Making the World Safe for Banksters: Syria in the Cross-hairs

“The 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.”  —Prof. Caroll Quigley, Georgetown University, Tragedy and Hope (1966)

Iraq and Libya have been taken out, and Iran has been heavily boycotted. Syria is now in the cross-hairs. Why? Here is one overlooked scenario. 

In an August 2013 article titled “Larry Summers and the Secret ‘End-game’ Memo,” Greg Palast posted evidence of a secret late-1990s plan devised by Wall Street and U.S. Treasury officials to open banking to the lucrative derivatives business. To pull this off required the relaxation of banking regulations not just in the US but globally. The vehicle to be used was the Financial Services Agreement of the World Trade Organization.

The “end-game” would require not just coercing support among WTO members but taking down those countries refusing to join. Some key countries remained holdouts from the WTO, including Iraq, Libya, Iran and Syria. In these Islamic countries, banks are largely state-owned; and “usury” – charging rent for the “use” of money – is viewed as a sin, if not a crime. That puts them at odds with the Western model of rent extraction by private middlemen. Publicly-owned banks are also a threat to the mushrooming derivatives business, since governments with their own banks don’t need interest rate swaps, credit default swaps, or investment-grade ratings by private rating agencies in order to finance their operations.

Bank deregulation proceeded according to plan, and the government-sanctioned and -nurtured derivatives business mushroomed into a $700-plus trillion pyramid scheme. Highly leveraged,  completely unregulated, and dangerously unsustainable, it collapsed in 2008 when investment bank Lehman Brothers went bankrupt, taking a large segment of the global economy with it. The countries that managed to escape were those sustained by public banking models outside the international banking net.

These countries were not all Islamic. Forty percent of banks globally are publicly-owned. They are largely in the BRIC countries—Brazil, Russia, India and China—which house forty percent of the global population. They also escaped the 2008 credit crisis, but they at least made a show of conforming to Western banking rules. This was not true of the “rogue” Islamic nations, where usury was forbidden by Islamic teaching. To make the world safe for usury, these rogue states had to be silenced by other means. Having failed to succumb to economic coercion, they wound up in the crosshairs of the powerful US military.

Here is some data in support of that thesis.

The End-game Memo

In his August 22nd article, Greg Palast posted a screenshot of a 1997 memo from Timothy Geithner, then Assistant Secretary of International Affairs under Robert Rubin, to Larry Summers, then Deputy Secretary of the Treasury. Geithner referred in the memo to the “end-game of WTO financial services negotiations” and urged Summers to touch base with the CEOs of Goldman Sachs, Merrill Lynch, Bank of America, Citibank, and Chase Manhattan Bank, for whom private phone numbers were provided.

The game then in play was the deregulation of banks so that they could gamble in the lucrative new field of derivatives. To pull this off required, first, the repeal of Glass-Steagall, the 1933 Act that imposed a firewall between investment banking and depository banking in order to protect depositors’ funds from bank gambling. But the plan required more than just deregulating US banks. Banking controls had to be eliminated globally so that money would not flee to nations with safer banking laws. The “endgame” was to achieve this global deregulation through an obscure addendum to the international trade agreements policed by the World Trade Organization, called the Financial Services Agreement. Palast wrote:

Until the bankers began their play, the WTO agreements dealt simply with trade in goods–that is, my cars for your bananas.  The new rules ginned-up by Summers and the banks would force all nations to accept trade in “bads” – toxic assets like financial derivatives.

Until the bankers’ re-draft of the FSA, each nation controlled and chartered the banks within their own borders.  The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives “products.”

And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.

The job of turning the FSA into the bankers’ battering ram was given to Geithner, who was named Ambassador to the World Trade Organization.

WTO members were induced to sign the agreement by threatening their access to global markets if they refused; and they all did sign, except Brazil. Brazil was then threatened with an embargo; but its resistance paid off, since it alone among Western nations survived and thrived during the 2007-2009 crisis. As for the others:

The new FSA pulled the lid off the Pandora’s box of worldwide derivatives trade.  Among the notorious transactions legalized: Goldman Sachs (where Treasury Secretary Rubin had been Co-Chairman) worked a secret euro-derivatives swap with Greece which, ultimately, destroyed that nation.  Ecuador, its own banking sector de-regulated and demolished, exploded into riots.  Argentina had to sell off its oil companies (to the Spanish) and water systems (to Enron) while its teachers hunted for food in garbage cans.  Then, Bankers Gone Wild in the Eurozone dove head-first into derivatives pools without knowing how to swim–and the continent is now being sold off in tiny, cheap pieces to Germany.

The Holdouts

That was the fate of countries in the WTO, but Palast did not discuss those that were not in that organization at all, including Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. These seven countries were named by U.S. General Wesley Clark (Ret.) in a 2007 “Democracy Now” interview as the new “rogue states” being targeted for take down after September 11, 2001. He said that about 10 days after 9-11, he was told by a general that the decision had been made to go to war with Iraq. Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.

What did these countries have in common? Besides being Islamic, they were not members either of the WTO or of the Bank for International Settlements (BIS). That left them outside the long regulatory arm of the central bankers’ central bank in Switzerland. Other countries later identified as “rogue states” that were also not members of the BIS included North Korea, Cuba, and Afghanistan.

The body regulating banks today is called the Financial Stability Board (FSB), and it is housed in the BIS in Switzerland. In 2009, the heads of the G20 nations agreed to be bound by rules imposed by the FSB, ostensibly to prevent another global banking crisis. Its regulations are not merely advisory but are binding, and they can make or break not just banks but whole nations. This was first demonstrated in 1989, when the Basel I Accord raised capital requirements a mere 2%, from 6% to 8%. The result was to force a drastic reduction in lending by major Japanese banks, which were then the world’s largest and most powerful creditors. They were undercapitalized, however, relative to other banks. The Japanese economy sank along with its banks and has yet to fully recover.

Among other game-changing regulations in play under the FSB are Basel III and the new bail-in rules. Basel III is slated to impose crippling capital requirements on public, cooperative and community banks, coercing their sale to large multinational banks.

The “bail-in” template was first tested in Cyprus and follows regulations imposed by the FSB in 2011. Too-big-to-fail banks are required to draft “living wills” setting forth how they will avoid insolvency in the absence of government bailouts. The FSB solution is to “bail in” creditors – including depositors – turning deposits into bank stock, effectively confiscating them.

The Public Bank Alternative

Countries laboring under the yoke of an extractive private banking system are being forced into “structural adjustment” and austerity by their unrepayable debt. But some countries have managed to escape. In the Middle East, these are the targeted “rogue nations.” Their state-owned banks can issue the credit of the state on behalf of the state, leveraging public funds for public use without paying a massive tribute to private middlemen. Generous state funding allows them to provide generously for their people.

Like Libya and Iraq before they were embroiled in war, Syria provides free education at all levels and free medical care. It also provides subsidized housing for everyone (although some of this has been compromised by adoption of an IMF structural adjustment program in 2006 and the presence of about 2 million Iraqi and Palestinian refugees). Iran too provides nearly free higher education and primary health care.

Like Libya and Iraq before takedown, Syria and Iran have state-owned central banks that issue the national currency and are under government control. Whether these countries will succeed in maintaining their financial sovereignty in the face of enormous economic, political and military pressure remains to be seen.

As for Larry Summers, he went on to become president of Harvard, where he approved a derivative bet on interest rate swaps that lost over $1 billion for the university.  He resigned in 2006 to manage a hedge fund among other business activities, and went on to become State Senator Barack Obama’s key campaign benefactor.

Summers played a key role in the banking deregulation that brought on the current crisis, causing millions of US citizens to lose their jobs and their homes. Yet he is President Obama’s first choice to replace Ben Bernanke as Federal Reserve Chairman. Why? He has proven he can manipulate the system to make the world safe for Wall Street; and in an upside-down world in which bankers rule, that seems to be the name of the game.

________________________

Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her websites are http://WebofDebt.com, http://PublicBankSolution.com, and http://PublicBankingInstitute.org.

58 Responses

  1. […] September 4, 2013, Ellen Brown […]

  2. […] Brown Web of Debt / Op-Ed Published: Friday 6 September 2013 Iraq and Libya have been taken out, and Iran has been […]

  3. […] Read more […]

  4. Reblogged this on honeythatsok: Stories we tell ourselves and commented:
    To understand ‘the war on terror’ we have to understand this. It’s not easy reading by any means. I read a lot and I had to read it three times and take several breaks to fully understand it all, but it is essential reading to understand the root cause of large scale war and global conflict. The links between the global bank elite and the US government cannot be denied anymore, and all questions of instability have to be analyzed from this perspective – the complete takeover of the world’s monetary system by a handful of people that will not tolerate that some people may want to live differently from them.

    “The ‘end-game’ would require not just coercing support among WTO members but taking down those countries refusing to join. Some key countries remained holdouts from the WTO, including Iraq, Libya, Iran and Syria. In these Islamic countries, banks are largely state-owned; and “usury” – charging rent for the “use” of money – is viewed as a sin, if not a crime. That puts them at odds with the Western model of rent extraction by private middlemen.”

  5. Honey … The root cause of war is rooted in debt, debt which causes scarcity. Honey, if you care to understand the solution, please contact me. I’ll take you on a journey where you will be able to rationalize, realize and understand the role that debt currency plays in the elimination of debt where the debt currency is a means to an end that has not been realized as yet. It has to do with the events of 1971 and how the desirable real-time genie was released from a bottle (Call it Yang), while at the same time, the evil debt genie (Yin) also escaped the same bottle at the exact same time. Your blog will be completely jammed when you write about this.

    • Rooster, Pls send me link to your info. I am 64 yr old and it is only in the last year that I am actually beginning to grasp the severity of the bankster tentacles on the world. I am stupefied!

      • geoyachtsus …. there’s no link that I can send. The evolution to real-time asset (gold & silver) currency by way of the market should be self evident if you have a decent grasp of the organic laws of the market. FIXED gold (pegged) only has monetary liquidity in so far as the amount of gold that is on hand. FIXED gold has historically run into liquidity issues as a currency, not because of the bullion, but because of the FIXED value. The FIXED peg was the problem given that total liquidity is the product of (weight x trade value), such as (1000 tons x $1390/oz), as a quick example. Liquidity can be enhanced by raising either of those factors. In short, if gold was ever to make for a good liquid currency , along with having its classical debt-free characteristics, it would have to be set free to float. That dollar-gold bullion FIXED price peg was severed in 1971. This set the stage for the theoretical monetization of bullion in the future. The appropriate real-time systems would have to mature to give the concept of real-time gold popularity within the overall market, a function that has been nurtured by the internet and John Q’s access to the internet. Today, as a market currency (not legal tender as there is no need for that “crutch”), you can but a stick of gum or a Ferrari with a debt-free store of value with instant, global liquidity. Debt-free store of value has integrated with full scalable instant liquidity as per market forces. Where people fall down on their grasp is that this process is bottom-up and organic as per market fundamentals. People are creatures of habit and default to top-down thinking given that we’ve alwasy been supply driven by hierarchy , right back to when the “apple was shoved in our faces:. This real-time gold-as-currency (account for by weight) is not top-down nor can it be overtly supported by the powers-that-be because of the real-time factor and the prospect that the legacy system of the USD would be in jeopardy of crashing very quickly if not governed by a rate of change that’s organic in nature. The elite are helpless in this situation and are essentially relegated to the role of “carrying the stick” (inflation) as an impetus for the market to migrate. People are unlikely to respond to the carrot given their propensity to resist change. Some evils appear to be necessary in “the script”. Follow the script ….as wisely as a serpent. :-)

        You cannot pour new wine into old wineskins.

        All of the above is already incorporated into bullion based payment processors in the marketplace. Here are 3 you can reference.
        freelakotabank.com
        goldmoney.com
        pecunix.com

        These private and sovereign models distribute your weighted currency that’s back by bullion on deposit. The currency essential represents to ownership title to the weight. This complements the older distribution model of hand-to-hand bullion , which is very familar to the market, although a ted bit inconvenient. In these models, gold is central to fiat currencies and the currencies acts as real-time measures given that we still price things, as a matter of habit, in debt-based currency. The real-time measure of USD/oz is the “bridge” or gateway from the debt-currency paradigm to the emerging gold-as-money paradigm …. in REAL-TIME.

        Happy to help. Spread the news.

      • geoyachtsus – go to http://www.zerohedge.com and become informed by the authors who are anonymous but I believe are successful financiers who expose the web of deceitful tactics comprehensively. Charts which show the money trail over time speaks volumes in this regard.

  6. Reblogged this on seeds for natural justice and commented:
    Very thought provoking insights into financial control worldwide, i recall that Saddam Hussein wanted to sell his oil not for dollars but in other currencies, and soon after he was targeted for takedown!
    ed
    ed for take down..

    • As was Gaddafi and Libya.

  7. […] Making the World Safe for Banksters: Syria in the Cross-hairs […]

  8. The timing for a transition from debt currency to asset currency is a delicate market undertaking and must be done from the grass roots, bottom-up. The USA has been the “stage setter” for real-time gold-as-money (via Bretton Woods) and the policeman for governing the rate of change from the debt paradigm. Saddam was “up there” a little too far , in regards to “visibility”. The current concern for the USD system is in creating a smooth rate of change. Had he not been stopped, the precedent could have cascaded very quickly, resulting in a dollar crash. A sudden dollar crash is not good for anyone. Rate of change has to be governed, even if it’s by “necessary evils” in order to allow for a reasonably smooth transition.

    Gold is money. Has been all along. The debt-based floating fiat dollar is but a stop-gap measure in history, while it served/serves its “apprenticeship” for the sake of fulfilling its ultimate role as a component within the floating real-time measure of USD/oz …. in REAL TIME. It’s a bridge. Cross it into a debt-free paradigm. In the debt-free currency paradigm (which co-exists), the dollar is a very valuable tool, not as a currency of settlement but as essential component of that real-time measure. The FIXED peg on gold had to be removed to fulfill organic law.

    • You cannot plant Gold.
      You cannot drink Gold.
      Gold will not combust in your automobile’s engine.
      Gold is worthless.

      • Be careful not to collapse your thinking, Ernestine. Liquidity (monetary) is essential to keep trade going in order to maintain production. You’re looking at gold as a store of value or an inflation hedge rather then as a currency.. If an economy has no liquidity, everything collapses. There is no incentive to produce.

        Why do you suppose Moses was so incredibly livid when he came down from the mountain ? RSVP

  9. […] Click here to continue reading at Web of Debt> […]

  10. […] Go to Original – webofdebt.com […]

  11. […] By Ellen Hodges Brown @ Web Of Debt: […]

  12. […] By Ellen Hodges Brown @ Web Of Debt: […]

  13. […] http://webofdebt.wordpress.com/2013/09/04/making-the-world-safe-for-banksters-syria-in-the-cross-hai… […]

  14. […] the late 1990s a plan was hatched by Wall Street and officials of the US Treasury Department; to open up global banking […]

  15. In history, transitions from one monetary system to another are associated with hegemonic war, imperial rule, tyranny, and revolution. How might nation states peacefully transition from the web of debt to public banking solutions?

    • Outstanding question , fibtechblog ! The question might be better expressed as “how do individuals” rather than “how do nation states”. The process is organic. The answer is in the market and the answer has already been developed and has been a market reality since the mid 1990’s. It’s just slow to surface as this free market beast rises. Now that gold trades in real-time, we have access to the circulation of debt-free store of value (bullion) with instant and scalable liquidity never seen in any monetary system of the past. This all nicely packaged in a decentralized structure, something that can only be achieved with an asset based currency. Gold and silver are currencies of tremendous efficiency now that they trade in real-time (float). The system is completely weight based but the bridge of transition that you are so eager to see was built by the powers that be. It’s the real-time tool of USD/oz … which now floats. Said another way, that tool says debt-to-assets. Let’s move with it. Real-time store of value is now married with instant global liquidity … in real-time. https://www.facebook.com/KeeptheFED

  16. […] This piece first appeared at Web of Debt. […]

  17. […] I samband med artikeln ovan kan den här passa att ta en titt på, också om tänkbara anledningar till att Syrien inte kan få lov att vara ifred – Making the World Safe for Banksters: Syria in the Cross-hairs […]

  18. @Ellen Brown – Are you aware of this private funding proposal for infrastructure in U.S. It is touted as not costing taxpayer dollars and being funded by private funds, but its just a tax break for corporations to repatriated their funds. Buy at “bond” at 1 percent interest and save billions in taxes.

    The scary thing is an article in Civil Engineering magazine said that principal forgiveness would be prohibited by AIF.

    I don’t know how giving giant tax breaks for repatriated wealth isn’t costing the taxpayers. Also, its giving corporations a tax break for something we should be able to do for ourselves.

    However, it does talk about “leverage” so it may be using some banking powers to public good. And given tax breaks to these corps to onshore their money is likely evitable, I guess its better than nothing.

    But it sounds like a set-up without a bankruptcy provision, principal forgiveness.

    http://delaney.house.gov/media-center/press-releases/delaney-introduces-bipartisan-infrastructure-bill

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