In Bretton Woods, New Hampshire, the International Monetary Fund (IMF), and the World Bank (initially called the International Bank for Reconstruction and Development or IBRD - the name, "World Bank," was not actually adopted until 1975), were approved with full United States participation.
What these two bodies essentially did, was repeat on a world scale what the National Banking Act of 1864, and the Federal Reserve Act of 1913 had established in the United States. They created a banking cartel comprising the world's privately owned central banks, which gradually assumed the power to dictate credit policies to the banks of all nations.
In the same way the Federal Reserve Act authorized the creation of a new national fiat currency called, Federal Reserve Notes, the IMF has been given the authority to issue a world fiat money called, "Special Drawing Rights," or SDR's. Member nations were subsequently pressured into making their currencies fully exchangeable for SDR's.
The IMF is controlled by its board of governors, which are either the heads of different central banks, or the heads of the various national treasury departments who are dominated by their central banks. Also, the voting power in the IMF gives the United States and the United Kingdom (the Federal Reserve and the Bank of England), effective control of it.
IMF have destroyed many nations, flourishing economies have collapsed, nation’s wealth plundered, people deprived of basic necessities of life. One example is Ecuador.
In order that Ecuador's government be allowed a loan of 1.5 billion dollars from the IMF, they were forced to take over the unpaid private debts Ecuador's elite owed to private banks. Furthermore in order to ensure Ecuador could pay back this loan, the IMF dictated price hikes in electricity and other utilities. When that didn't give the IMF enough cash they ordered Ecuador to sack 120,000 workers.
Ecuador was required to do a variety of things under a timetable imposed by the IMF. These included: raising the price of cooking gas by 80% by November 1 2000; transferring the ownership of its biggest water system to foreign operators; granting British Petroleum the rights to build and own an oil pipeline over the Andes; and eliminating the jobs of more workers and reducing the wages of those remaining by 50%.
If you are wondering where Ecuador is now! Bloomberg just reported that Ecuador has defaulted.
Ecuadorean President Rafael Correa halted payment on foreign bonds he calls “illegal” and “illegitimate,” putting the South American country in default for a second time in a decade.
The government won’t make a $30.6 million interest payment by Dec. 15, when a monthlong grace period expires, Correa told reporters in his office in Guayaquil. The $510 million bonds due in 2012 plunged to 23 cents on the dollar from 31 yesterday and 97.5 cents three months ago.
“I have given the order that interest payments not be made,” Correa said. “The country is in default.” ~reported December 12,2008 by Stephan Kueffner
Following is short list of other nations who suffered due to out of control fiat (paper) currency creation and exploding debt (due to wars and/or simple corruption.
Argentina (1975-1991) - In the 1992 currency reform, 1 new peso was exchanged for 10,000 australes. The overall impact of hyperinflation: 1 new peso = 100,000,000,000 pre-1983 pesos.
- Brazil (1986-1994)-The overall impact of hyperinflation: 1 (1994) real = 2,700,000,000,000,000,000 pre-1930 reis.
- Germany (1923-1924, 1945-1948)- At its most severe, the monthly rate of inflation reached 3.25 billion percent, equivalent to prices doubling every 49 hours. The U.S. dollar to Mark conversion rate peaked at 80 billion.
- Hungary (1922-1924, 1944-1946)- Hungary went through two hyperinflationary periods. From 1922 and 1924 the inflation in Hungary reached 98%. This seems quite timid when compared to the inflation rate of 41.9 quintillion percent reached in mid-1946 recorded as being the worst in modern history. At this rate prices doubled every 15 hours. By July 1946, the 1931 gold pengo is worth 130 trillion paper pengos.
- Russia (1921-1922, 1992-1994)- Russia experienced 213% inflation during the Bolshevik Revolution and again during the first year of post-Soviet reform in 1992 when annual inflation peaked at 2520%. In 1993 the annual rate was 840%, and in 1994, 224%. The ruble devalued from about 100 r/$ in 1991 to about 30,000 r/$ in 1999.
- Zimbabwe (1999 - present)- The Rhodesian dollar (R$), adopted in 1970, following decimalization and the replacement of the pound as the currency, was set at a rate of 2 Rhodesian dollars = 1 pound (R$ 0.71 = USD $1.00). At the time of independence in 1980, one Zimbabwean dollar (of 100 cents) was worth US$1.50. On December 1, 2008, 1 US $ = 67,500 Zimbabwe $. Note that, in this period (1980 – 2008) US $ itself has depreciated more than 75%.
As you can see the key to controlling the resources is ‘centralization’. First regional banks combined into central banks to control nations’ money supply. Then we have super central banks representing several nations. Such as Euro central bank (ECB). The ECB established in June, 1998 is responsible for making the monetary policy for 15 nations.
There seems to be an intention to have one global bank to control the entire planet. Timothy Geithner, the president and chief executive of Federal Reserve Bank of New York, wrote
……The institutions that play a central role in money and funding markets – including the main globally active banks and investment banks – need to operate under a unified framework that provides a stronger form of consolidated supervision, with appropriate requirements for capital and liquidity. To complement this, we need to put in place a stronger framework of oversight authority over the critical parts of the payments system – not just the established payments, clearing and settlements systems, but the infrastructure that underpins the decentralised over-the-counter markets. ~ The Financial Times, June, 2008Jon Ronnquist in his article entitled “What exactly is money?” summarized our predictament as
….But when it is controlled out of personal interest by a greedy few, we can see how it is also a very effective control mechanism. First replace supply with loans, then when the country is irreversibly in debt control those loans. Withdraw credit for a while, strangle the economy until it screams for more debt and supply it. Or flood the economy with worthless money and then recall debts fast and wait for the inevitable chaos to ensue. Delegate your divine right of money creation for interest to commercial banks and watch the population strangle itself with unmanageable debt. Allow Wall Street to create value out of thin air by turning confidence into price tags which soon have no comparable relation to the things they are attached to, as banks increase lending to make them affordable to you and me. Wait for the population to buckle under the strain of unmanageable debt, then lend more to their governments. Watch wars begin and lend to each side. Every time the cycle comes full circle, the concentration of power is a little less diluted and a lot more frightening.
The invention of the stock market in Amsterdam in 1602 combined with the issuance of the Bank of England’s credit-based paper money in 1694 was to change the course of human history for the next three hundred years. That epoch is now ending.
3 War profiteering
Wars in 20th century brought windfall profits for these bankers and tremendous suffering for the general public. Following is what happened in Germany post WWI.
When the WWI broke out on July 31, 1914, the Reichsbank (German Central Bank) suspended redeemability of its notes in gold. After that there was no legal limit as to how many notes it could print. The government did not want to upset people with heavy taxes. Instead it borrowed huge amounts of money which were to be paid by the enemy after Germany had won the war, Much of the borrowing was discounted and monetized Today’s “complex and sophisticated” markets are not as unique as some would believe. What is new, however, are the circumstances and consequences of the current collapse. Today, financial markets are a global phenomena; and so, too, will be the consequences.by the Reichsbank. By the end of the war, the amount of money in circulation had increased four-fold. In view of this, the extent of inflation was less than one might have expected. After July 1922 the phase of hyperinflation began. All confidence in money vanished and the price index rose faster and faster for fifteen months, outpacing the printing presses which could not run out money as fast as it was depreciating. Unemployment rose, peoples savings were wiped out and prices of commodities exploded.
Figure 3- Wholesale price Index - Germany after WWI
Central banks, mostly in Europe and America established a global clearing house in 1930, called Bank of International settlements (BIS). Based in Switzerland it facilitates the flow of international credit between banks.
In WWII, banks financed both sides through BIS. In fact, part of Austrian gold held in BoE was released to Reichsbank (of germeny) after Germany announced Anchluss (union) with Austria in March, 1938.
An American private banking interest, Brown Brothers Harriman, channeled investment into Germany’s Fritz Thyssen’s united steelworks, which controlled 75% of germay’s ore reserves.
1945-The Treasury Department revealed to congress that United Steel produced the following percentages of war munitions for the Nazis: Pig iron 50.8%; Pipe & tubes 45.5%; Universal plate 41.4%; Galvanised sheet 38.5%; Heavy plate 36%; Explosives 35%; Wire 22.1%..Every nation involved in World War II greatly multiplied their debt. Between 1940 and 1950, United States Federal Debt went from 43 billion dollars to 257 billion dollars, a 598% increase. During that same period Japanese debt increased by 1,348%, French debt increased by 583%, and Canadian debt increased by 417%.It took UK almost 65 years to pay off its WWII loan to US bankers.
Figure 4- US Debt- 1940 -2000
Since WWII, US is at war with nations across the world. Currently US debt is growing at about $500 billion a year.
According to the Defense Department's annual "Base Structure Report" for fiscal year 2003, which itemizes foreign and domestic U.S. military real estate, the Pentagon currently owns or rents 702 overseas bases in about 130 countries
Bankers have profited from fueling the military ambitions of all nations, specially, British empire and the US for the past two centuries and continue to do so today. But perhaps the most damning indictment yet of the World Bank and today’s bankers is John Perkins’s Confessions of an Economic Hitman (Barrett Koehler, 2004) in which Perkins reveals the hidden intent of the World Bank and US bankers to cold-bloodedly indebt third world countries such as Argentina and profit by their misery.
In their review of Confessions of an Economic Hitman, Russell Mokhiber and Robert Weissman writes:
Remember Smedley Butler? He was perhaps the most decorated Major General in Marine Corps history. In the early part of this century, he fought and killed for the United States around the world. Butler was awarded two Congressional Medals of Honor. Then, when he returned to the United States he wrote a book titled "War Is A Racket" which opens with the memorable lines:It is no surprise that that the US department of defense and world bank have shared executives in the past.
"War is a racket. It always has been."
"I was a high class muscleman for Big Business, for Wall Street and for the Bankers," Butler said. "In short, I was a racketeer, a gangster for capitalism."
Paul Wolfowitz, served in Arms Control and Disarmament Agency in early 1970s, as Deputy Assistant Secretary of Defense in late 1970s, as Deputy Secretary of Defense from 2001 to 2005. In March 2005, he was nominated as the president of World Bank. He resigned in June, 2007 after Several of Wolfowitz's initial appointments at the Bank proved controversial and later his affair with Shah Ali Raza.
Robert Strange McNamara, the 8th United States Secretary of Defense, served as Defense Secretary during the Vietnam War from 1961 to 1968. After holding that position he served as President of the World Bank from 1968 until 1981.
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