Eye Crumble

World Social Inequity More Pronounced Than Ever

The Super-rich are Hiding Trillions of Dollars in Offshore Tax Havens…

- by Ernst Wolff – 2012-07-27

The super-rich are currently hiding away wealth estimated between $21 trillion and $32 trillion in tax havens such as Switzerland and the Cayman Islands. This is the conclusion published last weekend by the Tax Justice Network, an NGO based in London. The author of the study is James Henry, a former chief economist at the McKinsey consulting firm and an expert on tax havens.

Henry bases his projections on data from the Bank for International Settlements (BIS), the International Monetary Fund (IMF), the United Nations and various national central banks. His study was limited to financial assets, and excluded tangible assets such as real estate, gold, jewellery or other possessions.

The figures reveal that “high net worth individuals” (defined as those with assets of over $50 million) have stashed away much larger sums in tax havens than previously thought. The report also shows that the concentration of global wealth in ever fewer hands has rapidly accelerated.

In 2005, the estimated offshore assets of the super-rich amounted to $11.5 trillion. Since then this total has doubled or tripled. Today the top 10 percent of the world’s population control 84 percent of assets, while the bottom 50 percent have access to just 1 percent. According to the study, the top of the pile—92,000 people who constitute an infinitesimal fraction of the world’s population—have hidden financial assets amounting to more than 9 trillion dollars, an average of nearly $100 million apiece.

The rapid growth of these assets during the past seven years shows that the global crisis of capitalism has been by no means disadvantageous for the financial elite. On the contrary, while more and more people in advanced countries are suffering due to government austerity programs and millions in developing countries are condemned to dire poverty, the super-rich have used the financial and economic turmoil of recent years to massively increase their wealth and hide their money beyond the reach of tax authorities.

They are assisted by a tax code that permits them to move huge amounts of money to offshore tax havens utilising legal loopholes and professional help.

While those on low incomes are strictly monitored by the state and are badgered for their tax payments, the super-rich are able to rely on a globally operating group of highly paid asset and investment advisers employed by the major international banks, which charge considerable sums in return for their tax fiddles. The four largest UK banks alone—HSBC, Barclays, Lloyds and Royal Bank of Scotland—have over 1,200 branches in tax havens.

According to Henry, the world’s 10 largest private financial institutions, including Deutsche Bank, moved more than $6.25 trillion offshore in 2010. Prior to the crash of 2007 the equivalent sum amounted to $2.34 trillion.

Those hit hardest by tax avoidance and tax evasion are developing countries. In the past 40 years the wealthiest citizens from 139 developing countries hid away non-declared assets estimated at $7.3 trillion to $9.3 trillion in tax havens. Their offshore assets are often greater than the national debt of their respective countries and play a major role in the lack of money to finance urgently needed public health and education programs in their home countries.

The top three in the list of countries with the most super-rich individuals are the US, China and Germany. A study by the German Institute for Economic Research (DIW) recently revised upward its estimate of the fortune of the country’s top 1 percent, from 23 percent to 34 percent of national wealth, conceding that the incomes of ultra-wealthy households had not been included in its previous investigations.

Based on the findings of the enormous scale of hidden assets, Henry argues in his study that the previously applied standards for inequality, which are generally related to household income, have “dramatically underestimated” the real divide between rich and poor.

The author of the study agrees with the British economist and journalist Stewart Lansley, who writes in his recently published book, The Cost of Inequality: “There is absolutely no doubt at all that the statistics on income and wealth at the top understate the problem.”

Global social inequality today is not only much more pronounced than all the official statistics show. It has, in global terms, reached levels unprecedented in human history.

Global Research Articles by Ernst Wolff
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The Hoard’s Prayer

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New Bill Passed in Iran: Close the Straits of Hormus

http://tv.globalresearch.ca/2012/07/strait-answer-iran-prepares-close-hormuz

Strait Answer: Iran Prepares to Close Hormuz

by grtv

Iranian lawmakers have drafted a bill that would close the Strait of Hormuz for oil tankers heading to countries supporting current economic sanctions against the Islamic Republic.

“There is a bill prepared in the National Security and Foreign Policy committee of Parliament that stresses the blocking of oil tanker traffic carrying oil to countries that have sanctioned Iran,” Iranian MP Ibrahim Agha-Mohammadi told reporters.

“This bill has been developed as an answer to the European Union’s oil sanctions against the Islamic Republic of Iran.”

Agha-Mohammadi said that 100 of Tehran’s 290 members of parliament had signed the bill as of Sunday.

Iran’s threats to block the waterway through which about 17 million barrels a day sailed in 2011 have grown in the past year as US and European sanctions aimed at starving Tehran of funds for its nuclear programme have tightened.

The Strait of Hormuz is a vital shipping route through which most of the crude exported from Saudi Arabia, the United Arab Emirates, Kuwait and Iraq and nearly all the gas exported from Qatar sails.

An EU ban on Iranian oil imports came into effect on Sunday.

Investigative journalist and historian Gareth Porter believes the bill’s introduction is a step in a series of actions that Iran can take to hamper oil shipments through the Strait of Hormuz, causing oil prices to skyrocket.

“What we can look forward to in the coming weeks and months is that the Iranians will make a series of moves, beginning with this bill in the Majlis, threating to pass the bill; if that doesn’t have an effect, certainly going ahead with the passage,” Porter told RT. “Then first in a series of limited moves towards threatening to actually put mines in the strait to prevent the shipping of oil from going through. And then, I think, Iranians have the option of a very limited use of mines, with very few mines being dropped in this strait to try to get the price of oil to shoot up, for one thing, and to get the United States to react.”

World’s ‘most important oil transit chokepoint’

The US Energy Information Administration, a statistical and analytical agency within the Department of Energy, said the Strait of Hormuz was the world’s “most important oil transit chokepoint,” with a daily flow of 17 million barrels per day in 2011. This constitutes roughly 35 per cent of all seaborne traded oil, or 20 per cent of all oil traded worldwide, according to the agency.

The agency also estimates that an average 14 oil tankers passed through the strait every day last year, with a corresponding number of empty tankers entering the Persian Gulf to pick up new shipments. Over 85 per cent of the oil tankers passing through the strait were heading to destinations in East Asia, the majority of these going to China, India, South Korea and Japan.

Concerns over the Strait of Hormuz’s shutdown have prompted a number of Arab nations to seek alternative for its oil exports.

The United Arab Emirates recently unveiled the Habshan-Fujairah pipeline with a terminal in Fujairah, which is situated on the Gulf of Oman coastline past the Strait of Hormuz. The pipeline has a capacity of about 1.5 million barrels per day, still short of the UAE’s total oil production of 2.5 million barrels a day.

Iraqi officials recently announced plans to construct a pipeline to Turkey’s Mediterranean port of Ceyhan, allowing it to bypass the gulf altogether.

The Saudi Arabian East-West pipeline linking the Persian Gulf and the Red Sea is also being mulled as part of a possible bypass. However, that pipeline has a capacity of up to 5 million barrels a day, less than half the daily oil flow through the Strait of Hormuz. Saudi Arabia also recently reactivated the Iraqi Pipeline in Saudi Arabia, which also transports oil to the Red Sea, but has a comparatively meager capacity of 1.65 million barrels a day.

Transporting oil to the Mediterranean and Red Seas still raises the question of how it would reach its Asian clients.

The shortest route appears to be through the congested Suez Canal, via the Red Sea and into the Gulf of Aden, an area prone to attacks by Somali pirates.

However, the question of how to bypass the strait appears to concern not only US allies, but Iran itself. The country recently announced plans to build a new terminal in Bandar Jask, 100 miles east of the strait. A pipeline is also set to connect Bandar Jask with the Caspian port of Neka.

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Liberty and War


This picture taken in 1918, is an image of 18,000 men preparing for war in Camp Dodge Iowa.

The Collapsing US Economy and the “End of the World”

By Dr. Paul Craig Roberts
Global Research, July 9, 2012
paulcraigroberts.com
In a recent column, “Can The World Survive Washington’s Hubris,” I promised to examine whether the US economy will collapse before Washington in its pursuit of world hegemony brings us into military confrontation with Russia and China. This is likely to be an ongoing subject on this site, so this column will not be the final word.

Washington has been at war since October, 2001, when President George W. Bush concocted an excuse to order the US invasion of Afghanistan. This war took a back seat when Bush concocted another excuse to order the invasion of Iraq in 2003, a war that went on without significant success for 8 years and has left Iraq in chaos with dozens more killed and wounded every day, a new strong man in place of the illegally executed former strongman, and the likelihood of the ongoing violence becoming civil war.

Upon his election, President Obama foolishly sent more troops to Afghanistan and renewed the intensity of that war, now in its eleventh year, to no successful effect.

These two wars have been expensive. According to estimates by Joseph Stiglitz and Linda Bilmes, when all costs are counted the Iraq invasion cost US taxpayers $3 trillion dollars. Ditto for the Afghan war. In other words, the two gratuitous wars doubled the US public debt. This is the reason there is no money for Social Security, Medicare, Medicaid, food stamps, the environment, and the social safety net.

Americans got nothing out of the wars, but as the war debt will never be paid off, US citizens and their descendants will have to pay interest on $6,000 billion of war debt in perpetuity.

Not content with these wars, the Bush/Obama regime is conducting military operations in violation of international law in Pakistan, Yemen, and Africa, organized the overthrow by armed conflict of the government in Libya, is currently working to overthrow the Syrian government, and continues to marshall military forces against Iran.

Finding the Muslim adversaries Washington created insufficient for its energies and budget, Washington has encircled Russia with military bases and has begun the encirclement of China. Washington has announced that the bulk of its naval forces will be shifted to the Pacific over the next few years, and Washington is working to re-establish its naval base in the Philippines, construct a new one on a South Korean island, acquire a naval base in Viet Nam, and air and troop bases elsewhere in Asia.

In Thailand Washington is attempting to purchase with the usual bribes an air base used in the Vietnam war. There is opposition as the country does not wish to be drawn into Washington’s orchestrated conflict with China. Downplaying the real reason for the airbase, Washington, according to Thai newspapers, told the Thai government that the base was needed for “humanitarian missions.” This didn’t fly, so Washington had NASA ask for the air base in order to conduct “weather experiments.” Whether this ruse is sufficient cover remains to be seen.

US Marines have been sent to Australia and elsewhere in Asia.

To corral China and Russia (and Iran) is a massive undertaking for a country that is financially busted. With wars and bankster bailouts, Bush and Obama have doubled the US national debt while failing to address the disintegration of the US economy and rising hardships of US citizens.

The charts below are courtesy of www.shadowstats.com

The annual US budget deficit is adding to the accumulated debt at about $1.5 trillion per year with no prospect of declining. The financial system is broken and requires ongoing bailouts. The economy is busted and has been unable to create high-paying jobs, indeed any jobs. Despite years of population growth, payroll employment as of mid-2012 is the same as in 2005 and substantially below 2008. Yet, the government and financial presstitute media tell us that we have a recovery.

According to the US Bureau of Labor Statistics, employment in 2011 was only 1 million more than in 2002. As it takes about 150,000 new jobs each month to stay even with population growth, that leaves a decade long job deficit of 15 million jobs.

The US unemployment and inflation rates are far higher than reported. In previous columns I have explained, based on statistician John Williams’ work (shadowstats.com), the reasons that the government’s headline numbers are serious understatements. The headline (U3) unemployment rate of 8.2% counts no discouraged workers who have given up on finding a job. The government has a second unemployment rate (U6), seldom reported, which includes short-term discouraged workers. That rate is 15%. When the long-term discouraged workers are added in, the current US unemployment rate is 22%, a number closer to the unemployment rate of the Great Depression than to the unemployment rates of postwar recessions.

Changes in the way inflation is measured have destroyed the Consumer Price Index (CPI) as a measure of the cost of living. The new methodology is substitution based. If the price of an item in the index rises, a lower priced alternative takes its place. In addition, some price rises are labeled quality improvements whether they are or not and thus do not show up in the CPI. People still have to pay the higher price, but it is not counted as inflation.

Currently, the substitution-based rate of inflation is about 2%. However, when inflation is measured as the actual cost of living, the rate of inflation is 5%.

The Misery Index is the sum of the inflation and unemployment rates. The level of the current Misery Index depends on whether the new rigged measures are used, which understate the misery, or the former methodology that accurately measures it.

Prior to the November 1980 election, the Misery Index hit 22%, which was one reason for Reagan’s victory over President Carter. Today if we use previous methodology, the Misery Index stands at 27%. But if we use the new rigged methodology, the Misery Index is 10%.

The understatement of inflation serves to boost Gross Domestic Product (GDP). GDP is calculated in current dollars. To be able to determine whether GDP rose because of price rises or because of increases in real output, GDP is deflated by the CPI. The higher the inflation rate, the less the growth in real output and vice versa. When the substitution based methodology is used to measure inflation, the US economy experienced real growth in the 21st century except for the sharp dip during 2008-2010. However, if the cost-of-living based methodology is used, except for a short period during 2004, the US economy has experienced no real growth since 2000

In the chart above,the lower measure (blue) of real GDP is deflated with the inflation methodology that measured cost-of-living. The higher GDP measure (red) deflates GDP with the new substitution based methodology. The lack of employment and real GDP growth go together with the decline in real household median income. The growth in consumer debt substituted for the lack of

income growth and kept the economy going until consumers exhausted their ability to take on more debt. With the consumer dead in the water, the outlook for economic recovery is poor.

Politicians and the Federal Reserve are making the outlook even worse. At a time of high unemployment and debt-stressed households, politicians at local, state, and federal levels are cutting back on government provision of health care, pensions, food stamps, housing subsidies and every other element of the social safety net. These cutbacks, of course, further reduce aggregate demand and the ability of income-stressed Americans to survive.

The Federal Reserve has interest rates so low that retirees and others living on their savings can earn nothing on their money. The interest rates paid on bank CDs and government and corporate bonds are lower than the rate of inflation. To live on interest income, a person has to purchase Greek, Spanish, or Italian bonds and run the risk of capital loss. The Federal Reserve’s policy of negative interest rates forces retirees to spend down their capital in order to live. In other words, the Fed’s policy is destroying personal savings as people are forced to spend their capital in order to cover living expenses.

In June the Federal Reserve announced that it was going to continue its policy of driving nominal interest rates even lower, this time focusing on long-term Treasury bonds. The Fed said it would be purchasing $400 billion of the Treasury’s 30-year bonds.

Driving interest rates down means driving bond prices up. With 5-year Treasury bonds paying only seven-tenths of one percent and 10-year Treasuries paying only 1.6%, below even the official rate of inflation, Americans desperate for yield move into 30-year bonds currently paying 2.7%. However, the the high bond prices mean that the risk of capital loss is very high.

The Fed’s debt monetization, or a drop in the exchange value of the dollar as other countries move away from its use to settle their balance of payments, could set off inflation that would take interest rates out of the Fed’s control. As interest rates rise, bond prices fall.

In other words, bonds are now the bubble that real estate, stocks, and derivatives were. When this bubble pops, Americans will take another big hit to their remaining wealth.

It makes no sense to invest in long-term bonds at negative interest rates when the federal government is piling up debt that the Federal Reserve is monetizing and when other countries are moving away from the flood of dollars. The potential for a rising rate of inflation is high from debt monetization and from a drop in the dollar’s exchange value. Yet, bond fund portfolio managers have to follow the herd into longer term maturities or see their performance relative to their peers drop to the bottom of the rankings.

Some individual investors and foreign central banks, anticipating the dollar’s loss of value, are accumulating gold and silver bullion. Realizing the danger to the dollar and its policy from the rapid rise in the price of bullion during 2011, the Federal Reserve has arranged offsetting action. When the demand for physical bullion drives up the price, short sales of bullion in the paper market are used to drive the price back down.

Similarly, when investors begin to flee Treasuries, thus causing interest rates to rise, J.P. Morgan and other dependencies of the Federal Reserve sell interest-rate swaps, thus offsetting the effect on interest rates of the bond sales. (Keep in mind that interest rates rise when bond prices fall and vice versa.)

The point of all this information is to establish that except for the 1 percent, the incomes and wealth of Americans are being cut back across the board. From 2002 through 2011 the economy lost 3.5 million manufacturing jobs. These jobs were replaced with lower-paying waitress and bartender jobs (1,189,000), ambulatory health care service jobs (1,512,000) and social assistance jobs (578,000).

These replacement jobs in domestic services mean that on a net basis US consumer income was moved out of the country. Potential aggregate demand in the US dropped by the differences in pay in the job categories. Clearly and unambiguously, jobs offshoring lowered US disposable income and US GDP and, thereby, employment.

Despite the lack of an economic base, Washington’s hegemonic aspirations continue unabated. Other countries are amused at Washington’s unawareness. Russia, China, India, Brazil, and South Africa are forming an agreement to abandon the US dollar as the currency for international settlement between themselves.

On July 4 the China Daily reported: “Japanese politicians and prominent academics from China and Japan urged Tokyo on Tuesday to abandon its outdated foreign policy of leaning on the West and accept China as a key partner as important as the United States. The Tokyo Consensus, a joint statement issued at the end of the Beijing-Tokyo Forum, also called on both countries to expand trade and promote a free-trade agreement for China, Japan and South Korea.”

This means that Japan is in play.

The Chinese government, more intelligent than Washington, is responding to Washington’s military threats by enticing away Washington’s two key Asian allies. As the Chinese economy is now as large as the US and on far firmer footing, and as Japan now has more trade with China than with the US, the enticement is appealing. Moreover, China is next door, and Washington is distant and drowning in its hubris.

Washington, which flicked its middle finger to international law and to its own law and Constitution with its arrogance and gratuitous and illegal wars and with its assertion of the right to murder its own citizens and those of its allies, such as Pakistan, has made the United States a pariah state.

Washington still controls its bought-and-paid-for NATO puppets, but these puppet states are overwhelmed with derivative debt problems brought to them by Wall Street and by sovereign debt problems, some of which were covered up by Wall Street’s Goldman Sachs.

Europe is on the ropes and has no money with which to subsidize Washington’s wars of hegemony.

Washington is becoming an isolated and despised element of the world community. Washington has purchased Europe, Canada, Australia, the former Soviet state of Georgia (and almost Ukraine), and Colombia, and continues its effort to purchase the entire world, but sentiment is turning against the rising Gestapo state that has shown itself to be lawless, ruthless, and indifferent, even hostile, to human life and human rights.

A government, whose military was unable with the help of the UK to occupy Iraq after eight years and was forced to end the conflict by putting the “insurgents” on the US military payroll and to pay them to stop killing American troops, and a government whose military has been unable to subdue a few thousand lightly armed Taliban after 11 years, is over the top when it organizes war against Iran, Russia, and China.

The only prospect Washington has of prevailing in such an undertaking is first use of nuclear weapons, of catching its demonized opponents off guard by nuking them out of the blue. In other words, by the elimination of life on earth.

Is this Washington’s program revealed by the neoconservative warmonger, Bill Kristol, who had no shame to ask publicly: “What’s the good of nuclear weapons if you can’t use them?”

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How Goldman Sachs Captured Europe

The European Stabilization Mechanism, Or How Goldman Sachs Captured Europe
By Ellen Brown
Global Research, April 19, 2012
Web of Debt
The Goldman Sachs coup that failed in America has nearly succeeded in Europe—a permanent, irrevocable, unchallengeable bailout for the banks underwritten by the taxpayers.

In September 2008, Henry Paulson, former CEO of Goldman Sachs, managed to extort a $700 billion bank bailout from Congress.  But to pull it off, he had to fall on his knees and threaten the collapse of the entire global financial system and the imposition of martial law; and the bailout was a one-time affair.  Paulson’s plea for a permanent bailout fund—the Troubled Asset Relief Program or TARP—was opposed by Congress and ultimately rejected.

By December 2011, European Central Bank president Mario Draghi, former vice president of Goldman Sachs Europe, was able to approve a 500 billion Euro bailout for European banks without asking anyone’s permission.  And in January 2012, a permanent rescue funding program called the European Stability Mechanism (ESM) was passed in the dead of night with barely even a mention in the press.  The ESM imposes an open-ended debt on EU member governments, putting taxpayers  on the hook for whatever the ESM’s Eurocrat overseers demand.

The bankers’ coup has triumphed in Europe seemingly without a fight.  The ESM is cheered by Eurozone governments, their creditors, and “the market” alike, because it means investors will keep buying sovereign debt.  All is sacrificed to the demands of the creditors, because where else can the money be had to float the crippling debts of the Eurozone governments?

There is another alternative to debt slavery to the banks.  But first, a closer look at the nefarious underbelly of the ESM and Goldman’s silent takeover of the ECB . . . .

The Dark Side of the ESM

The ESM is a permanent rescue facility slated to replace the temporary European Financial Stability Facility and European Financial Stabilization Mechanism as soon as Member States representing 90% of the capital commitments have ratified it, something that is expected to happen in July 2012.  A December 2011 youtube video titled “The shocking truth of the pending EU collapse!”, originally posted in German, gives such a revealing look at the ESM that it is worth quoting here at length.  It states:

The EU is planning a new treaty called the European Stability Mechanism, or ESM:  a treaty of debt. . . . The authorized capital stock shall be 700 billion euros.  Question: why 700 billion?  [Probable answer: it simply mimicked the $700 billion the U.S. Congress bought into in 2008.] . . . .

[Article 9]: “. . . ESM Members hereby irrevocably and unconditionally undertake to pay on demand any capital call made on them . . . within seven days of receipt of such demand.”  . . . If the ESM needs money, we have seven days to pay. . . . But what does “irrevocably and unconditionally” mean?  What if we have a new parliament, one that does not want to transfer money to the ESM?  . . . .

[Article 10]: “The Board of Governors may decide to change the authorized capital and amend Article 8 . . . accordingly.”  Question:  . . . 700 billion is just the beginning?  The ESM can stock up the fund as much as it wants to, any time it wants to?  And we would then be required under Article 9 to irrevocably and unconditionally pay up?

[Article 27, lines 2-3]: “The ESM, its property, funding, and assets . . . shall enjoy immunity from every form of judicial process . . . .”  Question:  So the ESM program can sue us, but we can’t challenge it in court?

[Article 27, line 4]: “The property, funding and assets of the ESM shall . . . be immune from search, requisition, confiscation, expropriation, or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action.”  Question: . . . [T]his means that neither our governments, nor our legislatures, nor any of our democratic laws have any effect on the ESM organization?  That’s a pretty powerful treaty!

[Article 30]:  “Governors, alternate Governors, Directors, alternate Directors, the Managing Director and staff members shall be immune from legal process with respect to acts performed by them . . . and shall enjoy inviolability in respect of their official papers and documents.”   Question:  So anyone involved in the ESM is off the hook?  They can’t be held accountable for anything? . . . The treaty establishes a new intergovernmental organization to which we are required to transfer unlimited assets within seven days if it so requests, an organization that can sue us but is immune from all forms of prosecution and whose managers enjoy the same immunity.  There are no independent reviewers and no existing laws apply?  Governments cannot take action against it?  Europe’s national budgets in the hands of one single unelected intergovernmental organization?  Is that the future of Europe?  Is that the new EU – a Europe devoid of sovereign democracies?

The Goldman Squid Captures the ECB

Last November, without fanfare and barely noticed in the press, former Goldman exec Mario Draghi replaced Jean-Claude Trichet as head of the ECB.  Draghi wasted no time doing for the banks what the ECB has refused to do for its member governments—lavish money on them at very cheap rates.  French blogger Simon Thorpe reports:

On the 21st of December, the ECB “lent” 489 billion euros to European Banks at the extremely generous rate of just 1% over 3 years.  I say “lent”, but in reality, they just ran the printing presses. The ECB doesn’t have the money to lend. It’s Quantitative Easing again.

The money was gobbled up virtually instantaneously by a total of 523 banks. It’s complete madness. The ECB hopes that the banks will do something useful with it – like lending the money to the Greeks, who are currently paying 18% to the bond markets to get money. But there are absolutely no strings attached. If the banks decide to pay bonuses with the money, that’s fine. Or they might just shift all the money to tax havens.

At 18% interest, debt doubles in just four years.  It is this onerous interest burden, not the debt itself, that is crippling Greece and other debtor nations.  Thorpe proposes the obvious solution:

Why not lend the money to the Greek government directly? Or to the Portuguese government, currently having to borrow money at 11.9%? Or the Hungarian government, currently paying 8.53%. Or the Irish government, currently paying 8.51%? Or the Italian government, who are having to pay 7.06%?

The stock objection to that alternative is that Article 123 of the Lisbon Treaty prevents the ECB from lending to governments.  But Thorpe reasons:

My understanding is that Article 123 is there to prevent elected governments from abusing Central Banks by ordering them to print money to finance excessive spending. That, we are told, is why the ECB has to be independent from governments. OK. But what we have now is a million times worse. The ECB is now completely in the hands of the banking sector. “We want half a billion of really cheap money!!” they say.  OK, no problem. Mario is here to fix that. And no need to consult anyone. By the time the ECB makes the announcement, the money has already disappeared.

At least if the ECB was working under the supervision of elected governments, we would have some influence when we elect those governments. But the bunch that now has their grubby hands on the instruments of power are now totally out of control.

Goldman Sachs and the financial technocrats have taken over the European ship.  Democracy has gone out the window, all in the name of keeping the central bank independent from the “abuses” of government.  Yetthe government is the people—or it should be.  A democratically elected government represents the people.  Europeans are being hoodwinked into relinquishing their cherished democracy to a rogue band of financial pirates, and the rest of the world is not far behind.

Rather than ratifying the draconian ESM treaty, Europeans would be better advised to reverse article 123 of the Lisbon treaty.  Then the ECB could issue credit directly to its member governments.  Alternatively, Eurozone governments could re-establish their economic sovereignty by reviving their publicly-owned central banks and using them to issue the credit of the nation for the benefit of the nation, effectively interest-free.  This is not a new idea but has been used historically to very good effect, e.g. in Australia through the Commonwealth Bank of Australia and in Canada through the Bank of Canada.

Today the issuance of money and credit has become the private right of vampire rentiers, who are using it to squeeze the lifeblood out of economies.  This right needs to be returned to sovereign governments.  Credit should be a public utility, dispensed and managed for the benefit of the people.

To add your signature to a letter to parliamentarians blocking ratification of the ESM, click here.

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org.  In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites arehttp://WebofDebt.com and http://EllenBrown.com.

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