Chapter 47 - IMF and World Bank

IMF

The IMF claims to do this:

“The IMF’s main goal is to ensure the stability of the international monetary and financial system. It helps resolve crises, and works with its member countries to promote growth and alleviate poverty.” [IMF website] [1]

And this:

“The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.” [IMF website] [3]

And this:

“The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.” [IMF website] [2]

It has a membership of 189 countries and is headquartered in Washington, D.C.

The IMF has been remarkably ineffective at its major tasks. The world economy is still prone to collapse. Poverty has not abated.

What the IMF actually does is this:

“The IMF lends money to member countries faced with balance of payments problems, ie when a country fails to earn sufficient foreign currency—through exports or provision of services—to pay for its imports. In return for financial assistance from the IMF, borrower countries must implement a set of economic reforms aimed at overcoming their balance of payments problems. Loans are disbursed in installments and payment is tied to the countries’ compliance with the structural adjustment policies.” [IMF website] [2]

The biggest borrowers are: Portugal, Greece, Ukraine, and Pakistan.(as of 2016-08-31) [2] There are also precautionary loans. The largest of these are: Mexico, Poland, Colombia, and Morocco.(as of 2016-08-09) [2] The IMF gave “surveillance consultations”. There were 130 consultations in 2013, 132 in 2014, and 124 in 2015. [2]

The IMF uses its lending to influence and direct the internal policies of democratic nations. The IMF instructions are worded as ‘practical help’. [3] Even without loans, the IMF has influence:

A nation conducts international trade. The exchange rate is contrived by a small sample of trades on a ‘Foreign Exchange Market’ known as ‘FOREX’. Eighty percent of the activity on FOREX is speculation and only 20% has anything to do with trade. Trade imbalances are guaranteed. The IMF kindly creates credit on its books in the required currency and charges interest on this virtual credit. The IMF can create any currency by double-entry-accounting. No genuine cash or currency is involved. This is merely book entries. Massive debts build up to this private corporation that operates outside the jurisdiction of any democratically elected government. Neither does it pay taxes. It is accountable to no-one. When it kindly issues this credit created as book-entries, it makes demands on the nation called ‘conditionalities’. This is classic usury. Debt is used to control these nations who then are relieved of their national assets. Jesus was talking about villagers. Usury is now so sophisticated, we are talking about the subservience and impoverishment of nations.

“... the IMF is charged with (i) overseeing the international monetary system to ensure its effective operation, and (ii) monitoring each member’s compliance with its policy obligations.” [IMF website] [2]

All the above quotes were from the IMF website. The IMF has thus created a type of ‘global governance’. If the IMF lends money to nations, the conditions are particularly stringent. These nations then operate under a debt induced control. This is why you see protesters with banners such as:

IMF.

World’s predatory lender.

IMF.

Trapping countries in debt.

End structural adjustment.

IMF + World Bank = Hundreds rich. Billions poor.

IMF and World Bank.

Economic Terrorists.

IMF World Bank out.

Here are some more quotes from the IMF website to show the depth that the IMF reaches into your nation:

“IMF offers technical assistance and training to help member countries strengthen their capacity to design and implement effective policies. Technical assistance is offered in several areas, including fiscal policy, monetary and exchange rate policies, banking and financial system supervision and regulation, and statistics.” [IMF website] [4]

“The IMF promotes economic stability and global growth by encouraging countries to adopt sound economic and financial policies.” [IMF website] [4]

“The IMF provides technical assistance and training mainly in four areas:

[IMF website] [4]

The IMF is strengthening the legal framework for its surveillance. This quote is from a European Central Bank annual report:

“Nonetheless, there is still margin for further enhancing IMF surveillance of the EU and the euro area.” [European Central Bank website] [5]

and

“...which enables the IMF to survey all policies that are relevant both for a member’s external and domestic stability.” [ECB website] [5]

The IMF enforces policies with the dubious claim that the policies will promote stability. Stability is very difficult to argue against. If an official says that a policy is needed for stability, it is difficult to argue that the policy is not needed for stability.

Criticisms of the IMF

Critics of the IMF’s policies comprise a wide range of people. This includes: activists, journalists, social scientists, government officials, academics, politicians, and heads of governments. The list of criticisms about the IMF is long:

Unfortunately, most of these policies are the policies that one would choose if one was trying to follow Moses in Deuteronomy:

Moses  “For the Lord thy God blesseth thee, as he promised thee: and thou shalt lend unto many nations, but thou shalt not borrow; and thou shalt reign over many nations, but they shall not reign over thee.” [Deuteronomy 15:6]

The IMF has become the ultimate supporter of the interests of big corporations and bankers. The IMF is employing usury on a scale never contemplated by Moses, Jesus or Mohamed. The IMF policies are designed to put the interests of corporations before the interests of citizens. The IMF is not just taking a pound of flesh it is draining the blood as well. Never forget that money is a freely created commodity. Money can be created in any quantity at no cost, by simply using a printing press or writing numbers in a book. The IMF is creating book entries and impoverishing nations. The justification is Moses:

Moses  “Of a foreigner thou mayest exact it again: ...” [Deuteronomy 15:3]

Moses  “The LORD will make you the head and not the tail, and you only will be above, and you will not be underneath, if you listen to the commandments of the LORD your God, which I charge you today, to observe them carefully, ...” [Deuteronomy 28:13]

Moses  “The LORD will make you abound in prosperity,...” [Deuteronomy 28:1]

We must reject the Old Testament.

Some relevant quotes about the IMF:

Asian Wall Street Journal, 1997 said the IMF is: “one of the most secretive institutions this side of the average missile base.”

Kari Polanyi Levitt 1983: “It is important to note that IMF programmes are not designed to increase the welfare of the population. They are designed to bring the external payments account into balance.... The IMF is the ultimate guardian of the interests of capitalists and bankers doing international business” [6]

Jeffrey Sachs, the head of the Harvard Institute for International Development in 1997 said: “In Korea the IMF insisted that all presidential candidates immediately ‘endorse’ an agreement which they had no part in drafting or negotiating, and no time to understand. The situation is out of hand...It defies logic to believe the small group of 1,000 economists on 19th Street in Washington should dictate the economic conditions of life to 75 developing countries with around 1.4 billion people.”

Jakaya Kikwete: “There were times when there were riots in Africa, demonstrations against the IMF because of the policy advice they were giving, the conditionalities they were imposing, and the difficulties that arose out of the implementation of those conditionalities.”

Abu Bakar Bashir: “The Muslim leaders swallow the advice of the Western powers and bodies like the IMF and World Bank, even when it is bad for their countries and they know this.”

Che Guevara 1959: “If it is an element of liberation for Latin America, I believe that it should have demonstrated that. Until now, I have not been aware of any such demonstration. The IMF performs an entirely different function: precisely that of ensuring that capital based outside of Latin America controls all of Latin America.” [7]

Ross P. Buckley 2002: “According to UNICEF, over 500,000 children under the age of five died each year in Africa and Latin America in the late 1980s as a direct result of the debt crisis and its management under the International Monetary Fund’s structural adjustment programs. These programs required the abolition of price supports on essential food-stuffs, steep reductions in spending on health, education, and other social services, and increases in taxes. The debt crisis has never been resolved for much of sub-Saharan Africa. Extrapolating from the UNICEF data, as many as 5,000,000 children and vulnerable adults may have lost their lives in this blighted continent as a result of the debt crunch.” [8]

Luis Ignacio Silva, Brazil 1985: “Without being radical or overly bold, I will tell you that the Third World War has already started - a silent war, not for that reason any the less sinister. This war is tearing down Brazil, Latin America and practically all the Third World. Instead of soldiers dying there are children, instead of millions of wounded there are millions of unemployed; instead of destruction of bridges there is the tearing down of factories, schools, hospitals, and entire economies . . . It is a war by the United States against the Latin American continent and the Third World. It is a war over the foreign debt, one which has as its main weapon interest, a weapon more deadly than the atom bomb, more shattering than a laser beam . .” [9]

Eddie Ward, Labor Minister of Australia talking about the 1945 Bretton Woods arrangements: “...I am convinced that the agreement [Bretton Woods] will enthrone a world dictatorship of private finance more complete and terrible than and Hitlerite dream. It offers no solution of world problems, but quite blatantly sets up controls which will reduce the smaller nations to vassal states and make every government the mouthpiece and tool of International Finance. It will undermine and destroy the democratic institutions of this country - in fact as effectively as ever the Fascist forces could have done - pervert and paganise our Christian ideals; and will undoubtedly present a new menace, endangering world peace. World collaboration of private financial interests can only mean mass unemployment, slavery, misery, degradation and financial destruction. Therefore, as freedom loving Australians we should reject this infamous proposal.” [10]

Brandon Smith 2014: “The IMF, like all central banks, is dominated by the international corporate banking cartel. Central banks are merely front organizations for globalists, ...” [11]

Who Owns the IMF

I cannot give you a definitive answer on that. The IMF has contributions from member nations. Irrespective of who owns the IMF, it is the control of the IMF that is of concern. Like the car that I bought for my daughter to use, it is not the ownership that is of concern, but who controls its use. It is the same with central banks. It is not a matter of who owns the central bank. It is of concern who controls the central bank.

Washington Consensus

The expression ‘Washington Consensus’ covers the cozy arrangement between the major influences on world economic policy that emanate from Washington. The consensus covers the Washington-based IMF and World Bank and the US government. This consensus believed that the appropriate path to economic arrangements included financial and trade liberalization. A debt crisis provides an opportunity to quickly impose conditions upon countries when they are desperately in need of credit. Conditions are called “Structural Adjustment Programs” which demand changes to a nation’s policies that open the nation to international takeover by multinational corporations working in tandem with private corporations masquerading as international banks. There is less questioning about Structural Adjustment Programs when a country is in need of a bailout. The debt crisis was necessary for the rapid international implementation of the programs.

The policies implemented during a Structural Adjustment Program tend to be devastating to a developing nation. Developing countries tended to be poorer in 1990 than in 1980. Debt became so great during the 1980s and 1990s that many developing countries had few resources to spend on social services and development. When the debt crisis arrived, the developing nations were starved of international credit. Nations had little choice but to sell out their economies to foreign purchasers. These third world nations were now under a form of financial colonialism neatly packaged as a neo-liberal economic theory.

John Perkins wrote an interesting book called the “Confessions of an Economic Hit Man”, in which he described his time as an economic planner in the 1970s. He wrote how Third World nations were enticed into debt by the IMF and World Bank. He would negotiate very large loans to Third World nations which the borrowers would have no hope of repaying. When default occurred the lenders would demand the natural resources and utilities and would gain control of its economy and political system. Enticements included cash, hookers, cocaine, and luxury. Any leader who would not cooperate would be overthrown in a CIA coup or even be assassinated. As is usual with bank lending, the money lent by the IMF and World Bank did not exist until it was lent. This man is effectively describing usury of a truly international level.

Edward S. Herman: “The World Bank, IMF, and private banks have consistently lavished huge sums on terror regimes, following their displacement of democratic governments, and a number of quantitative studies have shown a systematic positive relationship between U.S. and IMF/World Bank aid to countries and their violations of human rights.” [12]

IMF Riots

Joe Stiglitz: “Every country the IMF/World Bank got involved in ended up with a crashed economy, a destroyed government, and sometimes in flames with riots.”

Joe Stiglitz interview by Greg Palast

Joe Stiglitz: “In a recent interview with The London Observer and BBC TV’s Newsnight, some of the real, often hidden workings of the IMF, World Bank, and the bank’s 51% owner, the US Treasury were revealed. Also, documents marked ‘confidential’, ‘restricted’, and ‘not otherwise (to be) disclosed without World Bank authorization’ were brought to light. One such document entitled ‘Country Assistance Strategy’ outlined the assistance strategy for every poor nation, designed, says the World Bank, after a careful, in-country investigation. But, according to insider Stiglitz, the bank’s staff “investigation” consisted of a close inspection of each nation’s five-star hotels. It ends with the Bank’s staff meeting some begging, pleading finance minister who is handed a “restructuring agreement” pre-drafted for his “voluntary” signature. Each nation’s economy is individually analyzed, then, says Stiglitz, the bank hands every minister the same, exact four-step program.

Step One is Privatization - which Stiglitz says could be more accurately labeled ‘briberization’. National leaders, using the World Bank’s demands to silence the local critics - happily flogged their electricity and water companies for a 10% commission to be paid into a Swiss bank account for simply shaving a few billion off the sale price of their national assets. (Control ends up in the hands of a few and, ultimately, the monopolization of these essential assets leads to higher costs for consumers.)

Step Two of the “rescue” plan is “Capital Market Liberalization”. In theory, capital market deregulation allows investment capital to flow in and out. Unfortunately, as in Indonesia and Brazil, the money simply flowed out and out. Stiglitz calls this the “Hot Money” cycle as cash comes in for speculation in real estate and currency, and then flees at the first sign of trouble. A nation’s reserves can drain in days or hours and when that happens, to seduce speculators into returning a nation’s own capital funds, the IMF demands these nations raise interest rates to 30%, 50% or more. The results are predictable, demolished property values, crippled industrial production and empty national treasuries.

At this point, the IMF drags the gasping nation to

Step Three; Market Based Pricing, a fancy term for raising prices on food, water, and other essentials. This leads, predictably, to

Step Three and a Half, what Stiglitz calls the IMF riot.

When a nation is “down and out, the IMF takes advantage and squeezes the last pound of flesh out of them. They turn up the heat until the whole cauldron blows up,” as when the IMF eliminated food and fuel subsidies for the poor in Indonesia in 1998. The people rioted, but there were other examples - the Bolivian riots over water prices in 2000 and this February (2001), the riots in Ecuador over this rise in cooking gas prices imposed by the World Bank. (It is almost as though the riots were part of the plan)

One such ‘plan’, the ‘Interim Country Assistance Strategy’ for Ecuador stated with cold accuracy that ‘social unrest’ was expected. The secret report notes that the plan to make the US dollar Ecuador’s national currency has pushed 51% of the population below the poverty line. The World Bank ‘Assistance’ plan simply calls for facing down civil strife and suffering with “political resolve” - and still higher prices.

The IMF riots cause more panic and the flight of capital out of the countries and the ultimate bankruptcy of governments. (Look at recent events in Argentina). Foreign corporations also take advantage of these situations by buying up remaining assets at fire sale prices.

A pattern soon emerges. There are lots of losers and one clear winner, the Western banks and the US Treasury making big bucks off this crafty international scam. Stiglitz told a story of his early days at the World Bank. He met with Ethiopia’s newly elected president and the World Bank and the IMF had ordered Ethiopia to divert aid money to its reserve account at the US Treasury which, pays a pitiful 4% return, while the nation borrowed US dollars at 12% to feed its population. The new president begged Stiglitz to let him use the aid money to rebuild the nation, but no, the loot went straight off to the US Treasury’s vault in Washington.

Now Step Four of what the IMF and the World Bank call their “poverty reduction strategy.” Free Trade as designed by the WTO and the World Bank. Europeans and Americans are kicking down the barriers to sales in Asia, Latin America and Africa, while barricading their own markets against Third World agriculture. In the past, the West used military blockades to force open markets. Today, the World Bank can order a financial blockade, which is just as effective - and sometimes just as deadly.”

Special Drawing Rights

Special Drawing Rights (SDR) are international reserve assets created by the International Monetary Fund (IMF) and allocated to its members to supplement existing reserve assets. The IMF creates its SDR out of thin air in the same way a sovereign state creates currency. Yesterday, they did not exist. Tomorrow, they exist. They are book entries created by the ‘stroke of a pen’. They create SDRs as book money and exchange them for national currency. So real national money is given to the IMF in exchange for SDRs that the IMF created out of thin air. So the backing for the SDR is not anything the IMF created. The backing for the SDR is the currencies for the nations of the world. The SDR is an immediate ‘rip-off’ of national currencies. If the SDR was net exchangeable for national currencies, it would have no value. If the IMF creates ‘x’ of SDR worth say $1 billion, then that is an immediate rip-off of the USA or any currency that it is exchanged for. Someone has to give up $1 billion for the fresh SDR. By the stroke of a pen, the IMF created something that was an immediate call on $1 billion of U.S. currency.

The IMF will also lend SDRs to countries with a shortage of money for Balance of Trade issues. A country has a shortage of something, so it borrows something the IMF created out of thin air and nobody blinks an eyelid. Nice business if you can get it.

Various descriptions:

 

Marco Polo travelled to China in the 13th century. He found that among the Chinese had an alternative to gold as money. At the imperial court, mulberry bark was converted into money. The Chinese were printing paper notes. It was decreed that people must accept them. The imperial court picked up the sovereignage. The sovereignage is the advantage the imperial court gained from the first spending of the paper bark money. The IMF is spared the expense of the mulberry bark. It just enters the number of new SDRs in a register. It gains vast volumes of foreign currency when the SDR is passed to a borrower. It either gains from the interest or the outright exchange of the SDR. The value of a currency is dependent on what it will purchase. It retains this value whilst it can still purchase the goods. This relies on the issuing institution retaining credibility. The issuing authority does not need to back the goods with its assets, it has to ensure the money is backed by purchasable goods.

 

Duck Shoot.

The central bank of a nation is effectively the Forex dealer of last resort within the nation. The nation is required to be a sitting duck in a duck shoot in this exercise. The financial vultures can prey on the rabbits in any manner they wish. The nations are in a weak position compared to the financial vultures. During a speculative attack on the nation by vultures on the Forex, the vulture cannot be culled. When a central bank is not in a position to pay the vulture’s demands, it goes to the IMF for a loan to cover for the vultures kill on its currency. The IMF issues an SDR loan out of thin air. The SDR was created by the IMF but is a call on other nations currency. This enables the nation to pay the vultures the tribute exacted out of the nation by the vultures devious actions on the Forex. This means that the IMF and Forex work for the benefit of the financial vultures and any losses by a nation are funded by the IMF lending other nations money at interest to the IMF. Ethics and morals are no longer considered. If it is legal, it is acceptable.

Complaints about the SDR

Here is a graph of money and debt for Europe. Besides the unpayable debt, notice that the money supply has not risen for many years. Europe is in a financial straightjacket that restricts growth and creates horrendous unpayable debt.

Euro Area Money and Debt. Europe is in a financial straight jacket that restricts growth and creates horrendous unpayable debt. Data: BIS. Creative Commons Attribute - Andy Chalkley. www.andychalkley.com.au

The velocity of money is also stagnant. Money is only changing hands once each year. The ECB is doing a very bad job of maintaining the Circulating Money. 92% of the money is sitting idle in bank accounts. The low velocity is stifling transactions in Europe. Money sitting idle. Humans exist by trading. The lack of movement prevents the trade between humans.

Euro Area velocity of money. Creative Commons Attribute - Andy Chalkley. www.andychalkley.com.au
Forex

The Forex market is a market where participants buy, sell, exchange, and speculate on currencies. This market is considered to be the world’s largest financial market. It processes trillions of dollars of transactions. 80% of the trade on the Forex is speculation. Only 20% is involved with genuine trade. Big time speculators are able to bid against nations in a dangerously hostile manner.

Rapid Trading

Rapid trading software allows speculators to move money fast in a destabilizing manner. It should be taxed nationally out of existence. Share markets are designed to take money from those that don’t know how to use it and give it to those that are doing something productive. Speculation in assets should be banned.

New Messiah says: Speculation is of pure evil for the benefit of individuals and acts against the interest of mankind as a whole.“Speculation is of pure evil for the benefit of individuals and acts against the interest of mankind as a whole.”


Asset Backing of Money

When one borrows money from a bank, the money is not backed by any real money held by the bank. The loan is backed by the asset that was purchased with the loan. When you purchase a house, it is the house that is the asset backing for the loan. The bank uses your asset as collateral for the loan. In a crisis, the assets lose value and the loan then has almost no backing. Similarly, a loan to a country depends upon the ability of the country to pay back the loan. If the idiots at an international bank demand austerity then the chance of the loan being serviced are much reduced and the nation may default. One cannot but wonder what brand of logic is used to lend money to an entity and then set about destroying that nation’s ability to service the loan.

There is a disconnect between the trade conducted between countries and the mechanism to set exchange rates. It is not the trading of goods and services that sets the exchange rate. It is a separate entity called Forex, Foreign Exchange Market. Eighty percent of Forex involves speculation and twenty percent involves trade. Ordinary citizens can set up a Forex account and start betting on exchange rates. The effect is that there will be trade imbalances. These trade imbalances will finish up as a debt to someone. That someone is likely to be an international bank. Countries can try and adjust their currencies by a very crude and expensive method. The target nations can sell off items such as gold and cash reserves and they can adjust interest rates to counteract the actions of the big speculators. This is pretty frustrating as Forex clients are not dealing with real money. They have an account and bet with virtual money. No physical money changes hand. Whereas countries have to deal with real money. The hard-earned money of the people.

The Foreign Exchange Market, Forex

The Foreign Exchange Market (Forex) is the largest financial market in the world. Transactions run at about $5000 billion each day. Only $1000 billion of this has anything to do with international trade. The Forex is made up of central banks, currency speculators, governments, organizations, international investors and retail investors. The UK has about 36% of the traders. The USA has about 18% of the traders. Japan has about 6% of the traders.

The commercial and investment banks belong to the group known as the ‘Interbank’ market which has about 75% of the trade volume.

Now the strange bit.

What are they buying and selling in the currency market?

The short answer is “nothing”. The retail Forex market is a speculative market. No physical exchange of currencies takes place. Trades exist as computer entries and are netted out depending on market price. For dollar-denominated accounts, profits and losses are calculated in dollars and recorded as such on the trader’s account.

Forex Transactions

My reading is that most buying and selling of the Australian dollar has nothing to do with selling iron ore, cattle, or cars. Most trade in the Australian dollar is done as speculation on the Australian dollar. The Australian dollar has become quite a popular plaything with speculators. None of this is to the benefit of the people of Australia.

Short Selling

Shorting or short-selling occurs when a person sells an item that they don’t own. They wish to profit from a fall in price. The item is bought back a while later, when the price drop occurs.

Short selling or selling short or shorting is a technique used by investors to profit from the falling price of a stock.

Short selling is the practice of selling securities or other financial instruments that are not currently owned, and repurchasing them or covering them at a later lower price.

For example, consider an investor who wants to sell short 1000 shares of a company, believing the shares are overpriced and that their price will fall. The investor’s broker borrows the 1000 shares from someone who owns them with the promise they will be returned later. The borrowed shares are sold at the current price.

If the price of the shares drops, the speculator ‘covers the short position’ by buying back the shares, and the broker returns them to the lender. The profit is the difference between the price at which the stock was sold and the cost to buy it back, minus commissions and borrowing expenses. If the price of the shares increases, the losses can be high. Short selling is a risky technique.

New Messiah says: Short selling is an evil practice and should be banned.“Short selling is an evil practice and should be banned.”


Forex Allows Short Selling

Short selling is the selling of an item that the seller does not own. The seller thus promises to deliver sometime in the future. It is posh gambling. The seller is gambling on the price falling. The short seller will purchase after the price fall so that he can deliver. I am not comfortable that big time money people can play with my currency like this. You make up your own opinion.

New Messiah says: Speculation must stop.“Speculation must stop.”


Big Time Speculator George Soros.

The Man Who Broke the Bank of England.

During 1992, there was speculation that England was going to be rejected from the European Monetary Union. This would damage the English pound. George Soros with his Quantum Fund placed a ten billion short position in the Forex market. The Bank of England attempted to stabilize the English pound by intervening and selling all their foreign currency reserves. On 16 September 1992 (Black Wednesday) the pound plummeted. England was forced to withdraw from the European Monetary Union. Soros made $1 billion. He is now known as the man who broke the Bank of England.

New Messiah says: “Short selling must be banned.”


Big Time Speculator Andy Krieger And The Kiwi Dollar

During the U.S. stock market crash of 1987, traders were buying up currencies that were appreciating against the dollar, the most popular being the Kiwi. Mr. Krieger guessed that this rally could never last. He believing that the kiwi was overvalued. Krieger shorted two hundred million Kiwi. This is more than the entire money supply of New Zealand. The currency buckled under this pressure. Andy Kreiger made a massive profit.

New Messiah says: “Ban speculators.”


Examples of the Nonsense They Talk on the Forex That Influences the Australian Dollar

“Futures traders increased bets to a record that the Aussie will fall against the U.S. Dollar.”

“The Aussie dollar has been quite sensitive to the talk about tapering of QE3 in the US, so it is quite responsive to the moves.”

“the fall in Australian dollar was ‘just collateral damage,’ caught up in a volatile market place.”

“The Australian and New Zealand dollars slumped against their major peers as market volatility prompted traders to retreat from higher-yielding assets.”

“The difference in the number of wagers by hedge funds and other large speculators on a decline in the Aussie.”

“If we see the opportunity to try, for example, to take the tops off any exchange-rate peak then we may exercise intervention.”

“The falls came as Treasury secretary Martin Parkinson warned Australia faced a volatile economic ride.”

“Investors will pay close attention to Fed Chairman Ben Bernanke’s news conference for clues about the future of the central bank’s asset-purchase program, known as quantitative easing.”

This sounds more like horse racing gossip. They are posh betting on our currency. They are not operating for the benefit of nations. It thus turns out that the exchange value of your nation’s money is determined by a speculative operation that is involved in betting using the sovereign currencies of the nations of the world. This organization operates as a type of casino for international money with trades of around $5000 billion each day. Less than 20% of these transactions relate to the trade of real goods and services. In excess of 80% of the trade is speculation against the currencies of nations. The nations are the weak partner in this arrangement. When they suffer the indignity of loss against these speculators, the government may be forced into a debt with the IMF or World Bank. This global casino is in a position to cause foreign exchange crises. When a Forex crisis is precipitated on a nation, the nation runs to the money vultures at the IMF. Thus the FOREX feeds rabbits to the IMF. The IMF aids the vultures and their activities. The IMF watches with open chequebook as the Christians are fed to the lions.

New Messiah says: “My Christians are too gullible.”


Is Forex Rigged?

Bloomberg News published an interesting report based on whistle-blowing information from five foreign-exchange traders from three different large banks. They report that the foreign exchange-rate market is fixed. The world’s largest banks manipulated foreign-exchange rates. This influenced the value of trillions of dollars of investments and derivatives around the world. They profit immensely from this manipulation. This manipulation of foreign exchange rates effects investments and pension funds around the world. The Forex appears to have been rigged for more than ten years. Whistle-blowers reportedly said that major banks would regularly trade against their clients in the Forex. The procedure appears to be called “front-run”. The major banks would trade against their clients in sixty-second time-slots in which trading was supposed to be paused. Dealers colluded with other dealers to magnify the chances of modifying the exchange rates. The manipulation of exchange rates has been happening on a daily basis for at least ten years.

The British Financial Conduct Authority has received a complaint of rigging from a major European funds manager and is ‘considering opening a probe’.

Australia became exposed to the manipulation of the Foreign Exchange Market when the Bob Hawke and Paul Keating government floated the Australian dollar in 1983. Previous to 1983, Australia set its exchange rate itself. China still sets its exchange rate manually. China has not fallen into the international debt that is hurting Australia. As soon as a nation ‘floats’ its money, it becomes prone to the vultures at FOREX. This basically guarantees that it will accumulate unpayable debt. As my sister, Liz, said to me once whilst traveling “How come the exchange rate never goes in my favor?”

Balancing Trade

It appears that we have a system that is prone to creating indebted nations. A country has trade in and trade out. If the dollar value of exports is greater than the dollar value of imports then a surplus is created. If the dollar value of imports is greater than the dollar value of exports then a deficit occurs. This is obvious logic. However, the Forex market is independent of trade and is 80% speculation. Thus, if a country is doing very well then it is likely that its currency increases. By doing well it gets punished with a high exchange rate that is not actually reflected in the volume of trade but by the wishful thinking of the speculative traders. The traders wish to make money from money whereas the country and maybe its government, wish to make money from trading goods. The two do not match and so imbalances are inevitable. This plays straight into the hands of the big international banks. It is almost impossible for a country to balance its books when the exchange rate is set by speculation independent of the trade volumes between nations.

If one considers the situation before banks got involved, debt between nations was difficult to achieve. Traders would barter dried fish, animal skins, beads or tobacco for fabrics, bullets, needles, whiskey, traps, blankets, cloth, knives, salt, pots, windows, and mirrors. Thus international trade deficits could not exist.

These factors can affect a currency’s exchange rate, economic growth, government debt levels, trade levels, and oil and gold prices. Increased government debt, a slowing gross domestic product or a large trade deficit could cause a country’s exchange rate to drop. Rising oil prices could lead to higher exchange rate for oil exporting countries or oil rich nations. So the exchange rate is only partly dependent on trade volume. Thus working harder to correct a trade imbalance may not cut the trade imbalance. It could even make it worse. Even having untouched oil sitting in the ground could create trade imbalance.

My guess is that clever bankers knew this when the system was set up. Surely they didn’t accidentally create a system where so many countries got into debt. Their business is making money from debt. So like other businesses, they would naturally push trade along in their direction. So are bankers the best people to set up a trading situation between countries? I don’t think so.

Definition of Balance of Trade ‘BOT’

The Balance of Trade is the difference between a country’s imports and its exports. The balance of trade is the largest component of a country’s balance of payments. Debit items include imports, foreign aid, domestic spending abroad and domestic investments abroad. Credit items include exports, foreign spending in the domestic economy and foreign investments in the domestic economy. A country has a trade deficit if it imports more than it exports; the opposite scenario is a trade surplus.

It is also referred to as ‘trade balance’ or ‘international trade balance.’

Currency speculation is still incorrectly considered to be a legal activity. Speculators are allowed to take advantage of countries in a weak situation. The speculator can bet against weak countries without using their own money to take billions in profits. The devious procedure they use is to ‘sell short’ the currency that is in trouble. Selling short means they sell currency they do not own and then later purchase the currency when it falls so they can supply the currency that they have already sold.

New Messiah says: “Selling short is an invention of Satin.”

  “To profit from a nation’s pain is the work of the devil.”

These speculators rejoice in a good day’s work when they mercilessly make a profit from the misery they create. When the short selling is done in sufficiently large volume, it drives down the currency. The evil speculators then buy back the currency at a lower price and make a great profit in doing so. This needs to be classed as an act of hostility.

Speculative Attack

A speculative attack on a currency occurs when speculators think that a currency is over-valued. They sell that currency in the hope that the currency will fall in value. Nations suffer from the currency attacks.

The president of Malaysia has blamed his country’s misfortune on currency speculators. He directing much of his annoyance at George Soros. He has called for new restrictions on the activities of Forex speculators.

Some blamed the Mexican financial and currency crisis of 1994-95 on speculative action on Forex. The crisis with several European currencies in 1992 and 1993 was also blamed on speculative activities on Forex. The widespread economic suffering was linked to speculators. Some speculators amassed spectacular profits whilst the nations suffered.

Speculators with billions can use this wealth to smash nations economically. They achieve this with currency raids and other means.

Bank for International Settlements

This is an unusually powerful organization that most people have never heard of. The Bank for International Settlements (BIS) controls the money supply of the whole world. It is effectively the central bank of the central banks. It is the bank that controls the Central Banks. It is completely immune from any law made by any country. The Central Banks that it controls are carefully groomed to be ‘free from political influence’. The Central Bank of each nation has complete control of the money supply of the nation. The Bank for International Settlements has control over the lifeblood of the economy in nations.

This all powerful organization is in Basel, Switzerland. It is not required to pay tax to any country and has immunity from any national law. The Bank for International Settlements has the task of guiding and directing the global financial system. Sixty of the world’s central banks belong to the BIS. Its power over economies often exceeds that of the nation’s politicians. Its unelected members travel to Basel regularly and make decisions which affect every person on the planet. It even runs its own private police force.

The Bank for International Settlements makes decisions that devalue currencies, defend currencies, modify the price of gold, and adjust short-term interest rates.

The participants uphold a belief that central banks should act independently of their governments. This is cleverly worded as: “keep the central bank free from political interference.” The members also display an attitude that politicians should not be trusted to decide the fate of the international monetary system. The international monetary system is thus kept remote from any democratically elected representative.

The Bank for International Settlements has managed to create an arrangement where it has governmental immunity. This entity pays no taxes. It has its own police force. Its activities do not come under any democratic entity. It does not operate under the laws of any country. They decide how much money will be in circulation and how much interest to charge governments on money that was created at no cost. The Bank for International Settlements controls the money strings of the world’s monetary system. This gives them the power to create a financial boom or a financial bust in a country. Nations can be controlled by the simple action of selling the national currency.

Henry CK Liu

“BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies. The IMF and the international banks regulated by the BIS are a team: the international banks lend recklessly to borrowers in emerging economies to create a foreign currency debt crisis, the IMF arrives as a carrier of monetary virus in the name of sound monetary policy, then the international banks come as vulture investors in the name of financial rescue to acquire national banks deemed capital inadequate and insolvent by the BIS.”

The problems start as soon as a nation falls into the trap of accepting loans in a foreign currency. They then become subject to conditionalities.

One might assume that a good banking system would create an environment that has full employment. The Bank for International Settlements regulations demand high unemployment in the debtor nations. This is more in line with the instructions of Moses: “For the Lord thy God blesseth thee, as he promised thee: and thou shalt lend unto many nations, but thou shalt not borrow; and thou shalt reign over many nations, but they shall not reign over thee.” [Moses in Deuteronomy 15:6] This is close to what Carroll Quigley described when he said:

“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. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank, in the hands of men like Montagu Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank, sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.” [13]

Complaints about the Bank for International Settlements

The following passage is written by a well-respected historian by the name of Adam LeBor. He details the activities of Thomas McKittrick, a former president of the BIS:

“The BIS was founded in Basel in 1930, where it is still headquartered today. Ostensibly set up as part of the Young Plan to administer German reparations payments for WWI, its real purpose was detailed in its statutes: to ‘promote the cooperation of central banks and provide additional facilities for international financial operations.’ The establishment of the BIS was the culmination of the central bankers’ decades-old dream to have their own bank powerful, independent, and free from interfering politicians and nosy reporters.

Under the terms of the founding treaty, the bank’s assets could never be seized, even in times of war. Most felicitous of all, the BIS was self-financing and would be in perpetuity. Its clients were its own founders and shareholders, the central banks. The BIS, boasted Gates McGarrah, an American banker who served as its first president, was ‘completely removed from any government or political control.’ McKittrick’s involvement with the BIS began in 1931, when he joined the German Credits Arbitration Committee, which adjudicated disputes involving German commercial banks. One of the other two members was Marcus Wallenberg, of Sweden’s Enskilda Bank, who taught McKittrick about the intricacies of international finance. Marcus and his brother Jacob were two of the most powerful bankers in the world. During the war, the Wallenberg brothers used Enskilda Bank to play both sides and harvest enormous profits.

In May 1939 McKittrick was offered the position of president of the BIS, which he readily accepted. As head of the BIS, headquartered in Basel, from 1940 to 1946, McKittrick played a crucial role in abetting Hitler’s war—and, at the same time, in revealing details about his Nazi colleagues to his friends in Washington, D.C. On McKittrick’s watch, the BIS willingly accepted looted Nazi gold, carried out foreign exchange deals for the Reichsbank, and recognized the Nazi invasion and annexation of conquered countries. By doing so, it also legitimized the role of the national banks in the occupied countries in appropriating Jewish-owned assets. Indeed, the BIS was so indispensable to the overall Nazi project that the vice-president of the Reichsbank, Emil Puhl, who was later tried for war crimes, once referred to the BIS as the Reichsbank’s only ‘foreign branch.’ In the closing months of the war, as American GIs fought their way across Europe, McKittrick was arranging deals with Nazi industrialists to guarantee their profits after the Allied victory.”

International Trade

Winston Churchill 1960

“Germany’s unforgivable crime before WW2 was its attempt to loosen its economy out of the world trade system and to build up an independent exchange system from which the world-finance couldn’t profit anymore. ...We butchered the wrong pig.”

Benjamin Franklin

“The refusal of King George to operate an honest colonial money system which freed the ordinary man from the clutches of the manipulators was probably the prime cause of the Revolution. The Colonies would gladly have borne the little tax on tea and other matters, had it not been that England took away from the Colonies their money, which created unemployment and dis-satisfaction.”

Jeffrey Sachs

“The runs started in Thailand after the IMF intervened in such a dramatic way. Then the IMF came to Indonesia.”

Abu Bakar Bashir

“The Muslim leaders swallow the advice of the Western powers and bodies like the IMF and World Bank, even when it is bad for their countries and they know this.”

Louis McFadden 1930

“The Federal Reserve Bank of New York is eager to enter into close relationship with the Bank for International Settlements....The conclusion is impossible to escape that the State and Treasury Departments are willing to pool the banking system of Europe and America, setting up a world financial power independent of and above the Government of the United States....The United States under present conditions will be transformed from the most active of manufacturing nations into a consuming and importing nation with a balance of trade against it.”

American Mercury Magazine 1957

“The invisible Money Power is working to control and enslave mankind. It financed Communism, Fascism, Marxism, Zionism, Socialism. All of these are directed to making the United States a member of a World Government.”

John F. Kennedy 1963

“The great free nations of the world must take control of our monetary problems if these problems are not to take control of us.” [14]

Common Complaints about the World Bank

International Money

This has to be one of the strangest things to understand. Why would a national government borrow from an International Bank? A national government has the authority to create the money of the nation. If it borrows from an International Bank in its own currency, where did the money come from? If the International Bank is operating for the good of mankind, it would loan at an interest rate that would cover its costs. This rate might be 1%. If it was operating for the benefit of the bank and the shareholders of the bank, then it would charge a high interest rate. If the nation borrows in foreign currency for its own internal purposes, then there is a conversion factor involved and the loan needs to be repaid in foreign currency. The first question is why would a national government borrow money from an International Bank?

A national government has the authority to create its own money. So a national government should never be in debt for its own money. However, government tends not to use money that it issues itself because Cash Currency is too cumbersome. When banks arrive in the young nation, they persuade the citizens to give them their Cash Currency for ‘safe keeping’. They issue the citizens with digital receipts in the form of bank statements with an implied promise to give them back the same volume of money on request. The government also has accounts at the bank and use these accounts for all government transactions. The government has the potential to lift its balance in the bank in exchange for Cash Currency that it has created, but it does not do this. Cash Currency has only limited use in the nation. Although Cash Currency is how we envisage money, it is only 7% or less of the money in the nation and an even smaller percentage by volume of transactions. Thus the government has no means of obtaining sufficient Bank Credit in its bank accounts to operate its government functions. Although the government has a monopoly on the creation of Cash Currency, it is not Cash Currency that it uses to operate the functions of government. The government needs to borrow Bank Credit to operate. One method is to issue Bonds that carry an interest rate. They issue the Bonds into the market. This means that they sell them to anyone who will pay for them using Bank Credit. By this means, the government obtains Bank Credit. The government does not use Cash Currency, which is the Legal Tender of the nation, to operate the business of government. The government joins the system of bank created Credit where virtual money is transferred from bank account to bank account. The government has thus chosen the debt based money created by the banks rather than its own freely created Cash Currency. To operate using the convenience of Bank Credit, the government gets into debt to the tune of the bonds that it has issued.

Bonds are effectively the future taxes of the people. The government becomes revenue constrained and strange terms like ‘Balanced-Budget’ and ‘National Debt’ appear and strange practices such as ‘Austerity Economics’ occur. The source of money for the government becomes limited to taxation, borrowing, issuing IOUs called bonds and selling public assets. The government is not capable of creating Bank Credit for itself unless it runs a National Public Bank. A National Public Bank is a bank that is owned and operated by the government on behalf of the people and is in the same payments clearing loop at the other banks. For a system of banks to operate in a nation, a level of collusion is essential. They have to agree that their monetary unit is equal in value to the national unit which is based on Cash Currency and they have to agree to freely pass their Bank Credit between each other. Without this freedom of movement of Bank Credit, the system cannot work. So the only solution for a nation is for itself to have a bank in the system. Because it is owned by the government, it is called a Public Bank.

   The government is only capable of creating Bank Credit if it runs a National Public Bank owned and operated by the government on behalf of the people.

If the government fully owns and controls the central bank, then this would suffice as a National Public Bank. But in most cases, even when the central bank is apparently owned by the government, it is not controlled by the government. Study suggests that control comes from the Bank for International Settlements in Basel Switzerland. One should detect talking heads state that the Central Bank needs to be “independent of political influence” which could be translated as: “controlled by a cabal of private bank interests”.

A government should only need to borrow from an international bank when in need of a foreign currency. This should not need to occur. For normal trade between nations, money can be exchanged with the respective nation. Where the debts are built up due to speculative action against the national currency, those responsible should be classed as international terrorists and prevented from owning the national currency. When debts are owed to an International Bank, the debts must be repaid by exports or sales of assets, land for mining rights or public utilities to foreign entities. It becomes a form of asset stripping of the nation to international corporations whose shares are often owned by the International Banks. International corporations effectively become the operating arms of International Banks. What are these International Banks and who owns and controls them?

The IMF, BIS, and World Bank are not owned by the United Nations, nor are they owned by a consortium of national governments. These institutions are large corporations with shareholders. The shareholders are the large private banks of the world. When you look at the CIA table of the monies owed to the IMF World Bank on the CIA website, you find that every nation of the world, bar about four (Brunei and three you would never have heard of) is massively in debt to the IMF/World Bank. This would appear to be rather bizarre as you would expect some nations to be in credit and some in debt. Those in credit would balance with those in debt. This is not the case. They are all in debt. How can you have a situation where every nation of the world is massively in debt to a private corporation? Those not in debt are listed as zero. Where did this money come from? I suggest that it was manufactured in the same way that Bank Credit is generated by banking your nation. I suggest that the IMF World Bank writes one billion dollars in a credit account and $1 billion in a loan account. The one billion is passed to the creditors of your nation and your nation now owes $1 billion to the IMF World Bank. There is no way of paying the interest due on this mythical money without borrowing more mythical money. This is usury on a scale unprecedented in human history. In the history of empires, empires loaned money to the outlying subordinate countries at interest, but this IMF World Bank stands at a level higher than empires. In an attempt to pay off the interest and principal to the International Banks, each nation embarks on an export and asset selling frenzy. Unfortunately, they are competing against other countries in the same situation. The best thing that the green movements could do is to work towards the elimination of this international usury system which is causing much of the ecological damage to the world.

Where an International Bank loans out money, there is basically no hope of finding the extra money to pay the interest. Money is lent expecting a greater amount of money in return in a manner that unpayable debts have been created. There is unpayable debt owed to the IMF and World bank.

Most people criticizing the IMF World Bank system, concentrate on the devastating social effects it has on the people of the nations who borrow the money. What they don’t point out is that the IMF World Bank system creates unpayable debt in an Impossible Contract. With this new understanding, you can possibly see that the total money owed to the IMF / World Bank will increase each year by an amount equal to the interest rate plus new loans. The chance that the total decreases is fairly remote. It will take all the nations of the world to call their bluff.

I repeat a common joke: “If you owe the bank one dollar, the bank is in charge. If you owe the bank one million, you are in charge.” It would only take the debtor nations to ask where the money came from, and to refuse any repayment until they got a quality answer. Greece is capable of pulling this stunt at present. If debtors unite in the same way that workers unite under a union, they can dictate the terms to the bank. One must remember that money is a social convention and has no value to the creator. Money was designed to enable trade, not extortion.

So please reconsider. When the IMF and World Bank make loans, what are they lending? Because of the limited supply of money, the interest due constitutes an Impossible Contract. I claim that an Impossible Contract is invalid.

What is the alternative? To my mind, there is utterly no reason why national banks, whether private or public, should not directly exchange currencies between each other in much the same way that banks in a national network clear the Bank Credit between their banks. More work is needed on the subject, but whatever the solution, it needs to be between National Public Banks and by the people. It also needs to be recognized by the public that international borrowing for internal purposes is entirely ridiculous. No privately owned international bank will ever be the solution. Private International Banks will always be an international problem.

   International borrowing for a nation’s internal purposes is entirely ridiculous.

World Trade Organization

The World Trade Organization (WTO) is a powerful global commerce agency that expanded the General Agreement on Tariffs and Trade (GATT) into an enforceable global commerce organization. It is a powerful global commerce agency, and one of the main mechanisms of corporate globalization. Under the WTO’s system of corporate-managed trade, short-run corporate profits dominate social, environmental, labor, and other values. It was established in 1995 after the Uruguay Round of global trade talks. [15]

The World Trade Organization is very helpful to the business interests of multinational corporations. The WTO even places limits on our ability to rein in the Wall Street banks that wrecked the economy.

The World Trade Organisation has 160 member nations and is responsible for 97% of global trade. [15]

Complaints about the WTO include: