[OPE] Ellen Brown, "The Tower of Basel Secretive Plans for the Issuing of a Global Currency"

From: Gerald Levy <jerry_levy@verizon.net>
Date: Thu Apr 23 2009 - 09:16:54 EDT

????? / In solidarity, Jerry

Do We Really Want the Bank for International Settlements (BIS) Issuing Our
Global Currency

By Ellen Brown, "Global Research"

April 18, 2009 -- In an April 7 article in The London Telegraph titled "The
G20 Moves the World a Step Closer to
a Global Currency," Ambrose Evans-Pritchard wrote:
"A single clause in Point 19 of the communiqué issued by the G20 leaders
amounts to revolution in the global financial order.
"'We have agreed to support a general SDR allocation which will inject
$250bn (£170bn) into the world economy and increase global liquidity,' it
said. SDRs are Special Drawing Rights, a synthetic paper currency issued by
the International Monetary Fund that has lain dormant for half a century.
"In effect, the G20 leaders have activated the IMF's power to create money
and begin global 'quantitative easing'. In doing so, they are putting a de
facto world currency into play. It is outside the control of any sovereign
body. Conspiracy theorists will love it."
Indeed they will. The article is subtitled, "The world is a step closer to a
global currency, backed by a global central bank, running monetary policy
for all humanity." Which naturally raises the question, who or what will
serve as this global central bank, cloaked with the power to issue the
global currency and police monetary policy for all humanity? When the
world's central bankers met in Washington last September, they discussed
what body might be in a position to serve in that awesome and fearful role.
A former governor of the Bank of England stated:
"[T]he answer might already be staring us in the face, in the form of the
Bank for International Settlements (BIS). . . . The IMF tends to couch its
warnings about economic problems in very diplomatic language, but the BIS is
more independent and much better placed to deal with this if it is given the
power to do so."1
And if the vision of a global currency outside government control does not
set off conspiracy theorists, putting the BIS in charge of it surely will.
The BIS has been scandal-ridden ever since it was branded with pro-Nazi
leanings in the 1930s. Founded in Basel, Switzerland, in 1930, the BIS has
been called "the most exclusive, secretive, and powerful supranational club
in the world." Charles Higham wrote in his book Trading with the Enemy that
by the late 1930s, the BIS had assumed an openly pro-Nazi bias, a theme that
was expanded on in a BBC Timewatch film titled "Banking with Hitler"
broadcast in 1998.2 In 1944, the American government backed a resolution at
the Bretton-Woods Conference calling for the liquidation of the BIS,
following Czech accusations that it was laundering gold stolen by the Nazis
from occupied Europe; but the central bankers succeeded in quietly snuffing
out the American resolution.3
Modest beginnings, BIS Office, Hotel Savoy-Univers, Basel
First Annual General Meeting, 1931
In Tragedy and Hope: A History of the World in Our Time (1966), Dr. Carroll
Quigley revealed the key role played in global finance by the BIS behind the
scenes. Dr. Quigley was Professor of History at Georgetown University, where
he was President Bill Clinton's mentor. He was also an insider, groomed by
the powerful clique he called "the international bankers." His credibility
is heightened by the fact that he actually espoused their goals. He wrote:
"I know of the operations of this network because I have studied it for
twenty years and was permitted for two years, in the early 1960's, to
examine its papers and secret records. I have no aversion to it or to most
of its aims and have, for much of my life, been close to it and to many of
its instruments. . . . [I]n general my chief difference of opinion is that
it wishes to remain unknown, and I believe its role in history is
significant enough to be known."
Quigley wrote of this international banking network:
"[T]he powers of financial capitalism had another far-reaching aim, nothing
less than to create a world system of financial control in private hands
able to dominate the political system of each country and the economy of the
world as a whole. This system was to be controlled in a feudalist fashion by
the central banks of the world acting in concert, by secret agreements
arrived at in frequent private meetings and conferences. The apex of the
system was to be the Bank for International Settlements in Basel,
Switzerland, a private bank owned and controlled by the world's central
banks which were themselves private corporations."
The key to their success, said Quigley, was that the international bankers
would control and manipulate the money system of a nation while letting it
appear to be controlled by the government. The statement echoed one made in
the eighteenth century by the patriarch of what would become the most
powerful banking dynasty in the world. Mayer Amschel Bauer Rothschild
famously said in 1791:
"Allow me to issue and control a nation's currency, and I care not who makes
its laws."
Mayer's five sons were sent to the major capitals of Europe - London, Paris,
Vienna, Berlin and Naples - with the mission of establishing a banking
system that would be outside government control. The economic and political
systems of nations would be controlled not by citizens but by bankers, for
the benefit of bankers. Eventually, a privately-owned "central bank" was
established in nearly every country; and this central banking system has now
gained control over the economies of the world. Central banks have the
authority to print money in their respective countries, and it is from these
banks that governments must borrow money to pay their debts and fund their
operations. The result is a global economy in which not only industry but
government itself runs on "credit" (or debt) created by a banking monopoly
headed by a network of private central banks; and at the top of this network
is the BIS, the "central bank of central banks" in Basel.
Behind the Curtain
For many years the BIS kept a very low profile, operating behind the scenes
in an abandoned hotel. It was here that decisions were reached to devalue or
defend currencies, fix the price of gold, regulate offshore banking, and
raise or lower short-term interest rates. In 1977, however, the BIS gave up
its anonymity in exchange for more efficient headquarters. The new building
has been described as "an eighteen story-high circular skyscraper that rises
above the medieval city like some misplaced nuclear reactor." It quickly
became known as the "Tower of Basel." Today the BIS has governmental
immunity, pays no taxes, and has its own private police force.4 It is, as
Mayer Rothschild envisioned, above the law.
The BIS is now composed of 55 member nations, but the club that meets
regularly in Basel is a much smaller group; and even within it, there is a
hierarchy. In a 1983 article in Harper's Magazine called "Ruling the World
of Money," Edward Jay Epstein wrote that where the real business gets done
is in "a sort of inner club made up of the half dozen or so powerful central
bankers who find themselves more or less in the same monetary boat" - those
from Germany, the United States, Switzerland, Italy, Japan and England.
Epstein said:
"The prime value, which also seems to demarcate the inner club from the rest
of the BIS members, is the firm belief that central banks should act
independently of their home governments. . . . A second and closely related
belief of the inner club is that politicians should not be trusted to decide
the fate of the international monetary system."
In 1974, the Basel Committee on Banking Supervision was created by the
central bank Governors of the Group of Ten nations (now expanded to twenty).
The BIS provides the twelve-member Secretariat for the Committee. The
Committee, in turn, sets the rules for banking globally, including capital
requirements and reserve controls. In a 2003 article titled "The Bank for
International Settlements Calls for Global Currency," Joan Veon wrote:
"The BIS is where all of the world's central banks meet to analyze the
global economy and determine what course of action they will take next to
put more money in their pockets, since they control the amount of money in
circulation and how much interest they are going to charge governments and
banks for borrowing from them. . . .
"When you understand that the BIS pulls the strings of the world's monetary
system, you then understand that they have the ability to create a financial
boom or bust in a country. If that country is not doing what the money
lenders want, then all they have to do is sell its currency."5
The Controversial Basel Accords
The power of the BIS to make or break economies was demonstrated in 1988,
when it issued a Basel Accord raising bank capital requirements from 6% to
8%. By then, Japan had emerged as the world's largest creditor; but Japan's
banks were less well capitalized than other major international banks.
Raising the capital requirement forced them to cut back on lending, creating
a recession in Japan like that suffered in the U.S. today. Property prices
fell and loans went into default as the security for them shriveled up. A
downward spiral followed, ending with the total bankruptcy of the banks. The
banks had to be nationalized, although that word was not used in order to
avoid criticism.6
Among other collateral damage produced by the Basel Accords was a spate of
suicides among Indian farmers unable to get loans. The BIS capital adequacy
standards required loans to private borrowers to be "risk-weighted," with
the degree of risk determined by private rating agencies; and farmers and
small business owners could not afford the agencies' fees. Banks therefore
assigned 100 percent risk to the loans, and then resisted extending credit
to these "high-risk" borrowers because more capital was required to cover
the loans. When the conscience of the nation was aroused by the Indian
suicides, the government, lamenting the neglect of farmers by commercial
banks, established a policy of ending the "financial exclusion" of the weak;
but this step had little real effect on lending practices, due largely to
the strictures imposed by the BIS from abroad.7
Similar complaints have come from Korea. An article in the December 12, 2008
Korea Times titled "BIS Calls Trigger Vicious Cycle" described how Korean
entrepreneurs with good collateral cannot get operational loans from Korean
banks, at a time when the economic downturn requires increased investment
and easier credit:
"'The Bank of Korea has provided more than 35 trillion won to banks since
September when the global financial crisis went full throttle,' said a Seoul
analyst, who declined to be named. 'But the effect is not seen at all with
the banks keeping the liquidity in their safes. They simply don't lend and
one of the biggest reasons is to keep the BIS ratio high enough to survive,'
he said. . . .
"Chang Ha-joon, an economics professor at Cambridge University, concurs with
the analyst. 'What banks do for their own interests, or to improve the BIS
ratio, is against the interests of the whole society. This is a bad idea,'
Chang said in a recent telephone interview with Korea Times."
In a May 2002 article in The Asia Times titled "Global Economy: The BIS vs.
National Banks," economist Henry C K Liu observed that the Basel Accords
have forced national banking systems "to march to the same tune, designed to
serve the needs of highly sophisticated global financial markets, regardless
of the developmental needs of their national economies." He wrote:
"[N]ational banking systems are suddenly thrown into the rigid arms of the
Basel Capital Accord sponsored by the Bank of International Settlement
(BIS), or to face the penalty of usurious risk premium in securing
international interbank loans. . . . National policies suddenly are
subjected to profit incentives of private financial institutions, all
members of a hierarchical system controlled and directed from the money
center banks in New York. The result is to force national banking systems to
privatize . . . .
"BIS regulations serve only the single purpose of strengthening the
international private banking system, even at the peril of national
economies. . . . The IMF and the international banks regulated by the BIS
are a team: the international banks lend recklessly to borrowers in emerging
economies to create a foreign currency debt crisis, the IMF arrives as a
carrier of monetary virus in the name of sound monetary policy, then the
international banks come as vulture investors in the name of financial
rescue to acquire national banks deemed capital inadequate and insolvent by
the BIS."
Ironically, noted Liu, developing countries with their own natural resources
did not actually need the foreign investment that trapped them in debt to
"Applying the State Theory of Money [which assumes that a sovereign nation
has the power to issue its own money], any government can fund with its own
currency all its domestic developmental needs to maintain full employment
without inflation."
When governments fall into the trap of accepting loans in foreign
currencies, however, they become "debtor nations" subject to IMF and BIS
regulation. They are forced to divert their production to exports, just to
earn the foreign currency necessary to pay the interest on their loans.
National banks deemed "capital inadequate" have to deal with strictures
comparable to the "conditionalities" imposed by the IMF on debtor nations:
"escalating capital requirement, loan writeoffs and liquidation, and
restructuring through selloffs, layoffs, downsizing, cost-cutting and freeze
on capital spending." Liu wrote:
"Reversing the logic that a sound banking system should lead to full
employment and developmental growth, BIS regulations demand high
unemployment and developmental degradation in national economies as the fair
price for a sound global private banking system."
The Last Domino to Fall
While banks in developing nations were being penalized for falling short of
the BIS capital requirements, large international banks managed to escape
the rules, although they actually carried enormous risk because of their
derivative exposure. The mega-banks succeeded in avoiding the Basel rules by
separating the "risk" of default out from the loans and selling it off to
investors, using a form of derivative known as "credit default swaps."
However, it was not in the game plan that U.S. banks should escape the BIS
net. When they managed to sidestep the first Basel Accord, a second set of
rules was imposed known as Basel II. The new rules were established in 2004,
but they were not levied on U.S. banks until November 2007, the month after
the Dow passed 14,000 to reach its all-time high. It has been all downhill
from there. Basel II had the same effect on U.S. banks that Basel I had on
Japanese banks: they have been struggling ever since to survive.8
Basel II requires banks to adjust the value of their marketable securities
to the "market price" of the security, a rule called "mark to market."9 The
rule has theoretical merit, but the problem is timing: it was imposed ex
post facto, after the banks already had the hard-to-market assets on their
books. Lenders that had been considered sufficiently well capitalized to
make new loans suddenly found they were insolvent. At least, they would have
been insolvent if they had tried to sell their assets, an assumption
required by the new rule. Financial analyst John Berlau complained:
"The crisis is often called a 'market failure,' and the term
'mark-to-market' seems to reinforce that. But the mark-to-market rules are
profoundly anti-market and hinder the free-market function of price
discovery. . . . In this case, the accounting rules fail to allow the market
players to hold on to an asset if they don't like what the market is
currently fetching, an important market action that affects price discovery
in areas from agriculture to antiques."10
Imposing the mark-to-market rule on U.S. banks caused an instant credit
freeze, which proceeded to take down the economies not only of the U.S. but
of countries worldwide. In early April 2009, the mark-to-market rule was
finally softened by the U.S. Financial Accounting Standards Board (FASB);
but critics said the modification did not go far enough, and it was done in
response to pressure from politicians and bankers, not out of any
fundamental change of heart or policies by the BIS.
And that is where the conspiracy theorists come in. Why did the BIS not
retract or at least modify Basel II after seeing the devastation it had
caused? Why did it sit idly by as the global economy came crashing down? Was
the goal to create so much economic havoc that the world would rush with
relief into the waiting arms of the BIS with its privately-created global
currency? The plot thickens . . .
Ellen Brown developed her research skills as an attorney practicing civil
litigation in Los Angeles. In Web of Debt, her latest book, she turns those
skills to an analysis of the Federal Reserve and "the money trust." She
shows how this private cartel has usurped the power to create money from the
people themselves, and how we the people can get it back. Her earlier books
focused on the pharmaceutical cartel that gets its power from "the money
trust." Her eleven books include Forbidden Medicine, Nature's Pharmacy
(co-authored with Dr. Lynne Walker), and The Key to Ultimate Health
(co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com
and www.ellenbrown.com .
1. Andrew Marshall, "The Financial New World Order: Towards a Global
Currency and World Government," Global Research (April 6, 2009).
2 Alfred Mendez, "The Network," The World Central Bank: The Bank for
International Settlements, http://copy_bilderberg.tripod.com/bis.htm.
3 "BIS - Bank of International Settlement: The Mother of All Central Banks,"
hubpages.com (2009).
4 Ibid.
5 Joan Veon, "The Bank for International Settlements Calls for Global
Currency," News with Views (August 26, 2003).
6 Peter Myers, "The 1988 Basle Accord - Destroyer of Japan's Finance
System," http://www.mailstar.net/basle.html (updated September 9, 2008).
7 Nirmal Chandra, "Is Inclusive Growth Feasible in Neoliberal India?",
www.networkideas.org (September 2008).
8 Bruce Wiseman, "The Financial Crisis: A look Behind the Wizard's Curtain,"
Canada Free Press (March 19, 2009).
9 See Ellen Brown, "Credit Where Credit Is Due,"
www.webofdebt.com/articles/creditcrunch.php (January 11, 2009).
10 John Berlau, "The International Mark-to-market Contagion," OpenMarket.org
(October 10, 2008).
© Copyright Ellen Brown, Global Research, 2009

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