Banker-Controlled System is Fraudulent and the Cause of the Crisis

By LUIS MIRANDA | THE REAL AGENDA | JUNE 1, 2012

It took almost 100 years for the globalists in control of the financial and banking systems to realize that their fraudulent debt-based scheme can no longer be utilized to exploit the people and the resources of the planet. Back in 1913, rubber barons and the global novelty decided that they were going to control the issuance and flow of money with a system that would perpetually maintain all nations of the world in debt with the supranational financial institutions founded by international private banking entities. These entities would create the money out of thin air, lend it to their slave, dependent nations for a juicy profit while ensuring that future generations would have to work all of their lives to pay them interests on the never ending debt.

Today, most main stream media omitted the annual Bilderberg meeting in Virginia, United States, but did make time to promote the fact that the same banking organizations that brought the global economy to a halt, are finally convinced that their model does not work anymore. It is important to understand that when they say it does not work, it implicitly means that they can’t keep on defrauding the world with it. What the main stream dinosaur media is not telling the people is that the current global mafia intends to implement a new system under which they will remain in control, but with more power and more enslavement. Both the heads of the International Monetary Fund and European Central Bank have said that it is time to end the remaining nation-states and give way for a world financial organization that will dictate economic, environmental and financial policies, which will be indeed under the control of the same monopoly men.

Mario Draghi, president of the European Central Bank, labeled the current system imposed by central bankers themselves as “unsustainable” and once again blamed the governments of the nations that did not accept the bankers’ directives as responsible for the dire global economic and financial crisis. He said leaders have been slow to respond to the sovereign debt crisis, which was also manufactured by international banking institutions. “The configuration we had for 10 years, which was considered sustainable, has been shown now to be unsustainable unless further steps are undertaken,” said Draghi. He forgets to mention the fact that it was the bankers that created and sold derivatives and credit default swaps as the newest and trendiest forms of investment to later run away with the people’s money in the form of pension funds, retirement accounts, social security savings and so on. Another important detail left out by Draghi is that the globalization of the economy has served as a perfect platform to gain even more control.

After creating the problem, the bankers presented their rescue and austerity programs as a “solution” to kick start the economy, but as it turns out, it was all about the consolidation of indebted nations such as Iceland, Greece, and the new ones to come soon such as Spain, Portugal, France, the United States and Germany. Austerity came in the form of cuts to the entitlement programs upon which millions of people depend in those countries, and the rescues of international banks in the form of financial bailouts. As things stand today, the bankers were helped and the people were dumped. But trillions of dollars in financial rescue packages were not enough for the bankers. They wanted more. They wanted total control. Since their rescue programs did not render total control now they bankers are shifting to plan B, which includes the complete acquisition of other nation-states through a perpetual state of war that justifies their theft of natural resources and the centralization of all human activity.

After creating and selling the problem through continuous threats that warned about the complete collapse of the global financial system – a situation they sought and provoked — should governments choose not to bail the banks out, globalists like Herman Van Rompuy, Jean Claude Trichet and José Manuel Barroso tried to create panic so politicians would adopt the so-called austerity measures and illegally carried out the rescue of banks that were too large to go bankrupt. After bankers bet on toxic financial products which they knew would not stand a simple smell test, they ran away with 97 percent of investors’ money by risking people’s money in transactions that involved as little as 2 or 3 percent of their own cash.

Suddenly, the banks and their institutions are no longer capable of supporting the sand castles built over pillars of overconfidence, greed, hubris and financial degeneration. “Can the E.C.B. fill the vacuum left by lack of euro area governance?” he asked. “The answer is no.” Of course not. A new system is needed that allows the banks to operate with even less accountability and more liberty to continue taking risks by mortgaging the future of the working classes all around the world. Just as in the recent past, the bankers are warning that inaction, debt liquidation or more effective regulations would mean a generalized contagion of banks and economies which would happen more easily and rapidly due to the interconnectedness of the global economy. Banks are seeking complete deregulation and self governance, as supposed to accountability to governments. But it was precisely lack of regulation, malinvestment and self governance what allowed the bankers to do what they did, submit the world into a deep black hole of debt from which there is no way out.

The elimination of the Glass-Steagall Act of 1933, which had successfully curbed the bankers’ hunger for risky business, triggered a chain of events that is still ongoing. Banks in need of rescues because supposedly are too big to fail, governments without cash to meet their obligations, pension funds whose coffers are empty, run-away financial corruption, toxic and artificial investment products, insane leveraging, you name it. “It was the largest transfer of money from the working classes to the richest people in human history,” says Russ Roberts, the host of Econtalk. “It was bad for Democracy and for Capitalism.” The solution, according to the bankers however, is to create an insurance fund, which will be paid for by taxpayers from around the world, to assure banks there will always be a rescue plan ready to pull them out of their risky investments. That will not only effectively create the financial incentive to further centralized economic power, but will also eliminate the natural free-market accountability process, the barrier not to bet more than you can possibly pay. A global financial fund will prompt bankers to risk even more, because they can count on a working class that will provide the fruit of their labor to bail them out whenever they need.

Allan Greenspan, the head of the Federal Reserve Bank in 2008 said in Congressional hearings that he did not know what had happened, that he thought the bankers were able to regulate themselves. He said he believed the banks had the ability to assess their own risk. And they did. That is why for every 100 dollars that banks malinvested, only three dollars or so were from their own money. The rest was money from governments, pension funds, savings accounts and so on. Greenspan was the man sitting on the golden chair of the Federal Reserve when the largest banking deregulation process took place under previous administrations, and he knew exactly the potential that such deregulation would create for financial institutions to run unchecked with zero need for accountability. Now that their system has been uncovered as fraudulent, the bankers are using more colorful analogies to describe the supposed threats that would emerge should governments decide not to surrender their sovereignty completely. The latest of those is that the debt crisis is a ’time bomb’. Bankers do not want to buy government debt back and so they are labeling that proposal as the trigger that will detonate the ‘time bomb’.

The initiative to make banks buy the debt back, would not be a solution to the sovereign debt crisis, though. In fact, it would actually perpetuate the debt-based system, because governments would be able to create more debt, which will result in a deeper crisis, as they will be unable to make bond payments. The banks will then be left holding the bag, an outcome usually reserved for the working classes. The ideal scenario would be that banks were forced to buy back the current debt, which they created in the first place, and governments adopted sane fiscal and monetary policies without creating more money out of thin air. Of course, the banks will not allow that to happen, because it will reduce their control over the financial system. Independent, debt-free governments that adopt responsible fiscal and monetary policies would eliminate the need for the current debt-based system, and therefore erase the control the bankers have amassed up until now. The liquidation of debt by letting banks and other institutions fail and go bankrupt would allow the world economic system to begin fresh and operate on a clean, disinfected environment, where artificially created economies would not exist anymore and countries would run their businesses based on existence of resources, production capacity, real gross domestic product, the balance of sales and purchases, bilateral and multilateral commercial negotiations and so on.

“The crisis we’re now in was caused by people taking excessively risky bets with other people’s money,” says Roberts. He adds that a good question to ask is why did people allow the banks to take such high leveraged bets with their money. It was like a poker game where the banks only risked about 3 percent of their own money, while investors took the fall with 96 or 97 percent of their money. But instead of being punished for taking those risks, the banks were rewarded by receiving bailouts. Although the mathematical calculations used by banks to assess market risk and asset value are considered to be fraudulent, they are still used to evaluate investment opportunities. But when those opportunities were shown to be just risky bets, based on fraudulent calculations, the banks were told it was fine, because governments had come to their rescue. They were allowed to sell liabilities as assets making people take very high risks in exchange for a promise to get a miniscule return, if any at all. “I think they believed the government would bail them out in the case of a downturn,” asserts Roberts. As he sees it, the markets are now governed by crony capitalists, and the crony part must be taken out before things can go back to real Capitalism.

Capitalism is a profit and loss system. The prospect of good returns is an incentive to take risk, and the losses are calls for prudence. When the incentive to be prudent is eliminated because there is a government, entity or Fund that will bail out a bank or a whole system, it destroys the financial system, and that is what happened in 2008. Governments, at the behest of the powerful banking cartel covered the risks taken by banking institutions and by doing so eliminated the need for prudence and responsibility.