The G-20 piles unruly folly upon grisly folly
VIDEO (11 min): More IMF "Economic Medicine" Is Not the Solution: G-20 Proposals will exacerbate the Global Economic Crisis
LONDON, April 1: I am feeling a bit like correspondents who report from the Taliban frontline. In my case, a combination of anarchists, nutcases, attention-seekers, the grossly unemployed and assorted victims of the credit crunch have descended on the Bank of England, gathering up a tsunami of protests linked to the London summit of the Group of 20 countries  - a tidal wave of civil disagreement with authority that began barely a moment after I had secured an elusive macchiato from the local Starbucks.
The barista recommended that I stayed inside the shop when they boarded it up, fearing that anti-globalization protests would be directed against all symbols of America however far removed from the world of finance. Instead, I took my coffee and walked out into the beautiful London day, waiting to be asked a cogent question on the future of capitalism. As luck would have it, most of the folks in the crowd merely wanted to find out where to score drugs, while a few did inquire about where I had managed to find the coffee.
After we were all "locked" up inside a strange pattern of streets next to the headquarters of a large German bank that shall go unnamed, it soon became clear that the kids who had asked about drugs earlier were on to something. There was much trading in cannabis, right under the watchful eye of the London police, who only cared if anyone wished to lob a stone at the nearest bank.
Before all that though, drifting along with a crowd into Threadneedle Street, home to the Bank of England, was amusing. For one thing, the whole of the Bank intersection had been taken over by protesters ranging from anti-capitalists to environmentalists. Amongst the first acts of physical damage of the day was the trampling of spring daffodils outside the Royal Exchange; I observed that those doing the trampling were carrying the "End Carbon Emissions" placards. You really couldn't make this stuff up.
It was when the force of the crowd turned me the wrong way around, towards Bank Station that I found myself confronting a motley crew calling themselves the "G20 Meltdown" and who had helpfully brought along one of the four horsemen of the apocalypse. For a while, I thought the solitary horse was explained by their inability to afford all four, being idiotic communists, but as it turned out they had planned to get three other horses through other underground-railway stations. I only managed to spot one other horse during the day, and even that could well have been a mirage.
Anyway, this was a more charismatic group; which is to say that the ringleaders all looked like they had never held down a day's job in their entire lives except perhaps in one of Her Majesty's prisons. Alongside the horsemen, the group included a coalition known as "Class War" - it targets landowners and assorted capitalists.
This grouping was incredibly popular with the ranks of the unemployed: with more than 2 million jobs already lost, the UK clearly had more than sufficient supplies of people to join this group, never mind that they were protesting for a return of the status quo ante rather than an overthrow of the establishment.
All along, the crowds had been increasing to the point where the London police started applying mini-quarantine areas; the idea being to isolate any group that looked like they may actually be troublesome into a small square and disallow entry or exit. Things quickly turned nasty after that at a location that wasn't previously closed off; a branch of RBS was vandalized by protesters throwing computer screens at the glass window.
In effect that act brought up the old broken glass conundrum into sharp focus: if someone throws a brick through a window, classical economists would consider the event economically accretive: given that the homeowner would have to buy glass, pay someone to fix it and so forth. In more rigorous schools of economics (such as the Austrian) though, the act would be economically destructive: while the act of replacing the glass would increase gross domestic product, it would always substitute another act (such as the person paying for curtains or buying himself a new toaster oven). More importantly, the act of breaking the glass pane diminishes one's view of safety, thereby causing more useless, defensive spending such as buying home insurance and the like.
The reason for that moral question was the events of the next day when world leaders actually met.
April 2, 2009
Quite tired by the overnight ordeal of being trapped with a bunch of nubile 20-year olds (no, I am not making that up), I met the dawn of April 2 to the cacophony of UK newspapers blaring about the failure of the summit before it had even started. Despite having been in the main square of the protests, even I couldn't recognize the vituperative commentary being spewed by news columnists who with a single voice proclaimed a day of chaos, intrigue and whatever else caught their fancy.
That it had simply been a rough day made worse by the actions of the London police was of course beyond the grasp of the newspaper columnists. Those that didn't report on the "riots" focused on the state dinner: right-wing newspapers highlighted the supposed snub given by Queen Elizabeth's consort, Prince Philip, to US President Barack Obama; while other newspapers pointed to the sheer scandal of the First Lady placing her arms around the sainted monarch.
As it happened, audiovisual evidence indicated that the prince had misheard the president's remarks and made one of his characteristic gaffes, while the queen had actually initiated the extraordinary gesture by placing her arm behind the First Lady's back. Given the facts, it was clear that the prejudice of the UK media stood very much against Obama, something explained not so much by his actions since becoming president but by the simple act of supposed solidarity being shown with the extremely unpopular Prime Minister Gordon Brown in the UK. Brown is considered in the UK press as a bit of a buffoon, variously derided for being a bore and more recently for crash-burning the UK economy by his extraordinary series of borrowings during the good years for the economy; money that had been wastefully spent by the Labour government.
After the newspapers, the next chore was to actually get to the place where the G-20 meeting  was being held: in something called the Excel Centre in the eastern part of London. I had been warned to stick to public transport and duly complied.
Here is a slight digression for Asian readers who are used to the comfort of metropolitan train journeys within cities like Tokyo, Singapore and Hong Kong. If you are one such person and are asked to travel on London's tube, or underground rail, network, here is a simple one-word recommendation: Don't. Unlike the train systems in Asian cities, allegedly built or bequeathed by the British, the London tube system is a mess of delays and accidents. Inside the carriages, conditions are virtually unbearable even on a beautiful spring day, while outside in the train stations, expect to see failing escalators, overcrowding and what have you.
Anyway, my journey was interrupted along the way, and I had to finally take a cab. While expensive, the road journey did offer a stunning view of the Millennium Dome, a vanity project of former UK prime minister Tony Blair that offers a wonderful economic lesson all on its own. Initially conceived by its design rather than its purpose, the Dome was meant to represent a new generation of "cool" people that inhabited the British Isles.
It proved to be the proverbial albatross and was soon dumped by the government; eventually picked up by the private sector at a fraction of the price, the Dome was renamed the O2 (after a telecom company) and now houses the largest indoor concerts in Europe, all at a profit derived from the sheer scale of events relative to the cost of buying (not building) the place.
This object lesson in economics, along with the previous day's broken glass paradox, was completely lost on the assembled leaders in the Excel Centre. By the way, this center was another eyesore, apparently built by the British government to encourage business tourism; that it hasn't failed in the same proportion of the Millennium Dome is only because some businesses actually ended up hosting large trade shows in the venue as they fled the crowded confines of London.
As with the previous rounds of G-20 meetings, I actually did try to read the final, official statement  from the gathering. Unfortunately the assembled brainpower completely lost me on the fifth point:
The agreements we have reached today, to treble resources available to the IMF to US$750 billion, to support a new SDR [the special drawing rights, or currency, of the International Monetary Fund] allocation of $250 billion, to support at least $100 billion of additional lending by the MDBs [multilateral development banks], to ensure $250 billion of support for trade finance, and to use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries, constitute an additional $1.1 trillion programme of support to restore credit, growth and jobs in the world economy. Together with the measures we have each taken nationally, this constitutes a global plan for recovery on an unprecedented scale.(Japan, the European Union and China will provide the first $250 billion of the increase in IMF rescue funds to $750 billion, with the $250 billion balance to come from as yet unidentified countries, Bloomberg reported. The G-20 said they would couple the financing moves with steps to give emerging economic powerhouses such as China, India and Brazil a greater say in how the IMF is run, the report said.)
In effect, the only tangible result of the G-20 meeting - the tripling of IMF resources - is astounding. The same people who drove the Latin American economy into dust and were responsible for widespread poverty in Asia in the aftermath of the Asian crisis; the very people who encouraged the idiotic accumulation of market-return independent foreign exchange reserves by Asian countries that subsequently caused the asset bubbles of the US and Europe; the very people who had no clue about the impending bubble burst up until the beginning of 2008, are now supposed to gather up the foresight and skills required to end an economic crisis whose only recent historic parallel was the 1929 depression in the United States; an event that took place a good 16 years before the IMF was itself created.
Reading that bit of the statement, I was reminded about a different bit of history from the same Britain, and pretty much from the opposite end of London. This event took place on September 30, 1938; the BBC reported then as follows:
The British prime minister has been hailed as bringing "peace to Europe" after signing a non-aggression pact with Germany. PM Neville Chamberlain arrived back in the UK today, holding an agreement signed by Adolf Hitler which stated the German leader's desire never to go to war with Britain again. The two men met at the Munich conference between Britain, Germany, Italy and France yesterday, convened to decide the future of Czechoslovakia's Sudetenland. Mr Chamberlain declared the accord with the Germans signalled "peace for our time", after he had read it to a jubilant crowd gathered at Heston airport in west London. The German leader stated in the agreement: "We are determined to continue our efforts to remove possible sources of difference and thus to contribute to assure the peace of Europe."I have the dread feeling that the G-20 declaration from April 2, 2009, will achieve similar notoriety in years to come.
1. The G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the US, the UK and the European Union. Officials from Spain and the Netherlands were also present.
2. For the full text of the communique click here.
Reviewing Ellen Brown's "Web of Debt:" Part III
This is the third in a series of articles on Ellen Brown's superb 2007 book titled "Web of Debt," now updated in a December 2008 third edition. It tells "the shocking truth about our money system, (how it) trapped us in debt, and how we can break free." This article focuses on global debt entrapment.
Global Debt Enslavement - From Gold Reserves to Petrodollars
"The gold standard (while it lasted) was a necessary step in giving bankers' 'fractional reserve' legitimacy, but the ruse could not be sustained indefinitely" because exiting gold to defray foreign debts results in money backing it to be withdrawn from circulation. The result - contraction, recession, or depression, the very problem that forced FDR to drop the gold standard to prevent an even greater collapse. In 1971, Nixon did it permanently "when foreign creditors threatened to exhaust US gold reserves by cashing in their paper dollars for gold."
John Kennedy was the last president to challenge Wall Street, contends Donald Gibson in one of his two books about him. In "Battling Wall Street: The Kennedy Presidency," he said that Kennedy opposed "free trade," believed industry should serve the nation, and that America should sustain its independence by developing cheap energy. That "pitted him against the oil/banking cartel," intent on "raising oil prices to prohibitive levels in order to" entrap the world in a "web of debt."
Evidence also suggests that "Kennedy crossed the bankers by seeking to revive a silver-backed currency," independent of the Fed. In fact, on June 4, 1963, he issued Executive Order (EO) 11110 giving the president authority to issue currency. He then ordered the Treasury to print over $4 billion of "United States Notes" in place of Federal Reserve Notes. Some believe that he intended to replace them all when enough of the new currency was in circulation - to return money-creation power to the government where it belongs.
Five and a half months later, he was assassinated. In his second book on the president, "The Kennedy Assassination Cover-up," Gibson contends that a private network of wealthy individuals did it - not the FBI, CIA, Mafia, LBJ, the oil cartel, or anti-Castro extremists. Whatever the truth, bankers regained their power in short order when Johnson rescinded Kennedy's EO and fully restored their money-creation authority. They've had it ever since.
Bretton Woods - The Rise and Fall of the International Gold Standard
In mid-1944, the Bretton Woods monetary management system was established, about a year before WW II ended but when its outcome was clear. It created a postwar international monetary system of convertible currencies, fixed exchange rates, free trade, the US dollar as the world's reserve currency linked to gold, and those of other nations fixed to the dollar. It also designed an institutional framework for market-based capital accumulation to ensure that newly liberated colonies would pursue capitalist economic development beneficial to the victorious powers, most of all America.
In August 1971, the system unraveled when Nixon closed the gold window - ending the last link between gold, the dollar, and sound money. Thereafter, currencies would float and compete with each other in a casino-like environment, easily manipulated by powerful insiders, hedge funds, giant international banks, or governments at times in their own self-interest.
According to F. William Engdahl: "Market forces now could determine the dollar (entirely without gold). And they did it with a vengeance."
Bretton Woods was to ensure stability along with the IMF and World Bank's original missions - to establish exchange rates for the former and provide credit to war-torn Third World countries for the latter. Both bodies are, in fact, hugely exploitative while David Rockefeller ostensibly convened Bretton Woods to ensure gold-backed currencies would "justify a massive expansion of US dollar debt around the world."
The scheme worked until Vietnam war debt unraveled it. It might have continued (for a while at least) by raising the gold price. Instead it was kept at $35 an ounce forcing Nixon to close the gold window permanently, then take "the brakes off the printing presses" to generate as many dollars as there were willing takers. After that, Wall Street financiers "proceeded to build a worldwide financial empire based on a 'fractional reserve' banking system (using) bank-created paper dollars in place of the time-honored gold. Dollars became the reserve currency for a global net of debt to an international banking cartel."
Skeptics said they planned it that way to pull off "the biggest act of bad faith in history." True or not, gold failed as a global reserve currency because there isn't enough of it to go around. Inevitably shortages result forcing something to change.
Flawed as it is, however, "floating" exchange rates are much worse, especially for developing nations at the mercy of giants, like America, able to devalue currencies by attacking them through short selling. Manipulative power is so great, it can extract painful concessions that are hugely profitable to bankers.
Earlier in the 1930s, floating exchange rates proved disastrous, yet most countries agreed to them post-1971. Ones that resist are very vulnerable and can be coerced as a condition of debt relief, much like what happened after oil quadrupled in price in 1974. Suspicions about it at the time were justified.
It was a Kissinger - Saudi royal family scheme to revive dollar dominance by recycling petrodollars into US investments and weapons in return for guaranteeing the kingdom's safety - mainly from America had they turned us down. In a word, it was protection money like the underworld extracts on a smaller scale with oil now backing dollars instead of gold. Henceforth, countries need dollars to buy it and require exports for enough of them.
As for oil producers, Wall Street and London bankers profited from windfall petrodollar deposits - recyclable as developing nation loans to buy oil but at the same time to be entrapped in permanent debt bondage. Pre-1973, Third World debt "was manageable and contained....financed mainly through public agencies (for projects) promising solid economic success." That changed when commercial banks took over. Their business isn't development. It's "loan brokering (or) loan sharking," preferably with dictator/strongmen able to cut deals on their own.
Later the IMF got involved. At the behest of giant bankers, as "debt policemen" instituting rigorous structural adjustments, including slashed wages and social benefits as well as state asset sales on favorable terms to private investors.
At the same time, America got deeply indebted. It's now the world's largest by far and needs hundreds of billions annually to keep the dollar recycling game going - in the last 12 months alone, far more than that after the national debt doubled. Today, the nation is "hopelessly mired in debt to support the banking system of a private international cartel." Ordinary people pay the price.
Germany Finances a War without Money
The 1919 Versailles Treaty imposed onerous post-WW I terms on Germany. In May 1921, it got a six-day ultimatum to accept them or have the industrial Ruhr Valley militarily occupied. Even worse, it lost its colonies, all their resources, and the population had to pay the cost of war, amounting to three times the value of all property in the country. At the same time, German mark speculation caused it to plummet causing hyperinflation that by 1923 was catastrophic.
In January, the mark dropped to 18,000 to the dollar. By July, it was 353,000, by August 4,620,000, and by November an astonishing 4,200,000,000,000 - effectively worthless from the greatest ever hyperinflation, ravaging the nation's savings and making later calamitous events inevitable.
Loss of German assets compounded the problem. Britain took its colonies along with Alsace-Lorraine and Silesia with its rich mineral and agricultural resources. Lost was 75% of the country's iron ore, 68% of zinc ore, 26% of coal as well as Alsatian textile industries and potash mines. In addition, Germany's entire merchant fleets were taken, a portion of its transport and fishing fleet plus locomotives, railroad cars and trucks - all justified as legitimate war debts that were fixed at an impossible to pay 132 billion gold marks at 6% interest.
The 1923 Dawes Plan (named for US banker Charles Dawes) imposed fiscal control to continue the looting and assure reparations were paid. A huge debt pyramid resulted that collapsed after the 1929 crash along with radical political elements gaining prominence.
How to cope was the key question. Like the earlier American Greenbackers, Germany issued its own money after Hitler came to power. He had two choices, and like Lincoln, did it right. He freed the country from debt bondage and at the same time implemented vast infrastructure development - what Roosevelt as well did, but in his case by indebtedness to bankers.
Hitler issued $1 billion interest-free, "non-inflationary bills of exchange, called Labor Treasury Certificates." He put millions back to work, paid them with the Certificates that were used for goods and services to create more jobs and revive prosperity. Within two years, Germany was "back on its feet....with a solid, stable currency, no debt, and no inflation, at a time" America and Western economies were still struggling.
Hitler, however, diverged from the Greenbackers by equating bankers with Jews and launching a reign of terror against them. Greenbackers knew the real enemy - private bankers imposing debt bondage with onerous terms.
Beyond that and his imperial aims, Hitler reinvigorated the Third Reich in a few years, became hugely popular, and achieved it even before undertaking large-scale military spending. It impressed Pastor Sheldon Emry to write:
"Germany issued debt-free and interest-free money from 1935 and on, accounting for its startling rise from the depression to a world power in 5 years. Germany financed its entire government and war operation from 1935 to 1945 without gold and without debt, and it took the whole Capitalist and Communist world" to bring him down and restore the power of bankers.
Had Germany created debt and interest-free money post-Versailles, it could have escaped its disastrous inflation, later ravages, and rise of a tyrant like Hitler. In the 1920s, the privately-owned Reichsbank, not the government, caused havoc by flooding the economy with money compounded by foreign investor speculators shorting the mark and betting on its decline - because the Reichsbank printed massive currency amounts to be loaned "at a profitable interest to the bank. When (it couldn't keep up with demand), other private banks were allowed to create marks out of nothing and lend them at interest as well."
According to Hitler's Reichsbank president, Hjalmar Schacht, the government regulated the Bank, ended speculation by eliminating "easy access to loans of bank-created money," and solved the previous decade's hyperinflation problem as a result.
Reexamining the Inflation Humbug
Old theories die hard. It's not money creation that causes inflation. It's because merchants have to raise prices to cover costs, the result of "a radical (currency) devaluation" stemming usually from it being manipulated by its floating exchange rate.
Case in point - post-Soviet Russia's ruble collapse. It had nothing to do with rampant money creation. As F. William Engdahl explained in his Century of War:
"In 1992, the IMF demanded a free float of the Russian ruble as part of its 'market-oriented' reform. The ruble float led within a year to (a 9900%) increase in consumer prices, and a collapse in real wages of 84 percent. For the first time since 1917, at least during peacetime, the majority of Russians were plunged into existential poverty."
American-imposed "shock therapy" was the economic equivalent of military conquest, and most Russians have paid dearly to this day. With the IMF in charge, the nation and its former republics were weakened and made dependent "on Western capital and dollar inflows for their survival." A tiny elite got "fabulously rich" while most Russians experienced deep poverty and despair.
In 1993 - 1994, it was even worse for Yugoslavia and Ukraine, by some estimates an even greater hyperinflation than in Weimar Germany. Again the textbook explanation was rubbish.
Yugoslavia collapsed because the IMF "prevented the government from obtaining the credit it needed from its own central bank." Unable to create money and issue credit, social programs couldn't be financed or the provinces kept in place as one country.
Yugoslavia's problem was its success under a mixed free-market socialist model that threatened Western capitalism once the Soviet Union disbanded. It was feared that other former republics would emulate it, free from IMF shock therapy. As a result, the country had to be dismembered and its model destroyed, especially because of its strategic location - its "critical path" to potential Central Asian oil and gas.
In the 1980s, its imports exceeded exports, and it borrowed huge foreign sums for unprofitable factories. With too few dollars for repayment, IMF debt relief was requested under its usual terms. The result was 20% unemployment after 1100 companies went bankrupt. Worse still, inflation rose dramatically to over 150% in 1991. With still too little money to retain the provinces, "economic chaos followed causing each (one) to fight for its own survival" lasting a decade and causing tens of thousands of deaths and destruction.
Washington-imposed policies made it worse - a total embargo causing hyperinflation and 70% unemployment while blaming it on Milosevic. Ukraine met the same fate the result of IMF diktats. The currency collapsed, inflation soared, and state industries unable to get credit went bankrupt - as planned.
It's an ugly scheme to let Western predators buy assets on the cheap. Once Europe's breadbasket, Ukraine was reduced to begging the US for food aid, which then dumped its excess grain on the country, further exacerbating its self-sufficiency. Predatory capitalism is ruthless. This is how it works with bankers in the lead role.
Argentina is another example - "swallowed (by) the same debt monster" as the others. In the late 1980s, inflation rose 5000 percent, but money creation had nothing to do with it.
Post-WW II, the country was troubled by inflation, but it wasn't critical until after Juan Peron's 1974 death. Over the next eight years, it increased seven-fold to 206 percent - not by printing pesos but by radically devaluing the currency combined with a 175 percent rise in oil prices. One source said it was done intentionally to benefit exporters, speculators, and capitalists to prove free-market policies work best.
Nonetheless, high inflation and speculation became "hallmark(s) of Argentine financial life," the result of disastrous government policies. Even worse was that Argentina was "targeted by international lenders for massive petrodollar loans." When interest rates rocketed in the 1980s, repayment became impossible, and obtaining concessions came at the expense of IMF demands.
In the 1990s, they were implemented. The peso was pegged to the dollar. Currency devaluations ceased. The country lost its international competitiveness. The "money supply was fixed, limited and inflexible," and as a result national bankruptcies occurred in 1995 and again in 2001, but government reaction wasn't as expected. Argentina defied its creditors, defaulted on its debt, and began its road to recovery - with no foreign help or intervention. Post-2001, the economy grew by 8% for two successive years. Exports increased. The currency stabilized. Investors returned. The IMF was paid off, and unemployment eased.
Numerous other examples are similar. Professor Henry CK Liu calls foreign capital a "financial narcotic that would make the (19th century) Opium War(s) look like a minor scrimmage." In the late 1990s, Asian Tiger economies got a taste.
America's Economic War on Asia
Today's Japan evolved out of its feudal past once a modern central government was formed. Its 20th century economic model "has been called 'a state-guided market system.' The (government) determines the priorities and commissions the work, then hires private enterprise to carry it out."
America's military-industrial complex resembles it, but differs in one major respect. Post-WW II, Japan developed its economy without war. America practically worships it to the detriment of everyone at home and abroad.
At the end of the 1980s, "Japan was regarded as the leading economic and banking power in the world," and thus a challenge to US supremacy as the country that could say no. Its model was so successful that Asian "Tiger" economies copied it - in South Korea, Malaysia, Taiwan, Thailand, and elsewhere. Washington determined to undercut them as early as the 1985 James Baker-engineered Plaza accord and Baker-Miyazawa agreement.
He got Toyko to exercise monetary and fiscal measures to expand domestic demand and reduce Japan's trade surplus. At the same time, the Bank of Japan cut interest rates to 2.5% in 1987 and held that level until May, 1989. The idea was for lower rates to stimulate US goods purchases, but instead, cheap money went into Japanese stocks and real estate fueling two colossal bubbles.
The yen was also affected. Within months, it shot up 40% against the dollar, and overnight Japan became the world's largest banking center. At its twin bubble peaks, Tokyo real estate (in dollars) exceeded all of America's and its stock market represented 42% of world valuations - but not for long.
In 1990, Japan proposed financing former Soviet republics on its model and drew strong US opposition for two reasons. It might exclude US companies, and it would rely on the successful model that fueled Japanese and Asian Tiger growth. It had to be stopped and was.
Pressure was applied with threats of drastic US troop cuts that might endanger Japan's security. The scheme was drop your economic plans or defend yourself. At the same time, the country's twin bubbles imploded, and within months its Nikkei index lost $5 trillion in value, the result of predatory Wall Street short selling intervention. It left Japan severely hurt and no longer a challenge to America.
Confronting Asia's Tiger economies came next. In a Century of War, F. William Engdahl explained:
These economies "were a major embarrassment to the IMF and free-market model. Their very success in blending private enterprise with a strong state economic role" threatened IMF exploitation. "So long as the Tigers appeared to succeed with a model based on a strong state role, the former communist states and others could argue against taking the extreme IMF course. In east Asia during the 1980s, economic growth rates of 7 - 8 per cent per year, rising social security, universal education and a high worker productivity (free from debt) were all backed by state guidance and planning under market-based rules."
In 1993, Washington demanded changes - deregulate, open financial markets, and allow free foreign capital flows. Easing followed along with trouble. From 1994 - 1997, hot money flooded in and created speculative real estate, stock, and other asset bubbles ripe for imploding.
Hedge fund predators like George Soros/CIA took full advantage, attacking the weakest regional economy and its currency - Thailand and its baht. The aim: forced devaluation, and it worked. Thailand floated its currency and needed first-time ever IMF help.
Next came the Philippines, Indonesia, and South Korea with much the same result and fallout. Prosperous Asian Tigers were forced into IMF debt bondage as their populations sank into economic chaos and mass poverty, the result of a liquidity crisis severe enough to plunge the region into depression. Within months, over $100 billion shifted to private hands, and within a year $600 billion in stock market valuations were lost.
East Asia was effectively looted. Real earnings plummeted. Unemployment soared with the International Labor Organization estimating around 24 million lost jobs along with the region's remarkable miracle - its prosperous middle class. People literally were thrown overboard - small farmers and business owners, unions, and millions of ordinary people made human wreckage, the result of Wall Street-designed predation, the same scheme wrecking havoc today on a global scale.
China Awakens and Prospers
Under Deng Xiaoping, China changed from a centrally-planned economy to its own market-based model under government-owned banks able to issue credit for domestic development. Until the global economic crisis emerged, it grew impressively at double-digit rates.
Key is its banking system, its government-issued currency, and a system of state-owned banks. Henry CK Liu distinguishes between "national" and "central" banks - the former serves the national and public interest; the latter, private international finance at the expense of the nation and people.
In 1995, China's Central Bank Law gave the People's Bank of China (PBoC) central bank status, but more in name than form in that it still follows government policies by directing money for internal development, not bank profits. In addition, China is debt free and thus unencumbered by IMF mandates and predatory banking cartel interests. It also protected its currency by refusing to let it float (beyond a minor adjustment) and be vulnerable to speculative predators.
The proof is in the results. China's independent monetary policy works, much like colonial America, government under Lincoln, and Nazi Germany under Hitler. They printed their own money, debt free, and prospered - impossible under today's American model of indebtedness to predatory bankers.
Even worse are New World Order and WTO rules for a global government run by powerful international bankers and corporations - "oppressing the public through military means and restricting individual freedoms." Financial terrorism as well by shifting wealth hugely to the top at the expense of beneficial social change to be abandoned.