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GLOBALISATION AND THE GLOBALISTS AGE
A SECRETIVE BANKING ELITE RULES TRADING IN DERIVATIVES
http://www.WantToKnow.info/banking_finan..._financial


According to many top financial analysts and the revealing news articles below, the $700 trillion financial derivatives market may be a time bomb waiting to explode with catastrophic consequences. $700 trillion is more than 10 times the GDP of the entire world and equivalent to $100,000 for each of the 7 billion inhabitants of our planet. These financial instruments have a legitimate place in hedging risk, yet the recent explosion of growth in the global derivatives market has created a huge potential for massive instability.



According to the most recent report from the U.S. government's Office of the Comptroller of the Currency (OCC), the total value of derivatives has increased approximately 1000% since 1996, and 250% since 2006 (see graph on page 12 of the OCC report). Derivatives continued their rapid climb even in the midst of the global recession that started in 2008. Most disturbing is the fact that 95% of all U.S. derivatives are monopolized by just five megabanks and their holding companies.



The below verbatim excerpts from major media and government reports speak for themselves. What they don't mention is one simple measure which could greatly decrease the risk of the derivatives bubble bursting.



A simple tax of 0.25% (1/4 of 1%) on each speculative financial transaction would change the whole risky game. European citizens pay a value added tax (VAT) of 15% or more and most U.S. citizens pay a state sales tax of up to 13% on purchased goods. So why not add just a small tax on all speculative transactions? This would also net hundreds of billions of dollars in tax receipts, easing the growing world debt.



Thankfully, politicians are slowly becoming aware of the huge risk of the derivatives bubble and are taking steps in the right direction, but there is a long way still to go. And the financial speculation tax has yet to gain traction. By choosing to educate ourselves and spread the word on this vital issue, we can make a difference. For concrete ideas on how you can play a part, see the "What you can do" box below the article summaries.



With best wishes for greater financial integrity,



Note: For those who would like a simple explanation and very brief history of derivatives, click here.





A Secretive Banking Elite Rules Trading in Derivatives

December 12, 2010, New York Times

http://www.nytimes.com/2010/12/12/busine...ntage.html



On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan. The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential. Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk. In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks. The banks in this group ... have fought to block other banks from entering the market, and they are also trying to thwart efforts to make full information on prices and fees freely available. Banks’ influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small. The size and reach of this market has grown rapidly over the past two decades. Pension funds today use derivatives to hedge investments. States and cities use them to try to hold down borrowing costs. Airlines use them to secure steady fuel prices. Food companies use them to lock in prices of commodities like wheat or beef.



Note: To explore highly revealing news articles on the powerful secret societies which without doubt back these top bankers, click here.





OCC’s Quarterly Report on Bank Trading and Derivatives Activities: Third Quarter 2011

December 2011, OCC (U.S. Office of the Comptroller of the Currency, Administrator of National Banks)

http://www.occ.gov/topics/capital-market.../derivativ...



The OCC’s quarterly report on trading revenues and bank derivatives activities is based on Call Report information provided by all insured U.S. commercial banks and trust companies, reports filed by U.S. financial holding companies, and other published data. The notional amount of derivatives held by insured U.S. commercial banks decreased $1.4 trillion, or 0.6%, from the second quarter of 2011 to $248 trillion. Notional derivatives are 5.7% higher than at the same time last year. Derivatives activity in the U.S. banking system continues to be dominated by a small group of large financial institutions. The five banks with the most derivatives activity hold 96% of all derivatives. Insured commercial banks have more limited legal authorities than do their holding companies.



Note: Graphs in this OCC report (pg. 25 & 26) show that five U.S. banks, JPMorgan Chase, Citibank, BofA, Goldman Sachs, and Morgan Stanley, hold $235 of the $248 trillion above, while their holding companies control an additional $311 of the $326 trillion in derivatives held by holding companies. So these five banks and their holding companies combined hold $546 trillion in derivatives, 95% of the U.S. derivatives market, nearly 80% of the global market, and equivalent to over $75,000 for every person on the planet. If the above link fails, click here. For quarterly derivative reports by the OCC going back to 1995, click here.



The $700 trillion elephant

March 6, 2009, MarketWatch (Wall Street Journal Digital Network)

http://www.marketwatch.com/news/story/Th...m/story.as...



There's a $700 trillion elephant in the room and it's time we found out how much it really weighs on the economy. Derivative contracts total about three-quarters of a quadrillion dollars in "notional" amounts, according to the Bank for International Settlements. These contracts are tallied in notional values because no one really can say how much they are worth. But valuing them correctly is exactly what we should be doing because these comprise the viral disease that has infected the financial markets and the economies of the world. Try as we might to salvage the residential real estate market, it's at best worth $23 trillion in the U.S. We're struggling to save the stock market, but that's valued at less than $15 trillion. And we hope to keep the entire U.S. economy from collapsing, yet gross domestic product stands at $14.2 trillion. Compare any of these to the derivatives market and you can easily see that we are just closing the windows as a tsunami crashes to shore. The total value of all the stock markets in the world amounts to less than $50 trillion, according to the World Federation of Exchanges. To be sure, the derivatives market is international. But much of the trouble we're in began with contracts "derived" from the values associated with U.S. residential real estate market. These contracts were engineered based on the various assumptions tied to those values. Few know what derivatives are worth. I spoke with one derivatives trader who manages billions of dollars and she said she couldn't even value her portfolio because "no one knows anymore who is on the other side of the trade."



Note: The GDP of the entire world is estimated at around $60 trillion. Banks and financial firms deemed "too big to fail" were bailed out worldwide at taxpayers' expense. But what will happen if losses in the derivatives market skyrocket? No government in the world has the resources to save financial corporations from a collapse in their derivatives trading. For a treasure trove of reports from reliable sources detailing the amazing control of major banks over government and society, click here.







OTC derivatives market activity in the first half of 2011

November 16, 2011, Bank for International Settlements (Intergovernmental organization of central banks)

http://www.bis.org/press/p111116a.htm



After an increase of only 3% in the second half of 2010, total notional amounts outstanding of over-the-counter (OTC) derivatives rose by 18% in the first half of 2011, reaching $708 trillion by the end of June 2011.



Note: The Bank for International Settlements (BIS) is an intergovernmental organization of central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks." It is not accountable to any national government. Their accounting shows a total global derivatives market controlled by the banks of over $700 trillion. That's $100,000 for every man, woman, and child on the planet. As reported in Reuters, the derivatives market is largely unregulated. Do you think there is any manipulation going on here? BIS helps the bankers to work together to keep their hidden power.





Buffett warns on investment 'time bomb'

March 4, 2003, BBC News

http://news.bbc.co.uk/2/hi/2817995.stm



The rapidly growing trade in derivatives poses a "mega-catastrophic risk" for the economy and most shares are still "too expensive", ... investor Warren Buffett has warned. The derivatives market has exploded in recent years, with investment banks selling billions of dollars worth of these investments to clients as a way to off-load or manage market risk. But Mr Buffett argues that such highly complex financial instruments are time bombs and "financial weapons of mass destruction" that could harm not only their buyers and sellers, but the whole economic system. Derivatives are financial instruments that allow investors to speculate on the future price of, for example, commodities or shares - without buying the underlying investment. Outstanding derivatives contracts - excluding those traded on exchanges such as the International Petroleum Exchange - are worth close to $85 trillion, according to the International Swaps and Derivatives Association. Some derivatives contracts, Mr Buffett says, appear to have been devised by "madmen". He warns that derivatives can push companies onto a "spiral that can lead to a corporate meltdown", like the demise of the notorious hedge fund Long-Term Capital Management in 1998.



Note: Investor Warren Buffett was ranked the world's richest man by Forbes magazine in 2008. Though written in 2003 when the value of the derivatives market was about 1/4 of what it is now, the excellent article above reveals Buffett's thinking on the incredible risk of creating derivatives that have many times more value than the entire GDP of the world. The risk has increased tremendously since then.





Deregulation of derivatives set stage for collapse

January 30, 2011, San Francisco Chronicle (San Francisco's leading newspaper)

http://articles.sfgate.com/2011-01-30/bu...atives-otc...



"We certainly applaud the efforts of the commission," said White House press secretary Robert Gibbs, referring to the Financial Crisis Inquiry Report. "Frankly, I'm not sure much has changed," said one of commissioners, Byron Georgiou. "The concentration of assets in the nation's 10 biggest banks is bigger now than it was five years ago, from 58 percent in 2006 to 63 percent now." Referring to executives who remain at the head of those banks that almost ran aground, Georgiou said ... "Either they knew and didn't want to tell us, or they really didn't know. Either way, they put their institutions at risk." And have yet to be held accountable. Commissioner Brooksley Born can enjoy a certain sense of vindication. Not only had "over-the-counter derivatives contributed significantly to this crisis," ... but the enactment of legislation in 2000 to ban their regulation "was a key turning point in the march toward the financial crisis." As head of the Commodity Futures Trading Commission in the 1990s, Born was aware of the damage the largely unregulated instruments had already caused. Born suggested some more regulation. [She] was squashed like a bug by Clinton administration heavyweights, including Lawrence Summers and Robert Rubin, [and] Federal Reserve Chairman Alan Greenspan. One of the results: The Commodity Futures Modernization Act of 2000 eliminated government oversight of the OTC market. As the report documents, the use of such derivatives ... helped bring the entire financial system to its knees. Born hasn't seen much change in terms of accountability. One thing the report makes clear ... is just how preposterous were the "Who knew?" and "Who could have predicted?" statements offered up by chief executives and top government officials.



Note: So the 10 biggest banks now control 63% of total U.S. bank assets. According to the New York Times, the total for all U.S. banking assets as of the second quarter of 2010 were calculated at $13.22 trillion. Yet four of these megabanks also control an astounding 95% of the $574 trillion derivatives market, a sum over 40 times the amount of bank assets! Do you think there might be a problem with a derivatives bubble?





JPMorgan's Dangerous Derivatives

May 7, 2009, Bloomberg/Businessweek

http://www.businessweek.com/magazine/con...034013.htm



Gillian Tett [is the author of] Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe. Tett is a respected business journalist at the Financial Times. Tett successfully pieces together the colorful backstory of the bank's work to win acceptance in the market for its brainchild, turning credit derivatives "from a cottage industry into a mass-production business." With the benefit of hindsight, we know that while these inventions were intended to control risk, they amplified it instead. This novel idea turned noxious when applied broadly to residential mortgages, a game that the rest of Wall Street later entered into with gusto. We learn in deep detail about not only how collateralized debt obligations are assembled but also their many iterations. Perhaps it's noteworthy that Tett's book begins when JPMorgan had the face-value equivalent of $1.7 trillion in derivatives on its books. Today that number has jumped to a mind-boggling $87 trillion. Part of that portfolio includes almost $8.4 trillion in credit derivatives, more than Bank of America's (BAC), Citi's, and Goldman Sachs' (GS) holdings combined.



Note: So JP Morgan has $87 trillion in derivatives, a mass market it helped to create. That is greater than the GDP for the entire world! To verify, click here. For a New York Times review of this revealing book, click here.



Derivatives the new 'ticking bomb'

March 10, 2008, (Part of the Wall Street Journal's digital network)

http://www.marketwatch.com/story/derivat...-time-bomb



"In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal." That warning was in [Warren] Buffett's 2002 letter to Berkshire shareholders. He saw a future that many others chose to ignore. Wall Street didn't listen to Buffett. Derivatives grew into a massive bubble, from about $100 trillion to $516 trillion by 2007. Despite Buffett's clear warnings, a massive new derivatives bubble is driving the domestic and global economies, a bubble that continues growing today parallel with the subprime-credit meltdown triggering a bear-recession. Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world's clearinghouse for central banks in Basel, Switzerland. Keep in mind that while the $516 trillion "notional" value (maximum in case of a meltdown) of the deals is a good measure of the market's size, the 2007 BIS study notes that the $11 trillion "gross market values provides a more accurate measure of the scale of financial risk transfer taking place in derivatives markets." The fact is, derivatives have become the world's biggest "black market," exceeding the illicit traffic in stuff like arms, drugs, alcohol, gambling, cigarettes, stolen art and pirated movies. Why? Because like all black markets, derivatives are a perfect way of getting rich while avoiding taxes and government regulations. And in today's slowdown, plus a volatile global market, Wall Street knows derivatives remain a lucrative business.



Note: Do you think the financial industry is out of control? For lots more powerful, reliable information on major banking manipulations, click here.





How Goldman gambled on starvation

July 2, 2010, The Independent (One of the UK's leading newspapers)

http://www.independent.co.uk/opinion/com...n-hari-how...



This is the story of how some of the richest people in the world – Goldman, Deutsche Bank, the traders at Merrill Lynch, and more – have caused the starvation of some of the poorest people in the world. At the end of 2006, food prices across the world started to rise, suddenly and stratospherically. Within a year, the price of wheat had shot up by 80 per cent, maize by 90 per cent, rice by 320 per cent. In a global jolt of hunger, 200 million people – mostly children – couldn't afford to get food any more, and sank into malnutrition or starvation. There were riots in more than 30 countries, and at least one government was violently overthrown. Then, in spring 2008, prices just as mysteriously fell back to their previous level. Jean Ziegler, the UN Special Rapporteur on the Right to Food, calls it "a silent mass murder", entirely due to "man-made actions." Through the 1990s, Goldman Sachs and others lobbied hard and the regulations [controlling agricultural futures contracts] were abolished. Suddenly, these contracts were turned into "derivatives" that could be bought and sold among traders who had nothing to do with agriculture. A market in "food speculation" was born. The speculators drove the price through the roof.



Note: For a very powerful New York Times article by a top Goldman Sachs executive who recently quit for reasons of conscience, click here. Some researchers speculate that the global elite are aware that alternative energies will eventually replace oil, which has been a prime means of control and underlying cause of many recent wars. As a replacement for oil, the elite and their secret societies are increasingly targeting control of the world's food supply through terminator crops which produce no seed, and through the patenting of seeds.





Stock market time bomb?

May 10, 2010, Washington Times

http://www.washingtontimes.com/news/2010.../?page=all



Even the world’s most savvy stock-market giants (e.g., Warren E. Buffett) have warned over the past decade that derivatives are the fiscal equivalent of a weapon of mass destruction. And the consequences of such an explosion would make the recent global financial and economic crisis seem like penny ante. But generously lubricated lobbyists for the unrestricted, unsupervised derivatives markets tell congressional committees and government regulators to butt out. While banks all over the world were imploding and some $50 trillion vanished in global stock markets, the derivatives market grew by an estimated 65 percent, according the Bank for International Settlements. BIS convenes the world’s 57 most powerful central bankers in Basel, Switzerland, for periodic secret meetings. Occasionally, they issue a cry of alarm. This time, derivatives had soared from $414.8 trillion at the end of 2006 to $683.7 trillion in mid-2008 - 18 months’ time. The derivatives market is now estimated at $700 trillion. What’s so difficult to understand about derivatives? Essentially, they are bets for or against the house - red or black at the roulette wheel. Or betting for or against the weather in situations in which the weather is critical (e.g., vineyards). Forwards, futures, options and swaps form the panoply of derivatives. Credit derivatives are based on loans, bonds or other forms of credit. Over-the-counter (OTC) derivatives are contracts that are traded and privately negotiated directly between two parties, outside of a regular exchange. All of this is unregulated.



Note: This incisive article lays bare severe market manipulations that greatly endanger our world. The entire article is highly recommended. And for a powerful analysis describing just how crazy things have gotten and giving some rays of hope by researcher David Wilcock, click here.





BofA Said to Split Regulators Over Moving Merrill Contracts

October 18, 2011, Bloomberg/Businessweek

http://www.businessweek.com/news/2011-10...lators-ove...



Bank of America Corp., hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits. Derivatives are financial instruments used to hedge risks or for speculation. They’re derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in the weather or interest rates. Keeping such deals separate from FDIC-insured savings has been a cornerstone of U.S. regulation for decades, including last year’s Dodd-Frank overhaul of Wall Street regulation. Three years after taxpayers rescued some of the biggest U.S. lenders, regulators are grappling with how to protect FDIC-insured bank accounts from risks generated by investment-banking operations. “The concern is that there is always an enormous temptation to dump the losers on the insured institution,” said William Black, professor of economics and law at the University of Missouri-Kansas City and a former bank regulator. “We should have fairly tight restrictions on that.” Bank of America’s holding company -- the parent of both the retail bank and the Merrill Lynch securities unit -- held almost $75 trillion of derivatives at the end of June. That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives.



Note: Remember that the GDP of the entire world is estimated at around $60 trillion, less than JPMorgan or BofA own in derivatives. For an excellent article laying out the incredible risk this creates of a major economic collapse, click here. For more on the high risk and cost to taxpayers of BofA moving its massive amount of derivatives to its subsidiary, click here. For lots more from major media sources on the illegal profiteering of major financial corporations enabled by lax government regulation, click here.











Brooksley Born foresaw disaster but was silenced

December 5, 2010, San Francisco Chronicle (San Francisco's leading newspaper)

http://www.sfgate.com/cgi-bin/article.cg...1GLHFA.DTL



There's a brief scene in "Inside Job," the locally produced documentary on the Great Financial Meltdown, in which a colleague of the head of the Commodity Futures Trading Commission in 1997 describes how "blood drained from her face" after receiving a phoned-in tongue-lashing from deputy Treasury Secretary Larry Summers. The target of Summers' wrath was Brooksley Born, ... the first female president of the Stanford Law Review and a recognized legal expert in the area of complex financial instruments. Her crime: Born had the temerity to push for regulation of the increasingly wild trading in derivatives, which, as we learned a decade later, helped bring the U.S. economy, and much of the world's, to its knees. Summers, with 13 bankers in his office, told Born to get off it "in a very grueling fashion," said the colleague. The story is told in much more detail in All the Devils are Here, the latest, but eminently worthwhile, book on the roots of the crisis, by Bethany McLean and ... Joe Nocera. It makes for dispiriting, even appalling, reading. Responding to growing evidence of manipulation and fraud in unregulated derivatives trading – "the hippopotamus under the rug," as Born and others referred to it – Born suggested the commission should perhaps be given some sort of oversight. She had a 33-page policy paper drawn up, full of questions and suggestions, like, for example, whether establishing a public exchange for derivatives might not be a bad idea. Responding to the policy paper, Summers, "screaming at her," according to the book, told Born the bankers sitting in his office "threatened to move their derivatives business to London," if she didn't stop.











Interview: Brooksley Born

August 28, 2009, PBS Frontline

http://www.pbs.org/wgbh/pages/frontline/.../born.html



As head of the Commodity Futures Trading Commission [CFTC], Brooksley Born became alarmed by the lack of oversight of the secretive, multitrillion-dollar over-the-counter derivatives market. Her attempts to regulate derivatives ran into fierce resistance from then-Fed Chairman Alan Greenspan, then-Treasury Secretary Robert Rubin and then-Deputy Treasury Secretary Larry Summers, who prevailed upon Congress to stop Born and limit future regulation. PBS: Let's start with September 2008 as we all sat there and watched the economy melting down. Born: It was like my worst nightmare coming true. I had had enormous concerns about the over-the-counter derivatives [OTC] market ... for a number of years. The market was totally opaque. Nobody really knew what was going on. And then it became obvious as Lehman Brothers failed, as AIG suddenly appeared to be on the brink of tremendous defaults and turned out [to have been a major derivatives] dealer. PBS: How did it happen? Born: It happened because there was no oversight of a very, very big, dynamic, growing market. I would never say derivatives should be banned or forbidden. The problem is that they can be extremely misused. Traditionally, government has had to protect the public interest by overseeing the marketplace and keeping the extreme behavior under some check. All other financial markets have some kind of government oversight protecting the public interest. [But] not this one. The over-the-counter derivatives dealers business ... was something like 40 percent of the profits of many of these big banks as recently as a couple of years ago. PBS: We're the losers. Who were the winners? Born: Our largest banks. It was short-term benefit for a few major institutions at the expense of all the people who have lost their jobs, who have lost their retirement savings, who have lost their homes.



Note: Don't miss this entire, astonishing interview with Born, who practiced derivatives law for 20 years before being appointed head of the CFTC, which was tasked with overseeing the derivatives market. She lays bare the level of deceit, greed, and corruption by both bankers and some of the politicians who protect them.
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15 REASONS WHY THE US ECONOMIC CRISIS IS REALLY AN ECONOMIC CONSOLIDATION BY THE ELITE BANKING POWERS

http://endoftheamericandream.com/archive...ing-powers

Is the United States experiencing an "economic crisis" or an "economic consolidation"?  Did the financial problems of the last several years
"happen on their own",  or are they part of a broader plan to consolidate financial power in the United States?  Before you dismiss that possibility, just remember what happened back during the Great Depression.  During that era, the big financial powers cut off the flow of credit, hoarded cash and reduced the money supply.  Suddenly nobody had any money and the economy tanked.  The big financial powers were then able to swoop back in and buy up valuable assets and real estate for pennies on the dollar.  So are there signs that such a financial consolidation is happening again?

Well, yes, there are.

The U.S. government is making sure that the big banks are getting all the cash they need to make sure that they don't fail during these rocky economic times, but the U.S. government is letting small banks fail in droves.  In fact, in many instances the U.S. government is actually directing these small banks to sell themselves to the big sharks.

So is this part of a planned consolidation of the U.S. banking industry?  Just consider the following 15 points....

#1) The FDIC is planning to open a massive satellite office near Chicago that will house up to 500 temporary staffers and contractors to manage receiverships and liquidate assets from what they are expecting will be a gigantic wave of failed Midwest banks.

#2) But if the economic crisis is over, then why would the FDIC need such a huge additional office just to handle bank failures?  Well, because the economic crisis is not over.  The FDIC recently announced that the number of banks on its "problem list" climbed to 702 at the end of 2009.  That is a sobering figure considering that only 552 banks were on the problem list at the end of September and only 252 banks that were on the problem list at the end of 2008.

#3) Waves of small and mid-size banks are going to continue to fail because the U.S. housing market continues to come apart at the seams.  The U.S. government just announced that in January sales of new homes plunged to the lowest level on record.  The reality is that the U.S. housing market simply is not recovering.

#4) In fact, a lot more houses may be on the U.S. housing market very shortly.  The number of mortgages in the United States more than 90 days overdue has climbed to 5.1 percent.  As the housing market continues to get increasingly worse, it will put even more pressure on small to mid-size banks.

#5) More than 24% of all homes with mortgages in the United States were underwater as of the end of 2009.  Large numbers of American homeowners are deciding to walk away from these homes rather than to keep making payments on loans that are for far more than the homes themselves are worth.

#6) If all that wasn't bad enough, now a huge "second wave" of adjustable rate mortgages is scheduled to reset beginning in 2010.  We all saw what kind of damage the "first wave" of adjustable rate mortgages did.  How many banks are going to be able to survive the devastation of the second wave?

#7) In fact, one stunning new study forecasts that five million houses and condos will go through foreclosure within the next couple of years.  If that actually happens it will be absolutely catastrophic for the banking industry.

#8) But it is not just residential real estate that is a problem.  Many financial analysts now believe that the next "shoe to drop" in the ongoing economic crisis will be commercial real estate. U.S. commercial property values are down approximately 40 percent since 2007 and currently 18 percent of all office space in the United States is now sitting vacant.

#9) So are the financial powers doing anything to help?  In 2008 and 2009 they did, but now it appears that they plan to dramatically tighten credit.  In fact, Federal Reserve Chairman Ben Bernanke recently warned Congress that the Federal Reserve does not plan to "print money" to help Congress finance the exploding U.S. national debt.  So either Congress will have to spend less money or borrow it at higher interest rates from someone else.  Either of those alternatives will be bad for U.S. economic growth.

#10) In addition, the Federal Reserve is in discussions with money market mutual funds on agreements to help drain as much as 1 trillion dollars from the financial system.  But when you withdraw money from a financial system it slows down an economy.  Why would the Federal Reserve want to do this now when the economy is struggling so much?

#11) There are also persistent rumors that the Federal Reserve is plotting a series of interest rate hikes.  Federal Reserve Chairman Ben Bernanke says that the Federal Reserve may raise the discount rate "before long" as part of the "normalization" of Fed lending.  By raising that rate, Bernanke says that the central bank "will be able to put significant upward pressure on all short-term interest rates".  But higher interest rates will mean that it will cost more for everyone to borrow money.  This will also slow down the U.S. economy.

#12) Recent data suggests that there has been a very significant decline in the "real" M3 money supply, and every time that this has happened in the past it has resulted in a drop in economic activity.  In fact, this dramatic contraction in the money supply has many economic analysts now warning that it is not a matter of "if" we will have a "double-dip" recession, but of "when" it will occur.

#13) There are also signs that big U.S. banks are now hoarding cash.  In fact, the biggest banks in the U.S. cut their collective small business lending balance by another 1 billion dollars in November 2009.  That drop was the seventh monthly decline in a row.

#14) In fact, in 2009 U.S. banks posted their sharpest decline in lending since 1942.  This is the same kind of thing that happened at the beginning of the Great Depression.

#15) Meanwhile, the biggest U.S. banks are gobbling up a larger and larger share of the U.S. banking market.  At the end of 2007, the Big Four U.S. banks - Citigroup, JPMorgan Chase, Bank of America and Wells Fargo - held 32 percent of all deposits in FDIC-insured institutions. As of June 30th of last year it was 39 percent.

So do you see what is going on?

The real estate crash of the last several years has left hundreds of small to mid-size banks across the United States extremely vulnerable.

These small to mid-size banks desperately need the U.S. economy to get cranking again.

But now the big financial powers are reducing their lending, hoarding cash and shrinking the money supply.

All of those things reduce economic activity.

Many businesses will fail because they cannot get loans.

The real estate market will continue to suffer because banks are raising their standards and are lending less money.

Small to mid-size banks that are already on the edge of disaster are almost virtually certain to collapse when the "second wave" of the housing crisis starts hitting.

But when they do collapse the U.S. government is directing them to sell themselves to the big sharks.

So whether it is "planned" or not, what we are witnessing is a consolidation of the banking industry in the United States.

And that is not a good thing.


ADDENDUM

Who Said:
"I fear the foreign bankers with their craftiness and torturous tricks will entirely control the exuberant riches of America and use it to systematically corrupt civilization."


Who Said:
"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance."


Who Said:
"The government should create, issue and circulate all the currency and credits needed... the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity."

Answer -
Otto von Bizmark,
German Chancellor


Answer -
James Madison,
4th US President


Answer -
Abraham Lincoln,
16th US President



The Private Fed can create an unlimited amount of money from nothing for:

·         Buying anything it wants

·         Buying US Treasury bonds

·         Lending to its favorite commercial banksters at near zero interest rates who then turn around to buy interest bearing US T-bills


Commercial banks can create a limited amount of money from nothing based on the reserve ratio set by their godfather the Private FED.

Meanwhile, the biggest U.S. banks are gobbling up a larger and larger share of the U.S. banking market.  At the end of 2007, the Big Four U.S. banks - Citigroup, JPMorgan Chase, Bank of America and Wells Fargo - held 32 percent of all deposits in FDIC-insured institutions. As of June 30th of 2009 it was 39 percent. As more and more small banks are being forced to fail, the big 4 are gobbling them up.

Note: The Fed has kept the federal funds overnight rate to fellow banksters near 0%, and has pulled out all the stops to keep interest rates low, a huge subsidy for banks that are charging their best customers 20% or more to borrow on their credit cards. The ever-helpful Fed banksters also allowed their fellow banksters to deplete some of their precious capital. According to an investigative report by Jesse Eisinger in ProPublica, a year ago the Fed overruled an objection by the Federal Deposit Insurance Corp. and allowed 19 large banks to reduce their retained earnings by paying dividends and buying back shares. Read “Fed Shrugged Off Warnings, Let Bank Pay Shareholders Billions” on ProPublica.  
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GLOBAL FINANCE :THE SHYLOCK MODEL  
http://rt.com/news/global-finance-shylock-model-605/


A Greek brainstorming session would sound something like this: Default! Downgrade! Bond Swap! ECB Bailout! Austerity Measures! IMF Recipes! Riots! Euro Collapse! Pay up!! Can anybody make any sense out of this??



Let’s try…  Because it’s a question of joining the dots… correctly!  



First and foremost, Sovereign Debt “Crises” explode, then collapse only to “resurrect” bigger and fatter according to a Model: let’s call it “The Shylock Model” after William Shakespeare’s despicable Usurer in “The Merchant of Venice”: Shylock loaned money to Antonio, a Venetian Merchant, demanding he sign a bond pledging a pound of his flesh as collateral…  



Models are orderly, consistent and sequential representations of complex systems.  Like a Road Map, Models can guide us from point “A” to point “B” so that we don’t go astray.  When you understand how a Model works, the complex system it represents becomes predictable.







­A Comedy of Errors



In my 23rd February article for RT on Greece (http://rt.com/news/argentina-advice-gree...033/print/), I stressed that Sovereign Debt Crises are not the result of bad luck, worse judgment or coincidence. For over a quarter century we’ve seen the same show staged again and again with little variation. Greece, Argentina, Spain, Italy, Portugal, Brazil, Mexico, Iceland, Ireland, Russia, Asian Tigers… all “stupidly” borrowed too much from private bankers only to “discover” they couldn’t pay them back.  



Symmetrically, the same group of powerful global Mega-Banks lent too much to those countries only to “discover” they couldn’t recover those loans.



A Comedy of Errors in which governments and bankers are either very stupid or… are they discretely winking at each other as they carve out pound after pound of flesh?



­



Can somebody please clean our dirty sheets…!



Bankers and politicians make strange bedfellows.  Invariably, their Comedies of Errors get their linen soiled.  When that happens, bankers know they cannot go banging on the doors of presidential palaces, ministries of finance and parliaments yelling “Pay up, or else!”



The farce of “democracy” and “national sovereignty” must be maintained. That’s when banker-controlled “public multilateral agencies” come on stage – IMF, ECB, World Bank – to do the, er… banging!!  



After all Greece, you ARE a member of the ECB so you must obey their orders (even if written in German).  And you, Argentina, you ARE a member of the IMF so stop wailing and do your homework!!



­



Doctor, I’ve got a fever…



Market Analysts and Rating Agencies are today’s financial witch doctors telling us why stock markets go up and down like a patient’s fever.  Currencies rise, currencies fall in a casino-like roller-coaster; Sovereign Debt Bond Ratings are up-graded or down-graded, all to the tune of the Pied Pipers at S&P, Finch’s and Moody’s, FT and The Wall Street Journal…  And, yes, these oracles of “good” and “bad” are on Mega-banker payrolls.  



Whatever they utter is Revealed Truth.  So what if in 2008 they rated AIG, Lehman, Merrill Lynch, Fannie Mae “AA”, even “AAA” until they dissolved into oblivion?



In perfect sync, they downgrade Greece and Argentina, Spain and Italy, Ireland and Iceland forcing them to pay higher interest to the Mega-bankers…



­



I’ll have my Bond!



When Shylock the Usurer got ready to cut a pound of flesh nearest Antonio’s heart, he parrots time and again, “I’ll have my bond!” waving his legal contract, formally enforceable under the laws of Venice.  One will never understand a Usurer’s mindset if you believe that Shylock loaned the money to Antonio in order to get it back.  Oh, no!!  Shylock was betting on NOT getting it back!!



You see, rich, sovereign creditors who cannot pay back loans are music to bankers’ ears!   What good is a sovereign creditor who CAN and will actually pay back a loan?  That undermines the very essence of usury!   It thwarts parasitism forcing usurer bankers to have to work to find new victims to loan all that money to…



Jesus!  Do you expect a banker to work!?!?  Banking Business thrives on refinancing debt, rolling it over year after year, exponentially ballooning it through compound interest…



When a country can’t pay its debts, then our modern Shylock Banksters demand their “pound of flesh”: full control of the country turning it into a Financial Colony of the Global Power Masters, who impose their Trilateral Commission brethren in key positions of power: Papademos, Monti, Cavallo, Geithner…



It was never Shylock’s goal to recover his 3.000 Ducats.  No, Sir!  He only wanted his pound of flesh.  The loan and the bond were just the mechanism to get to that flesh.  Shylock’s Model was to legally indebt Antonio under the laws of Venice, so that those laws would then enforce his immoral outrage of executing the collateral: a pound of flesh.







­Bankers’ Worst Nightmare!



What’s the worst thing that could happen to Goldman Sachs, JP Morgan, Rockefeller, and Rothschild who manage the Shylock Model?  If any sovereign country – Argentina, Greece, Spain, Brazil, Italy – were to turn around and say: “Hey!  How much did you say I owed you? 200 billion?  No sweat! Come pick up your check Monday morning…”



If that ever happened, bankers would be confronted with two very serious problems:



·         Problem One (a Technical Hitch): Where would they find another group of ‘sheeple’ to impose unnecessary – even fictitious – 200 billion dollar debts at usury interest?



·         Problem Two (a Political Hitch): They would lose control over Greece, or Argentina, or Spain, or Ireland or Italy just when they had them right under their thumb, controlling their resources and governments; running the show because if any government were to do something “stupid” like being Sovereign, then all the bankers needed to do was say, “No, no!!  Remember: you owe us Zillions in “sovereign debt” that you can’t pay back.



If you do something foolish like prioritizing your people’s national interests, we will wipe you off the global financial map; our global media will destroy you; we’ll throw S&P and Fitch downgrades at you!  Watch out: we can literally set your country on fire!!”.  



Yes, when a country finally owes nothing to the bankers then that country is truly FREE!   Make no mistake: true national sovereignty, independence and freedom are the greatest enemies of the Global Money Power Masters.  



Today’s Global Financial System functions according to “The Shylock Model”: it will go to great lengths to carve out its pound of flesh…



Good doctors say: proper Diagnosis is the first step to being cured.
Reply
BILDERBERG MEETING 2012 LIST OF PARTICIPANTS
Global Research, May 31, 2012

Source: Biliderberg Meetings Website: http://www.bilderbergmeetings.org/participants2012.html

The 60th Bilderberg Meeting will be held in Chantilly, Virginia, USA from 31 May - 3 June 2012. The Conference will deal mainly with political, economic and societal issues like Transatlantic Relations, Evolution of the Political Landscape in Europe and the US, Austerity and Growth in Developed Economies, Cyber Security, Energy Challenges, the Future of Democracy, Russia, China and the Middle East.



Approximately 145 participants will attend of whom about two-thirds come from Europe and the balance from North America and other countries. About one-third is from government and politics, and two-thirds are from finance, industry, labor, education, and communications. The meeting is private in order to encourage frank and open discussion.



http://www.bilderbergmeetings.org/meeting_2012.html



Bilderberg Meetings

Chantilly, Virginia, USA, 31 May-3 June 2012



Final List of Participants



Chairman



FRA Castries, Henri de Chairman and CEO, AXA Group



 

DEU Ackermann, Josef Chairman of the Management Board and the Group Executive Committee, Deutsche Bank AG

GBR Agius, Marcus Chairman, Barclays plc

USA Ajami, Fouad Senior Fellow, The Hoover Institution, Stanford University

USA Alexander, Keith B. Commander, US Cyber Command; Director, National Security Agency

INT Almunia, Joaquín Vice-President – Commissioner for Competition, European Commission

USA Altman, Roger C. Chairman, Evercore Partners

PRT Amado, Luís Chairman, Banco Internacional do Funchal (BANIF)

NOR Andresen, Johan H. Owner and CEO, FERD

FIN Apunen, Matti Director, Finnish Business and Policy Forum EVA

TUR Babacan, Ali Deputy Prime Minister for Economic and Financial Affairs

PRT Balsemão, Francisco Pinto President and CEO, Impresa; Former Prime Minister

FRA Baverez, Nicolas Partner, Gibson, Dunn & Crutcher LLP

FRA Béchu, Christophe Senator, and Chairman, General Council of Maine-et-Loire

BEL Belgium, H.R.H. Prince Philippe of

TUR Berbero?lu, Enis Editor-in-Chief, Hürriyet Newspaper

ITA Bernabè, Franco Chairman and CEO, Telecom Italia

GBR Boles, Nick Member of Parliament

SWE Bonnier, Jonas President and CEO, Bonnier AB

NOR Brandtzæg, Svein Richard President and CEO, Norsk Hydro ASA

AUT Bronner, Oscar Publisher, Der Standard Medienwelt

SWE Carlsson, Gunilla Minister for International Development Cooperation

CAN Carney, Mark J. Governor, Bank of Canada

ESP Cebrián, Juan Luis CEO, PRISA; Chairman, El País

AUT Cernko, Willibald CEO, UniCredit Bank Austria AG

FRA Chalendar, Pierre André de Chairman and CEO, Saint-Gobain

DNK Christiansen, Jeppe CEO, Maj Invest

RUS Chubais, Anatoly B. CEO, OJSC RUSNANO

CAN Clark, W. Edmund Group President and CEO, TD Bank Group

GBR Clarke, Kenneth Member of Parliament, Lord Chancellor and Secretary of Justice

USA Collins, Timothy C. CEO and Senior Managing Director, Ripplewood Holdings, LLC

ITA Conti, Fulvio CEO and General Manager, Enel S.p.A.

USA Daniels, Jr., Mitchell E. Governor of Indiana

USA DeMuth, Christopher Distinguished Fellow, Hudson Institute

USA Donilon, Thomas E. National Security Advisor, The White House

GBR Dudley, Robert Group Chief Executive, BP plc

ITA Elkann, John Chairman, Fiat S.p.A.

DEU Enders, Thomas CEO, Airbus

USA Evans, J. Michael Vice Chairman, Global Head of Growth Markets, Goldman Sachs & Co.

AUT Faymann, Werner Federal Chancellor

DNK Federspiel, Ulrik Executive Vice President, Haldor Topsøe A/S

USA Ferguson, Niall Laurence A. Tisch Professor of History, Harvard University

GBR Flint, Douglas J. Group Chairman, HSBC Holdings plc

CHN Fu, Ying Vice Minister of Foreign Affairs

IRL Gallagher, Paul Former Attorney General; Senior Counsel

USA Gephardt, Richard A. President and CEO, Gephardt Group

GRC Giannitsis, Anastasios Former Minister of Interior; Professor of Development and International Economics, University of Athens

USA Goolsbee, Austan D. Professor of Economics, University of Chicago Booth School of Business

USA Graham, Donald E. Chairman and CEO, The Washington Post Company

ITA Gruber, Lilli Journalist – Anchorwoman, La 7 TV

INT Gucht, Karel de Commissioner for Trade, European Commission

NLD Halberstadt, Victor Professor of Economics, Leiden University; Former Honorary Secretary  General of Bilderberg Meetings

USA Harris, Britt CIO, Teacher Retirement System of Texas

USA Hoffman, Reid Co-founder and Executive Chairman, LinkedIn

CHN Huang, Yiping Professor of Economics, China Center for Economic Research, Peking University

USA Huntsman, Jr., Jon M. Chairman, Huntsman Cancer Foundation

DEU Ischinger, Wolfgang Chairman, Munich Security Conference; Global Head Government Relations, Allianz SE

RUS Ivanov, Igor S. Associate member, Russian Academy of Science; President, Russian International Affairs Council

FRA Izraelewicz, Erik CEO, Le Monde

USA Jacobs, Kenneth M. Chairman and CEO, Lazard

USA Johnson, James A. Vice Chairman, Perseus, LLC

USA Jordan, Jr., Vernon E. Senior Managing Director, Lazard

USA Karp, Alexander CEO, Palantir Technologies

USA Karsner, Alexander Executive Chairman, Manifest Energy, Inc

FRA Karvar, Anousheh Inspector, Inter-ministerial Audit and Evaluation Office for Social, Health, Employment and Labor Policies

RUS Kasparov, Garry Chairman, United Civil Front (of Russia)

GBR Kerr, John Independent Member, House of Lords

USA Kerry, John Senator for Massachusetts

TUR Keyman, E. Fuat Director, Istanbul Policy Center and Professor of International Relations, Sabanci University

USA Kissinger, Henry A. Chairman, Kissinger Associates, Inc.

USA Kleinfeld, Klaus Chairman and CEO, Alcoa

TUR Koç, Mustafa Chairman, Koç Holding A.?.

DEU Koch, Roland CEO, Bilfinger Berger SE

INT Kodmani, Bassma Member of the Executive Bureau and Head of Foreign Affairs, Syrian National Council

USA Kravis, Henry R. Co-Chairman and Co-CEO, Kohlberg Kravis Roberts & Co.

USA Kravis, Marie-Josée Senior Fellow, Hudson Institute

INT Kroes, Neelie Vice President, European Commission; Commissioner for Digital Agenda

USA Krupp, Fred President, Environmental Defense Fund

INT Lamy, Pascal Director-General, World Trade Organization

ITA Letta, Enrico Deputy Leader, Democratic Party (PD)

ISR Levite, Ariel E. Nonresident Senior Associate, Carnegie Endowment for International Peace

USA Li, Cheng Director of Research and Senior Fellow, John L. Thornton China Center, Brookings Institution

USA Lipsky, John Distinguished Visiting Scholar, Johns Hopkins University

USA Liveris, Andrew N. President, Chairman and CEO, The Dow Chemical Company

DEU Löscher, Peter President and CEO, Siemens AG

USA Lynn, William J. Chairman and CEO, DRS Technologies, Inc.

GBR Mandelson, Peter Member, House of Lords; Chairman, Global Counsel

USA Mathews, Jessica T. President, Carnegie Endowment for International Peace

DEN Mchangama, Jacob Director of Legal Affairs, Center for Political Studies (CEPOS)

CAN McKenna, Frank Deputy Chair, TD Bank Group

USA Mehlman, Kenneth B. Partner, Kohlberg Kravis Roberts & Co.

GBR Micklethwait, John Editor-in-Chief, The Economist

FRA Montbrial, Thierry de President, French Institute for International Relations

PRT Moreira da Silva, Jorge First Vice-President, Partido Social Democrata (PSD)

USA Mundie, Craig J. Chief Research and Strategy Officer, Microsoft Corporation

DEU Nass, Matthias Chief International Correspondent, Die Zeit

NLD Netherlands, H.M. the Queen of the

ESP Nin Génova, Juan María Deputy Chairman and CEO, Caixabank

IRL Noonan, Michael Minister for Finance

USA Noonan, Peggy Author, Columnist, The Wall Street Journal

FIN Ollila, Jorma Chairman, Royal Dutch Shell, plc

USA Orszag, Peter R. Vice Chairman, Citigroup

GRC Papalexopoulos, Dimitri Managing Director, Titan Cement Co.

NLD Pechtold, Alexander Parliamentary Leader, Democrats ’66 (D66)

USA Perle, Richard N. Resident Fellow, American Enterprise Institute

NLD Polman, Paul CEO, Unilever PLC

CAN Prichard, J. Robert S. Chair, Torys LLP

ISR Rabinovich, Itamar Global Distinguished Professor, New York University

GBR Rachman, Gideon Chief Foreign Affairs Commentator, The Financial Times

USA Rattner, Steven Chairman, Willett Advisors LLC

CAN Redford, Alison M. Premier of Alberta

CAN Reisman, Heather M. CEO, Indigo Books & Music Inc.

DEU Reitzle, Wolfgang CEO & President, Linde AG

USA Rogoff, Kenneth S. Professor of Economics, Harvard University

USA Rose, Charlie Executive Editor and Anchor, Charlie Rose

USA Ross, Dennis B. Counselor, Washington Institute for Near East Policy

POL Rostowski, Jacek Minister of Finance

USA Rubin, Robert E. Co-Chair, Council on Foreign Relations; Former Secretary of the Treasury

NLD Rutte, Mark Prime Minister

ESP Sáenz de Santamaría Antón, Soraya Vice President and Minister for the Presidency

NLD Scheffer, Paul Professor of European Studies, Tilburg University

USA Schmidt, Eric E. Executive Chairman, Google Inc.

AUT Scholten, Rudolf Member of the Board of Executive Directors, Oesterreichische Kontrollbank AG

FRA Senard, Jean-Dominique CEO, Michelin Group

USA Shambaugh, David Director, China Policy Program, George Washington University

INT Sheeran, Josette Vice Chairman, World Economic Forum

FIN Siilasmaa, Risto Chairman of the Board of Directors, Nokia Corporation

USA Speyer, Jerry I. Chairman and Co-CEO, Tishman Speyer

CHE Supino, Pietro Chairman and Publisher, Tamedia AG

IRL Sutherland, Peter D. Chairman, Goldman Sachs International

USA Thiel, Peter A. President, Clarium Capital / Thiel Capital

TUR Timuray, Serpil CEO, Vodafone Turkey

DEU Trittin, Jürgen Parliamentary Leader, Alliance 90/The Greens

GRC Tsoukalis, Loukas President, Hellenic Foundation for European and Foreign Policy

FIN Urpilainen, Jutta Minister of Finance

CHE Vasella, Daniel L. Chairman, Novartis AG

INT Vimont, Pierre Executive Secretary General, European External Action Service

GBR Voser, Peter CEO, Royal Dutch Shell plc

SWE Wallenberg, Jacob Chairman, Investor AB

USA Warsh, Kevin Distinguished Visiting Fellow, The Hoover Institution, Stanford University

GBR Wolf, Martin H. Chief Economics Commentator, The Financial Times

USA Wolfensohn, James D. Chairman and CEO, Wolfensohn and Company

CAN Wright, Nigel S. Chief of Staff, Office of the Prime Minister

USA Yergin, Daniel Chairman, IHS Cambridge Energy Research Associates

INT Zoellick, Robert B. President, The World Bank Group

 

Rapporteurs  

GBR Bredow, Vendeline von Business Correspondent, The Economist

GBR Wooldridge, Adrian D. Foreign Correspondent, The Economist
Reply
£13 TRILLION HOARD HIDDEN FROM TAXMAN
BY GLOBAL ELITE

http://www.guardian.co.uk/business/2012/...re-economy  


Study estimates staggering size of offshore economy
• Private banks help wealthiest to move cash into havens



The Cayman Islands: a favourite haven from the taxman for the global elite. Photograph: David Doubilet/National Geographic/Getty Images



A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary £13 trillion ($21tn) of wealth offshore – as much as the American and Japanese GDPs put together – according to research commissioned by the campaign group Tax Justice Network.



James Henry, former chief economist at consultancy McKinsey and an expert on tax havens, has compiled the most detailed estimates yet of the size of the offshore economy in a new report, The Price of Offshore Revisited, released exclusively to the Observer.



He shows that at least £13tn – perhaps up to £20tn – has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals. Their wealth is, as Henry puts it, "protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy". According to Henry's research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than £4tn in 2010, a sharp rise from £1.5tn five years earlier.



The detailed analysis in the report, compiled using data from a range of sources, including the Bank of International Settlements and the International Monetary Fund, suggests that for many developing countries the cumulative value of the capital that has flowed out of their economies since the 1970s would be more than enough to pay off their debts to the rest of the world.



Oil-rich states with an internationally mobile elite have been especially prone to watching their wealth disappear into offshore bank accounts instead of being invested at home, the research suggests. Once the returns on investing the hidden assets is included, almost £500bn has left Russia since the early 1990s when its economy was opened up. Saudi Arabia has seen £197bn flood out since the mid-1970s, and Nigeria £196bn.



"The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments," the report says.



The sheer size of the cash pile sitting out of reach of tax authorities is so great that it suggests standard measures of inequality radically underestimate the true gap between rich and poor. According to Henry's calculations, £6.3tn of assets is owned by only 92,000 people, or 0.001% of the world's population – a tiny class of the mega-rich who have more in common with each other than those at the bottom of the income scale in their own societies.



"These estimates reveal a staggering failure: inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people," said John Christensen of the Tax Justice Network. "People on the street have no illusions about how unfair the situation has become."



TUC general secretary Brendan Barber said: "Countries around the world are under intense pressure to reduce their deficits and governments cannot afford to let so much wealth slip past into tax havens.



"Closing down the tax loopholes exploited by multinationals and the super-rich to avoid paying their fair share will reduce the deficit. This way the government can focus on stimulating the economy, rather than squeezing the life out of it with cuts and tax rises for the 99% of people who aren't rich enough to avoid paying their taxes."



Assuming the £13tn mountain of assets earned an average 3% a year for its owners, and governments were able to tax that income at 30%, it would generate a bumper £121bn in revenues – more than rich countries spend on aid to the developing world each year.



Groups such as UK Uncut have focused attention on the paltry tax bills of some highly wealthy individuals, such as Topshop owner Sir Philip Green, with campaigners at one recent protest shouting: "Where did all the money go? He took it off to Monaco!" Much of Green's retail empire is owned by his wife, Tina, who lives in the low-tax principality.



A spokeswoman for UK Uncut said: "People like Philip Green use public services – they need the streets to be cleaned, people need public transport to get to their shops – but they don't want to pay for it."



Leaders of G20 countries have repeatedly pledged to close down tax havens since the financial crisis of 2008, when the secrecy shrouding parts of the banking system was widely seen as exacerbating instability. But many countries still refuse to make details of individuals' financial worth available to the tax authorities in their home countries as a matter of course. Tax Justice Network would like to see this kind of exchange of information become standard practice, to prevent rich individuals playing off one jurisdiction against another.



"The very existence of the global offshore industry, and the tax-free status of the enormous sums invested by their wealthy clients, is predicated on secrecy," said Henry.



TAX HAVENS CAUSE POVERTY
http://www.taxjustice.net/cms/front_cont...idcatart=2&lang=1



The Tax Justice Network promotes transparency in international finance and opposes secrecy. We support a level playing field on tax and we oppose loopholes and distortions in tax and regulation, and the abuses that flow from them. We promote tax compliance and we oppose tax evasion, tax avoidance, and all the mechanisms that enable owners and controllers of wealth to escape their responsibilities to the societies on which they and their wealth depend. Tax havens, or secrecy jurisdictions as we prefer to call them, lie at the centre of our concerns, and we oppose them.



Take a look at our core themes:



?We support sustainable finance for development

?We support international co-operation on tax, regulation and crime

?We oppose tax havens and offshore finance

?We support transparency and we oppose corruption

?We support a level playing field in competitive markets

?We support progressive and equitable taxation

?We support corporate responsibility and accountability

?We support tax compliance and a culture of responsbility

These issues affect rich and poor countries, and, like the fight against corruption, our approach does not fit easily into either of the old political categories of left and right. We do not argue generally for high or low taxes (that is for voters to decide) but we note the often better human development outcomes in higher-tax countries and oppose the demonisation of tax that is fashionable in some circles. What we do support is progressive and equitable taxation, which is what voters around the world have chosen. We wish to see nations’ sovereignty restored, so that electorates are given back the power to get the tax systems they vote for. To this end we advocate much stronger co-operation between states on tax and regulation. This will help us address the growing tension between global integration and a shortage of credible international governance.



For more details, see "Resources," to the left of this page.



Who are we?



The Tax Justice Network is led by economists, tax and financial professionals, accountants, lawyers, academics and writers, and we are driven by original research and ideas. We are supported by a growing community of individuals, economists, faith groups, non-governmental organisations, academics, lawyers, trade unions -- and many others. (Read more)



Why tax and tax havens?

Tax is the foundation of good government and a key to the wealth or poverty of nations. Yet it is under attack. These places allow big companies and wealthy individuals to benefit from the onshore benefits of tax – like good infrastructure, education and the rule of law – while using the offshore world to escape their responsibilities to pay for it. The rest of us shoulder the burden.



Tax havens offer not only low or zero taxes, but something broader. What they do is to provide facilities for people or entities to get around the rules, laws and regulations of other jurisdictions, using secrecy as their prime tool. We therefore often prefer the term "secrecy jurisdiction" instead of the more popular "tax haven."





The corrupted international infrastructure allowing élites to escape tax and regulation is also widely used by criminals and terrorists. As a result, tax havens are heightening inequality and poverty, corroding democracy, distorting markets, undermining financial and other regulation and curbing economic growth, accelerating capital flight from poor countries, and promoting corruption and crime around the world.



The offshore system is a blind spot in international economics and in our understanding of the world. The issues are multi-faceted, and tax havens are steeped in secrecy and complexity – which helps explain why so few people have woken up to the scandal of offshore, and why civil society has been almost silent on international taxation for so long. We seek to supply expertise and analysis to help open tax havens up to proper scrutiny at last, and to make the issues understandable by all.



The fight against tax havens is one of the great challenges of our age. Our approach challenges basic tenets of traditional economic theory and opens new fields of analysis on a diverse array of important issues such as foreign aid, capital flight, corruption, climate change, corporate responsibility, political governance, hedge funds, inequality, morality – and much more. (Read more in Part II of our Manifesto for Tax Justice)



How big is the problem, and what is its nature?

Assets held offshore, beyond the reach of effective taxation, are equal to about a third of total global assets. Over half of all world trade passes through tax havens. Developing countries lose revenues far greater than annual aid flows. We estimate that the amount of funds held offshore by individuals is about $11.5 trillion – with a resulting annual loss of tax revenue on the income from these assets of about 250 billion dollars. This is five times what the World Bank estimated in 2002 was needed to address the UN Millenium Development Goal of halving world poverty by 2015. This much money could also pay to transform the world’s energy infrastructure to tackle climate change. In 2007 the World Bank has endorsed estimates by Global Financial Integrity (GFI) that the cross-border flow of the global proceeds from criminal activities, corruption, and tax evasion at US$1-1.6 trillion per year, half from developing and transitional economies. In 2009 GFI's updated research estimated that the annual cross-border flows from developing countries alone amounts to approximately US$850 billion - US$1.1 trillion per year.





Offshore finance is not only based in islands and small states: `offshore’ has become an insidious growth within the entire global system of finance. The largest financial centres such as London and New York, and countries like Switzerland and Singapore, offer secrecy and other special advantages to attract foreign capital flows. As corrupt dictators and other élites strip their countries’ financial assets and relocate them to these financial centres, developing countries’ economies are deprived of local investment capital and their governments are denied desperately needed tax revenues. This helps capital flow not from capital-rich countries to poor ones, as traditional economic theories might predict, but, perversely, in the other direction.



Countries that lose tax revenues become more dependent on foreign aid. Recent research has shown, for example, that sub-Saharan Africa is a net creditor to the rest of the world in the sense that external assets, measured by the stock of capital flight, exceed external liabilities, as measured by the stock of external debt. The difference is that while the assets are in private hands, the liabilities are the public debts of African governments and their people. (Read more)





Globalisation and international trade and finance have got a bad name of late. Each brings opportunities, and risks. We must now start to address seriously what may be the biggest risk of all: tax abuse, and tax havens and everything they stand for.



What can you do?

Our resources are small, yet the huge, well-funded public and private interests that oppose us have no answers to the agenda we are setting. Our message is starting to spread fast. Please join us, support us, and engage with the emerging debate.



OUR CORE THEMES

Our core themes are briefly outlined below. The Resources section to the left of this page has more details.  



We support sustainable finance for development  

Tax is the most sustainable source of finance for development. The long-term goal of poor countries must be to replace foreign aid dependency with tax self-sufficiency. Developing nations in Africa, Latin America and elsewhere are especially vulnerable to the offshore world. Action on tax has the potential to deliver gains to poor countries that are orders of magnitude greater than what can be achieved with aid. To meet the Millennium Development Goals, OECD countries have been urged to raise their levels of aid to 0.7 percent of Gross National Income – but this is as nothing when compared to potential tax revenues: in some rich countries, tax constitutes over 40 percent of GDP.  





Tax is the link between state and citizen, and tax revenues are the lifeblood of the social contract. The very act of taxation has profoundly beneficial effects in fostering better and more accountable government. It is astonishing that so many members of the aid community have ignored tax for so long. Action on international taxation is, quite simply, the key to lifting hundreds of millions of people out of poverty. Read More





We support international co-operation on tax, regulation and crime

The tax policies of one country can seriously harm the citizens of another. In the 19th and 20th Centuries, rich nations agreed that a balance should be struck between corporations, governments and societies. Tax and regulation lay at the heart of these democratic contracts, and it was feasible to set up coherent systems under single nation states. But these grand bargains began to unravel in the 1920s, as multinational companies began to emerge as a force in world markets and exploit cross-border loopholes to reduce their taxes. This accelerated in the 1970s, as financial liberalisation increasingly allowed companies to shop around for jurisdictions to escape tax and regulation. Tax havens are now intensifying competition between jurisdictions on tax and regulation in a beggar-my-neighbour scramble to attract international capital, undermining already weak regulation of public companies and stock exchanges. International efforts to tackle this harmful “tax competition” are, to date, feeble, and the amount of wealth offshore is growing fast.





Insular, nationally-based approaches cannot do justice to these challenges. From the perspective of individual countries, it may be relatively easy to argue in favour of cracking down on outflows of money into tax havens, but it is far harder to challenge the inflows. Only a global approach will do: this means co-operation between nations on tax havens. Far from weakening state sovereignty, as is sometimes suggested, stronger tax cooperation is the best way to strengthen national tax systems in this age of globally mobile capital. Read More



We oppose tax havens and offshore finance

Tax havens and offshore financial centres have created an interface between the illicit and licit economies, corrupting national tax regimes and onshore regulation. The result is a shift of the tax burden away from capital and onto labour, and a dramatic rise in income and wealth inequality, as well as the corruption of democracies around the world as élites escape their responsibilities with impunity. Supporters of tax havens point to the wealth enjoyed by such tax havens as Switzerland or the Cayman Islands to bolster their arguments. This is like pointing to the wealth of a corrupt politician and arguing that corruption is therefore a good thing: tax havens effectively appropriate other countries' taxes for themselves.



We recognise that some small island economies depend heavily on hosting harmful tax practices, and may lose investment and economic growth from efforts to tackle the abuses. But the harm these activities cause are orders of magnitudes greater than any claimed benefits. We propose multilateral support for these countries to assist with re-structuring as part of efforts to clean up the tax haven scandal. In any case, the biggest culprits are the big financial centres such as in Britain, the United States and Switzerland. Read More



We support transparency and we oppose corruption

The Tax Justice Network supports transparency and opposes secrecy in international finance. We want companies to be made more open about their financial affairs and to publish data on every country where they operate. We want the finances of wealthy individuals to be visible to their tax authorities, so they pay their fair share of tax. Markets work better, and companies are more accountable, in an environment of transparency. Secrecy hinders criminal investigation and fosters criminality and corruption such as insider trading, market rigging, tax evasion, fraud, embezzlement, bribery, the illicit funding of political parties – and much more. We want to expand the commonly accepted definitions of corruption so that they no longer focus only on narrow aspects of the problem such as bribery. We must bring tax, tax avoidance and tax evasion decisively into the corruption debate.



Corruption, crime and corporate abuse have a demand side (such as the theft of public assets by a politician) and a supply side – the provision of corruption services, like the concealment of a politician’s stolen assets offshore. Tax havens and associated activities stimulate the demand side – so they are a central part of the corruption problem.  Eva Joly, an investigating magistrate who broke open the “Elf Affair” in France (Europe’s biggest corruption investigation since the Second World War) was furious about how tax havens stonewalled her probes. She compared magistrates to sheriffs in the spaghetti westerns who watch the bandits celebrate on the other side of the Rio Grande. “They taunt us – and there is nothing we can do.” As she says, the fight against tax havens must be “Phase Two” in the international fight against corruption. Read More



We support a level playing field in competitive markets

We support simplicity and a level playing field on tax. Complexity and loopholes provide a windfall for a pinstripe infrastructure of lawyers, bankers and accountants and distort markets, undermining market competition, mis-directing investment, and rewarding economic free-riders. These distortions favour  multinational companies over national ones; they promote big companies over small, and they hinder start-up companies in the face of established vested interests. New forms of finance that have become prominent recently, such as hedge funds and private equity companies, greatly benefit from lower tax rates, lack of transparency and minimal accountability which provide them with competitive advantages over their peers that have nothing to do with efficiency or innovation in the real world, or with the quality or price of what they offer. Companies wishing to act in an ethical manner find themselves at a competitive disadvantage vis à vis their more irresponsible competitors. Read More



We favour progressive and equitable taxation

We support progressive taxation, founded on the basic principle that tax should be based on ability to pay -  that is, the wealthy should pay higher rates of tax. The principle of progressive taxation has been supported almost unanimously by democratic choices in countries around the world – and we support those choices. To advocate progressive taxation is to oppose regressive tax systems where the poorer sections of society pay a higher share of their income. Financing public goods, according to voters’ wishes and ability to pay, mitigates inequality, which is one of the greatest political challenges facing the world today.  



Tax systems should also be comprehensive, containing layers of different taxes such as income tax, corporation tax, enviromental taxes, inheritance taxes, customs duties and so on. Different taxes have different functions, and tax systems should contain an appropriate mix of them all. Read More



We support corporate responsibility and accountability

Tax is the forgotten element in the corporate social responsibility debate – and probably the most important. We believe that corporate responsibility starts with paying tax.



We oppose a financial and legalistic approach to tax, which focuses exclusively on the boundary between what is legal (tax avoidance) and what is illegal (tax evasion.) Instead we favour an accountability-driven approach, differentiating between what is responsible, and what is not. A responsible approach sees tax not as a cost to a company to be avoided, but like a dividend: a distribution out of profits to all stakeholders. Companies do not make profit merely by using investors' capital. They also use the societies in which they operate -- whether the physical infrastructure provided by the state, the people the state has educated, or the legal infrastructure that allows companies to protect their rights. Tax is the return due on this investment by society from which companies benefit.



We suppport greater transparency in corporate reporting. We want to see corporate tax policies brought firmly and transparently into wider governance frameworks such as business principles and corporate values. We also support intervention to protect company directors who wish to behave in an ethical manner from being undermined by predatory actors who thrive on abuse. Read more



We favour tax compliance and a culture of responsbility

Tax compliance means paying the right tax in the right place at the right time. We want to see the restoration of a culture of tax compliance among individuals, corporations, tax professionals, and governments, and an ethical approach to tax. They should follow not only the letter of the law, but the spirit of the law, with respect to their tax affairs.



Both tax evasion and tax avoidance are anti-social and equally harmful. Tax avoidance may be the more so, because it is so insidious. Highly paid professionals spend their lives devising ingenious schemes to reduce or eliminate the tax liability of wealthy people, and they have set themselves up as the “experts” on international taxation, developing and propagating a world view that sees these kinds of abuses as acceptable. Huge, well-resourced vested interests support them and have skewered international efforts to address the problems. Politicians, economists and civil society groups, perhaps daunted by the complexity of the issues or unable to see or measure what is happening in the secret world of offshore, too rarely challenge this world view. Meanwhile, tax authorities rarely have the staff or time to combat the enormous resources and wiles of the tax avoidance industry. The resulting mouse-and-cat game – besides its effect on corrupting democracy – is enormously wasteful.  



It is time for change. Our code of conduct on taxation outlines our approach. Civil society groups, economists, journalists, and ordinary people need to rouse themselves and make this one of the great political struggles of this young century.



  



  



  



  



  



  



  



  



  



  



  



  



  



  



  



  



  



  
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HOW LONDON BECAME THE MONEY LAUNDERING CAPITAL OF THE WORLD


Rowan Bosworth-Davies

http://www.ianfraser.org/how-london-beca...the-world/


Speaking on the Marr Show on BBC One on March 23rd, the former Daily Telegraph editor and historian Max Hastings said a “senior central banker” recently told him that London is now considered to be the “money-laundering capital of the world”.

Hastings was discussing the shooting of a Russian banker in London. The remark was all the more pertinent since Russia is now said to be controlled by a ‘gangster culture’ and because of the large number of Russian oligarchs and other business people who now live and work in the UK. A lot of these people carry criminal baggage, but the authorities seem entirely comfortable with the idea they should reinforce London’s position as the world’s “funny” money hub.

How did this state of affairs come about when, on paper at least, the UK has some of the strictest anti-money laundering legislation in the world?

The answer, I believe, lies in the fact that our many laws and regulations have never been effectively enforced by financial regulators, and banks and other financial institutions know they can get away with paying lip service to the rules.

Only this year has the Financial Services Authority managed to bring a money laundering charge against a UK-based financier, and he is a very small fish indeed. In an insider trading case against Richard Anthony Joseph, the FSA added two money laundering charges. It charged him with eight counts of insider dealing and two counts of money laundering.

The charges follow Joseph’s arrest in May 2010. The interest in the case is not in the insider dealing per se but in the addition of charges of money laundering. Although the FSA has had the power to prosecute this offence for some time, it has rarely, if ever, used it.

There is a world of difference between having rules which are meant to be obeyed, and doing everything within one’s power to avoid providing any meaningful form of compliance with the rules. The purpose of the regulations is to make it as difficult as possible for people who have acquired their money illicitly, anywhere in the world, to find a safe haven in the international banking system.

So there are rules and regulations which impose a burden on banks and financial institutions requiring them to ensure that before they accept money from a client, that they have a clear picture of its provenance, that they know as much as possible about their clients, their businesses, the sources of their funds, and if they have held high political office, to make sufficient enquiries to ensure that the monies being deposited are not in fact the proceeds of international aid payments which have been stolen from the country’s Treasury.

These rules are routinely flouted by the financial institutions.

They will say that they have large compliance departments, with many staff dedicated to ensuring that such situations do not arise, and in many senses, they are telling the truth. The problem is that they are not telling the whole truth. In 2011, The Financial Services Authority conducted an investigation into London banks and found that three-quarters of them were not doing enough to verify the sources of some customers’ wealth. The probe shed some light on a system that is failing to stop the flow of corrupt money, a problem that continues to have disastrous consequences for millions of people. Predictably, the regulator did not name the banks that had ignored the rules, nor gave any indication they would do so.

Predictably, the FSA also failed to take any public action against any of these institutions for this egregious flouting of the rules. They could have brought prosecutions against them for failing to implement the relevant regulations, but they did not do so. This is typical of the regulatory response to flagrant wrong-doing in our banking sector, and it is looked upon by the banks and their employees as a sign of immense weakness, which they feel able to exploit at every opportunity.

The compliance regime is undermined by the calibre and quality of people employed by the banks to implement the anti-money laundering regulations. Repeatedly, in discussions with recruitment consultants I am told that the kind of person being sought to fill a particular role is a ‘low-level’ employee with minimal length of service. They are looking for someone with a couple of years’ experience who might be capable of filling a new position, but they don’t want to pay any real money for anyone with any skills, real experience, or more importantly, the sense of independent knowledge to be able to stand up to the commercial people and say, ‘you can’t do that’!

You only have to look at the salary levels paid to compliance officers and then compare them to the salaries paid to traders and business getters, to see the huge discrepancies in functional importance the banks place on compliance. At a Group Compliance Director level, you may be seeing six figure salaries, but these are rare. The vast number of employees in this function are being paid peanuts compared to the business side of the organisation.

Another problem with the British mentality towards compliance is the over-emphasis on ‘process’ as compared with ‘effective enforcement’. The compliance function is awash with processes and procedures, they have manuals full of them, but all they are doing is seeking to demonstrate to any regulator that, if asked, they complied with the process.

But any process that is not rigorously tested and then analysed by a skilled and experienced person will be worthless. I once did a pre-Arrow review for a major global bank of their anti-money-laundering function. They had processes and procedures written down in manuals, provided at vast expense by the consultancy arm of one of the ‘Big Four’ accountancy firms. When I tested how the staff were applying these processes, I found a huge lacuna in their areas of knowledge. To make matters worse, they had no-one with any ‘grey hair’ sitting in the middle of the web, holding all the ends of the processes, in order to ensure that they were being effectively implemented.

If we have a regulatory agency that repeatedly refuses to enforce the anti-money laundering regulations, and is sufficiently inept to accept that the level of compliance being provided by the banks and other financial institutions can be performed using a ‘tick box’ mentality, it provides a key part of the answer as to why London is now the money laundering capital of the world.

This is typical of the British attitude towards any kind of financial regulation. It is as if governments of whichever persuasion, have swallowed the canard that if they are seen to be heavy-handed towards the banks, then this will in some way deprive the UK of some hidden special advantage.

So, we have regulations which only get enforced at the margins, and which the major players ignore at whim. Yes, from time to time the regulators do seek to fine the banks for the worst examples of their egregious behaviour, but fining a bank is nothing more than an HP commitment as far as the bank is concerned. All it does is dilute their profitability, harming the shareholders not the executive perpetrators, which is reflected in even less tax being paid on their profits. If they are not named and shamed, as is routinely the case, then there is no reputational risk attached to the penalty either, and no stigma is applied.

As with so many other areas of financial wrong-doing, it seems the banks have seen off the regulators yet again, and the only loser would appear to be the UK financial services’ arena which is now, apparently, the venue of choice for every international crook’s dirty money. We must prepare ourselves to witness more Russian-style assassination attempts on our streets, as the organised criminals who deposit their money with the even better organised criminals in the banking sector, continue to see London as the money laundry of choice.

This article was written by Rowan Bosworth-Davies and first posted on his blog on March 26th 2012. It is reused with permission. Since then, it has emerged that HSBC faces a $1 billion penalty in the United States for weak anti money laundering controls by the US government. At a hearing in Washington this Tuesday, the US Senate Permanent Subcommittee on Investigations is poised to deliver a blistering attack on the London-headquartered bank’s anti-money laundering systems and controls, highlighting its role in transactions tied to Iran, terrorist financing and drug cartels. In a Reuters Special Report published July 13th 2012, Carrick Mollenkamp and Brett Wolf have detailed how the bank’s Delaware-based anti-money laundering hub pays lip-service to tackling the problem of money laundering.


HSBC & TERRORIST FINANCE  
July 30, 2012
Tom Burghardt
http://www.blacklistednews.com/Black_Dossier:_HSBC_&%3B_Terrorist_Finance_/20768/0/0/0/Y/M.html

http://www.hsgac.senate.gov/subcommittee...se-history


It's tough being the world's second largest bank.

HSBC, the London-based British multinational banking and financial services giant operates in 85 countries with 7,200 offices worldwide with assets totaling more than $2.6 trillion (£4.06tn).

They're also caught-up in serial scandals: the Libor interest rate-fixing scam, serious charges of drug money laundering as well as suspicions that bank officers "palled around" with terrorist financiers.

Founded in 1865 when the British Crown seized Hong Kong as a colony in the aftermath of the First Opium War, British merchants (today we'd call them drug lords) needed a bank to handle the brisk trade in the illicit substance and launched the Hongkong and Shanghai Banking Company Limited. Rebranded "HSBC" in 1991, the bank expanded at breakneck speed in the heady days after The Wall fell.

While some might call them a success story, exemplars of financial wizardry in tough economic times, more appropriately perhaps, we might borrow a term from Mafia lore to describe their preeminent position in the capitalist pantheon of corrupt institutions: juiced.

'Sorry, now Go Away'

Today, the "War on Drugs" rivals the "War on Terror" for top spot on the global hypocrisy index.

Moral equivalencies abound. After all, when American secret state agencies manage drug flows or direct terrorist proxies to attack official enemies it's not quite the same as battling terror or crime.

Pounding home that point, a new report by the Senate Permanent Subcommittee on Investigations accused HSBC of exposing "the U.S. financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-money laundering (AML) controls."

That 335-page report, "U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History," (large pdf file available here) was issued after a year-long Senate investigation zeroed-in on the bank's U.S. affiliate, HSBC Bank USA, N.A., better known as HBUS.

Drilling down, we learned that amongst the "services" offered by HSBC subsidiaries and correspondent banks were sweet deals with financial entities with terrorist ties; the transportation of billions of dollars in cash by plane and armored car through their London Banknotes division; the clearing of sequentially-numbered travelers checks through dodgy Cayman Islands accounts for Mexican drug lords and Russian mafiosi.

From richly-appointed suites at Canary Wharf, London, the bank's "smartest guys in the room" handed some of the most violent gangsters on earth the financial wherewithal to organize their respective industries: global crime.

A case in point. In 2008 alone the Senate revealed that the bank's Cayman Islands branch handled some 50,000 client accounts (all without benefit of offices or staff on Grand Cayman, mind you), yet still managed to ship some $7 billion (£10.9bn) in cash from Mexico into the U.S. Now that's creative accounting!

Playing fast and loose with U.S. banking rules, Subcommittee Chairman Carl Levin (D-MI) said that by exploiting the bank's "poor AML controls, HBUS exposed the United States to Mexican drug money, suspicious travelers cheques, bearer share corporations, and rogue jurisdictions."

Describing a "compliance culture" that was "pervasively polluted for a long time," Levin said it "will take more than words for the bank to change course."

Yet weasel words and butt-covering were all that were proffered to the American people even before Senate hearings began. Bank spokesman Robert Sherman said in an emailed statement that HSBC "will acknowledge that, in the past, we have sometimes failed to meet the standards that regulators and customers expect. We will apologize, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong."

Right on cue, chief compliance officer David Bagley dramatically fell on his sword during those hearings and resigned on camera. It was quite a performance even by Washington's tawdry standards.

Appearing contrite, Bagley told the panel: "Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators. ... I recommended to the group that now is the appropriate time for me and for the bank, for someone new to serve as the head of group compliance."

While there's no word yet just how big Bagley's golden parachute will be, it's a sure bet he won't spend a day in jail, nor for that matter will Lord Stephen Green, HSBC's former Chairman and Chief Executive Officer.

Between 2003-2010, Green tilled the helm after serial stints directing The Bank of Bermuda Ltd., HSBC Mexico, SA, HSBC Private Banking Holdings (Suisse) SA and HSBC North American Holdings Inc.; units which feature prominently in the scandal. Sensing perhaps that the jig was up, last year he joined David Cameron's Conservative government as Minister of State for Trade and Investment.

Unlike Pappy Bush who claimed to be "out of the loop" during the Iran-Contra guns-for-drugs affair, Green was fully apprised of bank shenanigans and the Senate published emails which prove it.

Cheekily however, while underlings take the fall, Green told The Daily Telegraph, "I do not believe that I have a case to answer other than in the important sense that as chairman and chief executive I was responsible for what the company did. HSBC has expressed regret for the failures. I share that regret."

The Telegraph noted that Green has not considered resigning from Cameron's government, saying he was "very engaged" with his current plum post.

Ironically enough, the current Baron of Hurstpierpoint is an ordained priest in the Church of England and the author of an inspirational tome, Good Value: Reflections on Money, Morality and an Uncertain World. And no, you can't make this stuff up!

The top spot is now occupied by Stuart Gulliver who, quicker than you can say "we're sorry," admonished employees to "do better" and expressed remorse over his firm's "unacceptable behavior." Never mind that before ascending the throne, Gulliver was director of HBUS, HSBC Latin American Holdings Ltd., and HSBC Bank Middle East Ltd., divisions that have raised more than an eyebrow or two amongst Subcommittee investigators.

Topping Bagley's Kabuki-lite performance with her own rendition of clown car camp, Irene Dorner, HBUS's President and CEO told the Senate: "We deeply regret and apologize for the fact that HSBC did not live up to the expectations of our regulators, our customers, our employees, and the general public. HSBC's compliance history, as examined today, is unacceptable. ... We've worked hard to foster a new culture that values and rewards effective compliance, and that starts at the top."

Bathos aside, it was a polite way of saying "let's move on" and get back to the business of lining our pockets; after all, it's what we do best.

'The past is never dead. It's not even past'

Years before hijackers slammed passenger planes into the World Trade Center and the Pentagon killing nearly 3,000 people, secret state agencies began to exploit the fraternal links between Osama bin Laden's Afghan-Arab database of disposable Western intelligence assets, also known as al Qaeda, and prominent financial institutions.

In his 1999 book, Dollars for Terror, journalist Richard Labévière relates how a former CIA analyst explained: "The policy of guiding the evolution of Islam and helping them against our adversaries worked marvelously well in Afghanistan against the Red Army. The same doctrines can still be used to destabilize what remains of Russian power, and especially to counter the Chinese influence in Central Asia."

Was a new Cold War dawning?

No. In fact, it was the same Cold War. Only this time it was tricked-out in seductive finery by denizens of Western think-tanks and on-the-make NGOs. In the age of spin and endless news cycles, they'd hit upon a splendid formula to pour the "old" imperialist wine into new bottles: "humanitarian intervention" and a "responsibility to protect."

It was a brilliant script. In the blink of an eye our media-saavy masters could "enhance democracy" and "reform markets," magically transforming publicly-owned resources into privately-held assets controlled by banks! That terrorist proxies would serve as walk-ons and help drive the final nail into the coffin of national sovereignty wasn't considered proper conversation in polite company.

Labévière wondered whether "the new forms of terrorism actually embody the highest stage of capitalism?" They did, and "the straw men of the bin Laden Organization's subsidiaries [were] very well received by the business lawyers of Wall Street and the Bahamas, by the wealth managers of Geneva, Zurich and Lugano, and in the hushed salons of the City of London."

Not so curiously perhaps, "the privatization of violence and the privatization of the economy has become paradigmatic." In fact, "apart from any religious purpose," Labévière wrote, "the 'Jihad' is gaining ground as a profitable activity. It becomes liable to all the mafioso devolutions, and sinks into pure banditry. In many cases, Islamist ideology is used as a wonder worker to paper over banditry in all its forms."

Bin Laden as a Mafia capo di tutti capi? It certainly was a novel reading of geopolitical machinations!

More to the point, if an "army marches on its stomach," who then are the money men who put food in their bellies and kalashnikovs in their hands?

Bankrolled by Saudi and Gulf banks with a wink, a nod and logistical support from their old friends, the CIA and the Pentagon, today's Green condottieri once again are on the march, wrecking havoc and sowing chaos, with particular attention paid to states targeted as official enemies by the Global Godfather. Just ask the Iraqis, Libyans and Syrians.

While the Senate report may have disclosed that HSBC turned a blind eye to terrorist financing among it correspondent banks, the Riyadh-based Al Rajhi Bank for one, Saudi Arabia's largest privately-held financial institution, such arrangements hardly flourished in a vacuum.

With assets totaling $59 billion (£92.5bn), the Al Rajhi's are amongst the wealthiest families in the Kingdom. Investigators found that after 9/11 "evidence began to emerge that Al Rajhi Bank and some of its owners had links to organizations associated with financing terrorism, including that one of the bank's founders was an early financial benefactor of al Qaeda."

While the Al Rajhi family deny any role in financing terrorism, they have declined "to address specific allegations made in American intelligence and law-enforcement records, citing client confidentiality," The Wall Street Journal reported back in 2007.

Journalist Glenn R. Simpson averred that "a 2003 CIA report claims that a year after Sept. 11, with a spotlight on Islamic charities, Mr. Al Rajhi ordered Al Rajhi Bank's board 'to explore financial instruments that would allow the bank's charitable contributions to avoid official Saudi scrutiny'."

"A few weeks earlier," the Journal disclosed, the Agency said that "Mr. Al Rajhi 'transferred $1.1 billion to offshore accounts--using commodity swaps and two Lebanese banks--citing a concern that U.S. and Saudi authorities might freeze his assets.' The report was titled 'Al Rajhi Bank: Conduit for Extremist Finance'."

Although U.S. law enforcement and secret state agencies "acknowledge it is possible that extremists use the bank's far-flung branches and money-transfer services without bank officials' knowledge," the Journal noted that CIA analysts had concluded that "senior Al Rajhi family members have long supported Islamic extremists and probably know that terrorists use their bank."

It goes without saying that one should always approach CIA reports with a healthy dose of skepticism, especially in light of the Agency's well-documented history of employing cut-outs such as al Qaeda as terrorist cats' paws.

Such reports however, lay a trail of bread crumbs that policy makers can either act upon or more likely, ignore. That senior Bush and Obama administration officials did nothing with this information, never mind the regulatory agencies charged to enforce anti-money laundering laws, is testament to the corrupt, bipartisan nature of American policy as a whole.

It also beggars belief that Lord Green or the bank's compliance officers were unaware of CIA allegations or that Britain's own foreign intelligence arm, MI6, hadn't apprised top officials of the risks involved. In fact, as we'll see below, HSBC's own internal documents prove otherwise.

Osama's 'Golden Chain'

There were certainly plenty of red flags flying which should have alerted bank officials.

In March 2002, al Qaeda's list of financial benefactors surfaced when computers were seized in Sarajevo at the Bosnian headquarters of the Benevolence International Foundation, "a Saudi based nonprofit organization which was also designated a terrorist organization by the Treasury Department."

Osama bin Laden, who held a Bosnian passport issued by the breakaway government fronted by Western "liberal interventionist" darling Alija Izetbegovi? during NATO's dismemberment of socialist Yugoslavia, was a supporter of the Nazi SS Handschar Division during World War II. Bin Laden referred to this group of financial angels as his "Golden Chain."

Additional evidence also emerged in 2002 during Operation Green Quest, a Treasury Department effort to "disrupt terrorist financing in the United States."

In March of that year, law enforcement officials raided the Herndon, Virginia offices of the SAAR Foundation "an Al Rajhi-related entity." Indeed, the name "SAAR" was an acronym for the organization's founder, Sulaiman Abdul Aziz Al Rajhi, the controlling partner of the Al Rajhi Bank.

Subcommittee investigators commented that "one of the 20 handwritten names in the Golden Chain document identifying al Qaeda's early key financial benefactors is Sulaiman bin Abdul Aziz Al Rajhi, one of Al Rajhi Bank's key founders and most senior officials."

An affidavit supporting the search warrants "detailed numerous connections between the targeted entities and Al Rajhi family members and related ventures. The affidavit stated that over 100 active and defunct nonprofit and business ventures in Virginia were part of what it described as the 'Safa Group,' which the United States had reasonable cause to believe was 'engaged in the money laundering tactic of 'layering' to hide from law enforcement authorities the trail of its support for terrorists."



Green Quest investigators were particularly keen on unraveling links between the SAAR Foundation and the Swiss Al Taqwa Bank, incorporated in the Bahamas in 1988 for "tax purposes."



Founded by Swiss Nazi sympathizer and convert to Islam, Albert Armand (Achmed) Huber, who professed admiration for both Adolph Hitler and Osama bin Laden, the bank was accused by U.S. officials in helping al Qaeda launder funds. Although the Treasury Department froze its assets in 2001, the investigation was shut down by the Bush administration before deeper linkages could be fully uncovered.



In 2011, a lawsuit was filed by insurance giant Lloyd's of London against Saudi Arabia which sought to recover pay outs to victims of the 9/11 attacks. The suit noted "that two individuals who were former executives at Bank al Taqwa, Ibrahim Hassabella and Samir Salah, were also associated with the SAAR Foundation."



At the time, The Independent reported that the legal claim suggested that defendants "'knowingly' provided resources, including funding, to al-Qa'ida in the years before the attack and encouraged anti-Western sentiment which increased support for the terror group."



According to court briefs, "Absent the sponsorship of al-Qa'ida's material sponsors and supporters, including the defendants named therein, al-Qa'ida would not have possessed the capacity to conceive, plan and execute the 11 September attacks. The success of al-Qa'ida's agenda, including the 11 September attacks themselves, has been made possible by the lavish sponsorship al-Qa'ida has received from its material sponsors and supporters over more than a decade leading up to 11 September 2001."



Senate investigators, citing Green Quest and Lloyd's case files, noted that "Mr. Hassabella was a former secretary of al Taqwa Bank and a shareholder of SAAR Foundation Inc. Mr. Saleh was a former director and treasurer of the Bahamas branch of al Taqwa Bank, and president of the Piedmont Trading Corporation which was part of the SAAR network. The U.S. Treasury Department has stated: 'The Al Taqwa group has long acted as financial advisers to al Qaeda, with offices in Switzerland, Liechtenstein, Italy and the Caribbean.' Regarding Akida Bank, the lawsuit complaint alleged that Sulaiman bin Abdul Aziz Al Rajhi was 'on the board of directors of Akida Bank in the Bahamas' and that 'Akida Bank was run by Youssef Nada, a noted terrorist financier'."



The report went on to state that "HSBC was fully aware of the suspicions that Al Rajhi Bank and its owners were associated with terrorist financing, describing many of the alleged links in the Al Rajhi Bank client profile."



As icing on the cake, a 2007 study published by the Congressional Research Service (CRS) also found that "Saudi individuals and other financiers associated with the Golden Chain enabled bin Laden and Al Qaeda to replace lost financial assets and establish a base in Afghanistan following their abrupt departure from Sudan in 1996."



Assets I might add, that were used to bankroll the 9/11 attacks.



'Keen to maintain the relationships'



HSBC's dubious links to the Al Rajhi Bank didn't end with information discovered in the "Golden Chain" files; it fact, they were the tip of the proverbial iceberg.



After 9/11, the FBI reported that three of the hijackers, Hani Hanjour, Nawaf Alhazmi and Abdulaziz Alomari cashed thousands of dollars in travelers checks and received wire transfers from an unnamed individual drawn on accounts at the Al Rajhi Bank.



As researcher Kevin Fenton pointed out in Disconnecting the Dots, links among most of the hijackers were discovered through their banking transactions. "In this context," Fenton wrote, "it is worth noting that Global Objectives, a British banking compliance company, identified fifteen of the nineteen hijackers as high-risk individuals and established database profiles for them before the attacks. ... The list of high-risk people maintained by Global Objectives was available to dozens of banks," a list that presumably also included HSBC.



While there is no evidence that HSBC, or for that matter the Al Rajhi Bank, had prior knowledge of the 2001 atrocity, the gross indifference exhibited by these institutions through their violation of "know your client" (KYC) rules governing financial transactions reveal a callous disdain for elemental norms as they raced to inflate their balance sheets come hell or high water.



Privileged communications amongst senior staff revealed they were well aware of the issues and risks involved, yet did worse than nothing, they lobbied that HSBC continue their arrangements with the Al Rajhi Bank.



Suspicions were such that senior staff "classified Al Rajhi Bank as a 'Special Category of Client' (SCC), its highest risk designation." This was done, Senate investigators noted, because the Kingdom was considered a "high risk country" and due to the fact Al Rajhi's largest shareholder, Sulaiman bin Abdul Aziz Al Rajhi was considered "a Politically Exposed Person (PEP)."



Internal HSBC documents also revealed that in 2002, that is, after the 9/11 provocation, "the International Private Banking Department asked to transfer [several] accounts to HSBC's Institutional Banking Department in Delaware which had superior ability to monitor account activity."



In fact, transferring Al Rajhi accounts to the bank's Delaware division would have just the opposite effect and bank officials knew it.



As journalist Nicholas Shaxson noted in his exposé of offshore banking, Treasure Islands, "Delaware is the biggest state provider of offshore corporate secrecy." Shaxson pointed out that Delaware's Chancery Court has a "'business judgement rule' under which courts should not second-guess corporate managers," thereby "granting corporate bosses extraordinary freedoms from bothersome stockholders, judicial review, and even public opinion."



So much for any alleged "superior ability to monitor account activity"!



HBUS's Joseph Harpster wrote an email, stating: "The most recent concern arose when three wire transfers for small amounts ($50k, $3k and $1.5k) were transferred through the account for names that closely resembled names, not exact matches, of the terrorists involved in the 9/11 World Trade Center attack. ... The profile of the main account reflects a doubling of wire transfer volume since 9/01, a large number of travelers checks but with relatively low value and some check/cash deposits. According to the account officer, traffic increased because they have chosen to send us more business due to their relationship with Saudi British Bank and the added strength of HBC versus Republic. ... Maintaining our business with this name is strongly supported by David Hodghinson of [Saudi British Bank] and Andre Dixon, Deputy Chairman of [HSBC Bank Middle East]. Niall Booker and Alba Khoury [of HBUS] also support."



Aside from adverse publicity, the "low value" of the transactions seemed not to have troubled Harpster or his associates in the least. After all, the total "cost" of murdering 3,000 human beings were certainly small compared to the price of a vacation home in the Hamptons or a new Maserati.



Anxious there might be increased scrutiny from regulators (no worries there!), Harpster's email was forwarded by Douglas Stolberg, the head of Commercial and Institutional Banking to Alexander Flockhart, then a senior executive in Retail and Commercial Banking at HBUS. Stolberg noted: "As we discussed previously, Compliance has raised some concerns regarding the ongoing maintenance of operating/clearing accounts for Al Rajhi group." He forwarded recommendations on how to handle the account: "Retain [International Private Banking] as the relationship manager domicile for continuity purposes, and as we understand there is interest in further developing private banking business with family members. ... Domicile the actual accounts with Delaware where HBUS's most robust account screening capabilities reside."



"Screening capabilities" which could be shielded from nosy regulators due to Delaware's strict bank secrecy laws.



Stolberg went on to state: "[T]his has become a fairly high profile situation. Compliance’s concerns relate to the possibility that Al Rajhi's account may have been used by terrorists. If true, this could potentially open HBUS up to public scrutiny and/or regulatory criticism. SABB [Saudi British Bank] are understandably keen to maintain the relationships. As this matter concerns primarily reputational and compliance risks, we felt it appropriate for SMC [Senior Management Committee] members to be briefed ... so that they may opine on the acceptability of the plan. Please advise how you would prefer us to proceed." (emphasis added)



According to Senate staff, "Mr. Harpster reported a week later that Mr. Flockhart had decided to transfer the accounts to HBUS in the Delaware office."



But HSBC weren't the only entities hoping to curry favor with the Kingdom. A 2009 Government Accountability Office (GAO) report went on to note that "certain performance targets set by the State Department had been dropped in 2009, such as the establishment of a Saudi Commission on Charities to oversee actions taken by Saudi charities abroad as well as certain regulations of cash couriers."



Although GAO "recommended that the United States reinstate the dropped performance targets to prevent the flow of funds from Saudi Arabia 'through mechanisms such as cash couriers, to terrorists and extremists outside Saudi Arabia,' the State Department's "most recent annual International Narcotics Control Strategy Report contains no information about Saudi Arabia's anti-money laundering or terrorist financing efforts."



One reason why the State Department's report contains "no information" just might be the Obama administration's policy of supporting Saudi-backed Salafi terrorists soon to come online in Libya and Syria, financed through "Saudi charities abroad" or more directly through "cash couriers."



'You'd better be making lots of money!'



The Senate disclosed that HSBC "provided Al Rajhi Bank with a wide range of banking services, including wire transfers, foreign exchange, trade financing, and asset management services."



"In the United States," investigators learned that "a key service was supplying Al Rajhi Bank with large amounts of physical U.S. dollars, through the HBUS U.S. Banknotes Department."



"The physical delivery of U.S. dollars to Al Rajhi Bank was carried out primarily through the London branch of HBUS, often referred to internally as 'London Banknotes'."



Indeed, "HBUS records indicate that the London Banknotes office had been supplying U.S. dollars to Al Rajhi Bank for '25+ years.' In addition to the London branch, HBUS headquarters in New York opened a banknotes account for Al Rajhi Bank in January 2001. The U.S. dollars were physically delivered to Al Rajhi Bank in Saudi Arabia."



"On one occasion in 2008," Senate staff reported, the head of HSBC Global Banknotes Department told a colleague: 'In case you don't know, no other banknotes counterparty has received so much attention in the last 8 years than Alrajhi.' Despite, in the words of the KYC client profile, a 'multitude' of allegations, HSBC chose to provide Al Rajhi bank with banking services on a global basis."



Even though the Al Rajhi Bank "had not been indicted, designated a terrorist financier, or sanctioned," HSBC's Group Compliance section recommended that affiliates should sever their ties.



After that initial decision however, "HSBC affiliates disregarded the recommendation and continued to do business with the bank, while others terminated their relationships but protested HSBC's decision and urged HSBC to reverse it."



Complaints by lower level staff continued, disregarded by higher-ups, even though a U.S. indictment was issued in February 2005 for two individuals "accused among other matters, of cashing $130,000 in U.S. travelers cheques at Al Rajhi Bank in Saudi Arabia" and then smuggling the cash to CIA-backed terrorists in Chechnya.



Although internal bank documents showed that officials decided to cut their ties to the Saudi financial institution, they reversed themselves when pressure was brought to bear by Al Rajhi officials. Between 2006 and 2010, Al Rajhi received shipments totaling more than $1 billion in physical cash in the lucrative banknotes business from HSBC's U.S. affiliate according to investigators. Officials at the Saudi bank "had threatened to pull all of its business from HSBC if the U.S. banknotes business were not restored."



Senate staff reported that on January 4, 2005, "HBUS AML Compliance head Ms. Pesce sent an email to Daniel Jack, an HBUS AML Compliance Officer who often dealt with the London Banknotes office, instructing him to: '[p]lease communicate that Group Compliance will be recommending terminating the Al Rajhi relationship.' Mr. Jack inquired as to when that recommendation would be made. She responded: 'I expect to see an email from Susan Wright today. She tells me that HBME [HSBC Bank Middle East] does not agree with Compliance and will not be terminating the relationship from the Middle East, but she/David B[agley] recommend that in light of US scrutiny, climate, and interest by law enforcement, we in the US sever the relationship from here'."



At the time, Susan Wright was "the Chief Money Laundering Control Officer for the entire HSBC Group. She reported to David Bagley, head of the HSBC Group's overall Compliance Department."



Senate investigators noted that the "documents do not explain why HSBC Middle East disagreed with the decision or why it was allowed to continue its relationship with Al Rajhi Bank, when HSBC's Group Compliance had decided to sever the relationship between the bank and other HSBC affiliates due to terrorist financing concerns."



It soon became clear however, that "HSBC Group Compliance began to narrow its scope." Shortly thereafter a trader in the Banknotes department wrote, "for us is business as usual." Alan Ketley, HBUS AML Compliance Officer commented on the decision not to include Al Rajhi Trading in their earlier decision to sever all ties: "Looks like you're fine to continue dealing with Al Rajhi. You'd better be making lots of money!"



Meanwhile, "Al Rajhi Bank communicated the threat to 'pull any new business with HSBC' unless given a 'satisfactory explanation' why HSBC had stopped supplying it with U.S. dollars via its relationship managers," the Senate disclosed.



In short order, it was business as usual.



Despite continuing allegations of terrorist financing swirling around Al Rajhi Bank, HBUS "continued to supply, through its London branch, hundreds of millions of U.S. dollars to Al Rajhi Bank in Saudi Arabia. In addition, at Al Rajhi Bank's request, HBUS expanded the relationship in January 2009, by authorizing its Hong Kong branch to supply Al Rajhi Bank with non-U.S. currencies, including the Thai bat, Indian rupee, and Hong Kong dollar." (emphasis added)



When concerns were raised internally once again, Christopher Lok, the head of HSBC's Global Banknotes Department in New York fired back: "This is an on-going debate that will never go away. My stance remains the same, i.e. until it[']s proved we cannot simply rely on the Wall Street Journal['s] reports and unconfirmed allegations and 'punish’ the client'."



Needless to say, Hong Kong's "arrangement" with Al Rajhi went forward.



Despite "troubling information" which should have led to HSBC's quick exit from the banknotes market, the Senate reported that "HBUS continued to supply U.S. dollars to the bank, and even expanded its business, until 2010, when HSBC decided, on a global basis, to exit the U.S. banknotes business."



In conclusion, one needn't be a "conspiracy buff" to posit a link from HSBC to Al Rajhi to "cash couriers" operating across the Middle East in support of a multitude of U.S.-Saudi-backed "regime change" gambits in play today; policies which "worked marvelously well in Afghanistan against the Red Army."



As investigative journalist Ed Vulliamy pointed out in The Observer, the issues involved here are wider than drug money laundering or terrorist finance. "It is about where banks, law enforcement officers and the regulators--and politics and society generally--want to draw the line between the criminal and supposed 'legal' economies."



Commenting on the HSBC scandal, Robert Mazur, a former Customs Department deep-cover specialist and author of The Infiltrator, who penetrated Medellín cartel money laundering operations during the prosecution and collapse of BCCI in 1991, told The Observer that "the only thing that will make the banks properly vigilant to what is happening is when they hear the rattle of handcuffs in the boardroom."



"The stark truth is," Vulliamy wrote, "the notion of any dichotomy between the global criminal economy and the 'legal' one is fantasy. Worse, it is a lie. They are seamless, mutually interdependent--one and the same."
Reply
THE GLOBAL 1% EXPOSING THE TRANSNATIONAL RULING CLASS 

Prof. Peter Phillips and Kimberly Soeiro
https://www.globalresearch.ca/the-global...lass/32356





This study asks: Who are the the world’s One percent power elite?

And to what extent do they operate in unison for their own private gains over benefits for the 99 percent?



We examine a sample of the 1 percent: the extractor sector, whose companies are on the ground extracting material from the global commons, and using low-cost labor to amass wealth. These companies include oil, gas, and various mineral extraction organizations, whereby the value of the material removed far exceeds the actual cost of removal.We also examine the investment sector of the global 1 percent: companies whose primary activity is the amassing and reinvesting of capital. This sector includes global central banks, major investment money management firms, and other companies whose primary efforts are the concentration and expansion of money, such as insurance companies.



Finally, we analyze how global networks of centralized power—the elite 1 percent, their companies, and various governments in their service—plan, manipulate, and enforce policies that benefit their continued concentration of wealth and power. We demonstrate how the US/NATO military-industrial-media empire operates in service to the transnational corporate class for the protection of international capital in the world.





The Occupy Movement has developed a mantra that addresses the great inequality of wealth and power between the world’s wealthiest 1 percent and the rest of us, the other 99 percent. While the 99 percent mantra undoubtedly serves as a motivational tool for open involvement, there is little understanding as to who comprises the 1 percent and how they maintain power in the world. Though a good deal of academic research has dealt with the power elite in the United States, only in the past decade and half has research on the transnational corporate class begun to emerge.



Foremost among the early works on the idea of an interconnected 1 percent within global capitalism was Leslie Sklair’s 2001 book, The Transnational Capitalist Class. Sklair believed that globalization was moving transnational corporations (TNC) into broader international roles, whereby corporations’ states of orgin became less important than international argreements developed through the World Trade Organization and other international institutions. Emerging from these multinational corporations was a transnational capitalist class, whose loyalities and interests, while still rooted in their corporations, was increasingly international in scope. Sklair writes:



The transnational capitalist class can be analytically divided into four main fractions: (i) owners and controllers of TNCs and their local affiliates; (ii) globalizing bureaucrats and politicians; (iii) globalizing professionals; (iv) consumerist elites (merchants and media). . . . It is also important to note, of course, that the TCC [transnational corporate class] and each of its fractions are not always entirely united on every issue. Nevertheless, together, leading personnel in these groups constitute a global power elite, dominant class or inner circle in the sense that these terms have been used to characterize the dominant class structures of specific countries.



Estimates are that the total world’s wealth is close to $200 trillion, with the US and Europe holding approximately 63 percent. To be among the wealthiest half of the world, an adult needs only $4,000 in assets once debts have been subtracted. An adult requires more than $72,000 to belong to the top 10 percent of global wealth holders, and more than $588,000 to be a member of the top 1 percent. As of 2010, the top 1 percent of the wealthist people in the world had hidden away between $21 trillion to $32 trillion in secret tax exempt bank accounts spread all over the world.



Meanwhile, the poorest half of the global population together possesses less than 2 percent of global wealth.



The World Bank reports that, in 2008, 1.29 billion people were living in extreme poverty, on less than $1.25 a day, and 1.2 billion more were living on less than $2.00 a day. Starvation.net reports that 35,000 people, mostly young children, die every day from starvation in the world. The numbers of unnecessary deaths have exceeded 300 million people over the past forty years. Farmers around the world grow more than enough food to feed the entire world adequately. Global grain production yielded a record 2.3 billion tons in 2007, up 4 percent from the year before—yet, billions of people go hungry every day. Grain.org describes the core reasons for ongoing hunger in a recent article, “Corporations Are Still Making a Killing from Hunger”: while farmers grow enough food to feed the world, commodity speculators and huge grain traders like Cargill control global food prices and distribution.



Addressing the power of the global 1 percent—identifying who they are and what their goals are—are clearly life and death questions.

It is also important to examine the questions of how wealth is created, and how it becomes concentrated. Historically, wealth has been captured and concentrated through conquest by various powerful enities. One need only look at Spain’s appropriation of the wealth of the Aztec and Inca empires in the early sixteenth century for an historical example of this process. The histories of the Roman and British empires are also filled with examples of wealth captured.



Once acquired, wealth can then be used to establish means of production, such as the early British cotton mills, which exploit workers’ labor power to produce goods whose exchange value is greater than the cost of the labor, a process analyzed by Karl Marx in Capital. A human being is able to produce a product that has a certain value. Organized business hires workers who are paid below the value of their labor power. The result is the creation of what Marx called surplus value, over and above the cost of labor. The creation of surplus value allows those who own the means of production to concentrate capital even more. In addition, concentrated capital accelerates the exploition of natural resources by private entrepreneurs—even though these natural resources are actually the common heritage of all living beings.



In this article, we ask: Who are the the world’s 1 percent power elite? And to what extent do they operate in unison for their own private gains over benefits for the 99 percent? We will examine a sample of the 1 percent: the extractor sector, whose companies are on the ground extracting material from the global commons, and using low-cost labor to amass wealth. These companies include oil, gas, and various mineral extraction organizations, whereby the value of the material removed far exceeds the actual cost of removal.



We will also examine the investment sector of the global 1 percent: companies whose primary activity is the amassing and reinvesting of capital. This sector includes global central banks, major investment money management firms, and other companies whose primary efforts are the concentration and expansion of money, such as insurance companies.



Finally, we analyze how global networks of centralized power—the elite 1 percent, their companies, and various governments in their service—plan, manipulate, and enforce policies that benefit their continued concentration of wealth and power.



The Extractor Sector: The Case of Freeport-McMoRan (FCX)



Freeport-McMoRan (FCX) is the world’s largest extractor of copper and gold. The company controls huge deposits in Papua, Indonesia, and also operates in North and South America, and in Africa. In 2010, the company sold 3.9 billion pounds of copper, 1.9 million ounces of gold, and 67 million pounds of molybdenum. In 2010, Freeport-McMoRan reported revenues of $18.9 billion and a net income of $4.2 billion.[xi]



The Grasberg mine in Papua, Indonesia, employs 23,000 workers at wages below three dollars an hour. In September 2011, workers went on strike for higher wages and better working conditions. Freeport had offered a 22 percent increase in wages, and strikers said it was not enough, demanding an increase to an international standard of seventeen to forty-three dollars an hour. The dispute over pay attracted local tribesmen, who had their own grievances over land rights and pollution; armed with spears and arrows, they joined Freeport workers blocking the mine’s supply roads. During the strikers’ attempt to block busloads of replacement workers, security forces financed by Freeport killed or wounded several strikers.



Freeport has come under fire internationally for payments to authorities for security. Since 1991, Freeport has paid nearly thirteen billion dollars to the Indonesian government—one of Indonesia’s largest sources of income—at a 1.5 percent royalty rate on extracted gold and copper, and, as a result, the Indonesian military and regional police are in their pockets. In October 2011, the Jakarta Globe reported that Indonesian security forces in West Papua, notably the police, receive extensive direct cash payments from Freeport-McMoRan. Indonesian National Police Chief Timur Pradopo admitted that officers received close to ten million dollars annually from Freeport, payments Pradopo described as “lunch money.” Prominent Indonesian nongovernmental organization Imparsial puts the annual figure at fourteen million dollars. These payments recall even larger ones made by Freeport to Indonesian military forces over the years which, once revealed, prompted a US Security and Exchange Commission investigation of Freeport’s liability under the United States’ Foreign Corrupt Practices Act.



In addition, the state’s police and army have been criticized many times for human rights violations in the remote mountainous region, where a separatist movement has simmered for decades. Amnesty International has documented numerous cases in which Indonesian police have used unnecessary force against strikers and their supporters. For example, Indonesian security forces attacked a mass gathering in the Papua capital, Jayapura, and striking workers at the Freeport mine in the southern highlands. At least five people were killed and many more injured in the assaults, which shows a continuing pattern of overt violence against peaceful dissent. Another brutal and unjustified attack on October 19, 2011, on thousands of Papuans exercising their rights to assembly and freedom of speech, resulted in the death of at least three Papuan civilians, the beating of many, the detention of hundreds, and the arrest of six, reportedly on treason charges.



On November 7, 2011, the Jakarta Globe reported that “striking workers employed by Freeport-McMoRan Copper & Gold’s subsidiary in Papua have dropped their minimum wage increase demands from $7.50 to $4.00 an hour, the All-Indonesia Workers Union (SPSI) said. Solosa, an official from the union, told the Jakarta Globe that they considered the demands, up from the (then) minimum wage of $1.50 an hour, to be “the best solution for all.”



Workers at Freeport’s Cerro Verde copper mine in Peru also went on strike around the same time, highlighting the global dimension of the Freeport confrontation. The Cerro Verde workers demanded pay raises of 11 percent, while the company offered just 3 percent.



The Peruvian strike ended on November 28, 2011. And on December 14, 2011, Freeport-McMoRan announced a settlement at the Indonesian mine, extending the union’s contract by two years. Workers at the Indonesia operation are to see base wages, which currently start at as little as $2.00 an hour, rise 24 percent in the first year of the pact and 13 percent in the second year. The accord also includes improvements in benefits and a one-time signing bonus equivalent to three months of wages.[xvii]



In both Freeport strikes, the governments pressured strikers to settle. Not only was domestic militrary and police force evident, but also higher levels of international involvement. Throughout the Freeport-McMoRan strike, the Obama administration ignored the egregious violation of human rights and instead advanced US–Indonesian military ties. US Secretary of Defense Leon Panetta, who arrived in Indonesia in the immediate wake of the Jayapura attack, offered no criticism of the assault and reaffirmed US support for Indonesia’s territorial integrity. Panetta also reportedly commended Indonesia’s handling of a weeks-long strike at Freeport-McMoRan.



US President Barack Obama visited Indonesia in November 2011 to strengthen relations with Jakarta as part of Washington’s escalating efforts to combat Chinese influence in the Asia–Pacific region. Obama had just announced that the US and Australia would begin a rotating deployment of 2,500 US Marines to a base in Darwin, a move ostensibly to modernize the US posture in the region, and to allow participation in “joint training” with Australian military counterparts. But some speculate that the US has a hidden agenda in deploying marines to Australia. The Thai newspaper The Nation has suggested that one of the reasons why US Marines might be stationed in Darwin could be that they would provide remote security assurance to US-owned Freeport-McMoRan’s gold and copper mine in West Papua, less than a two-hour flight away.



The fact that workers at Freeport’s Sociedad Minera Cerro Verde copper mine in Peru were also striking at the same time highlights the global dimension of the Freeport confrontation. The Peruvian workers are demanding pay rises of eleven percent, while the company has offered just three percent. The strike was lifted on November 28, 2011.



In both Freeport strikes, the governments pressured strikers to settle. Not only was domestic militrary and police force evident, but also higher levels of international involvement. The fact that the US Secretary of Defense mentioned a domestic strike in Indonesa shows that the highest level of power are in play on issues affecting the international corporate 1 percent and their profits.



Public opinion is strongly against Freeport in Indonesia. On August 8, 2011, Karishma Vaswani of the BBC reported that “the US mining firm Freeport-McMoRan has been accused of everything from polluting the environment to funding repression in its four decades working in the Indonesian province of Papau. . . . Ask any Papuan on the street what they think of Freeport and they will tell you that the firm is a thief, said Nelels Tebay, a Papuan pastor and coordinator of the Papua Peace Network.



Freeport strikers won support from the US Occupy movement. Occupy Phoenix and East Timor Action Network activists marched to Freeport headquarters in Phoenix on October 28, 2011, to demonstrate against the Indonesian police killings at Freeport-McMoRan’s Grasberg mine.



Freeport-McMoRan (FCX) chairman of the board James R. Moffett owns over four million shares with a value of close to $42.00 each. According to the FCX annual meeting report released in June 2011, Moffett’s annual compensation from FCX in 2010 was $30.57 million. Richard C. Adkerson, president of the board of FCX, owns over 5.3 million shares. His total compensation in was also $30.57 million in 2010 Moffett’s and Adkerson’s incomes put them in the upper levels of the world’s top 1 percent. Their interconnectness with the highest levels of power in the White House and the Pentagon, as indicated by the specific attention given to them by the US secretary of defense, and as suggested by the US president’s awareness of their circumstances, leaves no doubt that Freeport-MacMoRan executives and board are firmly positioned at the highest levels of the transnational corporate class.



Freeport-McMoRan’s Board of Directors



James R. Moffett—Corporate and policy affiliations: cochairman, president, and CEO of McMoRan Exploration Co.; PT Freeport Indonesia; Madison Minerals Inc.; Horatio Alger Association

Richard C. Adkerson—Corporate and policy affiliations: Arthur Anderson Company; chairman of International Council on Mining and Metals; executive board of the International Copper Association, Business Council, Business Roundtable, Advisory Board of the Kissinger Institute, Madison Minerals Inc.



Robert Allison Jr.—Corporate affiliations: Anadarko Petroleum (2010 revenue: $11 billion); Amoco Projection Company.



Robert A. Day—Corporate affiliations: CEO of W. M. Keck Foundation (2010 assets: more than $1 billion); attorney in Costa Mesa, California.



Gerald J. Ford—Corporate affiliations: Hilltop Holdings Inc, First Acceptance Corporation, Pacific Capital Bancorp (Annual Sales $13 billion), Golden State Bancorp, FSB (federal savings bank that merged with Citigroup in 2002) Rio Hondo Land & Cattle Company (annual sales $1.6 million), Diamond Ford, Dallas (sales: $200 million), Scientific Games Corp., SWS Group (annual sales: $422 million); American Residential Cmnts LLC.



H. Devon Graham Jr.—Corporate affiliations: R. E. Smith Interests (an asset management company; income: $670,000).



Charles C. Krulak—Corporate and governmental affiliations: president of Birmingham-South College; commandant of the Marine Corp, 1995–1999; MBNA Corp.; Union Pacific Corporation (annual sales: $17 billion); Phelps Dodge (acquired by FCX in 2007).



Bobby Lee Lackey—Corporate affiliations: CEO of McManusWyatt-Hidalgo Produce Marketing Co.



Jon C. Madonna—Corporate affiliations: CEO of KPMG, (professional services auditors; annual sales: $22.7 billion); AT&T (2011 revenue: $122 billion); Tidewater Inc. (2011 revenue: $1.4 billion).



Dustan E. McCoy—Corporate affiliations: CEO of Brunswick Corp. (revenue: $4.6 billion); Louisiana-Pacific Corp. (2011 revenue: $1.7 billion).



B. M. Rankin Jr.—Corporate affiliations: board vice chairman of FCX; cofounder of McMoRan Oil and Gas in 1969.



Stephen Siegele—Corporate affiliations: founder/CEO of Advanced Delivery and Chemical Systems Inc.; Advanced Technology Solutions; Flourine on Call Ltd.



The board of directors of Freeport-McMoRan represents a portion of the global 1 percent who not only control the largest gold and copper mining company in the world, but who are also interconnected by board membership with over two dozen major multinational corporations, banks, foundations, military, and policy groups. This twelve-member board is a tight network of individuals who are interlocked with—and influence the policies of—other major companies controlling approximately $200 billion in annual revenues.



Freeport-McMoRan exemplifies how the extractor sector acquires wealth from the common heritage of natural materials—which rightfully belongs to us all—by appropriating the surplus value of working people’s labor in the theft of our commons. This process is protected by governments in various countries where Freeport maintains mining operations, with the ultimate protector being the military empire of the US and the North Atlantic Treaty Organization (NATO).



Further, Freeport-McMoRan is connected to one of the most elite transnational capitalist groups in the world: over 7 percent of Freeport’s stock is held by BlackRock, Inc., a major investment management firm based in New York City.



The Investment Sector: The Case of BlackRock, Inc.



Internationally, many firms operate primarily as investment organizations, managing capital and investing in other companies. These firms often do not actually make anything except money, and are keen to prevent interference with return on capital by taxation, regulations, and governmental interventions anywhere in the world.



BlackRock, based in Manhattan, is the largest assets management firm in the world, with over 10,000 employees and investment teams in twenty-seven countries. Their client base includes corporate, public, union, and industry pension plans; governments; insurance companies; third-party mutual funds; endowments; foundations; charities; corporations; official institutions; sovereign wealth funds; banks; financial professionals; and individuals worldwide. BlackRock acquired Barclay Global Investors in December of 2009. As of March 2012, BlackRock manages assets worth $3.68 trillion in equity, fixed income, cash management, alternative investment, real estate, and advisory strategies.



In addition to Freeport-McMoRan, BlackRock has major holdings in Chevron (49 million shares, 2.5 percent), Goldman Sachs Group (13 million shares, 2.7 percent), Exxon Mobil (121 million shares, 2.5 percent), Bank of America (251 million shares, 2.4 percent), Monsanto Company (12 million shares, 2.4 percent), Microsoft Corp. (185 million shares, 2.2 percent), and many more.



BlackRock manages investments of both public and private funds, including California Public Employee’s Retirement System, California State Teacher’s Retirement System, Freddie Mac, Boy Scouts of America, Boeing, Sears, Verizon, Raytheon, PG&E, NY City Retirement Systems, LA County Employees Retirement Association, GE, Cisco, and numerous others.



According to BlackRock’s April 2011 annual report to stockholders, the board of directors consists of eighteen members. The board is classified into three equal groups—Class I, Class II, and Class III—with terms of office of the members of one class expiring each year in rotation. Members of one class are generally elected at each annual meeting and serve for full three-year terms, or until successors are elected and qualified. Each class consists of approximately one-third of the total number of directors constituting the entire board of directors.



BlackRock has stockholder agreements with Merrill Lynch & Co., Inc., a wholly owned subsidiary of Bank of America Corporation; and Barclays Bank PLC and its subsidiaries. Two to four members of the board are from BlackRock management; one director is designated by Merrill Lynch; two directors, each in a different class, are designated by PNC Bank; two directors, each in a different class, are designated by Barclays; and the remaining directors are independent.



BlackRock’s Board of Directors



Class I Directors (terms expire in 2012):



William S. Demchak—Corporate affiliations: senior vice chairman of PNC (assets: $271 billion); J. P. Morgan Chase & Co. (2011 assets: $2.2 trillion).



Kenneth B. Dunn, PhD—Corporate and institutional affiliations: professor of financial economics at the David A. Tepper School of Business at Carnegie Mellon University; former managing director of Morgan Stanley Investment (assets: $807 billion).



Laurence D. Fink—Corporate and institutional affiliations: chairman/CEO of BlackRock; trustee of New York University; trustee of Boys Club of NY.



Robert S. Kapito—Corporate and institutional affiliations: president of BlackRock; trustee of Wharton School University of Pennsylvania.



Thomas H. O’Brien—Corporate affiliations: former CEO of PNC; Verizon Communications, Inc. (2011 revenue: $110 billion).



Ivan G. Seidenberg—Corporate and policy affiliations: board chairman of Verizon Communications; former CEO of Bell Atlantic; Honeywell International Inc. (2010 revenue: $33.3 billion); Pfizer Inc. (2011 revenue: $64 billion); chairman of the Business Roundtable; National Security Telecommunications Advisory Committee; President’s Council of the New York Academy of Sciences.

Class II Directors (terms expire in 2013):



Abdlatif Yousef Al-Hamad—Corporate and institutional affiliations: board chairman of Arab Fund for Economic and Social Development (assets: $2.7 trillion); former Minister of Finance and Minister of Planning of Kuwait, Kuwait Investment Authority. Multilateral Development Banks, International Advisory Boards of Morgan Stanley, Marsh & McLennan Companies, Inc., American International Group, Inc. and the National Bank of Kuwait.



Mathis Cabiallavetta—Corporate affiliations: Swiss Reinsurance Company (2010 revenue: $28 billion); CEO of Marsh & McLennan Companies Inc. (2011 revenue: $11.5 billion); Union Bank of Switzerland-UBS A.G. (2012 assets: $620 billion); Philip Morris International Inc. (2010 revenue: $27 billion).



Dennis D. Dammerman—Corporate affiliations: General Electric Company (2012 revenue: $147 billion); Capmark Financial Group Inc. (formally GMAC); American International Group (AIG) (2010 revenue: $77 billion); Genworth Financial (2010 assets: $100 billion); Swiss Reinsurance Company (2012 assets: $620 billion); Discover Financial Services (2011 revenue: $3.4 billion).



Robert E. Diamond Jr.—Corporate and policy affiliations: CEO of Barclays (2011 revenue: $32 billion); International Advisory Board of the British-American Business Council.



David H. Komansky—Corporate affiliations: CEO of Merrill Lynch (division of Bank of America 2009) (2011 assets management: $2.3 trillion); Burt’s Bees, Inc. (owned by Clorox); WPP Group plc (2011 revenue: $15 billion).



James E. Rohr—Corporate affiliations: CEO of PNC (2011 revenue: $14 billion).



James Grosfeld—Corporate affiliations: CEO of Pulte Homes, Inc. (2010 revenue: $4.5 billion); Lexington Realty Trust (2011 assets: $1.2 billion).



Sir Deryck Maughan—Corporate and policy affiliations: Kohlberg Kravis Roberts (2011 assets: $8.6 billion); former CEO of Salomon Brothers from 1992 to 1997 a Chairman of the US-Japan Business Council; GlaxoSmithKline plc (2011 revenue: $41 billion); Thomson Reuters Corporation (2011 revenue: $13.8 billion).



Thomas K. Montag—Corporate affiliations: president of Global Banking & Markets for Bank of America (2011 revenue: $94 billion); Merrill Lynch (division of Bank of America, 2009; 2011 assets management: $2.3 trillion); Goldman Sachs (2011 revenue: $28.8 billion).



Class III Directors (terms expire in 2014):



Murry S. Gerber—Corporate affiliations: executive chairman of EQT (2010 revenue: $1.3 billion); Halliburton Company.



Linda Gosden Robinson—Corporate affiliations: former CEO of Robinson Lerer & Montgomery; Young & Rubicam Inc.; WPP Group plc. (2011 revenue: $15 billion); Revlon, Inc. (2011 revenue: $1.3 billion).



John S. Varley—Corporate affiliations: CEO of Barclays (2011 revenue: $32 billion); AstraZeneca PLC (2011 revenue: $33.5 billion).



BlackRock is one of the most concentrated power networks among the global 1 percent. The eightteen members of the board of directors are connected to a significant part of the world’s core financial assests. Their decisions can change empires, destroy currencies, and impoverish millions. Some of the top financial giants of the capitalist world are connected by interlocking boards of directors at BlackRock, including Bank of America, Merrill Lynch, Goldman Sachs, PNC Bank, Barclays, Swiss Reinsurance Company, American International Group (AIG), UBS A.G., Arab Fund for Economic and Social Development, J. P. Morgan Chase & Co., and Morgan Stanley.



A 2011 University of Zurich study, research completed by Stefania Vitali, James B. Glattfelder, Stefano Battiston at the Swiss Federal Institute, reports that a small group of companies—mainly banks—wields huge power over the global economy.[xxvi] Using data from Orbis 2007, a database listing thirty-seven million companies and investors, the Swiss researchers applied mathematical models—usually used to model natural systems—to the world economy. The study is the first to look at all 43,060 transnational corporations and the web of ownership between them. The research created a “map” of 1,318 companies at the heart of the global economy. The study found that 147 companies formed a “super entity” within this map, controlling some 40 percent of its wealth. The top twenty-five of the 147 super-connected companies includes:



1. Barclays PLC*



2. Capital Group Companies Inc.



3. FMR Corporation



4. AXA



5. State Street Corporation



6. J. P. Morgan Chase & Co.*



7. Legal & General Group PLC



8. Vanguard Group Inc.



9. UBS AG



10. Merrill Lynch & Co. Inc.*



11. Wellington Management Co. LLP



12. Deutsche Bank AG



13. Franklin Resources Inc.



14. Credit Suisse Group*



15. Walton Enterprises LLC



16. Bank of New York Mellon Corp



17. Natixis



18. Goldman Sachs Group Inc.*



19. T Rowe Price Group Inc.



20. Legg Mason Inc.



21. Morgan Stanley*



22. Mitsubishi UFJ Financial Group Inc.



23. Northern Trust Corporation



24. Société Générale



25. Bank of America Corporation*



* BlackRock Directors



Notably, for our purposes, BlackRock board members have direct connections to at least seven of the top twenty-five corporations that Vitali et al. identify as an international “super entity.” BlackRock’s board has direct links to seven of the twenty-five most interconnected corporations in the world. BlackRock’s eighteen board members control and influence tens of trillions of dollars of wealth in the world and represent a core of the super-connected financial sector corporations.



Below is a sample cross section of key figures and corporate assets among the global economic “super entity” identified by Vitali et al.



Other Key Figures and Corporate Connections within the Highest Levels of the Global Economic “Super Entity”



Capital Group Companies—Privately held, based in Los Angeles, manages $1 trillion in assets.



FMR—One of the world’s largest mutual fund firms, managing $1.5 trillion in assets and serving more than twenty million individual and institutional clients; Edward C. (Ned) Johnson III, Chairman and CEO.



AXA—Manages $1.5 trillion in assets, serving 101 million clients; Henri de Castries, CEO AXA, and Director, Nestlé (Switzerland).



State Street Corporation—Operates from Boston with assest management at $1.9 trillion; directors include Joseph L. Hooley, CEO of State Street Corporation; Kennett F. Burnes, retired chairman and CEO of Cabot Corporation(2011 revenue: $3.1 billion).



JP Morgan/Chase (2011 assets: $2.3 trillion)—Board of directors: James A. Bell retired executive VP of The Boeing Company; Stephen B. Burke  , CEO of NBC Universal, and executive VP of Comcast Corporation; David M. Cote, CEO of Honeywell International, Inc.; Timothy P. Flynn , retired chairman of KPMG International; and Lee R. Raymond , retired CEO of Exxon Mobil Corporation.



Vanguard (2011 assets under management: $1.6 trillion)—Directors: Emerson U. Fullwood, VP of Xerox Corporation; JoAnn Heffernan Heisen, VP of Johnson & Johnson, Robert Wood Johnson Foundation; Mark Loughridge, CFO of IBM, Global Financing; Alfred M. Rankin Jr., CEO of NACCO Industries, Inc., National Association of Manufacturers, Goodrich Corp, and chairman of Federal Reserve Bank of Cleveland.



UBS AG (2012 assets: $620 billion)—Directors include: Michel Demaré, board member of Syngenta and the IMD Foundation (Lausanne); David Sidwell, former CFO of Morgan Stanley.



Merrill Lynch (Bank of America) (2011 assets management: $2.3 trillion)—Directors include: Brian T. Moynihan, CEO of Bank of America; Rosemary T. Berkery, general counsel for Bank of America/Merrill Lynch (formerly Merrill Lynch & Co., Inc), member of New York Stock Exchange’s Legal Advisory Committee, director at Securities Industry and Financial Markets Association; Mark A. Ellman, managing director of Credit Suisse, First Boston; Dick J. Barrett, cofounder of Ellman Stoddard Capital Partners, MetLife, Citi Group, UBS, Carlyle Group, ImpreMedia, Verizon Communications, Commonewealth Scientific and Industrial Research Org, Fluor Corp, Wells Fargo, Goldman Sachs Group.



The directors of these super-connected companies represent a small portion of the global 1 percent. Most people with assets in excess of $588,000 are not major players in international finance. At best, they hire asset management firms to produce a return on their capital. Often their net worth is tied up in nonfinancial assets such a real estate and businesses.



Analysis: TCC and Global Power



So how does the transnational corporate class (TCC) maintain wealth concentration and power in the world? The wealthiest 1 percent of the world’s population represents approximately forty million adults. These forty million people are the richest segment of the first tier populations in the core countries and intermittently in other regions. Most of this 1 percent have professional jobs with security and tenure working for or associated with established institutions. Approximately ten million of these individuals have assets in excess of one million dollars, and approximately 100,000 have financials assets worth over thirty million dollars. Immediately below the 1 percent in the first tier are working people with regular employment in major corporations, government, self-owned businesses, and various institutions of the world. This first tier constitutes about 30–40 percent of the employed in the core developed countries, and some 30 percent in the second tier economies and down to 20 percent in the periphery economies (sometimes referred to as the 3rd world). The second tier of global workers represents growing armies of casual labor: the global factory workers, street workers, and day laborers intermittently employed with increasingly less support from government and social welfare organizations. These workers, mostly concentrated in the megacities, constitute some 30–40 percent of the workers in the core industrialized economies and some 20 percent in the second tier and peripheral economies. This leaves a third tier of destitute people worldwide ranging from 30 percent of adults in the core and secondary economies to fully 50 percent of the people in peripherial countries who have extremely limited income opportunities and struggle to survive on a few dollars a day. These are the 2.5 billion people who live on less than two dollars a day, die by the tens of thousands every day from malnutrition and easily curible illnesses, and who have probably never even heard a dial tone.



As seen in our extractor sector and investment sector samples, corporate elites are interconnected through direct board connections with some seventy major multinational corporations, policy groups, media organizations, and other academic or nonprofit institutions. The investment sector sample shows much more powerful financial links than the extractor sample; nonetheless, both represent vast networks of resources concentrated within each company’s board of directors. The short sample of directors and resources from eight other of the superconnected companies replicates this pattern of multiple board corporate connections, policy groups, media and government, controlling vast global resources. These interlock relationships recur across the top interconnected companies among the transnational corporate class, resulting in a highly concentrated and powerful network of individuals who share a common interest in preserving their elite domination.



Sociological research shows that interlocking directorates have the potential to faciliate political cohesion. A sense of a collective “we” emerges within such power networks, whereby members think and act in unison, not just for themselves and their individual firms, but for a larger sense of purpose—the good of the order, so to speak.



Transnational corporate boards meet on a regular basis to encourage the maximunization of profit and the long-term viability of their firm’s business plans. If they arrange for payments to government officials, conduct activities that undermine labor organizations, seek to manipulate the price of commodies (e.g. gold), or engage in insider trading in some capacity, they are in fact forming conspiratorial alliances inside those boards of directors. Our sample of thirty directors inside two connected companies have influence with some of the most powerful policy groups in the world, including British–American Business Council, US–Japan Business Council, Business Roundtable, Business Council, and the Kissinger Institute. They influence some ten trillion dollars in monetery resouces and control the working lives of many hundreds of thousands of people. All in all, they are a power elite unto themselves, operating in a world of power elite networks as the de facto ruling class of the capitalist world.



Moreover, this 1 percent global elite dominates and controls public relations firms and the corporate media. Global corporate media protect the interests of the 1 percent by serving as a propaganda machine for the superclass. The corporate media provide entertainment for the masses and distorts the realities of inequality. Corporate news is managed by the 1 percent to maintain illusions of hope and to divert blame from the powerful for hard times.



Four of the thirty directors in our two-firm sample are directly connected with public relations and media. Thomas H. O’Brien and Ivan G. Seidenberg are both on the board of Verizon Communications, where Seidenberg serves as chairman. Verizon reported over $110 billion in operating revenues in 2011. David H. Komansky and Linda Gosden Robinson are on the board of WPP Group, which describes itself as the world leader in marketing communications services, grossing over $65 billion in 2011. WPP is a conglomerate of many of the world’s leading PR and marketing firms, in fields that include advertising, media investment management, consumer insight, branding and identity, health care communications, and direct digital promotion and relationship marketing.



Even deeper inside the 1 percent of wealthy elites is what David Rothkopf calls the superclass. David Rothkopf, former managing director of Kissinger Associates and deputy undersecretary of commerce for international trade policies, published his book Superclass: the Global Power Elite and the World They Are Making, in 2008. According to Rothkopf, the superclass constitutes approximately 0.0001 percent of the world’s population, comprised of 6,000 to 7,000 people—some say 6,660. They are the Davos-attending, Gulfstream/private jet–flying, money-incrusted, megacorporation-interlocked, policy-building elites of the world, people at the absolute peak of the global power pyramid. They are 94 percent male, predominantly white, and mostly from North America and Europe. These are the people setting the agendas at the Trilateral Commission, Bilderberg Group, G-8, G-20, NATO, the World Bank, and the World Trade Organization. They are from the highest levels of finance capital, transnational corporations, the government, the military, the academy, nongovernmental organizations, spiritual leaders, and other shadow elites. Shadow elites include, for instance, the deep politics of national security organizations in connection with international drug cartels, who extract 8,000 tons of opium from US war zones annually, then launder $500 billion through transnational banks, half of which are US-based.



Rothkoft’s understanding of the superclass is one based on influence and power. Although there are over 1,000 billionaires in the world, not all are necessarily part of the superclass in terms of influencing global policies. Yet these 1,000 billionaires have twice as much wealth as the 2.5 billion least wealthy people, and they are fully aware of the vast inequalities in the world. The billionaires and the global 1 percent are similar to colonial plantation owners. They know they are a small minority with vast resources and power, yet they must continually worry about the unruly exploited masses rising in rebellion. As a result of these class insecurities, the superclass works hard to protect this structure of concentrated wealth. Protection of capital is the prime reason that NATO countries now account for 85 percent of the world’s defense spending, with the US spending more on military than the rest of the world combined. Fears of inequality rebellions and other forms of unrest motivate NATO’s global agenda in the war on terror. The Chicago 2012 NATO Summit Declaration reads:



As Alliance leaders, we are determined to ensure that NATO retains and develops the capabilities necessary to perform its essential core tasks collective defence, crisis management and cooperative security—and thereby to play an essential role promoting security in the world. We must meet this responsibility while dealing with an acute financial crisis and responding to evolving geo-strategic challenges. NATO allows us to achieve greater security than any one Ally could attain acting alone.



We confirm the continued importance of a strong transatlantic link and Alliance solidarity as well as the significance of sharing responsibilities, roles, and risks to meet the challenges North-American and European Allies face together . . . we have confidently set ourselves the goal of NATO Forces 2020: modern, tightly connected forces equipped, trained, exercised and commanded so that they can operate together and with partners in any (emphaisis added) environment.



NATO is quickly emerging as the police force for the transnational corporate class. As the TCC more fully emerged in the 1980s, coinciding with the collapse of the Union of Soviet Socialist Republics (USSR), NATO began broader operations. NATO first ventured into the Balkans, where it remains, and then moved into Afghanistan. NATO started a training mission in Iraq in 2005, has recently conducted operations in Libya, and, as of July 2012, is considering military action in Syria.



It has become clear that the superclass uses NATO for its global security. This is part of an expanding strategy of US military domination around the world, wherby the US/NATO military-industrial-media empire operates in service to the transnational corporate class for the protection of international capital anywhere in the world.



Sociologists William Robinson and Jerry Harris anticipated this situation in 2000, when they described “a shift from the social welfare state to the social control (police) state replete with the dramatic expansion of public and private security forces, the mass incarceration of the excluded populations (disproportionately minorities), new forms of social apartheid . . . and anti-immigrant legislation. Robinson and Harris’s theory accurately predicts the agenda of today’s global superclass, including



—President Obama’s continuation of the police state agendas of his executive predecessors, George W. Bush, Bill Clinton, and George H. W. Bush;



—the long-range global dominance agenda of the superclass, which uses US/NATO military forces to discourage resisting states and maintain internal police repression, in service of the capitalist system’s orderly maintenance;



—and the continued consolidation of capital around the world without interference from governments or egalitarian social movements.



Furthermore, this agenda leads to the further pauperization of the poorest half of the world’s population, and an unrelenting downward spiral of wages for everyone in the second tier, and even some within the first tier. It is a world facing economic crisis, where the neoliberal solution is to spend less on human needs and more on security. It is a world of financial institutions run amok, where the answer to bankruptcy is to print more money through quantitative easing with trillions of new inflation-producing dollars. It is a world of permanent war, whereby spending for destruction requires even more spending to rebuild, a cycle that profits the TCC and its global networks of economic power. It is a world of drone killings, extrajudicial assassinations, and death and destruction, at home and abroad.



As Andrew Kollin states in State Power and Democracy, “There is an Orwellian dimension to the Administration’s (Bush and later Obama) perspective, it chose to disregard the law, instead creating decrees to legitimate illegal actions, giving itself permision to act without any semblances of power sharing as required by the Constitution or international law.”



And in Globalization and the Demolition of Society, Dennis Loo writes, “The bottom line, the fundamential division of our society, is between, on the one hand, those whose interests rest on the dominance and the drive for monopolizing the society and planet’s resources and, on the other hand, those whose interests lie in the husbanding of thoses resources for the good of the whole rather than the part.”



The Occupy movement uses the 1 percent vs. 99 percent mantra as a master concept in its demonstrations, disruptions, and challenges to the practices of the transnational corporate class, within which the global superclass is a key element in the implementation of a superelite agenda for permanent war and total social control. Occupy is exactly what the superclass fears the most—a global democratic movement that exposes the TCC agenda and the continuing theater of government elections, wherein the actors may change but the marquee remains the same. The more that Occupy refuses to cooperate with the TCC agenda and mobilizes activists, the more likely the whole TCC system of dominance will fall to its knees under the people power of democractic movements.



Peter Phillips is a professor of sociology at Sonoma State University and president of the Media Freedom Foundation/Project Censored.



Kimberly Soeiro is a sociology student at Sonoma State University, library researcher, and activist.



Special thanks to Mickey Huff, director of Project Censored, and Andy Roth, associate director of Project Censored, for editing and for important suggestons for this article.
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VENEZUELA’s VICTORY OVER WALL STREET

Tony Cartalucci
http://www.globalresearch.ca/venezuelas-...ll-street/



Venezuela looks to have effectively outmaneuvered Western designs to overthrow national sovereignty, but many challenges lay ahead.



Venezuela has provided the world with a successful model to counter the subversive methods of Wall Street and London in their bid to overthrow yet another nation-state to be rolled into their global collective. However, many have noted that President Hugo Chavez is a flawed leader, with flawed policies – many of which run contra to concepts of personal freedom and liberty.



Image: President Hugo Chavez soundly defeated US-backed opposition, despite a coordinated propaganda campaign, and millions of US State Department dollars utilized to manipulate the elections. Venezuela still faces many challenges.



While this could be said about virtually any politician, the fact is that despite President Chavez’ flaws, he has posed a substantial obstacle to Western ambitions across South America, and has consistently opposed Western machination across the world.



It has been pointed out however, that President Chavez is heading a political movement very similar to the highly criticized, Wall Street proxy, Thaksin Shinawatra of Thailand – that is, using populist policies to build a reliable voting bloc to stay perpetually in power. In many aspects this is true, though Venezuela’s policies are sustainable, and a direct result of nationalizing the oil industry, while Shinawatra of Thailand simply took money out of state coffers while attempting to further privatize and sell-off to foreign multinationals, Thailand’s vast resources.



Also, political and economic policies are erroneously viewed by many as “sides” one is either on or against. In reality, the global elite see them simply as tools, and their use dictated not by personal preference or ideology, but by utility given any specific circumstance. Whether one is “good” or “bad,” when they are presented with boards that must be nailed together, they pick a hammer. Likewise, when a nation must be unified against a large, capable political opposition – political machines, populism, and socialist policies are generally used.



It is difficult to see what other effective method President Chavez could have used against the West in organizing the Venezuelan people against the collective corporate-financier interests arrayed against them and the substantial foreign subversion President Chavez has faced throughout his political career. Boards needed to be nailed together, and President Chavez elected to use a hammer. He is succeeding, and as his political structure is hammered together, taking a more distinct and stable form, it will soon be time to take out other tools to further refine it.



Ensuring A Stable, Enduring Structure



As Venezuelan President Hugo Chavez consolidates his position, it will be important to move beyond the populist policies required to win over people in the face of concerted efforts by foreign-funded opposition to win them over. In “Free Markets & Socialism: An Alternative View,” it stated:



Socialist handouts are tools. Like any tool they are only as good as the people using them. While the intentions of socialist medicine, welfare, education and so on seem noble, in reality they are primarily used by self-serving crooked politicians as bribes handed out in exchange for the voting public’s servile dependency on a particular political agenda. Generations of voting blocs have been created using socialist handouts in just this fashion. Pragmatic solutions are never seriously pursued because pragmatic, permanent solutions – while alleviating entirely any particular social problem – would undermine the real purpose of the handouts, namely, building a dependent, servile voting bloc.



However, let us imagine socialist handouts for a particular social problem such as medical care applied in the context of a temporary stop-gap measure. While people are subsidized for care, the commitments are temporary and voluntary only to prevent people from dying without proper treatment. Meanwhile, investments are put into education and biomedical technology with specific benchmarks and time frames in mind. Simultaneously, barriers such as crippling “intellectual property rights” and monopolizing business practices are eliminated to allow real competition to flourish.



By increasing the supply of trained practitioners and biomedical engineers through improved education, and advancing biomedical technology past current levels of precarious scarcity the price for medical care will drop accordingly. With monopolies eliminated, real progress can be effected. If a particular company has a viable, affordable treatment for cancer, no established monopoly will be able to lobby Washington to regulate it out of business to protect their particular racket. Similar solutions could also easily be applied to the inadequate, antiquated, parasitic oil and car industries as well.



We should look around society today and take stock in industries and commodities we take for granted. We do not kill one another over the last chicken leg or leaf of lettuce nor do many people go without basic food. This is not because we have mastered subsidizing socialist handouts to feed our populations, rather we have developed agricultural technology that allows us to create an affordable market nearly anyone can benefit from under normal circumstances.



Likewise, medical technology and other essential industries can and must be advanced to where the market price is affordable to all. This will not happen with socialist handouts or monopolizing regulations in place. It will happen with improved education and healthy competition within the markets, where the only protection given is the rights of entrepreneurs big and small to pursue their trade without being hindered by monopolistic practices. In the meantime, it is sensible to transition away from total, permanent (and pandering) socialist solutions and move toward temporary stop-gaps until this is achieved.



It should be understood that the concept of a “free market” described above does not refer to absolute economic anarchy. For instance, should Venezuela elect to pursue more permanent, technological solutions to problems currently subsidized, they would not by necessity “open their markets” to foreign multinationals and crippling “neoliberalism.” In many ways the West already observes truly “free markets,” or economic anarchy where giant corporations are free to do anything they wish, including wage massive, global wars in pursuit of their interests. The constricting laws and regulations many well-intentioned free-market advocates abhor, have been imposed by these unhindered, anarchical corporations, not by a “socialist government.” What these advocates perceive as a “socialist government” is in fact an interface created and controlled by unhindered, unregulated, unaccountable corporate-financier interests.



Image: Building things, making things, technological and scientific progress moves forward the frontier of human knowledge and makes all that follows in its wake more accessible and affordable to the average person. The next step of any genuine socialist movement aiming to meet the immediate needs of the people, is to empower the people through education and technology with the means to develop permanent technological solutions to replace what should be only temporary government-dependent subsidies. Socialism as a final end, is but another system of control.  



For Venezuela, the threat of foreign subversion is still very real. There is a very real global network of subversion maintained by the corporate-financier interests of Wall Street and London, forming the foundation of modern imperialism. For President Hugo Chavez to move on to the next step, to put down the hammer and begin using more articulate tools, he would have to effectively communicate these intentions to his support base and ensure that the Venezuelan people are aware of the dangers and payoffs of pursuing the next step.



Finally, as a growing front of nations begin to rise up against Western global hegemony and the “Washington Consensus,” it is important that people around the world prevent an identical, but opposing global order to take its place. Global governance by any name, administered by any nation, or group of nations, is unnecessary and only serves to subvert national, local, and individual sovereignty. A mulipolar world where the mutual respect of national sovereignty, and the primacy of the nation-state is it’s foremost principle, is what we the people of the world should not only demand of our representatives, but should work on a daily basis locally to achieve.
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MONEY LAUNDERING AND OFFSHORE FRAUD FOR THE RICH, ECONOMIC AUSTERITY FOR THE POOR

Julie Lévesque

http://www.globalresearch.ca/money-laund...or/5310347

Offshore banking is the elephant in the global economic room which the political and financial elite is trying to hide from the public view. While imposing austerity measures on hard working citizens, they are well aware that astronomical amounts of money are secretly held in offshore banks, thus lost in taxes. Where is that money from? What is it for?



Drug cartels, fraud, tax evasion and money laundering are common answers to those questions. Despite this reality and even in this era of fiscal austerity, the question world leaders avoid is: why is secret banking still allowed? Are they capable of putting a term to it but unwilling to do it because of the benefits it provides? Clearly.



Every once in a while a robber baron will serve as a scapegoat to give a pale illusion of justice to the common man. Although they deserve to be penalized, the corrupt banking system which allowed them to operate remains inviolate and its flaws are never questioned. Offshore banking is not a parallel banking structure. It is at the heart of the banking system. All major banks have offshore subsidiaries.



R. Allen Stanford is one of the white collar criminals serving time for running a “massive Ponzi scheme camouflaged as a bank [Stanford International Bank (SIB)] that sold some $7 billion in self-styled ‘certificates of deposit’ and $1.2 billion in mutual funds”:



[SIB’s chief financial officer James] Davis told the Justice Department that “his boss had been stealing from investors for decades while paying bribes to regulators and even performing blood oaths never to reveal his secrets.”



And with connections and generous pay-outs to U.S. politicians going back more than a decade, 65% of which went to Democrats including our “change” president, Allen Stanford was plugged-in.



Evidence also suggests he may have gotten an assist covering his tracks from regulators and U.S. secret state agencies, including the CIA [...]



Allen Stanford did business the American way; he swindled depositors and then siphoned-off the proceeds into a spider’s web of offshore accounts.



The indictment charges “it was part of the conspiracy that Stanford … and others would cause the movement of millions of dollars of fraudulently obtained investors’ funds from and among bank accounts located in the Southern District of Texas and elsewhere in the United States to various bank accounts located outside of the United States … in order to exercise exclusive control over the investors’ funds.”



Auditors learned that funds were moved through Stanford-controlled accounts to offshore banks, including HSBC in London, Bank Julius Baer in Zurich and eight others; banks which have figured in past money laundering or tax-avoidance scandals. None have been charged with an offense in connection with the affair. (Tom Burghardt Financial Fraud, The Laundering of Drug Money and the CIA, Antifascist Calling… August 4, 2010.)



Out of willful blindness, the troika – the European Union, European Central Bank and International Monetary Fund – inflicts draconian measures on many Europeans, while letting a “vast offshore industry [operate] out of sight and mind”. The same cannot be said for press freedom and whistleblowers, which are closely monitored:



Greek magazine publisher Costas Vaxevanis faces charges of violating state privacy laws. Potentially he faces two years in prison.



Press freedom and whistleblowing should be inviolate. Not in today’s corrupt money controlled world [...]



A [...] recent Tax Justice Network (TJN) USA report [...] estimates up to $32 trillion of hidden and stolen wealth stashed largely tax-free secretly.



“The Price of Offshore Revisited” reveals what super-rich elites want concealed. Governments let them avoid taxes. Societal costs are huge. Ill-gotten gains are free to make more of them. Only ordinary people pay what they owe. Many pay too much [...]



Hot Doc magazine editor Vaxevanis was arrested for publishing the “Lagarde List.” In 2010, French authorities gave it to Athens. At issue is investigating 2,059 wealthy Greeks with secret HSBC Swiss accounts. (Stephen Lendman, Greek Whistleblower: Billions in Secret Offshore Bank Accounts, October 31, 2012.)



Seeing poverty and inequalities rise dramatically due to budget austerity crafted and ordered by the banking industry, some European nations raise the specter of separatism:



Recent months have seen one example after another of gains for parties advocating the creation of new, small states in Spain, Belgium, Italy, Scotland and elsewhere in Europe.



The growth in support for such tendencies has been fuelled by the savage cuts and austerity measures being imposed by central governments on the instructions of the troika—the European Union, European Central Bank and International Monetary Fund—at the behest of the banks and global speculators. But the exploitation of legitimate social grievances does not mean that the political beneficiaries represent the interests of the broad masses who are being exploited. (Chris Marsden, Austerity and Political Balkanization: The Rise of Separatist Agitation in Europe, October 30, 2012.)



F. William Engdahl warns that the same kind of “ austerity measures paved the way to the III Reich” and insists that the banks are “the source of the problem”:



The EU governments have shied away from any resolute action on the banks involved in the dodgy lending in the first place during the financial bubble years. Those banks remain the source of the problem. There is no lending going on to the real economy, and that`s the root cause of the 25 per cent unemployment in Spain and Greece and elsewhere across the EU. Until that problem with the banks is addressed, we’re not going to see economic recovery. To treat it only as a sovereign debt crisis is grabbing the tale of the elephant and calling it a snake. (F. William Engdahl, Germany Enforces Same Austerity that Paved Way to 3rd Reich, October 30, 2012.)



With the recent images of the brutal Spanish police state in mind we have to wonder if following the corrupt banking industry diktats is a very ruinous ride on the highway to totalitarianism.
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GOLDMAN SACHS GLOBAL COUP D’ETAT

Thom Hartmann, Sam Sacks – via Truth-Out Nov 27, 2012

http://www.thetruthseeker.co.uk/?p=61146



When the people of Greece saw their democratically elected Prime Minister George Papandreou forced out of office in November of 2011 and replaced by an unelected Conservative technocrat, Lucas Papademos, most were unaware of the bigger picture of what was happening all around them.



Similarly, most of us in the United States were equally as ignorant when, in 2008, despite the switchboards at the US Capitol collapsing under the volume of phone calls from constituents urging a “no” vote, our elected representatives voted “yes” at the behest of Bush’s Treasury Secretary Henry Paulsen and jammed through the biggest bailout of Wall Street in our nation’s history.



But now, as the Bank of England, a key player in the ongoing Eurozone crisis, announces that former investment banker Mark Carney will be its new chief, we can’t afford to ignore what’s happening around the world.



Steadily – and stealthily – Goldman Sachs is carrying out a global coup d’etat.



There’s one tie that binds Lucas Papademos in Greece, Henry Paulsen in the United States, and Mark Carney in the U.K., and that’s Goldman Sachs. All were former bankers and executives at the Wall Street giant, all assumed prominent positions of power, and all played a hand after the global financial meltdown of 2007-08, thus making sure Goldman Sachs weathered the storm and made significant profits in the process.



But that’s just scratching the surface.



As Europe descends into an austerity-induced economic crisis, Goldman Sachs’s people are managing the demise of the continent. As the British newspaper The Independent reported earlier this year, the Conservative technocrats currently steering or who have steered post-crash fiscal policy in Greece, Germany, Italy, Belgium, France, and now the UK, all hail from Goldman Sachs. In fact, the head of the European Central Bank itself, Mario Draghi, was the former managing director of Goldman Sachs International.



And here in the United States, after Treasury Secretary and former Goldman CEO Henry Paulsen did his job in 2008 securing Goldman’s multi-billion dollar bailout, he was replaced in the new Obama administration with Tim Geithner who worked very closely with Goldman Sachs as head of the New York Fed and made sure Goldman received more than $14 billion from the bailout of failed insurance giant AIG.



What’s happening here goes back more than a decade.



In 2001, Goldman Sachs secretly helped Greece hide billions of dollars through the use of complex financial instruments like credit default swaps. This allowed Greece to meet the baseline requirements to enter the Eurozone in the first place. But it also created a debt bubble that would later explode and bring about the current economic crisis that’s drowning the entire continent. But, always looking ahead, Goldman protected itself from this debt bubble by betting against Greek bonds, expecting that they would eventually fail.



Ironically, the man who headed up the Central Bank of Greece while this deal was being arranged with Goldman was – drumroll please – Lucas Papademos.



Goldman made similar deals here in the United States, masking the true value of investments, then selling those worthless investments to customers while placing bets that those same investments would eventually fail. The most notorious example was the “Timberwolf” deal, which brought down an Australian hedge fund, and which Goldman Sachs banksters emailed each other about, bragging, “Boy, that Timberwolf was one shitty deal.”



This sort of behavior by Goldman helped inflate, and then eventually pop, the housing bubble in the United States. The shockwave then ran across the Atlantic, hitting Europe and turning Goldman’s debt-masking deal with Greece years earlier sour, thus deepening the crisis.



All of these antics should have brought about the demise of Goldman as well, but with their alumni in key policy positions on both sides of the Atlantic, Goldman not only survived, it flourished.



As the DailyKos sums up, “The normal scenario usually involves helping a nation hide a problem and sell its debt until the problem blows up into a bubble that bursts in a spectacular way…Goldman Sachs then puts their ‘man’ into a position of power to direct the bailouts so that Goldman gets all its money back and more, while the nation’s economy gets gutted.”



For years, tinfoil hat crazies who’ve bookmarked Glenn Beck’s websites and often appear as “experts” on Fox so-called News have warned us about a one-world government (here, here, and here). The latest threat, according to them, is Agenda 21 and the creation of a Soviet-style world authority that will confiscate private party everywhere, redistribute wealth to developing nations, and force us all to live by new global laws that sacrifice our national sovereignty. It’s totalitarian governments and not transnational corporations that we should be afraid of, they warn.



But when the tinfoil hat is removed, you can see that a sort of one-world government has already been established in a far more subtle form, through the rise of Goldman Sachs and their colleagues in the Wall Street elite.



A million questions arise when looking at what’s happening around the world. But many of these questions can be answered, once it’s acknowledged that Goldman Sachs alumni have executed a global coup d’etat.



Why are the working people of Greece, Portugal, Spain, and Italy suffering under austerity and being asked to sacrifice their pensions, their wages, and their jobs when, after five years, it’s clear these policies are only making these nations’ debts even harder to pay off?



It’s because Goldman Sachs is sucking the last remaining wealth out of those nations to recoup whatever failed investments they made before the Crash.



Why have thousands of homeowners in the United States turned to suicide, domestic violence, and even mass murder when faced with home foreclosure, when a simple solution like re-writing mortgages, which FDR did successfully during the Great Depression, could put an end to the bloodshed and misery?



It’s because re-writing mortgages would force banks like Goldman Sachs to take a hit. And thanks to the game they’ve created, they actually make more money when a home they own is foreclosed on.



Why, despite mountains of evidence, have banksters at Goldman Sachs and other Wall Street institutions not been thrown in jail for defrauding customers, manipulating LIBOR interest rates, and throwing thousands of Americans out of their homes illegally in a massive robo-signing scandal?



It’s because we have a two-tiered justice system in which those in power, like Goldman Sachs executives, get a slap on the wrist when they steal $50 billion, but people like you and me go to jail for stealing a 7-11 Slurpee.



Now does it make sense why Wall Street was bailed out and Main Street was sold out?



In this post-crash world, where agents of Goldman Sachs have infiltrated key positions of power all around the world, we must all fundamentally re-understand how we view the global economy and just how much effect our democratic institutions have on this economy.



We no longer have an economy geared to benefit working people around the world; we have an economy that’s geared to exploit working people for Goldman Sachs’ profits. Trader Alessio Rastani told the BBC in September before Goldman’s Lucas Papademos was installed as Greece’s Prime Minister, “We don’t really care about having a fixed economy, having a fixed situation, our job is to make money from it…Personally, I’ve been dreaming of this moment for three years. I go to bed every night and I dream of another recession.” Rastani continued, “When the market crashes… if you know what to do, if you have the right plan set up, you can make a lot of money from this.”



And as we’ve seen over the last decade, Goldman Sachs knows exactly what to do. They’ve had the right plan set-up, and it’s nothing short of a global coup d’etat.



As Rastani bluntly told the BBC, “This is not a time right now for wishful thinking that governments are going to sort things out. The governments don’t rule the world, Goldman Sachs rules the world.”
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