Some interesting points, but also quite a lot of inaccurate and completely false ones, which result in some very erroneous conclusions.
We now stand at the edge of the global financial abyss of a ‘Great Global Debt Depression,’ where nations, mired in extreme debt, are beginning to implement ‘fiscal austerity’ measures to reduce their deficits, which will ultimately result in systematic global social genocide, as the middle classes vanish and the social foundations upon which our nations rest are swept away.
Fiscal austerity is the only way out of unmanageable levels of debt and will ultimately lead to prosperity. If an individual pays off debts and saves more, they become more wealthy, not less wealthy. The same is the case for countries. Any attempt to prop up credit growth in the short term will make things look nice and rosy in the short term, but this always leads to ever increasing crises in the long term.
This should no doubt be the prerogative of a national government, however, central banks are of a particularly deceptive nature, in which while being imbued with governmental authority, they are in fact privately owned by the world’s major global banks, and are thus profit-seeking institutions.
In the United States, President Woodrow Wilson signed the Federal Reserve Act in 1913, creating the Federal Reserve System, with the Board located in Washington, appointed by the President, but where true power rested in the 12 regional banks, most notably among them, the Federal Reserve Bank of New York. The regional Fed banks were private banks, owned in shares by the major banks in each region, which elected the board members to represent them, and who would then share power with the Federal Reserve Board in Washington.
Given all that follows in the article, I really do not understand why the author believes that the monetary system should be the "prerogative" of government. He also does not give a single reason why this should be the case.
The author also misrepresents the legal status of central banks. While they are technically "private", they are not like any other private organization. Members of the central banking system are forced to own "shares" in the central bank, and the amount owned is also dictated by their size. Shares also cannot be traded, and do not appreciate in value. Technically they are more like bonds with set coupon rates. Ultimately, profits (if any)of the central banks go to the government, not member/"owner" banks. While the member banks do vote for board members, the controlling members are appointed by government, and, in the case of the Federal Reserve at least, the government has veto power over appointments made by member banks.
The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.
Financial "crony-capitalism" would be more accurate. The statement sounds very conspiratorial and secretive, when in fact the reason for a globalised central banking system is quite simple. Fractional reserve fiat money banking can only work with government guarantees, and is under constant threat from competing "hard" currencies. Creating a global central banking environment helped to ensure that individual systems did not come under threat.
That same year, the oil price shocks created a wealth of oil money, which was discussed at that years Bilderberg meeting 5 months prior to the oil shocks, and the money was funneled through western banks, which loaned it to ‘third world’ nations desperately in need of loans to finance industrialization.
Actually, most of the third world countries that heavily borrowed did so to finance their corrupt leaders' life styles and more importantly wars.
Volcker decided to raise interest rates from 2% in the late 70s, to 18% in the early 80s. The effect this had was that the countries of the developing world suddenly had to pay enormous interest on their loans,
This sounds like Volcker just made the decision at a whim or in order to harm the third world and "re-colonize" (as stated in another paragraph). The real reason for his actions were that when the last remnants of the gold standard were abolished by Nixon in the early 70s, the market was flooded with newly created dollars at low interest rates, i.e. monetary inflation. This eventually resulted in very high price inflation (10+%) which had to be tackled through tough and correct monetary policies, i.e. increasing interest rates.
In the West, corporations and banks saw rapid, record-breaking profits.
They did, but very little of their profits came from third world countries. The reason banks benefit so much from the central, fractional reserve banking system lies in the nature of inflation. Inflation is a monetary phenomenon, with increases in the CPI being the result. Those that receive the inflated/newly created money first, benefit most; and those that receive it last don't benefit at all, but rather pay the price. This means that banks and governments are the main beneficiaries of monetary inflation, and the average citizen pays the price.
While profits soared, wages for people in the West did not. Thus, to consume in an economy in which prices were rising, people had to go into debt. This is why this era marked the rise of credit cards fueling consumption, and the middle class became a class based entirely on debt.
This is the nature of inflationary policies, those that receive new money first gain the most. In addition, debtors gain at the expense of creditors.
However, it is completely wrong to suggest that the middle class was forced into taking on debt to keep up with increasing prices. Increasing prices were the direct result of monetary inflation. People went into debt for discretionary items, not day to day living expenses, and because lots of cheap credit was made available by central banks.
In the 1990s, the ‘new world order’ was born, with America ruling the global economy, free trade agreements began integrating regional and global markets for the benefit of global banks and corporations, and speculation dominated the economy.
Free trade agreements never really existed beyond a few sectors of the economy that were chosen by politicians. The only thing that comes close to free trade agreements is the ECC.
The global economic crisis arose as a result of decades of global imperialism – known recently as ‘globalization’ – and the reckless growth of– speculation, derivatives and an explosion of debt. As the economic crisis spread, nations of the world, particularly the United States, bailed out the major banks (which should have been made to fail and crumble under their own corruption and greed), and now the West has essentially privatized profits for the banks, and socialized the risk.
It was the central banking system that made the credit bubble possible in the first place, and yes, banks should be let fail no matter how big or small.
Thus, we see the emergence of a process towards the formation of a global central bank and a global currency, totally unaccountable to any nation or people, and totally controlled by global banking interests.
This is quite a leap and ignores the fact that central bankers make up the BIS board, and central bankers are appointed by politicians. While they are unelected, this only highlights the problem of having government controlled central banks in the first place.
In 2010, Greece was plunged into a debt crisis, a crisis which is now spreading across Europe, to the U.K. and eventually to Japan and the United States. If we look at Greece, we see the nature of the global debt crisis. The debt is owed to major European and American banks. To pay the interest on the debt, Greece had to get a loan from the European Central Bank and the IMF, which forced the country to impose ‘fiscal austerity’ measures as a condition for the loans, pressuring Greece to commit social genocide. Meanwhile, the major banks of America and Europe speculate against the Greek debt, further plunging the country into economic and social crisis. The loan is granted, to pay the interest, yet simply has the effect of adding to the overall debt, as a new loan is new debt. Thus, Greece is caught in the same debt trap that re-colonized the Third World.
Greece is in trouble because of fiscal mismanagement and it can only blame itself for this. The idea of a crisis
spreadingacross Europe because of Greece is nonsense. If other countries find themselves in a similar situation, it is not because Greece plunged into crisis, but rather because they also took on too much debt. Greece may have triggered the events that opened up the financial world's eyes, but debts are at the root of the problem.
Speculators are also not to blame, as they merely highlight in their actions the information provided to them. The reason PIIGS bond yields are going up is because the countries are at much higher risk of default. This is not something secret or devious, and all governments should know that their actions impact their ability to borrow, and rightfully so.
And again the idea of re-colonizing is just too far fetched and conspiratorial. Who would want to willingly take on a totally bankrupt country? And nobody forced these countries to go into debt in the first place.
At the recent G20 meeting in Toronto, the major nations of the world agreed to impose fiscal austerity – or in other words, commit social genocide
No matter how many times the author repeats this statement it doesn't make it any less false. Fiscal austerity is the only solution especially for debt riddled countries. That is precisely why Germany is recovering (by reducing spending and paying down debts) despite the fact that Keynesians the world over would have us believe that this is impossible.