Making the world safe for Banksters

SUBHEAD: Iraq and Libya have been taken out, and Iran has been heavily boycotted. Syria is now in the cross-hairs. Why?

By Ellen Brown on 4 September 2013 for Web of Debt -
(http://webofdebt.wordpress.com/2013/09/04/making-the-world-safe-for-banksters-syria-in-the-cross-hairs)


Image above: Spider Banksters threatening the world. Illustration by David Dees. From (http://ozmic.org/content/making-world-safe-banksters-0).

In an August 2013 article titled “Larry Summers and the Secret ‘End-game’ Memo,” Greg Palast posted evidence of a secret late-1990s plan devised by Wall Street and U.S. Treasury officials to open banking to the lucrative derivatives business. To pull this off required the relaxation of banking regulations not just in the US but globally. The vehicle to be used was the Financial Services Agreement of the World Trade Organization.

The “end-game” would require not just coercing support among WTO members but taking down those countries refusing to join. Some key countries remained holdouts from the WTO, including Iraq, Libya, Iran and Syria. In these Islamic countries, banks are largely state-owned; and “usury” – charging rent for the “use” of money – is viewed as a sin, if not a crime. That puts them at odds with the Western model of rent extraction by private middlemen. Publicly-owned banks are also a threat to the mushrooming derivatives business, since governments with their own banks don’t need interest rate swaps, credit default swaps, or investment-grade ratings by private rating agencies in order to finance their operations.

Bank deregulation proceeded according to plan, and the government-sanctioned and -nurtured derivatives business mushroomed into a $700-plus trillion pyramid scheme. Highly leveraged, completely unregulated, and dangerously unsustainable, it collapsed in 2008 when investment bank Lehman Brothers went bankrupt, taking a large segment of the global economy with it. The countries that managed to escape were those sustained by public banking models outside the international banking net.

These countries were not all Islamic. Forty percent of banks globally are publicly-owned. They are largely in the BRIC countries—Brazil, Russia, India and China—which house forty percent of the global population. They also escaped the 2008 credit crisis, but they at least made a show of conforming to Western banking rules. This was not true of the “rogue” Islamic nations, where usury was forbidden by Islamic teaching. To make the world safe for usury, these rogue states had to be silenced by other means. Having failed to succumb to economic coercion, they wound up in the crosshairs of the powerful US military.

Here is some data in support of that thesis.

The End-game Memo
In his August 22nd article, Greg Palast posted a screenshot of a 1997 memo from Timothy Geithner, then Assistant Secretary of International Affairs under Robert Rubin, to Larry Summers, then Deputy Secretary of the Treasury. Geithner referred in the memo to the “end-game of WTO financial services negotiations” and urged Summers to touch base with the CEOs of Goldman Sachs, Merrill Lynch, Bank of America, Citibank, and Chase Manhattan Bank, for whom private phone numbers were provided.

The game then in play was the deregulation of banks so that they could gamble in the lucrative new field of derivatives. To pull this off required, first, the repeal of Glass-Steagall, the 1933 Act that imposed a firewall between investment banking and depository banking in order to protect depositors’ funds from bank gambling. But the plan required more than just deregulating US banks. Banking controls had to be eliminated globally so that money would not flee to nations with safer banking laws. The “endgame” was to achieve this global deregulation through an obscure addendum to the international trade agreements policed by the World Trade Organization, called the Financial Services Agreement. Palast wrote:

Until the bankers began their play, the WTO agreements dealt simply with trade in goods–that is, my cars for your bananas.  The new rules ginned-up by Summers and the banks would force all nations to accept trade in “bads” – toxic assets like financial derivatives.
Until the bankers’ re-draft of the FSA, each nation controlled and chartered the banks within their own borders.  The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives “products.”
And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.
The job of turning the FSA into the bankers’ battering ram was given to Geithner, who was named Ambassador to the World Trade Organization.

WTO members were induced to sign the agreement by threatening their access to global markets if they refused; and they all did sign, except Brazil. Brazil was then threatened with an embargo; but its resistance paid off, since it alone among Western nations survived and thrived during the 2007-2009 crisis. As for the others:

The new FSA pulled the lid off the Pandora’s box of worldwide derivatives trade. Among the notorious transactions legalized: Goldman Sachs (where Treasury Secretary Rubin had been Co-Chairman) worked a secret euro-derivatives swap with Greece which, ultimately, destroyed that nation. Ecuador, its own banking sector de-regulated and demolished, exploded into riots. Argentina had to sell off its oil companies (to the Spanish) and water systems (to Enron) while its teachers hunted for food in garbage cans. Then, Bankers Gone Wild in the Eurozone dove head-first into derivatives pools without knowing how to swim–and the continent is now being sold off in tiny, cheap pieces to Germany. 

The Holdouts
That was the fate of countries in the WTO, but Palast did not discuss those that were not in that organization at all, including Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. These seven countries were named by U.S. General Wesley Clark (Ret.) in a 2007 “Democracy Now” interview as the new “rogue states” being targeted for take down after September 11, 2001. He said that about 10 days after 9-11, he was told by a general that the decision had been made to go to war with Iraq. Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.

What did these countries have in common? Besides being Islamic, they were not members either of the WTO or of the Bank for International Settlements (BIS). That left them outside the long regulatory arm of the central bankers’ central bank in Switzerland. Other countries later identified as “rogue states” that were also not members of the BIS included North Korea, Cuba, and Afghanistan.

The body regulating banks today is called the Financial Stability Board (FSB), and it is housed in the BIS in Switzerland. In 2009, the heads of the G20 nations agreed to be bound by rules imposed by the FSB, ostensibly to prevent another global banking crisis. Its regulations are not merely advisory but are binding, and they can make or break not just banks but whole nations.

This was first demonstrated in 1989, when the Basel I Accord raised capital requirements a mere 2%, from 6% to 8%. The result was to force a drastic reduction in lending by major Japanese banks, which were then the world’s largest and most powerful creditors. They were undercapitalized, however, relative to other banks. The Japanese economy sank along with its banks and has yet to fully recover.

Among other game-changing regulations in play under the FSB are Basel III and the new bail-in rules. Basel III is slated to impose crippling capital requirements on public, cooperative and community banks, coercing their sale to large multinational banks.

The “bail-in” template was first tested in Cyprus and follows regulations imposed by the FSB in 2011. Too-big-to-fail banks are required to draft “living wills” setting forth how they will avoid insolvency in the absence of government bailouts. The FSB solution is to “bail in” creditors – including depositors – turning deposits into bank stock, effectively confiscating them.

The Public Bank Alternative
Countries laboring under the yoke of an extractive private banking system are being forced into “structural adjustment” and austerity by their unrepayable debt. But some countries have managed to escape. In the Middle East, these are the targeted “rogue nations.” Their state-owned banks can issue the credit of the state on behalf of the state, leveraging public funds for public use without paying a massive tribute to private middlemen. Generous state funding allows them to provide generously for their people.

Like Libya and Iraq before they were embroiled in war, Syria provides free education at all levels and free medical care. It also provides subsidized housing for everyone (although some of this has been compromised by adoption of an IMF structural adjustment program in 2006 and the presence of about 2 million Iraqi and Palestinian refugees). Iran too provides nearly free higher education and primary health care.

Like Libya and Iraq before takedown, Syria and Iran have state-owned central banks that issue the national currency and are under government control. Whether these countries will succeed in maintaining their financial sovereignty in the face of enormous economic, political and military pressure remains to be seen.

As for Larry Summers, he went on to become president of Harvard, where he approved a derivative bet on interest rate swaps that lost over $1 billion for the university. He resigned in 2006 to manage a hedge fund among other business activities, and went on to become State Senator Barack Obama’s key campaign benefactor.

Summers played a key role in the banking deregulation that brought on the current crisis, causing millions of US citizens to lose their jobs and their homes. Yet he is President Obama’s first choice to replace Ben Bernanke as Federal Reserve Chairman. Why? He has proven he can manipulate the system to make the world safe for Wall Street; and in an upside-down world in which bankers rule, that seems to be the name of the game.

• Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her websites are http://WebofDebt.com, http://PublicBankSolution.com, and http://PublicBankingInstitute.org.

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Oh Canada!

SUBHEAD: How America's friendly northern neighbor became a rogue, reckless petrostate.

By Andrew Nikiforuk on 1 July 2013 for Foreign Policy -
(http://www.foreignpolicy.com/articles/2013/06/24/oh_canada#.UdHN2U0X_YM.email)


Image above: This is what Canada's shale oil boom looks like.  Phoo by Mark Ralston for AFP. From (http://www.foreignpolicy.com/articles/2013/06/24/the_great_black_north_canada_alberta_oil_sands).

For decades, the world has thought of Canada as America's friendly northern neighbor -- a responsible, earnest, if somewhat boring, land of hockey fans and single-payer health care. On the big issues, it has long played the global Boy Scout, reliably providing moral leadership on everything from ozone protection to land-mine eradication to gay rights. The late novelist Douglas Adams once quipped that if the United States often behaved like a belligerent teenage boy, Canada was an intelligent woman in her mid-30s. Basically, Canada has been the United States -- not as it is, but as it should be.

But a dark secret lurks in the northern forests. Over the last decade, Canada has not so quietly become an international mining center and a rogue petrostate. It's no longer America's better half, but a dystopian vision of the continent's energy-soaked future.

That's right: The good neighbor has banked its economy on the cursed elixir of political dysfunction -- oil. Flush with visions of becoming a global energy superpower, Canada's government has taken up with pipeline evangelists, petroleum bullies, and climate change skeptics. Turns out the Boy Scout's not just hooked on junk crude -- he's become a pusher. And that's not even the worst of it.

With oil and gas now accounting for approximately a quarter of its export revenue, Canada has lost its famous politeness. Since the Conservative Party won a majority in Parliament in 2011, the federal government has eviscerated conservationists, indigenous nations, European commissioners, and just about anyone opposing unfettered oil production as unpatriotic radicals. It has muzzled climate change scientists, killed funding for environmental science of every stripe, and in a recent pair of unprecedented omnibus bills, systematically dismantled the country's most significant long-cherished environmental laws.

The author of this transformation is Prime Minister Stephen Harper, a right-wing policy wonk and evangelical Christian with a power base in Alberta, ground zero of Canada's oil boom. Just as Margaret Thatcher funded her political makeover of Britain on revenue from North Sea oil, Harper intends to methodically rewire the entire Canadian experience with petrodollars sucked from the ground. In the process he has concentrated power in the prime minister's office and reoriented Canada's foreign priorities. Harper, who took office in 2006, increased defense spending by nearly $1 billion annually in his first four years, and he has committed $2 billion to prison expansion with a "tough on crime" policy that ignores the country's falling crime rate. Meanwhile, Canada has amassed a huge federal debt -- its highest in history at some $600 billion and counting.

Liberal critics like to say that Harper's political revolution caught many Canadians, generally a fat and apathetic people, by surprise -- a combination of self-delusion and strategic deception. That may be true, but though Canadians live in high latitudes, they're not above baser human instincts -- like greed. Harper is aggressively pushing an economic gamble on oil, the world's most volatile resource, and promising a new national wealth based on untapped riches far from where most Canadians live that will fill their pocketbooks, and those of their children, for generations. With nearly three-quarters of Canadians supporting oil sands development in a recent poll, Harper seems to be selling them on the idea.

THE RESOURCE UNDERWRITING many of these ugly behavioral changes is bitumen, a heavy, sour crude mined from oil sands. Deposits of the badly degraded asphalt-like substance lie under a forest the size of Florida in northeastern Alberta and comprise the world's third-largest petroleum reserves. Over the last decade, as oil prices increased fivefold, oil companies invested approximately $160 billion to develop bitumen in Alberta, and it has finally turned profitable.

Canada is now cranking out 1.7 million barrels a day of the stuff, and scheduled production stands to fill provincial and federal government coffers with about $120 billion in rent and royalties by 2020. More than 40 percent of that haul goes directly to the federal government largely in the form of corporate taxes. And the government wants even more; it's pushing for production to hit 5 million barrels a day by 2030.

Never mind that the entire process is a messy and wasteful one. It takes copious amounts of water, capital, and energy to dig out the carbon-rich sands, let alone upgrade and process the heavy crude, which can't even move through a pipeline until it is diluted with an imported gasoline-like condensate. With brazen cheek, the government nonetheless defends the Alberta megaproject as "responsible" and "sustainable" -- "an enterprise of epic proportions, akin to the building of the pyramids or China's Great Wall. Only bigger." Bigger indeed: Approved bitumen mining projects could potentially excavate a forest area six times as large as New York City. Reclamation and reforestation remain an uncertain and costly proposition. To date, oil companies have already created enough toxic mining sludge (6 billion barrels) to flood the entirety of Washington, D.C.

Unsurprisingly, Ottawa has become a master at the cynical art of greenwashing. When Harper's ministers aren't attacking former NASA scientist and climate change canary James Hansen in the pages of the New York Times or lobbying against Europe's Fuel Quality Directive (which regards bitumen as much dirtier than conventional oil), his government has spent $100 million since 2009 on ads to convince Canadians that exporting this oil is "responsible resource development." Meanwhile, Canada has bent over backward to entice Beijing. Three state-owned Chinese oil companies (all with dismal records of corporate transparency and environmental sensitivity) have already spent more than $20 billion purchasing rights to oil sands in Alberta.

The kowtowing to China, now the world's largest oil consumer, highlights Canada's big bitumen dilemma: how to get dirty, landlocked oil to global markets. The United States, Canada's biggest customer, doesn't seem to need it as much anymore; imports declined by more than 4 million barrels a day between 2005 and 2011, and with pipeline projects to the United States like Keystone XL stuck in the mud, Harper's vision of being an "emerging energy superpower" appears in danger. Unsurprisingly, Harper has recently jettisoned criticism of China's human rights record. As a secret foreign-policy document leaked last fall to the Canadian Broadcasting Corp. (CBC) makes clear, Canada has new priorities: "To succeed we will need to pursue political relationships in tandem with economic interests even where political interests or values may not align."

In 2012, Canada quietly signed a controversial trade agreement with the People's Republic and approved a $15 billion takeover of Nexen, an oil sands player, by the state-owned China National Offshore Oil Corp. And, perhaps to warm Canadians' hearts to the Chinese, the government recently lobbied to rent two traveling pandas at a cost of $10 million over the next 10 years.

Now that oil sands mining accounts for nearly 10 percent of Canada's greenhouse gas emissions, Ottawa can't really brook any discussion of a carbon tax, though a majority of Canadians would support one. Harper described the Kyoto Protocol as "a socialist scheme" and a "job-killing, economy-destroying" accord before pulling out of the agreement altogether in 2012. Many of Canada's ministers are now die-hard skeptics even about the science behind climate change. As Natural Resources Minister Joe Oliver recently explained to the Montreal newspaper La Presse: "I think that people aren't as worried as they were before about global warming of 2 degrees.… Scientists have recently told us that our fears [on climate change] are exaggerated." To silence any would-be exaggerators, the government simply stopped funding the Canadian Foundation for Climate and Atmospheric Sciences, disbanded Environment Canada's Adaptation to Climate Change Research Group, and eliminated the role of chief science advisor. And since 2008, political minders have vetted all media requests for the country's 23,000 federal scientists.

After the government barred a federal scientist from talking about the discovery of a large Arctic ozone hole, a 2012 editorial in the influential science journal Nature demanded that the Canadian government "set its scientists free." It seems Harper heard "cut them loose" instead: His government summarily closed the world-famous Experimental Lakes Area research station, a gem of Canadian environmental science that has helped spur global policy on acid rain, to save the princely sum of $2 million a year (though the Ontario government is working to keep it open).

THE SINGLE-MINDED PURSUIT of this petroproject has stunned global analysts. The Economist, no left-wing shill, characterized Harper, the son of an Imperial Oil senior accountant, as a bully "intolerant of criticism and dissent" with a determined habit of rule-breaking. Lawrence Martin, one of Canada's most influential political commentators, says that Harper's "billy-club governance" has broken "new ground in the subverting of the democratic process." Conservative pollster Allan Gregg has described Harper's agenda as an ideological assault on evidence, facts, and reason.

To be fair, Harper's government does have a plan for climate change -- pumping the problem to the United States and/or China. Oil sands crude transported to the United States by the proposed Keystone XL pipeline, for example, could over a 50-year period increase carbon emissions by as much as 935 million metric tons relative to other crudes.

And the planned $5.5 billion Northern Gateway pipeline from Alberta to the Pacific Ocean would result in up to 100 metric tons of carbon dioxide emissions a year, from extraction and production in Canada to combustion in China -- more than British Columbia's total emissions in 2009. The 2012 National Inventory Report by Environment Canada, the country's environmental department, actually boasts that Canada has partly reduced overall emission intensity in the oil sands "by exporting more crude bitumen."

All this underscores Canada's new reality: Just about any kind of rational evidence has now come under assault by a government that believes that markets -- and only markets -- hold the answers. Any act that industry regards as an obstacle to rapid mineral extraction or pipeline building has been rewritten with a Saudi-like flourish.

One massive omnibus budget bill alone changed 70 pieces of legislation, gutting, for example, the Fisheries Act, which directly prohibited the destruction of aquatic-life habitats but stood in the way of the Northern Gateway pipeline, which must cross 1,000 waterways en route to the Pacific Ocean.

Meanwhile, funding for Canada's iconic park system has been cut by 20 percent in what critics have called a "lobotomy." The CBC, the respected state broadcaster long scorned by Harper as an independent check on power, has suffered a series of cutbacks. The Health Council of Canada, which once ensured national health standards and innovation across Canada's 13 provinces and territories, also got the ax. Furthermore, with the élan of a Middle Eastern petroprince, Harper appointed the head of his security detail to be ambassador to Jordan. And he did it all with nary a peep from your average Canadian.

More than a decade ago, American political scientist Terry Lynn Karl crudely summed up the dysfunction of petrostates: Countries that become too dependent on oil and gas riches behave like plantation economies that rely on "an unsustainable development trajectory fueled by an exhaustible resource" whose revenue streams form "an implacable barrier to change." And that's what happened to Canada while you weren't looking. Shackled to the hubris of a leader who dreams of building a new global energy superpower, the Boy Scout is now slave to his own greed.

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USDollar - Ringfenced & Checkmated

SUBHEAD: The US Dollar as the world's reserve currency is about to be replaced by a union of the BRICS and G20.

By Jim Willie on 29 March 2013 for the Golden Jackass -

(http://news.goldseek.com/GoldenJackass/1364601600.php)

Image above: Photo op at this year's BRICS Summit Meeting establishing a world development bank. From (http://www.csmonitor.com/Commentary/the-monitors-view/2013/0327/Why-a-BRICS-world-bank-may-be-welcome).

An unstoppable sequence of events has been put into motion finally. The pressure has been building for months. Some themes are plainly evident, except to those who wear rose colored glasses in the US Dome of Perception. The USTreasury Bond will be brought home to the US and British banks, where it will choke its bankers, then be devalued for survival reasons, after a painful isolation. The Chinese and Russians will conspire to finance the Eurasian Trade Zone corridor foundation with USTBonds, held in reserve, put to usage.

The British will play a very unusual role, selling out the United States in order to be squires to the Eastern Duo. The process has begun; it cannot be stopped. The events are already being grossly misinterpreted and minimized in the US press, where devoted lapdogs, artistic swindlers, and creative writers prevail. The Paradigm Shift eastward is showing its next face, with a truly massive trade zone for cooperation and reduced cost overhead as the giant foundation. The Untied States for all of its past hegemony and devious manipulations and vicious attacks, will be excluded.

The British will assist in the exclusion in order to avoid the Third World themselves. The following blueprint is the result of years of planning, with steady information and hints and confirmations by at least two Hat Trick Letter sources. The sunset of the USDollar has a blueprint. As a personal embroidery, let me state that this article is the most important the Jackass has ever written. Let it be taken seriously for its grave somber message.

EURASIAN TRADE ZONE
The crowning blow is the financial centerpiece to the trade zone, which draws upon the critical mass bulk of the BRICS nations as nucleus. Together Brazil, Russia, India, China, and South Africa have begun to form an alliance built upon trade and economic development, forged by investment in infrastructure and its construction. Include Iran and Indonesia to welcome the new BRIIICS nations for a larger Eastern representation.

The arterial system of the trade zone will be energy supply, the life blood of commerce. The Eurasian Trade Zone is being formed, with an energy foundation. Important bilateral pacts were made concrete in the last week. Supply of crude oil, natural gas, including LNG, will come from a vast system of pipelines from Russia to Central Europe and from Russia to China. Completed pipelines will flow. Other pipelines will be completed.

Crucial pacts have been made final, with more to come. Additional important pipelines along the periphery will be completed also, like the Iran-Pakistan Pipeline, despite the USGovt obstruction and intimidation. New LNG ports will be constructed. Logistics for rail traffic will be agreed upon, for commodity supply. Many features of the trade zone will be worked out, like reduced tariffs, like border inspection methods, like payment systems including barter, like environmental concerns, like regional cooperation.

BRICS DEVELOPMENT BANK
Consider the BRICS Development Bank. It is so much more than a fund to build railroads in remote African locations, as the delusional US press reports. It will form the giant credit line for countless projects upon which trade will be conducted, often called infrastructure, but so much more. It will gradually reveal itself to provide a second function, a core bank for trade payments outside the USDollar sphere. Steps are being made, extremely important steps, that will shape the next chapter. The United States will not play a role.

With a trade zone and financial payment structure, the USDollar is to be rendered an outsider looking in, soon to be deemed obsolete. The many emerging nations are coming of age, flexing their muscles, banding together. Their critical mass in trade volume, in industrial output, and in product development, including patent registration, are impressive. In the last two years, they have demonstrated that the G-20 Meeting of finance ministers has totally eclipsed the G-7 Meeting that had dominated for two decades. They are making the next critical step in creating a bank, a global bank whose role will grow and expand. It will operate under the golden glow

 EXCLUSION OF UNITED STATES
The many years of abusive control of the FOREX currency markets, intervention in the sovereign bond markets, manipulation in the important commodity markets, devious propaganda in the communications networks, with support role played by the aggressive USMilitary and nefarious activity by its security agencies have guaranteed exclusion of the United States.

The unspeakable abuse of the US$ credit card will end, as the global reserve currency is dismissed from its throne. The US leader crew, led by fascist bankers, can print money and counterfeit bonds all they wish, but the currency will be required to submit to grand devaluation if they wish to purchase supplies for the massively lopsided and imbalanced USEconomy, the greatest travesty in marketplace history.

While the Keystone Pipeline is corrupted by the USGovt with hidden beneficiaries such as Halliburton and Burlington Northern, essentially divvying up the gangrenous paunch of the exhausted bloated American torso, the vast pipelines of the European and Asian continents are merging. They will not include the Americans, whose pathetic gambit fell on its face, the Trans-Pacific Partnership pushed by the Obama Admin. It actually attempted to form a trade zone with Asia, on condition that the lead nations Japan and South Korea excluded China. How incredibly moronic and amateurish! What a pathetic return on the dime for votes for this leader in the new police state.

BRITISH BROKER ROLE & INTRIGUE
The British have an historical knack to remain on top of the bank center heap. Earlier this year, when they announced the launch of a Chinese Yuan Swap Facility in London City, they stepped on the New York neck. Never in a million years would South Manhattan serve as the site of a Yuan Swap functionary post, not during a trade war that has a secret hot military war element being played out in Southern African near the horn (see Djibouti).

The embattled British Petroleum will retain a 19.75% stake in Rosneft, which is to acquire the significant BP-TBK energy firm in Russia. Both Bank of America and Citigroup are brokering a $55 billion deal that will enable Rosneft to become the world's largest oil company.

Several hidden messages are laden within the blockbuster global changing deal by Rosneft. By dissecting the flow, it is clear the BP executive staff is selling out, since not paying dividends. The collateral for the deal toward the loans will come from USTreasury Bonds. The Anglo-American bank complex will in effect be forced to swallow its own high volume of toxic paper. The tainted BP oil giant still reels from the tarnish of the Gulf of Mexico incident. Worse, BP is finally pushed out following its dubious role in the Yeltsin years of Russia. That difficult transition period in the 1990 decade saw a failed attempt by the Western Oil Giants to control Russia and its vast energy wealth.

Putin from the KGB said no, and it did not happen on his watch. He assumed the Kremlin top post. Witness a potentially crucial London role in helping the Eurasian Trade Zone, perhaps buying favor to avoid the Third World. The broad exclusion of the United States guarantees a Third World flavor and stench for the North American core, with a Mad Max overtone and a Dachau closet.

DEVIOUS CYPRUS HIDDEN ANGLEA piece of the financing for the Rosneft deal came from GazpromBank, which operates out of Cyprus. China has posted $30 billion in USTBonds as collateral within the massive deal, in return for ample future crude oil supply. Since Russia will receive a steady flow of payments from China from diverse energy pipeline supply, in the form of USTBond fund flow, the big debt to the London banks will be paid off by USTBonds.

The payoff will be in the same terms of the huge collateral. Conclude that the Eurasian Trade Zone will have an energy pipeline and delivery system with loaded supply whose foundation is built upon USTBonds, sent back to the Anglo-American bankers to digest. The USTBonds are going home to die. As Lenin said, the rope to hang themselves will be bought by the capitalists. As footnote, some important toes were stepped on in Cyprus. Expect more entries to the morgue. The event opened the door to dangerous games of brinksmanship.

The timing of the Cyprus bank account tax and confiscation is curious, exactly when the extremely significant summit meeting took place between Russian President Putin and Chinese President Xi Jinping, where several big pacts were signed. One is left to wonder if the Cyprus fire was lit by the Europeans in order to attempt to disrupt the Moscow Energy Summit with heavy smoke. It bears repeating. The summit received almost zero Western press coverage, even though its details outline a sunset of the USDollar.

Maybe because its details outline a sunset of the USDollar. The Jackass is left to wonder if the next important energy pact with the Eurasian Leader Duo (Russia & China) will involve Saudi Arabia, with a whiff of sunset for the Petro-Dollar defacto standard. Cyprus might indeed have been all about trying to save the Petro-Dollar, more than the European banks. Perhaps the Moscow Summit dictated the Cyprus timetable. The Italian elections to depose Monti, Spanish high level corruption and bankruptcies, and the French backtrack on massive spending cuts, these three nations point to urgency in disaster control. The bank account tax was thrust forward, unmasking the fascist bankers.

USDOLLAR HEGEMONY ENDING
The alternative system to conducting trade outside the USDollar system has had formative stages since the Lehman Brothers and Fannie Mae collapse. The Eastern trade leaders have been very busy quietly constructing a new system, with almost zero press coverage. They prefer to work in the background. Recent events indicate they have chosen the formal public stages and forums with wider visibility, starting with the February G-20 Meeting in Moscow. The true agenda for G-20 finance ministers was to hatch finally the USDollar alternative.

The sleepy West appears not to be paying much attention. The initiatives to construct alternative platforms were given a major thrust in the last year since the Iran sanctions led by the USGovt banker and their henchmen in London. For the last 20 years at least, trade has followed banking. Nations of the world have been coerced for three decades into holding USGovt debt securities in order to make payment in trade, most notably in crude oil.

With the Grand Arab Recycling accord struck by the 1970 decade leaders, the Petro-Dollar was born in return for a fantastic higher oil price. The oil-rich Arab royalty supported the USDollar by recycling trade surplus into USTreasury Bonds. The conventional practice dictated that global banking systems be dominated by USTBonds in reserves, serving as the banking foundation of debt.

New chapter to turn. The ongoing endless QE to Infinity has hastened Eastern trade leaders. The near 0% return from USTBond yields has motivated them to seek alternatives. They are horrified by the debasement of their hard-earned reserves, filled to the gills with USTBonds of shrinking value and low yield. The new trade settlement system based in Gold finance will turn the tables, as once more trade is to dictate banking.

The combination of central bank hyper monetary inflation, big US bank fraud, security agency $100 bill counterfeit, and rampant criminality in the US financial system has motivated the Eastern nations to act. They have acted. The clear outcome is that the Western banking system will topple, since the East will be shoving the USTBonds back to Anglo-American shores for cemetery treatment. Trade should always dictate banking. The major trade partners no longer want US$-based trade settlement. Watch for the crowning blow in the Saudi response soon, since they always follow the winners.

THE CENTERPIECE PLAN
The new BRICS development bank will surely be supplied with USTreasury Bonds at first. The primary seeding is obvious. The emerging nations have collected huge reserves from successful trade over the last decade, primarily held in USTBonds. They do not wish to hold them, since undermined and debased by their own steward at the US Federal Reserve.

The big Eastern nations have committed $100 billion for the fund, whose liquidity lies in USTBonds. On a gradual ramp, the USTBonds will be converted to Gold bars for the core bank asset in the development fund. Some of the 6000 metric tons of Gold bullion removed from London banks by the Eastern entities from March to July 2012 might find their way into the BRICS Fund core. The initial role of funding critical important projects like pipelines, communication networks, railroads, shipping ports, ships & trucks, perhaps even energy transfer ports, will become clear. The more overarching role of forming a (Eastern) global core central bank clearing house for payment transactions will be its second dual role.

The emerging nations have had their fill of the USDollar control mechanisms with the SWIFT bank structure, the Intl Monetary Fund steering committee, and others. Finally, Gold Trade Notes would be used in trade settlement. Witness the new Eastern Fed for trade settlement in Gold bullion. Better to call it the BRICS Development Fund, since a major Trojan Horse for excreting USTBonds through its rectum, the London Boyz busily catching it.

The Gold core will facilitate the purchase of Gold Trade Notes much like the common letters of credit used widely in commerce nowadays. Like the Eurasian Russian-Chinese energy foundation, the development fund will be built on the back of USTBonds in toxic discharge. In the process, expect extreme hardball, shoving the toxic USTBonds back into US and British banks, as collateral for huge loans, as funds for repayment of huge loans, as funds to purchase Gold. In the process, the COMEX with LBMA appendage will be drained of its Gold, a future default assured.

The Western gold marts will be unmasked as corrupt dens of empty inventory shelves. What comes is a BRICS Development Fund which will serve as a quasi global gold central bank for the expressed purpose of facilitating trade settlement in Gold. This is hardly just a fund to finance African rail projects.

THE CHECKMATE

A checkmate is in progress. It has four important elements.

1. The established Eurasian Trade Zone joins the massive Asian continent with a significant portion of the European continent, where three quarters of the world population resides. The trade zone has no visible presence or participation by either the United States or United Kingdom.
2. The BRICS Development Fund will control a giant sum of $100 billion. It will eclipse the role of the Intl Monetary Fund. The fund will facilitate numerous infrastructure projects. However, its other feature will be the shocker, as its core is transformed into Gold bullion. The conversion of USTBonds to Gold will nail the coffin in the isolated USDollar, a topic of Jackass scribbles for the last full year.
3. The flow of USTBonds will be from China to London, for financing the foundation of the Eurasian Trade Zone on its energy backbone with brisk energy flow. The collateral for large loans is to be USTBonds, as is repayment for loans to be USTBonds.
4. The transition from Yuan-based trade settlement via the numerous Swap Facilities in barter trade with key nations, toward Gold trade settlement via the BRICS fund that will feature a gold core, will launch the new Gold Trade Standard. It will not be a banker dominated currency type of Gold Standard. It will instead be a trade settlement Gold Standard that bypasses the hegemony of the Anglo-American banking system, the SWIFT rules, the FOREX gaming, and the IMF/World Bank harlots that harbor insects.

ZINGERS AS COFFIN NAILS

Many are the big signals and signposts with deep meaning. They line the path to the Third World. They are many, diverse, and unmistakable in importance. The gradual discard of the USDollar as global reserve currency, the gradual discard of the USTreasury Bond as primary banking system reserve asset, these events are in progress with a speed not seen in past months or past years, not since 2008. The level of intrigue matches the level of deception.

Cyprus is not a one-off event, an isolated insignificant beer fart. It is a flash point event. The tipping point events could be bank runs across Southern Europe extending to Britain and the United States, including Canada. Numerous potential tipping point events can be identified, each powerful and ominous for the US Fascists in power. The USDollar is coming home to be buried and devalued. The USTBond is coming home to be buried and downgraded. The ring fence has been clearly laid out.

The checkmate with the Eurasian Trade Zone and BRICS Fund is evident for the trained analyst eye. The devaluation will cause severe price inflation and supply shortages for the USEconomy. The end game has never been more clear. Follow the numerous highly important factors at work, each of which could produce a tipping point event. The dominos are aligned and ready. Inside the US Dome of Perception, they are less visible, yet still at work for extreme consequences. Some severe disorder comes this way. Expect some quantum leaps upward in the Gold price and Silver price, each controlled by unprecedented criminal activity in the financial markets.

• The BRICS Development Fund is the main event, to build a railway to a dark place for the United States, ring fenced for its toxic USDollar. Gone will be the corrupted motivated tools like the IMF and World Bank, with even Western central banks of lesser importance. The BRICS Fund could be the Trojan Horse (much like ObamaCare) that permits a vast conduit to be built, a seemingly innocuous let permitted entrance through the door, which permits USTBonds to be dumped like the trash.
• The upcoming Gold purchases by the BRICS Fund might be coordinated with the Shanghai Metals Exchange, to exploit the artificial low London Gold price. A COMEX bust can be foreseen.
• The BRICS should be careful about the new undersea global communication cable system. In 2007, foul play resulted in the Iranian cable being cut, the result of cooperative action by the USGovt and the little ally on the Southern Med that looks northwest to Italy.
• The tipping nation is Germany, which has had its fill supporting the slower wasteful debt-ridden Southern European nations. After cutting the cord, they will embrace the Eurasian Trade Zone. Evidence is the numerous heavy rail facilities that begin in Russia and end in Germany for commodity supply. There are two Germanys, one with old corrupt ties to the West, another with traditional reliable ties to the East. The Western camp is given light by the press, while the Eastern camp works behind closed doors shaping the next chapter.
• The Eastern Alliance (often discussed in past Hat Trick Letters) is slowly coming into view. The Russian and Chinese corridor will serve as the commercial foundation. The BRICS Development Fund will serve as the backbone. When Germany joins in more overt manner, the Alliance will be clear on the geopolitical stage. Then comes the Saudis to join, complete with protectorate role already offered by the Eastern Duo giants, who together will announce the end to the Petro-Dollar defacto standard.
• The political rebellion movement inside Germany is slowly coming into view. They wish to return to the D-Mark currency and to discard the Euro, an experiment in disaster, waste, fraud, and ruin. The movement is gaining traction. Discussion of the Nordic Euro (aka Teutonic Euro) has been heard on an increasing basis among its tribal cousins. Germany will side with Russia & China, and join the next chapter, after shedding its PIIGS pen trash.
• Both Russia and China purchase all their domestic gold mining output. If truth be told, their gold reserves are multiples higher than the official data indicates. Neither nation has any desire to cooperate with such critical disclosure, much like national trade secrets. Both nations are ready for the next chapter, with a few years of preparation in new modern systems, platforms, wiring, and gold held in reserve as core wealth.
  
  
• The ABN Amro news of halted gold delivery speaks volumes to the absent inventory linked to the corrupted London gold market. They have no Gold in inventory. They control the Gold price with paper leverage and suppressive techniques. This news halt out of the Netherlands should be viewed in context of the Germans, Dutch, and Austrians demanding their gold in repatriation. London has none. What gold bullion they do obtain comes from urgent shipments from the Roman Catacombs and the Basel hills of Switzerland.
• The nations across the entire West have citizens deeply worried about their savings wealth stored in the banks. They are beginning to realize their accounts are legally considered as bank liabilities subject to heavy loss upon bank failures. They will begin to remove the money from bank accounts in droves, but with capital controls imposed.
• The Cyprus bank account tax is the latest ignored shock wave warning to the West. It is described as a small tax to assure bank solvency, but it is a vicious transfer from sovereign source to depositor private source in funded bailouts. It is confiscation. The 2005 Bankruptcy Law in the US gave away the plan, with savings deposits subordinated under derivatives. The MF-Global episode has not resulted in much learned. It was the first test ride of the subordination rules in the new law. The Jackass warned in early 2012 of an MF-Global event for bank accounts and stock accounts. The event is coming very soon, but the public is very sleepy distracted and dulled.

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Road to World War 3

SUBHEAD: Those controlling the American empire are willing to enter World War III to get their way.

By Aaron Hawking on 11 September 2012 for Strom Clouds Gathering -
(http://stormcloudsgathering.com/the-road-to-world-war-3)


Image above:Still image from video below. From original  article.

We are on a road that leads straight to the World War 3, but in order to see that and to fully understand what is at stake you have to look at the big picture and connect the dots. This video examines the history of the dollar, its relation to oil, and the real motives behind the wars of the past two decades.


Video above: "The Roaf to World War 3". From (http://youtu.be/HP7L8bw5QF4).

Credits:
Music is original composition by StormCloudsGathering
Thumbnail is creative commons
Scenes from Grey State trailer used with permission from http://www.graystatemovie.com

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Fate of the Petrodollar

SUBHEAD: The revolutions came at the worst possible time for the empire and are threatening the financial system guaranteeing the Almighty Dollar.  

By Zainab Cheema on 3 March 2011 in Media Monitors - 
  (http://usa.mediamonitors.net/content/view/full/83795)


Image above: Fuel oil distribution in Asia set against chart of estimated demand by region. From (http://www.zerohedge.com/article/guest-post-peak-denial-about-peak-oil).

 As revolution fans across the Middle East, there are reams of commentary on the reasons behind the spectacular conflagration. Some are sage, such as Shahid Alam’s insightful analysis of the “dignity deficit” that the Muslim world suffers from. Others verge on doomsday comic, pinning the blame on unruly natural causes than self-evident political ones, such as Paul Krugman’s warnings of natural disasters and their impact on world food supply. Even Hillary Clinton, who is usually so serenely autocratic, struck a somber note in a recent Munich visit, declaring that “the status quo is not sustainable.”

Certainly, things will not remain the same. This much is inevitable. However, the motor driving the Middle Eastern revolutions lies elsewhere from long-suffering nature or the shadowy militants that Muammar Qaddafi of Libya or the Khalifa family in Bharain are so desperately trying to pin the tail on. If we really want to hear the Phantom singing in the basement of the Opera House, we should hearken to the tale of the US petrodollar, which has bankrolled the financial and military extravagances of US Empire Inc. from the 1970s.

The Vietnam War brought on a hefty debt crisis (yes, it is expensive to kill villagers in a far off land, as Afghanistan has proven). Under the pressures of Vietnam, combined with the “greed is good” hedonism of the emerging neo-conservatives, Nixon’s government entirely abandoned the gold standard and pinned the dollar’s value on the petroleum guzzling up from Middle Eastern soil. Thus, the petrodollar was born and life was good.

As long as the US leveraged control over the Middle East’s glistening black crude, and the worldwide supply and distribution networks, the Treasury could print dollars without needing to back it up with gold reserves, jobs, trade exchanges, or other material indices of economic health. The petrodollar meant that oil had to be bought and sold in US currency, forcing countries to buy dollars in order to purchase the energy demanded for agriculture, transportation, industry — really, every facet of modern life. As countries worldwide were obliged to purchase dollars for oil, the dollar itself became the US’s biggest export.

The Almighty Dollar indeed! Petrodollars bound the world into the US financial regime, making it impossible to resist what John Perkins calls “economic hit-men” from knocking on countries’ doors and selling “neoliberal reforms” that sold off the country’s assets under the guise of sacral privatization. Modernity came to the third world as a poisonous martini, the flush of dollars in their economies balanced with the bitter after-taste of servitude. What monopoly over oil gave the US was a credit-card without any limits.

The US could simply print the dollars for OPEC oil, while other countries had to trade their goods, services, and resources to the US for the dollars to buy crude. This enabled the US to run on deficit spending, engaging in ballooning consumption under a debt that was essentially shunted on to other countries in Empire Inc. As Wall Street speculated on their control of the world currency flow, the arms manufacturers reaped benefits by the political instability fostered in the Middle East.

As Henry Kissinger noted with typical Lord Voldemort flair, “who controls the energy can control whole continents; who controls money can control the world.” The US economy was a gasoline fueled Disneyland threatened by two specters. First was Peak Oil, the peak production point of existing oil fields in Africa and the Middle East, after which production would decline in the face of growing demand. The second was posed by movements for political and economic independence in the energy producing countries, who had the temerity to believe that they had authority over their natural resources.

Case in point — the 1979 Islamic Revolution in Iran, which significantly disturbed US dominance of Persian Gulf Oil. Iran’s move towards energy independence has actually attracted a significant customer base, including the EU countries, who publicly kowtow to the US but are privately exploring options for breaking the petrodollar.

In fact, economist William Clark believes that US belligerence towards the Iranian nuclear program is a cover for the deeper threat posed by Iranian oil to the gluttonous petrodollar. He writes:

 “Despite the ongoing subterfuge the US and the UK establishment are far more concerned about Iran’s upcoming internet-based oil exchange, or 'oil bourse,' which over time could undermine the petrodollar system, and thus the global supremacy of the US dollar. The decline of the petrodollar means the shift to a multipolar world, the crumbling of American hegemony."

Other threats to the petrodollar abound. Besides Iran, Russia has emerged as a major energy trader, vaulting its oil reserves and access to Central Asia’s fabulous gas fields into political influence. Russia has quietly worked on the sidelines to undermine the exclusiveness of the petrodollar and shift to a basket of currencies for oil trading.

The EU for its part has tried to convert the euro into the world’s reserve currency for oil trading, only to be stymied by the US. In addition, Brazil, Russia India, and China (BRIC) are creating an alternative trading block to the EU, one capable of promoting another reserve currency. All of these “big four” developing countries are significant players in the world’s emerging energy routes. Significant competition, to be sure, but has the US game plan for defending the petrodollar’s role been at the world’s energy-economic nexus?

Given the fact that Peak Oil is widely believed to have already hit Saudi Arabia and other oil producing states, the US is racing against time to cement over its feet of clay by expanding into the Central Asian gas fields. Originally, the race was determined by US’s ability to construct the TAPI gas pipeline across Afghanistan, Pakistan and India, before the Middle Eastern Oil fields became quiescent. The gas fields of Kazakhstan and Azerbaijan are earmarked as the substitute for Arabian and Persian Gulf energy.

However, the cost of destabilizing Pakistan and Afghanistan and subjugating populations along the pipeline route has proved rather steep. Not withstanding the US media’s broadcasted epiphany of American power “waking up” to the democracy as an inalienable right of the Arabs, the recent developments are hardly good news for US economic survival.

The fact that black crude underwrites the free-floating US economy makes clear that any disturbance to the global oil geography signifies an existential threat for American empire. We can track White House reactions to sound out the scale of the crisis.

While the Tunisian Revolution evoked Obama’s noble sloganeering, Egypt began to splotch his pristine white shirts with sweat. The Suez Canal after all, is still the heartline of the global oil transit system. Bahrain, a major oil producer and a strategic piece of real estate at the mouth of the Persian Gulf, began to elicit stammering from the White House Press Secretary.

Libya, the largest oil producer in Africa, has accelerated this palsy into a terse silence, occasionally broken by irrelevant comments about the need to “stop violence.” The US’s refusal to take the military option itself in the current revolutions is perhaps an overt sign of empire’s critical weakness. Before, the US unhesitatingly played the military card at the slightest hint of a threat to its Middle Eastern oil properties.

After all, the Iraq War was sparked by Saddam Hussein’s decision in 2000, to switch to the euro as Iraq’s energy trading currency. George Bush’s triumphal mandate for war contrasts with the wavering and indecision demonstrated by the Obama White House caught between its rhetoric and the material need to dominate a geography that has bankrolled its extravagant prosperity over the past six decades. US power is over-stretched, trembling on the verge of implosion, and the political leaders know it too. The practice of dangling democracy before the Arab world as both a reprimand and a fantasy yanked out of reach by US-funded dictators has paid back a somber coin.

The revolutions came at the worst possible time for empire, when a diversifying energy landscape is threatening the US’s role as prime energy controller and by extension, the very financial system guaranteeing the Almighty Dollar. And then the bill for its $14.13 trillion dollar deficit will finally be stamped and addressed to a US that is already taking stock of its derelict house.

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