Nexus - 1603 - New Times Magazine-pages

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will be transferred into private hands. A Circular and Contradictory Relationship Who will be buying State assets at rock-bottom The Federal Reserve System is a privately owned cen- prices? The financial elites, which are also the recipi- ral bank. While the Federal Reserve Board is a govern- ents of the bank bail-out. ment body, the process of money creation is controlled by the 12 Federal Reserve Banks, which are privately Consolidation of the Banks owned. A massive amount of liquidity has been injected into The shareholders of the Federal Reserve Banks, with the financial system from the bail-outs but also from he New York Federal Reserve Bank playing the domi- pension funds, individual savings, etc. nant role, are among America's most powerful finan- The stated objective of the bank bail-out programs is _ cial institutions. to alleviate the banks’ burden of bad debts and non- While the Federal Reserve can create money "out of performing loans. In actuality, what is happening is hin air", the multibillion-dollar outlays of the Treasury that these massive amounts of money are being used including the TARP program) will require the emission by a handful of institutions to consolidate their posi- of public debt in the form of Treasury bills and govern- tion in global banking. ment bonds. The exposure of the banks, largely the result of the US financial institutions oversee the US public debt. derivatives trade, is estimated in the tens of trillions of | They are involved in the sale of Treasury bills and gov- dollars, to the extent that the amounts and guarantees ernment bonds on financial markets in the US and granted by the Treasury and around the world, but they also the Fed will not resolve the cri- hold part of the public debt. sis. Nor are they intended to In this regard, they are the resolve the crisis. : creditors of the US government. The mainstream media sug- The establishment of a Part of this increased public gest that the banks are being | worldwide unipolar financial debt required to rescue the nationalised as a result of g banks will be financed or bro- TARP. In fact, it is exactly the | System is part of the broader ff kered by the same financial opposite. The State is being taken project of the Wall Street institutions which are the over by the banks; the State is being . . . . object of the bank rescue plan. privatised. The establishment of financial elites to establish... We are dealing with a perni- a worldwide unipolar financial a world government. cious circular relationship. system is part of the broader When the banks pressured the project of the Wall Street Treasury to assist them in the financial elites to establish the form of a major bank rescue contours of a world government. operation, it was understood In a bitter irony, the recipients of the bail-out under from the outset that the banks would in turn assist the TARP and Obama's proposed $750 billion aid to finan- Treasury in financing the hand-outs of which they are cial institutions are the creditors of the federal govern- __ the recipients. ment. The Wall Street banks are the brokers and To finance the bank bail-out, the Treasury needs to underwriters of the US public debt; although they hold run a massive budget deficit, which in turn requires a only a portion of the debt, they transact and trade in _ staggering increase of the US public debt. US dollar denominated public debt instruments world- Public opinion has been misled. The US government wide. is in a sense financing its own indebtedness: the They act as creditors of the US State. They evaluate money granted to the banks is in part financed by bor- the creditworthiness of the US government. They rank rowing from the banks. the public debt through Moody's and Standard & The banks lend money to the government, and with Poor's. They control the US Treasury, the Federal this money the Treasury finances the bail-out. In turn, Reserve Board and the US Congress. They oversee and _ the banks impose conditionalities on the management dictate fiscal and monetary policy, ensuring that the — of the US public debt. They dictate how the money State acts in their interest. should be spent. They impose fiscal responsibility. Since the Reagan era, Wall Street has dominated They dictate massive cuts in social expenditures most areas of economic and social policy. It sets the — which result in the collapse and/or privatisation of budgetary agenda, ensuring the curtailment of social public services. They impose the privatisation of urban expenditures. Wall Street preaches balanced budgets infrastructure, roads, sewerage and water systems, and but the practice has been lobbying for the elimination — public recreational areas. Everything is up for privati- of corporate taxes, the granting of hand-outs to corpo- __ sation. rations, tax write-offs in mergers and acquisitions, etc., The recipient banks are the beneficiaries as well as all of which lead to a spiralling public debt. the creditors. will be transferred into private hands. Who will be buying State assets at rock-bottom prices? The financial elites, which are also the recipi- ents of the bank bail-out. worldwide unipolar financial system is part of the broader project of the Wall Street financial elites to establish... 14 * NEXUS The establishment of a a world government. APRIL - MAY 2009 www.nexusmagazine.com