The Nexus of Central Banking

Headquarters of The Bank for International Settlements, Switzerland. Photograph: Wikicommons

Basle, Switzerland, is home to one of the most influential financial institutions on the planet, yet its existence is largely unknown to the general public. The Bank for International Settlements (BIS) is the oldest operating financial organisation on the globe, functioning as the nexus point for international central banking, encompassing 60 highly influential countries of the world.

Founded in May 1930, the BIS plays a pivotal role in shaping the world’s economic environment, with its roots tracing back to the formation of the Bank of England in 1694, and the Bank of France in 1803.

The mission statement of the BIS describes its role in world banking:

“The mission of the BIS is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.”

As a private bank, the BIS is viewed by many as the organ the corporate financial elite use to control and influence fiscal policy around the globe. Mayer Rothschild famously remarked in 1791, commenting on the degree of control private bankers can have over a country’s affairs if given the power to create and regulate their monetary policy:

“Give me control of a nation’s money supply and I care not who makes the laws.”

Secretive conferences are held bi-monthly in Switzerland, where the major bank Governors of the world meet  to discuss and plan the future economic policy of its members. Details of the meeting are not disclosed to the press.

Operations within the bank are centred in 3 offices, spread across the planet. The main office is located in Basle, Switzerland, with a second base in Hong Kong managing the region of Asia and the Pacific, and a final branch is situated in Mexico City (the Americas).

Controlling the activities of the bank is the Board of Directors, which is chaired by Christian Noyer, the Governor of the Central Bank of France. The heart of the Board consistently includes the Central Bank Governors of 6 countries; Belgium, France, Germany, Italy, the United Kingdom and the United States, with the possibility of an additional 3 Governors from other member states banks serving on the Board. A variety of International Bankers, influential bureaucrats and economists make up the rest of the board.

Mark Carney (Governor of the Bank of England), Janet Yellen (Chairman of the Board of Governors of the Federal Reserve System, CFR member), and Mario Draghi (President of the European Central Bank) are some of the most distinguished members of the present Board.

The membership of the BIS has grown rapidly since its inception in 1930. When first formed, 8 countries made up the membership of the bank. Today: the membership is more than 7 times greater than in 1930, encompassing 60 nations of the world – with Iran and Syria being noticeable exceptions from the list.

An individual who was privy to the activities of the BIS during the middle of the 20^th century, was Professor Carroll Quigley, a Professor of International Relations at Georgetown University. He was a mentor to Bill Clinton, and a person who was exposed to the elites agenda through his involvement with the Round Table Groups – most notably the British based Royal Institute for International Affairs, and the influential American branch, the Council on Foreign Relations.

In his 1966 work Tragedy and Hope, Quigley reveals his role as the historian for this private international cabal:

“In fact, this network, which we may identify as the Round Table Groups, has no aversion to cooperating with the Communists, or any other group, and frequently does so. I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960’s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments.”

He proceeds, outlining the plan the financial elite had for the BIS:

“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.”

Quigley continues,

“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.”  

Since its formation, the BIS has operated as a private organisation, completely independent of any government oversight. Gates W. McGarrah was the first chairman of the bank, a prominent international banker of his time, and the grandfather of the former CIA Director Richard McGarrah Helms. In 1931, he authored the First Six Months of the BIS, where he reveals the nature of the bank’s decision making practices from its inception:

“Governments have no connection with it or with its administration. Created by central bankers, its Board of Directors, made up of the governors of central banks, private bankers, and business industrialists, is the sole authority which fixes its policy.”

Controversy has surrounded the bank for many decades, due to its role in financing Nazi Germany in the run up to the Second World War. In 1939, the BIS complied with a transfer request – from the Nazi seized Czechoslovakian National Bank – of 23.1 metric tons of gold (£5.6 million worth) from a Czechoslovakian BIS account into an account held by the Reichsbank at the BIS. This sparked fury in Britain, as months later, courageous soldiers were fighting on the battlefield against an enemy which had previously received financial assistance through the BIS – an organisation that Montagu Norman (the Governor of The Bank of England at the time) was deeply involved with.

The BIS has functioned in the position of an international money lending agency in the past, providing support to Germany and Austria in the early 1930’s, and to France and Britain in the 1960’s. In the latter half of the 20^th century, the bank has also “provided finance in the context of IMF-led stabilization programmes (e.g. for Mexico in 1982 and Brazil in 1998)”, working in partnership with the IMF to implement reforms in certain nations: many of the Board of Directors at the BIS also hold high level positions at the IMF (Klaas Knot, Ignazio Visco)

At the beginning of 2013, the BIS started to implement the first phase of their latest Basle accord – Basle III – releasing a new set of banking regulations which will be fully implemented by 2019. As Michael Snyder reported in March of 2013, this latest Basle accord could have dramatic effects on the fragile global economy.

Additional Sources:

Carroll Quigley, Tragedy and Hope, 1966 – P324, P950.

Published By: The Analyst Report, 11 February, 2014

 

Iceland: From financial calamity to economic growth

Protesters outside the Icelandic parliament on 15th November 2008. Photograph: Wikipedia.

On October 9th 2008, Iceland found itself in the most severe economic crisis in Europe for 60 years, when their 3 largest banks – Kaupthing, Glitnir and Landsbanki – failed because of their excessive debts and unsustainable growth. This sent the Krona down 50% compared to other major currencies, and unemployment increased to rates of over 9% by the middle of 2010.

At the time of the collapse, the 3 biggest bank’s assets were at an astonishing ratio of 9 times the Gross Domestic Product of Iceland, in one of the greatest bubbles to grip any nation in the 2008 global financial crisis. A special investigation committee reporting in 2010 concluded that the 3 banks failed because of “their rapid expansion and their subsequent size”.

This economic calamity forced Iceland to look to the IMF for financial assistance, agreeing a $2.1 billion loan with the organisation on the 24^th October 2008. It also led to the greatest migration of people out of Iceland since 1887, with close to 11, 000 people migrating (a net negative migration of -4, 835) to other European countries, mainly to Poland, Norway and Denmark.

However, unlike most Western nations who suffered a financial collapse in 2008, Iceland took the unprecedented step of holding complicit individuals accountable for their role in the crisis. They proceeded with the prosecuting major figures in the banking sector who were involved with fraud and mismanagement in the run up to October 2008, and even took their former Prime Minister to court.

Two such banking figures who were prosecuted in the aftermath of the crisis were Laurus Welding, the ex CEO of Glitnir, and Gudmunder Hjaltason, a former director at the bank, who were both sentenced to 9 months in jail for fraud.

At Kaupthing bank, 4 high level figures were all given jail time for market abuse, with former chief executive Hreidar Mar Sigurdsson being dealt the longest sentence of 5 and a half years in jail.

Former Prime Minister Geir Haarde, who is the only leader in the world to be put on trial in relation to the 2008 global financial crisis, was found guilty of failing to hold emergency cabinet meetings before the implosion, but he was cleared of 3 more serious charges, which would have seen him spend up to 2 years behind bars.

Iceland provides an example to other nations that it is possible and necessary to prosecute bankers and politicians who were involved in the 2008 global crisis, which paved the way for European wide austerity and worldwide economic recession/depression, when politicians signed the public on to infinite amounts of private debt. Future generations now face the outlook of perpetual debt in the coming years, unless a radical transformation in the situation occurs, and some shred of justice prevails.

Glass-Steagall:

The 2010 special investigation committee report also revealed an incredibly pertinent issue in the global financial crisis: the need for most countries to adopt a version of the USA’s 1933 Glass-Steagall act – a separation of the commercial and investment activities of banks – which was implemented in America after the great depression, but was later repealed in 1999.

The report states;

“The SIC investigation into the Icelandic banks’ operations indicates that, as a consequence wider authorisation for the operations of financial institutions in the last few years, their operational risk increased significantly……. They were authorised to engage in investment banking in conjunction with the traditional activities of a commercial bank, although this scope for increased risk-taking did not go hand in hand with satisfactory restraints and increased equity requirements.”

Implementing Glass-Steagall would reduce vast amounts of risk on the global financial system, as irresponsible speculative banking practices would be split from retail banking, allowing investment houses to go bankrupt without jeopardising the whole financial system.

On the road to recovery:

Iceland is now performing well considering the severity of their economic problems, though it is not uncommon for people to work 60-70 hour weeks to maintain the high standards of living they are accustomed to.

The people of this small Nordic island of only 315, 000 people are powering the economy back to a prosperous system, with their diligence and ingenuity.

Unemployment has decreased to 4.8% in December of 2013, falling from heights of 9.2% in September of 2010. Iceland’s economy grew by 6.6% in the 3^rd quarter of 2013, with positive figures forecast for the future.

Although inflation is relatively high at 4.2%, Iceland is now beginning to grow at a promising rate, with a large part of the world looking on with surprise and envy.

Sources for this article:

https://www.imf.org/external/pubs/ft/survey/so/2008/car102408a.htm

http://www.bloomberg.com/news/2012-12-28/ex-glitnir-executives-get-9-month-jail-sentences-for-fraud-1-.html

http://www.bbc.co.uk/news/business-25349240

http://www.theguardian.com/world/2012/apr/23/iceland-geir-haarde-found-guilty

http://www.nordregio.se/en/Metameny/About-Nordregio/Journal-of-Nordregio/Journal-of-Nordregio-2010/Journal-of-Nordregio-no-1-2010/Iceland-lost-almost-5000-people-in-2009/

http://www.rna.is/media/skjol/RNAvefKafli2Enska.pdf

http://www.tradingeconomics.com/iceland/indicators

The Dichotomy in Ukraine

Is the West meddling in Ukrainian internal politics once again?

Kiev has been at the centre of mass protests over the past few months, with the dichotomy of Ukrainian society becoming more evident by the day. The eastern part of the country is predominantly made up of a pro-Russian populace which supports continued cooperation with Russia, and the Western part of the nation mainly seeks integration with the European Union.

With 77.8% of the country being of Ukrainian ethnicity and 17.3% being of Russian ethnicity (2001 census), there is a growing conflict of opinion over which direction the nation will take in the future. Ukraine is the second largest land mass in Europe and a vital geostrategic area for Russian energy exports to the West, with the country providing the artery for gas pipelines to Germany and France, amongst others.

The allure of the European Union is no doubt an attractive proposition to Western minded Ukrainian citizens – with the promise of greater freedoms in the press, and the end of established monopolies leading to more competition within the market place, compelling arguments.

However, the reality of EU admission may not live up to the hype surrounding the deal. With the future of the Euro dubious, and the situation in Greece and Portugal deteriorating by the day, this monolithic structure is not the most stable of political alliances to enter.

But the question that needs to be asked is whether these protests are genuine, organic demonstrations, or a covert Western agenda of manipulating Ukrainian politics to bring the nation under their influence.

The Russian Foreign Minister Sergey Lavrov commented on Saturday, in relation to the recent pro-European integration protests in Independence Square, stating “There is no doubt that provocateurs are behind it”. This is a revealing remark considering the historical evidence of Western involvement in Kiev’s internal politics.

November of 2004 marked the start of the Orange Revolution, a series of demonstrations relating to election rigging and corruption during the Ukrainian National elections. It resulted in a re-election being called and the installing of a pro-Western President, Viktor Yushchenko.

According to Geopolitical researcher F. William Engdahl, the revolution was in fact a soft coup orchestrated by the West in a bid to install a Government friendly to the West, and to break the long standing alliance between Ukraine and Russia, in a strategy of isolating the latter. Using the organisational ability of NGO’s such as the National Endowment for Democracy and the George Soros Open Society, and working through the medium of social networking and text messaging, they managed to topple the Government under the auspices of spontaneous and peaceful demonstrations.

Given the poor economic conditions in Ukraine and the growing sense of anger and frustration towards the Government, it is a perfect environment for provocateurs to foster this animosity and direct it against a pro-Russian President, for the EU’s own Geopolitical goals.

The next decade will be filled with instability and debate within Kiev, but it is up to the Ukrainian people to shape their country’s future.

Sources for this Article:
https://www.cia.gov/library/publications/the-world-factbook/geos/up.html
http://www.telegraph.co.uk/finance/financialcrisis/9793154/Greek-youth-unemployment-edges-toward-60pc.html
http://rt.com/news/lavrov-ukraine-criticism-provocations-243/
F. William Engdahl, Full Spectrum Dominance – Totalitarian Democracy in the New World Order, 2009, Chapter 2