No Bailouts Can Save This Sick System

This blog post was first published here on 7 January 2009.

It appears now that the bailouts of late 2008 may not have been enough to save the banking systems of the US and the UK, not to mention major corporations like Ford and General Motors.

Major manufacturers in the West have been crippled by the free trade policies of the last sixty years whereby cheaper foreign imports have been allowed to flood the home markets, driving down prices and destroying profits, leading to factory closures and job losses.

The banking system has simply shown itself to be unworkable. Governments can pump all the money in the world into this corrupt setup, but it will never work. Although it is euphemistically called “taxpayers’ money” it is in fact merely fictitious money created by the central banks and lent to  governments at interest so it can be “invested” in the banking system again.

It is a ludicrous merry-go-round and the only winners are the private banking families and their agents. Read what they think of the rest of us and what they plan to do next in David Rothkopf’s book, Superclass. And it you haven’t already, download and read this free Guide to this most pernicious economic system we’re all currently trapped in - Promise To Pay, by Dr R. McNair Wilson. And . . .

Spread the word.

Philip Gegan

 

The “Bailout” Racket

This article was first posted here on 18 December 2008.

Many aspects of the so-called “bailout” of the corrupt banking system of the US and the UK, and probably most other countries as well, have never been properly explained or subjected to close scrutiny.

For example, Goldman Sachs, the US investment bank, went cap in hand to the US government for a life-support share of the bailout fund and received the equivalent of £6.5 billion. Now we hear that this bank is paying bonuses to its London staff totaling some £4.3 billion, almost two thirds of what it has taken from the US taxpayer, supposedly to enable it to simply survive.

What does this tell us? Well, it tells me, for one, that the people who run this bank live on another planet. How can any institution receive a huge amount of public money from the taxpayer on the grounds that otherwise it will fold and carry thousands of other organisations down with it, and then just a few weeks later pay out two thirds of that huge amount to its key employees as a bonus for doing so well?

Apart from being morally repugnant, it just doesn’t add up, does it? Especially when you consider that the US government itself is bankrupt, in debt to the tune of so many trillions of dollars that it is virtually impossible to calculate or comprehend the true amount.

So why does a bankrupt organisation (the US government) give billions of dollars that it doesn’t have to another organisation that then fritters most of the money away on bonuses? And in a time when the rest of us are having to tighten our belts and cut costs wherever possible.

The truth is that the international money power that owns and controls the world’s central banks (Federal Reserve, Bank of England, etc) love weak and bankrupt governments. In the credit boom of the last ten or fifteen years it was becoming a little bit too easy for western governments. Perhaps they weren’t doing everything the way the private banking families wanted them to. They were beginning to get just a little bit out of control.

So what does the money power do? Naturally it pulls the rug from under the credit boom by cutting off further credit to its agents and apparatchiks (the big banks like Goldman Sachs, Lehman Bros, etc) and precipitates the credit crunch. Before long these big banks and major corporations like Ford, Chrysler and General Motors are begging the government for bailout money to survive.

The social and economic cost of allowing these institutions to go under is too high, so the government has to mortgage its future even more by lending or granting billions of dollars to them. This means borrowing even more from the central bank (Federal Reserve). The government is now tied even more securely to international finance.

It has to either restrict public spending, thereby worsening the crisis immediately and risking social and racial unrest. Or it must increase public spending to try and spend its way out of recession, thereby plunging itself into even more unprecedented levels of debt that will take forever to repay and making the situation much worse in the long term. This applies, of course, not just to the US government, but to all western governments.

So the credit crunch means hard times for everyone except the very people who caused it in the first place. The private families, the close-knit group of around 6,000 people who really rule the world (see “Superclass” by David Rothkopf, available from Amazon) have never had it so good.

Read the truth about international finance and the money power by downloading our free guide, the classic “Promise To Pay” by Dr R. McNair Wilson, from our home page.

Spread the word.

Philip Gegan

 

Where Has All The Money Come From?

This blog entry was first published here on 14 November 2008.

Hardly a month after the bailout we’ve all but forgotten about it. We’ve had the distraction of the US Presidential election in the meantime and now the media is concentrating our attention on how Obama is going to get his country out of the quagmire.

But don’t let us forget that the US government pumped over $700 billion into the banking system to save it from destruction. Actually the real figure, as far as we can establish, is around $810 billion, the extra $110 billion being for “sweeteners”, i.e. bribes and other underhand payments to ensure the whole package is glossed over and not subjected to unwanted scrutiny.

That’s a lot of money, and all the media can say about it is how it’s going to have to be repaid by our children and grandchildren, and will cause taxes to rise. That’s true enough, but the interesting point is about where this money came from in the first place.

It wasn’t the US government. The government is just the intermediary, acting as a guarantor that the money will be repaid to the ultimate lenders. It’s the same with all other countries that have adopted the same “solution” to the credit crunch.

Banks are over-stretched and losing money. Eventually they can’t afford to honour their obligations to either their own creditors or each other. They have to go cap-in-hand to the government for a “bailout”. The government gives them their bailout to the tune of hundreds of billions of dollars, which it borrows from the central bank, which in turn is owned by . . . private banks!

What a conundrum! Or is it? It only makes any sense when you realise that the banks that own all the stock in the Federal Reserve are not the same banks that have been forced to plead for government cash and accept partial nationalisation, as here in the UK. Although, of course, Lehman Bros is listed as a major shareholder in the Federal Reserve. So something’s going on that the media certainly isn’t going to inform us about.

We must keep digging until we get to the bottom of it all. In the meantime, download and read the classic “Promise To Pay” by Dr R. McNair Wilson, free of charge from our home page, and . . .

Spread the word!

Philip Gegan