the cold and the American people got no help.
  8. The Federal Reserve needs to be nationalized because it is an unelected, unaccountable “fourth branch of government” that has gotten completely and totally out of control.  Even some members of Congress are now openly complaining about how much power the Fed has.  For example, Ron Paul once told MSNBC that he believes that the Federal Reserve is now more powerful than Congress…..

“…The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress.”

And now we are here today, Trump has actually done it, further proving that he is probably not a lackey of the central banking mafia.  A lot of people out there think the worst, that we will go into a crazy economic recession but it’s scare tactics and more than likely the opposite will occur.

Many individuals throughout history have proposed to seize the functions of the Federal Reserve System and use it as a national bank to finance the long-term needs of the American people. The policy of federal lending, as distinct from federal spending, can be used to break the current political impasse. Federal lending allows us to make massive long-term commitments at modest short-term costs. For states and businesses, the cost of capital can be radically lowered – down to 0% for public infrastructure, and a competitive advantage of the United States in world markets can be secured. The overriding goal is the creation of 30+ million new jobs in production, with high capital investment, high energy intensity, high value added, and high technology.

The theoretical basis and historical validation for the program advanced here is the traditional American System of Alexander Hamilton, Friedrich List, Henry Carey, Henry Clay, Abraham Lincoln, the populists, and the New Deal. The method of transforming the central bank into a national bank to finance a recovery derives from the work of Woytinsky and Lautenbach, interpreted in the light of the experience of the US Lend-Lease Program. We are seeing what once felt like an unachievable fairy tale unfold in modern times, and most people seem to be completely in the dark as to how important and unprecedented this situation really is.